Creative Destruction – Page 16

Strategic Conversations: Vital to Creative Adaptation or Reinforcers of Lazy Consensus?

Source of book image: online version of the WSJ review quoted and cited below.

(p. A15) “Moments of Impact” is at its best on the importance of promoting different perspectives. Businesses need to look at the world through as many disciplinary lenses as possible if they are to cope with the fast-changing threats that confront them. But day-to-day corporate life is all about fences and silos. Strategic conversations give companies a chance to examine their business models from the outside–and, as the authors put it, to “imagine operating within several different yet plausible environments.”
. . .
Mr. Ertel and Ms. Solomon argue that companies increasingly face a choice between what Joseph Schumpeter called creative destruction and what they call creative adaptation–and that strategic conversations are vital to creative adaptation. Perhaps so. But strategic conversations can also reinforce lazy consensus, as people try to justify their jobs and protect their turf. Many bold decisions are driven by the opposite of “conversations”–by senior managers deciding to lop-off functions or take the company in a radically new direction.

For the full review, see:
ADRIAN WOOLDRIDGE. “BOOKSHELF; Go Ahead, Strategize; The best ‘strategy meetings’ unleash fresh thinking and offer maverick views; the worst and dull, unstructured time-sucks.” The Wall Street Journal (Thurs., March 27, 2014): A15.
(Note: ellipsis added.)
(Note: the online version of the review has the date March 26, 2014, and has the title “BOOKSHELF; Book Review: ‘Moments of Impact,’ by Chris Ertel and Lisa Kay Solomon; The best ‘strategy meetings’ unleash fresh thinking and offer maverick views; the worst and dull, unstructured time-sucks.”)

The book under review is:
Ertel, Chris, and Lisa Kay Solomon. Moments of Impact: How to Design Strategic Conversations That Accelerate Change. New York: Simon & Schuster, 2014.

Gas Company Literally Tried to Short-Circuit Edison’s Lights

(p. 104) The willingness of Edison to turn his laboratory into a public theater had succeeded, only too well. When he appeared, a shout, “There is Edison!” rang out, causing a surge of bodies in his direction. One report claimed that the crowds “more than once threatened to break down the timbers of the building,” a statement that may not have been hyperbole; the lab assistants were convinced that collapse was possible and hurried outside, bolstering the floor supports below with telegraph poles and lumber. Where the realm of science ended and that of entertainment began could no longer be distinguished, judging by the printed condemnation of the behavior of a minority of the visitors who “cared nothing for science, who regarded the laboratory as they would a circus.”
In the laboratory itself, the lights were arranged on a table to resemble a miniature layout of Menlo Park, and Edison had assigned assistants on all four sides to look out for sabotage. Their vigilance was needed that day, as one man was caught applying a jumper wire that ran under his clothes and down both sleeves, deliberately short-circuiting four of the lights. He turned out to be an electrician employed by the Baltimore Gas Company and was marched out, with language ringing in his ears “that made the recording angels jump for their typewriters,” Edison later recalled.

Source:
Stross, Randall E. The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World. New York: Crown Publishers, 2007.

Arc Lights Leapfrogged Gas Lights Before Incandescents Leapfrogged Them Both

(p. 85) The gas interests had been dealt a number of recent setbacks even before Edison’s announcement of a newly successful variant of electric light. An “enormous abandonment of gas” by retail stores in cities, who now could use less expensive kerosene, was noticed. The shift was attributed not to stores’ preference for kerosene but as a means of escaping “the arrogance of the gas companies.” Arc lights had now become a newly competitive threat, too. The previous month, Charles Brush had set up his lights in an exhibition hall in New York and then added a display in Boston. Sales to stores followed in several cities; then, as word spread, other establishments sought to obtain the cachet bestowed by the latest technology. William Sharon, a U.S. senator for and energetic booster of California, retrofitted the public spaces of his Palace Hotel in San Francisco with arc lights that replaced 1,085 gas jets.

Source:
Stross, Randall E. The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World. New York: Crown Publishers, 2007.

Edison, Not Antitrust, Reduced Power of Hated Gas Monopolies

Counterbalancing the angst of those hurt by the death of an old technology is sometimes the triumph creative destruction provides to those who were less well-served by the old technology. Some look to governments to restrain a dominant technology; but sometimes a more effective way is to replace the old technology through creative destruction’s leapfrog competition.

(p. 84) Gaslight monopolies had few friends outside of the ranks of shareholders. At the beginning of the nineteenth century, gaslight had been viewed as pure and clean; seventy years later, its shortcomings had become all too familiar: it was dirty, soiled interior furnishings, and emit-(p. 85)ted unhygienic fumes. It was also expensive, affordable for indoor lighting only in the homes of the wealthy, department stores, or government buildings. The New York Times almost spat out the following description of how gas companies conducted business: “They practically made the bills what they pleased, for although they read off the quantity by the meter, that instrument was their own, and they could be made to tell a lie of any magnitude…. Everybody has always hated them with a righteous hatred.”

Edison credited the gas monopoly for providing his original motivation to experiment with electric light years before in his Newark laboratory. Recalling in October 1878 his unpleasant dealings years earlier with the local gas utility, which had threatened to tear out their meter and cut off the gas, Edison said, “When I remember how the gas companies used to treat me, I must say that it gives me great pleasure to get square with them.” The Brooklyn Daily Eagle printed an editorial titled “Revenge Is Sweet” in which it observed that the general public greatly enjoyed the discomfort of the gas companies, too: “To see them squirm and writhe is a public satisfaction that lifts Edison to a higher plane than that of the wonderful inventor and causes him to be regarded as a benefactor of the human race, the leading deity of popular idolatry.”

Source:
Stross, Randall E. The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World. New York: Crown Publishers, 2007.
(Note: ellipsis in original.)

William Vanderbilt Helped Disrupt His Gas Holdings by Investing in Edison’s Electricity

(p. 84) But even the minimal ongoing work on the phonograph would be pushed aside by the launch of frenzied efforts to find a way to fulfill Edison’s premature public claim that his electric light was working. A couple of months later, when asked in an interview about the state of his phonograph, Edison replied tartly, “Comatose for the time being.” He changed metaphors and continued, catching hold of an image that would be quoted many times by later biographers: “It is a child and will grow to be a man yet; but I have a bigger thing in hand and must finish it to the temporary neglect of all phones and graphs.”
Financial considerations played a part in allocation of time and resources, too. Commissions from the phonograph that brought in hundreds of dollars were hardly worth accounting for, not when William Vanderbilt and his friends were about to advance Edison $50,000 for the electric light. Edison wrote a correspondent that he regarded the financier’s interest especially satisfying as Vanderbilt was “the largest gas stock owner in America.”

Source:
Stross, Randall E. The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World. New York: Crown Publishers, 2007.
(Note: ellipses, and capitals, in original.)

“Innovation” Word “Is Way Over-Used”

Source of Pop-Tarts image: http://cdn.foodbeast.com.s3.amazonaws.com/content/wp-content/uploads/2013/05/poptarts.png

(p. B1) It measures nearly 3 inches by 5 inches, and it’s made from enriched flour, corn syrup and creamy peanut butter.

This is Kellogg’s Gone Nutty! peanut butter Pop-Tart. If you agree with Kellogg CEO John Bryant, it’s one of the cereal company’s important products of 2013. He went so far as to call it an innovation.
Listen to the chiefs of America’s biggest companies, and you’ll find the Gone Nutty! Pop-Tart has plenty of company. Most CEOs now spray the word “innovation” as if it were an air freshener. A little spritz can’t hurt.
In the last three months, CEOs of S&P 500 companies have put the “innovation” word on Peony & Blush Suede perfume, premium potash and higher-alcohol Miller beer. “Innovation” also describes Dun & Bradstreet credit reports and PetSmart’s temporary tattoos for pets.
Back in 2007, 99 companies in the S&P 500 mentioned innovation in their third-quarter conference calls, according to reviews of transcripts from Capital IQ. This year the number was 197.
When Boston Consulting Group asked 1,500 executives to rank their company innovation from 1-10, more than two-thirds rated themselves a seven or higher.
The word “is way overused,” says International Paper CEO John Faraci.
. . .
(p. B8) As for the peanut butter Pop-Tarts, a Kellogg spokeswoman says that it had long been one of the most-requested new flavors.
“Development challenges and nut-allergy concerns stood in the way of launching this innovation. Since its launch, Pop-Tarts Gone Nutty has exceeded our expectations.”
There’s nothing wrong with keeping pace. It’s what companies must do. But it’s worth asking at your company, no matter what words the CEO uses: Where does survival end
and real innovation begin?

For the full commentary, see:
DENNIS K. BERMAN. “THE GAME; Is a Peanut Butter Pop-Tart an Innovation?” The Wall Street Journal (Weds., December 4, 2013): B1 & B8.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date December 3, 2013.)

In 20th Century, Inventions Had Cultural Impact Twice as Fast as in 19th Century

I used Google’s Ngram tool to generate the Ngram above, using the same technologies used in the Ngram that appeared in the print (but not the online) version of the article quoted and cited below. The blue line is “railroad”; the red line is “radio”; the green line is “television”; the orange line is “internet.” The search was case-insensitive. The print (but not the online) version of the article quoted and cited below, includes a caption that describes the Ngram tool: “A Google tool, the Ngram Viewer, allows anyone to chart the use of words and phrases in millions of books back to the year 1500. By measuring historical shifts in language, the tool offers a quantitative approach to understanding human history.”

(p. 3) Today, the Ngram Viewer contains words taken from about 7.5 million books, representing an estimated 6 percent of all books ever published. Academic researchers can tap into the data to conduct rigorous studies of linguistic shifts across decades or centuries. . . .
The system can also conduct quantitative checks on popular perceptions.
Consider our current notion that we live in a time when technology is evolving faster than ever. Mr. Aiden and Mr. Michel tested this belief by comparing the dates of invention of 147 technologies with the rates at which those innovations spread through English texts. They found that early 19th-century inventions, for instance, took 65 years to begin making a cultural impact, while turn-of-the-20th-century innovations took only 26 years. Their conclusion: the time it takes for society to learn about an invention has been shrinking by about 2.5 years every decade.
“You see it very quantitatively, going back centuries, the increasing speed with which technology is adopted,” Mr. Aiden says.
Still, they caution armchair linguists that the Ngram Viewer is a scientific tool whose results can be misinterpreted.
Witness a simple two-gram query for “fax machine.” Their book describes how the fax seems to pop up, “almost instantaneously, in the 1980s, soaring immediately to peak popularity.” But the machine was actually invented in the 1840s, the book reports. Back then it was called the “telefax.”
Certain concepts may persevere, even as the names for technologies change to suit the lexicon of their time.

For the full story, see:
NATASHA SINGER. “TECHNOPHORIA; In a Scoreboard of Words, a Cultural Guide.” The New York Times, SundayBusiness Section (Sun., December 8, 2013): 3.
(Note: ellipsis added; bold in original.)
(Note: the online version of the article has the date December 7, 2013.)

Amazon’s Story of the Evolution and Revolution of Disruptive Innovation

Source of book image:
http://i1.wp.com/allthingsd.com/files/2013/10/Stone_EverythingStore1.jpg

(p. C5) Mr. Stone, a senior writer for Bloomberg Businessweek and a former reporter for The New York Times, tells this story of disruptive innovation with authority and verve, and lots of well-informed reporting. Although “The Everything Store” retraces early ground covered by Robert Spector’s 2000 book, “Amazon.com: Get Big Fast,” Mr. Stone has conducted more than 300 interviews with current and former Amazon executives and employees, including conversations, over the years, with Mr. Bezos, who “in the end was supportive of this project even though he judged that it was ‘too early’ for a reflective look” at the company.

“The Everything Store” does not examine in detail the fallout that Amazon’s rise has had on book publishing and on independent bookstores, but Mr. Stone does a nimble job of situating the company’s evolution within the wider retail landscape and within the technological revolution that was remaking the world at the turn of the millennium.

For the full review, see:
MICHIKO KAKUTANI. “BOOKS OF THE TIMES; Selling as Hard as He Can.” The New York Times (Tues., October 29, 2013.): C1 & C5.
(Note: the online version of the review has the date October 28, 2013.)

The book under review is:
Stone, Brad. The Everything Store: Jeff Bezos and the Age of Amazon. New York: Little, Brown and Company, 2013.

“Brad Stone” Source of caption and photo: online version of the NYT review quoted and cited above.

Kerosene Creatively Destroyed Whale Oil

“The whale-oil lamps at the Sag Harbor Whaling and Historical Museum are obsolete, though at one time, whale oil lighted much of the Western world.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 20) Like oil, particularly in its early days, whaling spawned dazzling fortunes, depending on the brute labor of tens of thousands of men doing dirty, sweaty, dangerous work. Like oil, it began with the prizes closest to home and then found itself exploring every corner of the globe. And like oil, whaling at its peak seemed impregnable, its product so far superior to its trifling rivals, like smelly lard oil or volatile camphene, that whaling interests mocked their competitors.

“Great noise is made by many of the newspapers and thousands of the traders in the country about lard oil, chemical oil, camphene oil, and a half-dozen other luminous humbugs,” The Nantucket Inquirer snorted derisively in 1843. It went on: “But let not our envious and — in view of the lard oil mania — we had well nigh said, hog-gish opponents, indulge themselves in any such dreams.”
But, in fact, whaling was already just about done, said Eric Jay Dolin, who . . . is the author of “Leviathan: The History of Whaling in America.” Whales near North America were becoming scarce, and the birth of the American petroleum industry in 1859 in Titusville, Pa., allowed kerosene to supplant whale oil before the electric light replaced both of them and oil found other uses.
. . .
Mr. Dolin said the message for today was that one era’s irreplaceable energy source could be the next one’s relic. Like whaling, he said, big oil is ripe to be replaced by something newer, cleaner, more appropriate for its moment.

For the full story, see:
PETER APPLEBOME. “OUR TOWNS; Once They Thought Whale Oil Was Indispensable, Too.” The New York Times, First Section (Sun., August 3, 2008): 20.
(Note: ellipses added.)
(Note: the online version of the story has the title, “OUR TOWNS; They Used to Say Whale Oil Was Indispensable, Too.”)

Dolin’s book is:
Dolin, Eric Jay. Leviathan: The History of Whaling in America. New York: W. W. Norton & Company, Inc., 2007.

Pretentious Studios Were Pushed Aside by Grounded Googlers

(p. 261) Kamangar didn’t put a value judgment on the way the labels and studios worked but tried to crack their code, talking to executives, producers, agents, and managers. One day he happened to be in New York and was invited to meet with the CEO of Universal Music Group, Doug Morris. Kamangar was escorted by bodyguards to a private elevator and ushered to a fancy office high above the city. He couldn’t help thinking of the contrast with Google, where you stumbled in and went to the microkitchen for coffee. Kamangar didn’t dwell on the (p. 262) irony that it was the scruffy kids in shorts, munching energy bars and writing analytics programs, who were pushing aside the old power structure. While he put the pieces of YouTube together, though, he always kept in mind that he was documenting a traditional media system on the verge of collapse. He had to deal with the music world as it was but also plan for the way it would be after disruptions, which Google and YouTube were accelerating.

Source:
Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.

Booker Bravely Boosted Bain

“Cory A. Booker, right, the Democratic mayor of Newark, on “Meet the Press” with Mike Murphy, a Republican strategist. “Enough is enough,” Mr. Booker said of attacks in the presidential race.” Source of caption and photo: online version of the NYT article quoted and cited below.

Romney was criticized for his past association with Bain Capital which was criticized for its role in the process of creative destruction. Democrat Cory Booker, to his credit, defended Bain. (But to his discredit, he later went wobbly when fellow Democrats were appalled by his defense.)

(p. A15) Mayor Cory A. Booker of Newark, a prominent Democrat enlisted as a surrogate for President Obama’s campaign, sharply criticized it on Sunday for attacking Mitt Romney’s work at the private equity firm Bain Capital.

Mr. Booker, speaking on the NBC program “Meet the Press,” made his comments in response to a television advertisement the president’s campaign unveiled last week. It portrays Mr. Romney, the presumptive Republican presidential nominee, as someone who eliminated jobs for the sake of profits during his years running Bain Capital.
“I have to just say, from a very personal level, I’m not about to sit here and indict private equity,” Mr. Booker said. “To me, it’s just we’re getting to a ridiculous point in America, especially that I know I live in a state where pension funds, unions and other people are investing in companies like Bain Capital. If you look at the totality of Bain Capital’s record, they’ve done a lot to support businesses, to grow businesses. And this to me, I’m very uncomfortable with.”

For the full story, see:
RAYMOND HERNANDEZ. “Newark Mayor Criticizes Obama’s Ad.” The New York Times (Mon., May 21, 2012): A15.
(Note: the online version of the article has the date May 20, 2012, and has the title “Surrogate for Obama Denounces Anti-Romney Ad.”)