A4.1. Tracking dominant designs above all

Marketed objects¹ are bound to a structuring reference for organizing trade: the design is shared by players, including competitors; markets are rather mature²: “The value of objects can be assessed, products are endorsed by competitors, knowledge can be accumulated, and all changes followed on. One virtue of a dominant design is to simplify the offer-demand relationship. Incremental innovation may be performed to sustain a dominant design. In the end, dominant designs evolve to the point of sheer complexity, hence may call for self alteration; then, new dynamics emerge that break dominant designs down”.

The notion of dominant design traces back to Utterback and Abernathy [UTT 75, ABE 78, UTT 94].

A4.2. Why they (still) exist

Industry typically operates by favoring a relatively stable categorization of products, market segments, players, etc. and even ecosystems. This has evident advantages: competition can be set, organized and strive.

By doing so, its means of action are making key market assumptions:

• – objects’ identities are as stable as possible: functionality and performance can be referred to;
• – delegation can be organized (supply chains, research, development...) and specialized departments become in charge of a key dimension of the work;
• – then, planning is based on linear models, which are bound to predictive and other statistical analysis approaches;
• – and, finally, the classical management models with respect to objectives can operate, also by using the many well-known methods, techniques and tools such as market and value analysis, portfolio management, change management, business process re-engineering, etc.

A4.3. Why they still work (less and less)

However, can the above be a safe harbor for long? Are products really permanent? It is the quintessential function of innovation to alter a status quo. For sure, innovation can create a roller coaster game both for clients (who then have to re-learn about products and usages) and competitors (who can’t rest assured on agreed market grounds safely shared by all). Innovation is that spoofy catalyst that, when regulated with care, transforms entire industry domains with no possible return, ever.

As soon as innovation forces drive the competition, the above assumptions and model of industrial activity gradually lose their validity:

• – object identities are altered continuously, without an a priori commonly agreed plan, stifling the stable references industry was building from;
• – specialized departments need to intertwine their operations deeper and deeper, for example, R&D can no longer be distinct from marketing;
• – statistics become insufficient to feed the plans and methods, which shift from reactive to proactive, even anticipative;
• – and, finally, the organization can no longer be managed “incrementally” based on identified resources, bound to fixed objectives, and on fixed division of labor.

When innovation becomes intensively called forth, the traditional settings of industry not only lose their value but represent, as time goes on, an impediment to become dynamically agile, and to regenerate itself at times. If flexibility shall rule, it would be at the expenses of rigidities everywhere: structural (hierarchies and commandment), organizational (competences, procedures, etc.) and operational (from R&D to markets and back).

A4.4. What would an industry breaker do?

The method is simple to explain:

1) Accept the industry’s dominant designs (DD) and understand where they come from.

You can’t fool them but, by understanding where they originate from, you gain a key to an exit door. For instance, by realizing “banking is important, banks are not” (a famous quote from Bill Gates), you wouldn’t position banks at the center of a business ecosystem when dealing with billing procedures. Instead, you would attempt to understand why banks were created and for which original functions. focusing on the transaction act itself and secure the passage only, by getting rid of all other dimensions, actually becoming de facto contingencies. And this is potentially revolutionary.

2) Locate a few of them and dig out their functioning.

You’re not at the exit door yet, venturing in an unknown land. You need to first scope each DDs found well: do I need it? Is it optional? Who controls it? Do alternatives exist? So you prune them and extract a short list upon which to forward your new venture. The rest of the basket of DDs goes to the back burner for the time being for later steering.

This step presupposes a lot of leaning ability from the part of the company.

3) Find a point of break and open it.

Breaking a dominant design is the door to venturing into the unknown. By removing the locks that express anterior compromised methods and solutions, entire avenues of new possibilities can see the light of day, as long as the new choices are sound, a thing no market analysis can prove to you nor prove it remains impossible. The postulated choices are but undecidable at this stage. Those who dare to venture through may be rewarded with surprisingly successful bets. The trick will be to express the dominant designs in a way that they can be broken for exploring what it would mean then for the product. After which step, rupture axes need to be defined and explored.

The following illustrates what Apple has performed in terms of breaking the locks.

4) Later, intentionally create dominant designs regimes.

Here enter the notion of lineage (“a matching of key competencies and product families” [LEM 10]) whereby:

• – new knowledge has been created;
• – a products lineage is created by reusing this knowledge;
• – hybridization follows that aims at exploring all possible strategic market spaces corresponding to that new knowledge.

Through a succession of products, a stabilization path can thus be forged where innovation is still present. Dosed variations in product functionality, design, performance, etc., make the road to sustained presence on markets.

Because the client has to go through new learning processes each time a lineage is created, the new knowledge put on the market should be as intuitive as feasible. Then, the lineage process itself creates a virtuous “endogenous customer learning process” [LEM 10] that, for instance, Apple has been mastering epochally: a Mac user shall learn it all just by doing.

Reciprocally, the firm learns from customer experience throughout the entire lineage process.

A4.5. Conclusion

We are far from offer and demand, market saturation first principles and market erosion phenomena. When lineages prevail, the firm cannot preserve its past hierarchies and organizational methods but becomes more and more a “swarm” organization, dwelling into complexities at every stage of its operations.

As dominant designs in lineages follow classical S-shaped curves (slow growth first, then high growth, followed by slow growth at high output [LEM 10]), the industry regenerates a traditional pattern of mature industries anchored on their dominant designs. Those companies having a “revolutionary” DNA cannot content with this fate and will compulsively prefer to enter a radically new game, by again, breaking yet another dominant design. And here, we ever see Apple at its best. A compulsory evolutionary destiny of a born-catalyst.