Archive for March, 2003

Living on the Fault Line. Geoffrey Moore et al

Geoffrey Moore has climbed to the top with nary a new idea. So why is he so useful?

In this era of the new new thing, it’s refreshing to meet a guru who readily admits his ideas are not only not new, but not even really his own. Geoffrey Moore, one of Silicon Valley’s most influential thinkers, does so unabashedly – and for good reason. The very basis of his business thinking is found in the notion that marketing, as opposed to innovation, is the key to success.

His current book, Living on the Fault Line (HarperBusiness), for example, takes Harvard professor Clayton Christensen’s idea of disruptive technologies, throws in the value discipline model of consultants Michael Treacy and Fred Wiersema, and views them through the lens of the wrenching changes brought about by the Internet. In doing so, Moore manages to assimilate the best of each intellectual model and pitch the aggregate to an audience eager for concentrated thinking about managing in the new economy. “My intellectual style is to try to assimilate ideas and models no matter where I encounter them,” Moore says. “What I have tried to do for better or worse is fuse them into a supermodel.”

This fusion has got the attention of CEOs and book-buyers alike. The 53-year-old Moore, a former English teacher with a Ph.D. in medieval and Renaissance literature, today has a client list that’s a who’s who of the high-tech elite, including Hewlett-Packard (HWP), Microsoft (MSFT) and Oracle (ORCL). As founder and chairman of the Chasm Group consulting company, he commands a day rate of $15,000. And his books, which are now required reading at business schools from Harvard to Stanford, have sold more than 600,000 copies.

Moore’s supermodel is, more specifically, something he calls “the technology adoption life cycle,” a process by which technological innovations are eventually accepted by the masses, and it informs almost every aspect of his work.

It, too, is unoriginal. The theory’s origins are in a somewhat arcane field called diffusion research, the brainchild over a century ago of a French judge named Jean-Gabriel de Tarde. An amateur sociologist, de Tarde wondered how it was that inventions took root in society and over the years developed what he called the “laws of imitation” to codify the process.

Forty years later, University of Iowa researcher Bruce Ryan and his assistant Neal Gross put de Tarde’s theories to work in a now legendary study of how a farming community gradually accepted technological innovation: in this case, a new corn hybrid. The innovation spread – diffused – in distinct stages. In the first phase, it was taken up by a small group the researchers called innovators. These were the better-traveled farmers who were generally wealthier and more willing to take risks. They were quickly followed by the early adopters, community leaders who were willing to take a gamble once they had seen the success of the innovators. The technology really took off, though, when the so-called early majority and late majority farmers took up the cause, establishing the innovation as a new standard.

Drawing on this research, as well as that of Everett M. Rogers, whose 1962 book Diffusions of Innovation further refined the field, Moore began to develop and popularize his own model. His real genius, though, was in providing practical thinking to complement the academic theory – takeaways.

While working for marketing expert Regis McKenna, Moore had seen several promising new technologies fail to pay off for the firms that developed them. Pen-based computing, for example, tanked despite millions of dollars in research, cool technology and a core base of passionate users. Moore argued that this occurred because each phase’s fundamentally different customers required unique managerial strengths – you sell to innovators one way and the late majority another. Success would go not so much to managers able to innovate as it would to managers able to create enough momentum to cross over from one phase to the next.

Those ideas eventually grew into Crossing the Chasm, published by HarperBusiness in 1991 to huge success. Since then, Moore has expanded his model to show how the technology-adoption life cycle affects all areas of corporate life. Inside the Tornado took a strategic look at how companies can select and successfully maximize profits in new markets. In The Gorilla Game, he and coauthors Paul Johnson and Tom Kippola showed how investors can use the life-cycle model to spot companies that have successfully crossed the chasm to become “gorillas,” market-dominating companies like Cisco or Microsoft.

And in Living on the Fault Line, Moore expands his model to the next logical realm: big, publicly traded companies. Moore argues that at a time when the Internet is forcing executives to figure out precisely what is core to their business, they can turn to the technology adoption life cycle as a useful tool in determining what resources to keep and how to position them.

What’s remarkable about Moore’s technology adoption life cycle is how well it applies to the life cycle of Moore himself. If his ideas about marketing were themselves a high-tech product – and his publisher will assure you they are – then Moore serves as living proof that market leaders achieve prominence more through marketing brilliance than product innovation. He says his success is “rooted in the essence of the adoption model itself … the way in which people make adoption decisions is based on looking at the behavior of the people in the adjacent neighborhoods. The overwhelming majority of high-risk, low-data decisions are based on the actions of the herd.”

So how did Moore get to the head of the herd? Through relentless proselytizing he has achieved a form of intellectual “lock-in” among high-tech leaders, who regularly cite such Moore-isms as gorillas and “bowling alleys” (profitable market niches that companies can use to topple other niches into acceptance). He meets with about 70 to 100 companies a year, speaks constantly and leverages his inside position with leading firms to garner intelligence from some of the Valley’s brightest stars.

In addition, Moore has proved to be a brilliant marketer of his own intellectual products. Just as one of Lee Iaccoca’s strokes of genius in turning around Chrysler was using the same K-Frame as a platform for a family of different-looking vehicles, Moore has found a way to both serve and expand his core audience by building a family of products from the same intellectual infrastructure.

His most recent book, for example, argues that as a result of the Internet’s turning everything from atoms to bits, the technology adoption life cycle now applies to virtually every company – a condition that broadens Moore’s ideas about technology-impacted markets to, essentially, the entire world of business.

Moore says he plans to spend the next decade cracking the culture code. Having identified the markets and strategies for producing successful high-tech products, he is now turning to the organizational makeup that enables – or prevents – companies from following through on those ideas. Already citing such thinkers as Peter Senge and Ichack Adizes, it is clear that he has begun the R&D for his next great product.