IoT & the Drawer of Fitbits Problem

One of my business heroes, Peter Drucker, famously said that “culture eats strategy for breakfast.” This does not mean that strategy is unimportant. On the contrary, strategy is critical to success and many companies confuse tactics with strategy on a daily basis. Culture is the way in which your corporate values, strategy and execution manifests itself in the actions and attitudes of every employee.

So why is culture relevant when talking about IoT? IoT is a disruptive technology that requires a level of innovation around business models and processes that far exceeds the technical innovation. The technical challenges are not always easy, but they are usually very solvable. It is a similar situation to the early days of the internet and mobile when businesses were trying to figure out how to apply the technologies in their business. Day to day business owners can sometimes struggle to adopt the next new thing as they are measured and compensated for doing the current thing well.

When was the last time that you heard of a “Head of Mobile?” As a technology matures, in time it simply becomes another tool in the toolbox. I am an advocate of having someone to lead IoT in medium to large companies, because the industry is still very immature and solutions will struggle to be properly designed and implemented by many business units in the next few years. IoT needs a dedicated internal champion to bring it to life.

Microsoft recently announced that they are finally killing off the Windows Phone ( I commented that not a single player from the traditional PC ecosystem could build a business in mobile phones. In the end, it was a culture problem unrelated to resources or having enough smart people. We have seen the same thing many, many times in technology, from Kodak (who originally invented the digital camera in 1975), Nokia (owned ~50% mobile phone market share) and many others.

One of the most common questions that I am asked is “aren’t the traditional telecom operators going to own the IoT space? They are perfectly positioned.” My slightly harsh response is that “yes, they are well positioned, just like they were for mobile payments, app stores and social networks.” Experience tells us that it is very difficult to optimize an extremely large, successful business while creating the next big thing. The metrics, skills and most importantly, the culture required is very different.

Remember when HP removed the word “invent” from their logo a few years ago? The founding company of Silicon Valley (and the original garage startup) shifted to acquiring more innovation than they produced internally. All of this tells us that innovation must be incubated in a different environment than the traditional business, and that IoT is subject to the same rules.

Like any other new technology, the most successful projects do not try to bet the farm from the start. Successful projects set modest expectations, clear milestones, and heavily communicate with all stakeholders. These projects hit bunts and singles, fill the bases, and then aspire to make a much bigger impact after they have earned the right through the success and learnings of the initial work. Treat IoT as you would staff, resource, manage and measure any other successful innovation process and you will significantly increase the odds of having a successful IoT project.

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