A very sensible article and strategy from Stephen Chu, the Energy Secretary in the US. Simple, pragmatic and politically feasible. Unlike Australia’s Carbon Tax. (This is from a couple of years old but still very relevant).
Huge international climate deals are vexing. It would be simpler, Steven Chu says, to get the US and China to agree on cuts. Other nations would then follow.
From the New York Times:
Here is the rub: Apple is so big, it’s running up against the law of large numbers.
Also known as the golden theorem, with a proof attributed to the 17th-century Swiss mathematician Jacob Bernoulli, the law states that a variable will revert to a mean over a large sample of results. In the case of the largest companies, it suggests that high earnings growth and a rapid rise in share price will slow as those companies grow ever larger.
If Apple’s share price grew even 20 percent a year for the next decade, which is far below its current blistering pace, its $500 billion market capitalization would be more than $3 trillion by 2022. That is bigger than the 2011 gross domestic product of France or Brazil.
Considering the large market opportunities left for Apple in Phones (8% of the world marketshare) , PCs (5%), Tablets (70% plus but growing) and possible new products in the future there is a lot of steam left. For more read Asymco.
Daniel Tello does an amazing job of analyzing Apple’s growth into the future with some great analysis and charts of the historical growth and the diffusion of innovation theories.
In my previous post on “Building a theory of change or an organisation that creates change” I talked about successful businessmen who in Philanthropy to support an organisation that creates change rather than specific programs that support a theory of change in a complex social environment that is constantly changing.
On further thinking, I think there is a role for both. In essence, Organisations need support to build and expand their theory or what Drucker would call the “Theory of the Business (PDF)” and each program would have in effect a “theory of change” even if its just a hypothesis.
Duncan Curtis suggested that the The Science of Entrepreneurship is:
So two things.
I think to build a great company you need to have a well defined hypothesis based on a theory for a market’s evolved future.
And I think the most effective way to enter that market is to build a company like a scientist testing the theory. As an experiment.
An organisation like TACSI will need to experiment and find out what it takes to create and expand the “theory of the business” around social innovation while a program/project like Family By Family needs to test and ensure that the original hypothesis driving the program or its theory of change will work in the future.
This is how the designers and engineers at Apple roll: They roll.
They take something small, simple, and painstakingly well considered. They ruthlessly cut features to derive the absolute minimum core product they can start with. They polish those features to a shiny intensity. At an anticipated media event, Apple reveals this core product as its Next Big Thing, and explains—no, wait, it simply shows—how painstakingly thoughtful and well designed this core product is. The company releases the product for sale.
Then everyone goes back to Cupertino and rolls. As in, they start with a few tightly packed snowballs and then roll them in more snow to pick up mass until they’ve got a snowman. That’s how Apple builds its platforms. It’s a slow and steady process of continuous iterative improvement—so slow, in fact, that the process is easy to overlook if you’re observing it in real time. Only in hindsight is it obvious just how remarkable Apple’s platform development process is.
[...]
The iPhone is following the same pattern. In 2007 it debuted with no third-party apps, no 3G networking, and a maximum storage capacity of 8GB. One year later, Apple had doubled storage, added 3G and GPS, and opened the App Store. The year after that, Apple swapped in a faster processor, added a compass and an improved camera, and doubled storage again. The pattern repeats. We may never see an iPhone that utterly blows away the prior year’s, but we’ll soon have one that utterly blows away the original iPhone.
Gruber is explaining a clear agile, iterative process but one that is supported by a clear vision, a well executed strategy, a world wide supply chain that responds to this and fantastic marketing.
So two things.
I think to build a great company you need to have a well defined hypothesis based on a theory for a market’s evolved future.
And I think the most effective way to enter that market is to build a company like a scientist testing the theory. As an experiment.
I discussed this earlier in the context of a podcast by Horace Dediu. A small excerpt from the HBR artcicle "Marketing Malpractice: Cause and Cure" where this is first articulated.
By understanding the job and improving the product’s social, functional, and emotional dimensions so that it did the job better, the company’s milk shakes would gain share against the real competition – not just competing chains’ milk shakes but bananas, boredom, and bagels. This would grow the category, which brings us to an im- portant point: Job-defined markets are generally much larger than product category-defined markets. Marketers who are stuck in the mental trap that equates market size with product categories don’t understand whom they are competing against from the customer’s point of view.
Notice that knowing how to improve the product did not come from understanding the "typical" customer. It came from understanding the job. Need more evidence?
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From HuffPost by Sean Stannard-Stockton
The "theory of change" concept draws on the practices of scientific discovery. Social systems, however, are relatively resistant to scientific analysis. As philanthropy attempts to affect dynamic, human-influenced systems, I wonder if we might need to give up the search for the perfect theory of change and instead embrace what might be called Capital Market Philanthropy by focusing our philanthropic efforts on building great organizations.
This is quite interesting. A lot of funding dollars in the social sector is around the "theory of change" which is the idea that for a program (like Family by Family); a specific theory of change occurs for individuals through the program. This is quite an important aspect to evaluate programs and provide funding.
The question is whether that is enough?
What Stannard-Stockton asks here is due to the dynamic nature of social change it cannot be compared to a scientific study with specific questions, hypothesis and answers. The dynamic nature means that what works now will not work tomorrow and needs to be adapted. So, do we support a specific program or the organisation that has created this program and will adapt it to the future.
For Philanthropy I think this is a great question, especially for successful businessman who understand what it takes to build a business. Can Philanthropy help in supporting an organisation to create change?
Strategy. That is the magic word that I loved from the time I decided to work in business more than a decade ago. Reading, learning, working and experimenting over the last decade has given me an opportunity to use strategic thinking at work.
In the last week at work it seems like the culmination of all these years has come to fruit. May be the 10,000 hr rule has kicked in but something has started to be very different in my ability to get things done.
Strategy in the social sector ofcourse cannot be about marketshare, BCG matrix, and other strategy tools only. Some may be useful but the key is to look beyond that.
