Leadership Principles and Purpose

Summary : The underlying principles and purpose of their leaders govern the outcome of all marketing battles.

The underlying principles and purpose of their leaders govern the outcome of all marketing battles.

 

Back in 1998, I predicted that the NC (Network Computer) would fail because it violates this maxim.  At the time it was the supposed Next Big Thing (NBT) and would kill the PC.  But Larry Ellison of Oracle and Scott McNealy of Sun had made it clear that the issues were really about wresting power from the Wintel consortia.  Their companies are IT centric and so, they were pushing a concept that puts the power back with the IT group and takes it away from the individual user.  This is a dark view of the world, in which users can’t be trusted with their own machines.  The Darth Vaders in IT would always love to pull us back under the control of the dark side of the force.  Anyone who had to work under the old mainframe tyranny can remember being told that the only time you could get on the mainframe to run your programs was at 2 AM.  In contrast, it was the PC that wrested computing power away from IT and put it in the hands of individuals.  Wintel was so successful because they systematically broke up this control and freed us.

Years ago, IBM, Apple, and Motorola formed a joint venture that spawned the PowerPC, which was also intended to dethrone Wintel.  I made bets with several leading industry executives that the PowerPC would not overtake Intel’s Pentium (which had also just been introduced).  In their opinion, the PowerPC would carry the day because it was technically superior, faster, and more elegant than the Pentium (all true).  Supposedly, it also solved the problem of application portability.  I made my bet on the belief that this would not matter because the PowerPC was more than just a microprocessor; it was an attempt to shift control of the IP (intellectual property) back to the system maker so they could regain control of the profits.  IBM and Apple enjoyed 20% of the system level profits.  Intel was happy with only 20% of the chip level profits, while the clone suppliers were happy with only 5% of the system level profits.  Intel won, because the customer won with less expensive PCs.

In the stepper market, a similar thing happened between GCA and Nikon.  GCA wanted to control the stepper market like Perkin-Elmer had controlled the projection aligner market.  I saw a management that was highly focused on its own success and stock prices.  Nikon just wanted to build the best stepper.  Nikon won, GCA lost.

Principle-oriented leaders are often unpopular in good times, but they shine in hard times and always last over the years.  The bottom line is that most markets are reasonably efficient, so serving the customer’s agenda will always win over your company’s or your personal agenda.

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