Edge Perspectives with John Hagel

Blindness to the Deep Structures of Globalization

Alan Blinder is undeniably a smart guy, but that makes his recent pronouncements on offshoring even more revealing.  While seeing some of the surface elements in play, Blinder is blind to the deeper structures playing out in globalization.

Blinder is a prominent economist at Princeton University and former Vice Chairman of the Federal Reserve.  When he speaks, policy makers listen, especially as the next election season approaches.  Blinder made the front page of the Wall Street Journal earlier this week when he expressed growing concern about the implications for the US economy of massive job shifts overseas. Blinder remains a committed supporter of free trade policy, but he is making headlines both in terms of his estimates on the magnitude of potential job shifts associated with offshoring and his suggestions regarding public policies for coping with the dislocations caused by these job shifts.

In the WSJ article entitled "Pain From Free Trade Spurs Second Thoughts" (registration required), Blinder estimates as many as 40 million US jobs are vulnerable to moving offshore over the next two decades.  While many are labeling him as an “alarmist” on this front, I actually think he may be too conservative in terms of long-term impact, as I have discussed at length here, because he assumes that service jobs requiring personal, face to face contact will not be vulnerable to offshoring.  Blinder is careful to stress he is taking a long-term view extending over one to two decades.

The article quotes Diana Farrell of the McKinsey Global Institute as one who believes that these numbers are far too high. Part of the difference in perspective may have to do with semantics as well as time frames.  Blinder is focused on “vulnerability” – as I read him, he is not predicting that these jobs will necessarily move offshore, but merely suggesting that these jobs could be performed offshore.  MGI’s work in this area is much more focused on potential labor supply constraints in offshore locations in the short-term and projects much more limited impact from offshoring.  Nevertheless, as I have also written, while I have enormous respect for the work that the MGI is doing, I believe that the MGI estimates on this front are too conservative.

Both perspectives are much too static in their view of potential job movements.  They rely on the infamous ceteris paribus qualification – i.e., all other things being equal.  Of course, other things are never equal and the dynamics in competitive strategies and talent development initiatives could shift the actual movement of jobs significantly in one direction or another.

On an even deeper level, this debate about job shifts tends to reinforce a “zero sum” mindset – if offshore locations gain a job, onshore locations lose the job.  Under the terms of this debate, the only question is how many jobs are gained or lost. For reasons discussed below, we are moving to institutional architectures that support positive sum outcomes where growth of overall economic value dampens debates over distribution of jobs.

Rather than getting bogged down in a numbers debate, though, I want to focus on the other dimension of the Blinder perspective highlighted by the WSJ article. Expressing concern over “the vast and unsettling adjustments in the way Americans and residents of other developed countries work, live and educate their children,” Blinder urges a much more active role for the US government in helping to dampen the disruptive effects of these job movements.

So, what is he recommending? Well, the article focuses on two things. First,

Mr. Blinder says there’s an urgent need to retool America’s educational system so it trains young people for jobs likely to remain in the US.  Just telling them to go to college to compete in the global economy is insufficient. . . . It isn’t how many years one spends in school that will matter, he says, it’s choosing to learn the skills for jobs that cannot easily be delivered electronically from afar.

This is where Blinder reveals his blindness to the deep structures reshaping the global business landscape.  As JSB and I have written in our “From Push to Pull” working paper, we are in the early stages of a fundamental shift in institutional architectures from push programs to pull platforms.  The offshoring trend needs to be understood within this broader context.  We are moving from a world where demand can be forecast and resources “pushed” to the right place at the right time to a world where we need to flexibly “pull” resources wherever they reside when they are needed.

Our business institutions over the past centuries have focused on scaling push programs.  Toyota and other pioneers of lean manufacturing “pull” systems have more recently begun to pursue limited pull approaches among a limited number of business partners.  The next wave of innovation will focus on the development and deployment of pull platforms across a very large number of institutions.  These pull platforms will not only transform business institutions, but other forms of institutions as well.

Traditional educational institutions represent classic examples of push programs.  We project far in advance what students should learn and then develop curricula and programs to push that knowledge at the appropriate time. Just like the push programs in business, that model is now coming apart at the seams.

Blinder appears to believe that he can project into the future what skills our educational systems should seek to impart so that students need not worry about their jobs moving offshore.  There are two problems with this.  First of all, it writes off entire swaths of the economy and concedes those to offshore providers.  Second, it assumes that there is a stable and predictable set of skills that we can keep onshore.  Leaving aside such uninteresting examples as snow removal, pizza delivery and dry cleaning services (which certainly do not require that much school anyway), I certainly do not pretend to know what skills will drive success ten to twenty years from now.

We are moving into a world where such long-term forecasting becomes an exercise in folly.  What if we gave up this push mindset and instead focused on crafting a set of institutions and platforms that made it possible for people to accelerate learning on demand?

This is a massive undertaking to be sure and it starts with a fundamental shift in mindsets.  But the good news is that we have the blessing of time.  For reasons developed by the MGI report mentioned earlier, these job shifts, if they ever happen, are not going to occur overnight. On the other hand, we also have the curse of time.  If we cling to old push mindsets and refocus our educational institutions based on some long-term forecast of job shifts, we may find at the end of this lengthy undertaking that we have seriously missed both opportunities and challenges.

In the meantime, we will lull ourselves into a false sense of complacency that the “problem” is being fixed.  The problem is not that jobs are vulnerable; the problem is that we have not developed the institutions required to accelerate talent development so that we can continue to push the performance envelope of the jobs we perform.  We need to move from a static view of jobs and the skills required to perform them to a dynamic view of talent development.

The same concern applies to Blinder’s other major public policy recommendation:

Similarly, [Blinder] says any changes to the tax code should encourage employers to create jobs that are harder to perform overseas. . . . Mr. Blinder says the focus should be on jobs with person-to-person contact, regardless of pay and skill levels – from child daycare to physicians.

Once again, Blinder is a prisoner of the push mindset – all we need to do is forecast demand for job categories and adjust fiscal policies accordingly to push employers to create these jobs. Blinder simply does not see the deeper structures that require us to re-think public policy at a much more fundamental level.

Many forces are driving the shift from push programs to pull platforms, including technology innovation and public policy shifts that systematically reduce barriers to entry and barriers to movement. As we discuss in our working paper, pull platforms are much more effective in supporting innovation, learning and talent development.  For this reason, they help to move us from a world of diminishing returns to a world of increasing returns.

The greatest risk is that we remain wedded to push programs that demand accurate forecasting in world markets characterized by increasing uncertainty and accelerating change.  The inevitable forecasting failures will indeed produce severe economic dislocations and significantly increase the risk of a profound backlash that will once again raise barriers to movement across national boundaries. We will then be back in the nasty zero sum world where one country’s gain inevitably becomes another country’s loss.

As I have suggested before, the globalization process is a fragile one, and far from inevitable. If we do not challenge our traditional mindsets, we significantly increase the likelihood that globalization will be reversed.

Community 2.0

It has been ten years since I wrote Net Gain and many people have asked me what my current view is on the economic opportunities associated with virtual communities.

Well, a couple of weeks ago I had the pleasure of delivering the opening keynote presentation at the Community 2.0 conference held in Las Vegas.  It provided me with a long awaited opportunity to re-visit in a public forum the topic of virtual communities.  Given the growing interest in this topic, I thought I would polish up my speaker’s notes and share this perspective with a broader audience.

I am deeply encouraged about the commercial prospects for virtual community.  When I published Net Gain ten years ago, it unleashed a huge wave of investment – there was a period in 1998 when virtually every business plan submitted to VCs in Silicon Valley claimed to be establishing a virtual community.

Of course, few of these ventures were actually virtual communities and even fewer had any real understanding of what was required to build sustainable virtual communities. As a result, much of this investment was wasted, consistent with the broader pattern of the dot com bubble. An inevitable backlash set in – virtual community became a suspect term.  Lots of interesting initiatives continued to be pursued under the radar screen without much publicity or visibility, but helping to build skill sets, experience and performance results.

Then something interesting happened.  Over the past 6 – 12 months I have received a growing number of calls from senior executives from large, blue chip companies saying, “Remember that book Net Gain? We’d like you to come back and talk to us about it.” So, at least a personal barometer suggests a major climate change.

Challenges in building virtual communities

In reflecting on the experiences accumulated to date by companies seeking to build virtual communities, I’d like to focus on four challenges:

First Challenge – Language. What are we talking about when we use the term "virtual community"?  During the last big wave of investment in virtual communities, the term was used so loosely that it lost all meaning.  Let me offer my own definition of virtual community so that you will at least know what I mean by the term.  For me, virtual community involves:

• establishing connections on electronic networksamong people with common needs

• so that they can engage in shared discussions

• that persist and accumulate over time

• leading to complex webs of personal relationships and an increasing sense of identification with the overall community

The key elements of virtual community, therefore, are shared discussions, shared relationships and shared identity.  Now, these may seem arbitrary but, as I’ll discuss below, they contribute to building shared meaning, shared trust and shared motivation in ways that are distinctive and responsive to the growing needs among participants.

These elements also help to distinguish virtual communities from a variety of other Internet enterprises:

• Social networks – focus on identity creation and connection with friends, but lack the same degree of shared discussions and shared identity as VCs

• Electronic markets – primary focus on transactions rather than relationships

• Content aggregation sites – display and access interesting content but limited focus on shared discussions and shared relationships

Virtual communities inexorably seek to extend their interactions into physical space and a complex interweaving of physical and virtual communities occurs over time.  This will become even richer and more powerful as presence and mobility technologies enhance abilities to connect anytime and anywhere, either in physical or virtual space or blends of the two.  Similarly, virtual communities as economic enterprises represent a complex interweaving of social and commercial dimensions.

Second challenge – Integrating diverse skill sets.  Three distinct skill sets (and cultures) must come together to create a successful virtual community:

• Content – effectively integrating published content with contributed content, making it easily accessible

• Social interactions – catalyzing and sustaining rewarding interactions among participants in ways that promote the creation of enduring relationships

• Economic business models – establishing rewarding and sustainable economics to support the growth of virtual communities

Almost every virtual community starts with deep spike in one of these three areas but has difficulty striking right balance with other two areas, leading it to stall rather than scale.

Third challenge – Shifting mindsets.  This is especially a problem for large companies seeking to organize virtual communities.  They must navigate through three major mindset shifts:

• Participant focus vs. vendor/sponsor focus – most companies spend a lot of time on what they want to accomplish with virtual communities but much less time focusing on what participants might want to accomplish   

• Long-term value creation focus vs. short-term “get rich quick” focus – of course, commercial viability is essential for businesses, but the time frames are critical – with a short-term time frame, commerce becomes corrosive of community, but with a longer term time frame, commerce and community powerfully reinforce each other

• Bottom up emergent organization vs. top down imposed organization – executives fear loss of control but fail to understand the potential to shape and influence

As with most things in life, there is a balance that needs to be established, but most companies tend to bring mindsets from traditional businesses that are corrosive to community

Fourth challenge – Organizational barriers. These occur at three levels:

• Structure – who’s accountable? Do they have the status and influence required to mobilize appropriate resources? Are they too narrowly focused in terms of interests (e.g., marketing vs. customer support vs. product development)?

• Systems – what is measured/rewarded? How will a company define success? What are relevant operational metrics? Are there systematic reviews to enhance performance?

• Skills – who has relevant experience?  This is challenging – the most critical skills sets such as discussion moderation and discussion archiving are in very short supply. Mindsets and measurement systems often don’t even reveal the need for specific skill sets

So, there are four big challenges to building successful virtual communities. But there’s an even greater set of opportunities that make me optimistic about the potential for virtual communities.

Opportunities for virtual communities

Companies need virtual communities in order to successfully respond to growing pressure on performance coming from two directions simultaneously – customers and talent. We all know the story about customers gaining more power and how the Internet is enhancing and accelerating this.

The talent story is a little less well known and yet it is increasingly relevant to the virtual community opportunity. Two forces are coming together to increase the bargaining power of talent:

• Talent is becoming increasingly valuable to companies. The basis of competition is shifting from structural and physical asset advantages to advantages based on intangible assets – intellectual property, networks and brand – all of these hinge on talent. On top of this, intensifying competitive pressure driven in part by growing customer power is making talent more central to sustained value creation

• At the same time, talent has more options available than ever before. The Internet provides greater visibility on alternative employers. Employees have more mobility – both geographically and institutionally. Talent has more opportunities to strike out on its own and continue to create value as an independent contractor.

Companies can respond to this growing bargaining power by paying talent more money, but a more powerful and sustainable approach is to provide institutional environments that accelerate talent development, including enhanced opportunity to connect into talent pools that extend beyond the enterprise.

Shifting performance metrics

Dealing with the growing profit squeeze from customers and talent requires a shift from conventional measures of business performance to a new set of metrics. To make it easy, I keep the same acronyms – ROA, ROI and ROS - but just attach different meanings. These metrics will increase the importance of virtual communities but they also make it imperative for community organizers to rigorously monitor these metrics in their own operations.

ROA – Return on Attention
This performance measure is driven by the proliferation of options available to us in all domains of our life, increasing the relative scarcity of an increasingly valuable resource – our attention.  ROA must be measured both from a participant and organizer perspective.

The key question for community participants is: Of the total attention I allocate to this particular source, what is the productivity of that attention in terms of value received for effort and time invested?  There’s a related question: How much attention do I receive from other participants and how much value do I derive from that attention?

The key question for community organizers is: How much effort and resource is required to gain attention from participants and how much value am I able to generate from that attention over what period of time? Virtual communities demonstrate compelling economics in terms of reducing cost to attract attention, leveraging resources of others to deliver value in return for attention and retaining attention for longer periods.  The power of communities in these domains is well documented, although I am struck by how few companies track these metrics on an ongoing basis.

Virtual communities can be particularly powerful in delivering ROA – enhancing serendipity rather than just search.  This is the highest form of ROA – finding highly valuable resources that I didn’t even know existed or were relevant to me. In this context, one of the biggest missed opportunities in virtual communities is to archive, edit and organize participant contributions. It is the most valuable asset of the community but often the most difficult to access. In this context, I recommend that everyone study Peter Morville’s Ambient Findability a book that I have blogged about here.  Here are two key takeaways: usability presumes findability and findability leads to fundability.

In thinking about ROA, beware of framing the opportunity solely as one to one marketing or personalization. From a one to one marketing perspective, nirvana is one vendor connecting with each individual customer in a walled garden. In contrast, the real opportunity is to help connect customers with a growing array of resources, including each other, in environments that maximize relevance. This expanded choice can be exhausting, but virtual communities can help filter and present relevant choices.

This is one challenge that vendors face in sponsoring virtual communities. Most participants want to find the full range of resources relevant to them, regardless of vendors, so third party sponsors may be best positioned to offer greater ROA because they have less incentive to restrict options.

ROI – Return on Information
In this context, I emphasize information in the form of participant profiles - participant backgrounds, interests, activities and relationships.  Again, ROI needs to be evaluated from both a participant and an organizer perspective.

From a participant perspective, the key question is:  How much information about myself and my needs have I provided, how much effort did it require and, relative to both of these, how much value have I received in return from the information provided?

From an organizer perspective, the question becomes: How much effort and cost did I invest in acquiring information about individual participant and how much value have I been able to generate in return, both for the participant and for me? I am struck by how few community organizers explicitly focus on leveraging the profiles of their community members – they accumulate large amounts of information but invest little time in leveraging.

Some of the specific questions this metrics leads to:

• Are we fully utilizing the information we already have about participants in terms of delivering value back to them?

• What more can we do to learn about participants and their needs by watching their interactions? (We all know the drawbacks of lengthy registration forms.)

• How can we be more helpful to participants through recommendations of resources based on prior behavior? This ties back to serendipity in return on attention.

• How can we shorten the time between information collection and value delivery?

ROS – Return on Skills
This more accurately should be return on talent, but I find it hard to get executives excited about maximizing ROT. Besides, ROS has better symmetry with ROA and ROI.

As before, we need to measure ROS from the perspective of both participants and organizers.

For participants, the key question is: given the amount of effort I devote to participation, how rapidly am I improving my ability to deliver value to the people that matter the most to me?  This could be either through development of my skills or amplifying the value of my skills through social and structural capital available in the virtual community. Could I develop my skills even more rapidly by participating in other virtual communities or collaboration environments?

For organizers, the question is: am I able to attract and retain the most valuable contributors to this community?  What can I do to enhance the ability of these contributors to deliver greater value to the people that matter most to them?

Blurring of boundaries

These metrics will become more tightly integrated for virtual communities. Today, it is common to make a distinction between communities of interest and communities of practice. In communities of practice, people come together to generate joint work products as in open source software communities. I expect that we will see an increasing blurring of boundaries between these two types of communities for two sets of reasons:

• As pressure intensifies for people to deepen their skills and increase the value they deliver from those skills, they will tend to adopt their passions as their professions and seek out communities that enable them to accelerate their talent development while pursuing their passions. We see this very much in open source communities where talent development and reputation building are key motivations for participation

• As customers gain more power, they will want to become more deeply involved in the design, delivery and tailoring of products and services to meet their needs. This is also a prominent factor in open source software communities where many of the participants are users who want to tailor functionality to their specific needs.

Today, we also see communities emerging around all three of the core processes that define most enterprises – customer relationship management, supply chain management and product innovation and commercialization. These are relatively segmented now, but over time I anticipate that we will see a significant blurring of boundaries, especially driven by prosumer trends.  For example, customers will want to connect with other customers to learn about products, then get involved with product developers to tailor products and then want to track and perhaps reroute shipments of products, all in one integrated environment.

The Bottom Line Opportunity

In this context, the evolution of virtual communities will be a key catalyst in the shift from push programs to pull platforms that JSB and I have written about.  As we have written,

push programs treat people as passive consumers even when they are producers like workers on an assembly line. In contrast, pull platforms treat people as networked creators even when they are customers purchasing goods and service.  In this context, virtual communities have the potential to become kernels of massive pull platforms.

Across the business landscape, we are moving to more collaborative forms of commerce: collaboration marketing, creation nets and global process networks.  Virtual communities will become a powerful foundation for collaborative commerce on three levels:

• Connection – communities are not just helpful in finding people with relevant interests or capabilities, but help to foster broader and deeper trust-based relationships among these people.

• Conversation – by providing rich discussion environments for the sharing of common interests, virtual communities accelerate the building shared meaning

• Construction/creation – virtual communities can provide platforms, governance structures and tools for building jointly developed work products, as the open source software arena confirms.

In short, we are moving from a stage where virtual communities were largely associated with consumers and hobbies to a new stage of opportunity where communities become a rich environment for bringing people together to accelerate their talent development and deliver even more value to their relevant constituencies. In the process, the value creation potential of virtual communities will exponentially increase.

Unsafe Harbors for Viacom and Google

The blogosphere has been engaged all week about the $1 billion Viacom suit against Google. Even for jaded media and technology executives, $1 billion can still get attention. Unfortunately, most of the commentary seems to be missing the real strategic point.

Watching the press releases fly back and forth between Viacom and Google, I am reminded of Kabuki theater – actors engaging in highly stylized and scripted movements.  Let’s acknowledge first of all that this lawsuit is largely a negotiating ploy applied by Viacom in an effort to extract more cash payments from Google for access to its copyrighted material. It is unlikely ever to reach the courtroom.

Most of the commentary in the blogosphere acknowledges this, but chooses to focus on the copyright issues raised by the lawsuit.  You can always trust copyright to get people on both sides of the debate to hit the keyboards.  Reason rapidly gives way to emotion as both sides insist that creative talent and innovation will wither away if their particular view of copyright is not upheld.  As Fred Wilson notes, copyright is not just a political issue, it has become a religious issue, calling forth all the fervor that theological debates can generate.

I take a somewhat jaundiced view of all this, although I will be the first to acknowledge that our intellectual property rights regimes need some serious re-thinking. Ultimately, I view this as a contractual, rather than a legislative, issue and I expect that appropriate contractual forms will emerge in response to shifting market forces. As Umair Haque notes, our current view of property rights “is based on an industrial-era understanding of economics that’s utterly obsolete.” Umair has a nice paper on “New Strategies for Property Rights” that outlines both the challenges and opportunities in this area.

Before moving beyond the copyright issues, though, I want to savor briefly the irony that the DMCA, a piece of legislation that represented a victory for copyright hawks, actually contained a few “safe harbors” that are now providing refuge for Google in its dispute with Viacom.  No doubt the copyright hawks will mobilize their lobbying forces to try to close these safe harbors, sooner rather than later.

Rather than getting distracted by copyright issues, I want to explore in a little more detail the strategic issues percolating beneath the current negotiations between Google and Viacom.  There is a very real possibility that Viacom may win the battle, at least in the sense of extracting more payments from Google for access to its content, but then go on to lose the war.

Justin Fox in a recent column notes that Sumner Redstone, the founder of Viacom, is credited with coining the phrase “content is king.”  This is a perspective that has long dominated the media industry, even though one can challenge whether it has ever been true. Certainly, the ability to extract more payments from Google will reinforce the belief that content still is king.

That would be a shame, because it would make it more difficult to focus on the real opportunities in the media business.  Don’t get me wrong – content, especially high quality content, will always have value.  But, on a relative basis, the opportunities for value creation are shifting.  As content proliferates, the ability to help audiences connect with content that matters the most to them will become the real sweet spot of the media industry.

As I have observed about companies more generally, media companies are an unnatural bundle of three very different kinds of businesses – product innovation and commercialization businesses, customer relationship businesses and infrastructure management businesses.  By proclaiming that content is king, Redstone plants himself firmly in the product innovation and commercialization business in terms of mindset, even though Viacom today is involved in all three of these business areas. 

All media companies are ultimately going to have to choose what business they are really in. If they choose to focus on content, or the product innovation and commercialization business, they will face increasing challenges in building a sustainable and scalable business.  I advise large media companies that, if they don’t want to shrink in size and profitability over time, they would be better off building out their customer relationship business and, over time, shedding the other two businesses.

From my experience, if you want to transition from a content business to customer relationship business in the media industry, you need to start focusing on content platforms.  In a traditional content business, you rely on professionals to deliver content that is meant to be experienced exactly as produced.  Content platforms still rely on professionals, but the role of professionals in a platform business is to catalyze further contributions by a growing range of third parties, including audience members.  A platform is meant to be built on and will rapidly evolve over time.  A product, once produced, never changes.

As I have written before:

Products are designed to be used on a standalone basis – you buy it and you view it or listen to it in the specific way the content creator intended.  Platforms are designed to be built upon – they create opportunities for the original creator, third parties or the customers themselves to extend, enhance and tailor the content in ways that the original creator never anticipated. Offered as a platform, content can create far more value than any equivalent standalone product.

What do content platforms include?  They may start with content produced by the platform owner, but that is just the beginning.  Content platforms point to other content and resources available anywhere on the net that are relevant to the focus of the platform – a key role of a content platform is to “curate” content, helping audience members to connect with high quality and relevant resources. Platforms also provide tools for participants to comment on and add to content that is already available – everything from tagging to discussion boards to content production tools.  In the process, they provide environments for complex webs of relationships to be built among people who share an interest in the content, whether they are participating in its production or simply experiencing it.

If done well, content platforms provide a natural transition to audience platforms.  It’s a subtle shift, but an important one.  In content platforms, the primary focus is still on the content.  In audience platforms, the primary focus is on understanding the needs and interests of a specific audience segment and using that understanding to help audience members increase their “return on attention”. 

This, by the way, is the challenge that YouTube faces.  YouTube in many respects is a rich content platform (although it is missing some key elements like pointing to content that is not available on YouTube and providing rich discussion environments that go beyond comment posting and tagging). The risk for content platforms over time is that they get pushed into the background, evolving as infrastructure management businesses, rather than becoming true customer relationship businesses – but that’s the focus for another blog.

In this respect, YouTube’s acquisition by Google is not helpful since Google is genetically very far from being a customer relationship business. If I had to predict, I would wager that YouTube ends up becoming an infrastructure management business – a powerful and scalable repository for video content that gets accessed by a growing array of customer relationship businesses that do a better job of tailoring video content (and integrating it with a broad array of other media) to address the needs of specific audience segments.

Without effective competition from large media companies on the customer relationship business front, Google is likely to become complacent and settle into what it knows best – infrastructure management business.  There’s nothing wrong with that, if it is an explicit choice with a clear understanding of the consequences.

So, here’s one risk for Viacom – by “winning” in this latest negotiating round with Google, it becomes even more deeply entrenched in the content business rather than taking more aggressive steps towards becoming a customer relationship business. Redstone should be careful to make sure that, if content is king, it is not King Louis XVI on the eve of the French Revolution.

But, there’s another, deeper risk as well.  Viacom’s suit reflects a mindset that is all too prevalent in executive boardrooms across all industries today.  For too many executives, existing stocks of knowledge represent the primary source of value – this is why they spend so much time on intellectual property protection and related issues like defending copyrights. It’s a problem because it inevitably focuses on defensive strategies – protecting what has already been created. 

In rapidly changing environments, the focus of value creation rapidly shifts from existing stocks of knowledge to effectively participating in diverse flows of new knowledge and rapidly learning from these flows. If you’re focused on defending what you already know, the chances are you will not devote adequate attention on strategies to learn more rapidly – or recognize that you need to share your existing intellectual property in order to participate in a broader range of flows. If Viacom “wins” this latest negotiating round, it will feel vindicated in focusing on the value of its existing properties and potentially feel less urgency about participating in, much less shaping, new flows.

Once again, the image of King Louis XVI comes to mind, sitting in his palace in Versailles nervously peering out the windows at the milling masses below, not quite sure what they are unhappy about, and giving orders to his attendants to make sure that the gates are firmly locked.  The media companies that shift away from defensive strategies to protect existing content and that find ways to engage audiences by increasing their return on attention will most likely navigate successfully through the turbulent times ahead.