This is Karl Moore of the Desautels Faculty of Management at McGill University with Talking Management for The Globe and Mail. Today I am in Vancouver sitting down with MIT's Michael Cusumano.
Your new book Strategy Rules, I enjoyed it, great book, talks about disruptive technologies. How is that changing the world?
CUSUMANO - We start out the book talking about Gordon Moore. Gordon Moore's idea was that the power of the microprocessor would double every two years or so and he wrote this paper in 1966 proposing that.
Actually, Bill Gates, Andy Grove and Steve Jobs took that idea and built three different kinds of companies.
To Bill Gates, it meant that microcomputers and computers would be everywhere so why build hardware that is going to become cheap or even free. hardware doubling in power every two years, I am going to make a software company. He created the first software products company that way.
Andy Grove thought that computers would be everywhere and so it would cause the vertically integrated industry to disintegrate. IBM, making everything from microprocessors to software, would just collapse. And he thought mass production and scale would be most important in different layers and he would focus on microprocessors. That became Intel.
Steve Jobs took the same idea and said computers are going to be everywhere so I want to make a computer that is as easy to use as a toaster. So his toaster, the Macintosh, eventually never really became that popular but the iPhone did as he put together make it as easy as a toaster with the idea of a platform and an ecosystem of applications and it all comes together.
MOORE - What are a couple key lessons for someone today looking forward to how should my company be successful?
CUSUMANO - Well one is you need to look forward and reason back, is how we say it. So we want to learn from history but actually the great entrepreneurs had some sense of where the future would go and then they actually would motivate people, build organizations to kind of reach that future in very concrete ways.
The other thing we learn, particularly in high technology, is that you don't have control over your own fate. Like Apple, it can build a great product but if other companies don't adopt it, forget about users, then it's not going to be successful.
Apple was a failed company, almost failing for 20 years until it recognized that it had to partner and had to create an ecosystem and it had to open up some of it's technologies and enable other companies to build applications, systems and accessories.
So again, platforms rather than just products. Those are kind of two powerful ideas, among others, that we write in the new book Strategy Rules.