Discovery Driven Planning for CIO’s
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In this blog Steve Miller notes that DDP can be a bridge between ‘searching’ activities and ‘planning’ activities and suggests how the idea could be imported to the world of IT.
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- Posted Rita McGrath on December 22, 2009
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IDEO’s Colin Raney on the ‘large market fallacy’
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This week, I’m here with a fantastic group of participants in Columbia’s Leading Strategic Growth and Change program, which I direct. This morning’s presentation featured Colin Raney and Joe Gerber from design consultancy IDEO . We had a great morning. Colin and Joe described how IDEO works on design problems and how they use Discovery Driven Planning to model business designs just as they traditionally have modeled product designs. Then, we engaged the whole class in an exercise to rethink Wiley’s “For Dummies” franchise. It was energizing, fun and fresh!
During the course of our time with IDEO, Colin mentioned the “large market fallacy” which is a typical mistake that big companies make—thinking that the road to strategy nirvana is getting relatively small slices of huge markets. It’s something we battle against all the time with big companies. You can read more about Colin’s ideas on sizing markets in this Blog Post.
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Event Alert - MacMillan talks about Discovery Driven Growth
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Esteemed colleague and co-author MacMillan will be giving a talk in Philadelphia on Nov. 18. Check out the details here..
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- Posted Rita McGrath on November 03, 2009
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How decisions made under uncertainty can cast a long shadow - Internet Pricing
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The reality of having to make decisions under uncertainty is that quite often, you’ll get things wrong. Unfortunately, sometimes those wrong things have very long and path-dependent consequences. I’m thinking in particular of two decisions that were made virtually industry-wide as the Internet evolved: 1) the decisions that content should be ‘free’; and 2) the decision to sell Internet access on a flat-fee for unlimited access basis. As a recent article in the Wall Street Journal points out, in the early days of the Internet (remember dial-up access?) consumers were perfectly happy to pay by the amount of connection time they used. If you cast your mind back to the old AOL business model, you paid a basic access fee to get your ID and password, and that covered a certain amount of usage. Then, if you went over that, you paid more. This kind of pricing makes a lot of sense when you have a resource that is vulnerable to overuse, and you want to encourage investment in the infrastructure to support it.
Then, along came a bunch of bright sparks with the idea of offering ‘always on’ unlimited access to the Internet at high-speeds for a fixed, flat rate. I’m sure the original idea was to try to undermine the AOL model both in terms of speed and in terms of ease of use. What was apparently not anticipated was that the amount of traffic that would eventually begin flowing through the networks as our lives become increasingly digital and on-line. Now, those who offer network services are in a pickle: How do you backtrack on that business model, once you have trained customers that your services should essentially be available in unlimited quantities for one flat price? I think it’s rather analogous to the problem news organizations and content providers are up against as well - how do you convince people to pay for content after spending over a decade providing the news for free?
There are a few examples in which companies have been able to get customers to pay for something they used to get for free - cable TV and (to some extent) Satellite radio might be cases in point. But it isn’t easy, and requires some kind of barrier to competition.
It will be interesting to see how the net neutrality legislation now making its way through the legislature will play into this. While I do agee that you don’t want network provides making decisions about which services customers can and can’t get, it doesn’t seem to honor basic fairness to me to dictate that they have to offer their services to any comer on an unlimited basis. After all, nobody is telling the electricity company that they can’t charge more to those who use more. And in telephony, interestingly enough, the operators seem to have avoided the seduction of giving their network minutes away for free. We have a strong interest in making sure that networks are capable of handling the traffic of the Internet future. And someone has to pay for that. Let’s hope that some reasonable compromise can emerge, in which network providers have an incentive to provide great service, while charging fair prices for the access they provide.
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Heard on the Street - Discovery Driven Planning Changes Leadership Decisions - at Harvard, no less!
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One of our dear colleagues at Wharton happened to be teaching at a conference up at Harvard Business School. He was kind enough to report the following exchange to us:
Dear Mac -
I just came back from a long conference at HBS that included a lot of business people and HBS alumni. The discussion came up about best advice for pushing their leadership team, and one of the business people said, “Well, this discovery-driven planning program that I participated in taught me that I needed a new CFO because the one I had wasn’t flexible enough. So I’d recommend that.”
Our friend continues: “As you might imagine, the HBS moderator didn’t follow up that line of discussion.”
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- Posted Rita McGrath on June 04, 2009
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