I’ve been writing about television’s business landscape recently. A reader told me that Australia’s Channel10 is in “voluntary administration.” Death’s door, in other words.
At the same time, I’m teaching an entrepreneurship course at the University of Victoria. We’ve just finished discussing strategy, innovation, and industry life cycles. Sounds complicated, but it’s actually simple:
Strategy tells you three things:
- Be unique
- in a way that your customers will pay well
- so you can defend yourself from inevitable competition.
How do we know competition is inevitable? Because the industry life cycle tells us so:
- An industry starts with a significant innovation that drives fast growth,
- followed by more innovation and increasing competition,
- followed by intense competition, shrinking profitability, and industry decline – including “voluntary administration” 🙁
Many CEOs and business profs discuss strategy and industry life cycles as if they were linear sequences. Which resigns them to the “inevitable” decline, and blinds them to the solution:
Innovation is at the heart of strategy.
Strategy ain’t linear.
Let’s rewrite bullet #1 above. Instead of “Be unique”, let’s say “Innovate”. And rather than a linear list of bullet points, let’s make it circular:
in a way that your customers will pay well
so you can defend yourself from inevitable competition.
You see, not only does innovation get your business going, but it prolongs its longevity.
Apple is one of a few great examples. It’s had several major innovation cycles with each cycle driving its own growth curve. And each has combined to reinforce the strength of Apple’s other innovation cycles. Computers, iPod, iPhone, iPad. All great businesses by themselves, but they’ve combined to create the world’s most valuable company.
Are there lessons here for Channel10? I think so:
1. Forget about the past. It’s gone. Sunk cost. Can’t fix it or change it.
2. Embrace your voluntary administration process. It’s a gift that allows you to rethink, recast, reset yourself.
3. Place innovation at the heart of your strategy.
4. Examine these trends and aim for the future.
Come to think of it, these are good lessons for all of us. Including Apple!