The people are smart but the institutions are dumb.
Exactly. You can have 535 saints and geniuses in the U.S. Congress and Senate and they would still make stupid decisions, because the decision-making process in the institution is obsolete.
How does that affect business?
There is a slightly odd notion in business today that things are moving so fast that strategy becomes an obsolete idea. That all you need is to be flexible or adaptable. Or as the current vocabulary puts it, "agile." This is a mistake. You cannot substitute agility for strategy. If you do not develop a strategy of your own, you become a part of someone elses strategy. You, in fact, become reactive to external circumstances. The absence of strategy is fine if you dont care where youre going. If youre traveling and you go to the airport and you dont care where youre going, then you dont mind having the crowd push you towards some counter and taking whatever flight happens to be leaving at that point. Which means you dont care whether you go to Pago Pago or Patagonia, and your baggage goes to Portland. Strategy is not only an invaluable concept, but an absolute necessity. But that does not mean that you fix a goal of five years into the future, like the Soviets used to employ in Moscow, and you march inexorably toward that goal. That was pretty dangerous.
So how do you do it? You need to have both a sequence of temporary strategies, and also have a process or some climate that makes that possible.
Lets talk about some business strategy. For instance, getting first to market. With so much change already swirling through the consumers head, is that still important?
First is always a dangerous place to be by the nature of resistance to change. But I think being first can be turned into an advantage. Look at the concept of increasing returns. But that concept is not universal and doesnt apply to every industry and every moment. These should not be thought of as universal laws of business. They apply to certain markets. What is frequently the case is that we hit upon some principle that works in telecom, for example, and then write about it and talk about it and develop a universally true axiom. One of the critical ideas that my wife and I introduced in Future Shock and developed in all of our subsequent work is, in fact, the idea that the society and the economy are increasingly differentiated and demassified. Companies are frequently more different than they are similar. Thats why I am skeptical about rules of business: ten rules, six rules, eight rules, whatever. There is a tendency among consultants and CEOs and others to universalize what should not be universalized. Which makes sense in a second-wave. mass production system, but makes less sense if there are customizing factors.
Todays highly decentralized society is almost the opposite of what we thought the future was going to be like 50 years ago. Back then, it was groupthink and rigid central government and unthinking clones marching in lockstep. Now youre describing an environment where the worker has more of the power. So I suppose the future aint what it used to be.
Exactly. The dominant assumptions about the future by geniuses such as Orwell and endless numbers of science fiction writers, sociologists, and other scholars and so on, was simple: More technology equals more massification. More technology equals more bureaucratization. We argued that one of the defining changes was a shift to increase diversity rather than uniformity.
|Were flooded with business books
offering rules for everything from online marketing made easy to tips for customer
acquisition. Partly they are a reaction to the incredible change. We want guidance in
times of uncertainty. Should we ignore these books?
What criteria do you choose the rules applicable to you? Do you just take the latest book off the shelf? Kevin Kelly wrote a very fine book (New Rules for the New Economy ) and its a good book. A smart book. But it doesnt apply to everyone, and I as a reader have to have the wit to recognize what may or may not apply to me. Perhaps a more fruitful approach is to not simply accept all these rules at face value but select which rules are applicable for your niche and then customize them.
Does the future have a bad reputation?
It depends upon what country and culture youre in. In Europe, the future has a terrible reputation. Instead of a rational and critical response to genetic engineering, for instance, you have panic and stupidity masquerading as concern for the public and so forth. Europe is about to shoot itself in the brain, just as it has done previously. It shot itself in the brain by ignoring the whole IT revolution for years. Now, despite the fact that it has a powerful pharmaceutical base and chemical industries, it runs the risk of being completely sidelined again from the latest technological advances of the human race. Thats a deeply cultural thing. By contrast, the Japanese look to the future and are optimistic.
At the same time, the Japanese business culture does not exactly encourage entrepreneurialism, the way the United States does.
Yes, thats absolutely correct. But its beneath the surface. Go to a bookstore in London and youll see endless rows of books on the history of British royalty or the Victorian garden or the Great Age of Elizabeth. In a Japanese bookstore, those books are about the future of transportation, the future of health, the future of urban development, and so forth. We Americans, on the other hand, tend to have no past and no future. We are what the advertisers in the 60s called, on behalf of Pepsi, the Now Generation. We tend to be focused on the immediate. Thats where a lot of this notion that strategy is unimportant comes from.
Has the role of the customer changed?
The customer is now a participant in the production process. One way or another, we recruit customers to become our allies and in effect, co-producers. The customer now is what we call a prosumer. Years ago, you grew your own food, sewed your own clothes, built your own house. The Industrial Revolution split the producer from the consumer. The economic concept of production and consumption became two separate things. Now you make a car in Detroit and its bought and driven in California. The producers and consumers never met. Whats happening is a shift toward consumption in which the lines have blurred between producer and consumer or customer. The customer provides information as to what they want. Without that information, producers create a product that they cant sell and no one wants. So in more and more complex technological industries, you have the joint teams working togethercustomer and supplier. The relationship with the customer to the producer is radically changed and enhanced by the Internet. The Internet does the followingsay you bought a car and suddenly you discover you have a problem with the carburetor or some part of it, or something is wrong with it. Say something is not working. You take it back to the dealer and say fix it. The dealer tried to fix it, gave it back to you and its still broken. You send it back again and again. Youre getting angry, the dealer is getting angry, and no one is fixing it and youre fighting with each other, and finally as a customer, you walk away helpless. Now you can go online. I say I just bought a year 2001 gizmo. Anyone else buy that? Im having trouble with my X, Y, Z. How about you? Before you can say "litigation," you have 700 people with complaints and youve got a case, a product liability case, or some action of litigation.
In this age of unceasing change, what happens to brand loyalty?