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IPTV Innovation and Next Generation Thinking

Business Week magazine has a commentary by Mark Gimein entitled "The Phone Companies Still Don't Get It" that describes his impressions, as the result of being invited by AT&T to observe a demonstration of their U-verse IPTV service in San Antonio, Texas.

The theme is unfortunately a recurring one, as telecom service providers around the world attempt to transform their legacy business model, and thereby launch new entertainment services, they're building next generation networks -- but they're applying previous generation organizational thinking.

I've already contributed my own perspective to this evolving storyline, and the analysis always seems to bring us back to the same place -- the incumbent telcos seem to be fighting the enemy within; their internal legacy 'command and control' business culture.

The challenge ahead is daunting because the traditional compliance doctrine of the 'telco collective' inhibits creativity and strategic foresight. Now their goal is to undo, or otherwise dramatically change, an outmoded belief-system that essentially was ingrained into their workforce during a century of developing monopoly-centric business practices. As they searched for more worldly forward-looking thinkers and leaders within their own ranks, some have found that their creative talent pool was little more than a talent puddle.

Undeterred, the telcos are seeking advice, and some have established very close ties with a few select vendors they have entrusted to help lead them in the right direction. I contributed to a recent Telephony magazine column entitled "Buyer/Supplier Linkages Crossing Traditional Lines", where I've voiced my concerns about relationships that started with systems integration outsourcing objectives and somehow evolved into business strategy counselling and guidance.

Furthermore, upon reading a thought provoking commentary by Nick Ingelbrecht, Research Director at Gartner, I felt compelled to comment on his article entitled "The Need to Structure Companies for Innovation."

To clarify the problem, this isn't an organizational constraint that is the result of a lack of intellect. Instead, the dysfunction that is manifested as impaired judgement has its root in nepotism and a fundamental lack of experience diversity. In the absence of objective opinions -- expressed as informed points of view -- even the most myopic perspective and associated conclusions can actually appear rational.

The essential problem is further compounded when the naive and insulated telco executive leadership acts upon the biased recommendation of those who have very apparent vested interests. Misguided competitive threat assessments therefore result in telco business strategy recommendations that are founded upon a delusional basis of under-developed assumptions.

Meanwhile, non-traditional telco competitors are free to plan their progressive and methodical relegation of the telco business model to the increasingly profit-restricted role of the 'commodity' network infrastructure provider. IPTV innovation can not thrive in this environment, given this scenario, and based upon these market dynamics.

Telcos can't be the last-to-market video entertainment provider with a "close follower" mindset. They must substantively raise their bar of expectations to surpass, not merely match, both the established and emerging industry players.

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