The winter holidays are always a great time to catch up on some reading. Unlike any other time of the year, when you’re on vacation for a week or so everybody else is too, so there is no e-mail to get back to or urgent calls to return.
And this year, it is especially important to catch up. I can’t remember a time when so much was happening so fast. Sure, you can keep up with events on the news or in blogs, but to really understand what’s going on, you need the depth and perspective that you get from books.
It used to be that we would read about the future and then wait for it to happen. Now, it seems that we read about it as it’s happening and the impact is already being felt in business, economics and society. Just as in past years (this is my 5th list), this list reflects what I’ve read and written about over the last 12 months. Have a great holiday!
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Everywhere you look, publishers are under fire. The Washington Post was sold to Jeff Bezos. Time Inc, the world’s largest magazine publisher, is to be spun off by its parent and the NY Times years of financial woes is now leading to a massive exodus of talent.
Yet publishing itself is doing quite well. The Huffington Post and Bleacher Report created hundreds of millions of dollars of value in just a few short years. Others, like The Atlantic, have remade themselves in the digital age and AOL and Yahoo are very healthy.
So the situation is far from hopeless. In fact, there has probably never been a better time to be a publisher, it’s just that many have lost their way. Ironically, the way forward isn’t technological wizardry or even innovative business models—neither of which seem to be a major factor in successful operators—but in rediscovering publishing itself.
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“The customer is always king” has long been a time-honored business adage. Peter Drucker, the most renowned management thinker of the 20th century, was probably best known for advocating a consumer-centric approach.
So I probably shouldn’t have been surprised that, when I said in a recent post that creating, delivering and capturing value are at the heart of any viable business model, several commenters felt the need to correct me. “You always start with the customer,” they said.
Forget about the fact that “creating, delivering and capturing value” implies that value is created for someone—and who, if not a customer? The truth is that a successful business must balance the needs of a variety of stakeholders. Focusing on customers to the exclusion of everyone and everything else can kill a business just as easily as neglect.
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Most people in the tech world know the hype cycle all too well. A new technology enters the marketplace amid great expectations. Inevitably, disappointment sets in and a retrenchment period begins, practice and process catch up to expectations and new value is unleashed.
Right now, there is probably no area more hyped than big data and there’s already no shortage of self-proclaimed experts. Yet most big data efforts fail and there is a growing divide between enterprises that are benefiting from its use and those who are not.
There are a variety of reasons for this—a lack of qualified data scientists, poor integration across departments and a failure to manage expectations all play a part. Yet for those who have built a big data culture, the investment is already paying off. They key lies not with fancy algorithms or buzzwords, but by focusing on real world problems.
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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.
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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.
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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.
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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:
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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.
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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?
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