Editor's Choice of the Global Human Capital Journal

As I reflect on 2007 and create strategy for 2008, several macro-trends come into sharp relief, and I believe that some of them might be helpful to you as you conduct your own planning. As always, I focus on emerging phenomena because they are areas in which disruption and discontinuous change are acting on markets, thereby elevating threats and opportunities. Helping leaders to create strategy to manage the risk of unusual market developments is the focus of my consulting practice.

In 2007 it became clear to me that we were entering a profound social transformation that would produce an unimaginable degree of change. Unlike the technology-precipitated change that I've been helping people with since the 1990s, technology is shifting to the background now, and pervasive social change is taking the stage. Look for disruption in all areas affected by how people connect, communicate, purchase and collaborate: business, politics, community and leisure. Moreover, these changes are completely global with all the variations that engenders.

I can't tell you how many acts this opera has, but 2007's themes can provide you enough clarity, at a minimum, to notice that the water is getting warmer. I have also included among the links some prescriptive market advisories I wrote this year. They give explicit advice and action steps to maneuver your organization so that you can become stronger as these changes unfold.

Thank you for your readership and support, and best regards as the curtain rises on the first act!

Edison as Mashup Artist: Combining Discipline, Process and Intuition

Innovate Like Edison is a must-read for anyone who wants to thrive in the "flat world." Had it been written in the 20th century, the book would have been applicable to R&D leaders, and it would have been a nice-to-have for business and government leaders. Innovation was the place kicker on the team during the Industrial Economy because companies created value through efficiency (refining continuous processes), and innovation is about discontinuous processes.

In the 21st century Knowledge Economy, however, innovation is the linebacker. Customers merely expect world-class efficiency, but it rarely differentiates. Innovation is now a core competency at most levels of every organization.

The problem is, the authors explain, is that very few people are innovation literate, and they don't know how to practice it practically. As I've written extensively, business innovation failures are over 95%, and most new products fail at high rates. We must reposition innovation as a linebacker, and that means understanding it differently and treating it differently. It's a group effort, no longer a specialist activity. Therefore, this book is one of the key guidebooks of government and business leaders, and it's also a fascinating read. Here's why:

Valuable Space to Create Your Professional Knowledge Network

LinkedIn is a social network website that enables people to build and manage (mostly) business connections in order to discover jobs, ventures, new clients, etc. Unlike other social networking sites, its focus is business rather than social or entertainment.

LinkedIn is emerging as a dominant networking environment for executives and professionals, and its development will be of interest as both an immensely practical tool and as a study of the social network phenomenon. Founded in 2003, LinkedIn crossed the chasm in 2007, as the company reports that thousands of people are joining per day. Today, it has more than 9 million members, and membership is very global.

As valuable as LinkedIn is, one of the company's weakest points is making itself approachable to executives. For example, I recently attended an Illinois IT Association Sales Round Table at which attendees represented a broad range of executives, IT management and professionals and were no strangers to developing relationships and business development. Presenter Steve Weinberg gave an excellent presentation on LinkedIn's potential and features. Listening to the interaction of the at-capacity crowd, I was impressed by the lack of knowledge in the room, including my own.

Therefore, I decided to put LinkedIn under the microscope. I investigated its methods for enabling networking while protecting privacy, and I delved into its tools and methods. I wanted to assess whether it was ready for prime time for the time-pressed business and government leaders I know. I conclude that LinkedIn is an extremely useful tool, and most professionals and executives will benefit significantly by using it.

Immensely Valuable Field Guide for Word of Mouth Practitioners—with a Twist

Word of Mouth Marketing is an exceptionally useful, insightful and surprising book. Andy Sernovitz has done a masterful job at creating a brief, lucid and tactical guide to realigning your company's relationships with your customers, quickly and inexpensively. It is very straightforward, honest and full of practical techniques. Moreover, it is very human because it addresses customers as human beings, not demographics. I suspect that this aspect of the book might peeve those marketers that are invested in the difficulty and complexity of their craft. Think about it: when customers were (relatively) mute and invisible, marketers were the intermediary between the enterprise and the customer; in the absence of the customer's voice, they created models and theories to simulate it. WOM, powered by Web 2.0, means that customers can talk in their own words, and companies can listen. The customer's back!

However, this direct customer connection also means that marketing will be much more fun and less frustrating for companies that understand the shift and engage their customers. This direct, fun and productive new reality emanates from the book's every page, and its energy is infectious. As a business strategy consultant, I cannot overstate the importance of beginning to act on consumer empowerment as soon as possible. I highly recommend the book as a way to change your thinking and develop some practical first steps.

An Excellent Primer for the Core Competency of the 21st Century

To thrive in the Knowledge Economy, companies will have to learn how to innovate at warp speed, or they will simply slip beneath the surface of the water like stricken liners. Ultra low costs and exceptional quality feature sets are merely expected, and they no longer differentiate. Conventional wisdom holds that "innovation" cycles reappear every five years, when companies have exhausted the then-current cost-cutting approaches and need to focus on driving the top line.

However, the Knowledge Economy doesn't call for your father's innovation. The 21st century kind will require that companies turn themselves inside-out. Winners will learn to engage and catalyze their customers' creativity. As author Patty Seybold aptly puts it, "Companies with the smartest customers win." Outside Innovation is an in-the-trenches manual for evolving your company to embrace the innovation imperative.

A Must-read Guide to the Importance of Web 2.0 and the Knowledge Economy

The Long Tail is a watershed book that reflects many of the profound socioeconomic changes wrought by the transition from the Industrial Economy to the Knowledge Economy. The "Long Tail" represents the splintering of the mass market—what is happening, why and how you can thrive in the new era of the niche. Moreover, it shows how the mass market was a temporary phenomenon that developed because niches were not economically viable for producers to address.

Chris Anderson is editor-in-chief of Wired, and the book has an appreciation for culture, the economics of technology and the importance of innovation. It's also very well written: Anderson tackles some fairly abstract concepts, but the reader doesn't trip over them. It's possible to read the book quickly, but there is plenty of substance for a detailed, reflective reading as well. Difficult to over-recommend!

The Long Tail offers an insightful look into the byte-oriented Knowledge Economy and its movement away from the zero-sum, bits-oriented Industrial Economy—and what this holds for business and culture. The book has the technology/culture/innovation I associate with Wired, which makes it very insightful for understanding the implications of the changes. It includes numerous case studies and examples, many drawn from the entertainment industry, but also manufacturing and high technology.

Due to the book's importance, I've included some detailed chapter notes before adding Analysis and Conclusions at the end.

Excellent guidebook for succeeding in the online world, including social networking

The Virtual Handshake is an immensely valuable book, both as a handbook to the virtual world for the business-oriented person and as a guide to purposeful networking. I was compelled to get it after seeing David Teten speak at a conference because he spoke with authority while explaining new things clearly. Allen and Teten have done a masterful job at writing an interesting book that is full of useful information. Moreover, they succeed at providing a conceptual framework, so the reader can make use of the information. It is also a fun read.

As a marketing executive and a management consultant (strategy) since the early 1990s, I have helped to build parts of the virtual world the authors describe. I am very familiar with the topics, and I found the book useful on two key levels:

• Conceptual: The virtual world is difficult to understand conceptually because it is boundaryless and serendipitous, and the authors describe what it is enough so you can get to the point: how to interact with it to accomplish what you want. This is extremely important because the online world is limitless; one needs to understand enough of the content and potential to make actionable goals for oneself. The authors are very goal-oriented.
• Detail: The book contains several work strategies like how to work your email box and integrate it into your day so that you are not constantly interrupted; in addition, it includes myriad useful tips and information such as the latest sites to locate new emails for people with whom you've lost touch. As someone who spends extensive time on-line, I picked up numerous useful on-line resources, and the authors do a good job at pulling it all together into an actionable handbook.