July 18, 2017
Since 1990’s, we have heard about disruptive innovation leading to disruptive competitors. Of course, most of those talking about it don’t know what it is. Even the creator of the concept, Clayton Christensen, sadly notes
“Despite broad dissemination, the theory’s core concepts have been widely misunderstood and its basic tenets frequently misapplied…. There’s another troubling concern: In our experience, too many people who speak of ‘disruption’ have not read a serious book or article on the subject. Too frequently, they use the term loosely to invoke the concept of innovation in support of whatever it is they wish to do. Many researchers, writers, and consultants use ‘disruptive innovation’ to describe any situation in which an industry is shaken up and previously successful incumbents stumble. But that’s much too broad a usage.”
But back to disruptive competition. This is not the first effort, but a major recent effort, to dissect the concept of competition and to explain how the marketplace really works. Consider these: predatory competitor, imperfect competition, and even Joseph Schumpeter’s creative destruction. They are all efforts to detail situations which veer from “perfect” competition to explain economic behavior.
Now, recall that perfect competition presumes the presence of perfect information, including information on competitors (bet you were wondering when I would get to that). When you drill down, you will find that what they all have in common is that there is less than perfect information. It may be about markets, competitors, technology, consumers, trends, etc. In other words, until you get to a monopoly situation, where there is NO competition, competitors suffer when they lack perfect, or even good, actionable intelligence on these key topics.
The lesson: those companies lacking ongoing intelligence efforts, whether centralized, DIY or both, are likely to be the victims rather than the beneficiaries of disruptive/imperfect/predatory/destructive competition!
 Clayton M. Christensen, Michael E. Raynor, and Rory McDonald, “What Is Disruptive Innovation?”, Harvard Business Review, December 2015, https://hbr.org/2015/12/what-is-disruptive-innovation.
July 11, 2017
This week, a local paperreported that applicants for Pennsylvania medical marijuana licenses were permitted to submit two versions of their applications: one for evaluation by the state’s licensing authority and a second, self-redacted version, for public release.
What was released to the public was a bewildering mass of blacked-out text. In addition to blacking out notes on proximity to health care facilities, maybe, maybe, a competitive or confidential issue, they variously redacted page numbers (?), the business’ name and address (!), and the business’ expected impact on the local community, which seems to be exactly what should be released. One applicant is described as redacting “nearly its entire 186-page grower application, including [the official] instructions” (?!)
The article quoted a Marijuana trade association official who said that these companies were “looking at what their competitors are going to see” and redacted that. Page numbers? And, Pennsylvania officials say that they cannot un-redact what has been blacked out. Then, consider the questions of why a filer can ever exercise absolute control over what is disclosed from public records, and why Pennsylvania ever created this public/private record system.
Ever wonder why Open Record laws don’t work?
 Nicole C. Brambila, “Marijuana firms redacted many parts of applications”. Reading Eagle, July 10, 2017, A1, A3.
July 5, 2017
On the relationship
- “I’m not the final client for this work.” That makes doing the work harder, since the consultant is going through a filter – you. And that means no opportunity for effective pushback or digging into the end user’s real needs, as opposed to its (different) stated needs.
- “We’ll promise you more business if you’ll cut your fee.” Unless you have that authority, and there is more business in the pipeline, do not hold out this faux carrot. And don’t you think this will impact the current work? Remember the saying, “There are three things possible, but you only get two: fast, cheap, or good.”
- “Your relationship is limited to the person who signed your contract.” (This involves a sad story in which a client was fired in mid-project, and his successors initially didn’t want to pay a pending invoice.)
On the submitted bid/proposal
- “We’ll share your proposal and/or approach with other vendors.” In other words, one consultant is now working for its competitors? Increasingly, proposals are submitted to potential clients with language forbidding sharing the contents. Respect it.
- “We’re really just looking for good ideas for our own people.” Why not pay a consultant to work with your team to learn how to develop better skills and approaches?
- “You’re column fodder.” That means you need to get three bids, but want only vendor #1. The other two bidders are there to fill out the columns on the evaluation matrix. Don’t do it.
- “Your bid is a bargaining tool.” Sometimes bids are solicited on an existing piece of work to keep an incumbent “in its place” cost-wise and otherwise. See number 6 above.
- “You’re not bidding on the same scope of work as others.” It is amazing how few companies issue formal RFPs or other engagement specs for CI these days, so they are often getting competing “apples and oranges” proposals.
On fees and payments
- “We always bargain harder with small vendors.” High quality small vendors without big time “brand names” are often seen as more likely to cut fees to win work. See number 2 above.
- “We only pay on 45 (or 60 or 75) days.” When that comes from a (large) firm which requires its own customers to pay in 10-15 days net, it translates to “We ride our accounts payable to enhance our cash flow.”