viernes, octubre 24, 2014

Applying #Jobsism to transform current global #Fordism marketing myopia

Fifth update. Can COP21 participants address energy antisystem strategic myopia? This post is inspired in the post Para el Pacto Eléctrico y la COP 21: ¿Serán antisistemas los sectores eléctricos mal reestructurados?, something like "For the Electric Pact and COP21: Are wrongly reestructured electricity sectors antisystemic?" After vertical integration utilities became unsustainable, a process was initiated to restructure them. But such a process was found to be flawed, for example, by Cato Institute’s Policy Analysis No. 530, Rethinking Electricity Restructuring, of November 30, 2004, by Peter Van Doren and Jerry Taylor.

A new way introduced in the above mentioned post to view the situation, intends to positively influence participants at COP21 by explaining what happened is that the utilities that became antisystems were restructured with antisystems instead of systems about 20 years ago. The difference is that systems have non-linear positive synergy that turn low costs into big results, while antisystems also have non-linear negative synergy but turn big costs into low results.

To develop such positive synergy, deep transformation restructuring of energy antisystems need to be agreed upon on COP21 to dissolve climate change by enabling the emergence of systems to replace energy antisystems all over the world. This in line with The Economists's article Clear thinking needed, written on ocassion of the 21st Conference of the Parts (COP21) about climate change, which has as subtitle "Global warming cannot be dealt with using today’s tools and mindsets. So create some new ones." As can be seen, for example, in this post main entry and its four earlier updates they have already been created based under a clear systemic thinking mindset. The highest level tool is the architecture of systems (and now antisysyems) which might be suficient to avoid this time the strategic myopia of the 20 earlier conferences.

One key idea of that article says "Unfortunately, energy companies (unlike, say, drug firms or car companies) see investment in radical new technologies as a poor prospect, and governments have been feeble in taking up the slack." Both energy companies and governments have been under such a strategic myopia induced by the energy antisystems in place, whether under vertical integration or under wholesale organized markets.

Writing about the "...sort of thing drives green-minded politicians mad," The Economist Special Report on Climate Change, that is introduced with the above mentioned article, says that "...It is hard enough to persuade voters that global warming is a serious danger that they must pay to avoid, in the form of higher energy bills..." But is it true that voters must pay higher energy bills?

Yes it is true as long as energy is an antisystem, we have "big costs, with low results," where a very non-linear negative synergy depends on energy oriented decreasing returns on tangible investments with very low innovation, because of "very poor prospects." However, it is not when energy becomes a system, where non-linear positive synergy emerges information oriented increasing returns in intangible investments that open the energy industry to much needed innovations and competition. This is the main suggestion that COP21 participants need to be influenced by.

The above is further explained (with small editing) in the first update to this post as "The 'feat inconceivable with traditional management practices' with ecosystems is how antisystemic problems are approached in the first technological revolution of the systemic civilization 'that is easily adapted to meet the needs, preferences and passing whims of every single user.'” That's. for example, how Uber and Airbnb are changing the world under Jobsism with disruptive technologies.

The problem is that those energy antisystems have been becoming more antisystemic as end users have cheaper and cheaper information available leading to a increasingly negative relationships at the interfaces between them and the companies and governments. The result is an antigonistic value substraction, as opposed the big value creation that result from increasingly positive relationships at the same interfaces.

Just like Henry Ford develop the institutional innovation of the large-scale mechanized mass production that introduced a mechanical paradigm shift of Fordism that was emulated by vertically integrated utilities, Steve Jobs developed the instititution innovation of whole ecosystems organic paradigm shift which is suggested as Jobsism, that enable the development that was anticipated in the 2013 paper A complete and fully functional electricity restructuring proposal. While under the Fordism current antisystem paradigm, for example, solar panels still do not compete with fossil fuel technologies, once a transformation is done to enable an energy system under Jobsism they will end the need for fossil fuels and disolve the climate change antisystemic crisis.

By the way, the third and fourth update, the Energy Roadmaps for Haiti and Dominican Republicd can't be truly sustainable if they are based on an energy antisystem. The big discussion on the opportunities must then be deflected to how to develop our ecosystems.

Fourth update. Just like the Haiti's Energy Roadmap is the DR Energy Roadmap truly Sustainable?Transitioning electricity proposed by @Worldwatch @OchsNews on #Fordism goes up to 85% renewable, transforming it goes to 100% on #Jobsism. Just like the Haiti's Energy Roadmap is the DR Energy Roadmap truly Sustainable?

Still another update. Is Haiti's Energy Roadmap truly Sustainable? Worldwatch Institute claims it is about "Harnessing Domestic Energy Resources to Build a Reliable, Affordable, and Climate-Compatible Electricity System." Should it be tested to see if it passed the test for a service at the Bottom of the Pyramid?
This is a timely update on #Jobsism and #Fordism, that is based on getting myself to stand on the top of the shoulders of two giants, Gary Hamel and Bill Fischer, respectively. I am able to do that by using Steve Denning's quotes on his article Why Bureaucracy Must Die. Next is a comment I posted under that article:

“To build organizations that are fit for the #GPDF14 future,” says Hamel, “we have to go deeper, much deeper.” We must “challenge our foundational beliefs… of organizations which are still feudal at their core.”

Dear Steve Denning,

While in one of his excellent article Mr. Hamel tells us about “… organizations which are still feudal at their core,” he also tells us in the other article that “simply put, at this point in business history, the pay-off from reforming capitalism, while substantial, pales in comparison to the gains that could be reaped from creating organizations that are as fully capable as the people who work within them.” As feudal describes both organizations and capitalism, Isn’t he getting into a contradiction as to the need for capitalism to upgrade itself to get not just into the 21st century, but to get into an emergent civilization we need to not jut reform but transform capitalism to get raid of its feudal core?
As we question what has happened to #Fordism in association with capitalism that wants to extend the industrial civilization, it is easy to infer by reinterpreting what Hamel said that capitalism's decay is the result of #Feudalism. Now lets turn to the support given by professor Fischer to highlight the great influence that innovation platforms have to support the emergence of the common sense #Jobsism, which is an essential element in the transformation needed by capitalism.

The above update fits nicely to go to humility.
“True humility is not thinking less of yourself; it is thinking of yourself less.” ― C.S. Lewis, Mere Christianity

This update starts with proposed key meanings of Jobsism and Fordism. Taking the description in Wikipedia, it is proposed that Fordism dealt with making such an effective assembly line that led to the transformation of the world during the fourth technological revolution suggested by Carlota Pérez.

Taking on the section "Mobilizing ecosystems" of Steve Denning’s article Three Strategies For Managing The Economy Of Access, it is also proposed that Ecosystem is the key meaning of Jobsism. This is what Mr. Denning wrote:
The other fundamental shift needed is that companies have to be much more strategic about how they deliver, and extract, value in their business models. As margins progressively move towards zero in the Economy of Access, it’s not enough simply to make a good mousetrap or even a better mousetrap. Many firms will have to offer whole ecosystems, in which some products or services delight customers so much that they are willing to pay a premium to have access to them.

The quintessential example is Apple, which offers iTunes, the App store and software upgrades at little or no cost, and is able—so far—to make money by charging a premium for its hardware that enables access to the free stuff. But the business model requires constant refueling: if Apple’s ecosystem ever stops delighting customers or if cheaper competitors are able to offer “good-enough” alternatives, Apple will also find its margins start their march towards zero. Apple has to go on innovating or die.

To meet these kinds of challenges, firms may need to be mobilizing ecosystems of partners. The Elastic Enterprise (2012) by Nicholas Vitalari and Haydn Shaughnessy explains how Apple [AAPL] met the diverse needs of hundreds of millions of individual iPhone users by launching its own ecosystem—a technology platform that enabled hundreds of thousands of developers to create Apps that could meet every conceivable human need and to offer them directly to customers. The result is an ecosystem that is easily adapted to meet the needs, preferences and passing whims of every single user—a feat inconceivable with traditional management practices.
The “feat inconceivable with traditional management practices” with ecosystems is how systemic problems are approached in the first technological revolution of the systemic civilization “that is easily adapted to meet the needs, preferences and passing whims of every single user.” Now, as a test of humility, I hope I can receive quick feedback about the newly introduced critical meanings by those on the side of Jobsism, which are described in the background of this series of post, articles and papers, for example, EcoIsOurs to replace EcoNoMy, systemic civilization, Jobsism.

Applying #Jobsism to transform current global #Fordism marketing myopia 

Summary: let's agree that this is the most important leadership issue being faced by humanity.

From the current Fordism common sense, The Economist 'cover leader' can be considered to represent a current reality that shows that capitalism all over the world is undergoing a similar “Marketing Myopia” that Theodore Levitt described in 1960 about how the railroad business industry sector over expanded.

This time it is not just an industrial sector, but the whole industrial civilization that has over expanded under the common sense of Fordism in such a way as to create a huge social and environmental systemic crisis for the world as a whole. As a result we should all agree that it is the most important leadership issue being faced right now by humanity.

The key sector behind that systemic crisis and its solution is in general the energy sector and electricity in particular. While there might be disagreements as to whether the Eurozone is the biggest threat, it seems that it is the best place to start the emergent transformation to Jobsism.
Resumen: Pongámonos de acuerdo en que este es el tema más importante de liderazgo que se enfrenta la humanidad. 
Desde el actual sentido común fordismo, el artículo de la portada de The Economist se puede considerar que representa una realidad actual que muestra que el capitalismo en todo el mundo está pasando por una "Miopía de Marketing" semejante  a la que Theodore Levitt describió en 1960 acerca de cómo el sector de la industria de negocios de ferrocarril sobre expandió.

Esta vez no se trata sólo de un sector industrial, sino a toda la civilización industrial que se ha sobre expandido en el sentido común del Fordismo de tal manera como para crear una enorme crisis sistémica social y ambiental para el mundo en su conjunto. Como resultado tenemos que ponernos todos de acuerdo que es el tema de liderazgo más importante que se enfrenta en estos momentos por la humanidad.

El sector clave detrás de esa crisis sistémica y su solución es, en general, el sector de la energía y la electricidad en particular. Si bien puede haber discrepancias en cuanto a si la zona euro es la mayor amenaza, parece que es el mejor lugar para comenzar la transformación emergente para Jobsism.
In the top part of a message sent, on October 23, 2014, by John Micklethwait, Editor-in-Chief of The Economist, a conventional common sense reality of the world is very well synthesized this way:

The world economy is not in good shape—and the biggest threat comes from the euro zone. As Angela Merkel and her peers have dithered, the currency union is on the verge of slipping into its third recession in six years and its inflation rate has slipped to 0.3%. Our cover leader warns that deflation is all too close and extremely dangerous.
That cover leader is The world’s biggest economic problem, which starts its last paragraph with “behind all this sits a problem of political will” and ends  with “Europe’s leaders are running out of time.” As a result we should all agree that it is the most important leadership issue being faced right now by humanity.

While The Economist says “something radical is needed,” in the next to last paragraph, they, like many other highly influential governments and financial institutions, are coming short by asking to increase government expending to invest in tangible goods. Can that increase be advisable at a time when we are facing a huge global environmental and social crisis as a result of an over expansion of those tangible goods, which have been in the making for at least 20 years (maybe 40 if the OPEC embargo is the reference).

It is such an over expansion that invites us to consider the following as it is shown in the new presentation as a Harvard Business Review preview:
“Marketing Myopia” is the quintessential big hit HBR piece. In it, Theodore Levitt, who was then a lecturer in business administration at the Harvard Business School, introduced the famous question, “What business are you really in?” and with it the claim that, had railroad executives seen themselves as being in the transportation business rather than the railroad business, they would have continued to grow. The article is as much about strategy as it is about marketing, but it also introduced the most influential marketing idea of the past half-century: that businesses will do better in the end if they concentrate on meeting customers’ needs rather than on selling products. “Marketing Myopia” won the McKinsey Award in 1960.
In its introduction, “Marketing Myopia” says:
Every major industry was once a growth industry. But some that are now riding a wave of growth enthusiasm are very much in the shadow of decline. Others that are thought of as seasoned growth industries have actually stopped growing. In every case, the reason growth is threatened, slowed, or stopped is not because the market is saturated. It is because there has been a failure of management.
This time however, it is the failure of managing the whole industrial civilization that was once in growth and that is now in decline in some countries and that have stopped growing in others.  This time we can say it is the failure of the current capitalism that's in need of a transformation.

I am able to infer such a marketing myopia because I have written about it on the most important sector of the economy, as can be seen, for example, in the blog post The Utilities’ Business Marketing Myopia Manifesto, where there is an interesting discussion about What Would Steve Jobs Do About Energy Innovation. That 2012 blog post starts by repeating an “an excerpt of the August 2010 EWPC article Answering "What Energy Business Are You In?” As the Way Out of The Third Depression, whose summary is:
During a similar time of great change, railroads and utilities have defined their business incorrectly, by ignoring several insights, like the one Theodore Levitt gave us in his 1960’s Marketing Myopia manifesto. A quote on the 1982 book Megatrends explains utility investors why the attempt to keep a monopoly on the customer relationship, with an ineffective old economy Big-Bang Advanced Metering Infrastructure will further extend the uneconomic over expansion of the resources of the supply side. To reduce the odds of the return of the depression, we need policies for the new economy, like power industry transformation and boring banking, which mutually reinforce each other with the coming communications’ boom to enable innovative value creation and long term jobs.
Paraphrasing one of Levitt’s paragraphs on railroads business, this is what the mentioned excerpt says:
The utilities did not stop growing because the need for energy based services (light, air conditioning, refrigeration, etc.) declined. That grew. The retail side of utilities are in trouble today not because that need was filled by others (competitive retailers, energy services companies, energy management companies, solar panel vendors, demand side energy efficiency suppliers, demand response companies, battery manufacturers) but because they could not be filled by the utilities themselves. They let others take customers away from them because they assumed themselves to be in the utility business rather than the energy based services business. The reason they defined their industry incorrectly was that they were utility oriented instead of services oriented; they were product oriented instead of customer oriented...
To reaffirm that electricity is the most important sector, please take a look at the article From Electricity under Jobsism to a Golden Age, whose summary says:
As political decay of capitalism takes hold, for example, of the United States and the Eurozone, Germany seems to have the best potential to become the leader of the current technological revolution. Unless the common sense behind Fordism (“the common sense behind” is not repeated but intended from here on before both Fordism and Jobsism) is replaced by Jobsism (after Steve Jobs), the current path towards a Second Middle Ages capitalism will continue under the status quo. Germany is well ahead to be able to take the leadership under the Jobsism agenda to get the Eurozone out of its deep systemic crisis, while renewing to a capitalist system without social and environmental externalities, but it needs France to buy in. France will need to let go Fordism in its regulatory systems, by starting to exercise complete and fully functional deregulation, for example, in electricity under Jobsism, even now that French economist Jean Tirole was awarded the 2014 Nobel Price of Economic Sciences, for his work on regulation which is however restricted by Fordism. [An update to that article says the Tirole has also work valuable for Jobsism]
We can now reinterpret as efficiency measures that might make matters a lot worst, the suggestion that The Economist repeated from other parties of introducing structural reforms, when what’s needed to address the marketing myopia is a whole transformation from the industrial civilization to the systemic civilization. To do it, Governments, for example, in the Eurozone, must be asking to increase private sector investment to convert tangible good into intangible ones where appropriate.

This can be seen as a paradigm shift from supply side black gold Fordism projects to demand side green gold Jobsism projects. This is also a shift from money to wisdom as the most powerful currency. Lots of jobs will be generated as the incentives and disincentives are shifted towards addressing the social and environmental systemic problems being faced by humanity, specially at the Bottom of the Pyramid, which is where most of the potential growth is.