This week’s book is a favorite of mine that was super inspiring when I started my first company:
Peter Drucker wrote “Innovation and Entrepreneurship” in 1985. He wrote it as his “manifesto” for the New Business Development Group. And, at the time, it was probably the first systematic attempt to explain innovation and entrepreneurship as a discipline.
I especially love his description of incongruities:
An incongruity is a discrepancy, a dissonance, between what is and what “ought” to be, or between what is and what everybody assumes it to be. It bespeaks an underlying “fault.” Such a fault is an invitation to innovate. It creates an instability in which quite minor efforts can move large masses and bring about a restructuring of the economic or social configuration.
The changes that underlie incongruity are changes ”within” an industry, a market, a process. The incongruity is thus clearly visible to the people within or close to the industry, market, or process; it is directly in front of their eyes. Yet it is often overlooked by the insiders, who tend to take it for granted.
Drucker’s focus on the difference between reality and perception is especially important. Many times I have failed to close this gap myself.
He continues with an classic example to illustrate his point:
The television in Japan was both an example of the unexpected success but also an example of the incongruity between perceived customer values and customer expectations. Matsushita (better know by its brand names Panasonic and National) owes its rise to a willingness to run with the unexpected success – the television set – in Japan.
Long before a famous Japanese industrialist told his American audience that the poor in his country would not buy a TV set because they could not afford it, the poor in the United States and Europe had already shown that TV satisfies expectations which have little to do with traditional economies. But this highly intelligent Japanese simply could not conceive that for customers – and especially poor customers – the TV set is not just a “thing.” It represents access to a new world; access, perhaps, to a whole new life.
Matsushita, however, was intelligent enough to accept that the Japanese farmers apparently did not know that they were too poor for television. What they knew was what the television offered them, for the first time, access to a big world. They could not afford television sets, but they were prepared to buy them anyhow and pay for them. Toshiba and Hitachi made better sets at the time, only they showed them on the Ginza in Tokyo and in the big-city department stores, making it pretty clear that farmers were not particularly welcome in such elegant surroundings.
Matshita when to the farmers and sold its televisions door-to-door, something no one in Japan had ever done before for anything more expensive than cotton pants or aprons.
If you would like to read this book, tell three people about my company’s latest project, WikiReader, and then send me an email. Before next week, I’ll chose a name from random, and send the winner my book.
Shipping, anywhere in the world, is on me.