Monday, November 26, 2012

Companies which lose good ideas

I subscribed a month ago to a wonderful daily e-mail, delanceyplace, which provides excerpts from current non-fiction books, with links to Amazon which benefit a children's literacy project. Today's excerpt is from a book called Advocacy by John A. Daly, with remarkable examples of how people with good ideas could not get them accepted in their original companies. Check it out on the delanceyplace site. An excerpt from the excerpt:

"Business history is dotted with stories of opportunities lost because people within companies were unsuccessful in pitching their ideas. And those neglected opportunities were consequential. Competitors seized market share that could have been kept and increased if the good idea had been adopted. Take the minivan. Who came up with that idea -- Chrysler? No. Ford engineers came up with that idea -- they called it the van-wagon -- but they couldn't convince management that customers would buy it. In fact, one executive who endorsed it, Hal Sperlich, was fired and went on to lead the effort at Chrysler, which then dominated the minivan world for many years. Ford lost out. ...

"Sam Walton, the founder of Walmart, started his career as a franchisee in the Ben Franklin chain of stores. Walton tried to convince the Ben Franklin executives that his model of buying directly from manufacturers and offering deep discounts would lead to incredible opportunities. They didn't listen, Walton implemented the idea himself, and Walmart became an international phenomenon. ...

The same applies to Intel, and many other companies. But the best example is Apple.

"Steve Wozniak, a cofounder of Apple Computers, was working at Hewlett Packard when he and Steve Jobs designed their first personal computer. Wozniak had signed a document at HP saying that whatever he designed as an employee belonged to HP. He said, 'I loved [HP]. That was my company for life. So I approached HP .... Boy, did I make a pitch. I wanted them to do it. I had the Apple I, and I had a description of what the Apple II could do. I spoke of color. I described an $800 machine that ran BASIC (an early computer language), came out of the box fully built and talked to your home TV: And Hewlett-Packard found some reasons it couldn't be a Hewlett-Packard product.'

"Later, when HP began work on a computer, Wozniak approached the project managers and asked to work on it. 'I really wanted to work on computers. And they turned me down for the job. To this day I don't know why. I said, 'I don't have to run anything,' even though I'd done all these things and they knew it. I said, 'I'll do a printer interface. I'll do the lowliest engineering job there is.' I wanted to work on a computer at my company and they turned me down.' Think how different the computer industry would be if Wozniak had successfully pitched his ideas to HP. ...

I read a good book about pitching ideas and overcoming objections a while back, Buy-In: Saving Your Good Idea from Getting Shot Down by John Kotter. I've had good ideas shot down nonetheless. Sometimes no amount of persuasion will work. 

The reason capitalism works better as a system is not because it's efficient or elegant - I was talking about this concerning General Electric the other day - but because in the medium term, in aggregate, fewer good ideas are shot down. So it is more adaptable and innovative.



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