Work, business & professional services
The wisdom of crowds
In terms of hot business trends, we’ve written extensively about open-source innovation, the long-tail effect and simplicity but here’s a new one – collective wisdom. The idea is simple: the wisdom of a large group of people is nearly always greater than the intelligence of any single member. The theory is especially hot in Internet circles – where obviously it’s very easy to access the collective intelligence of users – but it’s also emerging as a hot forecasting tool in financial markets. The idea is as old as the hills, but it’s re-emerged due to technological developments (eg, convergence and social networks), and a book called 'The Wisdom of Crowds' by James Surowiecki. Goldman Sachs, Deutsche Bank and Hewlett-Packard are all using group wisdom to predict everything from next quarter sales figures to future economic indicators. Group prediction can even be played for fun on various websites like www.ideosphere.com, www.hsx.com and www. longbets.org. Is this a future trend or just a short-term management fad? What do you all think?
Ref: The Times (UK) 8 October 2005, ‘The next “big thing” prediction markets’, D. Rowan. www.timesonline.co.uk See also Strategy + Business (US) ‘Our ten most enduring ideas’, A. Kleiner. www.strategy-business.com
www.strategy-business.com See also ‘Extraordinary Delusions and The Madness of Crowds’ by Andrew Tobias.
Links: key trends, wisdom of crowds, open source, simplicity, long tail effect, wisdom, groups, intelligence
The global Google economy
If the world’s largest retailer is watching Google ‘very closely’ perhaps they know something you don’t? According to the New York Times, Wal-Mart sees the seven-year-old start-up as both a competitor and a technological pioneer. It’s a threat because if information becomes available to everyone, Wal-Mart is no longer in control. For example, if you enter your post (zip) code and the name of an item you’re interested in buying into Froogle (Google’s shopping site) it will give you a map showing retailers in your local area and the prices they’re charging. Google’s stated aim is to ‘organise the world’s information and make it universally accessible and useful’. This could potentially make Google a serious competitor in fields as diverse as real estate, newspapers and telecommunications. For example, if Google merged their satellite imaging capability from Google Earth with local property listings information – hey presto, instant global real estate firm. As David Yoffie, a professor at Harvard Business School, puts it: ‘Google is the realisation of everything we thought the Internet was going to be’.
Ref: New York Times (US) 6 November 2005, ‘Just Googling it is striking fear into companies’, S. Lohr. www.nytimes.com
Links: google, maps, competition, information, internet
Products + services
Are you still making products and just selling them? If so you’re in for a rude awakening because enlightened companies are wrapping smart services around products and building intelligence into objects and materials to get even closer to customers. Any product that uses electricity (including batteries) today will have intelligence and networked communications built-in tomorrow. This will allow companies to become pre-emptive in terms of trouble-shooting but will also allow manufacturers to offer customers all kinds of new products and services such as customised products (based on hard intelligence about individual usership), and product replenishment (for products that break down or get thrown away). How will such intelligence get built-in? Solutions will include everything from RFID tags to sensor motes (see science section, issue 9). For example, Rolls Royce and GE already build sensors into their jet engines to monitor in-flight performance. If there’s a problem that can’t be fixed, they’ll request assistance. Other services that can be ‘built-in’ to everything from toys to coffee makers include diagnostics, repair and maintenance, parts delivery, sale of used equipment and even performance-based rental contracts. Furthermore, this wealth of information about how customers use products and how products perform can also be used to model future sales or input into research and development projects.
Ref: Harvard Business Review (US) October 2005, ‘Four strategies for the age of smart services’, G. Allmendinger, R. Lombreglia. www.hbr.org
Links: products, services, intelligence, networks, networked, internet, service, innovation, communications
Things to ignore in 2006
We just love lists! Here’s a list of nine things to ignore over the coming year.
1. Podcasting – great, but where’s the revenue stream?
2. Space tourism – yeah, don’t call us.
3. Outsourcing – if it hasn’t happened already, it probably won’t.
4. City apartments – invest somewhere else.
5. China Inc – we’ve been here before (remember Japan Inc?)
6. HDTV – Who needs it? Who knows which to get – Blu-Ray or HDTV?
7. Hydrogen-powered cars – yes, but not until 2015 at the earliest.
8. Niche mobile phone services – done already.
9. Celebrity clothing brands – a trend that’s so old it’s already vintage.
Ref: Various including Business 2.0 (US) 21 September 2005, ‘Nine fads to ignore’. www.business2.com See also Globe and Mail (US) ‘The best and worst of 2005’.
Links: lists, fads