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8 posts from February 2009

February 10, 2009

Champagne economics

Champagneeffectsmall
Photo courtesy of ori2uru

Technology creates affordances within organizations that are making it possible for commerce to experience a shift from process to people.

With technology creating transparency, we don’t need the apparatchik. Management layers of old can be stripped away as true talent claims the right to emerge, blinking, into a new world.

The new world is about more than strength in numbers or the factory. It's where quality and quantity balance and where the strength of the individual is the key to the strength of the collective.

This is an intriging dynamic. And, in recession, it has the possibility to create a ‘champagne effect’.

Quality and equity both boil down to the strength of the individuals that support and follow something. In that kind of situation, every impression, every experience, every touchpoint matters and the richness of experiences is what holds sway. This is a phenomenon of social connectivity.

Technology means what now matters is all about the company we keep. This new world brings with it huge potential for those prepared to live outside bureaucratic protection because freedom beckons for strong individuals.

Network effects are crucial to consider, and it's impossible to ignore the implications of the long tail - both good and bad - and that an infinite supply of crumbs can exist in the tail, while the big players in the juicy head grow bigger.

Whatever the case it’s clear that the simple irrefutable equation is that leadership creates success.

One essential characteristic of tribes is that the strength of a tribe is inherently connected to the strength of its leadership. You get to have a tribe by having the courage to lead. Where push marketing is thrust and permission marketing is traction, it’s the pulling power of the leadership from which all else follows.

So when a leader is ‘full up’ and their cup overfloweth in a tribe there are opportunities to go round, opportunities gained by developing leadership in each and every member within their tribe, each doing their own thing, each going their own way, each with a specialization, each being remarkable.

These aren’t the days of the factory anymore where people are assigned. In tribes leaders choose and are chosen. I wonder whether the way to make profitable relationships in a tribe is less about tails and heads it’s more about leadership and individual excellence.

The commune was fair, but flat. Imagine a notional 30%:70% value split cascaded all the way down a champagne tower and you get a lot more fizz, and a lot more leadership. But it also takes strong leadership to stir up the bubbly in the first place.

The champagne effect is what makes social communities exciting. It encourages leaders with fizz and the chance for us all to pop our corks.

The world is maybe enough

Enough may become the most important word of 2009. Enough is finite, not infinite, growth.

Enough is satiated not insatiable wants.

Enough is finding a share of voice that works.

Enough is a sense of resignation, a letting go to counterbalance competition.

Enough is sharing. Enough is abundance.

Enough is a word for our time.

The blindsiding of bankers

This is the age of social activism. It’s an age that was brought to life by the good - by the fun and exhilaration of youtube and grown by the bad - by disasterous earthquakes and desperate meltdowns.

Whilst we first came to know about networks via video and new kicks with pictures, we’ve got organized around events like China, bank charges and bonuses and the need for hope.

Social community is, at its core, about human connections and emotional bonds. It’s an age that supports self expression.

This doesn’t sit well with everyone. Rational, analytical types on the Keirsey Temperament Scale, for example, may view social communities as unattractive. One attribute of social communities is their random volatility, they are not all code. There’s also the question of how to measure the value of social communities, problematic in a risk averse and credit crunched marketplace.

Technology and goodwill, however, have the combined power to create seismic shifts in this.

The Treasury Select Committee is questioning the highly numerate Fred Goodwin  of RBS, Andy Hornby  of HBOS, Lord Stevenson and Tom McKillop to a packed crowd today at Westminster.

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Picture courtesy BBC

And within this investigation of what went wrong with the banks, what’s transpiring is the extent of a tragic mismatch – between what was required to manage in changing circumstances and what we actually had.

The ground was shifting and there was no way to recognize it until it was too late.

Andy Hornby, ex head of HBOS has proudly stated how 5 members of the HBOS Executive Team had 150 years of experience between them. Experience in looking backward. They were blindsided.

They were blindsided too by an abject lack of consumer dialogue and a culture lacking conscience. As John Prescott and myself and others find potential for action in facebook, there’s clear and tangible evidence that the gulf between public opinion and Board perspective has hardly been wider.

A universal uproar at the dual principles that have been applied is in motion, the disparity between what expectations are handed down to the public around risk and reward and the management of credit and debit, compared what banks are claiming as principles for themselves.

Those protected by a bubble of assets, highly numerate and secure, are failing to grasp the emotional content that real life hardship is releasing. This is the kind of content that’s going back to the more primal connections and real life values that social networking fosters and allows.

Despite the fact that these bankers have gambled away huge sums of capital built up by shareholders and customers, with RBS losing £28 billion in the last year, Fred Goodwin walked away with £4.3m in bonuses.

That’s the paradox. The failure to grasp how it feels to hear that when others go broke for far less means that communities and trusted places are becoming places of some refuge, stimulating new ways of trade. Time for organization 2.0.

February 05, 2009

Towards a superbrain: Clay Shirky at the LSE

This is a snippet of Clay Shirky at the LSE talk I was at on Wednesday discussing the development of network effects and how they're beginning to scale.

Clay says something very interesting in the context of social communities when, as he puts it, 'fast is different from slow, and large is different from small'.

The best capacity for change doesn't come from large groups and it doesn't come from individuals.

It comes from small groups of people who are passionate about the same thing, working with each other and sharing what they know or, as Clay puts it, 'small groups of large people arguing with each other'.

Brilliant insights into why tribes are so powerful and the potential that exists in consented group capability.

Established, conventional brands and businesses may have to go some distance to measure up against that.

Seth Godin explains why we need a tribe

In a nutshell... Thanks to Loic Le Meur for filming this at TED yesterday. People will forget what you said and they’ll forget what you did, but they’ll never forget how you made them feel and what you inspired them to do. If you're a marketeer, make something that matters and that's worth talking about. Nice little story about Seth's name, too.

February 04, 2009

A bounce away from big

Bouncing kangaroos
Boxing kangaroos picture courtesy of aaardvaark.

In an interesting article by Dan Fairey-Jones, Brand Republic reports today the decision by The Competition Commission’s to put an end to Project Kangaroo, the joint venture between BBC Worldwide, ITV and Channel 4, ‘on the grounds that it would overly restrict competition in the video on demand market.’

There are several views in that article about what Project Kangeroo represented. It represented the ability to lead in content generation at a global level, the ability to keep content generation open to competition and a project to promote UK media content with healthy advertising revenues attached as part of the change.

What can be taken out of this decision? Without being near the centre of these discussions and from an arm’s length perspective but with a lifetime involved in media communications, it seems to me what's worth noting is that this decision brings with it a bounce away from big.

The days of big above the line media spends are becoming tinged with a degree of twilight.
If channel proliferation is staying as is, how will media reach audiences effectively as we start to favour content creation on the web that is increasingly homespun?

Are media organizations scaled to deal with that, I wonder, and what brands will have to do to play a part in the lives of their consumers this way.

There's the question of how will we fare as on the global stage as media content providers within a global marketplace, the next chapter of economic evolution is likely to be about that in some form.

On the side of small, community management is replacing brand management with intimacy in communications becoming consequently more important. When attention is at a minimum, loose intimate bonds are most rewarding and most accessible.

These new media and market dynamics will mean a rethink in media strategy for many.

Personally, whilst I regret the missed opportunity for a market-leading UK supermedia brand to emerge with this decision, there is every opportunity and reason now for media brands, and brands generally, to communicate with more relevance with their constituencies, and in building constituencies than can be, each in their own right, very springy.

Chill... part two

Keep calm and carry on 

A message from the past very similar to yesterday's 'chill' sentiment is published today in this article by the BBC - reassuring memories from times of similar adversity.

The thing is, we know markets need more than stoicism, they need confidence.

We maybe need new ideas, and we're used to a certain degree more autonomy compared to how this paternalist advice was dispensed in the past.

Interesting to think how we might rephrase these words of wisdom in that context.

February 03, 2009

Chill

It wasn’t absolute zero yesterday, but it was a colder day than most, and ten inches of snow brought London practically to a standstill.

On Wimbledon Common the snowman building tribe came out, for one day only, to do their thing, a temporary tribe.

People were engaged in a shared experience and the community spirit was not only alive and well it was thriving, creating a life affirming energy in the depths of winter. That’s what communities do.

Chilling out has long been associated with having a plus side, it suggests moderation, it attracts rathers than repels. As Lucy Kellaway writes about the recession’s web of fear and how we manage an emerging global collective psyche, arguably the best thing we can do right now amidst the panic of potential meltdown, is chill.

The interesting thing absolute zero as a temperature is it’s when matter exhibits quantum effects such as superconductivity and superfluidity, so as far as getting things going is concerned, it’s a pretty good place to be.

Apply that to economics and no growth may be a good thing for a while, a time to take stock in lateral ways.

When we take time to survey the economic scene it’s just as much in the depths of a bleak midwinter as my local snowscene. It looks like the repetitive rush to profit and productivity has driven us at a reckless pace into the buffers like a runaway train that’s facing derailment on snowy tracks.

Compare that to the strongest social community I know, Seth Godin’s www.triiibes.com community where, on an entirely voluntary basis, in six months 3,942 members have created 353 groups, 3,163 discussions, 2,075 blog posts and uploaded 437 videos.

It’s the laissez faire approach coupled with a strong leadership ethos of ‘lead and get out of the way’ that’s generated an excellent signal-to-noise ratio, such remarkable productivity and a whole wave of active participants as the antidote to 'single-think'.

The internet lowers the cost of failure and has the ability, in social communities, to create safe places to land, thus spawning entirely different cultural possibilities compared to more rigid management structures.

These cultures are more relaxed, committed to the need for collaboration as the way to get things done, and capable of rapidly accelerating group capabilities because of the cumulative effects of learning iteratively together in real time.

Strong community cultures accept and encourage everyone involved to express themselves, to feel valued for having a point of view, metaphorically speaking, to build their own snowmen.

They recognize that consumption and production and new forms of credit can often be generated better as a group, for and with one another, than by seeking that fix from outside, especially when a common purpose can bind people together like glue.

These things are beginning to emerge as new imperatives for productivity and growth. Being chilled about that probably isn’t a bad way to start.