As 2015 winds to a close I've been reflecting on what I've learned this year. For succinctness, I'll keep this post just to 'learned about the Digital Economy'. Enjoy, and thanks for reading in 2015!
This is taking ages... I've been amazed by the slow pace of change to digital economy cultures amongst organisations in all sectors. Having been thinking about this for years I take for granted that ideas like Lean Startup are the norm in management, but it seems not. I realise that I've been unrealistic. These kinds of massive changes take decades and I suspect I'll be advising on this phase for much of the next ten years of my career.
The fundamental lessons are the same in every industry. This year, my team and I have worked in a huge range of industries, from government departments to construction machinery, snake bites to sportswear, groceries to car manufacturer, appliances to social media, and in most cases we've come in as generalists. And that's just fine because the discipline of setting strategy and building growth ventures using Lean Startup applies in every circumstance, albeit often with tweaks to enable the language and pace to work in a given organisation without being rejected by the corporate immune system. This gives me a great deal of confidence that we're on to something :)
We must be on the verge of another wave of extinctions?! The slow pace of change in organisations, coupled with continued heavy investment into startups suggests that some industries that have hitherto remained secure may well start to suffer in 2016. Retail banking, insurance of all sorts and healthcare providers have all managed to avoid disruption despite inaction. With new waves of challenger banks entering the UK and US market, a glut of data coming from all sides that'll enable radically better risk assessment and health outcomes this must be the year for one of these three titans to feel at least a bit of pinch?
Objectivity is still absent in many businesses. Good metrics are the simplest, yet most fundamental thing that any organisation needs in the Digital Economy. Without them it's impossible to spot disruption and opportunities for growth, nor is it possible to change the organisation with new management ideas or new technologies without having a baseline to work from. The worst culprits? Still Marketing departments.
'Experts' are still very vague about a lot of things! And I include myself in this: many methodologies and ideas about growth and leadership in the new economy are still ill-formed. It's easy for people like me to be defocused and flit between new ideas rather than focus on clear methods that help people without the luxury of time to think about the change understand the concepts, plot a course and act on advice. Next year I'm going to narrow my team and I's focus and be really clear about what we do and how we do it. The 'miracles of nature' have to go.
It's really hard to find digital strategy talent. I read a report on this for my own team, which suggested that there were only about 1,000 digital strategy professionals in the UK. That could be true, but in my experience the challenge of recruiting is not about finding the needle in the haystack that is the fully qualified, experienced professional, but instead it's about finding the right combination of smarts, flexibility and grit that enables digital strategy people to be trained. It's a funny role, spanning deep intellectual musings all the way through to building and trading startups and you need to have experienced it all to set strategy effectively... needless to say I'll be focusing on building rather than buying next year.
So there we are. Six things I've learned during this crazy year of growth and discovery. I'd love to think 2016 will be calmed... but there's no chance of that. First stop for me will be Las Vegas for CES. I look forward to telling you all about it!
Thursday, 31 December 2015
Tuesday, 22 December 2015
One of the techniques we've been playing with this year is The Digital Nightmare Competitor, a framework for stretching the thinking of executives in a business by showing them how their industry could look strategically, operationally and economically in a digital world. I recently did such an exercise for a studio client and thought I'd share a nightmare I particularly like. Think of it as a Grinch-like Christmas present :)...
November 5th 2026, London
In late trading, shares in Wintermute, the apex media business of the 2020's hit a record high, valuing the business at more than $400Bn. This success marks a remarkable rise to prominence for an organisation barely a decade old.
Classical disruption started with the customer
From its launch in late 2016, Project Wintermute targeted people turned off by the complex media distribution and rights landscape of the mid-2010’s. By offering a single monthly subscription to unlimited premium digital content at a significantly lower price point (EUR 15 a month, without contract) than the EUR 50 (typically with a 12 or 24 month contract) or more that the traditional pay TV industry charged, Wintermute created a ‘no-brainer’ decision for tens of millions of younger consumers around the world. Basing the experience around mobile and making it impossible to share subscriptions through ‘Totally Secure Streaming’ technology or find content without ‘Total Social Search’ (which only allows you to watch if you’ve been recommended and only being recommended if you’ve done likewise) only made Wintermute more cultish and compelling.
Top-to-bottom data redefined the industry’s value chain… backed by billion dollar parents
Although giving early equity to A-list content creators certainly helped build momentum, Wintermute’s unreal economics are really a combination of Digital Economy technologies and business concepts.
Making a virtue of short content windows enables the company to manage the cost of essential 3rd party content. Artificial Intelligence enabled Wintermute to assess the quality of talent and creative concepts from the structure of a pitch and find great behind the scenes and on screen talent from their own job network with radically greater success than the industry they replaced.
Combining funding with talent in a single platform created an instant and enviable ecosystem of virtual independent producers. And with billions of dollars of backing from the Valley’s largest funders it was able to ride out years of heavy spending while it built global scale, leaving Wintermute free to compete with the incumbents in an unequal competition between a global over-the-top player and local oligarchies.
Starting and staying lean is an essential strategic advantage
Despite its rapid growth, Wintermute remains a very small organisation, assembled from an ecosystem of seven-person, multi-disciplinary ‘icebreaker’ teams, each of which owns one of the business’ small set of outcomes. Each team operates semi-autonomously, drawing in external experts where they’re needed, resulting in a business that does the job of tens of thousands with a few hundred full time employees. By building its business around talent, rather than vice versa, Wintermute believes that it remains perfectly placed to lead further disruption in the trillion-dollar global media industry.