Toffler and the Revolution

Lawrence Fisher’s interview of Alvin Toffler, published in Strategy+Business, is an excellent review of the thinking and writings of the futurist and author. His books, Future Shock and its successors, The Third Wave (Morrow, 1980) and Powershift: Knowledge, Wealth, and Violence at the Edge of the 21st Century (Bantam, 1990) were at their best when not making predictions, but when synthesizing an array of disciplines, including science, technology, sociology, and religion, thus providing plausible explanations for happenings on the world’s stage.

In his new book, Revolutionary Wealth (Knopf, 2006), Mr. Toffler and his wife, Heidi, argue that more and more economic activity takes place through processes that do not involve the exchange of currency. The rapid rise of this nonmonetary wealth system has major implications for both the global economy and for humanity in general — implications that have been unmeasured and underestimated.

The interview also recounts some fundamental trends, like education, which this blog has addressed previously. 

Here is an excerpt from the Fisher interview: In the book, you write of education’s failure to move from the industrial age to the knowledge economy. Is homeschooling a “prosumer” response to this crisis?

TOFFLER: Yes, now that you mention it. It is an important and growing form of prosuming. The parents do it themselves, because the market does not supply what they want or need, or for that matter what the market needs.

Think about how we learned to use personal computers. PC use went from zero to hundreds of millions of people who know and use PCs routinely, and nobody went to school to learn how. Instead, chances are you found a “guru,” and a guru was anyone who bought his PC a week before you bought yours. And there were user groups — volunteers passing valuable knowledge back and forth. If you agree that the PC has had an impact on productivity in the money economy, then the fact that people taught each other how to use this thing without money changing hands is another example of what a big impact prosumers can have on the money economy. Add these things together — homeschooling, teaching how to use PCs, Linux, etc. — and you begin to understand this big invisible economic force. People have written about each of these pieces, but haven’t seen them as part of a huge nonmoney economy interacting with the money economy.

Organizing Without Organizations

Clay Shirky may be the finest thinker today on the Revolution. His book Here Comes Everybody is more than just about technology; it's an absorbing guide to the future of society. Anyone interested in the vitality and impact of groups of human beings -from knitting circles, to political movements, to multinational corporations-needs to read and more importantly UNDERSTAND this book.

With accelerating velocity, our age's emerging technologies of networking are evolving into new groups doing new things in new ways, and old and new groups alike doing the old things better and more easily. Times they are a changin'. Hierarchical structures that exist to manage the work of groups are seeing their raisons d'être swiftly eroded by the rising technological tide. Business models are being destroyed, transformed, born at dizzying speeds, and the larger social impact is profound.

One of the culture's wisest observers of the transformational power of the new forms of tech-enabled social interaction is Clay Shirky, and Here Comes Everybody is his marvelous reckoning with the ramifications of all this on what we do and who we are. Like Lawrence Lessig on the effect of new technology on regimes of cultural creation, Shirky's assessment of the impact of new technology on the nature and use of groups is marvelously broad minded, lucid, and penetrating; it integrates the views of a number of other thinkers across a broad range of disciplines with his own pioneering work to provide a holistic framework for understanding the opportunities and the threats to the existing order that these new, spontaneous networks of social interaction represent. Wikinomics, yes, but also wikigovernment, wikiculture, wikievery imaginable interest group, including the far from savory. A revolution in social organization has commenced, and Clay Shirky is its brilliant chronicler.

The Olympics Meet New Channels of Distribution

The shift to digital content deployment represents the most rapidly advancing and impactful distribution change in the history of business. Many, as this article will show through the example of NBC's Internet broadcasts of the Olympics, are embracing the shift while a large number of other businesses are wrangling to adapt because of perceived risks and more critically the requirement for their leadership to actually think anew about extant business models. Failure to quickly adopt these new methods of customer interaction will result in catastrophy for many organizations while other competitors pass them by. This is even more true forcompanies that rely largely on the deployment of digital media content. The 2008 Olympics is illustrative of this point. Just two years ago during the 2006 Turin Winter Games, NBC streamed only one hockey game online. This year, the network will stream 2,200 hours of 25 events live. In only two years time the shift occured. Imagine what the next two years will bring.

The rapid pace of advancement for the new channels is occurring from a combination of factors. There has been a significant recent change is the amount of video organizations can put online. YouTube is the lingua franca of what's happening on the Internet, and has expanded enormously in the past two years. In addition the consumer’s appetite for content has changed. It’s no longer about just putting content online. Consumers now demand and expect transmission onto mobile devices and the ambition for enlightened organizations is to be able to reach as many viewers as possible. Video player technology is also much improved today, processor connections and network connection feed is much better and this will continue to improve at a rapid rate. In the end the biggest driver are consumers who have been exposed to online video and digital content and are increasingly expecting it.

Depite the obvious, many organizations are failing to proceed with the adoption of these new channels because they cannot reconcile the perceived threat these new channels entail to their existing business models. However, time is their enemy. They are the buggy whip makers watching the Ford production plant spit out the first fleets of cars from afar. Leadership of these businesses naively believes that the cannibalization of current revenue streams is not worth the risk of moving into the future. The tragedy is that because of this thinking, these organizations are not even preparing for just how rapid this change will occur. Because of their failing to accept the inevitable they will be ill equipped to catch up when the avalanche of consumer demand reaches a “tipping point”, which it has. Just think about the NBC Olympics example. This is a company whose revenue model is nearly exclusively surrounding digital content deployed on television and they are embracing the risk, because they know they have to.

Research shows that if you look at households with children, there are more laptops than televisions in the house. The way young people and increasingly older people are approaching the world, seeing technology as a tool, is changing things very quickly. Failing to embrace this change in your organization is a prescription for obsolescence.

Lively - Google's Entry Into Virtualization

Further evidence of the advancing revolution of content being delivered as “experience” is Google’s latest expansion beyond its main mission of organizing the world's information. Google unveiled a free service Tuesday, July 8^th, 2008 in which three-dimensional software enables people to congregate in electronic rooms and other computer-manufactured versions of real life. The service, called "Lively," represents Google's answer to a 5-year-old site, Second Life, where people deploy animated alter egos known as avatars to navigate through virtual reality. Google (GOOG, Fortune 500) thinks Lively will encourage even more people to dive into alternate realities because it isn't tethered to one Web site like Second Life, and it doesn't cost anything to use. After installing a small packet of software, a user can enter Lively from other Web sites, like social networking sites and blogs.

The Lively application already works on Facebook, one of the Web's hottest hangouts, and Google is working on a version suitable for an even larger online social network, News Corp.'s (NWS, Fortune 500) MySpace.

"We know people already spend a lot of time online socializing, so we just want to try to make it more enjoyable," said Niniane Wang, a Google engineering manager who oversaw Lively's creation over the past year.

Although Google is best known for the search engine that generates most of its profits, the company has introduced other services that are widely used without making much, if any, money. Google's peripheral products include its 3-D "Earth" software, Picasa for sharing photos and programs for word processing, calendars and spreadsheets. The service also enables users to create different digital dimensions to roam, from a coffeehouse to an exotic island. The settings can be decorated with a wide variety of furniture, including large-screen televisions that can be set up to play different clips from YouTube.com, Google's video-sharing service. Lively users can then invite their friends and family into their virtual realities, where they can chat, hug, cry, laugh and interact as if they were characters in a video game.

Competing Through The Revolution - Network Orchestration

Quality thinking regarding effectively competing in a rapidly changing world is presented in "Competing in a Flat World". Many of the concepts center on the creation of orchestrated networks as part of business strategy and these are delivered impressively in this book . It is a must read for individuals and organizations trying to grasp and understand what the paradigm of value creation has become.

When one accepts the three mega trends and their convergence it is impossible to not embrace the notion that single non-networked firms can actually compete in the new world. However, numerous industries still remain untouched at this point by these trends that represent Friedman's "triple convergence" a critical mass of enabling technologies, individuals and organizations skilled enough to take advantage of these new methods and the sudden arrival of more than three billion people from emerging economies entering the new,more level, playing field.  The reality is that adopting orchestration is a necessity for all businesses and organizations to survive; large and small. It is not a choice, it is an imperative. Learn more about Li & Fung in the video clip below.