Category Archives: Corporate Darwinism

He Who Hesitates is Forgotten

It took Charles Darwin over 20 years to go public with his theory on evolution. His voyages on the HMS Beagle that lead him to his Theory of Natural Selection were over a five year period from 1831 to 1836. But it wasn’t until 1859 that his On the Origin of Species was finally published.

Did it take a quarter century for Darwin to finalize the theory? Well, yes and no. The theory was largely defined much earlier, but there were a few vexing exceptions to the elegant concept that Darwin wanted to explain to his own satisfaction first. So he continued to pick away at the theory, and often put the work on the shelf for long periods of time, while he worked on other areas, including a rather intensive study of barnacles, or dealt with his recurring health issues.

But further insight is gained when one examines Darwin’s character and the social environment he was in. Darwin was cursed with an extremely developed habit of self deprecation. He constantly questioned his own intellect and status in scientific circles. So, given that the theory he was working on was so potentially controversial, especially in tight laced Victorian England, it was natural (pun fully intentional) that Darwin would fret over its release. He carefully pondered the religious implications.

What made Darwin finally publish? In came down to a race with another biologist, Alfred Wallace, who was also pursuing ideas that were similar, or identical in many cases, to Darwin’s long developing theory. Ironically, Wallace choose Darwin as a channel to forward some of his thoughts to a common friend, and Darwin, upon reading Wallace’s notes and realizing that 20 plus years of work could be for naught, quickly took a much larger manuscript he had been working on and pared it down to a publishable abstract. Darwin published first. And that made the difference. Chances are, you never heard of Alfred Wallace before this blog post.

The point of this is that the speed of society in Victorian England was much slower than it is today. Publishing can be instantaneous. The need to do something, anything, is greater than ever. If you have something important to say, say it. Don’t worry too much about being wrong. There has been an explosion of scientific discovery in many areas in the last few decades, including many areas of psychology and neorology. Some of this acceleration is due to new diagnostic technologies, but I believe a large part of it is due to the compressed timelines of publication. We’re putting ideas out there faster than ever, and peer review as well as public review is happening quickly and organically. Darwin’s own environment of natural selection has taken an online bent in the form of idealogical evolution.

What this means, in the words of my friend Mike Moran, is that you have to “Do It Wrong Quickly“. You have to be prepared to go out on a limb, take chances and be willing to be shot down. But, on the other hand, you just might come up with the next Google, Facebook or Theory of Natural Selection. Ironically, it’s a world that Charles Darwin probably wouldn’t function very well in.

Edison Also Asked: “When Will People Get It?”

First published November 15, 2007 in Mediapost’s Search Insider

Over the past few weeks, my general theme has been “why don’t more people get it?” Why don’t agencies get search. Why don’t CEOs get search? Why don’t more search portals get that it’s the user that determines your success? Why don’t more people get that the world is changing, quickly? What’s with us, anyway?

Well, this week, I gained a little insight; thanks to a paper by Paul David called “The Dynamo and the Computer.” Maybe we just need some time. It’s not the first time this happened. Let me tell you the story of the light bulb.

Lighting Up the Industrial Age

Edison introduced the first practical incandescent light bulb in 1879. The first generating stations in New York and London started their dynamos spinning in 1881. Profound changes were to follow. Productivity was to grow by leaps and bounds.

Factories in the 1800’s were dark, noisy and not particularly pleasant places to spend a day.  At the center sat the steam engine: a huge, hungry and finicky behemoth, connected by an extended system of belts to the operating machinery of the factory. Even the early electrical engines were smaller, cleaner and much more efficient. Electric lighting made 24 hour shifts more practical. The benefits were obvious. Electricity was the ultimate “no-brainer.”

Still in the Dark

But by 1899, almost two decades after the introduction of the light bulb, only 3% of homes were “wired.” And the much-predicted impact on the North American industrial engine would have to wait until the 1920s to take hold. It took a half century for electricity to make much of a difference in America.

You see, technology tends to move fast, but people move slowly. It’s because transition tends to be dependent on many factors. It’s not like the flicking of (quite literally, in this case) a light switch. It’s more like waiting for a long series of dominos to fall into place, each drop contingent on the previous one.

In the case of electricity, significant money had been invested in steam power. You don’t just rip it all out and start over again, no matter how compelling the advantages might be. So factory owners waited for things to break down, and then retrofitted with new electric engines. But even this retrofitting had to wait for the supply of electrical engineers to catch up. In 1899, not many people knew how to design an electrical delivery system. The skill gap had to be eliminated. And this lack of expertise also showed up in less direct ways. America also had to wait for a new generation of factory architects to appear, who could design factories built to be powered by electricity. For every obvious benefit of electrification, there was a long series of factors that had to fall into place first. That’s why it took five decades to turn on the light.

History Repeating Itself

This technology adoption curve has been repeated over and over. The replacement of horsepower with steam power. And more recently, the information technology revolution. We can get as frustrated as we want with the snail’s pace reluctance of many to grasp the realities of the new world, but the fact is, we’re just being human.

Technology adoption usually follows a predictable path: introduction of technology, commercialization of technology, layering the technology onto what preceded it, and finally, throwing out the old completely and building from the ground up to embrace the technology. Each step depends on the step before it. And in every case, legacy investment slows the speed at which we move from one to the other.

If we look at the adoption of Internet technology and compare it to previous technology adoption curves, we’re just starting up the beginning of the long and steep part of the “S” curve. There’s no doubt we’ll get there, but it will take time.

Caution Will Kill You in the Search Game

First published November 8, 2007 in Mediapost’s Search Insider

A strange thing started happening to me in the last two years or so. As I became more vocal about my opinion, people started seeking it out more often. The more I shared it, the more people nodded their heads. And the more obnoxious I got about it, the more people jumped on my own little opinion bandwagon. It you look at comments to this column as an indicator of striking chords, it seems like I touch cords either when I’m being a total dickhead (increasingly frequent) or introspective and emotionally deep (a much rarer occurrence). But other than a “right-on” post or comment, and the vigorous nodding of heads, I’m not sure it will go much further than that. Inside, we all like to be smarter than our bosses and a little bit revolutionary. But on the surface, where we live and work, we go with the flow. I call it the Cluetrain Conundrum.

The Cluetrain Manifesto was posted in 1999, when the Internet was still new and bold and gritty. Much of the initial grass-roots appeal that tweaked the interest of Messrs. Locke, Weinberger and Searles has since been paved over to make room for commercial storefronts. At the time of publishing, as an in-your-face, spit-in-your-boss’s-coffee and laugh-all-the-way-to-the-corporate-bathroom call to action against the cluelessness of the command and control establishment, it attracted its own rush of “right-ons.”. In fact, since it went online, thousands have signed the Manifesto. It seemed like the world could change. But now, eight years later, we’re still waiting.

You see, it’s one thing to say you’re ready to change. It’s another to convince the rest of the people in all the cubicles in all the offices in all the world that you’re right. You know it, and the person in the next cubicle knows it, but the chowderheads in the X-0 suites seem intent on running the company off the cliff. Why? In a word, caution.

No, Really, Tell Me what You Think…

In the last few months, I’ve been asked for my opinion on how to improve certain search properties. I think the people asking me are hoping for an answer like this: “You see all these ads you’re trying to get people to click on? Well, all you have to do is move them here and put this colored box behind them, and people will sprain a finger trying to buy from your advertisers. It’s that simple!”

Of course, it’s not. It’s understanding all the things that the Cluetrain authors were trying to get across. It’s understanding that markets are conversations, that we’re sick of advertising, that we long for authenticity and transparency, and that we can sniff insincerity and BS a mile away. It’s saying that you have to worry about users first, build up truckloads of trust, and then figure out how to make money. And that’s just not likely to happen when you already have an existing search property.

The problem is that you’re already somewhat successful. There’s existing revenue and advertisers. Generally speaking, although attrition is higher than you’d like, most of the advertisers keep coming back. And as long as they’re doing that, management won’t be very motivated to change. Because the changes required are not simple fixes. They’re stripping things down to the foundations and rebuilding for the user. And that means a lot of money, and almost certainly lost revenue in the short term, against the remote possibility of long-term gain. That’s a ton of risk, and it’s not surprising that someone in the C-level executive wing is unwilling to stake their corporate reputations on this particular roll of the dice. There’s a lot better chance you’ll go down in flames than be crowned a hero.

The Illusion that You Have a Choice

But the irony here is that while it appears you have a choice, you really don’t. Because if you don’t take this chance, someone with a lot less to lose will. And eventually, that someone else will win. They’ll win, and you’ll lose, because Web traffic is a zero-sum game. Just ask every search engine who’s not Google. So while it appears there’s way too much to lose by reinventing your business model, it’s much, much riskier not to. Because as much as you think you’re in control of your business, you’re not. The users are, and you have them now by the simple virtue of there not being a better place to go — yet. In the Internet world, there will always be a better place to go, eventually. Either you build it or someone else will.

Last month, in a hotel lobby, I was having this conversation with somebody who had asked me my opinion. I basically told him what I’m telling you today and asked him if his company had the courage to do this. He wasn’t sure, and asked how important it was. I said it depends on the competition. He was a little reassured, because their competition is even more cautious. The reassurance was short-lived when I replied, “Ah, but that’s the competition you know about. Chances are, this is going to come completely out of the blue and you won’t know what hit you.”

I suspect people are going to stop asking my opinion.

It’s Not about Control – It’s About Connections!

Pete Blackshaw from Nielsen Buzz Metrics wrote an interesting column this week talking about the fact that CMO’s still have control.  He railed against the absolution of responsibility on the part of marketers, using the new buzzwords of consumer empowerment to justify the fact that they can throw more spam at the average user now because, after all, the user is in control.

“First, the overheated rhetoric acts as a deceptive rationalization. Remember the theory of cognitive dissonance, that testy tension emanating from two conflicting thoughts at the same time. I worry all this talk about consumers being in control relieves dissonance. It allows us to absolve ourselves of treating consumers with respect. Hey, if they have control and, hence, the power, what possible harm could our junk mail, spam intrusiveness, and recklessness do?”

Pete touches on a very interesting point that I’ve talked about in the number of columns and post before.  It’s the idea of brand messaging going beyond the carefully manufactured advertising and marketing channels and being baked right into the DNA of the company.  Now, brand messaging is as much about customer experience and customer service as it is about the message we see in the typical 30 second television spot.  It brings up an interesting question about consumer control.  Is it so much about control as it is about the ability to connect with information in a new way?  As Pete rightly points out, marketers still have control over a number of aspects of the relationship.  It’s impossible to have a two-way relationship with one side being in total control.  The fact is that consumers control part of that relationship and marketers control part of that relationship.  The success of the relationship lies in the ability for the two sides to connect in a mutually beneficial way.  It’s not so much the consumers have taken control from marketers as it is that what was typically much more a one-way relationship has evolved into a two-way relationship.

“At the end of the day, we still control the message and the business processes that shape it, but we may need an alterative path to get there. Product quality, customer service, accurate claims, and employee empowerment are all within our control. And these are the input types that really matter, and always have.”

Let’s explore a little bit closer how this has happened.  It really comes down to the number of channels available for messaging to get from the marketer to the consumer.  It used to be that those channels were tightly controlled and there were only a handful of them.  It goes back to the idea of power constructs.  The last hundred years our society has been all about power constructs.  The paths that lead from the manufacturing of products to the consumption of the products were few and were controlled by the powerful.  This was true in virtually any market you could think of.  With consumer packaged goods the ability of those goods to flow from the manufacturer to the consumer is controlled at various points along that channel by a few powerbrokers.  The same has been true in advertising.  The paths from the advertiser to the consumer were generally controlled by a few very powerful corporations.  Look at how the power construct in advertising typically played itself out:

  • At the top we have the advertiser.
  • Below that we have the advertising agency that was responsible for crafting the message.
  • Next you have the media buyer that takes a message created by the advertising agency and determines the channels to reach the target consumer.
  • Below that you have the channels used to reach the consumer, whether they be broadcast TV, newspaper, magazine or radio stations.
  • Finally, at the bottom, you have the consumer themselves.

All the communication in this channel went one way, from the advertiser down through each of the successive layers until it reached the consumer.  There was no corresponding channel to allow communication from the consumer to flow back through all these gates to the advertiser.  In the case where an advertiser did want to get information from an individual consumer, they would employ a market research company to circumvent the entire power structure of communication and go directly to a handful of representative consumers, determine what they were thinking and report back to the advertiser (or perhaps the advertising agency).  Picture a series of locks on a canal, with all the water flowing one way and with each of the gates of the individual locks designed to let water out and not let water back in.  The only way for water to run back was a small pipeline with a pump on it and the switch to that pump was always in the hands of the advertiser.  They chose when they wanted to listen to the consumer and when they chose to ignore the consumer.  The consumer had virtually no power to push their message back to the advertiser.

Now let’s look at what the Internet did.  The Internet took a highly structured, albeit one way, channel and completely blew it apart.  Now water flows freely back and forth between the advertiser and the consumer.  This not so much took control way from the advertiser and gave it to the consumer as it eliminated (or is in the process of eliminating) the existing structure that information flows through.  It democratized connections.  Rather than a man-made channel with restrictive gates and locks that restrict the flow of information from one place to the other, the Internet has turned the landscape into a vast field during a rainstorm.  Water collects in a thousand tiny pools and flows according to the online landscape.  Advertisers can influence where those flows happened as much as consumers can.  The control of flow is now jointly owned by everyone.  Advertisers have not had their power taken away.  They just have to learn how to share it.  They have to live up to the responsibility that goes with a truly two-way relationship.  Because they can no longer control the channel the message goes through, they have to spend more time controlling the very message itself.  They have to make it bulletproof, capable of withstanding the BS test.  And you have to understand that that message can’t be carefully crafted, it has to be lived.  It encompasses everything they do in the day-to-day operation of their business.  It has to include all the touch points that brand has with the outside world.  Because every touch point is a small puddle in that massive field.  If they manage the information correctly it will flow in the desired direction.  If they abdicate their responsibility of meeting the customer halfway in providing a mutually beneficial proposition, then they have to bear the consequences when the flow goes in the direction they don’t want it to.  And if there is enough momentum in the opposite direction, they will get flooded by a tidal wave of consumer dissent.

All in all, it’s a healthier relationship.  One-way relationships tend not to be sustainable in the long term.  But as with any power shift, there’s a pendulum effect that will likely occur here.  As power finds its natural balancing point, it will likely swing too far in the direction of the consumers before it comes back again.

Should Google Stick to the Knitting or See What Works?

I was just doing some year end cleaning of my “to be blogged about” folder and found a couple of lingering items from a few months back. While most of that time, that would make them hopelessly outdated, these two touch on a bigger theme that is still relevant, and is aligned strategically to a book I just finished re-reading.

First, the here-to-fore neglected articles. Did-It’s Bill Wise wrote a Search Insider column on how Google wins by losing, and John Markoff at the NY Times talked about the concern over “Google Sprawl”.  Both talk about Google’s strategy of pushing into new businesses at a frantic rate, seemingly trying to reinvent everything at the same time. But they take slightly different approaches. Bill’s opinion is that the strategy works because the string of new challenges, and the many subsequent failures, continually generates buzz for Google that keeps driving it’s main revenue channel, search. The NY Times reports on recently voiced Google concerns that the myriad of new initiatives will confuse users and impact the user trust in the Google brand. It also touches on the implied conundrum that comes with Google’s goal to integrate functionality into a simple and elegant interface, making it the online Swiss Army Knife, and it’s desire to keep user data open, steering away from the Microsoft approach that landed them in hot water with the Department of Justice. The timing of both pieces was right around the Google acquisition of Youtube.

There’s a bigger piece here that seems to be missing from both viewpoints. Let’s look at Wise’s assertion first:

“By continually announcing that it’s expanding beyond search, Google gains tremendous buzz, which translates into higher stock prices, which translates into still more buzz. All that attention keeps Google top-of-mind; by being top-of-mind, Google draws more users and more loyalty towards the Google brand–which means more searchers flock to Google Search, and more searchers stick with it. And it’s through Google Search that Google actually makes its money.

All that buzz is only beneficial if the new launches don’t succeed. If Google were to successfully expand past search, users would mistrust it as a corporate giant bent on empire-building–a problem that’s certainly familiar to Microsoft. Because Google fails at really getting a hold beyond search, users don’t see any effects of Google’s empire-building, and instead only see Google as a company that’s continually on the rise.”

The problem here is that Wise is confusing strategy and a by product of an approach that’s baked right into Google’s corporate DNA. I really don’t believe Google is purposely trying to fuel the buzz machine by venturing into areas with low odds for success. I believe Google does this because they don’t know any other way. It’s part of their genetic code.

Next, John Markoff starts to uncover the clues that point to the bigger picture:

“Google executives generally answer questions about acquisitions by saying that the company is still experimenting with business plans, or by arguing that a program like Sketch-Up — a simple computer-aided design program — will have an indirect revenue impact by making the entire Google service more valuable.”

To be sure, the culture of grass roots innovation that has been scrupulously nurtured at Google is at the same time it’s greatest strength and it’s greatest challenge. And despite the fact that Google is being hailed as a pioneer, it’s ground that has been trodden before. Google is hardly the first to go down this path. Which brings me to my renewed acquaintance with Jim Collin’s and Jerry Porras’s book Built to Last.

The Google mandate that a percentage of their engineer’s time be set aside to work on new, cool and cutting edge products is a chapter that was stolen right out of 3M’s playbook. And 3M, like HP, like Sony, like Motorola and like many of the other visionary companies profiled in Built to Last, started without a business plan. These companies worried first about the who, and then worried about the what. Google is clearly following in the same footsteps.

In fact, in the book, Collins and Porras show how visionary companies often “try a lot of stuff and keep what works”. Here is a pertinent quote from the book:

“Visionary companies make some of their best moves by experimentation, trial and error, opportunism, and – quite literally – accident. What looks in retrospect like brilliant foresight and preplanning was often the result of “Let’s just try a lot of stuff and keep what works.”

Collins and Porras devote a whole chapter to the topic. They show how many iconic corporations struggled, often for years, before they found the right business model. Google has a leg up on these, as they already have a very successful cash cow that’s driving their ability to “try a lot of stuff”. And it’s one notable area where Collins and Porras offer a different viewpoint from previous seminal works, including Tom Peters’ and Bob Waterman’s In Search of Excellence. Peters and Waterman advocate “Sticking to the knitting”, warning “the odds for excellent performance seems strongly to favor those companies that stay reasonably close to the businesses they know.”  Collins and Porras counter that if that were always the case, 3M would still be trying to run mines in Minnesota, HP would be selling nothing but audio oscillators and American Express would still be a delivery service.

The challenge for Google comes in not impacting the user, as Markoff identified in his article. Ironically, it comes from Google’s initial success in search. If Google search wasn’t as successful as it is, Google would have free reign to experiment. But they have to pay scrupulous attention to the user experience. I’ve commented before that Google’s biggest obstacle as a visionary company is it’s early success.

Here, Google is faced with the Yin and Yang challenge that faces all visionary companies. How to preserve the core while at the same time stimulate progress? And this gets down to a fundamental place where Google might be veering off track. Google’s core purpose, and the one that Google search succeeds very well at, is to organize the world’s information and make it universally accessible and useful.  This should be what the company scrupulously protects. All of Google’s free time initiatives should be aligned to that core purpose. But Google seems to be trying to pursue a number of core items at the same time. Redefining how advertising is bought and sold (recent forays into print and radio) seems to have little to do with Google’s stated core purpose. Controlling the main intersections of the new online global community (the purchase of YouTube) might be tangentially related, but clear alignment is not apparent. If Google stuck to their initial core purpose, that gives them scads of room for growth and innovation.

If Google is going to pursue a grassroots culture of innovation, that’s admirable. If they want to try experimenting in a number of areas and see what succeeds, while at the same time pruning out the failures, they can take comfort in knowing that strategy worked well in the past, notably for 3M. But to go down this path, it’s essential that an overarching core purpose be defined and communicated clearly to each and every Google employee. Innovation has to be aligned with a common goal. And when companies try to identify more than one core purpose, they can lose direction. Google might be well advised to see how other trailblazers have handled this in the past. For example, the core purpose of 3M is to solve problems through technology. While it’s broad and all encompassing, it does provide a sense of direction for 3M employees.

If I was to identify one challenge for Google to face in 2007, it would not be the fragmenting their business model, or even defining one. It would not be nailing another surefire revenue channel. It would be deciding, clearly and unequivocally, what they want to do, communicating the hell out of that internally and by doing that, point all that formidable brainpower in one direction.