Event Alert - MacMillan talks about Discovery Driven Growth
Esteemed colleague and co-author MacMillan will be giving a talk in Philadelphia on Nov. 18. Check out the details here..
Tweet This!
Share this article: 
- Posted Rita McGrath on November 03, 2009
- Trackback
- Leave a comment
How decisions made under uncertainty can cast a long shadow - Internet Pricing
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.
Tweet This!
Share this article:
Heard on the Street - Discovery Driven Planning Changes Leadership Decisions - at Harvard, no less!
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.”
Tweet This!
Share this article:
- Posted Rita McGrath on June 04, 2009
- Trackback
- Leave a comment
Plan on paper, not with live ammunition
John Caddell, in a recent review notes that when using Discovery Driven Growth principles, planning should happen on paper, rather than in ways that are expensive and potentially risky. Hear Hear!
Tweet This!Share this article:
Discovery Driven Growth Going to India
In a nice comment on some of the core ideas in Discovery Driven Growth, a blogger from the Hindu Business Line describes a point we make in the book as useful. That is that you are better driving your projects from key decisions points rather than date milestones. The reason it matters so much, we have argued, is that when something is very uncertain, predicting dates can be nearly impossible, You usually can, however, anticipate the next major checkpoint and plan towards that. If people are given permission to replan at such key points, we suggest, there will be less escalation of commitment to failing courses of action and faster progress.
Tweet This!
Share this article:
recent entries
- Discovery Driven Planning Makes an Impression on CFO’s
- An application of Discovery Driven Planning by one of Mac’s students
- Video about “Leading Strategic Growth and Change” now up on YouTube
- Fascinating application of discovery driven planning to social ventures
- Sagantia Innovation Boot Camp - Kick Starting Innovation
