He is a world-renowned theoretical physicist who has developed theories of black holes and space-time. On the other hand, unless you are in the black hole business, he hasn’t really produced much of a practical nature. We can’t use his inventions in our cell phones, and we can’t teleport ourselves to Barbados. So what good is he?
In my last post, Driving into the Chasm, I used Geoffrey Moore’s diagram to point out the need to continually refresh with your customers and clients. The question remains as to how to do this?
There is another concept outlined in David Maister’s book Managing The Professional Service Firm that might help answer this question. His idea for professional services firms, which I believe also applies to B2B companies, deals with the match of talent to the size of the business problem that the company or its products serve. In summary, he says that there are three types of firms; 1) Brains, 2) Gray Hair and 3) Procedural. These services reflect the complexity of the problem they are aimed at. For example, Brains firms solve new business issues such as minimizing the effects of new tax laws, while Gray Hair solves tax laws that are relatively new but just require experience, and Procedural solves routine tax problems, i.e. H&R Block. The problem he identifies is that the application of the wrong kind of talent or personnel to each of these areas results in either a cost issue or a customer satisfaction issue. For example, if you have really smart people (expensive) working on simple problems you aren’t going to make a lot of money. If you have windowless cubicle drones (low cost procedural people) working on really sophisticated problems, you are likely not going to satisfy your clients and customers. He expresses this dilemma in the set of triangles at the bottom of the diagram below.
If you overlay Maister’s concepts with Moore’s you see an overlap of Brains with Innovators and Early Adopters, Gray Hair with the Early Majority, and Procedural with Late Majority. Another way to look at this is to say, if you want to offer new products and services to accommodate the change in buyer needs and the familiarization issue outlined in my last post, then you need to have Brains. Maybe hire Stephen Hawking. Or otherwise you need to restructure your company to specialize in one of the three areas.
It’s surprising how often companies ignore this need for fundamental structural change as they move from left to right in the market and try to apply the same set of skills. Or just as surprising that they expect to add new products and services without investing in the brains to develop them.