More Confusion from the WSJ: Creativity vs. Management

Yesterday's Wall Street Journal was a motherlode of interesting articles on which to comment.

The first is Lee Gomes' follow up to the Gates-Otellini op-ed letter in the Journal last week. That letter was their "reply" to comments by Journal technology reviewer Walt Mossberg's comments on the relative merits and status of Apple's "closed" design system vs. WinTel's "open" system. I wrote some thoughts about the Gatellini letter here.

Gomes stated that he would "like to play the peacemaker in a debate kicking around in these pages over the past few weeks." He then goes on to describe the prior written pieces, and their positions.

I don't like to seem to be harsh on any one person, but I have to say, this is the second article in a row from Gomes, whom I usually enjoy reading, that simply contains shallow thinking.

Consider the title of his piece yesterday, "Above All Else, Rivals of Apple Mostly Need Some Design Mojo."

Really? Indeed! How wonderfully simple to fix. Just call a few industrial designers, and Microsoft is back on track to consistently superior return performance for the rest of this decade. Same for intel, eh?

I don't think so. No, it runs far deeper. Like product strategy, choice of arenas in which to compete, and corporate sizes so large as to insulate the senior executives from a meaningful appreciation of the amount of value destruction that continued mediocrity will cause.

I found Gomes' last paragraph to be the most telling evidence of his misunderstanding of what has been going on in this situation. He writes,

"Apple has worked hard in recent years to adopt some of the business-process efficiencies that the Wintel companies have long taken for granted. Its rivals, then, ought to be able to make themselves a little more creative."

Again, it's not that simple. I have undertaken proprietary research on the occurences and sources of consistently superior total return performance among large-cap companies. My findings have shown that innovation and creativity are the most unique, important attribute of such companies. Whereas expense and process management are fairly easy to hire and implement, true innovation and creative product development, which drive consistently superior revenue growth, appear to be the rare talents.

Therefore, it's not going to be very easy for Microsoft and Intel, at their size, and with their bloated bureaucracies, to simply "make themselves a little more creative." Not when Chairman Bill is the self-ordained "chief software architect" of his software empire. As I have written prior to this, if Microsoft is to break historic patterns, it probably has to seed entirely new companies. For more on this, see my piece on new style corporate governance.

To close, I remain disappointed that the WSJ continues to pump out such shallow and badly-conceived ideas about business strategy. I doubt it would have taken more than a few phone calls to business colleagues for Lee Gomes to be disabused of his notion that, just like process efficiency improvements, creativity can be easily hired or "managed" on demand.

It cannot. And that, dear readers, is why Steve Jobs' Apple is running (profitably) loose among product/markets no other PC software or hardware providers can even begin to consider. He has a natural flair and appreciation for design and usage that Bill Gates has never displayed. And in the current environment, that now matters.