Wednesday, December 31, 2008

Are you Bulldozer or Speedbump This Year?

Stayin' Alive

Chaos Paves the Way for Creation - i-Ching

If you stand in front of the Bulldozer of Technology change you are just a Speedbump on the Information Superhighway - Alistair Nicholson, IBM IT Strategy Course, Singapore 1999

Ten years on from "the Internet will change everything", 2009 presents the next version of disruption - disruption in business, technology and personal lifestyle. I just pray that no one will call it 'Disruption 2.0'. The good news is these challenges also create personal and professional opportunities. The opportunities arise because of the combination of economic and technological change -- the sort of "perfect storm" -- that influences our career path for the next decade (at least). Back in 1999 our IT Strategy course was divided into two camps - one (the mainframers) had Amazon driven out of business by the 'bricks and mortar' advantage of Barnes & Noble, the other (early adopters and web developers like me) that thought Amazon would understand the web better, and keep its customer base.

Amazon has survived, and thrived through a serious meltdown by understanding and 'infusing itself with IT' to use Tim O'Reilly's phrase. If I'm to get through this year I'll need a pretty good infusion myself, and I'm sharing where my path is taking me. Feel free to use what you can. Over the next few weeks I'll develop effective personal and professional strategies by assessing the economic cycle, the main technological and business changes, and our business and personal plans. (Enter Bee Gees Stage left singing "stayin' alii--ii- iive").

Let me be clear though - this is a time of great disruption. There is opportunity, but it is deadly opportunity. Wrong moves will end in checkmate, serious removal from the Island. I found an interesting re-analysis of the Chinese character for Crisis:

It is basically true that the modern word for "crisis", wei2-ji1 or wei1-ji1, is analyzed as "danger" + "opportunity"... The main meaning of the xiesheng character ("wood" added to "subtle sign") is "trigger of a crossbow", clearly related to the idea of a subtle but powerful military moment. Derived meanings include "weapon" (in general), "key object or idea", and "turning point" or "crucial moment". ...

One of the most idiomatic modern expressions incorporating this character is shi2-ji1, "time" + "trigger", meaning something like "turning point" or "key moment in time". The concept of seizing the correct moment is of great importance in traditional Chinese thought, military and otherwise.

I know the word 'opportunity' is substituted for 'problem' in corporate speak - but think of this 'opportunity' as a turning point in a battlefield full of violent, armoured, fighting warriors armed to the teeth, with half of them trying to turn you into one of the corpses strewn across the ground... 2009 is THAT sort of opportunity.

There are New Shoots Emerging

The commentators I respect agree on this - imitators will be swept away, but there is venture capital and market share for people that do something real. Peter Rip from Crosslink Capital explains some of the reasons in "The coming Venture Capital Boom".
... I see the today’s carnage as much as everyone else. This year is going to be tough. .. But the forest will begin its renewal because Life Goes On, and with it ingenuity, entrepreneurship, and innovation..... We will see dozens of these opportunities in the coming years, but it requires an investment discipline tethered to public market realities about who are likely buyers, why, and at what valuations.

The second phenomenon to emerge from 2000 was the re-invigoration of the Web. As with every wave of innovation, much of the activity became more imitative than innovative as this matured.... The venture money that went into most of these imitations will soon be written off.
So why am I so sanguine about the prospects for venture capital as everyone seems to sound the alarm about Recession, the lack of capital, and the fear gripping the markets? It is simple:

  1. Venture capital returns are predicated on scarcity of risk capital. It has been all too abundant. That will change.
  2. Many good businesses will be left on the beach as the rest are washed out to sea – the remaining VCs will invest in them and both the entrepreneurs and VCs will get rewarded as the survivors gain market share and become successes in the economic recover[y].
  3. The economic recovery plan of the new Administration will be massive and favor investments in productivity-enhancing growth sectors like information technology and energy technology.
We also need to think through what Depression 2009 would look like to ensure we are looking for new developments in the right place. This will be similar but different to what has gone before.

Social and Cloud are Real, Real, Real

How many cycles have we seen now? They all start with some bright idea. Gradually the ideas change into practical applications. This is the tipping point, but also a difficult time to risk clients or career. The 'sensible' manager will just have to point to promoters of the technology (and a few ever-present disasters) to show how 'unsound' it is. Managers and organisations that behave that way will arrive too late and lack the skill set needed for the new technology.

It is a fundamental strategic planning error "playing the man not the ball", but an easy debating style. The problem is that the tipping point occurs at the very moment the first effective tools enter the market enabling commercially viable implementations.

The story from that moment is the same - whether it is adoption of PC's, Unix midrange servers, NT Servers, web sites, Relational database, online editors, high-level development languages or web-based email - rapid momentum becoming explosive. At the end of the process that same manager expressing that same idea ridiculing the technology is considered incompetent, hopelessly inefficient and a liability to the organisation.

So, this means more change, but we have to deal with it because it's reality - it's part of what IT is about. The Obama campaign changed the view of Social software techniques for managing activity. Once Harvard Business School starts blogging about it, the outcome is foregone. Harvard had several blog articles out the morning after the election. In fact it is such an orthodoxy that Doc Searls is calling social another bubble.

“Social” is a bubble. Trust me on this. I urge all consultants on “social ______” (fill in the blank) to make hay while the sun shines. Even as the current depression deepens, lots of companies are starting to realize that this “social” thing is hot stuff and they need to get hip to Twitter and the rest of it....

Meanwhile, here’s the challenge: make the Net personal. Make relationships personal. Equip individuals with tools of independence and engagement. That’s what VRM is about.

Social is colliding with technology outsourcing to create the new Web 2.0, enterprise 2.0 beasts. Language for opening up the technology options moved from leading edge to hit the mainstream in 2008; Cloud computing, Software as a Service (SaaS), application service provider (ASP), Service Oriented Architecture (SOA). Are you prepared? Are your people prepared? Are you sure? Look at this:

Robert Scoble (Fastcompany, started the year with a cool product that prompted The story of 2009? Enterprise disruption?. He found a product that has let me finish a Web 2.0 environment for building Business Service Transformation skills for a very low cost. He said:

So, why did this catch my eye? First, they are taking something very expensive, Business Intelligence charting and dashboarding, and making it free. That alone is pretty disruptive. ...

But don’t focus on that disruption.

Instead, look at the bigger picture. Here they are using Google spreadsheets to bring you live, collaborative, business intelligence. Watch the second video to see how different this is from most of the “old-school” approaches that haven’t yet built on a platform designed for the web from the start.

See that’s the real disruption: there’s a new platform being built. Right now it’s ugly and incomplete. But every year it gets better and better. Will 2009 be the year when lots of you try out a web-based collaboration suite like the ones from Zoho or Google?

However, we must be careful how this is interpreted. Many will go for the comfort of a 'quick fix' and familiar letters. The point is not that successful organisations use Web 2.0 or SOA or whatever. It is that they are using IT to do their business better - focusing on the Institute of Government Business Mantra of "more effective and efficient business Processes" through technology. Tim O'Reilly puts it this way in the Power of the Real Time Enterprise:

What do Google, WalMart, and have in common, besides their extraordinary success? They are organizations that are infused with IT in such a way that it leads to a qualitative change in their entire business.

I get frustrated when I see people highlighting use of social media--blogging, wikis, twitter, customer feedback systems like Dell IdeaStorm or MyStarbucksIdea--as if they were exemplars of what has come to be called "Enterprise 2.0."

So what can you do to survive? Here are my personal short term action items, yours might be similar:

Action: Make sure YOU understand the emerging technology for Social and Cloud computing.
Action: Make sure you have a plan to use this for your own career.
Action: Make sure your organisation or business has a plan to use Social and Cloud computing, train the staff, create new and adapt existing systems.
Action: Make sure your organisation isn't going to be destroyed by Social and Cloud computing. If so, move now, not soon, now!

Create Something with Meaning

Tim O'Reilly has been through these cycles before. He keeps saying that to get through downturns "do stuff that matters".

  • Work on stuff that matters...
  • Exert visionary leadership in our markets....
  • Be prudent in what we spend money on....

    These are all things we should be doing every day anyway. Sometimes, though, a crisis can provide an unexpected gift, a reminder that nobody promised us tomorrow, so we need to make what we do today count.

Tim O'Reilly is suggesting that although the guy that developed a "Fart" application for the iPhone made $40,000 in two weeks, this superficial 'eyecandy' application is fleeting, and will evaporate in difficult times. We can survive this downturn, if we understand what is changing and what is emerging.

Understand the new social and Cloud implications. Understand the way the economy is reshaping. Plan well. Train yourself. Train your staff. Bon chance.

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