Top Digital Business Insights in 2014
POSTED : diciembre 7, 2014
BY : Dave Wieneke

To paraphrase Roger Martin, a design thinker who is one of this year’s featured authors, there are no marketing, design, legal, or customer decisions; there are only business decisions. If anything characterizes the business reading that we’re excited about at PK, it’s this idea of integrative thinking that unifies the vision of specialists to direct changes that make business better.

We’ve tried to not limit ourselves to recommending only books. More books than ever start as high impact trade articles. We’ve also seen a noticeable shift to MOOCs (Massive Online Open Courses) allowing authors to personally express their ideas and directly engage tens of thousands of learners. This is a significant new addition to the publisher’s toolkit, and we’re glad to recommend these often free resources as a way to dig deeper into this year’s picks.

Business strategy as art and craft

Digital disruption is changing how firms in every industry do business. Unfortunately, as Roger Martin points out in his article “The Big Lie of Strategic Planning,” many management teams are more comfortable with the exercise of annual planning than the more ambitious task of setting strategy. As Roger notes, this could stem from confrontation of both uncertainty and the need to commit to a scale often not fully visible in an annual plan.

This need to balance established facts with imagination and judgment is the core of what J.-C. Spender lays out in Business Strategy: Managing Uncertainty Opportunity & Enterprise. The book is a mix of storytelling of strategic drift and wayfinding, as well as a toolkit of rubrics and frameworks.

With tools come the risk of the freshman error which Jerimiah Owyang called “fondling the hammer”. That is, to over focus on a tool, rather than on its skillful use. After all, frameworks and documents are just artifacts of strategy; decisions, especially those that create alignment for action are the art of strategy. Spender’s Business Strategy grounds itself in value created by the judgment and imagination that fuel strategic choices, rather than rote processes that channel data to decision.

However, if it’s strategy tools and analytical chops you seek, then Darden Business School’s Michael Lenox has created a free Coursera MOOC that doubles as a strategist’s gym. In it, he brings his Strategist’s Toolkit to life in a seven-week interactive program connecting in excess of 80,000 learners at once. This spring, I joined in Professor Lenox’s course and found grading the investigations of other students a rare chance to see how a series of independent would-be strategists would take on similar analyses. Of course, you can buy his book, too, but his free MOOC offers a potentially richer introduction to his teaching.

Putting a value on relationships

If digital business capacities are strategic, it is because they expand how businesses connect with and serve their customers. In his December 2013 article, “When Marketing is Strategy,” Niraj Dawar of the Ivey Business School sets up the dichotomy for the core of his book, Tilt: Shifting Your Strategy from Products to Customers. The shift he describes is a traditional focus on the upstream “value creation activities related to production and products” to downstream values based on “how companies interact with customers.” Most companies still focus on designing products, rather than how they are acquired, used, and modified.

But if customers and their delight are the new core of competitive advantage, then companies must focus on finding the right ones for their business. Peter Fader is Professor of Marketing at the Wharton School and Co-director of its Customer Analytics Initiative. His book, Customer Centricity, is grounded on the truth that all customers are not equal, and that differentiating between them is the root of true customer commitment. You can get a free taste of his teaching at Wharton’s Marketing MOOC on Coursera, which PK’s Jeff Cram calls one of his “A-level sources of insight”. And conveniently, you can get a deep dive with Professor Fader in his online course The Strategic Value of Customer Relationships with Wharton’s Executive Education program.

Service design thinking

This greater focus on customers has driven a renewed focus on service design thinking in many of the companies we work with and admire. Roger Martin’s The Opposable Mind is part inspiration, part toolkit, and it’s the rare book that focuses first in making thinking better before improving design. If you use mindmaps in your creative process, you’ll find Opposable Mind to be jet fuel for assembling ideas, and for finding solutions that integrate apparent trade-offs rather than splitting the difference.

Alan Trefler, the CEO and Founder and Chairman of Cambridge-based Pegasystems is a different breed of designer. In his book, Build for Change: Revolutionizing Customer Engagement through Continuous Digital Innovation, Trefler shows what it takes to shift how a business thinks about its customers, teams, and technology to become more digitally adept. Though there is no one with a more powerful view of how to programmatically use data to increase the value of customer relationships, Trefler calls out the over-reliance on data as a major theme of his book. (See the chapters “Death by Data” and “Bringing Judgment and Desire”.)

Changing culture before anything else

Let’s face it, there are reasons why some companies wait to change until it’s too late. The decision to change comes from vision of the future which is naturally speculative, while resistance to change is rooted in real benefits from how things are today. So organizations find they have an immunity to change as part of their cultural operating system.

Harvard Professor Robert Kegan has developed an approach to overcoming this resistance, which he described in the already well-known book, Immunity to Change. While strategy may explain why a change could be beneficial, Kegan dissects how to test and change beliefs so that managers can align around change.

But, be careful. It’s said that the road to hell is paved with good intentions. PK Co-Founder Jeff Cram put me on to the novel The Circle, which is popping up on “best book” lists everywhere. Most reviews discuss it as a story about the loss of freedom and ethics in an age of privacy-invading technology.

It is also a commentary on how corporate culture influences and has the potential to take over lives. In real life, the social network the Circle would almost certainly be regarded as a Top Place to Work. It uses metrics to gamify and influence its users, and its staff through a self-righteous and self-serving corporate culture. It’s a more adroitly designed paternalism than the factory towns of a century ago. Through corporate culture, The Circle earns its own captive workforce.

You can read a nice roll-up of The Circle’s themes by H. James Wilson, a senior researcher at Babson Executive Education near Boston.

You haven’t seen anything yet

The Second Machine Age: Work, Progress, and Prosperity in an Time of Brilliant Technologies puts forward the optimistic thesis that the global economy is on the cusp of dramatic growth which will leverage decades of work in artificial intelligence and the expansive scale of our digital world.

While you might expect to hear technical exuberance from authors based at MIT’s Center for Digital Business, Erik Brynjolfsson and Andrew McAfee ground their optimism in the idea of exponential growth. As the number and power of processors continues to double regularly, we have now reached such a saturation of computing power that further increases will be staggering. If you like, take a look at their TED Talk which lays out the bones of their vision.

To illustrate their point, Brynjolfsson and McAfee compare Eastman Kodak to Instagram. This simple app has allowed over 130 million consumers to share 16 billion photos. Within a year and a half of its founding, Instagram sold for $1 billion to Facebook. Today Facebook is several times the value of what Kodak was at its peak. It’s created seven billionaires with a net worth ten times that of George Eastman at his peak. Plus, this was done with 4,600 workers in comparison to Kodak’s 145,000.

The benefits of frictionless distribution, reprogrammable platforms, and millions of connected users multiply the effort and value invested in Instagram. The Second Machine Age weaves insights from macro- and microeconomic theory with an array of other disciplines to make a compelling and provocative case for a future based on new engines of value.

No, you simply can’t have one of the best books of the year

Just before Thanksgiving, Evan Osnos, a staff writer for the New Yorker who has chronicled real transformation on the ground in China for year, won the National Book Award. Ironically, the result was a complete sell-out of his first edition, which may not be available in many stores until after Christmas.

But thanks to the archives of the New Yorker, you can enjoy his writing and perhaps find a richer view of why China merits a place in your thinking about digital business.

The business press has done a good job a recounting China’s influence in tech. That’s not hard when four of the world’s ten top-valued Internet firms are based there. This year the value of tech IPO’s driven by China dwarf the worlds other largest economies combined. It’s hard to overstate its promise as the world’s second largest economy, or its threat as a potential participant in cyber espionage. But after a while, these declarations of scale turn China in to a monolith.

What Osnos has done is ground China’s historic changes in first-person accounts of life in what is turning out to be “the greatest show on earth” for the twenty-first century. Whether its use of the Internet in China, such as star Yao Chen has been quoting Solzhenitsyn to followers by Twitter, or 5,000 police putting down a riot inside of Apple’s manufacturer of iPhones, much of his work is framed by the power of technology coursing through the emergence of China. Whether it’s John Stewart recognizing that a huge portion of his web visitors were suddenly Chinese, or Edward Snowden being hailed as a hero there, or a historian spending time in North Korea with Google’s Eric Schmidt , all put the impact of economic sanctions into perspective.

“China reminds me most of America at its own moment of transformation,” writes Osnos, “the period that Mark Twain and Charles Warner named the Gilded Age, when ‘every man has his dream, his pet scheme.’ “ As you architect your firm’s digital business vision, it might be wise to take the dreams and schemes of China into account.

That’s what new years are for

John Maeda once noted that “Time may tick in seconds, but it is lived in years.” As we sit here hungry for the brief pause between years, the forces moving digital business have never seemed stronger.

Having the vision and capabilities to bring these forces together is one of the best promises for change in the years to come. Hopefully these guideposts will help you marshal culture, technology, design, and all the knowledge that is part of planning what’s next.

Let us know what you’re reading, and where you find inspiration to imagine what’s just over your company’s horizon.

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