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Kaihan Krippendorff
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A strategist, author and innovation expert, Kaihan Krippendorff teaches executives, managers and business owners how to seize opportunities others ignore, unlock innovation, and build strategic thinking skills. Companies such as Microsoft, Citigroup, and Johnson & Johnson have successfully... More
My company:
Strategy Learning Center
My blog:
The Outthinker
My book:
The Way Of Innovation
View Kaihan Krippendorff's Instablogs on:
  • The 10 Most Competitive Tech Companies In The World

    An idea is only innovative if adopted. Chicago University Professor Michael Csikszentmihalyi says there are two types of creativity. "Little c" creativity is coming up with something new and different. But "big c" creativity changes things because it is adopted and changes the world.

    As Steve Jobs put it, "Innovation is creativity that ships."

    Which is why we should consider the innumerable lists of most innovative or admired companies with some skepticism. Too often they're "cool" and different and fascinating, but are they really going to change the world? It will be the market, not us, who judges.

    So six months ago I launched an effort to really measure what the most innovative tech companies are, not based on what I like, but as measured by the impact they are having on their market.

    My colleagues and I assembled a database of 6,300 companies, tracking 5 to 10 years of data on 105 factors including sales growth and profit margins. We ranked these companies according to three factors:

    1. Growth: They are growing faster than their peers, which means they are expanding their market share
    2. Profit: They are significantly more profitable, which means their offering is so attractive they can charge higher prices and/or they have sustained lower costs
    3. Value creation: They have generated value (enterprise value) considerably higher than the competition

    For each company, we calculated a "competitiveness score" and then dug in deeper to see how analysts and investors explained the company's performance. Finally we calculated an "Outthinker" score, our measure of the level of competitive advantage a company has, which can help us predict whether the company's performance is likely to continue.

    For our white paper detailing our findings click here.

    (click to enlarge)Outthinker Top 10

    Feb 19 10:59 AM | Link | Comment!
  • Why Comcast Will Beat Netflix
    I'm sitting in my rental car outside of eBay headquarters on a rainy day in San Francisco. I'm about to step into my second day delivering an Outthinker workshop to group of technology execs from various companies. Television news here centers around the rapidly reorganizing technology landscape: the Yelp IPO, Yahoo suing Facebook during its pre-IPO quiet period.

    But the most game-changing technology news has gone mostly overlooked. Comcast, the largest US cable service provider, announced it will soon launch a video-streaming service aimed at beating Netflix. It's easy to miss the strategic importance of this move. But if you understand the strategic narrative that cable companies have played again and again to devastating effect, you will recognize this as the critical turning point in the plot.

    The battle to own the "digital home" has been waging for years, but over the past 12 months, it has really heated up. Apple is rumored to be launching a television, Amazon's video-streaming business is taking off, Samsung and other electronics firms are imbedding ever more online video services into their TVs, and television channels are increasingly streaming directly. How this all plays out will have significant consequences for investors and television viewers around the country.

    The future may look uncertain but look to the past and you will see a pattern that points clearly to where things may be going. A shift is underway. Cable companies look poised to turn the tables on Netflix and other video streaming players. The recent relative stock performance of Comcast and Netflix underscores that this is happening (see the stock chart below). That in a few days Netflix will lose its rights to carry Starz video content, including my daughter's favorite Disney films, offers yet more evidence.

    Here is what the past tells us about who may win and lose in this high-stakes game.

    1. There are only three sources of advantage and Netflix has none of them: for any company to win over the long term, they must secure one of three sources of competitive advantage: customer captivity (think Microsoft Windows), economies of scale (think Walmart), or preferential access to resources (think De Beers Diamonds). Netflix once enjoyed customer captivity but this advantage has eroded thanks to its missteps that upset customers, drove an exodus of over 800,000 Netflix users, and cut its stock price dramatically.

    2. The tortuous heads toward the finish line: cable companies have historically acted like the tortuous to high-tech innovator hares. They adopt a predictable pattern - they let someone introduce a new service, watch the market grow, and much later step in and take away the opportunity. This is how cable companies beat out TiVo (which introduced the world to the DVR) and Vonage (which convinced Americans to embrace VoIP). Comcast's announcement is the most direct message yet that it intends to seriously attack the new video-streaming opportunity Netflix has ushered in.

    3. Google and others understand the game: this is why Google is making steady inroads into the home. In Kansas City, Google has launched an experiment with potentially huge consequences. It has begun wiring homes with high-speed fiber optic service which positions it to get into the cable service provider game.

    4. Netflix's last hope is to become HBO: there is little reason to believe Netflix can regain customer captivity or create economies of scale, so the company's only hope is to secure preferred access to content, which it is attempting to do by producing its own shows and movies. If Netflix can succeed at this, it will begin looking more like HBO. If it fails, it falls.

    As you watch your company evolve, look for these three sources of advantage and see who is moving toward them ahead of you. Do you have customer captivity? Do you have economies of scale? Do you have preferential access to a key input? If not, start making plans now, like Google is doing and Netflix probably should have done, to build such power now.

    View my weblog here.

    Tags: CMCSA, NFLX
    Mar 04 8:00 PM | Link | Comment!
  • Four Points for Outthinking the Competition

    When the U.S. Air Force asked their best fighter pilot, John Boyd, to analyze how he trained pilots to outmaneuver even better-armed enemies, he took the task seriously. He analyzed not just his dog-fights, but many of history's greatest battles, seeking to understand what he and other great generals did to win. After years of analysis and refinement, he came up with a powerfully simple answer.

    His theory is that all intelligent organizations and even organisms win by passing more efficiently through four stages of interactions with their environments:

    • Observation: collecting data from multiple sources (e.g., the senses for organisms, business systems for corporations, spies for the CIA)
    • Orientation: analyzing and synthesizing the data to form a mental model
    • Decision: deciding to take a specific set of actions based on your mental model
    • Action: physically making or executing your decisions

    You have surely heard the debates about which step is most important. Many say great companies win through execution (Action) while others say the key is strategy (Decision). Amazon offers 1,000 books about strategy and 6,000 about execution and if you read these you'd think you'd have covered your bases.

    But John Boyd would likely agree with a newcomer on the block who says that if you cannot observe and orient well, all of your execution or strategy crafting skill is useless. It is time that large companies begin to consider a new concept, Unified Information Access (UIA), a vision espoused by an interesting young technology company called Attivio. UIA, if realized, has the potential to turn the slow, entangling web that most large companies have into nimble jet planes of information.

    Check my blog next week when I will share my interview with Sid Probstein, Attivio's CTO, to learn more about this vision, how Attivio is trying to get us there, and whether we ever will reach the promise land.

    Dec 16 10:23 AM | Link | Comment!
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