Posts Tagged ‘Ted Levitt’
In the summer of 2004, while just starting as an intern at FierceMarkets, a coworker sent me an invitation to create a Gmail account and I’ve been following Google in some way, shape, or form, ever since. It often appears as though everything that the company slaps its name on or develops turns to gold and every market it enters, it dominates. Although this case reads a bit like the Wikipedia page of Google, it’s interesting to read the in-depth history of a company that I personally find intriguing.
What I found the most interesting is how Google is such a prime example of a company that does things correctly. Google has never type casted itself as a search engine company (read more about Ted Levitt and Marketing Malpractice in my previous post). Instead “Google’s mission is to organize the world’s information and make it universally accessible to all.” In addition, Google understands the importance of a shared value and vision and lives and breathes it. Extremely important decisions are routinely based on the philosophy of “don’t be evil.” It truly impresses me that the company, which Fortune placed 2nd on its 2011 list of most admired companies, so closely follows the strategies that I am currently learning about as an MBA student.
Google seems to be doing nearly everything right, but being on top today does not ensure future success. Being on top means you must constantly fight to stay on top. The case asks what Google should do next and the clear answer to continue innovating. To date Google has been so successful because it has constantly changed and improved and developed and created. As long as the company can continue to hire the right people and focus on constant innovation, it will continue to be successful.
The key point of the article What IT can learn from the railroad business, is that the masses are quickly learning new technology and the IT department is marketed in such a way that it may eventually be considered “general office knowledge” along with copying and faxing. This may result in the eventual breakdown of the IT department, similar to how computers have nearly eliminated the need for secretaries. In order to better market the IT function within a firm, IT professionals should promote the department as a strategic partner that supports the company in eliminating costs and driving revenues as opposed to a cost center that completes varying levels of complex technological tasks.
This article is reminiscent of the HBR article on Marketing Malpractice: The Cause and the Cure. Harvard marketing professor Ted Levitt is quoted saying “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” This urges marketers to focus on the job they are doing as opposed to the specific process currently being used to complete the job. As innovation runs its course, the current process will become outdated and the job will be completed in a different way. If the firm wishes to remain in the business of completing that job, they must also innovate.
The IT department does manage the technology of the firm and generates expenses, but it also supports nearly every function of the business and streamlines tasks in order to increase revenue and make the firm more efficient. This latter job of the IT department is the “quarter-inch hole” and the learning that the IT department can take from the mistakes of railroad business. Railroad tycoons defined themselves as being in the “train” business, instead of the transportation business, thus when trucks entered the scene, the railroad tycoons failed to view them as competitors. This allowed the trucks to slip under the radar of the railroad tycoons (see Judo strategy) and eventually steal a significant portion of their profits.
In the case of the IT department, the general public’s growing knowledge of technology is the truck that the IT department needs to watch. Unless the IT department is able to rebrand itself as a revenue generator and cross-functional, strategic partner, it runs the risk of suffering the fate of the railroad tycoons.