Get Your Ducks In A Row
People rarely just buy an innovation – they buy everything that goes with the innovation. Usually, they buy a system. They also buy into the future of that system. They judge what other people will buy and what other suppliers will do to support particular products. Unsupported innovation may not be worth buying.
Companies supporting the system also have choices. They choose what is good for them now and in the future. This includes a judgement about what competitors and customers will do. Standing out can be a good thing but being the odd one out is not. Unpopular innovation may not be worth supporting.
Years ago, Sony tried to sell the world Betamax. Its innovative video recording format was first to market with superior quality to VHS - its chief rival from JVC.
After eight years of fierce competition, Sony accepted defeat. Recently, Sony tried to sell the world Blu-Ray. Its chief rival was HD DVD backed by Toshiba and Microsoft. In 2008, after five years of competition, Sony won. What changed?
In an American bowling alley the skittles, or pins, are known as ducks. They must lined-up in a row to make a strike possible. The success of most innovations depends on getting your ducks in a row. Make sure that all the people outside your company who need to support your innovation are lined-up and ready to go.
When Sony bought two Hollywood movie studios, it also bought one of the ducks it needed. It was free to provide support for its new Blu-Ray format. It was equally free to withhold support for the rival HD-DVD format. It also had a network of relationships that naturally included other major ducks – the other film studios and the global retailers who decide which format to stock.
Sony got another duck when it entered the games console market. When it launched the latest version, the Playstation 3, there were already 100 million people who had bought the previous versions. By making the simple decision to include a Blu-ray player in every new games console it started to outsell standalone HD DVD players by a ratio of 3 to 1.
Toshiba started the latest format wars at a very significant disadvantage. It didn’t have its own games console. It didn’t have a movie studio. When people figured that out - the format didn’t have a future. Sony was able to influence the expectations about the choices of others regarding which format to support. In this way, it succeeded in coordinating choices based on those expectations.
To make an innovation attractive to customers, they must believe that your innovation will come with a package of support from the market. To make an innovation attractive to players in the market, they must believe that your innovation serves their best interest and most other players in the market will choose it. They must all believe that your innovation has a future.
Getting your ducks in a row is vital. You need to imagine your innovation successfully out in the market. What future are you selling? Which ducks do you need? Who matters most? Who needs to decide to support you and in what order? What influence have you got? What do the other players want? By asking these questions, you can work back from the future to decide what to do now.
Getting your ducks in a row is a game. You take actions based on what you imagine other players will do. Everyone in the game is trying to win by anticipating the actions of other players. In interconnected markets, self-fulfilling prophecies occur. Individuals create the collective future that they have imagined.
Consider the iPod. Customers bought it because is beautiful and usable but also because it is connected, available everywhere, with a huge online shop for music, and the biggest, best range of accessories. Apple succeeded in getting all the digital ducks of the media industry to line up to support it. It did this by telling the best available story about the future of media. It may have been the only coherent story that came backed up with software and hardware.
Scared by the steal-and-share approach of Napster and eager not miss the party, everyone signed up. Apple didn’t invent any of the components but they continue to get their ducks in a row so that every new product launch is a perfect strike. From the iPod to the iPhone to the iPad.
Apple’s success was getting it’s hardware (duck) in a row with it’s software (duck), content (duck) and a wide range of peripherals (ducks). It managed to line them up with social and technological trends such as high speed mobile networks that made them what we now call - an ecosystem of choice.
So successful have they been that the ducks Sony got lined up to defeat HD DVD have been shuffled to one side. Blu-Ray won the battle of disc formats yet the disc itself has become less important as downloading became the delivery system of choice.
Sony’s lack of expertise in this area left them weak - as the subsequent scandal involving problems involving hacking of customer account showed. They fell behind both Apple and Microsoft who played to strengths not understood by their main competition.
The name of the game is replacing one status quo with another that has a place in its heart for your innovation. You want it to change to let in your idea but you don’t want it to change again and throw your idea out. At least not until you have a better idea ready to take its place.
(Max Mckeown is the author of Adaptability: The Art of Winning)
