Been meaning to write this post since I read the article What Detroit Can Learn From Silicon Valley by Andy Grove (Intel) the Journal last week.
I do not get too political on this blog and don’t wish too in this post. But as we live in the world of bailouts and government intervention, Grove’s comments are too timely. I’m not talking about his perspective about vertical integration but his points are quite valid there too. I think his point about government involvement (or not to) is spot on.
“Imagine if in the middle of the computer transformation the Reagan administration worried about the upheaval and tried to rescue this vital industry by making huge investments in leading mainframe companies. The purpose of such investments would have been to protect the viability of these companies. The effect, however, would have been to put the brakes on transformation and all but ensure that the U.S. would lose its leadership role.”
This is a very compelling statement. Think about it. More often than not, people that know me know that I will fall into the camp of letting innovation, letting customers choose and the markets decide. In the long term, letting companies that have fundamental problems and issues figure it out themselves forces creation, value for customers and quite effectively removes bloat from the market. Sometimes sea changes happen, companies go away, new ones enter that have learned from the past and are built for the future. Holding up things for a few more rounds that are clear are not working typically costs us in the short term (money), costs of in the long term (money) and the scariest consequence could prevent new emerging greatness from places we aren’t aware of yet or least expect. Definitely Darwinian but in most cases, the best path.
Something to think about.