This social media is nothing but trouble
Well, social media isn’t the problem – but social media DOES disrupt what passes for authoritative information, and that concerns us as intelligence professionals and as leaders.
These slides are from my Pecha Kucha style presentation for the Intelligence Collaborative, a group that considers such issues.
Are you a subscriber to this blog? New feed starting today
Hello intelligence mavens and followers of foresight based competitive analysis! If you are subscribed to the Competitive Futures blog on a reader, then you’ll find that after today, the RSS feed will no longer work.
Kindly sign up for the new feed at: http://feeds.feedburner.com/competitivefutures/jjFJ and enter your favorite reader.
More trends and analysis to follow in 2010.
Apple’s true killer app: disruptive business models
Great analysis from Paul Denlinger at The China Vortex about the upcoming Apple Tablet, and what its real impact will be on the market.
As Denlinger points out, most people assume that the secret of Apple’s success is their reliably sexy user interface. Sure, that’s a critical factor in its dominance of the premium computing market – the stuff works and is beautiful. What makes Apple so influential as a company is its ability to change business models, making everyone else a follower.
Sure, iPod was a great little device, but others had portable MP3 devices, however ugly. It was iTunes that got people thinking of MP3s as legitimate purchases instead of illicit stolen files. The music publishing world is still reeling, and Apple is the number one music retailer in the world. The iPhone is not only cool, it introduced the App Store that allows each phone to be user-customized, with prices set by the free market. They don’t yet own the market, but the word “app” is now an accepted concept in the business lexicon. Sexy brings you to the dance, and wonky, quantifiable, innovatively-engineered business models take you home.
And so what awaits the Tablet?
Now, in order to make the Apple Tablet a real success, it has to have certain functionality which will not cannibalize iPhone and Mac notebook sales. This is why it’s point of attack will have to be on books, magazines and the publishing industry. It will offer developer tools for Apple’s digital publishing solution. Already there is talk about Apple’s new SDK for this new platform.
My prediction is that this new SDK will make it apparent why Apple has not been friendly about offering Adobe’s Flash access to the iPhone, since Apple’s solution will offer much of the same feature set as Adobe Flash, but will be more tightly bundled in on the front and back ends to the device and to the store. (Steve Jobs likes closed ecosystems where he controls the whole experience.) Tough times for Adobe’s Flash and Microsoft’s Silverlight: all dressed up and nowhere to go.
Speaking as an author, the industry is ripe – no, begging – for disruption. And as usual, it’s the Googles and Apples who notice first.
This will be fun to watch.
Will bankruptcy result in banks owning major media?
The United States is facing a difficult situation. It is no secret that all too many of our major organizations function not by the value they produce, but by the debt they take on. Last year’s financial armageddon was the result of too many banks leveraging themselves against assets made of completely fictional, and declining value. Debt was laid on top of more debt, until the whole thing melted down, and the only “fix” was to have the U.S. Federal Government take on even more debt. At no point has productivity or value entered into this debate, just debt, invented from thin air, helping nobody and shackling future generations to our poor management.
Coinciding with our failing banks is the failure of American media. Information is going online, content is free, attention is scarce. As advertising revenue shrinks, media companies are going into default. But in the event of failure, who gets the assets?
Banks.
And major media companies are financed by major banks. This brings us to the incredible situation of Goldman Sachs and JP Morgan inheriting so many media companies, that they are running afoul of already-weak media ownership laws.
So, to recap, banks that failed last year are only around due to the American taxpayer. Those taxpayers can only keep tabs on such organizations through government agencies and news outlets. The banks are now so big that they essentially in direct partnership with the United States government, which cannot let them fail. (Or at least protest that it would be too dangerous.) And now, those banks will begin owning an increasing percentage of the major media which most Americans use, rightly or wrongly, to derive information about the economy.
Our institutions are becoming intertwined at a level where a dialogue is nearly impossible. For every conversation, you need at least two people. What are the differences between the banks who control money, the media telling their story, and the government offering to prop both of them up?
The answer may have to do with large organizations in general. Major media need huge advertisers to pay for their conglomerates. Small, niche, local media? They can survive on engaged, passionate niches. Major banks need huge customers for their debt. Small regional banks can survive helping local businesses actually provide value.
Maybe the problem isn’t banking or media or government, but the BIG versions of all three.
A proposal for an Intelligence Collaborative
Originally posted over at the Competitive Intelligence Ning forum, our intention is to bring forth a collaborative of people who use intelligence for more than just creating value in businesses. More on this idea to follow.
WE NEED EACH OTHER: A Proposal for a Collaborative of Intelligence Professionals
We live in an era of transforming economies, simmering terrorism, transitioning institutions, and few historical analogues to guide us. As such, intelligence, in all its manifestations, is a matter of life and death, prosperity and poverty, reason and superstition, light and dark. It is our profession and our passion, and we must support it now, more than ever. We must come together for dialogue, education, and mutual support.
RECENT FAILURES OF INTELLIGENCE
Intelligence has never been more important, yet it finds itself on hard times. In the past few years, the word itself has suffered a number of scandals. At the government level, America’s national intelligence apparatus missed the weak signals leading up to the greatest attack on its soil since Pearl Harbor, if not 1812. Shortly following September 11, the architects of the war in Iraq used an incompetent reading of Iraq’s military capacity to justify a war that has proved immeasureably costly in blood and treasure.
In the private sector, nearly every purveyor of business analysis was caught flatfooted throughout the 2000s, failing to understand or foresee the bursting of an economic bubble from which we suffer today. At the center of this catastrophe were financial analysts who judged, using their own intelligence methdology, that a large group of financial instruments were AAA-grade debt, despite being composed of nothing but fantasy and fraud. Instead of recognizing the failure of their intelligence, the cataclysmic (yet predictable) event is portrayed as an act of God, totally random, and business resumes as usual, plus or minus a few trillion in bailouts.
In all of these catastrophe’s, where was intelligence?
Read more
15,000 visitors to the Competitive Futures Blog in August
Just checked the stats and it’s our biggest month ever on this blog – 15,000 visitors this month alone.
We’re glad you’re listening, and hope to hear from even more of you in our Disqus comments section, which can automatically link to your Twitter account.
Lots more discussion about the future to come. Enjoy the last weekend of summer!
The Do-It-Yourself Future
The vast majority of the media reported economic activity only in terms of gigantic institutions and abstract numbers. We hear about the Federal Reserve, the Treasury, and the rates they charge mega-banks to borrow imaginary money. We hear about unemployment rates, though those statistics rarely include those underemployed, running their own business, or those who don’t participate in society enough to work at a company. Then we hear about the stock market indexes, which is a tabulation of what a tiny group of gamblers in New York, Tokyo, and London were willing to hypothetically pay to own a chunk of some companies’ future earnings. (Actually, it’s not even gamblers, but computers programmed to think like gamblers.)
You may notice, that at no point have you heard about people. Your friends and neighbors and not covered by this analysis. When you provide each other child care, it doesn’t hit the books. Build a barn yourself out of lumber you purchased directly from a mill? GDP will go down. Start a foreign language club? Sorry, it’s not educational sales, and we don’t count that. Grow your own food and eat it? Sure, you may be eating delicious food and cutting your risk of heart disease and diabetes, but all you’re doing officially is taking potential revenue away from companies we measure (and tax.)
When we don’t measure this activity, it’s hard to tell when a trend is happening. When I need help getting reliable trend data, I do what every good analyst should: I go and ask my Dad.
My father still lives in our hometown of Rutland, Vermont. Yes, yes, I know you’ve been skiing nearby, and it’s quite lovely. Well, the state nearby is lovely; the town is generally on hard times. Due to a completely nihilistic policy of zero economic development, Rutland, and indeed most of Vermont has shed jobs at a terrifying rate. (One of the local heads of economic development once confided to me that what the place needed was more gift shops, “So the tourists really know we’re ‘open for business.’”) Average age of the county is around 53. The kids are gone to Boston and New York and Washington in search of work, except for those who make up our growing heroin problem. Those kids are hanging out near the collapsing downtown of boarded-up former retail space. Pretty bleak, really.
Except my Dad has never had it so good. He’s running the local farm and garden store, and after surviving an onslaught from Home Depot, Tractor Supply, and Wal-Mart (retail stores designed for MUCH larger markets) he’s having his best years ever. The reason: GARDENS. As soon as that economic disaster hit and fuel oil went through the roof, Vermonters wasted no time in getting back to their birthright of bringing up their own food in our frigid, rocky soil. Speaking as a native Vermonter, when you tell us we’re headed back to the agriculture age, threatening some scary pre-industrial nightmare, it just wasn’t that long ago for us. The last town in America to receive rural electrification was Victory, Vermont in 1967, about five miles east of where I grew up. The idea of a 19th century lifestyle is simply not that terrifying for Vermonters.
Today, despite the meeting in Jackson Hole, Wyoming declaring the whole financial crisis “over,” people in Rutland are still planting gardens, chopping logs for firewood and going back to more self-reliance. This is good news, the sign of a civilization that may not crumble over some fruity derivatives sold by financial companies that didn’t understand them either. In the end, the word economy comes from the Greek for “how you run your house.” Our major institutions sure help run the larger picture, gluing together discrete economic activity into a global picture that could ostensibly be managed. In the end, gardens are necessary and they aren’t. With all the scandal and backroom dealing and intrigue, it’s comforting to know that when push comes to shove, people can and do plant their own gardens, look after each others’ kids, build each others’ houses. The fate of central banks are not the fate of people in general. This should give cause for optimism.
We all have our reasons
We all have our reasons the future turns out a certain way.
Did we not anticipate the adoption of new technologies that would erase our competitive advantage? Yes, well you see, we had our reasons. We were amortizing old technology, and besides everybody knew that those upstart companies weren’t really serious. Yes, we’re in the red, but if you look back, we had our reasons for making those decisions. Now, let’s not get into the blame game.
Sure, we encouraged a speculative bubble in housing that has destabilized everything that uses a dollar sign: households, banks, cities, the whole national economy. But we had our reasons. GDP was increasing and people were getting monster bonuses! You can’t fool around with the genius of the market. And sure, those regulations on banks had been there since the 1930s, but as you can see, there was no way we could know they were still useful. In retrospect, you can see what we were thinking, right?
Are all the young people and businesses in our state leaving? That’s because of structural factors that are beyond our control. We didn’t necessarily encourage economic development or give reasons for the next generation of talent to stay, but that’s not actually in my job title. We can’t be held responsible for the “foot loose and fancy-free” young kids who don’t even have loyalty to us! Why are they leaving? I don’t know, but I’m sure they have their reasons…
Why did companies like Google create new ways of using information while using new, massively profitable business models? Why do some nations invest for their futures while others consign themselves to the also-rans of history?
Why do some leaders think about future trends and act early?
They have their reasons.
Muslim demographics: what’s the real trend in Europe?
Only few hours following my post on statistics, I was sent this YouTube piece from the BBC questioning the veracity of claims in a video entitled “Muslim Demographics.” It illustrates pretty wonderfully the care we need to take in examining our biases whenever we get talking about numbers. Also, it is probably the most downloads any piece on demographics have ever received, and so I’m sure a lot of demographers are pretty excited.
Clearly, the following two videos are pretty different in their aims. The first one, viewed over 10 million times I might add, is a call to evangelical Christians to get having more babies, because demographics indicate that the whole world is going to be Muslim in a generation or so. When you hear the ominous, dark synthesizer in the background, rattling like Satan with emphysema, you get the picture quickly that this isn’t purely an objective statistical analysis. No matter – it’s attempting to tell a story, and laying out fairly clearly its assumptions for which fertility rate is “required” to sustain “a culture.” Most analyses never go this far, so it makes for a good comparison.
Now check out the riposte from the BBC. It presents another set of assumption on demographic forecasting, as well as direct interviews with demographers from the European Union. Asking experts is always an important phase of the methodology of quality futures work. They do lots of basic fact checking, too, such as the fact that Belgium’s Muslim population is 6%, not 25% – a pretty key distinction.
Key point here from the Beeb: “Population projection is an inexact science.” That’s the soul of the future – a blurry view is better than none, but the whole thing requires professionalism and an open mind.
You can believe either one of these videos you’d like, in the final analysis. The most important thing is to simply ask where statistics come from, and why these were chosen instead of others.
Numbers are just relationships
My friend and colleague August Jackson says that in most management contexts, fake numbers will win out over real logic. Pie charts sound warm and delicious, while cold hard facts sound like they are tasteless with an unpalatable texture, which is often the case. So deep is our attachment to numbers that often, we don’t even care how they were calculated or what they mean. At least statistics count as “quantifiable,” which for many is superior than common sense that lacks numbers.
And yet I love statistics, any form of abstraction that helps us understand a rapidly changing world. They often help us understand more about the analysts and what they chose to study, but it’s usually better than nothing. And when they are really useful they help us unpack dangerously inaccurate beliefs that we hold, usually from listening to media stories picked for their sensational value rather than their informational content.
Example: If you listen to the major media, you will think that the United States is at an all-time peak of violence, a cesspool of shootings and abductions and freak crimes. A quick look at statistics will show you that actually, violent crime has dropped in a statistically-significant way since 1993. News reportings of violent crime are up, but the actual numbers are down.
That’s useful to know. Now we can stop feeling like the world is out of control and that humans are getting worse, and we can start asking why our TV stations and newspapers are invested in us feeling scared. By looking at some simple statistics, our understanding of the world just got a little better. Isn’t it cool to be an analyst, and not just accept other people’s view of the world at face value?
As a competitive intelligence aficionado, this dynamic tension is my life - how do we use numbers, understand what they mean, and see beyond them, while thinking clearly and logically? It’s not easy, but it’s what makes being an analyst both an art and a science.
Not all sets of statistics are useful in helping us understand our world. I got thinking about this when the guys at Fark pointed me to this graph of the Forex for pounds sterling/US dollars under the caption “This will make it all clear.”
OK, kinda funny. What is this stuff? Is it about money? Wealth? Life getting easier or better? What will it help you predict?
This is my tension with a LOT of numbers bandied about these days, especially on the subject of the putative economic recovery.
The questions are in no short supply.
- Is the stimulus working?
- Are we seeing green shoots?
- Is the bottom in in real estate?
- What about stocks?
- When can I get back to the business of ignoring the wider world, giving money to banks, and expecting my retirement to show up when I need it?
These are all questions being asked incessantly these days. The answers are typically being given in number form. BIG number form. Well, this bank owes five trillion in derivates, so we spent two trillion in borrowed money to stimulate other numbers, especially stocks and housing prices. So, um, we know lots of you don’t have jobs and find your wages dropping, but here are some big numbers to look at to make you feel like a recovery is in the works. You want this to recover, don’t you?
Here’s the problem: I don’t really understand what a trillion is, and neither do you. Moreover, I’m pretty sure I don’t understand that Forex chart above, and for that matter I’m not sure why stocks are up.
Here’s another, bigger question: What does any of this matter? At the end of the day, these numbers are here to serve human beings, not the other way around. Their adoption less than 100 years ago was supposed to bring a scientific bent to management and make things more efficient. However, these days our statistical measures have less to do with actual human behavior than ever. Sure, perhaps they describe the behavior of a few thousand people in Manhattan, London City, and Tokyo, but they have less and less to do with people waking up, making coffee or tea, leaving the house and working with fellow humans to provide value to each other. Our statistical measures are supposed to help us better understand our relationships with one another, but they are rapidly become a self-justifying system of overcomplex gambling. We watch these numbers with baited breath, but I am less and less convinced that the return of our numbers will mean a return to a pleasant humane life.
As such, perhaps some non-statistical questions may be the only ones that suffice on the subject of the global economy. Instead of waiting for irrational and abstract statistics to show you what the world looks like, try these non-quantifiable measures:
- What kind of food are you eating? Is it good?
- Do you get to eat with friends and loved ones?
- How many hours a week are you working?
- Would you prefer to work more or less?
- How many of your family and friends are sick right now?
- Can they get the care they need?
- How often can you take part in some form of leisure activity – camping, dancing, music, polo, whatever?
- How much time will it take you to get to the beautiful space (park, museum, mountain range) near your home?
- Do you know your neighbors?
Yes, you can makes these questions into statistics, but I dare say they are less abstract than the S&P 500. They will skip the phenomenon of “numbers for numbers’ sake” and ask about how we are doing as human beings, relating to one another, even in an economic sense. So it’s not the numbers that are the problem, but the relationships they are describing.
As analysts, let’s make sure we’re trying to understand the right relationships.
About Eric Garland
Eric is one of the world's pre-eminent thoughtleaders in forecasting and strategy. He helps leaders of business and government make critical decisions about their futures.New project: Manufacturing 2020!
Competitive Futures is
proud to announce a new research project on the future of manufacturing in North America through 2020. Download a prospectus today and learn where to invest for the next decade.Get Eric's blog delivered!
Connect with us
Read Future Inc.
Learn
a time-tested, profitable method of discovering business opportunities in the future with Eric Garland's groundbreaking Future Inc: How Businesses Can Anticipate and Profit from What's Next, available at Amazon and fine independent booksellers.
