Ahhhh Summer! It looks like it’s gonna be a good one. Despite the lousy economy, we have a lot to look forward to this year.
London will host the Olympics (let’s hope the weather will be better than the food!), Barak Obama and Mitt Romney will be slagging each other off all summer long, nearly guaranteeing us at least one juicy scandal and even the wars seem to be winding down.
In between the endless hours of sun and fun we also have time to catch up on some reading. Like in previous years, I’m providing a list with a theme. This year, it’s books that inspire thought. Some are very readable, others more challenging, but all open up new worlds, help us question what we thought we knew and well … make us think.
Who is your target consumer? That’s been the “go to” question of branding consultants for generations. People who come up with insightful answers are valued and admired.
There has been no shortage of strategies and methods put forth to answer it. Consumer surveys, focus groups and statistical techniques have sought to identify, communicate to and acquire the right consumer for the right product.
Yet it’s becoming clear that we are, in large part, a product of our social networks. Our opinions and behavior are greatly affected by a complex web of social influence. That realization is leading to a new mindset and a host of new strategic possibilities. Network analysis has been useful in other fields and the potential for marketing is enormous.
Throughout his career, Rupert Murdoch built a fortune by marrying tantalizing content with superior distribution. I can see why he’s pissed.
The media value chain has been thrown into disarray. Lines between creation, curation and outright piracy are blurry at best. Some would say that they don’t exist at all. And distribution? Once information is out, it’s out. The Internet has infinite memory.
It seems like some rules are being violated, but whose rules? Shakespeare was a habitual plagiarizer (by today’s standards anyway). Many scholars believe that Homer never really existed, but that the epics were created and honed by generations of oral transfer. Many of the norms we revere are recent, not historical. So, what should guide us?
Albert Einstein once said, “if I had 20 days to solve a problem, I would spend 19 days to define it.” Good advice.
Innovation is a particularly sticky problem because it so often remains undefined. We treat it as a monolith, as if every innovation is the same and one approach fits all. That’s why efforts tend to be fraught with buzzwords and rarely lead anywhere.
With all the confusion, how should we go about innovation? Should it be handed over to guys with white coats in labs, an external partner, a specialist in the field, crowdsource or what? Defining the innovation problem is often overlooked, but it’s absolutely essential if we are to choose the right path. Here’s a framework that will help.
In Oliver Stone’s classic movie Wall Street, the financier Gordon Gecko schooled his protégé in the aphorisms of Sun Tzu, the ancient Chinese military philosopher.
The point was clear. Business is war, an ancient game with eternal truths and the essence of strategy is a methodical, time-tested approach. Superior planning, matched with flawless execution, is the key to domination of the competitive environment.
It sounds good, but we’ve long known that strategic planning has serious limitations. The notion of managers as generals, guiding action from high on the hill, is an outdated concept at best. While that doesn’t always register with us grownups, the often-maligned Millennials know it intuitively and a lot of that has to do with the games they play.
What a difference ten years can make! Merely decade ago, we were just getting used to the idea that Apple would survive as an independent company. Now it’s the most valuable business in the world.
Microsoft, on the other hand, went from being the dominant player with monopoly power to the gang that couldn’t shoot straight. They’ve seemed to miss every major trend, stumbling, bumbling and putting out inferior products.
The funny thing is, among all the failures and screw-ups, Balmer and team seem to have finally put all the pieces together to gear up for a major resurgence. Over the next few years, it looks like Apple and Google will be the ones playing catch up. Right under our noses, Microsoft might just be pulling of one of the great turnarounds in history.
What happens when technology cycles become shorter than corporate decision cycles? That’s the question I posed in an earlier post about Facebook’s acquisition of Instagram
Saul Kaplan takes it even further in his new book The Business Model Innovation Factory, when he points out that the concept doesn’t just apply to technology, but business models as well. That, if anything, is a much more difficult problem.
Whereas a firm used to keep the same business model for a generation or more, now the way in which a particular industry creates, delivers and captures value can be disrupted every few years. What’s more, the process is accelerating and business models will become even less stable. So we’re going to have to rethink much that we thought we knew.
Rishad Tobaccowala likes to say that “The future will not fit into the containers of the past,” and he’s right. Past mindsets and tactics seem clumsy and contrived, remnants of a lost era.
Old distinctions, like broadcast and non-broadcast, traditional and digital, media and creative don’t apply the way they used to. Moreover, skills sets that were once sequestered in one discipline or another must now be integrated.
The result is much confusion. Traditionalists think that the old ways just need some tweaking, while digital natives insist that those days are gone, never to return. Both betray a misunderstanding of paradigm shifts, which do not nullify hard won truths, but give new perspectives on old fact patterns. Here’s a guide to what’s changed and what’s not.
There’s an old story about an economist who walks by a $20 bill on the street. When asked why he didn’t pick it up, he replies, “it can’t really be there, if it was, someone would have already taken it.”
That, in a nutshell, is the theory of rational expectations, which proposes that a market of rational actors will value things correctly. The price, therefore, represents the proper value for everything at any given time.
However, the overwhelming evidence shows that we have lots of reasons for believing things, many of them decidedly irrational. We were wired by evolution to survive, not to make economic transactions. The result is that price and value often become uncoupled by fashion and zeitgeist, leaving much more than $20 on the ground.
“What’s that word again that you used for stealing content” my newspaper editor friend asked me? “Curation” I said, “and it’s not stealing content.”
I had that conversation a few years ago, but the debate is still raging. SOPA was killed, but is now reborn as CISPA. Rupert Murdoch has called Google a piracy leader, while Neil Young has said that piracy is the new radio. What’s going on?
It seems to me that at the heart of the controversy is a fundamental shift in the value of information. It used to be scarce, but now we’re drowning in it. That’s creating a fundamental shift in the economics of media. Therefore, the the answer lies not only in product innovation, but business model innovation, which is even harder.
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. The notion of managers as generals, guiding action from high on the hill, is an outdated concept at best. While that doesn’t always register with us grownups, the often-maligned 
, when he points out that the concept doesn’t just apply to technology, but business models as well. That, if anything, is a much more difficult problem.
