5.1. The chasm

Duality is our legacy. Battles always have two camps. One must win and the other loses. One will negotiate and the others adapt. It is written so in our genes’ legacy. We say “survival of the fittest” and accept the penalty for lack of contest, supremacy and luck.

5.2. Amplifying the gap and progressing

“To win one hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without fighting is the acme of skill.”

Sun Tzu, The Art Of War

Even if Apple did not remain totally inactive, with its own offering (iWorks), the iWorks suite has clearly never been a priority, and remained largely unchanged over a long period (except recently, on the occasion of a move toward a Cloud offering). When Oracle decided at one point in time to be involved in Open Office (which resulted in the Libre Office fork), this could have been a good opportunity for Apple to jump in this boat, but they did not (Oracle finally gave up on Open Office in 2011).

Office suites, for example, still remain the killer application in the business world, and Microsoft long enjoyed an undisputed dominant position in this market. But eventually, the time has come in favor of Apple. What was a major weakness in Apple’s offering in 1997 is no longer a major concern, because PCs now are used for a myriad of other things than office suites, and a number of alternatives to Microsoft Office now exist, including the free Libre Office Suite.

Microsoft never ceased proposing a Mac version to its Office suite (although without extreme enthusiasm…) and recently came to the conclusion that it could no longer ignore the iOS market share. Accordingly, it decided to develop iOS versions of its MS Office suite.

In a subtle way, the Sun Tzu quote applies well to this case and Apple is on its way to winning, without having had any head-on fighting.

In the same line of thought, when Steve Jobs presented the iPod with iTunes, the announcement was then perceived as a minor and insignificant move, failing to bring any suitable answer to Apple’s major weakness on the PC market (which, by the way, was the only one on which Apple was present at that time).

A lengthy explanation is not required. Hindsight clarifies what the grand design behind this brilliant move was: repositioning Apple on markets with considerably more potential than that of the PC alone, and paving the way for a “post PC” era, which is now putting Microsoft into trouble.

OK, being as smart as Steve Jobs cannot be that easy. However, the above examples show that battles in which a wise general refuses to engage exist. Why so? Because chances of success are too small.

In such a situation, shifting to another – widely unexpected – battlefield may be far more clever. An operations room that yields plenty of time to gain strong positions, before competitors, could help us understand what is the hell going on out there.

Alas, lots of companies, especially the ones which can afford the muscled up strategy, do privilege frontal assault. They routinely use their financial resources to regain a lost advantage. When Microsoft saw trouble on the cell phone market acquired a bundle of companies at an extremely high price. Skype was acquired at $8.5B in 2011. Microsoft paid about $1,000 for every Skype customer, whereas, on average, those customers were worth a profit of about $30 each. Four years later, the business justification still appears questionable.

Arguably, the more a company succeeds in something, the more it is tempted to stick to it and never depart from. Perhaps the most striking example is the absolutely huge Office plus Windows installed everywhere, at a time when consumers – and more and more enterprises – were centering their daily life on mobile applications. This seems to oppose persistence (another gene we spotted), but what is orthodox persistence against the waves of the future? Big ruptures have to be taken into consideration and pondered before it is too late. For the way out must be paralleled with doing something else. As PCs took over the user world from mainframes in the 1980s, mobile computing is taking over PCs in the 2010s. Shifting battlegrounds from PC software and platforms was long overdue for Microsoft. But, the genetics of the company has not been the inventing new markets – never. Perhaps, it will be able to capitalize on a “new mature” market someday by redoing Bill Gates’s coup for IBM’s DOS operating system? But, PCs-as-a-commodity have lost their value and troubled waters loom; will PCs be soon free to use?

When the leveraging point is lost, value goes away and it means it is time to employ divergent thinking, not convergent: to think of alternative routes in a radical way, e.g. to connect unexpected things to what we know or do best. For instance, socially networked ways of working. The criterion that measures the creativity is “variety”, as opposed to “consistency”. There must be ways to harness the vast knowledge base that Microsoft has nurtured with Office and Windows series and redirect it to new things. This requires generating variability (“whether convergent or divergent products result depends upon the way in which this thinking power is applied: to produce more of the same, or to generate novelty” [CRO 15b]) or stagnation, then regression will ensue.

Given its financial resources, Apple could virtually buy any company on the planet. Only competitive market authorities and regulators could possibly impose limits, in some cases.

For any other MBA-wired manager, the obvious strategy to follow would be to engage a massive acquisition policy, rather than remain seated on this huge pile of cash.

But, this is not in line with Apple’s DNA.

Apple’s talent to select the fights which deserve to be fought can also be related to this famous Steve Jobs quote:

“There’s an old Wayne Gretzky quote that I love. ‘I skate to where the puck is going to be, not where it has been.’ And we’ve always tried to do that at Apple. Since the very very beginning. And we always will.”

Steve Jobs, Macworld Conference and Expo in Jan. 2007