Sep 22, 2010 | Change, Communication, Innovation, Leadership, Social Media, Strategy
A Wall Street Journal op-ed by Eric Schmidt, chairman of Google argues that the demise of printed media, particularly newspapers and magazines is as much a result of their own hubris as it is the advent of new media, and that the opportunities for journalism have flourished rather than diminished.
Fairfax have just announced that the outcomes of a strategic review conducted by McKinsey will result in significant changes to their commercial profile over time, with greater emphasis on electronic media. About time they woke up, having lost huge slabs of classified advertising, their “Rivers of Gold” revenue streams, to specialist web sites like “Car Sales”, “Seek” and others. The tenor of the public announcements still smells of them seeing electronic publishing as a competitive force, rather than a very different but complementary one that will not go away.
Print has lost its immediacy over a long time, first to radio, then TV, more latterly the web, but the process has not been one that should have taken them by surprise, the challenge is to harness the fundamental two differences the web has enabled:
- Anyone can be a publisher now, in a variety of formats from print to photographic and video.
- The whole communication process is now 2 way, hugely networked and fragmented, no longer a one way broadcast, the source of Fairfax’s success last century.
My instinct is that it is too late for incremental change to their business model, even at a rapid rate, the game has moved on too far for them to recapture the fortunes of the past. Glad I am not a shareholder, although Fairfax chairman Roger Corbett has a track record in instituting rapid improvement that generates great returns.
Sep 21, 2010 | Change, Leadership, Personal Rant, Social Media
In Australia, we are considering the NBN, and the impact it will have, and argue about the best way to deliver it, cost effectively.
A further debate should be the impact of connecting the billions of people in the world not yet connected, and what that may mean to us, and others currently enjoying the benefits of living in a developed economy.
What will happen when Africa has access to the net, not just the knowledge, but the social tools, the ability to connect and do business across borders, absorb the cultural and economic differences they have with the developed world? With the resources base in Africa, the potential for development based on resources is huge, as with Siberian Russia, so long as the social institutions in those regions can evolve to the benefit of the majority, rather than breaking down into deadly squabbles over the potential spoils to the few.
The growth in Asia, low cost manufacturing based on low labor and institutional costs, has led to increased prosperity, increased education, a movement from the country to the cities, changes in traditional diets, will only accelerate and move to other areas in the world with increased connection, with huge flow on impacts.
Logically this also leads to consideration of the financial markets, as the developing world generates large trade surpluses, and investments in infrastructure funded by domestic saving further increasing their competitive advantage, how will the currently developed world repay the accumulated public debt? What will happen in those “developed” countries that slash public expenditure, and increase taxes to repay the debt rather than default?
We are in for a wild ride over the next few decades, but we seem to focus excessively on meaningless trivia, perhaps it is a coping mechanism.
Sep 20, 2010 | Change, Innovation, Social Media, Strategy
“Open source innovation” is rapidly becoming an accepted strategy, an increasing trend as the communication tools on the net make it progressively easier, and people think up new ways to use them.
Eric Von Hippel a professor at MIT wrote “Democratising Innovation” some years ago, and put it on the web for free download, P&G have a deliberate strategy of seeking innovation from outside the firm rather than keeping it all internal, this is not outsourcing, rather it is casting around for the best ideas wherever they come from. Now, the idea has spread to more modest companies, one of my clients is experimenting with a “Wiki” as an adjunct to their more traditional and too slow technical processes.
These types of initiatives thrive on low communication costs, low barriers and transaction costs, it is the speed to market, the creative networks, personal kudos, and energy created that works for the initiators and participants, not necessarily the promise of royalties.
Sep 19, 2010 | Customers, Marketing, Sales
Watching The Gruen Transfer a couple of weeks ago, one of the panelists quoted one of the oldest adages in marketing, ‘Sell the problem” as if it was a revelation. Fact is, addressing the problem is often forgotten as marketers become so entranced by the features of their products they forget to define the reason somebody would buy it.
People do not buy solutions to problems until they see the solution as costing less than managing the ongoing costs and inconvenience the problem generates, it therefore follows that the best way to sell is to develop the understanding of the relative size of the problem to which you have the solution.
This is the basis of “SPIN” selling, (Situation, Problem, Implication, Need pay-off) which is still the best sales book ever written, outlining a selling process that focuses on what a sale delivers to the buyer, and the best way to get there.
Sep 16, 2010 | Alliance management, Collaboration, Communication
Social networks have boomed, tools to enable the networks abound, MySpace, twitter, face book et al being the most well known, but many more fail than succeed, and they do so based on the degree of mutuality that exists.
Bear with me here.
Imagine 2 people who have $10 to distribute between them, one has the power to divide the money any way he likes, the other has just one thing, the right to accept or veto the deal for them both.
Rational economics would suggest that the holder of the veto would accept any deal that has him better off beyond the inconvenience of saying yes or no, say 2 cents, as both parties will be better off with a yes. However, experiments consistently demonstrate that the second person will veto any offer he sees as unfair, resulting in both parties losing, and this “fairness” point kicks in around a 70/30 split.
This implies there is a deep willingness to punish unfairness, even at personal cost, and that there is a strong emotional dimension to decision making, something very hard for economists to take account of in their models.
This emotional dimension underpinning behavior has profound implications for the way we should be thinking about the development of networks, irrespective of weather they are social, commercial or political ones.
Social networking works because there is an unspoken deal in place, which promises mutuality, Wikipedia being a shining example, there appears to be no control and there isn’t, control is exercised by the “wiki community” by virtue of their ability to remove any incorrect, irrelevant, or corruptive content, the access to the edit key which is easier to exercise than the effort required to post something, keeps things on track. Wikipedia in its earliest incarnation was a failure, as it left control with a small group of expert editors and contributors, with nothing left for the community which then failed to show up, as the “mutuality deal” was not in place.
Much of my work is with farmer groups, and the greatest challenge in the formative stages of getting a group “over the line” is the notion of mutuality, and how the group coalesces around a source of that mutuality, then finds ways to self regulate, if it is to be successful.
