In his novel The Castle, Franz Kafka tells the story of a man named “K” who is summoned by mysterious authorities for unknown reasons. He finds himself at the mercy of their bureaucracy and endless paperwork, which is carried out for a purpose that nobody can fathom but everyone seems to accept.
Most people can relate to the story. 20th century era bureaucracies often seem as if they were designed by Kafka himself. From governments to corporations to international institutions like the IMF, we are often at the mercy of a monolithic central authority we don’t really understand, but must submit to.
Yet although we’ve mostly come to accept the realities of central authority, digital technology is creating a titanic shift toward distributed models. Rather than assets managed by centralized institutions, we have ecosystems managed by platforms. While most welcome this change, it does create new challenges. We’re all going to have to learn to adapt.
For decades, marketers plied their craft according to a simple formula: Advertising creates awareness which in turn produces sales. This was not, as many would argue, a mistaken belief. Virtually all of the great brands of the 20th century were built using that model and many still prosper with it today.
However, it has become incomplete. A variety of trends, including community marketing, digital technology, social media and mass personalization—just to name a few—have conspired against the traditional view that message and media are sufficient to create sales.
So today’s marketers have a serious challenge. If the old model is broken, what should replace it? Unfortunately, there is no easy answer. Media budgets continue to play an important role in successful marketing programs, just as many of the trendy new tactics often fall short. What we need is not a new model, but a more strategic way of thinking.
Humans are natural pattern recognizers. Whether, as in prehistoric times, we were recognizing danger in a telltale rustle of the bushes or skimming a page of letters and numbers today, we use patterns to derive meaning without having to do a more detailed inspection.
Futurist and entrepreneur Ray Kurzweil considers pattern recognition so important that in his recent book, How to Create a Mind, he argued that pattern recognition and intelligence are essentially the same thing. Expertise, in essence, is the familiarity of patterns of a specific field.
It’s earnings season again and Amazon, for the first time ever, has broken out the financial results of its cloud services division, Amazon Web Services (AWS). The results are impressive. In less than a decade, Amazon has grown AWS into a $5 billion business that is still growing at 50%.
Yet even more impressive—and strangely unnoticed—is that IBM cloud services is now a $7.7 billion business growing at 75%, according to IBM CFO Martin Schroeter’s prepared remarks during the company’s recent earnings call. Even for Big Blue, that’s a big business.
Amazon and IBM run vastly different operations, so making a direct comparison between the two announcements isn’t exactly apples to apples. Still, I think two things are clear. First, the cloud is becoming an absolutely massive business. Second, that much like the PC business back in the 90’s, most of the value will be in software and services, not hardware.
Most of us live busy lives. There is work, family, maybe a hobby or two and the need for some leisure time to refresh our batteries. So the amount of things we devote serious thought to is necessarily small and we get in the habit of not paying attention to much that goes on around us.
In the great majority of cases this is harmless, even prudent. We conserve our cognitive energy for things that are meaningful to us and let the rest sail by. Yet often, when tragedy strikes, it becomes clear that many people were aware of the problem, even laughed about it, but chose to do nothing.
Yet once you get into the habit of ignoring things, it becomes increasingly likely that you will miss something important. We often feel something is wrong, but look away and let the pangs of unease subside. There’s comfort in numbers, so it’s easy to go along with the crowd. However, crowds are often stupid. Simply going along with them can lead us horribly astray.
The successful decoding of the human genome in 2003 was a historic achievement. Not only because it unlocked the biological code to life, but also because it marked a new fusion of life sciences and information technology, using powerful computers and analytical techniques to multiply scientists’ efforts many times over.
Yet all of the technology won’t amount to much if the millions of people who work in healthcare can’t use it effectively. That’s the problem Dr. Lynda Chin is working to solve. By weaving together a diverse network of researchers, technologists, practicing physicians and other stakeholders, she’s creating a movement that she hopes will transform healthcare.
Tony Soprano, the heavy-handed mafia boss from the famous TV show, was a master of coercion. Through violence, extortion and bribery he rose to the top of his industry, leaving competitors in his wake. Despite the high employee turnover in his organization, he achieved attractive margins.
Yet sensing that he could benefit by exploring alternative strategies, he often sought the advice of Dr. Jennifer Melfi, who encouraged him to take a more collaborative approach. Tony thought about it for a minute and asked, “Then how do I get people to do what I want.”
Today, every manager has some version of the Tony Soprano problem. We’re used to hierarchal organizations optimized for specific tasks. Now we find that we’re competing in a networked world in which the old rules don’t apply. Rather than traditional lines of authority, we need to start thinking in terms of ecosystems, platforms and movements.
It’s no secret that big corporations aren’t what they used to be. In recent years, we’ve seen paragons such as General Motors, Kodak and Blockbuster have go bankrupt even as upstarts like Tesla, Instagram and Netflix rocket forward. The average lifespan of a company on the S&P 500 has fallen from more than 60 years to less than 20.
Power has, in large part, shifted from large organizations to platforms. It used to be that only large enterprises could access crucial resources, such as financing, distribution, production and so on, but the digital economy has leveled the playing field. To compete, today’s corporations need to match the agility of startups.
Throughout its history, IBM has played a special role in helping companies adapt to changes in the marketplace. It has a rare ability to not only develop advanced technology, but to design, implement and manage systems at scale. These days, however, technology is not enough and IBM’s new initiative seeks help to companies move at the speed of a lean startup.
Last spring, the Clayton Christensen, one of the world’s top management thinkers, suggested that, despite being awash in cash, corporations are “failing to invest in innovations that might foster growth.” He considers this trend so insidious and pervasive that he called it the capitalist’s dilemma in Harvard Business Review.
Others have seized on the current boom in stock buybacks as evidence that supports Christensen’s narrative—intense pressure from activist investors is creating an environment in which short-term profits trump long-term prosperity. If true, it’s a terrible indictment of our economic system.
Yet buybacks do not necessarily indicate a lack of investment (especially when capital is, as Christensen points out, superabundant). Only a lack of investment indicates a lack of investment. When I looked into it, I found that the issue does not lie in the private sector, but the public one. In effect, it’s not corporations that are the real problem, but the rest of us.
There’s no doubt that journalism in crisis. Great institutions like The New York Times and The Washington Post, once fantastically profitable, now struggle to stay afloat. News bureaus, both international and local, are being drawn down as budgets are cut to the bone.
The recent debacle at The New Republic shows the pitfalls. A well-heeled white knight comes in to save the company and decides he wants to be editor-in-chief. His handpicked CEO vows to “break shit” and build a “vertically integrated digital-media company.” Top journalists balk and leave.
It has become fashionable to say that publishers must innovate in order to survive, yet that will only take us so far. We also need to shift our mental models of how journalism operates as a business. In order for top quality journalism to survive, it needs to permeate the entire enterprise and that means killing the time honored practice of Chinese walls.
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, Franz Kafka tells the story of a man named “K” who is summoned by mysterious authorities for unknown reasons. He finds himself at the mercy of their bureaucracy and endless paperwork, which is carried out for a purpose that nobody can fathom but everyone seems to accept.
, he argued that pattern recognition and intelligence are essentially the same thing. Expertise, in essence, is the familiarity of patterns of a specific field.
