The engineers building Nintendo’s next console had a rule that had nothing to do with games: the fan must not spin at night.
The machine was meant to stay on 24 hours a day, and Satoru Iwata, Nintendo’s president, could picture what a whirring box in a dark living room would lead to. “If the fan is spinning in the middle of the night,” he said, “I could just imagine mothers everywhere pulling the plug right out of the wall because they thought it had been left on again.”
So the chips had to run cool. Shiota, who developed them with Nintendo’s partners, used cutting-edge chips the other way round: to cut power, not to chase raw performance. He admitted to feeling anxious about the choice. Leaving the industry’s roadmap, he said, “takes a lot of courage.”
Spending less on one thing is only half a decision. The other half is where the money goes instead.
Four questions, one grid
W. Chan Kim and Renée Mauborgne turned that pairing into a tool. In a 1997 Harvard Business Review article, and later in their 2005 book Blue Ocean Strategy, they asked four questions. Which factors that the industry takes for granted should be eliminated? Which should be reduced well below the industry’s standard? Which should be raised well above it? And which should be created that the industry has never offered?
Decide what to drop, what to cut back, what to raise and what to add, all on one page.
The page is the eliminate-reduce-raise-create grid. Its authors say the point is to do all four at once. Asking only one or two of the questions, they wrote, isn’t enough for profitable growth. The grid also “immediately flags companies that are focused only on raising and creating,” which lifts their costs and often over-engineers what they sell.
Iwata said much the same about consoles. “If you simply repeat the process of building up the hardware specs, then you just end up with higher costs and a larger console.”
A kitchen remodel that only adds things runs out of budget before the room works. Writing the removals on the same page as the additions is what pays for the new oven.
Nintendo’s choices, sorted
Nintendo didn’t publish a grid for the Wii. But its engineers described their choices in enough detail to sort them.
Reduce was the loudest box. Cutting power was so new for a home console that, Shiota said, the team had to rely on the know-how of Nintendo’s handheld designers. Takeda, who oversaw development, said the console was never meant to be “overly extravagant,” just a device “containing only carefully selected technologies.”
Raise is where some of the money went. Takeda said Nintendo spent on a slot-loading disc drive and a stand, “areas in which Nintendo would not have considered investing in the past,” because the console had to appeal to everyone in the family, not be “just another toy for the children.”
Create is the part people remember. Iwata told game developers in 2006 that the new one-handed controller was expensive to develop and to include with every console. “Some people put their money on the screen, but we decided to spend ours on the game experience.” And by Takeda’s account, the Wii was the first Nintendo system the company could keep working on, through software updates, after the customer bought it.
Eliminate is the hardest box to fill. In these interviews, the clearest elimination is a small one: the sound of a fan at three in the morning.
The new-hire laptop
Imagine you run IT for a company that hires about 30 people a month. Each new hire gets a 40-page setup guide, a choice of nine laptop models, and a ticket queue. Every year someone asks you to add something: a longer guide, a tenth model.
This time you fill in all four boxes. Eliminate the guide; nobody finishes it. Reduce the models to two. Raise one thing well above what you do now: the laptop is on the desk, set up, before the person arrives. Create something new: a twenty-minute call on day one with someone from your team.
The money for the setup work comes out of the seven models you stopped stocking. Two weeks later, a designer files an exception request for the large-screen model you dropped.
The grid after the fact
A grid is easy to fill in for a winner, years later, as this page just did. Before the fact, it’s hard to know which factor customers quietly care about, and cutting the wrong one is a real risk. In 2009, Andrew Burke, André van Stel and Roy Thurik pointed out that the theory’s empirical claims rested on case studies of companies that succeeded (more on the blue ocean page).
The grid doesn’t say which box will matter. It only makes you write all four before you start. Nintendo’s engineers picked their non-negotiable early, and Takamoto, who designed the console’s structure, said that clear goal was what made it possible: a fan that stayed still at night, so that nobody’s mother would pull the plug.