Monday, July 29, 2013

How Do Organizations Learn?

Following a recent blog post where Horace Dediu asks, "What's an Android user worth?", two readers ended up discussing the relative strategic positions of Apple and Google.

handleym writes:

BUT there is another side to the future, the server side. Machine learning, big stats, all that entails. Voice recognition, image recognition, translation, emotion detection, pattern recognition (and notification when the patterns change), all that. Google is obviously king here. More to the point, Google GETS this as a conceptual category, a way of thinking, not just as a series of current products, in the same way Apple gets design as a conceptual category. And by the same token, Apple does NOT get machine learning and big stats as a conceptual category. They see it as a few products --- Siri, a few parts of Maps, that's it.

To the extent that I am worried about Apple's future, it is here. They have design, HW, UI, developer tools, network engines, server farms, all the tools of the past, covered for the foreseeable future. What they have not shown any strength in (and any interest in acquiring) is the tools of the future. I want to see them hiring some big academic names in big statistics, acquiring a few more firms in machine learning. I want evidence that they understand that this is the essence of the future of computing, every bit as much as graphics (from the first Mac GUI on) were the essence of the past 30 yrs of computing.

And Kizedek replies:

I am not too worried about Apple taking on the future.

First, we don't know what they are working on and have under wraps. We often don't know what they have prepared in advance until they launch it. Though we get some hints from patent applications.

Second, Apple seems quite adept at finding and acquiring the small startups it needs to bring a core team into its fold. Chip designers, Siri, mappers (news this week or so), whatever.

For the sake of argument, let's say that machine learning and big data is the future, and Google gets it and Apple does not. Is Apple doomed? Will Apple coast along, getting slower and fatter until more nimble competitors eventually race in and disrupt it?

That is certainly the lifecycle for 99.9% of the successful companies out there. You identify an opportunity in the market, build a competitive advantage, and then milk that competitive advantage for all its worth until the market shifts and you go bust. Apple often gets credit for disrupting itself... being willing to cannibalize its old personal computer business to grow a new business in smartphones and tablets. But there is no old guard at Apple protecting its turf in personal computers. Apple has a functional structure, so when Apple began working on the iPod or iOS, the existing software, hardware, services, design, operations, and marketing groups could all see it as a new growth opportunity, not as a threat that needed to be smothered in the crib. Instead of having to reinvent itself to enter the music market and then the mobile market, you could say that Apple simply used its competitive advantage in vertical integration and UX design each time to disrupt others, not itself.

Disrupting yourself is hard. It is not enough for management to recognize that it needs to add core competencies in machine learning and big data, and then go out and hire those people. handleym describes it as a conceptual category, a way of thinking. Executives at Apple often talk about the company's DNA. Any new core competency must be integrated into the company's way of thinking or DNA, not simply tacked on. And this can't just happen at the management level. The thinking at Google is still nothing like the thinking at Apple even after hiring Matias Duarte and releasing the Chromebook Pixel and Chromecast; and the thinking at Apple is nothing like the thinking at Google even after introducing Siri.

I'm a huge fan of Peter Senge's learning organizations, and it is clear that Steve Jobs had a similar vision for Apple. Jobs wanted to leave behind a company that would engage in inquiry and adapt to new challenges through deep reflection and capacity building, from the top of the company down to each and every employee. Did he succeed? I think it is impossible for any outsider to know at this point. But I do know that he took a real stab at it and that he was under no illusions about the difficulty of the task. That is a necessary but not sufficient first step. For the rest, we'll just have to wait and see.

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