We think of tunnel vision as a bad thing. But, in today’s world of hyper innovation, it may just be the best thing.
The age of general managers and general [motors/electric/mills/etc.] is over. These were the power houses of the twentieth century. They were based on acquisition for diversification. The power houses of the twenty first century are all about focus. They are about invention and acquistion for acceleration of that invention.
The first thing that Steve Jobs did when he returned to Apple in the 90’s was slash products. He slimmed down their portfolio and focused the organization. He knew that Apple was really good at creating integrated ecosystems with exceptional user experience. And, so they looked to markets where they could make a large contribution to the improvement of the customer experience – MP3 players, smartphones, tablets and, most recently, smart watches. They were never first to market, but they were the best because of their extreme focus on customer experience.
When Larry Page became CEO of Google, he too slashed products and focused the company on what they’re really great at. As his and Sergey Brin’s interests and focus expanded beyond Google’s core, they have now launched Alphabet – a holding company in which Google will now be just one (albeit very key) asset. Alphabet will focus on very ambitious, transformative projects in diverse areas. But, Google will stay focused on organizing the world’s information and making it universally accessible. Hence, Google’s own ambitious Project Loon.
Hewlett Packard and eBay/PayPal are refocusing too, but taking a different approach. This fall HP will split into two organizations: HP, Inc. and Hewlett Packard Enterprise. Inc. will focus on personal systems and printers, while HPE will focus on technology infrastructure, software and services. eBay and PayPal also recently split so that they can focus on what each is best at: online marketplaces and digital payments, respectively.
Even General Motors and General Electric are focusing. As GM restructured through its bankruptsy, the firm emerged with just four brands: Chevrolet, Cadillac, Buick and GMC. All of its other car brands were either sold off or altogether shuttered. Jeff Immelt has overseen the sale of its stake in NBC Universal and now its GE Capital assets.
In each case, the focus leads to more purposeful innovation. Companies that want to thrive can no longer simply manage for efficiency alone, collecting profits from their products at maturity stage. In The Purpose Economy, companies must consistently invent and reinvent new products and industries within their focus (or purpose). How else can they thrive on in a world envisioned by rising juggernauts like Uber and Airbnb that are entirely reinventing industries?