BUSINESSWEEK ONLINE : OCTOBER 23, 2000 ISSUE
BUSINESS WEEK E.BIZ -- PERSONALITIES ONLINE EXTRA: Q&A with Tech-Marketing Guru Geoffrey Moore "An Old Economy company that embraces the New Economy is...an incredibly powerful animal" Geoffrey Moore became a hit in Silicon Valley when he published his first book, Crossing the Chasm, in 1991. The lively handbook essentially taught tech companies how to sell their gadgets to mainstream customers. Now the tech-marketing guru is setting his sights on Corporate America with his latest tome, Living on the Fault Line: Managing for Shareholder Value in the Age of the Internet (HarperBusiness; May, 2000). He urges traditional firms to focus on their core strengths and shed the rest, which he calls context. Here, Moore discusses his books, his motivations, and his prescriptions for traditional companies with Business Week's Faith Keenan. Q: Where was "the chasm" born? A: It had a two-part gestation. In 1987, I joined Regis McKenna, a high-tech marketing firm. With many clients, initially there were great press launches, enthusiasm about the company -- that this would be the next big thing. Then all of a sudden, it would fall off the radar. Your first thought was to blame the management, that these guys don't know what they're doing, we should replace them. But that leads to Part Two: In my career, I had taken two, maybe three, products into the chasm and none out. I assumed I had my share of personal failure and needed to move on. Then I thought, "Goddamn it, this is happening too often. It can't be a mistake. There's something going on here." So I drilled down in the technology-adoption life cycle, and I realized the visionaries [early adopters of technology] and the pragmatists [the mainstream] are going to hate each other. The visionary thinks the pragmatist is brain-dead, and the pragmatist thinks the visionary is dangerous. They'll repel each other. That's where the gap comes in. I called it the chasm, and it struck a chord. Q: How do you help companies cross it? A: Many executives are unconsciously competent. They don't have a model of what they're doing, they're just doing it. It works great until they hit a bend in the road that they didn't anticipate and the model breaks down. If they can figure out where they broke up, they can reorient and take the next steps forward. This is where we have to have our therapy session. That act of deconstruction and reorientation is what the Chasm Group does for a living. It's like putting Legos on a table -- let's see what we can build. Q: What motivates you besides money? A: As you start to operate in a high-tech world, it is a very heady experience. There are a handful of individuals in venture capital, law, on Wall Street -- the Mary Meekers -- who get to play this game. You start building relationships where you can broker and make things happen that are part of the emergence of the sector. Instead of commenting on it, there's a larger orchestration of this market. You get invited to participate in more, higher-level decisions. That's part of what's motivating us now. We're on the edge of that now. We're not in the center of it. It's kinds of humbling now. Q: So, you want to be a bigger player? A: Yes. It's a little like Hollywood. You have a bunch of players, as you get into the next ring of the circle, new opportunities emerge. None are financially driven at the high end. This is not the billionaire boys club, though the financial implications do get better. It's more like it's a fun game to play. Q: And you want to play with the big boys? A: Absolutely. But not just the big boys. My view of Fortune 500 boardrooms is these folks have missed the bus big time. They'll go through decades of pain, needless pain, if they stay on the course they're on. An Old Economy company that embraces the New Economy is like a Tyrannosaurus rex that got nimble -- it's an incredibly powerful animal. But most, if they stay on the track they're on, will be like the Brontosaurus. They're just going to walk off into the pond and drown. Q: Why should they listen to you if you have no experience in their businesses? A: I say, "I don't know your business, but I do know about what happens when technology disrupts things." In the auto industry, for the last 50 years, there have been no tech disruptions. You can drive a car built in 1965, but you can't run a computer built in 1980. Now these sectors will get disrupted big-time. And there's no DNA in those management teams that makes them understand that. Well, there might be some, but it's accidental. The boards have no idea what to do. Not one. Q: Who doesn't get it? A: Compaq. Xerox. Kodak. Hewlett-Packard. Q: Who does get it? A: Enron. Texas Instruments. BPAmoco. All have outsourced or sold businesses big-time. Q: What about Procter & Gamble or AT&T? Are they crossing the chasm or just screwed up? A: I think P&G is screwed up. In 1978, it was synonymous with the best in the market. Then it got into a late bureaucratic culture, brought in this guy to stir up the animals, and they just sabotaged him. The culture just spit him out. O.K., they proved him wrong. Nice job. Now what will they do about it? The answer: "We'll retreat into the bunkers and won't listen to the rest of the world." But if you do that, the capital markets will punish you perpetually. Q: And AT&T? A: AT&T is a classic core-context problem. People like [AT&T Chairman and CEO] Michael Armstrong and [Hewlett-Packard Chairman and CEO] Carly Fiorina, boy, do they get it. They're core to their toenails. My alert to them is that if you have the core-context problem that I'm afraid you have, your personal hand on the strategy tiller steering the company to a new vision isn't going to be enough. If the rest of the company is caught up in managing old context stuff and you don't find a way to get that stuff out of the company, you have trouble turning the boat. Q: Have you ever worked for them or any of the Fortune 500? A: No. That's what this new book is for. This is just an ad campaign, really. Q: You delivered the manuscript of Fault Line before the dot-com crash in April. Have you changed your views since then? A: If I could rewrite the manuscript now, I wouldn't change the idea. The disruption that the dot-coms embody is every bit as serious a force as I said it is. No Fortune 500 company should feel the pressure is off, because the forces that led to that enthusiasm are still operating. But a lot of brain-dead abuses of financial markets have been corrected. But I would change the rhetoric. In several places, I use the dot-com as bogeyman: The dot-coms are coming, the dot-coms are coming. Right now, it doesn't look like much of a bogeyman. And the first reaction is, "Aha. We told you that was Sodom and Gomorrah, and the righteous are saved." But I would argue, "Don't kid yourself." _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS EBIZ Contents for issue dated Oct. 23, 2000 Geoff Moore Goes Mainstream RESUME: Geoffrey Alexander Moore TABLE: Geoffrey Moore's Laws ONLINE EXTRA: Q&A with Tech-Marketing Guru Geoffrey Moore INTERACT E-Mail to Business Week Online

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