There are four books that stand out as particularly relevant to understanding the challenges businesses face going into 2001. It’s time we put our aspirational predictions of the future aside and take a look at what’s really happening in the environment around us. The books are The Social Life of Information, Mastering the Dynamics of Innovation, The Innovator’s Dilemma, and The Cluetrain Manifesto: The End of Business as Usual. Here are my comments on each.
The Social Life of Information by John Seely Brown and Paul Duguid, Harvard Business School Press, 2000
For years pundits have predicted that the digital revolution will eliminate or completely change mass media, paper documents, bureaucracies, trips to the supermarkets, etc. John Seely Brown and Paul Duguid book help us cut through these crazed visions of the future and understand the social forces at work in the sea of technological change. The authors argue that the gap between the pundits and reality is due to the “tunnel vision” bred by information technology. The book provides a highly informed and optimistic view showing that the transformation of education, work and social institutions is not simply the result of technological change, but a complex interaction between technology, organizations, communities, and people. Of particular interest to me was chapter seven which explains how groups form around documents. Brown and Duguid draw upon the research described in Benedict Anderson’s seminal book Imagined Communities: Reflections on the Origin and Spread of Nationalism, offering insights in the workings of “Imagined” communities: communities whose members may never know each other in person, nonetheless they share a bond that is often stronger than traditional community ties.
Mastering the Dynamics of Innovation by James Utterback, Harvard Business School Press, 1994
James Utterback is a Professor of Management and Engineering at the MIT Sloan School and has written a book about technological innovation that is refreshing, informative, and dare I say, entertaining. Through detailed case studies he examines how innovation creates, transforms, and sometimes even destroys an industry, illustrating along the way the behaviors and strategies of firms with respect to technological changes and long-term survival. Case studies including the harvested ice industry, which at one time efficiently transported harvested ice as far away as India, yet was unable to envision refrigeration. It took industry outsiders to do it. Sound familiar? History repeats itself. Utterback discusses in detail how market leaders prior to the introduction of a new technology are rarely the market leaders after the acceptance of the technology. Utterback’s explanation is that entrepreneurs and innovators are squeezed out of established companies by what he calls the “incrementalists.” Utterback writes “…From a practical point of view, their managerial attention is encumbered by the system they have—just maintaining and marginally improving their existing systems is a full-time occupation.”
The Innovator’s Dilemma by Clayton Christensen, Harvard Business School Press, 1997
Clayton Christensen examines how new companies with products based on disruptive technologies at first cut into the low end of the marketplace and eventually evolve to displace established high-end competitors. The most important contribution of the book is an approach for anticipating new technologies by understanding how they expand from a lower need-defined market into a mainstream market. Incumbents often misunderstand the danger of a disruptive technology and how to address it. The Innovator’s dilemma is “how to allocate resources to developing a technology that will target a smaller market and at lower margin than your current technology.” Existing customer needs often distract companies away from their future markets. One day you wake up and your competitors are stealing away your customers with an “inferior,” yet disruptive, technology. Christensen suggests that innovation should be more integral to corporate strategy. Clayton Christensen is a Professor at the Harvard Business School.
The Cluetrain Manifesto: The End of Business as Usual by Christopher Locke, Rick Levine and Doc Searls, Perseus Books, 2000
This book challenges the traditional axioms of marketing. It’s much longer than it has to be and ventures deep in the zone of hyperbole, however, there are some valuable nuggets of insight contained within these pages. Locke et al. suggest that exposing yourself is the new way to do marketing. Markets, at their core, are about conversations. This book is to marketing and communications what the open-source movement is to software development. The writers believe that the traditional “broadcast model of marketing” will eventually fail as more customers go on-line and participate in professional or special interest forums. On the net people have become accustomed to talking with each other in an honest conversational manner which is at odds with the traditional one-way communication forms of television, radio and print. The authors argue that having employees openly and honestly participate in online conversations can be infinitely more useful than traditional corporate advertising.
Each of these books provide valuable insights as we welcome in a new year in times of rapid change. Many pundits are full of hot air, but collectively the authors of these four books offer some sound insights we can use to make sense of the environment around us. Happy reading and best wishes for happy 2001.
Note: this article was originally published on the old version of my web site and has been placed in blog format since the old page now redirects to this blog post.