We tend to see technology through advances in products. One company launches a new and improved version, only to be matched or overtaken by a competitor. The R&D treadmill continues and we all struggle to keep up.
While that is certainly an important aspect of today’s competitive environment, a far greater shift is happening with respect to strategy. Even foundational concepts, such as core competency, 5 forces and competitive advantage have lost their relevance.
The upshot is that technology is not only changing how we run our operations, but how we need to think about our enterprises. Speed now trumps intelligence. We need to break free of old assumptions and adapt to a new business environment in which everything is connected, information is cheap and resources are not owned, but accessed.
In 1937, a young economist named Ronald Coase took on a big question: Why do firms exist? While seemingly obvious, economists at the time had no explanation for why businesses would maintain resources instead of just acquiring them when needed.
The answer he came up with was simple, but powerful. Coase pointed out that greater resources led to greater access to information and lower transaction costs. Therefore, as a business grew, it would become more competitive.
In the past, technology increased advantages to scale. Big businesses could afford sophisticated ERP systems while small businesses shuffled papers or had hodgepodge of software that didn’t work together. Now, that’s changing and an entire ecosystem is emerging in the cloud that is giving small businesses the capabilities of big ones.
Wearable technology. Sensors everywhere. The cloud. We now have the power to monitor, in real time, just about anything and everything, giving rise to the trend known as the quantified self. We can optimize every aspect of our existence—from our health, to how we manage our time, to various aspects of our family lives.
This excites many, but to be honest, it horrifies me. I’m obsessive enough already. The last thing I need in my life is a machine that will constantly remind me about my questionable lifestyle choices and bad habits. My wife performs that function more than adaquately.
What interests me is not the quantified self, but the qualified self—technology that allows me to expand my range of experiences. Yes, these are qualified experiences and not the real thing, but they are experiences nonetheless and I am better for having them. What’s more, I can share these experiences with others, encoding myself into their lives as they have into mine. The future of technology, ironically, is all too human.
Ask any marketer what she does and you’ll get a different answer. That’s because marketing is a hard discipline to define. We don’t cure people like doctors or build things like architects or even blow up the economy like those slick Wall Street guys.
The truth is what marketers do most of the time is meet and discuss… endlessly. We discuss the brief and trends and the consumer mindset and just about everything else you can imagine.
Crucial to these discussions are buzzwords, which serve as shorthand for more complex concepts that nobody really understands. They save the time and energy that we would otherwise spend actually thinking about things. The problem is that some of the ideas buzzwords represent are themselves nonsense and lead us astray. Here are four of them:
Business used to be simpler. If you came up with a good idea and served your customers well, your operation would grow. Increased scale would increase efficiency and competitiveness, creating a virtuous circle. Success would breed more success.
And that wasn’t just true of business, in the scale economy bigger was always better, whether the arena was commerce, politics or culture. Now, it seems that no one—no matter how big or powerful—is safe anymore.
The rules have changed. Technology has made it possible for small groups to connect and cascade into large movements that upend the existing order. Yet the situation is far from hopeless. There are the natural laws that govern networks of connections and, by applying them effectively, we can manage disruption instead of falling victim to it.
In most businesses, there are a number of companies waging pitched battles to eke out a few points of share. It’s a game of inches and even a small triumph a big deal. You celebrate the win and then go back to duking it out.
Yet technology is different. If you’re early, like IBM in mainframes, Microsoft with operating systems or Google in search, you can dominate the competition and exploit monopoly power to earn outsize margins for years to come.
So, not surprisingly, every tech company is looking to build the “next big thing.” IBM has Watson. Google is focusing on things like autonomous cars at its secret Google X lab. Microsoft is building the operating system for the cloud with Azure and Apple always seems to have something in the works. So who has the best plan for global domination?
When we think about innovation, we tend to think about individual gifts of insight—researchers in crisp, white lab coats, slick tech entrepreneurs with fancy gadgets and VC’s doing inspired deals.
Yet, the truth is that innovation is a messy business. It’s full of blind alleys and half-baked ideas, random collisions and abrupt changes in direction. Ideas mix and recombine, fail, reemerge and, in the end, a precious few become wildly successful.
Innovation, most of all, is driven by collaboration. So it takes more than just smart people, but diversity as well. Different people, working on different things, colliding together in unexpected ways is what brings about important new ideas. That’s why, more than anything else, vibrant cities are crucial to our continued ability to innovate and compete.
When Napoleon Bonaparte said, “History is a set of lies agreed upon,” he meant something more than the old adage about victors writing the history books, he was pointing out that lies are often things we tell ourselves so that we can move on.
And we all do it, mostly because we want to think of ourselves as good people. The fact that even our best intentions can lead us astray is unsettling and we do what we can to avoid facing uncomfortable truths.
Much like Jack Nicholson’s said in his famous line, we can’t handle the truth. We’re wired to make snap decisions on scant information and ignore contrary evidence. We also have a hard time admitting that we are guilty of the same shortcomings we see in others. So we do what’s sensible. We tell ourselves lies. Here are six of them.
Making a enterprise succeed isn’t easy. You need to come up with a viable product, identify the right market for it and then find a way to get paid. Those 3 elements, creating, delivering and capturing value are at the heart of any successful business model.
Yet developing a model is only half the battle, To make it work, you need to develop an organization—people, processes and practices—that is dedicated to making the model work. Without that, all you have is a concept.
The danger is that once an organization hits on a successful formula, rigidity naturally sets in. We all like to think we’re capable of change, but once profits are rolling in and everybody is happy, staying the same seems a whole lot more profitable. That’s the irony of disruption, it’s something that happens to successes, not failures.
When Bill Gates released his famous Internet Tidal Wave memo, the old media adage “content is king” became a mantra for the video age. Gates rightly pointed out that “the more users it gets, the more content it gets, and the more content it gets, the more users it gets.”
What followed was almost comical, as media types struggled to understand the new technology and Silicon Valley geeks clumsily navigated the world of content. Somehow, through fits and starts, we all stumbled through and the media world was transformed.
Now, commerce is coming to the fore and we’re seeing many of the same issues as retailers strive to build a true omnichannel that merges at-home, in-store and mobile commerce into one seamless experience. Much like with content in the early days of the Internet, the transition is a rocky one, but the future holds great promise.