Friday, 30 March 2012

The impact of social media on business and politics

[This is an article I posted to another blog back in April 2010 which is about to be shut down, so I thought I would rescue it.  Sometimes it's interesting to look back at perspectives from the past.  I like this post because it barely mentions IT stuff.  Although technology is the underlying enabler, it is in effect just the amplifier of human interaction.  It's the people element that is most important - and that applies to IT as much as it does to anything else.]

In prehistoric times, when monolithic companies ruled the earth, there were few competitors, no saturated markets and every industry had a handful of established leaders.  Driven by market research, these companies responded to the world’s requests for ‘more of the same but cheaper please’.  The monolithic companies were good at managing expectation.  Customers didn’t expect much, so they didn’t get much.  Change was slow, but nobody was in a hurry.  Standardization was the key to mass production and these monolithic firms got so good at producing standard products that it became the business model that defined the best part of the 20th century.  Despite what some people might think about the past, interaction with the market was impersonal, driven by interruptive one-way advertising on TV and radio networks.  Salesmen were the top dogs and doing anything to get a customer to part with their cash was the way to go.  Organizations were regimented into functional silos and slow-moving decision hierarchies.  The world wasn’t changing fast, so these monolithic firms could afford to be slow.  Markets were steady, supply chains were solid and blue chips were unassailable.

Then the world got connected and everything started to speed up.  Look at what’s changed over the last 20 years.  Yet the internet still reaches fewer than 30% of the population.  As technologies do become more widespread, tending towards 100% coverage, the rate of change is going to increase exponentially.

Any individual will be able to communicate with any other individual in the world in real-time.

Telephone, cell phone, VOIP, email, instant messaging.  Many methods are available to us now.  More (or indeed more likely fewer) will be available in the future.  I’ll leave you to ponder why pervasive real time communication should be a fundamental objective for us as a race.  Of course, this is only effective if it is supported by universal freedom of speech.

Heading back to the topic of the changing business environment, people in business are evolving to meet the challenges of rapid change.  Rules and rigid structures slow things down.  Agility is now the key to survival.  Standardization of products and services has been replaced by a custom approach.  Hierarchies are being dissolved to make way for business process management models, with horizontal processes cutting across silos to deliver what the individual customer wants.

The rules are – there are no rules.  The large blue-chips that dominated the world’s markets are finding themselves left behind.  Cumbersome structures and old-world thinking is giving light-weight competitors an advantage and with new attitudes towards partnerships and the latest technology supporting them they can deliver faster and better than the monoliths.

The internet meteorite has hit, and the old-world dinosaurs are choking on the dust, while the nimble warm-blooded mammals have taken a foothold.  There are still a lot of dinosaurs about, but their time is short.