3 Big Megatrends

Yesterday, as part of a study I’m helping a collaborator with, I was asked what I thought the big mega trends affecting the remainder of the decade will be.

Considering that’s one of the major drivers for Sidestep and Twist, my about-to-come-out book, I thought I’d share my answer with you on this blog.

No 1: Human Crowds are the Future

Crowds are everywhere, and they can do almost anything.

They can do things like, for example, reverse engineer patents or get around copyrights. They can discover trade secrets, and do it in ways which are very hard to defend against. Have you heard of OpenCola? It’s an open source recipe for Coke, and its on Version 1.1.3. You can’t tell the difference between it and the real thing.

What else can crowds do?

They can change products and services designed for one thing into something else. Like what Chris Anderson and his DIY drone project have been doing for a number of years with mobile phones and model airplanes. Whole communities are devoted to having crowds make things out of other unrelated things.

They can spot opportunities and then engage in large numbers of trials to create new knowledge. CureTogether.com, one of my favourite websites, does this for medical knowledge, an area that’s just emerging in citizen-science.

At CureTogether, crowds have discovered the best cure for depression in not some drug made by a corporation for profit, it is exposure to sunlight. They also discovered the best cure for migraine is not a drug but a bit more sleep each day.

Imagine that: crowds that can do real medial research that is as statistically valid as any medical trial.

Crowds can change the third world, one small investment at a time, like crowds at Kiva.org, are doing every day. Hundreds of millions invested. 620,000 lives on the way out of poverty in 216 countries. All because a crowd of just under a million people in the developed world have invested, on average, $20.

So much for public crowds.

Companies are also crowds, but they’re not like other kinds I’ve mentioned so far.

They’re rigidly structured, based on principles of command and control. They’re less flexible and less autonomic. They’re good at going after single-minded goals, but are really an organisational edifice to take the human out of group of people.

There is a disconnect between the inhuman crowds companies like to build, and the much more human crowds that occur by themselves amongst their customers.

The former are optimised to make everything the same, for the lowest cost, and the largest profit. The latter, on the other hand are optimised to create joy for the participants.

So I think the first big megatrend that will affect commerce by 2020 is this: companies will work out that building human crowds to help them help their customers is the best way to create the maximum amount of happiness for both customers and employees.

They’ll also work out that profits will naturally follow such a strategy.

You need proof? Have a look at the Mondragon Corporation, which has 83,859 employees and is the seventh largest Spanish corporation.  It’s employee run, for employees but doesn’t sacrifice business excellence.

Or Caja-Civica, a bank with a difference. They’re running a bank for customers and communities, and letting customers and communities actually participate in running the bank. Oh, and they’re now the 7th largest savings bank in Spain, and the 10th biggest bank in the industry.

Spanish examples, I know. I wonder if they’ve discovered something earlier than the rest of us?

No 2: Products that get better the more they’re used

If human crowds with more of a role in organisations are the next big thing that differentiates companies, it follows the products those companies will create will be different as well.

I think the difference will be a simple one: crowds will make products which are for crowds, not individuals.

What is the defining characteristic of such products? They get better the more they’re used. The crowd makes them better.

That’s why CureTogether is interesting. One person reporting that they’ve found their depression is better after sunlight isn’t all that important. But if thousands of people say the same thing, it means something.

The same with Caja Civica. The more people who bank with them, the better the community around the bank because there’s more money invested back to the crowd.

Now, this is something of a contrast to the traditional model people follow when they build stuff. Normally, what you do, is cram as many features as possible into a product, features whic are hopefully a little bit better than the features of everyone else.

This gives you competitive advantage, which you hope to get customers to come to you rather than go to the people who make the same stuff as you.

The future will be different. Instead of inhuman crowds inside companies trying to stuff as much into a product as possible, companies will recognise crowds just need a framework onto which they’ll graft their own human stuff.

Crowds need platforms not products.

What are the big crowd products today? Facebook. IPhone. Android. Wikipedia. Lego. Too many more to mention.

What’s the defining characteristic of all these? The crowd takes the basic thing and can make something else out of it. Often, the manufacturer of the basic thing has not even imagined the future the crowd creates.

I think the second big megatrend by 2020 is going to be this: all the important products in the world are going to be platforms for human products. And all the products by inhuman crowds in companies are going to be little more than features attached to something else.

No 3: The End of Resource Advantages

The advent of human crowds, particularly connected human crowds leads me to a third megatrend for the rest of the decade: the end, or certainly the beginning of the end, of resource advantages as a driver of success.

In the past, you had to go to a certain place where there was a certain concentration of resources if you wanted to maximise your chances of success.

Why is London a financial centre of the world?

It’s because it has a critical mass that has attracted all the money and talent.

I, for example, had to come to London before anyone took very much notice of me. Sydney, my hometown, is hardly the back-of-beyond, but it isn’t a global centre for innovators or bankers.

Why is Silicon Valley the best place in the world to start a tech company? It, also, has a critical mass which has attracted most of the talent and money. People tell me that if you want to build a successful start-up, your best chance of stellar success is just to go to California.

When I was in Russia the week before last, I was asked to comment on what is apparently a commonly held belief: that all the good stuff is happening elsewhere, and that western-trained execs are being imported to supplement or even replace local talent in critical roles.

I was asked “What can we do in Russia to compete?”.

I suppose at first I was taken aback by this question, because I met some of the most superbly educated, brilliantly ambitious people ever in my short visit. There was certainly no lack of talent that I could see.

But the point is, till now, it hasn’t really been about the talent of individuals. It has been about the kinds of structural factors that make places the centre of happenings.

Places are about resource concentrations, but human crowds are about talent concentrations.

Futhermore, talent concentrations, when they’re taken in the context of human crowds, can be placeless. My extremely talented Russian colleague Daniel Gusev is probably the leading bank innovator in Russia. I can collaborate with him whether I am in Russia or not. And he collaborates with most of the profile bank innovators around the world.

I think these connected human crowds are going to eliminate the advantage of all these place-based resources by the end of the decade.

So that’s the third big megatrend for this decade: if your business is based on resource concentrations or having more resources than anyone else, you’re in danger. It is talent concentrations that will matter by 2020, and they’re not only placeless, they’re borderless as well.

2 Responses to“3 Big Megatrends”

  1. Karl
    September 17, 2011 at 12:56 am #

    I especially enjoyed the question asked by the Russians; I could see your thoughts formalize and become the answer you shared.

    In the military, we’ve recognized these steps as well (though they may not be our top 3). We utilize collaboration sites for each of our specialties. It provides a forum of information flow and gives people a chance to consult others to confirm or discuss alternatives that may have been previously overlooked. We’ve even begun issuing “smart” devices that record user’s inputs in attempts to take “the crowds” views and actions into future planning and doctrinal practice. I realize that doesn’t sound like innovation but it is very closely associated with your thoughts on the road ahead.

    I look forward to reading more of your blogs, thanks for sharing.

  2. James Gardner
    September 18, 2011 at 10:29 pm #

    Karl,

    Thankyou so much for reading the blog.

    I agree, Military organisations are crowds, and that means the kinds of things I wrote here are very applicable. Its funny, I’d not thought of the military in that way till you’d made the point.

    Thank you for your positive remarks. and I really look forward to more of your contributions.

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