Janis Joplin used to sing that “freedom’s just another word for nothin’ left to lose.” I wonder if the same isn’t true for innovation.
That’s certainly the case that Joe Nocera made in his Saturday column in the New York Times, “Has Apple Peaked?” Apple, as the whole world seems to know, shipped the iPhone 5 last Friday. Though the sales have been phenomenal, a consistent gripe is that Apple has pulled Google Maps out and substituted its own “vastly inferior” Apple mapping system.
Nocera takes this switcheroo as evidence that Apple has passed its peak and is losing its innovative edge. That may seem harsh but it’s an intriguing argument. As Nocera points out, when Steve Jobs returned to Apple in 1997, the company “had nothing to lose”. There was no point in being defensive because there was nothing to defend. Might as well “think different” and try something new and innovative. Today, of course, things are different — Apple has lots to defend. Perhaps it’s better to defend against Google than to deliver “insanely great” solutions to customers. Nocera points out that it happened to Microsoft and now it seems to be happening to Apple.
This is an important point to me because many of the software companies I’ve worked with are desperate to defend their maintenance revenue stream. Maintenance is high-margin revenue and relatively predictable. As a steady stream, it can offset the peaks and valleys of the volatile software license business. I can’t tell you how many CEOs I’ve heard say, “Our first priority is to defend our maintenance base.”
So, how can a software company defend its maintenance turf and still be innovative? The best answer I’ve found so far is “The Ambidextrous Organization” proposed by O’Reilly and Tushman in the Harvard Business Review back in 2004. The idea is to create two organizations in your company. One organization focuses on “exploiting current capabilities” — defending your turf, in other words. The other organization “explores new opportunities.”
The question is how to balance thee two organization effectively. How do you compensate people in each side of the house? How do you prevent a “dinosaurs” versus “visionaries” culture clash? These are tough problems to solve but they are solvable. I’ll be writing more about this over the next few weeks. In the meantime, you can find the original article here.