Nonlinear Thinking

Compendium/Miscellanea/Almanac 04.17.2013

Stuff that has crossed my radar lately for one reason or another.

• The Strategic Plan is Dead.  Long Live Strategy. (Stanford Social Innovation Review)
• A new reality between the CMO and CIO (ZDNet)
• We’re from Corporate and We’re Here to Help (Strategy + Business)
• The Software Revolution Behind LinkedIn’s Gushing Profits (Wired)
• Pragmatic Pathway – New Approaches to Organizational Change (Deloitte University Press)
• Global Information Technology Report 2013 (World Economic Forum)
• Viral’s Secret Formula (Huffington Post)
• All eyes on the sharing economy (The Economist)
• 13 Hot Business Model Innovations (Sustainable Brands)
• Challenges and Opportunities of Investing in Cleantech and Renewable Energy (IGEL@Wharton)
• Marketers Rise to the Cloud Challenge (CMO.com)

Hotel California?

For some reason, this line from the Eagles classic Hotel California became lodged in my cerebral cortex when I saw the artist rendering of Google’s next headquarters campus.

"We are programmed to receive. You can check-out any time you like, but you can never leave! "

How Content Becomes Viral

This terrific graphic from Infographic World has been making the rounds quite a bit lately, but I thought it was such a great visualization of how content (presumably good content) can so easily go viral, I wanted to pass it along.

Chaos, Boundaries and Innovation

As I am a visual thinker, I do love a good graphic.  Jeremy Gutsche, Chief Trend Hunter at TrendHunter.com, included some nice ones in his book, Exploiting Chaos last year.  At the core of his thesis, that in times of chaos, companies must learn not to create structure and stability, but rather, to adapt quickly, is this evocation of a process that is aligned with much of my thinking.  While I have nits to pick with some of his conclusions in the book, I appreciate the codification of the thinking around chaos and the opportunities that learning to manage chaos to the enterprises' (and individual's) benefit serves in creating elements of competitive advantage.

The key elements of what Gutsche refers to as the Exploiting Chaos Framework are outlined below:

Culture of Revolution

Culture is more important than strategy. Culture underlies your organization’s ability to adapt, and times of dramatic change magnify this importance. Most likely, your organization perceives the need to adapt, but uncertainty and resistance are paralyzing innovation. By creating an organizational culture of revolution, you can spark a new paradigm for creative change.

Trend Hunting

Innovation and strategic advantage hinge on your ability to anticipate trends and identify the next big thing. By using the cutting-edge framework in this book, you can filter through chaos and identify clusters of opportunity to focus your innovation.

Adaptive Innovation

Engineers, designers, and scientists have invested billions of dollars to perfect human creativity. By applying the best of their proven practices to your own field, you can think big while acting small. You can rapidly identify and evaluate new opportunities.

Infectious Messaging

The Internet has created a world cluttered with chaos, but it has also created the world’s first viral platform for ideas. Well-packaged stories travel faster than ever before. Unfortunately, most marketers are stuck in a world dominated by traditional advertising and cliché. By cultivating infection, your ideas will resonate, helping you to leapfrog ahead of the competition.

 

An expanded view of the Framework adds some color to the canvas.

The first chapter of the eBook is available for free download here and the book can also be purchased at the same location.

Compendium/Miscellanea/Almanac 01.12.2011

Stuff that I find interesting.  Maybe you will too.

• Budgets, Innovation Squarely in CMOs' Sights in 2011 (Advertising Age) 
• Clouds, big data, and smart assets: Ten tech-enabled business trends to watch  (McKinsey Quarterly) 
• How Tech Will Be Critical to Corporate Sustainability in 2011 (Greenbiz) 
• Light My Fire: The Matchbook Makes a Cultural Comeback (Fast Company) 
• How Aha! Really Happens  (Strategy + Business) 
• Swimming Against the Tide: How Technology, Media, and Telecommunications Companies Can Prosper in the New Economic Reality  (Boston Consulting Group) 
• Eric Berlow: How complexity leads to simplicity  (TED)  
• The AI Revolution Is On  (Wired)  
• The Battle for Control of Smart Cities  (Fast Company) 

The Slow Road to A Smarter Grid

The advent of the smart grid has been announced numerous times during the past 15 years.  It has been simultaneously encouraging and discouraging to witness the progress towards an environment of intelligent energy management during that period.  Few great advances arrive without serious headwinds.  Particularly in such a “smokestack”-affiliated industry as electric utilities, change can be glacial.

The “science” surrounding innovative technologies has always held far less interest for me than the practical application of those technologies.  It is not what it is, but what it can do, that intrigues me and feeds into my constantly evolving view of the world and the industries and markets that comprise the global marketplace.

A dozen years ago, I participated in sketching out an early architecture for the concept of the Smart Home as part of the broader smart energy initiative and have a continuing interest in the advancement of the technologies that comprise what is now referred to as the Smart Grid.  A simple graphic of the smart grid environment is represented below.

 

Managing energy demand and optimizing energy usage are fundamental to any strategy/philosophy/approach to arriving at a sustainable and clean energy economy.  To that end, electric utilities are being encouraged to utilize smart-grid technology -- network-connected devices to help intelligently monitor and manage power usage -- whether on their dime or through funding from the U.S. government's 2009 stimulus package. Smart energy systems are designed to save energy via intelligent management of energy usage in homes and businesses. Beyond that activity at the point of consumption, the smart grid seeks to promote improved optimization at every point between generation and consumption to actively manage the grid.

As this proposed build out of the smart grid is, for the most part, a digital network solution, the question/concern of hacking the system necessarily arises.  However real and mature the threat, it does create new challenges for utilities to meet to ensure safety, reliability, etc. for their residential and commercial customer bases.  The threat may be most acute at those interfaces where smart grid platforms are required to integrate with older control equipment such as SCADA ( Supervisory Control and Data Acquisition) systems as well as the first generation of smart meters.

As more and more processes in every industry become digitally-driven, we will face these same kinds of challenges.  In many cases, such as with the smart grid effort, they will be met and overcome because their is simply no alternative.

The Only Constant is Change

"To improve is to change.  To be perfect is to change often." - Winston Churchill

Forrester has a new report out discussing the dynamic evolution that traditional IT services providers are going to experience over the next several years.  This analysis is very timely and it addresses a combination of external drivers that I have been writing and speaking about for the past several years.  The authors, John C. McCarthy and Pascal Matzke have done a masterful job in codifying the thinking around these externalities and their impact to the existing IT service provider business model. This excerpt from the executive summary delivers the high-level on the emerging metamorphosis.  

“The tech services market is about to undergo a massive transformation that will call traditional provider business models into question. Four factors will combine to dramatically change the dynamics, economics, and competitive landscape of IT services over the next three to four years: 1) the “restructuring economy”; 2) innovation moving to the edge of the enterprise; 3) the redefining of buying and governance dynamics in accounts; and 4) “as-a-service” becoming the norm.”

For those that have been engaged in surveying the technology market landscape over the past decade, the conclusions McCarthy/Matzke draw from their analysis is no surprise.  Unfortunately, few of those individuals appear to actually work for the major players in global tech services because those firms have made few, if any, alterations to the business model they have employed for the past 15 years.  As innovation in IT moved from the data center to the business units, on-demand/as-a-service and other cloud-based solutions gained traction, and social/mobile activity emerged as integral parts of the technology platform, Nero fiddled.

And the hits just keep coming.  The Forrester report offers a forecast of why and how the IT services model of today will cease to exist by 2020.  

• Forrester sees at least nine new services entering the market as cloud/SaaS redefine the services business.
• Selective sourcing and utility pricing models broaden their footprints.
• Digital natives and the advance of business (unit) buyers push traditional IT into the background.
• Standardization in cloud/SaaS solutions create pricing transparency and profound pricing pressure on traditional service models.
• Cloud/SaaS drive increasing standardization and process industrialization of services leading to delivery models based on solution partner ecosystems.

From my perspective, the most provocative item in the report is the following table that contrasts the top ten service providers in 2010 with a forecast of what the top 10 will look like in 2020.

 

Looks like a whole lotta growth, death and consolidation in the sector.  Ten years may seem like a lot of time for the current top ten to embrace and adapt to this new environment, but the truth is that this evolution has been ongoing for at least five years.  Too many of the incumbents lack the cultural and operational survival instincts to revolutionize their business models.  Some of the logos we have come to recognize in the global tech services space have already vanished.  It will be interesting to watch how this all plays out over the next decade.

57 (Marketing) Channels and Nothing On

“A message came back from the great beyond
There's fifty-seven channels and nothin' on
Fifty-seven channels and nothin' on”

Bruce Springsteen

When Bruce penned those lyrics almost 20 years ago, the not so subtle suggestion was that the expansion of cable TV choices had not resulted in a concomitant elevation in overall quality.  Now, with 600 to 700 channels, that indictment has been writ large as any number of  cable/satellite/Internet channels deliver far too little in the way of edifying content.

Ancillary to this, but perhaps much more important, the competition for “eyeballs” has driven an increasing polarity in the way individual channels position themselves.  On one end, we have the many “news” channels that “ape” each other in the pursuit of the sensationalistic stories that hold the audience rapt with anticipation for the next salacious element in the narrative.  At the other, much more plentiful end, are the hundreds of boutique/niche channels whose core mission is so narrow as to obviate any chance of delivering something unique on a 24 X 7 basis.  Copying, stealing, sharing, repeating --  to the point of extremely diminishing returns.

In the digital/social media universe, we are risking much the same type of dilution of message that has become endemic in television.  As enterprises increasingly avail themselves of every channel that might, at its endpoint, find one of their prospective customers, there exists the same risk of watering down the intent of the positioning/ messaging in which so many have invested so much.  

I am cognizant of the foundation for successful branding and positioning strategy - consistency and repetition of the message across all media.  But in the constantly expanding digital environment, where many of the channels have little or no cost to the user, might the competition for “eyeballs” devolve into an exercise that dilutes the core enterprise story and value proposition?  Alternatively, with the increasing requirement to narrowcast to reach an expanding population of niche sub-segments, doesn't the new channel strategy become incredibly more complex as individual channels are allocated to serve a single unique niche target customer group?

As we complete the transition from marketing 1.0 to marketing 2.0, the advent of marketing 3.0 challenges marketers to adapt the strategy, planning, and execution of the marketing effort to embrace this increasing complexity and work to ensure that their chosen channels are delivering a message that their target constituencies find to be clear, concise and valuable.

Don Draper's Head Explodes

I think we are long past the time for substantive debate on whether the traditional marketing model is dead.  There is NO question that we are deeply in the model that is alternatively referred to as Marketing 2.0 or Social Media Marketing or, well, you pick the cutting edge nomenclature.  individuals and organizations will be forced to adapt or will perish (quickly or slowly and painfully - their choice) as they always are when the unstoppable force that is technological innovation challenges their stasis and makes their comfort zone not nearly so comfortable.  Sort of like global warming for the world we have known as marketing 1.0.

Marketing in the traditional model has, for the most part, been a very linear process.  Market research and analysis identifies both latent and active market opportunities, strategy aligns those opportunities with organization strengths (core competencies), products and services are designed/developed, positioning and branding strategies are created, value propositions are broadcast or narrowcast to the market via communications and advertising channels, and, hopefully, customers are nurtured and cared for in an effort to retain and expand share of wallet, feeding data points back into the market research effort.  This marketing 1.0 model has been primarily a closed-loop process that engaged external constituencies (the customer, partners) generally in a controlled fashion.

Social media and the digital platforms that enable it have made marketing much more about the ad-hoc, the organic, the open-ended conversation, than traditional marketing ever could have.  This is no longer the classic linear, closed-loop process of the 20th century. In this world of the marketing 2.0 model, Don Draper's head explodes as he and the team at Sterling Cooper attempt to get their hands around what it means to no longer control the dialogue that surrounds a company's products and services.

Venture Funding Dries Up in Q1

The venture capital industry took another big hit in the first quarter of the year, according to new data from Dow Jones VentureSource. VCs pumped 50% less money into startups than they did one year ago. At $3.9 billion, it was the lowest total the industry has seen since 1998. That means it was worse than anything seen in the years after the seminal dot-com bust. Information technology fell to its lowest levels since 1997, with just $1.68 billion in deals, and clean tech fell by 73% to just $117 million.