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Some of the world's smartest technology companies may be a little bit too smart for their own good. Fueled by corporate leaders with big egos and a desire to develop and control new markets, companies like Apple, Google and Microsoft are increasingly treating their operations like a game of chess.

But is this really such a good thing? There's a strong argument to be made that companies engaging in the type of calculated strategy required to win a game of chess actually risk doing very foolish things.

A good example of this comes in the form of Apple, which has launched a questionable lawsuit that clearly targets Google. A growing number of observers are starting to wonder if the company is becoming "preoccupied with zero-sum maneuvering versus hated rivals". Indeed, it's clear that Apple CEO Steve Jobs isn't the biggest fan of Google, and some believe that the lawsuit is "nothing more than a manifestation of Jobs’s own sense of injustice".

But is Apple's patent lawsuit proxy war against Google really such a smart move? Apple may arguably be the world's top mobile device company, but it recently announced a tablet device that left many disappointed. Which begs the question: when did Apple decide that its resources were better spent on litigation than innovation?

Apple isn't alone. Google has lobbied against the competition, and its recent threat to pull out of China was clearly a business maneuver designed to change the game in China, one of the few countries it doesn't dominate in search. Yet while Google has been focused on playing chess with competitors such as Apple and Microsoft, and with entire nations like China, it completely blew the launch of a major social networking initiative that it was clearly hoping would help keep it relevant in the social networking space as Facebook continues its rise. For its part, Microsoft is now engaged in an open effort to see that the same antitrust regulations it suffered from are used against its chief online rival, Google. Yet despite Microsoft's gains with Bing, it's unclear whether this effort will actually help Bing, or simply hurt Google.

So what's the problem here? While three of the world's most successful technology companies have been busy playing chess with each other, they have been ignoring customers. Perhaps correlation isn't causation, but I think it's obvious: customers usually benefit very little from the chess games companies play. Certainly, Apple's resources are far better spent on product development than a ridiculous patent lawsuit. A little bit more focus on the basics instead of world domination would probably keep Google from tripping on its shoelaces. And Microsoft's desire to do Google in will require greater innovation, not just a little help from antitrust regulators.

Obviously, nobody is going to argue that companies shouldn't pay attention to the competition and seize opportunities to gain advantages over the competition, but companies should also be strategic about their strategies. Companies can be too smart for their own good, and it usually starts when "zero-sum maneuvering" becomes more important than the customer.

There are six questions corporate leadership should ask when developing strategy:

  • Are we acting logically?
  • Is this the most effective use of our resources?
  • Can this have a positive impact on our reputation?
  • Does this grow the market, or create new markets?
  • Are we creating value?
  • Will this benefit our customers?

If a company's leadership can't answer 'yes' to all six of these questions, particularly the last two, leadership may want to consider that it's being too smart for its own good. And that's never a wise thing, as customers are increasingly learning the hard way.

Patricio Robles

Published 5 March, 2010 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2378 more posts from this author

Comments (5)

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Akash Sharma

Hi Patricio, Great post on what describes being ethical in doing business,These companies are loved by certain percentage of their users and stuff like this does have an impact on their thoughts about the brand.

Recently Facebook also did the same by patenting the real time feeds, it was a slap directly to companies like twitter and indirectly to Google which has just started buzz.

Its quite confusing to understand that why do they do it? is it a feeling of insecurity, vengeance or what? A lot of rethink strategies by corporates are required.

over 6 years ago

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Tony Vahl

These companies are attempting to create shareholder value. Their particular markets are maturing, and they want to protect their market share. Personally, I think Apple is doomed to repeat it's Mac failure of the 80's, where they lost to more open competitors that used the IBM platform, like Dell and Microsoft. The Android OS on multiple platforms looks like a winning strategy for Google, long-term. Google seems to be the Microsoft of search -- they are determined to keep creativity as part of their corporate culture, to their credit. Microsoft is becoming like IBM -- old and stodgy. Very corporate, with lots of infighting. These companies have all made mistakes before -- heck, Microsoft worked hard on touch-screen tablets for years, and that innovation didn't help them. I don't think innovation is a cure-all. As for the iPad -- I'd be careful judging that as a failure based on the reaction of a small segment of the population.

over 6 years ago

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Allen Bonde

Nice post!  Three words: Markets are self-correcting (maybe 4).  The above commentary could have easily been written about big banks, the big 3 automakers in the US, big telecoms...but the tech space also has some pretty big egos to deal with ;-)

When companies try to control a market vs serving a market they may gain initially, but in the end "blocking" maneuvers can't really stop the forces of technology innovation and creative destruction.  Especially if your business IS technology.

over 6 years ago

Patricio Robles

Patricio Robles, Tech Reporter at Econsultancy

Tony,

"Shareholder value", like all value, is created in the marketplace, not in a courtroom or through chess-like backroom strategy. A successful iPad, for instance, would do far more for Apple than an expensive and distracting lawsuit designed to harm Google.

Allen,

Great comment. The only true way to "control" a market is by serving it and serving it well. Anything else only delays the inevitable.

over 6 years ago

Ed Stivala

Ed Stivala, Managing Director at n3w media

Really good post Patricio.

Let's not forget Opera though. Political courtroom chess playing is not limited to the main players in the industry. The consequence of their 'victory' seems to be that many users who really don't care about the browser are now faced with more complexity and in some cases possibly concern. Opera may have won, but in my opinion many users 'lost'.  

over 6 years ago

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