Let me start by saying that I know next to nothing about fluid dynamics. However, the little that I do know has helped to provide me with a great many insights of the 'digital customer' and by extension a very good vantage point from which to evaluate the future of digital entertainment convergence.
You see, I have painted a picture in my mind of the millions of digital customers as one massive stream of water rushing downriver while digital entertainment businesses are the dams whose turbines generate revenues as digital customers come gushing through them.
While I use the above analogy to gain a better understanding of some of the dynamics of digital entertainment convergence at the 'macro' level, I similarly apply it at a 'micro' level when evaluating a particular digital business offering and also at the 'nano' level to determine the level of 'fluidity' of a specific functionality for example. Here I will discuss mainly the macro level.
So let's look again at the key elements which form part of this 'digital stream'. We have water (digital customers), the dams (digital businesses) and the turbines (digital systems & processes). Each element has a particular function and objective. Water wants to flow to the 'other side' and it will pass through the dam's turbines to get there (digital customers want to use or purchase a digital offering); the dams want to contain as much water as possible to power their turbines (digital businesses will grow and thrive in proportion to the number of digital customers they are able to attract) and finally the turbines will attempt to use the flow of water as efficiently as possible so as to maximize the energy produced in the process (the more efficient a digital system is the more revenues it will be able to generate, the more profits it will derive and the faster it will thus be able to grow).
Assuming for a moment that two competing parties are targeting identical markets (the location of the dam and its associated water flows) and that their 'construction and engineering' teams have matching capabilities, the key issue will turn to which of these two parties is able to maximise the returns from its activities through the superior design of its systems and processes (the design and efficiency of its turbines).
Unfortunately, I have repeatedly come across situations where people believe that the mere fact of locating and building their digital business within close proximity to a large stream of digital customers will automatically grant them untold riches. There are two issues that they fail to properly take into consideration. Firstly, they are not operating in a void but have many direct and increasingly indirect competitors who will fiercely attempt to divert as much of the digital stream for themselves. Secondly, they spend significantly more time looking at the big picture of the water and the dam than the minute details of the turbine where all the energy will actually be generated.
Again, I am often faced with instances where managers are not immediately concerned (or worse, aware) that while their dam may be generating 400 megawatts their competitor is also generating 400 megawatts but failing to recognise that this competitor is able to achieve the same level of output with a dam that is two thirds the size of theirs through the use of more efficient turbines. Within the context of a dynamic digital environment there is little doubt that the more efficient operator will rapidly eclipse the other.
In conclusion, while many digital businesses are in the right location and have developed a digital offering of one kind or another the ultimate winner will be determined by which player is able to design the most efficient and fluid system to exploit the Digital Stream.
I would like to thank my good friend Stephane K. for the many conversations which have greatly stimulated my thinking on this as well as other issues.
1. Articulated clearly and succinctly 2. Capable of stirring emotions 3. Versioned by many and regularly 4. Repeated often 5. Demonstrated by ongoing 'small wins' 6. Refined with time and changing conditions 7. Nurtured and encouraged 8. Provided with nutrients 9. Given time to germinate 10. Followed by actions
I have just returned from a business trip in Paris via Eurostar which should have provided me with the opportunity to catch up on a large stack of unread news and articles. However, one of these by my friend the economist Reuven Brenner and entitled 'Unsettled Civilizations' so engrossed me that I did not get much other reading done...
Like many, I consider Reuven to be one of the foremost thinkers in the area of entrepreneurship and its economic benefits. His knowledge and insights are truly remarkable and I only wish that more companies and nations could learn to apply the many lessons that he teaches us.
Although this article starts off on the matter of how the US can deal with Iraq you will find that its scope goes significantly beyond this and as he states early on "today's conflict  can be viewed as one between 'mobile' and 'immobile' civilizations whose members can be found in every society".
Among others, he asks and answers two important questions: - "Why have so few societies succeeded in developing deep and open capital markets?" - "How did the West stumble on the maze of institutions that laid the foundations for its 'mobile' civilization?"
One of the comments that struck a particular cord from my own experiences living and building a business in Venezuela some years back is how "institutions are needed to give an increasing number of young people hope and a stake in the future [without which instability ensues]".
Although I know that many will feel uncomfortable with the word 'dreaming', I strongly believe that a 'future vision' [dreams about a richer future] are much needed to motivate an individual or a nation into taking the actions required to achieve this vision. The main issue thus becomes how and what vision to state in the first place and this article offers a good starting point.
Following the emails that I have received and other feedback to my latest post 'Confronting Change', I would like to share with you some more thoughts on the topic - in this instance about change when customers are smiling.
When raising the issue of change this is what I often come across: "Our customers love our products! They're all smiles! Our sales have never been better! We don't need to change a thing!"
Following this corporate wearesocoolwepissicecubes statement I point out that 99% of customers are extremely well brought up, model citizens who have strong values and go to church on a regular basis.
The response I get is: "Andrew, are you feeling OK?"
Quite OK thank you. The point that I'm trying to get across is that the majority of customers will have a high propensity for politeness and will feel bad to make you feel bad because they are basically, well, very nice people. The fact that they may not be actively voicing their opinions says nothing about how they really feel about your products or services (or vice-versa those who do voice their opinions are not necessarily representative of those who don't).
In short: "When a customer smiles it's not always because he/she is happy, they're quite often simply being polite."
However I also remind companies that this politeness stops short of reaching customer's wallets. They will nevertheless very politely indeed exit for the nearest competitive offering if it offers them better value - and it's not all just about a slightly better, faster or cheaper product/service but about the complete customer experience!
The latest volley of conventional wisdom (click here to read how I feel about this particular subject) posits that we now live at a time where technology is enabling us to recruit customers to help us design our products. The principle is absolutely right but I believe that we are rapidly evolving to a stage where the expectation is that customers will do pretty much all of the design work and this is absolutely not right. I now frequently come across: "We'll get [it] out to market and if it's not right our customers will tell us how to solve it." Multiply this across thousands of products and services and the pressure on customers to help companies get it right becomes unbearable.
This is particularly true in the consumer technology sector (both for products and services) where of late more and more offerings are coming out to market 75% finished instead of a more acceptable 98% - acceptable that is only if there is absolutely no way that it can ship 100% finished. Of course there are competitive pressures but speed-to-market should not become an excuse for negligent work!!! Furthermore, considering that we are rapidly coming to a point (if we haven't reached it already) where any 'kid with some pocket change' (in another context a very good thing) can develop and market a new product or online service, I fear that things are likely to get much worse on this front going forward.
Finally, I have not come across that many people questionning the long-term damage in consumer confidence that this is causing. If customers were somewhat apprehensive about trying new technologies before we're closely approaching a point where we're scaring the bejesus out of them! As an industry example, it may be worthwhile noting that for all the iPods sold out there people using digital music and MP3 players still pales in comparison to those making do with conventional CD's. We're going to have to work a lot harder at getting the right products and services on the market to appeal to this audience.
Ultimately: "It is not the responsibility of customers to run or tell you how to run your business. That's what they pay you for when they buy your products and services."
To say that we are confronting change on an unprecedented scale cannot even begin to describe the disruptions facing us in the coming decade. From the continued growth and pervasiveness of the Internet and the resulting changes in consumer attitudes and expectations towards business and government to the constant introduction of new innovations and technologies across countless industries we are living through one of the most momentous times in the last century.
So how are businesses and governments confronting these changes? To be frank, most (consciously or unconsciously) currently have their heads burried deep in the sand and are oblivious to the threats and opportunities that lie ahead.
It is important to understand that there are two kinds of attitudes that motivate change initiatives by governments and businesses worldwide:
In a rapidly changing environment, there are those that proactively rally their resources in a quest for "opportunities" across new frontiers while others only respond reactively to "threats" while trying to protect their existing dominion.
True leadership (usually closely followed by economic success) can only be found amongst the first group as the other scrambles and struggles to eat from the leftovers.
Many will come to me and say: "Andrew, what are you talking about? Look at all the initiatives that we have in place. We are doing something about it!". I have to respond that yes they are often doing 'something' about it but then question them by asking how 'seriously' their organisation is taking these initiatives. By seriously I mean in the sense that "are you absolutely 100% wanting this something to succeed and will stop at nothing to make it work?".
The response after this is a bit different: "Well our CEO/Chairman doesn't fully support this yet"; "It's not that critical to our business because it's small compared to the rest" - you get the picture... Essentially these organisations are not playing to win they're just playing! How motivating can this be for the managers and employees in these organisations!? What if this was football and your coach told you that he loved the game but you really felt that he didn't care that much if the team won or lost... I wish that I could have such a cavalier attitude when tens or hundreds of millions are invested to fund these initiatives...
I've so far only discussed governments and established businesses but there is a third crucial category - entrepreneurs. Why do I consider that entrepreneurship is so vital to be included separately here? Because an entrepreneur can never start a venture with a business plan premised on threats. He/she will always have to start a business in the pursuit of new opportunities as no investor will be prepared to fund them otherwise.
So what's so important about having entrepreneurs pursuing these opportunities? Well there's one simple prevailing fact about entrepreneurs: in order to succeed they know that they must create something that is somewhat or significantly better than what is currently available because customers will otherwise have absolutely no reason to flock to their products or services. Entrepreneurs are the ones who risk to dream the future, who have the courage to succeed, the ones who must have the motivation and energy to make it work because there isn't a nice 'cushion' to sustain them if things don't work out - they have to make it work. Naturally not all entrepreneurs will approach their business in this spirit and may also fall in the 'play to play' category but the odds are that most will.
In times of rapid change in particular, a country driven by entrepreneurs pursuing opportunities will over time completely outdistance its competitors. For example, we recently presented an analysis demonstrating how a comparatively simple competitive advantage compounded over 10 years could represent the difference between one company achieving $10 billion in revenues while its peer only managed to reach $1 billion over the same period. The biggest surprise actually came from finding out that people found this surprising!
As a businessman, futurist and change agent I often find myself struggling to get this message across and a wise friend suggested with the quote below that this blog may just be the right forum to do this.
"Reflection instead of confrontation, articulation versus confusion, persuasion under candlelight..."
I personally believe that much more agressive means are necessary because time is rapidly running out and I feel that my sense of urgency is not shared among many CEO's and politicians but as I said my friend is much wiser than I am...
How are you or your organisation confronting change? This article seeks to generate debate. Make the most of it. Use your mind, use your voice, use your pen, share your thoughts! Post your comment below and share your own experiences with the many global entrepreneurs (or will-be entrepreneurs) who visit this blog and are at this very moment going through the same travails as you are or you can email me if you prefer. I will write a follow-on piece to disseminate and share your views with others and hopefully together we'll build the pressure to get things moving! Thanks for visiting and a particular thanks to all those of you who have already exchanged your remarkable stories with me and who continue to inspire and motivate these discussions.