Absences Speak Loudly at Video Game Expo

By NICK BILTON

Published: June 12, 2011

http://www.nytimes.com/2011/06/13/business/media/13gaming.html?_r=1

This article underscores the myopic view of the future held by leaders with very successful products/systems. It builds off the last posting on: “Building a Shared Mental Model to Rekindle Collaboration”. What is the correct mental model for this business? My guess it is not those espoused by the leaders of Microsoft, Sony, and Nintendo but the opportunity potential from Apple and Facebook systems. Without recognizing the realty of the situation and aggressively pursuing alternate business designs to create a more robust portfolio in the future, my bet on sustained growth is not on the big “off-the-shelf” offerings but a rather one with a richer mix of the alternate model. What set of questions would you offer to force the CEO’s of these companies to change their corporate mindsets for this situation?

LOS ANGELES — The big names were all here last week at the Electronic Entertainment Expo, the video game industry’s annual conclave — Microsoft, with its XBox; Sony, with its PlayStation; and Nintendo, with its Wii. But they all make console games, and these days the game platforms enjoying the most explosive growth are a social network — Facebook — and a mobile device maker — Apple.(THIS IS THE CORRECT MENTAL STATE VIEW OF THE FUTURE)...
...That deadly confusion begins with a flawed mental model that fails to reflect reality but still serves as the basis for taking action. Like people in survival situations, the ability to develop an accurate mental model often separates successful companies from organizations that do not survive.So what exactly is a company's mental model? Simply put, a robust mental model eliminates internal confusion. The mental model is a framework that simplifies a potentially complicated strategy, allowing everyone in the organization to internalize the strategy and be guided by it.Great companies build and share their mental model internally in ways that enable managers and employees to independently make critical decisions day in and day out that are aligned with the strategy. Without a strong mental model strategy can become open to interpretation, decision making can become bogged down, or both can occur at once........The sales team prided itself on bringing in the biggest deals with huge volumes from these target customers. Their mental model was essentially, "Big customers, big volumes, big dollars".While this interpretation of the strategy seems valid, there was a fatal flaw: big customers with big print volumes also command big discounts........A simple, but powerful exercise for building a shared mental model brought the cross-functional teams together. Using this approach, each function separately answered a series of key questions, including:Which customers are the most profitable?  How well aligned is our value proposition to their demands?  What differentiates our value proposition from competition? How will we compete and win?