I recently got a call from my mother asking me to help her watch House of Cards on Netflix. She was frustrated and complained, “I keep pressing the thing and nothing happens!” It was hard to get her to understand I had no idea what thing she was pressing or what was supposed to happen when she did.
I’m still not exactly sure what the problem was, but getting her to understand that the buttons on her remote had little to do with the TV in her bedroom and everything to do with giving instructions to servers in faraway places seemed to help. Before long, her frustration with technology turned to fascination with the political machinations of Frank Underwood.
Many businesses have the same problem as my mother. As technology advances, its function evolves and those that are unable to shift their mental models find themselves unable to compete. This is especially true of digital technology, where every generation sees a new crop players emerge while old titans falter. Only a rare few are able to cross the chasm.
The media business used to be fairly simple. It operated on linear model, consisting of content, distribution and audience, with a small priesthood of publishers, producers and programing executives making editorial decisions for the rest of us. Stars were created by the choices they made.
The Internet blew that model apart. Today it is obvious—even trite—to say that anyone, anywhere can get their voice heard. Platforms like YouTube, Flipboard and Pandora offer a cacophony of voices—from major media companies to journeyman professionals and hopeful amateurs.
For the most part, the removal of the distribution choke-point has been a good thing, but it also comes with a built-in problem. Increase the supply of anything and prices will fall, which makes it harder for creators to finance their work. Now, a number of new business models are rising up to fill the void and it’s changing what we read, watch and listen to.
I recently watched a documentary about Kobe Bryant, the NBA legend. Kobe grew up in my hometown, so I was aware of his superstar status earlier than most people. At his high school games, he looked like a man playing with boys. No one was surprised when he was drafted by the NBA in the first round, at the age of 17.
We expect genius to always look like that. When we see someone of extreme accomplishment, it is almost inconceivable that their special gifts weren’t always apparent, but they usually aren’t. To take just one famous example, Albert Einstein wasn’t even made a full professor until 1911, six full years after his miracle year.
The problem is that true genius defies convention and it is by conventional standards that we ordinarily define achievement. When someone who comes along with a completely new paradigm, it usually looks like nonsense and tends to be ignored. Yet some people have the ability to recognize brilliance in an idiotic guise and that is itself a special kind of genius.
The Hillary Clinton email scandal has seemingly everything that can bring down a presidential candidacy. There are national security issues at stake, an FBI investigation and the fact that a cabinet official chose to use a private email rather than an authorized government address, something her staff was discouraged from doing.
The issue is, of course, highly partisan. Democrats insist she did nothing wrong, while Republicans say that she will be indicted on criminal charges (although the FBI doesn’t). Muddying the water further is the fact that her Republican predecessors, Colin Powell and Condoleezza Rice, had similar email issues.
What makes it all even more confusing is that there are technological issues that very few political reporters fully grasp, so even objective journalists often give skewed impressions of the facts. That’s a real problem. We’re increasingly living in a world where there is a requisite amount of technical knowledge needed to make moral judgments about many issues we face.
Last month, IBM announced that it lead the list of companies receiving US patents for the 23rd consecutive year. IBM’s patent leadership is extreme. It not only consistently tops the list, but outpaces the number two company, Samsung, by 50%. That’s pretty impressive.
IBM’s commitment to research goes back a long way, dating to when its legendary CEO, Thomas Watson established the Research division in the depths of the Great Depression. And, while other great labs, such as Xerox PARC and Bell Labs have long since fallen into obscurity, IBM has redoubled its efforts.
Yet there is a notoriously poor connection between patents and corporate performance. Samsung, Canon and Sony, who also consistently perform well on the patent ranking, have fallen on hard times. Apple, on the other hand, which never makes the list, has dominated tech over the past decade. So is IBM a model for others to follow or a cautionary tale?
Marketing used to be pretty simple. To promote your brand, you used mass media to reach large audiences and create widespread awareness about your product or service. If you crafted a powerful message, the approach could work wonders. Most of the great brands of the 20th century were built that way.
Yet marketing in a digital economy is different. Not only have audiences fragmented, necessitating a more targeted approach, but digital activity is tracked. So even if you are successful in building awareness and creating action, your rivals can retarget those consumers with competing offers.
That’s why many have turned to content. Rather than paying to be sandwiched within ad breaks and between editorial pages, brands can communicate directly with consumers. Unfortunately, the result is often a longer form version of the same old ads. Marketers need to change their approach. Here are four questions that will help you create a viable strategy.
Yet look a little closer and it becomes clear that that the real problem wasn’t callousness, but mismanagement. The defect in the ignition system was, in fact, relatively minor. The real problem was that it caused airbags not to deploy. Each subsystem was performing to standard, but the interaction between them that resulted in disaster.
Sadly, most organizations today are run much like GM. All too often, we optimize isolated metrics, but fail to see the whole system. Today, we have to deal with a level of complexity unimaginable a generation ago and we need to think in terms of ecosystems rather than linear value chains. We need to focus less on metrics and more on a shared sense of mission.
Look at any marvel of our technological age, whether it be an iPhone, a self driving car or a miracle cure and you’ll find three things: An academic theory, a government program and an entrepreneurial instinct. When it all works it is a wonder to behold, not only creating prosperity, but solving our most difficult problems in the process
It is the unlikely partnership between academia, the public sector and private enterprise that allow us to navigate the path from discovery, to innovation, to transformation. The process, however, is often unwieldy, taking decades to go from from primary discovery to a measurable impact on society.
Unfortunately, most efforts to accelerate innovation focus on just one facet, such as giving tax breaks for innovation, increasing investment for research and helping start-up companies find funding. Nevertheless, these approaches ignore the fact that innovation is a complex process, requiring us to integrate a variety of efforts. That’s where we need to focus now.
In 1914, Thomas J. Watson was hired to run the Computing-Tabulating-Recording Company, a far flung holding company strewn across several industries. Watson, sensing an opportunity, decided to focus the firm on something he called “information processing” and changed the name to International Business Machines.
More than thirty years later, after IBM had come to dominate the market for punch card machines, it faced an existential threat from UNIVAC, an “electronic brain” that far outperformed IBM’s products. Yet the company that owned UNIVAC, Remington Rand, failed to focus on the technology and IBM soon dominated once again.
Today, 100 years later, IBM Is a $136 billion company while Remington Rand is long gone, acquired by the Sperry corporation in 1955 (which is also long gone). IBM’s focus had a lot to do with the outcome. It’s easy for corporate strategists to point to greener fields and fabulous yonders, but truly great companies are the ones that are able to do one thing extremely well.
Modern marketing really began in the 1960’s with Philip Kotler and his ideas about uncovering the “needs, wants and interests of target markets.” Ever since, generations of marketers have learned to focus on the consumer and communicating features and benefits to them effectively.
Yet perhaps an even more important source of wisdom for marketers today is Ronald Coase’s famous 1937 paper about The Nature of the Firm, which argued that the purpose of a firm is to minimize transaction costs, especially search and information costs. Surely, that is also an important function of brands.
Today, digital technology has brought search and information costs crashing down. So the challenge is no longer getting a message in front of consumers, but that they are so deluged with information that they are often completely overwhelmed. That’s why marketers need to worry less about collecting “eyeballs” and learn to design rich and seamless interfaces.