<story><title>The Rise and Fall of Silicon Graphics</title><url>https://www.abortretry.fail/p/the-rise-and-fall-of-silicon-graphics</url></story><parent_chain><item><author>mrandish</author><text>You highlight one of the most interesting (and perhaps less understood things) about the key Innovator&amp;#x27;s Dilemma insight. Even if the senior management have read the Innovator&amp;#x27;s Dilemma books, know they are being catastrophically disrupted and desperately trying to respond - it&amp;#x27;s &lt;i&gt;still&lt;/i&gt; incredibly difficult to actually do.&lt;p&gt;Not only are virtually all organizational processes and incentives fundamentally aligned against effectively responding, the best practices, patterns and skill sets of most managers at virtually every level are also counter to what they must do to effectively respond. Having been a serial tech startup founder for a couple decades, I then sold one of my startups to a valley tech giant and ended up on the senior leadership team there for a decade. I&amp;#x27;d read Innovator&amp;#x27;s Dilemma in the 90s and now I&amp;#x27;ve now seen it play out from both sides, so I&amp;#x27;ve thought about it &lt;i&gt;a lot&lt;/i&gt;. My key takeaway is that an incumbent&amp;#x27;s lack of effective response to disruption isn&amp;#x27;t necessarily due to a lack of awareness, conviction or errors in execution. Sure, there are many examples where that&amp;#x27;s the case but the perverse thing about I.D. is that it can be nearly impossible for the incumbent to effectively respond - even if they recognize the challenge early, commit fully to responding and then do everything within their power perfectly.&lt;p&gt;I&amp;#x27;ve even spent time sort of &amp;quot;theory crafting&amp;quot; how a big incumbent could try to &amp;quot;harden&amp;quot; themselves in advance against potential disruption. The fundamental challenge is that you end up having to devote resources and create structures which actually make the big incumbent less good at being a big incumbent far in advance of the disruptive threat appearing. It&amp;#x27;s hard enough to start hardcore, destructive chemo treatment when you actually &lt;i&gt;have&lt;/i&gt; cancer. Starting chemo while you&amp;#x27;re still perfectly healthy and there&amp;#x27;s literally no evidence of the threat seems crazy. It looks like management incompetence and could arguably be illegal in a publicly traded company (&amp;quot;best efforts to maximize&amp;#x2F;preserve shareholder value&amp;quot; etc).</text></item><item><author>martinpw</author><text>Whenever this topic comes up there are always comments saying that SGI was taken by surprise by cheap hardware and if only they had seen it coming they could have prepared for it and managed it.&lt;p&gt;I was there around 97 (?) and remember everyone in the company being asked to read the book &amp;quot;The Innovator&amp;#x27;s Dilemma&amp;quot;, which described exactly this situation - a high end company being overtaken by worse but cheaper competitors that improved year by year until they take the entire market. The point being that the company was extremely aware of what was happening. It was not taken by surprise. But in spite of that, it was still unable to respond.</text></item></parent_chain><comment><author>duxup</author><text>Even just changing simple behaviors across a large company can be impossible.  I worked at a company with several thousand employees all required to attend mandatory training on &amp;quot;effective meetings&amp;quot;, several hours long spread out across thousands of employees.  Rule 1 was to have an agenda for the meeting.  This was something nobody did at this company and you would regularly attend meetings unprepared.&lt;p&gt;After all that training, still nobody did it (ok I did and one other guy).   That company couldn&amp;#x27;t change anything.   It was amazing.&lt;p&gt;They had a project to change a department into more proactive than reactive.  The solution was to create a lot of bureaucracy surrounding being proactive.  As you can imagine bureaucracy about being proactive was really just institutionalizing ... not being proactive.&lt;p&gt;I eventually left and work at a smaller company now.  It&amp;#x27;s been refreshing for years now when we can decide &amp;quot;this process doesn&amp;#x27;t work, let&amp;#x27;s not do it anymore&amp;quot; and it just happens.  Even just new coworker: &amp;quot;I won&amp;#x27;t be in tomorrow, who do I tell?&amp;quot;, me: &amp;quot;you just did, have a great time off&amp;quot; seems revolutionary after being at a big company for so long.&lt;p&gt;I&amp;#x27;m convinced that as the sheer numbers of humans increases the friction to making real change in a company decreases and there&amp;#x27;s not much you can do.   Fundamental change to respond to real disruption, nigh impossible.</text></comment>
<story><title>The Rise and Fall of Silicon Graphics</title><url>https://www.abortretry.fail/p/the-rise-and-fall-of-silicon-graphics</url></story><parent_chain><item><author>mrandish</author><text>You highlight one of the most interesting (and perhaps less understood things) about the key Innovator&amp;#x27;s Dilemma insight. Even if the senior management have read the Innovator&amp;#x27;s Dilemma books, know they are being catastrophically disrupted and desperately trying to respond - it&amp;#x27;s &lt;i&gt;still&lt;/i&gt; incredibly difficult to actually do.&lt;p&gt;Not only are virtually all organizational processes and incentives fundamentally aligned against effectively responding, the best practices, patterns and skill sets of most managers at virtually every level are also counter to what they must do to effectively respond. Having been a serial tech startup founder for a couple decades, I then sold one of my startups to a valley tech giant and ended up on the senior leadership team there for a decade. I&amp;#x27;d read Innovator&amp;#x27;s Dilemma in the 90s and now I&amp;#x27;ve now seen it play out from both sides, so I&amp;#x27;ve thought about it &lt;i&gt;a lot&lt;/i&gt;. My key takeaway is that an incumbent&amp;#x27;s lack of effective response to disruption isn&amp;#x27;t necessarily due to a lack of awareness, conviction or errors in execution. Sure, there are many examples where that&amp;#x27;s the case but the perverse thing about I.D. is that it can be nearly impossible for the incumbent to effectively respond - even if they recognize the challenge early, commit fully to responding and then do everything within their power perfectly.&lt;p&gt;I&amp;#x27;ve even spent time sort of &amp;quot;theory crafting&amp;quot; how a big incumbent could try to &amp;quot;harden&amp;quot; themselves in advance against potential disruption. The fundamental challenge is that you end up having to devote resources and create structures which actually make the big incumbent less good at being a big incumbent far in advance of the disruptive threat appearing. It&amp;#x27;s hard enough to start hardcore, destructive chemo treatment when you actually &lt;i&gt;have&lt;/i&gt; cancer. Starting chemo while you&amp;#x27;re still perfectly healthy and there&amp;#x27;s literally no evidence of the threat seems crazy. It looks like management incompetence and could arguably be illegal in a publicly traded company (&amp;quot;best efforts to maximize&amp;#x2F;preserve shareholder value&amp;quot; etc).</text></item><item><author>martinpw</author><text>Whenever this topic comes up there are always comments saying that SGI was taken by surprise by cheap hardware and if only they had seen it coming they could have prepared for it and managed it.&lt;p&gt;I was there around 97 (?) and remember everyone in the company being asked to read the book &amp;quot;The Innovator&amp;#x27;s Dilemma&amp;quot;, which described exactly this situation - a high end company being overtaken by worse but cheaper competitors that improved year by year until they take the entire market. The point being that the company was extremely aware of what was happening. It was not taken by surprise. But in spite of that, it was still unable to respond.</text></item></parent_chain><comment><author>throwaway4good</author><text>Everyone has been reading that book since the late 90es.&lt;p&gt;I remember a talk by Clayton Christensen talking specifically about Intel and how they setup the Celeron division to compete with themselves (based on his advice).&lt;p&gt;A key property of tech in economics lingo is that it is “natural monopolies” - all fixed cost and no variable cost.&lt;p&gt;This creates these winner takes all games. In this case both Intel, SGI plus others knew the rules and it just ended up with Intel taking the prize and it all becoming Wintel for a decade or so - basically until the smart phone allowed enough capital to be accrued to challenge the old monopoly.</text></comment>