3 Keys to the New Economy

If you’ve got the feeling that something is afoot out there in your marketplace, but haven’t quite been able to put words to it yet, I highly recommend carving our 30 minutes to listen to John Hagel’s keynote (mp4 video) at the recent FastForward conference.

I’ve been reading Hagel and John Seely Brown’s The Only Sustainable Edge: Why Business Strategy Depends on Productive Friction and Dynamic Specialization recently and Hagel’s comments at FastForward pick up on some of the core thoughts of the book. His foundational point is that we are in the midst of a “user revolution,” a significant power shift that is putting much more control in the hands of individual stakeholders, be they customers, employees, members, or donors. (Hagel doesn’t actually mention either members or donors, but they certainly bear mentioning.)

For those who have been paying attention, this part of Hagel’s speech is hardly breaking news, but as always, he is concise and articulate in summing up the essential forces driving the revolution. He sees three:

Attention Scarcity
The cost of interacting with stakeholders has dropped dramatically, and given the range of options now available to the average consumer, capturing attention is increasingly difficult. What used to be a battle for shelf space (whether literal of figurative) is now a battle for mindshare.

Powerful Talent
As value in markets has shifted to intangibles like intellectual property, social networks, and brands, people have become more valuable than physical assets. We’ve all paid lip service to this idea for quite some time, but we’re now bumping up against the fact that “talent”—which includes not just employees, but increasingly, customers—has a great deal of bargaining power. The increased visibility of choices available to talent and the decrease in “switching costs” make it harder for organizations to attract and retain talent. Indeed, as Hagel sees it—and this idea is the driver for The Only Sustainable Edge—the key business challenge now is not how to attract and retain talent, but how to develop talent faster and better than potential competitors.

Platforms, not Programs
Hagels sees a shift from push-oriented programs to pull-oriented platforms. A program tightly prescribes activity; it is useful when pushing out products and services to meet a clearly defined demand. With demand becoming a much more individualized phenomenon, a platform that provides a flexible framework for coordinating resources becomes a much better choice. And Hagel sees three important performance measures for evaluating the success of platforms: return on attention (ROA), return on information (ROI), and return on skills (ROS).

I’ll point you to Hagel’s address again to learn more about these last three points and also to flesh out my quick summaries above. I guarantee you that spending some time listening to Hagel’s thoughts and pondering their consequences for your organization will deliver a very high return on your attention.

JTC