Back in the days of the dot com boom at Razorfish we had a tag line – “everything that can be digital – will be.” At the time it was a bold statement of belief in a new reality. Today, perhaps it seems like an inevitability. Of course there is a price to be paid, but there always is.
In recent months we have seen businesses like HMV, Game, Waterstones and Ottakars (high street music, games and book retailers) suffer from online/download competition. They blame the competition, but it was obvious it would come to this ten years ago, what is impressive is that they kept it going this long with a declining business model.
My question this week is why are we so unwilling/unable to see the writing on the wall and even if we do see it, why do we find it so hard to do something about it?
This is a critical question, not just for business, but for society as a whole. After the financial crash of 2007/8 there were plenty who said they had seen it coming, who had offered warnings – but no one was able to do anything about it.
What will we say after irreversible climate change has taken place or after the oil has become too expensive for us to burn on trivial journeys?
I have a few ideas and I would love to see your contributions on the blog.
I think we all have a built in crisis detector. The problem is that the calibration of the crisis detector varies depending on three main criteria.
1 – Our knowledge of the crisis area.
If we are entirely ignorant of a subject, it is easy to continue on a dangerous path unaware of the risks and dangers. If we are very aware of a subject we can be more circumspect – however we have also have wildly varying risk thresholds, what one person may see as terrifying another sees as exciting. Indeed part of the role of leadership is to turn crisis into opportunity by inspiring, motivating and encouraging others to deliver their best even when they feel uncomfortable.
2 – Our interests in the crisis area.
We may like to think that we are rational about these things, but I think the evidence suggests that self interest often out weighs logic. There is a blindness motivated by our short term interests. The leadership of one of the companies listed above has to be truly courageous to sacrifice short term revenue for long term security. Imagine the board meeting ten years ago where the CEO of HMV/Game/Waterstones proposes that they start to cannibalize their existing retail business by going into downloads.
3 – Our interests in something other than the crisis area.
Conversely we might be far more willing to take up a transformation if we believe we have much to gain and little to lose in taking the risk. Which is why it is often far easier for newcomers or marginal players to embrace a market shift that for those who are already successful.
Our crisis calibration is also a key personal skill for evaluating our work, relationships and life in general.
The questions to ask are:
1 – What facts can I gather from the most objective sources?
2 – What are my motivations?
3 – What are my fears?
4 – How can I see the crisis far enough ahead to turn it into opportunity?
So – a prediction for the future that will be a crisis for some and an opportunity for others – depending on how you are able to respond to it.
Everything that can be crowd sourced – will be.
We have seen it already in encyclopedias – Wikipedia has won out dramatically against Encyclopedia Britannica and Encarta (remember that?).
We are beginning to see it in entertainment – with things like YouTube, film (Rotten Tomatoes), travel (Trip Advisor). But this is just scratching the surface – the next level is using the internet to crowd source real services like accommodation (Air B&B), plumbers etc (myworkman) and so on.
Whatever business you are in start thinking about the risks and opportunities of crowd sourcing for things like recommendations, market research, supply, selling, product development and so on, your prosperity may depend on it.
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