Archive for Strategy

EVs Facing a Thelma & Louise Moment

Environmentalists and foreign oil hawks alike have gnashed teeth over the apparent slow adoption of electric vehicles (EVs), lamenting that “if only people knew [fill in the blank]”, EV sales would quickly surpass those of conventional fossil fuel-powered cars. EV supporters point to the lack of a national charging network, ignoring the fact that you can plug in – though maybe not to a high-amperage socket – nearly anywhere in the US. Build the infrastructure, they claim, and EV sales will take off. Others point to the general slowdown in auto sales brought on by the Great Recession.

There is a current of truth to all of these explanations, but none tell the whole story. I’d like to offer an additional – and I think fundamental – explanation for why EVs are not yet mainstream.

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Reinvention Redux

My post several weeks ago on reinvention spurred a number of interesting offline conversations. The first of which was learning that Waste Management is undertaking a similar portfolio strategy to BMW in figuring out what their long-term sustainable business model is. Their blog discusses some of these businesses if you’re interested in reading more.

But the reason for revisiting the topic is that I told an incomplete story. The portfolio strategy I described works well for established businesses that are well-capitalized and have long-term time horizons. What about small and mid-sized businesses that live and die by their ability to generate current positive cash flow? Read more


Reinvention is hard. It’s an order of magnitude harder for companies successful in their industry, and exponentially harder for companies whose business depends on natural resources that are becoming scarcer and facing greater price volatility.

Nowhere is this more evident than in primary energy production – coal, petroleum, and natural gas. Exhibit A is BP. Despite an attempt, begun in the ’90s, to move “beyond petroleum”, BP quietly abandoned their attempts to reinvent their business by shutting down their flagship clean energy business, BP Solar, in 2011.

Yet energy companies need to reinvent their businesses with more urgency than most. I won’t make the full argument for why here, but in brief, it’s a combination of their “balance sheet” business model (i.e., their proven reserves are delivered to market, depleting their asset base) and increased pressure from many countries to de-carbonize their economy. Read more