By Paddy Miller and Azra Brankovic
Have you noticed that more and more video interviews and podcasts are done by amateurs (someone in the office) with a Flip or a Kodak Zi8 camera. Easy to use and download images that are good enough for any internal company presentation and come at 100th of the cost of getting professionals in to do it. Take a look at YouTube and you’ll find millions of homegrown movie makers doing their own material. Many podcasts and webinars are done directly from the office and with minimal technical ability. Wired (10/27/09) talks about it as “The Good Enough Revolution” — where just-good-enough products are gaining share (cheap netbooks, shaky phone calls over Skype, watching movies on laptop screens) because we are prizing accessibility and ease of use over quality, and indeed the notion of “quality” is being re-defined to mean cheap, accessible and easy to use. We’re busy, mobile, and wanting something that’s going to work.
Vijay Govindarajan writes about GE learning fast how to turn the good-enough-revolution into big bucks in his HBR article “How GE Is Disrupting Itself.” Vijay talks about GE spending $3 billion to create at least 100 health-care innovations that would substantially lower costs, increase access, and improve quality. Note the correspondence of those last three terms with the above. We believe “quality” here does not mean premium quality, but improved quality in the sense of just good enough. What makes a difference in management thinking now is that source and price become main drivers of innovation — in emerging markets products arise in a context of poverty and limited infrastructure, whereas in the “rich” world they are developed (or recognized as useful) because of their convenience (and lastly price). Responding to the “good enough revolution” companies such as GE are making a strategic choice to focus on emerging markets as a source of new products in order to pre-empt disruptive innovation (they’re “disrupting” themselves). “Success in developing countries is a prerequisite for continued vitality in developed ones,” they say. While they are phrasing this as inevitable, it’s a strategic choice; likely a good one, but still a choice. They are seeing the opportunity as well as the danger in the external environment, and are choosing to focus on it.
From a creative culture point of view these companies see that reverse innovation requires new organizational forms / new organizational design / new organizational software (by which they mean hiring practices, titles, norms, power) to support it. The way GE goes about it is to look at what other companies did, but also to look at which internal efforts to come up with new structures actually survived the numerous obstacles involved in “changing long-established structures, practices, and attitudes.” They talk about the guy who moved away from centralization to running three independent business units, and who then added a fourth unit for China. Also they’re creating a separate P&L for all GE businesses in India, which is different from their usual structure (product first, country second). This is “organizational innovation,” even if they don’t put those two words together. We tackle some of these issues in our soon to be published case “Jordan Cohen at pfizerWorks.”