I have two reports launching next week in San Francisco, so here on the site it’s been a quiet time. A third report went out last week on GigaOm Research. That was about how design needs to change to contribute to fluidity. The upcoming reports concern disruption vectors and transformation. If you’re on the lookout one will launch at GigaOm Roadmap and the other at Iloveapps.
But to last week’s report. It makes a few assertions about design not least that it will become more open and that it is less of a core competitive advantage. Most companies can access great design if they are prepared to pay for it. It is necessary but not sufficient for advantage.
My take on it is that the world of hardware will be key to how we compete over the next decade. There is enough going on in programmable matter and in new production techniques to make it very interesting.
The challenge will lie in how to integrate these advances with software and connection I say in fact that the product of the near future has these four elements:
Demands on the hardware element will force companies to seek support from the many open engineering communities now springing up. This will be the ecosystem element of the atoms’ revolution. Few companies will have the skills in-house, just like they don’t have all the software skills they need.
Next week’s report will look closely at the disruption vectors underlying that change, and what it means to incumbents in hardware. Those incumbents are often quite new to the game – Google, Amazon…. will they survive sudden change that they cannot dictate? I also said, last week, a few things about the design profession:
- Design will change as a discipline as it becomes more focused on engineering and solutions.
- New solutions communities, such as GrabCAD, will help new players to emerge in the design and innovation space.
- Enterprises will become more dependent on the design differential, but the differential will be far more complex and will require more innovation-management skills.
- As a new platform and ecosystem approach to design emerges, designers will need to learn how to make their work more open and extensible.
The paper is worth a look because it suggests that hardware innovation will force companies to go outside for more essential, core competency. I’m excited about next week – some of the fluid core ideas come together in the two reports I’ve mentioned. Please drop in again for an update.
I had a fascinating and productive day up in Helsinki at the start of the week. The Need For Speed is the new program of Digile (digital agility), the group that invited me up there. I had plenty of interesting conversations and found myself very much drawn to their struggle, fight, mission to fill the hole left by Nokia’s phone business.
Here is my presentation – with an extra emphasis on changes in decision making. The Fluid Core is at the heart of it. I’m sorry to say so far I have not been able to make the embed code work but will keep trying.
UPDATE: OK, so now we have it! Thanks Jarmo.
I gave a presentation earlier in the week on how decision making is changing – and how it must. We have assumed we can do ROI-based decision making for most of the time companies have been around but when you get highly fragmented markets an ROI is almost impossible to predict. It’s an aspiration or a dream. I wrote about it briefly at the start of the week here. Now for the longer version.
If your ROI narrative is broken, what do you replace it with? Here are my thoughts on that overall topic.
I’m in Dubai talking tomorrow at SIBOS, an annual gathering of 6,000 bankers. My theme is this: The ROI model of decision making is dead. People who have decision making responsibility need to get out of binary mode and begin listening to the options their people are putting in front of them. These are almost bound to be informed by more social and creative decision models.
That’s what the Fluid Core is all about too.The Fluid Core principles are first and foremost not to do the knee jerk reaction and say – but that’s not my core business. Second principle? Get away from ROI models as the sole decision-making tool.
Below you can see a diagram I use to illustrate that all elements of the value chain can now be decided in a public, social context, from where your ideas originate, to the developers or suppliers you chose to work on the project, to how you launch and market a product, to after sales support.
Decisions based on social processes are not right because they are more democratic or because they are novel. They are recognition of a shift of power away from the corporate oligopoly of the past. They are one more model, not the only one, and not always the right one.
If you don’t open up to social and creative decision models though you will join Kodak and Nokia and similar companies that were not able to be part of a wider change movement. I call this image the human interest model of business but I could equally call it the social decision chain.
Chris Andersen’s The Long Tail published in 2006 was one of the few times that a non-economist has said something incredibly powerful about the way the new economy works. I happen to think we got the essential details wrong. Nonetheless he pointed to a very important change. It’s very relevant to ideas about fluidity in your life and in the way businesses function.
The theory of the Long Tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of “hits” (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-targeted goods and services can be as economically attractive as mainstream fare. Read the rest of this entry »
I’ll come back later with a deeper explanation of this slide but I wanted to share it with a view to getting some feedback and collecting further examples. Here’s a short list of companies that practice fluid core principles. Do you know any more?
Harman – previously a hardware company now needs to compete with companies like Spotify, to keep its relevance to in-car infotainment. So they are developing personal virtual radio, but not just radio. In the Aha system, you can upload your own podcasts to the Aha community and be a broadcaster.
Disney is thinking about 3D printable optics. Intel is moving into TV, as well as professional consulting.
You get the drift, I’m sure. Companies taking on markets they are not familiar with or developing product and services that are new to them. In the process they are redefining the core away from its static past to something much more fluid.
Where I grew up in rural England people drank tea. When you walked into anybody’s house there was a kettle on and tea to be made. Now many of those people drink coffee. In the 1950s very few people in the UK, and I imagine, the USA, ate pasta. Now look at the rows of pasta sauces in the supermarket. Olive oil was not something we would dream of consuming. Parents kept a very small bottle for medicinal purposes. Now we throw it all over our salads and use it to fry meat.
The point is: people change. People are very happy to change. But in work they seem to resist it. It’s not only that people in lower paid salaried work seem to hate change at work, all the while changing their lifestyles. People at the very top hate change too.
The auto-industry executive Lee Iococca once said: “We are continuously faced by great opportunities brilliantly disguised as insoluble problems,”
The reason I want to write The Fluid Core is because of my belief in change. People embrace change when it is clearly in their interests to do so. We need to talk about change in terms that re-frame fear as opportunity. In the 21s century there are scary changes like the implosion of the European economy. The American economy is not great either. It’s unlikely that many European economies will get back to their pre-2007 living standards in the next decade or so. Who knows what will happen in those areas of the USA that the newspapers don’t talk about? Governments are not going to help, not in Europe, not in the USA.
We as individuals are left having to make choices about change. We need a different view of how we go about creating wealth and the philosophies that drive us to set up businesses and to work.
Business used to be giant firms that rules their industries. Now its people like me and you looking to consolidate our living standards, improve them too, hire a few people, and grow as people and as businesses. We need to think of the world in much more fluid terms – hence The Fluid Core. I’ll be writing about it as regularly as possible and showing how people use Fluid Core ideas to change businesses and to keep the wealth making machine in action. It’s about businesses and it’s about people. I hope you will help me with some feedback.