Globalization: Coming soon to a theatre near you
"We are flying into some turbulence, so please return to your seats and keep your seatbelts fastened while we try to find more favorable winds."
As chronicled in the just-published Decade in Review 2000-2009, the twenty-first century is proving to be volatile and disruptive in every way, and 2010 will continue the trend. Three disruptive forces are converging: the relative value of the Industrial Economy continues to fall as overproduction reigns. Globalization is replete with extras that people at the head table didn't order. Most imperceptibly yet poignantly, the emerging Knowledge Economy is digitizing communications and changing the economics of knowledge and relationships. Web 2.0 and social networks drive down the cost of communication, which accelerates volatility because when people talk, ideas change and lead to action, and digital conversations happens faster and less expensively. Social networks are rapidly making "the Web" human, thereby attracting an ever-larger portion of all human communications online. In 2009, adoption reached critical mass, ramping strongly among consumers, so many enterprises are following. The Web 1.0 adoption rhythm is very instructive.
Pervasive Web 2.0 also means reexamination or disruption of most areas of life, culture, society, government and business because social networks alter how many and what kind of relationships people have. The impact is similar to Ford's production line, except it is more powerful: it scales relationships. Large organizations will remain in a profound state of turmoil because they were not built with withstand the volatility these forces are unleashing. Many Fortune 500 companies will be confronted with their survival, and some will not make it. Entire industries will consolidate over the next several years (automotive, airlines, banking, hotels, food, consumer goods...). Web communications mean we consume novelty far more quickly, which curtails product life cycles and leads to ultra-fast commoditization. Companies will require unprecedented innovation to even stay in place. New entrants around the world compete for customers and leverage their lower costs and better innovation processes. And Web 2.0 is still in the early stages of adoption.
This dynamism elevates opportunity and threat for executives and their organizations, so our focus here is to lay out probable milestones for 2010 to assist executives in business strategy and career planning for 2010 and beyond. First, I will lay out predictions, on which I'll build for my 2010 recommendations. By the way, this follows Year in Review—2009/Social Networking Gains Legs on Heavy Seas and Decade in Review 2000-2009/The Rise of Web 2.0, the New Pervasive Human Space.
We need to upgrade the turntable again! When I emerged from undergrad in the eighties, the economy was rotating at 16rpm, which we doubled in the nineties with Web 1.0 to 33rpm. The 2000s had us grooving at 78rpm. Even though one part of me says that this metaphor is poorly chosen because it's retro, it also reflects another key trend: atomization and mashing up.
The Web is a communications revolution that speeds the consumption of novelty and its economic value, so it is destroying the Industrial Economy's main value mechanism: value via efficiency and long product life cycles. During the 21st century's first decade, the overriding trend is that society and markets in which executives have interest saw extensive disruption and change. That meant volatility. As I'll discuss, this volatility will continue to accelerate because the transaction costs of communication are plummeting, which drives rapid iteration and change in all areas of human society. At the risk of sounding subjective, I believe this will probably be regarded as one of the most disruptive eras in history.
Continue reading Decade in Review 2000-2009/The Rise of Web 2.0, the New Pervasive Human Space
Editor's Choice of the Global Human Capital Journal—Behind the Curtain—The Best Strategy, Tactics, Case Studies and Insights of 2009
2009 may have been many things, but boring was not among them! To do it justice, I feel like I have to dock the ship, which has been sailing on turbulent seas, frothed with spellbinding sunrises, sharks, dead winds and tempests. Volatility and surprise have certainly been the watchwords among executives I've collaborated with this year, and all indications are that we should look for the same in 2010. However, as dramatic as the environment is, it is only the backdrop for the real story: Enterprise social networking has found its legs and is ramping strongly. Although still tentative, social network investments are becoming pervasive due to the exploding adoption among individuals—and the latter's impact on markets and firms. As I have been writing since 2005, digital social networking represents unprecedented disruption, opportunity and risk, and I saw many of my predictions play out in 2009.
The 2009 Year in Review gives you the chance to come up to speed rapidly or fill in the holes in your understanding. My perspective comes from intense collaboration with exceptional pioneers of enterprise-focused social networking. Many of the articles come from client work and real situations I encountered this year. I have reviewed 2009's articles, selected the best and wrapped them in a review and analysis to help you realize where we have been, so you can better plan where you want to go in 2010.
So, throw a log on the fire, pour yourself a nice glass, and let's dive in.
President Bill Clinton addressed 2,500 alumni of the Indian Institutes of Technology in Chicago on Saturday at PanIIT 2009 with the message: You can make an impact as an individual, and all of us have to take responsibility for creating a more equitable, stable world. Speaking at the three-day global confab, Clinton pointed out that interdependence had positive and negative consequences because it brought people together in unprecedented ways. Through actual and media contact, people start seeing how everyone else lives around the world, and startling differences are difficult to understand and accept. Overshadowing this are a slew of global challenges like disease and climate change, problems that demand unprecedented collaboration. I will both summarize his remarks and provide my analysis and conclusions.
The 20th century created and democratized unprecedented wealth for humankind in many parts of the world, but soon after the 21st century dawned that party ran out of booze (credit), and the global economy is still seeking a new equilibrium. Businesses and individuals are beginning to suspect or realize that they find themselves in a fundamentally different environment. Here I will briefly outline two levels of adversity executives are facing, one of which is serving as a smokescreen for the other. Then I will share some recommendations for managing through this period. By understanding some of the causes involved in these economic effects, you will be able to guide your company and career most appropriately.
Specializing in Web 2.0 and social networking since early 2006, I've formulated strategy and programs for hundreds of business and government leaders. The main goal of these initiatives has been engaging people in the most appropriate and effective way. Since many of my clients are B2B (business to business, commercial) executives, I have worked extensively with LinkedIn because it has been most relevant for most situations (it still is).
However, I am increasingly seeing cases in which people have accelerated relationships by connecting in multiple platforms, and this is growing in importance in client work. Here I will offer a cursory introduction of this concept and how it can work.
I am also pleased to announce that the Executive's Guide to Facebook will launch next month. If you are in Chicago, you can attend a special sneak preview on May 4.
IOR Before ROI
As disruptive innovations cross the chasm and prepare for widespread adoption, early adopters need to integrate them with the levers of market power to create unusual value. For over 20 years, I have helped companies seize unusual advantage by adopting disruption ahead of competitors, so here I'll share how early adopters are creating value with social network investments. Specifically, I will show how to combine social networking with "business development" (practice development, sales). I will begin with a high-level description of the social network-led business development life cycle, and I'll close with key thoughts on value and ROI. Although the immediate context here is B2B and business development, the principles also apply to the B2C environment.
Web 2.0 and Social Networks have gained perceptible mindshare during Q1 2009, and conversations with clients, fellow speakers at conferences and online conversation are clearly showing the reappearance of a familiar adoption curve. Here I will discuss the Adoption Curve for Web 2.0 and Social Networks and provide rough milestones, so you can use it to gauge your investments in Web 2.0. You can avoid some of the extremes that the majority of the market will experience.
In addition, I will also show how Web 2.0 provides a rare opportunity to develop competitive advantage ahead of the market.
What a difference a year makes! The Social Networking Conference debuted several years ago as a forum for social networking sites and vendors, with enterprise clients few and far between. Miami 2009 took place January 22-23, 2009 at the Miami Beach Convention Center, and it was a veritable enterprise 2.0 conference. Many of the presenters hailed from enterprise-focused high technology vendors, but they spoke as social networking practitioners. The good practices they shared reflected the maturation of social networks. Don't get me wrong, we are still in early days, but it was obvious to see that social networks would be completely mainstream this year. Enterprise-focused vendors provided additional evidence by explaining some of the new social network features in their offerings.
Social Networking Watch's Mark Brooks gave an overview of key trends, while jetBlue's Morgan Johnston and IBM's Adam Christensen drove home the message that companies could be rewarded for trusting their customers in social networks. Ford's Scott Monty, Sun's Lou Ordorica and Microsoft's Marty Collins shared how they were using social networking to evolve their companies by opening up to customers and adopting P2P, two-way communications.Yammer's David Schwartz and Faceforce's Clara Shih presented two tech innovators that promised significant disruptive potential. SAP's Steve Mann, Opera's Thomas Ford and Dow Jones' Tom Aley all shared fascinating social networking elements of their portfolios, which were all enterprise-focused. Awareness Networks' John Bruce was on hand to share good practices and pitfalls. I presented the only industry-focused preso, focused on how social networks were beginning to disrupt the U.S. healthcare industry. I also gave the pre-conference workshop, Successful Social Networking Projects in the Enterprise.
Between my workshop and conference track, I scribbled enough notes to share the high points of many of the tracks, which I'll summarize before offering Analysis and Conclusions. The reportage follows this convention: the summaries are from my notes of speakers' remarks, and [when a sentence is bracketed], it is a comment. Click on logos for abstracts of the tracks.
Now that the Year in Review 2008 has summarized key trends, we are in excellent position for 2009 prognostications, so welcome to Part II. As all experienced executives know, risk and reward are inseparable twins, and periods of disruption elevate both, so you will have much more opportunity to produce uncommon value than normal.
This is a high-stakes year in which we can expect surprises. Web 2.0 and social networks can help because they increase flexibility and adaptiveness. Alas, those who succeed will have to challenge conventional thinking considerably, which is not a trivial exercise in normal times. The volatility that many businesses face will make it more difficult because many of their clients and/or employees will be distracted. It will also make it easier because some of them will perceive that extensive change is afoot, and Web 2.0 will blend in with the cacaphony. Disruption produces unusual changes in markets, and the people that perceive the new patterns and react appropriately emerge as new leaders.
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