“The real voyage of discovery consists not in seeking new landscapes but in having new eyes.” –Marcel Proust
Question: There is a small town that has only one street. It runs in an east-west direction and is exactly one mile in length. The town council recently granted liquor licenses to two taverns with the proviso that the establishments be situated such that they are maximized for the convenience of the town’s inhabitants as well as the tavern owners’ benefit. Where along the one mile street should the establishments be located?
Did you say that the taverns should be positioned on opposite sides of the half-mile point? This ensures that both taverns will draw an equal number of patrons but the locations are not maximized for the customers benefit. To do this, the establishments must be located at the 1/3 and the 2/3-mile marks. Under this scenario, both taverns draw an equal number of people but no one in the town walks more than a one-third of a mile.
The difference is that in the first scenario the tavern owners optimized the situation for their own benefit but that didn’t yield the best solution for the town’s residents. The situation has comparable real-world implications and it is a behavior worth unlearning because it can lead to missed opportunities.
In his book, Guns, Germs and Steel, Jared Diamond writes that one of history’s greater curiosities is the fact that the large island of Madagascar, which sits only 225 miles off the coast of Africa, wasn’t discovered by Africans. It was discovered by peoples from Indonesia — a country thousands of miles to the east.
Much the same dynamic is at play when large and established businesses miss big opportunities close to home. Clayton Christensen argues persuasively in his book, The Innovator’s Dilemma, that the habit of listening to one’s best customers – to the exclusion of everyone else — lays at the heart of many missed business opportunities. In cases as diverse as the disk drive, hydraulic excavator, steel and video-gaming industries, leading companies were often so focused on meeting the needs of their best customers — who frequently claim that they only want incremental progress — that they failed to pay attention to new breakthroughs on the fringe of their industry which were initially uncompetitive.
Over time, though, these breakthroughs got better and less expensive. Eventually, even the company’s customer came to recognize the benefit the new technology. Alas, by this time, it was too late for them to offer a comparable product at a comparable product. The result: the customer switched suppliers and left them with an obsolete product or service.
In other words, by hewing too closely to the needs of their most familiar customers they missed new opportunities lurking just beyond the horizon. The solution is to be aware of the dangers of optimizing for only one party and, instead, occasionally send small scouting parties out on the horizon to see what is next. Or, as Andre Gide, wrote, “Man cannot discover new oceans unless he has the courage to lose sight of the shore.”
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