Opportunities for Action in Consumer Markets. Yesterday and Tomorrow

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1 Opportunities for Action in Consumer Markets Yesterday and Tomorrow

2 Yesterday and Tomorrow Understanding and building on past success is often the key to the future. The early years of our new century promise to be a technologically tumultuous time. The current period is a lot like the electromechanical revolutions of the 1880s and 1890s, when great fortunes were made and lost. Today, once again, we are blessed with rapid technological transformations and challenged by new applications. In a time of change, understanding yesterday can open up tomorrow. As we approach the New Year, I ask your indulgence with a story about a genius from the past a genius in product conceptualization, proliferation, and exploitation. In 1847, in a little town in Ohio, a boy was born who would change the world. He was the seventh and last child of a deeply religious mother and a father who drank too much and suffered one business failure after another. When the boy was only 8 years old, his mother was summoned to his school. Your son is failing, his teacher said. He has trouble reading, and he won t pay attention. The mother s response was to teach her son at home. Four years later, her lessons had to stop the 12-year-old boy needed to contribute to the family income. His first job was on a railroad, selling newspapers and candy. At the time of the Civil War and immediately after, the railroad was where the action was. The teenager had lots of free time on his train route, and he used it to teach himself math, physics, biology, and chemistry. With the money he saved from his earnings, he bought chemicals for experiments that he conducted in a closet on the train. Inexperienced as

3 he was, he occasionally mixed volatile ingredients and eventually caused a serious fire. An enraged baggage master boxed the boy s ears, which resulted in a permanent loss of hearing in one ear. He was also summarily dismissed. A failure at school, fired from his first job it seemed the boy s life was over at 15. But luck sometimes has a way of breaking a cycle. Soon after losing the lucrative job on the train, he was lounging at the station and saw a small child start to cross the tracks as a train was approaching. Without hesitation, he dashed to the tracks just in time to save the child. The thankful father asked the boy to name his reward. Teach me a trade, he replied. And so the father, a telegraph operator, taught the boy his trade. You might think of the telegraph as the Internet of its day. Accomplished telegraph operators, like accomplished Web designers, could get well-paying jobs in any city they desired. But the boy set his sights higher than mere telegraph operator. He wanted to be an inventor. He tinkered. He sketched. He created. He was his own greatest salesman, never too shy to sing his own praises. Today we would admire a person of such dazzling intellect, active imagination, and free spirit, but the boy was also capable of driving people crazy. He rarely slept more than three or four hours at a time. He often failed to pay his bills running up large balances with equipment and chemical suppliers. And he rarely released his inventions when he promised he would. Not every idea was an instant success. His first invention was a vote-recording machine. To market it, he visited state legislators across the United States and showed them how the machine worked. The politicians told him that the last thing they wanted was a record of their individual votes.

4 Undiscouraged, the young man approached the president of Western Union and persuaded him to provide seed money to enhance the telegraph s output, advancing it from 1 line to 4 lines to 16 lines. (He was so obsessed with the technology that he even nicknamed his first two children Dot and Dash.) In 1877, when he was 30, the young man figured out a way to extend the technology of the telegraph to a primitive voice recorder the predecessor to the phonograph. In 1879 he and his team created the first electric light bulb. There was a lot of activity in lighting research at the time, but he was the first to discover the right material for the filaments, and he got the patents. Winning the battle against darkness would make him famous and influential forever. In many ways, the invention of the light bulb was a miracle. Not only was the bulb difficult to perfect, but to be commercially viable it had to be linked to a system for distributing power. When our inventor was building the first factory to manufacture light bulbs, he also built the first power plant, and he located it within sight of Wall Street. He did this, he said, so that J.P. Morgan and his fellow financiers could look out their windows and see the future in electric lights, 24 hours a day, seven days a week. Next, combining his inventiveness with commercial ingenuity, he created a web of linked independent businesses, out of which arose General Electric and dozens of other companies. The Edison Map As you must know by now, this is the story of Thomas Edison. I believe his life is worth studying not just because of what he invented but also for the way he went about it. Edison moved from arena to arena,

5 creating, as it were, a map for success that people a hundred years later can still learn from. Edison s map began with the telegraph. The technology could immediately be extended to the telephone. In fact, he called the telephone the talking telegraph. And once he helped develop the telephone (in competition and cooperation with Alexander Graham Bell), he realized that the diaphragm technology could be extended to sound recording. Edison s knowledge of electricity led him to discuss possibilities for further applications with his colleagues. The most exciting was for lighting systems. But that required power, wiring, filaments, vacuums, and glass technology. At this point, Edison decided that he needed further education in chemistry, physics, biology, and mathematics. That learning opened up many more ideas involving, for example, iron ore mining, the making of cement, and the development of storage batteries. (See the exhibit Edison s Invention Sequence: A Progressive Map. ) You can rally the individuals in your organization to create their own Edison maps parlaying skills from Edison s Invention Sequence: A Progressive Map Telegraph Telephone Phonograph Light bulb ore Chemistry + Physics + Biology + Mathematics}Iron Cement Locomotive Generator Storage battery Kinetoscope Electric chair X-ray

6 one domain to another and turning initial ideas and early inventions into breakthrough innovations. By moving from the telegraph, phonograph, and light bulb to power distribution, alkaline batteries, the film projector, and the motion picture camera, Edison wound up with a breathtaking 1,091 patents still a record for an individual. Edison didn t go it alone, though: he believed in collaboration and called his collaborators muckers because he sent them out to muck about in the world and come back with great discoveries. He organized his labs by teams each team with three to ten muckers who filled out timecards with project numbers. Edison s work with Charles Batchelor, one of his closest laboratory assistants and partners, resulted in many of his breakthroughs. Together they invented the process for making cement. They discovered the filament that made the light bulb possible. Of course, they also encountered failures with iron ore mining, X-ray machines, and talking dolls, among others but they learned from them as well. Balanced, well-trained, aligned teams generally create more than individuals do on their own. That model of invention still works. Lessons for 2000 and Beyond The world can be transformed by your inventions. As we approach the New Year, create your own Edison map. Generate a list of your current accomplishments and what you hope to accomplish in the years ahead. Then go over the list carefully and focus all your energy on what could become your legacy. Will you leave the world with a product or an idea that will deliver lasting change and extraordinary benefits?

7 If we learn from Edison, we must become both obsessive and practical. Edison was ambitious, aggressive, rebellious, single-minded, and imaginative. You don t need that precise set of qualities. But you do need edge and differentiation. Edison provoked his teams to go to a higher level of creativity. How will you inspire your team to reach a higher level of creativity and output? Consider these four guiding principles: Focus on the fundamentals. One key to success is to define a problem or an opportunity as broadly as possible. Another is to view the totality of your customers needs. Only by doing both can you understand the building blocks that will quickly lead to a viable solution. Edison s skills were both conceptual and pragmatic. His progress from one spectacular invention to another was possible only because he built on his own work and the work of others, constantly learning from past mistakes and hunting for improvements. He leapfrogged his contemporaries by defining problems or opportunities more broadly than they did and by understanding better how to provide a commercial solution. Become committed to invention and reinvention. In a large organization there is often so much day-to-day pressure that people lose sight of their primary objective. That objective should be to invent or innovate. People should not only be free to do this; they must see it as an obligation. Those who are content to imitate the breakthroughs of others are generally left in the dust. So, too, are those who invent something and then rest on their laurels. Edison s work always culminated in a product followed by a series of improvements. That s why his patents stretch over 40 years.

8 Move with the market. Even Edison didn t always get this right. In 1877, when he drew the original design for the phonograph, he published an article on its potential uses. They included letter dictation, books for the blind, talking clocks, spelling guides, and oral last wills and testaments. He did not mention music reproduction. His first commercial offering of the phonograph was as an office dictation machine. He considered the jukebox a debasement of his invention. It took 20 years for Edison to concede that the main purpose of the phonograph was to play music. Eventually, he responded to market input. He was not omniscient. Even Edison had to learn about applications from people who used his products. Aspire to greatness. Edison s factory of creativity and invention had as its slogan A minor invention every ten days and a big invention every six months. Hold out hope for grand designs, big ideas, and ambitious growth. Accept no compromises. Michael Silverstein Michael Silverstein is a senior vice president in the Chicago office of The Boston Consulting Group and head of the firm s global Consumer practice. You may contact the author by at: silverstein.michael@bcg.com We invite you to post comments and questions to the author online at Or just visit the site to see what other readers have to say about this topic. The author will respond within three days. We hope to generate a lively discussion and welcome your participation. The Boston Consulting Group, Inc All rights reserved.

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