Future That Has Already Happened

Drucker writes this in his book The Ecological Vission as the work of the Social Ecologist. This theme comes up regularly in many of his books including the latest, Management, Revised Edition. The idea is to focus on what has already happened and use that as a way to forecast the impact of those changes. I think this is such a powerful tool if well implemented.

If social ecology is a discipline, it not only has its own subject matter. It also has its own work-atleast for me. But it is easier to say what is work is not than to be specific about what it consists of.

I am often called a “futurist”. But if there is one thing I am not-one thing a social ecologis must not be-it is a “futurist”. IN the first place it is futile to try to foresee the future. This is not given to mortal man. And the idea that ignorance and uncertainity become vision by being put into a computer is not a particularly intelligent one. One problem is that the things the most brilliant and most successful predictor never predicts are always the things that are more important than the things he does predict. Futurists, always measure their batting average by how many things that they have preducted came true. They never count how many of the important things that came true they did not predict.

A good example is the most successful futurist in recorded history, the Frech science fiction write Jules Verne (1828-1905). Most of the technologies he predicted have come true. But he-probably quite unconsciously-assumed that society and econmy would remain what they were around 1870-and the changes in society and economy have, of course, been atleast as important as the new inventions.

But also, and more important, the work of the social ecologist is to identify the changes that have already happened. The important challenge in society, economy, politics is to exploit the changes that have already occurred and to use them as opportunities. The important thing is to identify the “Future That Has Already Happenned” – the tentative title of another book which I did not write, a book which was intended to develop the methodlogy for perceiving and analyzing these changes which had happened-and irreversibly so-but which had not yet had an impact, and were indeed not yet generally seen.

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Facebook’s business model – Chris Dixon

The key question when trying to value Facebook’s stock is: can they find another business model that generates significantly more revenue per user without hurting the user experience? (And can they do that in an increasingly mobile world where display ads have been even less effective.) Perhaps that business model is sponsored feed entries, as Facebook seems to be hoping (along with Twitter and perhaps Tumblr). The jury is still out on that model. Personally, I have trouble seeing how insertions into the feeds aren’t just more prominent display ads. You still have to stoke demand and convert people from non-purchasing to purchasing intents. A more likely outcome is that Facebook uses their assets – a vast number of extremely engaged users, it’s social graph, Facebook Connect – to monetize through another business model. If they do that, the company is probably worth a lot more than the expected $100B IPO valuation. If they don’t, it’s probably worth a lot less.

via Facebook’s business model – Chris Dixon.

I don’t think facebook is worth $100B.

The Amazon Playbook

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Venkatesh Rao writes a fantastic article on Amazon’s strategy.

Amazon’s story is so much like a chess game in fact, that I suspect a fascinating book could be written about it by focusing on just the game. You wouldn’t need emotions, larger-than-life characters or redemptive arcs to make it interesting. You could get all the emotional content you wanted by focusing on the reactions of the others in the water with Amazon, like the human characters in Jaws. If you recall, the shark was pretty expressionless throughout.

The Tablet Job to be Done

The iPad has been dominant in the Tablet world and I love my iPad. The Android manufacturers of Tablets are struggling with creating something that can stand as competition with the iPad. The most simple reason is that they cannot compete on 1) price and 2) apps. Because in the Job to be Done defined as “There’s an app for that”; Apple rules.

From Brian Soloman writing for Forbes:

For Apple, what’s special about the iPad is tied up in its apps. In the space of 30 seconds, they showcase eight different apps used for a variety of purposes. Most of the depicted apps were built by third-party developers and may not appeal to more than a fraction of iPad owners. Not everyone wants to practice calligraphy, play the piano, or learn about the human skeleton. But that’s fine – there are over 100,000 different apps.

The Kindle Fire from Amazon is doing something very different. Amazon has thought through the entire value chain, its capabilities, long term plans and defined its Kindle Fire in the Tablet space very differently. The Job to be Done in this case is “all the content”.

More from Forbes:

“Enjoying your content should be simple and easy. One touch gives you instant access to Amazon’s massive content library, including over 18 million movies, TV shows, songs, apps, magazines, and books.”

Did you catch the difference? Amazon portrays apps as “content” equivalent to other downloadable entertainment. And if you look closely, the video shows off a tablet interface in which “Apps” is just another tab side-by-side with “Newsstand”, “Books”, “Music”, “Video”, “Docs”, and “Web”. Compared to Apple’s approach, in which all other content is bought, viewed, and manipulated within apps themselves, this is a somewhat radical departure.

There you go. For Apple the JTBD is “There’s an app for that” and for Amazon its “all the content”. And I think for this reason both will thrive.

 

 

 

The ill-structured problem

I am reading Richard Rumelt’s Good Strategy/Bad Strategy. It provides a really useful set of insights on strategic thinking but falls short on “what do I next?” kind of action steps. Well, that is the part where we strategists come in I guess.

Good Strategy Bad Strategy: The Difference and Why It Matters

A good summary of his idea is the McKinsey article “The Perils of Bad Strategy”.

He makes a very good point about maximising profit as a goal in his book.

An economist would tell her that she should take actions that maximise profit, a technically correct but useless piece of advice. In the economics textbook it is simple: choose the rate of output Q that provides the biggest gap between revenue and cost. In the real world, however, “maximise profit” is an ill-structured problem. (emphasis mine)

This is a really good way to think about it. Its a goal, not a strategy and its a bad one. It’s ill-structured. The same can be said about “maximizing shareholder value”. These goals do not help in anyway to understand the challenge or diagnosis as he says, provide a guiding policy nor help in creating a coherent set of actions.

Why Drucker said Deming is obsolete now?

In a 2001 lecture (from The Drucker Lectures ) Drucker called W. Edwards Deming, the quality guru, “totally obsolete”.That is a bold statement but as usual Drucker is right. For those who do not know, Deming was one of the main drivers of the Japanese Industrial rise.

In Sayonara Sony, Adam Hartung at Forbes explains this very well:

Why did Sony’s management go along with this?  As mentioned, Akio Morita was an innovator and new market creator.  But, Mr. Morita lived through WWII, and developed his business approach before Deming.  Under Mr. Morita, Sony used the industrial knowledge Deming and his American peers offered to make Sony’s products highly competitive against older technologies.  The products led, with industrial-era tactics used to lower cost.

But after Mr. Morita Sony’s other leaders were trained, like American-minted MBAs, to implement Industrial strategies.  Their minds put products, and new markets, second.  First was a commitment to volume and production – regardless of the products or the technology.  The fundamental belief was that if Sony had enough volume, and cut costs low enough, Sony would eventually succeed.  Without any innovation.

By 2005 Sony reached the pinnacle of this strategic approach by installing a non-Japanese to run the company.  Sir Howard Stringer made his fame running Sony’s American business, where he exemplified Industrial strategy by cutting 9,000 of 30,000 U.S. jobs (almost a full third.) To Mr. Stringer, strategy was not about innovation, technology, products or new markets

 

The “pebble” watch and Job to be Done

The Pebble watch raises $4 million and counting on Kickstarter. Read about how VC’s did’nt support further development and the actual Kickstarter page here.

This is the interesting bit though:

Migicovsky said he’s more adept at pitching to consumers than to venture capitalists.

“With VCs, they worry about models and size of market and stuff like that,” he said. “With consumers, one of the things I love about the videos, we just showed how you’re going to use it.”

How you are going to use it? That is the Job to be Done. Nothing else really matters. Not market sizes and the traditional customer segmentation.

The way to understand the world is changing quickly and Job to Done does a great job of it. Horace Dediu from Asymco is a master at explaining this.

You can check out more on his podcast “The Futulity of Machinations” or on my blog post here.