When I started using my new Amazon Kindle, their 10.3 ounce electronic reader, it became clear to me that Jeff Bezos is rewriting our relationship to content and information devices. On My Kindle (yes its content is customized to me), I can access 115,000 books, 327 blogs, 18 newspapers, and 15 magazines, play MP3 music, read and send email, browse the internet, look up the meaning of any English word instantly, and view files - and it boots up in less than ten seconds. No wonder they can't keep it in stock. Some of the functions are clunky - as you'd expect in version 1 - but book reading is easier than "using" a paperback. Amazon charges a hefty price for both the device ($399.00), digital books ($9.99 to $120.00 or more), and even blogs ($0.99 per month for O'Reilly). Not only is Amazon getting paid for digital content but the Kindle allows them to link content to customer - the Rosetta Stone of any media company. The mind reels with what CEO Bezos will be able to do if he can achieve mass penetration of this device. The Kindle is not just a reader, it is an entirely new form of network computer - and like the BlackBerry, will create a whole new sets of user behavior. Given that Amazon knows me, my credit card number, my buying habits, and they back up all the electronic content on my Kindle - including my notes - they can become the portal for any and all relevant media. iTunes should take notice, as should every media company.
The general lesson for all companies is that Amazon has this breakthrough strategic option because Bezos did not stick to his knitting. Think of the courage it took for Amazon to enter one of the most crowded and competitive product categories in the world - consumer electronics. Imagine trying to get investment capital within an old line company like the New York Times - to create a product like Kindle. My bet is that the executive chorus would universally shout: Stick to our knitting! (even if our knitting is predictably shrinking).
In a recent Business Week interview Bezos said that companies which innovate within their existing competencies are doomed to fail; innovation means building new competencies. Gary Hamel eloquently said in his book Leading the Revolution most executives in an industry are "blind in the same way" - both to what is happening and to what they don't see happening. In order to perceive new things, leaders must be willing to try innovations beyond current competencies! Put another way, if it is comfortable it is probably not profitable! You need to ask yourself:
- Is my firm's dedication to the core killing our ability to innovate?
- How can I, as a leader, help discover new customer needs?
- Do I have the courage to lead the investment in new capabilities to fulfill those needs?