Ron Adner’s response to my “Better Place” question

As promised, I asked Ron what he thought about A Better Place, a company that I'm very struck with that has the potential to transform our relationship with energy.  Turns out he'd given them a lot of thought already - here's what he said:

 

To date, the electric car has been a poster child for ecosystem mismanagement.  We’ve seen a lot of great innovation in the individual pieces: improved batteries, cars, charge spot deployments, etc.  But what has been desperately lacking is a strategy for pulling them together on terms that make sense to mainstream buyers.

 

Better Place breaks the mold in this regard.  They are doing something so interesting that I dedicated an entire chapter (chapter 7) of my book, The Wide Lens (www.TheWideLensBook.com) to exploring their strategy. 

 The power of the Better Place model is that that they are not trying to innovate the electric car, but rather to innovate the ecosystem around the car. 

 Two broad elements stand out.  First is the way in which they have completely reconfigured the e-car ecosystem to overcome the six key problems that undermine the traditional approach to the electric car in the mass market. (see http://articles.businessinsider.com/2012-03-23/news/31227987_1_electric-cars-blind-spot-nissan-leaf)  By applying what is essentially a mobile telephone operator model to the context of automobiles, selling multi year contracts based on Note, however, that this entails controlling the urge to grow – first achieving commercial success in the early markets, and only then moving forward to pursue the bigger fish.  That takes a lot of discipline.

 

In the language of ecosystems, Israel and Denmark offer Better Place the opportunity to establish their minimum viable footprint. And from this position, they can leverage ecosystem carryover to accelerate their success in adjacent markets.

 

Their success is not guaranteed.  But they have a better shot than any other player on the field.

 

 

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• Posted Rita McGrath on April 03, 2012

Square Enix and Business Model Disruption - Event tonight at Columbia!

This evening, I will be a discussant at an event sponsored by the Columbia Center on Japanese Economy and Business.  Entitled Video Games and the Shaping of Industrial Transformation, the event will feature a keynote speech by Yoichi Wada, the CEO of Square Enix, a global videogaming company with titles such as "Final Fantasy" to its credit.  In his talk, Mr. Wada will trace the evolution of the game business as it moves from hardware and software running on dedicated systems, to consoles running more sophisticated games and software, to today's environments when games are increasingly running in the cloud, people play against other people, and the goal is to create a complete user experience that is unmatched by others.  One of the more fascinating aspects of his experience is seeing how the industry has navigated - and in some cases missed - these technological and user experience transitions.

 

In my discussant role, I'm going to speak about the dynamics of business model innovation as well.  I'll be describing the early warnings that a business model may be in trouble - namely, that new innovations stop increasing competitive differentiation; or new technologies make desirable new functionality possible or of course when the issues start turning up in the numbers.  I've written about this before in an article (and live interview) over at my Harvard Business blog.  Those interested in the topic can hear the actual interview, or of course, read the article. 

If any of my readers would like slides or further references, drop me an email. 

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• Posted Rita McGrath on February 21, 2012

Interesting application of options idea to “Green” Energy programs

A colleague of mine drew to my attention an NPR story about the Federal government's plans to develop green technologies.  In many ways, the approach echoes options reasoning:

 

Many small bets

Substantial upside if the opportunity is successful

Less concern about the rate of failure than the cost of failure

Genuine uncertainty

 

A pretty interesting approach. 

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• Posted Rita McGrath on June 13, 2011

Prioritization - never an easy thing

Scott Anthony of Innosight wrote a great blog post:  3 ways to prioritize a long list of ideas which provides some good insight into how to start.

 

I'll add to that::  I also try to think of contrasts.  Good projects (and what made them good) vs. not so good (and what made them that way).  Good customers vs. not so.  Great opportunities vs. things you wish you hadn't done...and eventually you can begin to discern the patterns that make some things desirable and others not.  That can eventually lead to something as disciplined as a scorecard, which I've written about in various books.  Should I put a sample on the tools page?  Let me know....

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• Posted Rita McGrath on April 05, 2011

Uncertainty and risk in discovery driven planning

I was recently fortunate enough to be teaching in a very interesting program for strategy consultants at IBM.  One of their senior leaders, an ex-BCG guy, pointed out to me that I really could use a picture to communicate the value of Discovery Driven Growth.  Here, therefore is his suggestion!  What it basically shows you is how uncertainty is brought down simultaneously with investment increasing so that you tie the level of investment you are making to the level of uncertainty you face.  Pretty interesting idea.

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• Posted Rita McGrath on July 24, 2010

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