Most of my day today was spent in meetings. I, like many, loathe meetings. I can probably count on one hand how many meetings actually resulted in a positive outcome. Same goes for the number of times I’ve come out of a meeting and said, “that was a great meeting.” Nonetheless, they’re a part of business, especially if you’re just another monkey in the tree. So I grin and bear it. This time, however, I had to sit through a dry run of a presentation one of the Men was going to deliver at a conference. His presentation was on the “Network Effect.”
The parent company I work for owns several smaller companies. For the longest time each company was essentially an island. Each did it’s own thing and didn’t do much to acknowledge the other. Everyone was happy and everything went well. Shortly after I got involved with the company there was a huge push for convergence. That being the sharing of resources - trying to push the islands together into one great Pangea. Well, after more than five years of hearing it, it’s slowly starting to happen…but not without resistance, as is normal with change.
People in our company, like myself, constantly question this strategy. I know that sharing resources is a good theory that does work well when executed properly, but there are trade-offs. In this presentation Microsoft and Apple was used as an analogy. In short, Microsoft made use of the “Network Effect” while Apple did not. Meaning Microsoft made their product and then invited the world to play, thus becoming a huge monster of prosperity. Apple, in comparison, kept to themselves and failed to take over the world. Now, as a nerd I know the Apple/Microsoft debate has gone on for ages and each have their loyal following, but I tried to look at this as an example and not include by bias towards one or the other.
The Network Effect will inevitably lead to a poor outcome. I think too much homogeneousness leads to laziness and shitey products and eventually unhappiness for everyone. Quality over quantity has usually been by philosophy. But briefly in this presentation he had in writing something that suggested that those who don’t pursue the Network Effect can skip on quality because they’ll make up for it in out right cash. This is true. Microsoft proves that. Pound for pound, Apple makes better products that Microsoft. Microsoft stuff works great, but only when you live in a Microsoft world…a iron fisted world. So in essence, here’s a fat cat of my company saying we don’t need to push our quality because if just join hands we can make up for it. Let’s join the Army instead of leading a Revolution.
Personally, I believe that if you keep your standards of quality high that people will pay for it and like it. Apple proves this. They’re not dominant, but they’re still making money hand-over-fist because their products are good. They cost more, but you get what you pay for. And as Apple has also proven, this type of strategy builds a very loyal following - a following that you can cash in on at any given time. I like that strategy. Much like a drug dealer, I’d rather give people a lot of quality up front for cheap knowing I can count on them later when I need to…but unlike the dealers, my quality would not suffer as time went on, if anything it would improve, thus converting even more people.
As far as the islands are concerned, I enjoy being an island. But I also enjoy using (free) resources others provide. I think that is a happy balance. We’re taking advantage of the “Network” by sharing resources, but we’re masking the fact we are a network by delivering the resources in our own way. If you let the same quality shine through all of your networked properties, pretty soon the crappiness of one property will filter to all the others, regardless how hard the others are working. Crappiness by association, if you will.
I think history has proven, both in business and in politics, that The Network doesn’t work. It looks good on paper and sounds good when you think about the possibilities, but in practice and reality it doesn’t lead to favorable results. (Just ask Russia)
Actually companies like Apple rarely survive and if they do they play in niche markets and never become top companies.
While you assume the the “crappiness” will spread across the company, in practice the oppisite is true. Bad practices are more easily identified and removed from the system. The “crappiness” is removed from the company because the better processes will be shared and adopted.
Its like a network in your house, you probably don’t have copies of every song you like on each computer, you have them on one computer and can access them from all the others. Or it’s like borrowing a ladder from a friend. I don’t need to buy a 15 foot ladder because you have one.
Sure, there are some costs of being a “network” and they might seem very substaintial to you, but for the entire business the costs are easily overcome by the benefits.
What you’re saying is exactly what I’m talking about. You say, “the entire business the costs are easily overcome by the benefits,” and I’m saying a company should focus more on quality because if you do the money will take care of itself.
And crappiness does not get removed over time, it becomes the standard because people just accept it. Taking your MP3 example…I don’t have my music on all my computers, it’s all shared across the network. But if I have only crappy music on my main computer, then everyone sharing will only get crappy music. That means either everyone accepts the poor music, or they download their own, thus bypassing the Network entirely.
I would actually say bad practices are not expunged as often as they should because doing so costs too much. It’s easier to deal with crappiness and find workarounds (read laziness) than it is to spend the proper amount of effort and resources fixing the problem. The bigger the Network, the more effort it takes to find/fix problems. This can’t be fixed, frankly, it’s just the way things are…but it’s backwards.