By Robert Jones
The book that first got me interested in the whole idea of management was Tom Peters’ In Search of Excellence, and one of its mantras was ‘stick to the knitting.’ But is that still good advice, 30 years on? Kodak, Xerox, Nokia, Kmart and Blockbuster all did, and look what’s happened to them. By sticking to their core activity, they failed to react to rivals coming from somewhere else. Google, on the other hand, has moved from its original search-engine knitting into every other handicraft, including self-driving cars.
We explored this topic at a breakfast discussion I hosted last week, exploring our view of the five habits that make 21st century businesses game-changing – which include ‘experimental’ and ‘value-creative’, by which we mean constantly searching for new strategies and revenue streams.
It’s also the topic of Repeatability by Chris Zook and James Allen, two consultants from Bain & Company. They say, in contrast: identify your core, simplify it, and repeat it.
So who’s right? We asked our excellent breakfast panellists came from Zipcar, Zopa and Google. Their view was that experimentation has always been important, and that the Internet now makes it easy to test new things very rapidly, with a huge population of testers. They believe that this kind of testing is natural to a 21st-century business, and that it’s so common that fear of failure – indeed, use of the word ‘failure’ – hardly exists any more. They also say that open experimentation – trying things out in the marketplace – is a great way to be transparent, to involve customers, and so to earn trust.
Where they differ depends on the life stage of their business. In the early years, they say, experiment around the edges until your core idea is proved, but stick to the core idea. ‘It’s a big enough battle,’ said one, ‘to establish our model’. In older age (and Google is a geriatric 14 years old), it become OK to experiment more widely and more radically. ‘Google is always in beta,’ said a panellist.
All three panellists, though, agreed that fruitful experimentation needs to be driven by a purpose. And that purpose can be hugely ambitious: Zipcar has its eyes on the day when there are more car sharers than owners, and Zopa on the moment when peer-to-peer loans outnumber bank loans. Zipcar, Zopa and Google all want to change the world for the better.
So maybe the answer to the conundrum is that Tom Peters was right. You do need to stick to the knitting – but don’t think of your knitting as your activity (which should change over time), but your purpose (which shouldn’t).
Illustration by James Kape.