Last year, I read in Harvard Business Review that the most difficult position for a business to be is at the top of it’s sector. You are making lots of money and doing well, but you are also the target of all of the competing organizations and, to make matters worse, you generally require the world to stay the same as long as possible to stay up there. Otherwise, you need significant capital investment in innovation because you can’t just copy your competitors as they try to imitate you.
Everyone is watching your every move to find mistakes or little ways they can crack your castle. Case in point, look at Apple. It’s surprising how much everyone enjoys taking the top guy down a notch whenever they can.
Ironically, the article mentioned that being number two is actually pretty sweet though. Tou have the most money of the non-top players, you can copy the good innovations that the top guy has and build on them yourself. You usually have enough capital to invest in solid R&D, and since you aren’t at the top, your shareholders are not as adamant about “not wasting money on R&D.” Samsung has done a great job copying Apple and then doing minor innovations to make their products just a touch better for short periods of time.
For many years, I believe Apple got around this issue by having a genuine salesman, Steve Jobs , convince the shareholders to allow for some pretty heavy investment in design and development. That it would pay off in the long run. It really did, the stock took off, the iPad, iPhone and App Store really have changed how we all interact with the world, and are the best selling products in their sector.
However, with the new CEO, who is not a saleman, but more of a technocrat, they are slowly sliding. The investors are demanding dividends instead of value creation. They don’t see that iPhone is still outselling everyone else. No one is pointing out to them the fact that the profits last year by Apple dwarfs the entire revenues of Google. They don’t have a CEO who is able to show them that investment in good R&D generally implies higher yields down the road in exchange for lower yields right now like another iPhone or iPad. They don’t have a CEO who knows how to rile the troops and make them uncomfortable with where they are at. The iPhone 5 was the most boring update I’ve ever seen.
Why do you think Apple is sitting on such a stockpile of money? Why do you think every update they are doing is incremental or price based?
Steve Jobs understood the cardinal rule about the universe – Always expect change. You don’t ride a wave by swimming behind it.
Unfortunately, many businessmen, technocrats, politicians, and general elite hate this rule. It’s so much easier to work and plan if everything stays the same. Over the past decade I’ve read article after article with this common mistake. Many assume, or hope, things will always stay as they are and if they don’t stay as they are, they assume that we need to work 100% to maintain the status quo.
This is the birth of the Capitalism is the best system of economy, democracy (or our variant of it) is the best system of government, the current layout of federal and state powers are the best way to do it. This is why we hear “Don’t ever question the status quo.”
This is not due to maliciousness though, it’s due to the fact that the status quo, a stable system, is the easiest system to control. Technocrats, politicians, and elites are already in power. They want the system to stay the way it is so their plans (some of which are utopian) can be enacted as they see fit.
This is the key to why they will all eventually fail.
You cannot stay in power indefinitely by forcing a status quo. While, in theory, if you maintain the status quo as long as possible, you will be on top the heap as long as possible. if you control the change, encourage it, and guide it, you will survive the fact that the world changes and we must all change with it.
But, simply put, the best way to lose is to stand still. The game is always changing, the world is always changing, and even if you control everything, general complexity theory will eventually kick in and all of your models and theories will be for naught.
Absolutely nothing is permanent. Once you realize that, it’s a whole lot easier to move on to better things.
Sometimes it sucks, but that’s what faith in the future is for.