Secondly, innovation: I think we might be held back by the structure of capitalism. Large corporations must make money. To this end, product lines must have managed life cycles. Planned obsolescence has to happen in order for the next raft of products to make a market impact. The corollary of this is that any product should never be too advanced such that the corp can't force it into obsolescence. Something too advanced will create a risk that you can't make the next big thing and also that there will not be a high enough perceived benefit of upgrade. There is therefore no urgent need for a company to innovate particularly fast. Finally, the other argument I have to throw in is the big-company internal communication. Senior mgt says: "make me something innovative". Middle mgt hears: "make me something saleable". Analysis bods are told to point-increment an existing product. Project leaders are given an aggressive budget and the point increment is delivered late and below spec. However, the reports going back up the chain now show glowing results, perhaps new buzzwords, etcetera and everyone is happy.
All except me, who is wondering...
Posts
2 comments:
I sense an irational grudge against capitalism and corporations.
Of course companies (private or public) have to make money because otherwise they can't pay the bills and go bust. In general this forces them to provide a good or a service to a customer at a price the customer is willing to pay. Profit levels are almost always kept in check by competition from other companies, and for most large companies it is a statement of fact that the vast majority of profit is ploughed back into the company for research/development/investment in growth etc. For example a typical plc in the UK has 5-10% profit level on turnover, maybe 20-40% of that is distributed as dividends to the share holders and most of the rest is used to grow the company. So typically only 2-5% of the turnover of a company is "profit" in shareholders pockets. That is pretty efficient.
There is no real alternative to plc's as efficient provider of goods and services. For example in order to launch a global steel company, a huge amount of capital must be layed out. Other than forming a plc to raise the funds, only a government could raise the necessary funds. The government would end up either subsidising it if it was loss making, or claiming all its profits to subsidise something else (removing the reinvestment necessary to increase efficiencies or grow the company etc).
Products don't NEED to have managed life cycles, it's just a fact of the real world it makes sense to plan your business that way, because if you constantly support old products it becomes a money-draining chain around the companies neck. If users of the old products were happy to pay support fees there would be (and in some cases are) micro-industries which form supporting the old products. In many cases though, its money better spent for a consumer of the product to buy the latest version because it is actually a better product, and it doesn't cost much more than paying for support for an old product. If a consumer is happy and comfortable with an old product, they do not need to upgrade it or buy support services. It's their choice.
First, thanks for your comments. It's good to know I'm not alone, gibbering into the mellee of online noise!
I do have to disagree, I don't have an irrational grudge. In human terms, a large corporate is quite psychopathic. That's not an emotional judgment, I think it's fairly analytically thought out and thinking in this way, it seems, does give some interesting information. Especially if you are (like me) trying to have a relationship with a psychopath!
However this is not the point I was trying to make here. I was trying to investigate the feeling that innovation is somewhat slow in coming these days. Smaller, step-increments, I agree, are made with certain (clock-work I might suggest) regularity. It's the big stuff I'm interested in.
I'm very pleased to hear figures like the ones you quote (hope they're accurate! :-). I would really like to assist a larger company in doing it's R+D work, in fact I currently believe it would be an ideal job (ideals huh? haven't had many of those since I stopped being a teenager!). I just find it difficult to see evidence of such jobs really existing.
As for managed lifecycles. I never suggested it wasn't logical. What I perhaps missed was the emphasis of version increments for their own sake. An example perhaps? Is there really anything in M$ Word now that wasn't there in '97? Is that 3 or 4 step increments for no real benefit? Same with Excel and Powerpoint. M$ are an easy, and much favoured target, I probably should have thought harder and come up with others, but I hope my point is made.
Post a Comment