A good article on avoiding turnaround situations from strategy+business magazine.
Kenneth Freeman, managing director at Kohlberg Kravis Roberts & Co.and former CEO of Quest Diagnostics, wrote the article, and it is relevant to disruptive innovation and in particular to pre-turnaround cases where a firm is bleeding at the edges and struggling to avoid disruption. Mr.Freeman points out, correctly, that many of these firms suffer from deep organizational dysfunction and customer relations problems. His turnaround approach seems to focus as much on these challenges as it does on profitability. he uses the examples of corning and Quest Diagnostics, both of which he turned around in the1990s:
How do you approach such a company and tell them to develop new business models and new product development approaches when upper management and the employees on the ground are no longer communicating?
In a perfect world, a struggling company would manage to pursue the benefits of a disruptive product development approach, using an outside entity to bring in new revenue streams while controlling risk and getting it's own house in order. In reality, struggling pre-turnaround companies are either likely to ignore potentially disruptive approaches or see them as a silver bullet that will magically allow them to meet investor demands without making painful internal changes. Wait long enough on the former, indifferent company, and it likely that you will see a flash of the latter before new management comes in.
If this is not bad enough, overweighting a profile of unrelated disruptive efforts can reduce the chances of profitability. To this end, Mr. Freeman cites his experience with Quest:
The problem is that many companies sit on one side or the other of this picture: ignoring the competition until it is too late or embarking on innovative acquisitions and multiple projects until the company itself loses focus. Part of a successful innovation strategy relies on the development of a balanced portfolio and the use of metrics that provide information regarding overall portfolio risk and growth prospects. Easier said than done for a struggling pre-turnaround company.
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OhGizmo points out the Dreamgate Sleep Aid
Design-wise, this reminds me of the snore stopper. This device, however, provides vibrating acupressure to three pulse points associated with sleep in Chinese medicine. Delivery, I suppose, is inaccurate since this is a "one size kinda fits all" device but it may work for some people.
I like this idea because I've wanted to see the acupressure adhesive bandage for a while. How difficult would it be to incorporate a small battery and vibration/ electrolysis unit into a fingerprint-sized bandage? Not too hard I imagine. How hard would it be to put these vibrating molskins on pressure points to relieve stress or cure an upset stomach? again, not so hard. The most difficult point might lie in training the consumer to find the right acupressure points. Templates could help. In this case, I could see a small wrist template that could be laid out on the skin prior to applying the vibrating molskins. Unlike the watch, the templates could come in a few different sizes. Let's call this whole area CAM/ Eastern Transdermals.
Kenneth Freeman, managing director at Kohlberg Kravis Roberts & Co.and former CEO of Quest Diagnostics, wrote the article, and it is relevant to disruptive innovation and in particular to pre-turnaround cases where a firm is bleeding at the edges and struggling to avoid disruption. Mr.Freeman points out, correctly, that many of these firms suffer from deep organizational dysfunction and customer relations problems. His turnaround approach seems to focus as much on these challenges as it does on profitability. he uses the examples of corning and Quest Diagnostics, both of which he turned around in the1990s:
In the early 1990s, as an incoming CEO, I led the turnaround of Corning’s television glass business in North America. Corning had invented color television glass 40 years earlier, alongside RCA. Now the television set business faced tough international competition, and Corning had reduced its exposure by creating a joint venture with Asahi Glass. Employees in the factories were very proud. They didn’t buy the fact that customers were unhappy with Corning’s quality and service. They simply denied that their products were anything but the best. The employees weren’t hearing direct feedback from the customers. “You’re the third CEO in five years,” they said to me. “You’re telling us the customers are going to walk away. We’ve outlasted the last two guys who told us that. Why should we believe you?”
How do you approach such a company and tell them to develop new business models and new product development approaches when upper management and the employees on the ground are no longer communicating?
In a perfect world, a struggling company would manage to pursue the benefits of a disruptive product development approach, using an outside entity to bring in new revenue streams while controlling risk and getting it's own house in order. In reality, struggling pre-turnaround companies are either likely to ignore potentially disruptive approaches or see them as a silver bullet that will magically allow them to meet investor demands without making painful internal changes. Wait long enough on the former, indifferent company, and it likely that you will see a flash of the latter before new management comes in.
If this is not bad enough, overweighting a profile of unrelated disruptive efforts can reduce the chances of profitability. To this end, Mr. Freeman cites his experience with Quest:
One typical form of behavioral excess is an oversupply of entrepreneurial zeal. MetPath (now known as Quest Diagnostics) was started in the 1960s by Dr. Paul Brown, who developed a unique model for providing high-quality, low-cost medical testing services grounded in sophisticated information systems. After Corning Inc. acquired MetPath in 1982, the executives of the merged company ran the lab business as serial entrepreneurs; they knew one primary way to make the company go, and that was growth through acquisition. By the early 1990s, Corning Clinical Laboratories had acquired hundreds of small labs across the United States. But the company was imbalanced: Its entrepreneurial zeal far outweighed any focus on reliable, responsive systems and processes. By the time I walked into the business as CEO in 1995, the industry was suffering from Medicare fraud and abuse issues, large numbers of customer defections, and a lack of process discipline. Predictably, profitability and cash flow were declining rapidly. This situation is common in many maturing companies.
The problem is that many companies sit on one side or the other of this picture: ignoring the competition until it is too late or embarking on innovative acquisitions and multiple projects until the company itself loses focus. Part of a successful innovation strategy relies on the development of a balanced portfolio and the use of metrics that provide information regarding overall portfolio risk and growth prospects. Easier said than done for a struggling pre-turnaround company.
==========================================================================
OhGizmo points out the Dreamgate Sleep Aid
Design-wise, this reminds me of the snore stopper. This device, however, provides vibrating acupressure to three pulse points associated with sleep in Chinese medicine. Delivery, I suppose, is inaccurate since this is a "one size kinda fits all" device but it may work for some people.
I like this idea because I've wanted to see the acupressure adhesive bandage for a while. How difficult would it be to incorporate a small battery and vibration/ electrolysis unit into a fingerprint-sized bandage? Not too hard I imagine. How hard would it be to put these vibrating molskins on pressure points to relieve stress or cure an upset stomach? again, not so hard. The most difficult point might lie in training the consumer to find the right acupressure points. Templates could help. In this case, I could see a small wrist template that could be laid out on the skin prior to applying the vibrating molskins. Unlike the watch, the templates could come in a few different sizes. Let's call this whole area CAM/ Eastern Transdermals.
