Category Archives: management

Guest post: The Future of Management, by new futurist Branimir Trošić

Delighted to host a guest post by a new futurist Branimir Trošić sharing his thoughts on

The Future of Management

Self-management includes concepts like no hierarchical structures (where no one has any coercive power over anyone else) and the concept of accountability which explains that people must keep their commitments to each other (Josh Alan Dykstra, 2014). Many understand that concept, but can not quite understand how this concept could work in practical situations, partly because there is a problem of understanding this concept with a learned mental model: learned assumptions how the organization should be organized: a hierarchical structure where information flows from top to bottom. Not being able to imagine the alternative and the idea of an organization without managers frightens many: who would be in control, who would be responsible for the company’s strategy, who will lead the way? This concept purports that there is one god-like leader that sits on top of the organization and shows the way. And, usually, organizations are currently organized in that way, but the problem of that kind of organization is that not everyone in the organization understands what “The” leader is communicating, nor do people find themselves accountable for the organization to reach the common goal. Natural state of mind of every individual is that he or she will work for their own interest. And interestingly, this is one of the axioms of economy: an organization will flourish only if the individual within the organization can flourish. The problem of a hierarchical organization is exactly in hierarchy: different levels have different goals, meaning that the goal of the CEO (increasing the profits) is not the same as the goal of the worker at the bottom (usually to finish his/hers daily chores, not minding the efficiency of the work and head home). Hierarchical organizations repeatedly fail at motivating different levels to accept shared vision and to act upon it.

If motivating every worker in the organization is the problem of a hierarchical organization, and if exactly hierarchy is the show stopper in implementing that, then the logical solution would be to remove hierarchy from the organization. Solution sounds simple, but another question imposes: how can this be done in real life? If there is no boss to tell you what to do and how to do it, who should be the one to define the direction?  There were many attempt to foster self-management throughout history, and some experiments didn’t work out. Partially because people were not ready for self-management because of  wrong image of self-managing and self-organizing organization – the question of the master manipulator hangs above that idea, and assumptions that emerge from that mental model actually destroy any possibility of creating a self-organizing organization. What helps us understand that concept is to look at other things that are self-organizing, that thrive at self-organization. If we look at manmade systems, we will not find any examples because of artificial surroundings. In his book  “The necessary revolution” Senge claims that seeing systems is the most important concept that helps cultivate an intelligence that we all possess and in that way to cultivate the positive force for systems intelligence to flourish on a larger scale. When people start seeing systems, they begin to understand the basic flaws in prevailing mental models and alternative futures that are possible (Senge, P., 2014). So, if “artificial” is a characteristic of something that is not self-organizing but imposed, then everything that is not artificial should have also the characteristic of self-organization. The answer is in the question: nature is self-organizing and gives us numerous examples how human organizations should be structured. The best example that one can come across when thinking about self-organizing communities is the community of ants. Ants teach us that there is no hierarchy but specialization, and that type of social structure is called eusociality. Eusociality is the ability for the certain group of ants (or insects) to specialize for certain job or work, losing the ability to do anything else, but in cooperation work to reach the mutual goal (rising of offspring, gathering food, etc..)

In those terms, when same principles apply to human society and/or organizations, then we can understand that all the answers are in the nature, because nature is self-organized and self-managed. Nature teaches us that there is really no need for the manager in a sense of having one god-like persona that directs and tells everybody what to do, but a leader who can help individuals develop their abilities and help people find one’s own purpose.  This type of self-organization has numerous implications, both on the organization itself and on the individual.

From the organization perspective: having  fifty without a manager people that work relentlessly on mutual goal is usually more productive than having one thousand people with managers, each one working on their own goals not understanding the mutual goal. This is partly because managers tend to tell people what they cannot do, rather to empower them to do it. Google organized their project teams of three individuals, with project leadership rotating between them. Similarly how ants do it, they put in charge the one whose abilities are appropriate for given situation. Leader is appointed not according to mutual consent by deciding who has the best leader traits, but by looking which ones traits are the best answer to current problem. Furthermore, when people are empowered to take lead according to their abilities, they are put in surroundings in which management still exists, but a different kind of management: the one where behaviors of both leaders and followers are induced, rather than compelled (Hock, D., 2000.).  In such self-organizations, power is never used; at least not the one whose sole purpose is to boost an ego of a manager, but power whose purpose is to solve the problem. By giving up power and coercive control – you get it back and have access to power. The question imposes why managers are not willing to give up their power. The problem is fear, they try to manage things, force them to their will. To do that immense energy is wasted solely on defending themselves. When this control is let go, the manager/leader then frees up huge amounts of energy spent in wrong way (Watts, W.A.1968.). To be able to let go that control, one should trust their subordinates and this main characteristic of a leader: leader has faith in his followers to do the job, and this trust is born out of humility, a feeling that your subordinates are equal to you, the leader. That freed power that is gained through letting go of control, having faith in subordinates and considering them equal is then divided throughout organization, and when power is divided – everybody becomes the leader, vision becomes mutual. In organizations where everybody is equal and does his best to reach the shared vision, productivity rises because workers stop being active and start being productive: problems are communicated and solved in order to reach the mutual goal. At this point, we should stop using the term self-management and start using the term self-organization. At this point the mental model of an old hierarchical organization becomes obsolete, and its alternative: self-organization becomes clearer. In comparison to hierarchical organization, self-organized one is decentralized, or in Clevelend’s terms: uncentralized, it becomes a real network of cooperation between groups of people specialized by their passion and gained power to work and achieve the mutual goal. When a network of passionate and specialized people starts communicating in such a way, a vision becomes a flux and not a rigid non-flexible axiom.  Since it is a flux, and everybody is a leader, everybody is also invited to participate in creation of that flux. When a self-organization reaches that state, it also becomes a dynamic organization, the one that has the freedom to change (or not to change) from day to day, and is as a chaordic organization powered from periphery, not from center. In this way, the vision will be a goal that can be reached, and the one that cannot live up to its plans. This is why hierarchical organizations fail: since there is no possibility for the people to participate in the vision (the god-like creature at the top is the one who communicates the vision), to change it according to its possibilities, since the people are not empowered to become leaders in their own fields, since power is used in coercive way and taken from people, since there is no trust, no faith, and rule of fear, the probability to reach the goals of the vision is rarely high. Or to put it better: the vision is not the one that is communicated, but the one that is known and not communicated, the taboo: to fulfill the wishes and achieve the ideas of workers direct superior, that often (due to lack of specialization) has anything to do with productive fulfillment of the vision. In that way, we should understand that in hierarchical organizations the real customer whom the whole organization is serving is actually – the CEO, which is, to put it in a simple term: wrong.

From the perspective of an individual, we have to recognize that simple acts of minifying subordinates mistakes and empowering them to decide for themselves how they will contribute to a mutual goal actually transforms unsatisfied workers that probably do not sleep at night  and are afraid of what will happen to them because of the hierarchical relationship with their boss  to a highly productive workers that like to talk of different subjects, proactively solve the problems of the company  and are repeatedly praised. This is the model of how leadership should look like. A leader has to understand that the most productive system is a uncentralized system, with every center being specialized for a certain job, every specialization center should take over the lead when an organization faces the problem which can be solved exactly by that specialization center. This type of organization should be backed also financially, and this can be done in two ways: everybody should start with the same pay-check. The work people do should be then categorized in order to define what type of work brings what type of revenue (or any other benefit to the company), and the basic pay should be multiplied with the index of complexity of the productivity (not activity). In that way, people can choose to do a lot of little improvements that will lead towards reaching the same goal or one big innovation that will be the game changer. The difference between the first worker and the lateral is simply in the knowledge. Knowledgeable workers tend to be more productive by applying their knowledge into daily business.  Second way is to build profit centers and gather specialized people around them. Each profit center should be responsible for their own budget they would receive after committing to reach a goal negotiated with other profit centers. The budget would be dynamic, going up or down on every quarterly forecast depending on contribution profit center had to fulfillment of a goal.

Furthermore, from the perspective of an individual, working in chaordic organization has several benefits. First, by pursuing their passion, people are intrinsically motivated to do what they love to do. And this is the holy grail of motivation: how to intrinsically motivate the worker. The answer is simple: let him or her do whatever they want to do, while they pursue the mutual goal. It does not matter how long they stay at work, do they work from nine to five, or even if they are coming to work, while they have their own way of contributing to an organization. Being able to organize one self, and not to feel that the punishment will follow because bosses requirements are not met is the crucial thing in letting the team go (Medinnila, A, 1998.)

In terms of self-organization, management has no future. At least, not what under the word “management” we understand today. Management will become just one of the jobs being done within the company, not putting people who manage businesses above nor below anybody else. The characteristic of the third industrial revolution: decentralization of production and distribution of services will apparently happen also within the organizations. Social structures will be disrupted, since fewer and fewer people are prone to be their own boss, there is not a single reason not to create organizations and companies according to those who make the company: people. And only in the moment when every single employee is a leader within his or hers line of work, when every leader works and collaborates with a goal to reach a mutual goal, then the noun “company” will achieve it’s true meaning. Until then, people will work in slaveries, not companies, being unproductive, unimaginative and unmotivated.

We should doubt that there is any possibility of changing current companies in such a way, but new ones with described structure will arise, become disruptive, more efficient and the same thing will happen that happens with all the companies that refuse to adapt and ride the tsunami of the future: they will go bankrupt.  It is a model in which internet replaced tv and other media, how air b’n’b replaced booking the hotel, Uber the taxi and all other examples how new emerging models had disruptive effect towards old economy of scarcity models.

The disruptive transformation of a company is a transformation of doing business, and also, in a way a transformation of how we live.

Branimir’s contact details:

Branimir Trosic, btrosic23@gmail.com

Stimulative technology

You are sick of reading about disruptive technology, well, I am anyway. When a technology changes many areas of life and business dramatically it is often labelled disruptive technology. Disruption was the business strategy buzzword of the last decade. Great news though: the primarily disruptive phase of IT is rapidly being replaced by a more stimulative phase, where it still changes things but in a more creative way. Disruption hasn’t stopped, it’s just not going to be the headline effect. Stimulation will replace it. It isn’t just IT that is changing either, but materials and biotech too.

Stimulative technology creates new areas of business, new industries, new areas of lifestyle. It isn’t new per se. The invention of the wheel is an excellent example. It destroyed a cave industry based on log rolling, and doubtless a few cavemen had to retrain from their carrying or log-rolling careers.

I won’t waffle on for ages here, I don’t need to. The internet of things, digital jewelry, active skin, AI, neural chips, storage and processing that is physically tiny but with huge capacity, dirt cheap displays, lighting, local 3D mapping and location, 3D printing, far-reach inductive powering, virtual and augmented reality, smart drugs and delivery systems, drones, new super-materials such as graphene and molybdenene, spray-on solar … The list carries on and on. These are all developing very, very quickly now, and are all capable of stimulating entire new industries and revolutionizing lifestyle and the way we do business. They will certainly disrupt, but they will stimulate even more. Some jobs will be wiped out, but more will be created. Pretty much everything will be affected hugely, but mostly beneficially and creatively. The economy will grow faster, there will be many beneficial effects across the board, including the arts and social development as well as manufacturing industry, other commerce and politics. Overall, we will live better lives as a result.

So, you read it here first. Stimulative technology is the next disruptive technology.

 

The future of MBAs

I’ve reached M in my ‘the future of’ series. So, MBAs.

We have all had to sit through talks where the speaker thinks that using lots of points that start with the same letter is somehow impressive. During one such talk, I got bored and produced this one letter fully comprehensive MBA. Enjoy:

Corporate Cycle

The future of walled gardens

In the physical world, walled gardens are pretty places we visit, pay an entry fee, then enjoy the attractions therein. It is well understood that people often only value what they have to pay for and walled gardens capitalise on that. While there, we may buy coffees or snacks from the captive facilities at premium prices and we generally accept that premium as normal practice. Charging an entry fee ensures that people are more likely to stay inside for longer, using services (picnic areas, scenery, toilets etc) they have already paid for rather than similar ones outside that may be free and certainly instead of paying another provider as well.

In the content industry, the term applies to bundles of services from a particular supplier or available on a particular platform. There is some financial, psychological, convenience, time or other cost to enter and then to leave. Just as with the real thing, they have a range of attractions within that make people want to enter, and once there, they will often access local service variants rather than pay the penalty to leave and access perhaps better ones elsewhere. Our regulators started taking notice of them in the early days of cable TV, addressed the potential abuses and sometimes took steps to prevent telecoms or cable companies from locking customers in. More recently, operating system and device manufacturers have also fallen under the same inspection.

Commercial enterprises have an interest in keeping customers within their domain so that they can extract the most profit from them. What is less immediately obvious is why customers allow it. If people want to use a particular physical facility, such as an airport, or a particular tourist attraction such as a city, or indeed a walled garden, then they have to put up with the particular selection of shops and restaurants there, and are vulnerable to exploitation such as higher prices because of the lack of local choice. There is a high penalty in time and expense to find an alternative. With device manufacturers, the manufacturer is in an excellent position to force customers to use services from those they have selected, and that enables them to skim charges for transactions, sometimes from both ends. The customer can only avoid that by using multiple devices, which incurs a severe cost penalty. There may be some competition among apps within the same garden, but all are subject to the rules of the garden. Operating systems are also walled gardens, but the OS usually just goes with the choice of device. It may be possible to swap to an alternative, but few users bother; most just accept the one that it comes with.

Walled gardens in the media are common but easier to avoid. With free satellite and terrestrial TV as well as online video and TV services, there is now abundant choice, though each provider still tries to make cute little walled gardens if they can. Customers can’t get access to absolutely all content unless they pay multiple subscriptions, but can minimize outlay by choosing the most appropriate garden for their needs and staying in it.

The web has disappointed though. When it was young, many imagined it would become a perfect market, with suppliers offering services and everyone would see all the offerings, all the prices and make free decisions where to buy and deal direct without having to pay for intermediaries. It has so badly missed the target that Berners Lee and others are now thinking how it can be redesigned to achieve the original goals. Users can theoretically browse freely, but the services they actually want to use often become natural monopolies, and can then expand organically into other territories, becoming walled gardens. The salvation is that new companies can always emerge that provide an alternative. It’s impossible to monopolize cyberspace. Only bits of it can be walled off.

Natural monopolies arise when people have free access to everything but one supplier offers something unique and thus becomes the only significant player. Amazon wasn’t a walled garden when it started so much as a specialist store that grew into a small mall and is now a big cyber-city. Because it is so dominant and facilitates buying from numerous suppliers, it certainly qualifies as a walled garden now, but it is still possible to easily find many other stores. By contrast, Facebook has been a walled garden since its infancy, with a miniature web-like world inside its walls with its own versions of popular services. It can monitor and exploit the residents for as long as it can prevent them leaving. The primary penalties for leaving are momentarily losing contact with friends and losing interface familiarity, but I have never understood why so many people spend so much of their time locked within its walls rather than using the full range of web offerings available to them. The walls seem very low, and the world outside is obviously attractive, so the voluntary confinement is beyond my comprehension.

There will remain be a big incentive for companies to build walled gardens and plenty of scope for making diverse collections of unique content and functions too and plenty of companies wanting to make theirs as attractive as possible and attempt to keep people inside. However, artificial intelligence may well change the way that networked material is found, so the inconvenience wall may vanish, along with the OS and interface familiarity walls. Deliberate barriers and filters may prevent it gaining access to some things, but without deliberate obstruction, many walled gardens may only have one side walled, that of price for unique content. If that is all it has to lock people in, then it may really be no different conceptually from a big store. Supermarkets offer this in the physical world, but many other shops remain.

If companies try to lock in too much content in one place, others will offer competing packages. It would make it easier for competitors and that is a disincentive. If a walled garden becomes too greedy, its suppliers and customers will go elsewhere. The key to managing them is to ensure diversity by ensuring the capability to compete. Diversity keeps them naturally in check.

Network competition may well be key. If users have devices that can make their own nets or access many externally provided ones, the scope for competition is high, and the ease of communicating and dealing directly is also high. It will be easy for producers to sell content direct and avoid middlemen taking a cut. That won’t eliminate walled gardens, because some companies will still do exclusive deals and not want to deal direct. There are many attractive business models available to potential content producers and direct selling is only one. Also, as new streams of content become attractive, they are sometimes bought, and this can be the intended exit strategy for start-ups.

Perhaps that is where we are already at. Lots of content that isn’t in walled gardens exists and much is free. Much is exclusive to walled gardens. It is easy to be influenced by recent acquisitions and market fluctuations, but really, the nature of the market hasn’t really changed, it just adapts to new physical platforms. In the physical world, we are free to roam but walled gardens offer attractive destinations. The same applies to media. Walled gardens won’t go away, but there is also no reason to expect them to take over completely. With new networks, new business models, new entrepreneurs, new content makers, new viewing platforms, the same business diversity will continue. Fluctuating degrees of substitution rather than full elimination will continue to be the norm.

Or maybe I’m having an off-day and just can’t see something important. Who knows?

 

 

The future of Fridays

F now. Done fairies, food, fashion, never done Fridays, so here we go.

TFIF is a common sentiment for wage slaves. Some of us are very fortunate and manage to earn sufficient income from things we love doing, but most people have to make do with jobs instead. If you don’t enjoy your work, then the weekend often promises a welcome break and Friday is a long emotional run-up or run-down.

Many companies have discovered that staff work better when they are happy, and that people can be very creative when they are having fun. Some of them have introduced formal contractual agreements or at least informal managerial tolerance of their staff working a proportion of their time on their own projects, typically 10%.

Few bother to coordinate or manage such activities, leaving that to the staff themselves. I believe that is a mistake. With a few minor tweaks, this could really become a good source of employee fulfillment and corporate revenue.

Self-managing should be an option for sure, but it should be permitted and even encouraged to rope other people into your interesting projects, consensually of course. An engineer might have some great ideas, but some other staff might have other skills appropriate to bring it through to realization. Lots of staff might welcome being involved in other people’s pet projects if they sound more fun than their own ideas.

Companies should also make the full company resources available in the same proportion. A project probably still needs some expenditure, even if it is for fun.

They should also allow people to join up with appropriate people from other companies where it will provide a benefit. Obviously, there needs to be some reasonable restriction on that, but it is certainly feasible and potentially valuable.

Why? Surely the company employs accountants and strategists and planners and directors to decide what to do and where to allocate funds? Actually, the staff sometimes know better. Senior staff may be marginally better at some things than those below them and therefore managed to get through a few promotion interviews, but that doesn’t make them infallible or omniscient. Every employee probably knows better what they are really good at than their boss’s boss’s boss’s boss. Many will have a pretty good idea how they can make things better, or have an idea for a new technique or product or service. Some might not work, but letting them try will bring in a few valuable wins, and even when it doesn’t, it will still maker the staff happier, more self-fulfilled, and importantly, more loyal and productive. If your staff love you and your company because you let them enjoy themselves, you will find them easier to manage and more productive, so you’ll get rewarded too.

When this is all informal and uncoordinated, it doesn’t achieve full potential. Making Friday, or Friday afternoon at least, a time when everyone plays at their own projects would allow the project team-building and managing to work well. If lots of companies adopt it, there would be a large pool of people from lots of companies to add value to their companies, their own lives, and their communities. It would be fun, it would make everyone happier and we’d all benefit from the results.As part of the ongoing evolution of capitalism into a warmer, more human-centered care economy, it is a natural next step.

So, fun-friday. Not because the weekend is coming, but because Friday’s themselves are fun.

 

Automation and the London tube strike

I was invited on the BBC’s Radio 4 Today Programme to discuss automation this morning, but on Radio 4, studio audio quality is a higher priority than content quality, while quality of life for me is a higher priority than radio exposure, and going into Ipswich greatly reduces my quality of life. We amicably agreed they should find someone else.

There will be more automation in the future. On one hand, if we could totally automate every single job right now, all the same work would be done, so the world would still have the same overall wealth, but then we’d all be idle so our newly free time could be used to improve quality of life, or lie on beaches enjoying ourselves. The problem with that isn’t the automation itself, it is mainly the deciding what else to do with our time and establishing a fair means of distributing the wealth so it doesn’t just stay with ‘the mill owners’. Automation will eventually require some tweaks of capitalism (I discuss this at length in my book Total Sustainability).

We can’t and shouldn’t automate every job. Some jobs are dull and boring or reduce the worker to too low a level of  dignity, and they should be automated as far as we can economically – that is, without creating a greater problem elsewhere. Some jobs provide people with a huge sense of fulfillment or pleasure, and we ought to keep them and create more like them. Most jobs are in between and their situation is rather more complex. Jobs give us something to do with our time. They provide us with social contact. They stop us hanging around on the streets picking fights, or finding ways to demean ourselves or others. They provide dignity, status, self-actualisation. They provide a convenient mechanism for wealth distribution. Some provide stimulation, or exercise, or supervision. All of these factors add to the value of jobs above the actual financial value add.

The London tube strike illustrates one key factor in the social decision on which jobs should be automated. The tube provides an essential service that affects a very large number of people and all their interests should be taken into account.

The impact of potential automation on individual workers in the tube system is certainly important and we shouldn’t ignore it. It would force many of them to find other jobs, albeit in an area with very low unemployment and generally high salaries. Others would have to change to another role within the tube system, perhaps giving assistance and advice to customers instead of pushing buttons on a ticket machine or moving a lever back and forward in a train cab. I find it hard to see how pushing buttons can offer the same dignity or human fulfillment as directly helping another person, so I would consider that sort of change positive, apart from any potential income drop and its onward consequences.

On the other hand, the cumulative impacts on all those other people affected are astronomically large. Many people would have struggled to get to work. Many wouldn’t have bothered. A few would suffer health consequences due to the extra struggle or stress. Perhaps a few small business on the edge of survival will have been killed. Some tourists won’t come back, a lot will spend less. A very large number of businesses and individuals will suffer significantly to let the tube staff make a not very valid protest.

The interests of a small number of people shouldn’t be ignored, but neither should the interests of a large number of people. If these jobs are automated, a few staff would suffer significantly, most would just move on to other jobs, but the future minor miseries caused to millions would be avoided.

Other jobs that should be automated are those where staff are give undue power or authority over others. Most of us will have had bad experiences of jobsworth staff, perhaps including ticketing staff, whose personal attitude is rather less than helpful and whose replacement by a machine would make the world a better place. A few people sadly seem to relish their power to make someone else’s life more difficult. I am pleased to see widespread automation of check-in at airports for that reason too. There were simply too many check-in assistants who gleefully stood in front of big notices saying that rudeness and abuse will not be tolerated from customers, while happily abusing their customers, creating maximum inconvenience and grief to their customers through a jobsworth attitude or couldn’t-care-less incompetence. Where people are in a position of power or authority, where a job offers the sort of opportunities for sadistic self-actualisation some people get by making other people’s lives worse, there is a strong case for automation to avoid the temptation to abuse that power or authority.

As artificial intelligence and robotics increase in scope and ability, many more jobs will be automated, but more often it will affect parts of jobs. Increasing productivity isn’t a bad thing, nor is up-skilling someone to do a more difficult and fulfilling job than they could otherwise manage. Some parts of any job are dull, and we won’t miss them, if they are replaced by more enjoyable activity. In many cases, simple mechanical or information processing tasks will be replaced by those involving people skills, emotional skills. By automating these bits where we are essentially doing machine work, high technology forces us to concentrate on being human. That is no bad thing.

While automation moves people away from repetitive,boring, dangerous, low dignity tasks, or those that give people too much opportunity to cause problems for others, I am all in favour. Those jobs together don’t add up to enough to cause major economic problems. We can find better work for those concerned.

We need to guard against automation going too far though. When jobs are automated faster than new equivalent or better jobs can be created, then we will have a problem. Not from the automation itself, but as a result of the unemployment, the unbalanced wealth distribution, and all the social problems that result from those. We need to automate sustainably.

Human + machine is better than human alone, but human alone is probably better than machine alone.

Will marketing evolve from fiend to friend?

Let’s start with a possibly over-critical view of marketing today, to emphasise the problem that I think needs solved.

Marketing helps to make us aware of new products and services we might want to buy, and provides some well paid jobs. That’s the good side. But marketing saps a lot of money out of the system, skimming off money as it helps move it around – like banking, or car parking fees for shoppers, without giving much back to GDP. It helps companies sell things, but adds costs to the customer that could have been spent on other products and services. We basically pay companies to tell us to buy their products. Of that money, marketers spend far too high a proportion on advertising, which is basically the lazy marketing option. They waste our time as we watch TV, cold call us, send nuisance texts and automated calls, fill our data quotas with video ads, delay downloads, force installation of applications to block them, which all requires extra computer power and maintenance. In short, we pay them to waste a significant proportion of our precious lifetime as well as our money. In fact the financial cost added to every product is dwarfed by the costs of the extra time consumed. All the extra energy used to broadcast ads on TV or the net or the extra paper and bleach and ink to put them in magazines has an enormous environmental impact too. Advertising consumes a huge amount of resources but on a per-advert basis is very ineffective at making us buy. Google makes a fortune from UK companies for its adverts but by diverting the ad sales through Ireland, manages to avoid paying UK tax, therefore pulling off an excellent vampire impression, dressing stylish and looking cool while sucking the lifeblood from industry. By using up so much air time and online bandwidth advertising directly impedes productive uses. On current form, because of excessive reliance on the lazy option, marketers are more fiend than friend.

Marketing has almost become a one-tool profession, too willing to annoy a lot of people to get a few sales. Other components of marketing such as launch events and trade shows are effective and very effectively target those who are likely to be interested, but advertising dwarfs them. Surely there has to be a better way. How do we get marketing to go from fiend to friend?

There is. Pull marketing (if done properly) gives people what they ask for, in the right form, on the right platform, when they ask for it, not what they don’t want, in their faces, all the time. Marketing will evolve from push to pull. However much the marketing industry and advertisers don’t want it to go that way, the potential value for a given spend via pull marketing is so much higher that it is inevitable. Think about it. Only an idiot would employ someone to stand in a doorway blocking the entrance, jumping up and down screaming messages at customers that are actually trying to squeeze past into the store to spend money. That is the difference between push and pull. Unfortunately for marketers, pull needs different skills, so if they don’t have them, they need to retrain or they will eventually be made redundant. They can hide and massage performance figures for a while to hide the ineffectiveness of throwing money down the drain on advertising, but not forever.

People want to know what is available that might be of interest to them. They also want clues to help filter the vast number of potential products down to a manageable choice. They don’t want silence from suppliers, but appropriate and timely information. Branding is aimed at this of course. So is PR. Marketing should be better integrated into ongoing background brand management and public relations, with excellent web sites to provide information when people want it. In that way, people will think of them when they want something, and be able to find the most appropriate product easily.

The task of providing a good website is often allocated to other groups in the company. This is a mistake. The website needs to be extremely well integrated with marketing, PR and brand. In many companies, only the brand people get a strong influence. A potential customer coming to the site from any angle of approach should be faced with extremely easy navigation, immersed in the values and styles they already associate with that brand and assisted as far as possible in what they are trying to do. They should not be bombarded with waves of ads, popups and guano that prevents them from finding what they want. Even if a customer wants to cancel a service, it should be very easy to do so. They are far more likely to come back than if they had to spend ages finding their way through a maze and over barriers to do so.

One way of keeping customers aware without ramming branding message down their throats every day is to integrate into target communities as useful members rather than just seeing them as potential sales. People will always favour their friends, so actually being a friend is a good idea. That shouldn’t be any great revelation. Big companies recognise their relative inability to engage with local communities across their range and harness an army of resellers who can better achieve this local involvement. Social networking provides a good alternative channel to local resellers, but not by using the wasteful and annoying blanket broadcasting that we usually see. It needs to be focused. A reseller wouldn’t waste time cold calling every resident in an area just in case. They focus efforts on targets that are likely to buy. They do the customer’s work for them, identifying those for whom a product is suited and then making contact. Being friends also means giving genuine discounts or exclusive deals to regular customers. It doesn’t mean using them to palm off products that you can’t shift through normal channels.

Lifestyle is an easy route too. Everyone lives differently, but many people reveal their lifestyles via magazines or newspapers that they buy, the places they visit, the things they do, and indeed the products and services they buy. These are obviously high value marketing hooks. People like their existing opinions and attitudes to be reaffirmed. Letting them know they have made a good decision buying your product makes them feel better about the spend. It takes skill to package such affirming in a way that it doesn’t come across like the lazy ‘congratulations on buying this’. Providing favourable reviews, news links and ongoing support would soon become spam if used too much, but sparingly and with appropriate products, it can be useful.

Handled properly, excluding employees with deep staff discounts, the most likely person to buy is someone who has bought from you before, then in second place, someone who has bought equivalent products from a competitor, then someone who has a strong proven interest in that field. Much further away is someone with a casual unspecified interest in the area who just happens to have chosen a particular keyword in a search for any reason whatsoever, and in the very far distance, a total stranger. Yet those last two are where most advertising revenue is spent.

Magazines are an excellent platform to reach targeted groups, but they still need the right approach. An advert in a magazine is more likely to be read than one in a newspaper, but is still likely to be ignored. An article by a trusted writer will be read, and if it mentions your product favourably, the trust in the writer transfers to your product. If they already have it, it builds the feel-good factor. Strongly themed magazines form an important part of the self-selected lifestyle choice, especially since people can only buy a few each month, and this trust and identification with its writers can go far beyond the magazine itself, into their social media and blogs, and soon, into their augmented reality as they wander around. As social media continues to expand into the high street with location-based services, that relationship will grow and winning the favour and approval of writers will become a more important part of marketing. Care is needed of course. Writers will not want to appear partial since that would compromise their trust and their following, but providing exclusive information to them and being honest about defects wins support without threatening impartiality.

As we move into the era of augmented reality, companies are already discovering how to use precise location. Today, location doesn’t just rely on GPS or mobile signal strengths. Image recognition can identify a customer and also exactly where they are, what gestures they are making, even the expression on their face. From those and various other contributing factors is evolving the huge technology field called context. Context is very important in knowing whether to give marketing information at all and if so, how and what. It helps make sure that efforts are spent to make customers want to buy rather then to make them avoid you. A family might be interested in meal vouchers when lunchtime is creeping up. If they’ve just eaten (and paid), the same vouchers may be very unwelcome. If I have just bought a car, the last thing I want is proof that I could have got it or a better one cheaper or had some extras thrown in!

As context technology develops in parallel with positioning, image recognition and augmented reality technology, we will see the air around us essentially digitised, context-sensitive messages pinned to every cubic millimetre of the air. Digital air, or virtual air, will be a major new marketing platform that will offer hugely more potential and value than advertising, with far less cost and customer annoyance. It also offers the potential to bombard customers with unwelcome blanket ads too, so it will be easy for the industry to shoot itself in the foot. Not just easy, but probably inevitable in an industry with some players who think it is smart to deliberately offend people. If that happens, spam filters will block such ads and the potential will be damaged irreparably for everyone.

Word of mouth is one of the best forms of marketing. It is free and natural and goes to companies who provide good products or services. In its simplest form, it is like ebay’s  reputation score on Facebook’s ‘like’ button. At a higher detail level, companies such as Trip Advisor make good income by harnessing the desire people have to tell others about their experiences, good or bad. People will often take guidance from strangers when there is no better alternative, and even though everyone knows some reviews are by friends, competitors or by people who have never even had any experience of the supplier, if there are a lot of strangers giving reviews, the assumed probability is that most will be telling the truth and any bias will be reduced.

Even so, these sites don’t reach the same level of trust that people have in their friends and colleagues. We should expect that to be harnessed far more in the next few years. Innovative Amazon is among the leaders as always, trying to harness this with its ‘I just bought’ social network button. However, I’m not at all interested what my friends have bought. I am far more interested in whether it turned out to be a good or a bad buy, and then only if I am looking for something similar. I certainly don’t want spam every time anyone I know buys anything. A service that lets people review stuff and then allows people to see the reviews, sorted according to social proximity of the reviewer would be far better. If such a site already exists, as it may well do, I am not yet exposed to it, so it has its own marketing to do. So what is needed would be a site like Trip Advisor, but with a social proximity selector that strips away reviews from friends and competitors, restricts to those who have actually purchased, and then sorted according to social proximity with the reader. By linking to your other social network sites, and identifying your friends and colleagues, it would be able to show you any reviews from that group.

Unfortunately, we already see a rising barrier to this kind of development. Too often, companies want access to our social networks to do push marketing to a broader community of relevance, to make personalized ads, and essentially to use our contacts to abuse us even more efficiently. That is an industry destroying its own future prospects. By misusing the potential to do its push marketing today, it is destroying the potential to do far more effective pull marketing tomorrow. It gets a tiny benefit today at the expense of a huge one tomorrow. Most of us have already become wary of allowing access to our contacts lists because we already assume for good reason that they will be abused. Spam filters quickly remove any short-term benefit they may have won, and prevent future mutual benefit.

Most of these areas of future potential share the same threat of destruction by the very industry that can benefit most. Marketing will move from push to pull whether marketers want it to or not. By trying to force the worst practices from the push era onto the areas that offer the best potential in the pull era, they will only ensure that marketing will remain an underachiever. Sadly, a few players today can and probably will ruin it for many tomorrow. The result is that marketers will marginalize themselves, making themselves relatively powerless in a world where they could have been powerful.

People will find what they want, and what their friends think of things, but they will do so via sites and intermediary companies who respect them, respect their privacy, and give them what they want, not what they try hard to avoid getting, not via push marketers. Pull marketing done well will go to new players who have no time for the old practices and values, to people who want to improve the lives of others by helping them make the right purchasing decisions, not trying to make them buy the wrong ones.  The likely mechanism for this is use of social networking sites that have a different business model than selling adverts – perhaps even ones with the primary purpose of helping the community and improving quality of life rather than making money.

Marketing will evolve from fiend to friend. Hopefully it will be by the fiends reforming, rather than simply dying.

And another new book: You Tomorrow, 2nd Edition

I wrote You Tomorrow two years ago. It was my first ebook, and pulled together a lot of material I’d written on the general future of life, with some gaps then filled in. I was quite happy with it as a book, but I could see I’d allowed quite a few typos to get into the final work, and a few other errors too.

However, two years is a long time, and I’ve thought about a lot of new areas in that time. So I decided a few months ago to do a second edition. I deleted a bit, rearranged it, and then added quite a lot. I also wrote the partner book, Total Sustainability. It includes a lot of my ideas on future business and capitalism, politics and society that don’t really belong in You Tomorrow.

So, now it’s out on sale on Amazon

http://www.amazon.co.uk/You-Tomorrow-humanity-belongings-surroundings/dp/1491278269/ in paper, at £9.00 and

http://www.amazon.co.uk/You-Tomorrow-Ian-Pearson-ebook/dp/B00G8DLB24 in ebook form at £3.81 (guessing the right price to get a round number after VAT is added is beyond me. Did you know that paper books don’t have VAT added but ebooks do?)

And here’s a pretty picture:

You_Tomorrow_Cover_for_Kindle

Death by accountant

Some people are not very good at their jobs. Accountants are one of the critical roles in a successful company. If they are good, the company can flourish. If they are bad, it can die. I have come to the conclusion that the worst employee a company can have is an accountant who thinks they are clever but is actually an idiot. If they work with an equivalent self-regarding idiot from marketing, they can destroy a company. Again, many marketing people are essential and very talented, but some just aren’t.

Permit me one rant as a good example:

My dishwasher just broke, again. It is Hotpoint. I wasted a fortune and six hours of my time to get one of their engineers out to fix it, under guarantee, then another to repair the damage he’d done by doing it wrong. Total repair time was 3.5 weeks because they don’t have enough engineers. They cost money apparently. The 6 hours was because an accountant had decided that they should use fewer staff in the call centre to save costs, and even though their customers probably earn more than a call centre staff member, that would be their money, not Hotpoint’s. It’s OK to waste customer’s money and time, even if they never want to buy from you again as a result. And I won’t!

I would normally have trashed the dishwasher, but the girl in the call centre assured me that this model should last for several years after the repair, and they’d give me a 3 month extended guarantee. So I did. Big mistake. Now, 3.5 months later, it has broken again, £110 for 3.5 months dishwasher, not good value at all. This time I decided to fix it myself, but I’d watched a TV program about people who had dishwashers repaired by independent engineers and they wouldn’t work because they weren’t allowed the codes to reset the machine. An accountant had worked out that that blocking independent fair-priced repairs would guarantee high-priced work for their own engineers. However, this is a broken hinge, so might not be part of the control system. I found the broken part, a far-too-thin for the job bolt, which had sheared due to normal everyday forces on it. The thin bolt is cheaper than a strong one, saving several pounds a year for Hotpoint, and designed to last past the initial parts and labour guarantee. After that, the few pence for the bolt is covered by the 5 years by the parts guarantee, but changing it is a £110 call-out fee. Savings are minimal, the potential extra high value work for already overloaded engineers is actually minimal, but the cost of no more sales of white goods ever again to that customer is large. The outcome is a small short term gain, followed eventually by death as customers blacklist them one by one.

This kind of accountancy decision happens everywhere. Identifying tiny savings here and there presumably wins a little praise from a line manager, perhaps an extra bonus for the staff that thought it up, but who  checks the cost of losing the customer by thoroughly annoying them? That usually isn’t one of the beans that gets counted.

Comet went bust a while back. I remember going there. They had a price guarantee on all their products, so why would anyone need to go anywhere else? Well, an accountant and a marketer decided they could offer a price guarantee to fool all their dumb customers by adding a different letter at the end of each product code, so that they could claim that it wasn’t actually the same product, so the comparison didn’t count. So all their customers stopped buying from them. Death by accountant.

A few of our local restaurants suffered presumed death by accountant too. They were doing very well, filling the place, with lots of happy customers. One day, they look at the books and an accountant explained that if they sold lower quality food, or smaller portions, then profit per meal would be higher. But they presumably didn’t take into account the effect on sales volume of selling lower quality food or reducing portions. Customers stop coming and buying, so they went bust. Death by accountant again.

One or two well-known supermarket chains frequently tried for far too long to fool their customers with fake half price offers and selling large packs at higher price per kilo than small ones. Then it seemed to catch them by surprise that people were going elsewhere. Their accountants and marketers presumably think that customers don’t ever realise the tricks and don’t mind having their intelligence insulted and their time wasted calculating value every time they visit. Their accountants and marketers are actually by far the most valuable employees to their competitors, who see their market share increasing rapidly at their expense.

Telecoms companies, TV companies and many others who sell contract based services take confusion marketing and trick contracts to extremes, with relative novelties such as putting everything possible on their sites except links to let you end a contract, which they make as difficult and time consuming and error ridden as possible. Tricking customers by auto-renewing and making sure that the auto-renew engages a month before a contract expires, and not letting the customer know near that time is tantamount to fraud, but is apparently legal. As long as they mention it in the small print once during the entire life of the contract they can avoid punishment. Obviously their customers don’t check every service they have every week and enter diary reminders to check years ahead on everything they buy, so this is very deliberate trickery. It might make a short-term win, but once a customer is fooled once, they are very likely to avoid doing business with that company again. It may take time, but those customer migrations will eventually be death by accountant too.

Automatically increasing insurance and hoping customers won’t check also trades short term wins against long term survival. The problem seems to affect many industry sectors. This suicide-by-accountant trend seems to be an epidemic at the moment. It must surely end soon, because customers are proving that they are willing eventually to migrate their custom to companies that treat them better. Those accountants that are praising their own cleverness today are actually accumulating a huge volume of angry customers who will happily leave them to die when the market inevitably provides such a sensible competitor.

Customers aren’t stupid. You can treat them as fools for a while, but eventually they will resent it. Then you’ll lose far more than you ever gained.

Complete course covering company conception – cremation

If you’re sick of crappy management guides that insist on using the same letter for each point, fight back in kind:

Corporate Cycle