Constraints, Fresh Starts, and Seoul
By Scott Anthony
I've been in Seoul, South Korea for most of this week. It's my sixth journey here over the course of the past year, and I find I enjoy the city more with each visit. There's a vibrancy you feel walking down the streets, a sense that the country — which has achieved so much over the past four decades — is still on the up-swing.
A visitor to Seoul can't help but notice technology's ubiquity. On the subway you'll see people watching high quality television on their handsets. The broadband speed at hotels puts the United States to shame. Sensors on escalators help to conserve energy by turning the escalator off when it is not being used. The toilets have more buttons than an Xbox controller (this is not hyperbole).
Commenting on the broadband speed available here sparked, one colleague said to me, "It's so fast. I guess the U.S. just doesn't have the right government policy to support the deployment of high-speed Internet access."
Key political differences may have helped Korea build world-class Internet infrastructure, but what also helped is the fact that constraints and fresh starts can be innovation rocket fuel.
About half of South Korea's 50 million people live in the greater Seoul area. That constrained, contained population is a boon to certain forms of innovation, because it makes provisions of services much more economical, just as there are some business models that work well in Manhattan but nowhere else in the United States.
My colleague Clayton Christensen served a two-year mission for his church in South Korea in the early 1970s. When he describes his time there, he always mentions two things. First, he talks about how he was highlighted in a newspaper as the tallest person in Korea. Second, he talks about the country's abject poverty. In the Korean edition of The Innovator's Guide to Growth, he wrote:
"When I arrived, the country was deeply impoverished. I remember watching, for example, as workers building a new sports stadium in Pusan carried hand-mixed concrete up bamboo scaffolding in back packs," he wrote. "A few years ago I visited Mongolia, where my daughter Annie was serving a mission for our church. Mongolia is today one of the poorest countries in the world. But it is far more economically advanced than Korea was 30 years ago."
It's hard to believe that when you look around the gleaming metropolis today. The advantage, of course, is that Seoul got to design the modern version of its city basically from the ground up. That means it has a modern, super-efficient subway system, roads that can go as wide as 10 lanes, and an underground infrastructure that is easier to upgrade than the tangled mess that lies beneath older cities.
Incumbents don't have the luxury of making fresh starts, making it harder for them to master game-changing innovation. As an analogy, think about how easy it is for children to learn new languages. I've watched my four-year-old son pick up Chinese in our six months in Singapore. He doesn't have to unlearn anything to speak the language, so it's easy for him. I struggle because I have to de-program parts of my brain before I can learn.
Still, there are three things a company can do to get some of fresh start benefits:
• Bring in outside perspectives. Outsiders help to ensure that companies don't end up mindlessly mimicking past behavior.
• Limit borrowing from the core business. Remember, every asset has a corresponding liability. I always advise companies to ask a simple question. "If an entrepreneur had access to a resource for free, would they take it?" If not, it's a good sign that you shouldn't "gift" your capability to an innovation venture.
• Impose constraints. Narrow budgets and tight time frames can force people to follow novel approaches because they have no other choice.
If they follow these tenets, companies can get the best of both worlds, the resources of an incumbent that startups can only dream of, and the liberation that comes from fresh starts.