Adaptive Imperative

Date: 5 Oct 2010

Venue: NUS Bukit Timah Campus

Speaker: Jeff Chua, Boston Consulting Group

I have attended a talk recently about developing business strategies in turbulent times when it is difficult to see trends beyond two or three years. The speaker mentioned the following observations:

The context of strategy has changed since changes happen frequently.

1. Market leadership does not necessarily imply the same extent in profitability.
2. It is harder to define industry boundaries.
3. It is harder to predict the future.
4. Market position is unstable. Those on top do not stay on top for very long.

Example of a Market Leader losing out to latecomer:

Blockbuster vs Netflix

Blockbuster was a market leader in video rental. But on 23 Sep 2010, it filed for Chapter 11 of the US Bankruptcy Code or protection against creditors.

Netflix is also in the video rental business and started in 1997. It deployed no strategy other than encouraging compulsive dissent and experiments. They tried sending out DVDs on envelopes, posting them and pricing them on a flat fee for as many DVDs customers care to watch. Then they continued to stream videos across different channels. By 2007, they passed the billionth DVD delivered.

This, the speaker claimed is evidence of increased unpredictability and turbulence.

Businesses would need to have:

- Responsiveness (agility)

- Resilience (robustness)

- Readiness (anticipation)

- Recursion (experimentation)

Example of two market leaders deploying very different strategies:

Google – using open systems

Apple – using closed proprietary systems.

The speaker continue to suggest that businesses should adapt using their:

1. Signal Advantage
2. System Advantage
3. People Advantage
4. Simulation Advantage
5. Social Advantage.

My opinion:

I think the speaker had focused too much on the form and not enough on the essence of the apparent ‘changes’.

The underlying common denominator of the current observations is merely the advent of technology and its easy and cheap availability. For instance:

- Netflix triumph over Blockbuster because of the former’s clever use of technologies.

- Large companies no longer make the proportional scale of profits as they used to because clever technologies are no longer just affordable by big companies, but they are affordable to small ones too. It is now possible even to become a one-man multi-national company.

So things aren’t that unpredictable or turbulent if we focus on the common denominator of ‘technology’.

Also, while Google appears to be ‘open’ and Apple being ‘closed’ using propriety systems, the commonality is that both makes money through their own propriety ‘orifice’. Google’s orifice is their search engine, while Apple’s is iTunes. And we have another major orifice called Microsoft Windows. Businesses love orifices. So in this respect, they are the same. So there isn’t the unpredictability or turbulence.

In summary, observations may appear different in form, but in essence there are usually common causes. The trick is look beyond the raw data to derive meaningful meta-information. The luminary Buckminster Fuller (Bucky) believed that the universe is one system obeying a set of generalized principles, and that in the early days when equipment are limited in ability and accuracy, different phenomena appeared to behaved differently. That resulted in the formation of different disciplines. So some scientific observations became ‘physics’, some became ‘chemistry’, some became ‘biology’,…etc, but in truth, they all belong to one system in the universe.

By those measures, it doesn't matter if Apple is a computer company, a mobile phone company or a lifestyle company. The fact that businesses have be categorized wrongly as stoke pipe industries with clear boundaries, doesn't mean that they need to continue to be so. A fresh look at them as eco-systems in one universe with their outreach enabled by technology would be closer to the reality.

Once the causes are identified it’ll be easier to help companies to cope up. So now you cure the causes, not the symptom. That means a simpler remedy, but usually that means you cannot sell expensive ‘medicine’ and make a lot of money. Bucky said, “You either make sense or make money, they are both mutually exclusive.” To date, I am still pondering over this question, "Can we make both money and sense?"

Bucky Group 11 - Videos about Bucky

Buckminster Fuller World Game Synergy Anticapatory
Warning: This is a very long monotonous video lasting 55 mins, but do listen out for the gems of information from Bucky's analysis of the Universe.

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I have summarised the video to aid your comprehension:

• (Very humbly) He is really a demonstration of what an average healthy individual is capable of achieving given the faculties and resources and makes up his mind to face up to various challenges, and not going in the way of what the game of money and politics may bring.

• By working with nature's design and the evolution of consciousness to bring forth maximum benefits to humanity

• The discovery of principles requires the use of the mind, not just the brain. The brain is for cloning and case information that are internal and finite. The mind has the capability to discover infinite relationships leading to common principles.

• Principles have no beginning or end. They are eternal, non-contradicting, inter-accommodating and concurrently operative. To work with these principles is akin to 'design'.

• The Universe is vast, with chemical abundance enough for everyone, and scarcity is a fallacy.

• The Earth is a nett importer of energy from the Sun, which has provided us with energy stored in plants and algae now existing below the ground as fossil fuels. Energy changes from one form to another, it never got created or destroyed. Energy is eternally re-generative.

• Humans and animals consume these vegetation for energy.

• In order for the Universe to be eternally re-generative, there need to have local sensing of information to solve problems based on universal principles.

• Our game on Earth is problem solving

• There is a planetary design priority that includes environmental control like the geodesic dome, which is designed to take snow, hurricane and earthquake loadings.

• Past design preceives building as fortresses and aeroplanes as weapons.

• We should move from weaponry to 'living-ry'.

• There is enough resources and knowledge to get on with such design priorities.

• There are enough metals above the ground to be recycled to serve our needs, especially considering the advent of new alloys that stand up to higher stresses, therefore doing more with less.
• Example 1: A quarter tonne satellite dish now functions what is done by 175,000 tonnes of copper cable in telecommunications.
• Example 2: The Japanese' recycling of the armaments left over by the Americans after World War 2.

• Due to floods, wars and famines, human kind has wrongly believe in scarcity. That's what all politics is based on - scarcity. So politicians persuade you to join them or elect them so that you come up on top against the others, creating the 'You vs Me' mentality.

• Now having discovered and knowing that there is enough to go around, that most people are now literate and have access to information and can communicate, politics is now OBSOLETE!

• Politicians are in such a bind as politics are inherently corruptible, as it is based on the belief of scarcity and involves trickery to tamper with the truth. It has always been like that, but now it is out in the open as the young now does not put up easily with lies and likes to do their own thinking. They have repeatedly hear things told to them proven wrong in front of their own eyes. eg. That it is "impossible to fly", then they see the Wright brothers taking off in the sky.

• Nations are also based on a 'you' vs 'me' mindset. This is offset by multi-national companies where national sovereignty matters much less. In time, nationalism will make less sense and nations will become irrelevant.

• Technology will be producing wealth, using less and less of human labour.

• Mass production would not have been possible without mass distribution, which would not have been possible without mass consumption, which would not have been possible without mass marketing.

• The fear of machines taking over labour is unfounded. This is due to the conditioning that one has to 'earn for a living', this is again a belief in scarcity. So we had 6-9 year old going to work in the mines in the past, but now thankfully they go for their education. Then they will be automatically included to live in this planet and let the machines do the production and think about how to make the Earth work.

• Everyone will be put on salary. There are economic models (not communism) that let the citizenry own the means of production. This would have been the status-quo, if we had not started the present unfair accounting system. (For more information read World Game.)

• But really we don't own anything, as we are already part of this extra-ordinary re-generating system (the Universe).

• That with broadband cable television and computers, the future university will be one that produces a lot of documentary videos to educate its students that are dispersed all over the country or the world, as they stay in gainful employment. Note that that this video was captured in mid 1974. Fast forward to Year 2007 and doesn't this sound like YouTube? :)

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... about our ability to give everyone a better quality of life by 1985
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... about Bucky's inventions and his life, click here
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... about Bucky's experiment with his own life for 50 years on behalf of humanity
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... building a tensegrity
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... the Dymaxion Car
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... about the Dymaxion Map, click here
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... about sending all the politicians around the world a free ride around the sun
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... an Apple Video that includes Bucky... "Think Different"
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