It’s human nature to be reactive, to have Won’t-Happen-To-Me syndrome. The overweight couch potato that doesn’t worry about heart disease. The 25-year-old who doesn’t need to start putting money into a 401k. The Fortune 500 company that doesn’t need to reinvent itself, its products, its processes.
There are people all over the country with a family history of heart disease, who don’t exercise, eat poorly, even smoke, who can be told over and over again by their doctors that they’re going to have a heart attack if they don't change and yet they do nothing.
I just got the new issue of Fast Company and the cover story by Clive Thompson is exciting and frightening. Exciting because a 37-year-old self-taught mechanic who dropped out of school after 7th grade is doing things with car engines that all the thousands of "professionals" in Detroit aren't. Frightening because a 37-year-old self-taught mechanic who dropped out of school after 7th grade is doing things with car engines that all the thousands of "professionals" in Detroit aren't.
Johnathan Goodwin is making super efficient, super powerful cars. He turned a Hummer into a vehicle that ran 700 miles on a tank of hydrogen while doubling horsepower and cutting fuel consumption in half. The Hummer can run on diesel, hydrogen, corn oil and more.
That’s absurd for a ton of reasons but primarily because GM, Ford and Chrysler have been sitting around reacting for 30 years, their executives telling each other they’re fine as they create incremental improvements on irrelevant products. And now they are in a fight for their lives due to overseas competition, boring product, archaic thinking (plus health-care obligations, etc.).
The article reads:
Indeed, Goodwin is doing precisely what the big American automakers have always insisted is impossible. They have long argued that fuel-efficient and alternative-fuel cars are a hard sell because they're too cramped and meek for our market. They've lobbied aggressively against raising fuel-efficiency and emissions standards, insisting that either would doom the domestic industry. Yet the truth is that Detroit is now getting squeezed from all sides.
It continues:
If the dream is a big, badass ride that's also clean, well, he's there already. As he points out, his conversions consist almost entirely of taking stock GM parts and snapping them together in clever new ways. "They could do all this stuff if they wanted to," he tells me, slapping on a visor and hunching over an arc welder. "The technology has been there forever. They make 90% of the components I use." He doesn't have an engineering degree; he didn't even go to high school: "I've just been messing around and seeing what I can do."
Hoover did the same thing. James Dyson peddled his invention to all the major vacuum cleaner manufacturers and none wanted it. Feedback included that that it was costly; that people didn’t care if the product looked good; that no one wanted to be able to see the dirt and grime being sucked up.
But this is the best part, Hoover and the rest of the industry make a ton on the bags they sell. In fact, this shining example of forward-thinking shows that even after the success of Dyson, human nature finds it hard to part ways with the old:
"I do regret that Hoover as a company did not take the product technology off Dyson; it would have lain on the shelf and not been used."
- Hoover's Vice President for Europe, Mike Rutter
Gotta keep that vacuum bag cash cow! Well, in a June USA Today article I read and posted on my office wall, these stats were shared on the upright vaccumm industry:
Would you rather have part of the $500 million bag market that will continue to become more and more irrelevant or a leading position in new industry technologies and a 25% share of the upright market at the fat profit margins Dyson generates?
And sure enough here comes Hoover expending all kinds of energy to make up ground. Doesn't this:
appear to be trying to look a lot like this:
Stupid Dyson, why can't he just stick to the rules the vacuum cleaner industry was playing by?
Here we are now, with telecoms getting pummeled by cable companies, Skype, Vonage, and soon Google.
The music industry is still trying to figure out how to put Napster back in the box.
TV is dealing with BitTorrent, Joost, Slingbox and DVRs.
You can see the same is happening for the car companies.
So what does an entrenched company have to do to innovate? To stay fresh? To start reinventing itself? Continuing my heart disease analogy, I figure you either:
a) Have company leadership that gets it and is already a healthy-eating, exercise addict.
b) Your company has a heart attack that’s mild enough to survive but frightening enough to jolt your leaders into eating better and taking the stairs more.
c) Like many Americans, there are plenty of companies that don't change their habits after a clutcher. They convince themselves it's heartburn.
Thing is, at the point you’re close to having a heart attack you don’t know if it's going to be fatal or not.
If it can happen to Hollywood, Ma Bell and Detroit, as big and all-American as it gets, then it sure as hell is going to happen to your industry too. I'm curious about the organizations you work for or clients you work with (you can keep the company names anonymous of course) - is leadership already eating well and exercising, are they eating their cheeseburgers on the couch watching American Idol, or was there a recent heart attack that forced them to decide to be proactive and start reinventing themselves before someone else does it for them?
P.S. There is an option D - quit your job and create something remarkable yourself, be the Johnathan Goodwin or James Dyson of some staid old industry.
Jon, what a great review of the article! Excellent connection to the other industries that are violently struggling against their own demise.
I made some comments on my blog about the auto industry needing an overhaul only a week or so before the Fast Company article came out ... had I known then what I know now, I wouldn't have been so gentle.
I work for a company that's owned its niche for over 25 years, having invented it in the first place. The irony is that the innovation that started the company has ground to a snail's pace as bureaucracy and smug satisfaction have taken over. I guess it's a lesson in not resting on your laurels ... you have to keep pushing the envelope, predicting new needs, growing into new areas, keeping in touch with the customers you serve and meeting their often unidentified needs/desires. The real downfall was the loss of the founder, who was the true visionary for our industry.
Sad to say, I believe my employer falls into category c): they experienced a brief "clutcher" when the dot com boom hit and competitors flooded our market cheaply and easily, then either purchased or squeezed out most of the players and tried to pretend it was all over. Unfortunately, those remaining competitors have only gotten stronger and gained ground as my company failed to change its bad habits.
The next big attack might be the one that finally puts it down.
Posted by: Todd | October 23, 2007 at 12:58 PM