Friday, November 26, 2010

The Next Really, Really, Really, Big Thing

Everybody should be excited about the next big thing. And why not? It’s very, extremely big. Even bigger than anything that came before. No, really, it’s that freakin’ HUGE.

If you don’t want to get left behind, you’ve got to hop on this right away. Of course, you will need to be fast and smart and work late nights, but it will be worth it. You can’t go halfway on a thing like this. It’s all or nothing, baby!

I’m here to tell you what this big thing is. But first, let’s take a quick look at past big things so that we can see why this one is so much bigger.

A Short History of Big Things

We live in interesting times. Conventional wisdom says that it takes about 20 years for new technology to take its full effect. These days, innovation cycles are much shorter, so we’re getting new stuff before we really know what to do with the old.

Many economists believe that these time lags account for the productivity paradox (i.e. it’s notoriously difficult to measure what we really get out of all this new stuff). So it is always hard to see the next big thing until it’s already really big and you’ve missed out.

Nevertheless, there are always pundits and gurus to point the way. Unfortunately, they are usually only partly right, which makes the history of big things somewhat muddled:

Digital Media: Sometime back in the 90’s, an extremely confident young man appeared on the TV show, 60 Minutes, and announced that he was going to put their company (CBS) out of business.

I don’t remember what actually happened to the guy, but last year CBS earned about a billion dollars in operating profit (Yahoo made about a tenth as much). 60 minutes, of course, is still on the air and still gets huge ratings.

E-Commerce: During the dot-com boom, many pointed out that a lot of the web revenues were driven by advertising (which, for some reason, is supposed to be a bad business). However, selling things over the web was infinitely more promising.

Of course, many of those e-commerce start-ups failed, some did okay and some did extremely well. Today, is enormously successful, but really not in Wal-Mart’s league. I was at the mall the other day and it seemed pretty crowded.

Search: After the crash in 2000, Search emerged as the new, new thing. Google has made a bundle on this one (and some regional players, like Yandex in Russia and Baidu in China, have also done well). Yahoo and Microsoft… not so much.

Social Media: This is the most recent big thing (and, of course, has a big movie to prove it). Facebook has 500 million members, but profits remain elusive. Others, such as MySpace, Friendster and Digg… well, we’ll see.
Big Things That Last

Of course, the biggest things get so big that they last for a very long time. Jim Collins profiled a bunch of them in his book Built to Last. He studied firms like Hewlett Packard, Sony and General Electric and found that much of what we hear about really big things is untrue.

For instance, they often don’t start with very good ideas. In fact, sometimes they begin with lousy ones (apparently Sony’s first product was a rice cooker). Nor do they tend to have charismatic, visionary leaders. What they do have is a lot of talented people who work as a team.

It seems to me, this is where a lot of technology driven companies go wrong. We glamorize the vision and forget that it is people who actually make it happen. Moreover, because our globalized, digitized world is so complex, these people have very diverse skills and perspectives and need to operate in an uncertain environment.

Getting really smart, driven people to work together well is the truly BIG thing.
Winning the Talent War

A while back, I wrote a post about how to win the war for talent, and I made the point that talent isn’t something you acquire, it’s something you build. I think it’s worth summarizing the main points here:

In-House Training: While third party training can sometimes be helpful, having an in-house training program is much more valuable. Companies like GE and McDonald’s have put enormous resources into training campuses, but even small companies can build good programs with a little effort and focus.

An often overlooked benefit of in-house training is the trainers themselves, who are usually mid and senior level employees. They get to refresh basic concepts in their own minds while they teach more junior people. This also helps the old guard get invested in the next generation.

Perhaps most importantly, training helps to bring people together who would ordinarily not meet and improves connectivity throughout the company.

Focus On Intrinsic Motivation: Most people want to do a good job. Of course, money is important, but the best people want to achieve things and to be recognized for doing so. Often, time and effort wasted on designing elaborate compensation schemes could be better spent on getting people recognized for true accomplishments.

A senior executive taking a minute or two to stop and recognize a job well done can often mean more than a monetary reward. That doesn’t mean that people don’t need to be paid what they’re worth, but anybody can sign a check. Paying big salaries is not, and will never be, a long term competitive advantage.

Best Practice Programs: One way for people to shine is to have regular meetings where they can present successful initiatives to their peers. This also helps increase connectivity and gets good ideas spread throughout the company.

Another approach is to build an in house social network where people can share ideas and rate each others work (there are plenty of applications similar to slideshare that can be adapted easily and cheaply to a company intranet).

Coaches and Mentors: Getting regular feedback is essential for development. We’re generally pretty bad judges of our own efforts. Some companies have formal mentoring programs that are quite successful. However, what is most important is a realization throughout the company that senior people are responsible for helping to develop junior ones.

Firing Nasty People: A long time ago, I decided that I didn’t want to work with nasty people, so I started firing them regardless of competency. I’ve been amazed at what a positive effect it had and have never looked back. Nasty people invariably destroy more than they create.

A Community of Purpose: Most of all, people need to believe in what they do; that their work has a purpose and makes a positive impact. Nothing motivates better than a common cause that people value above themselves.

So the next big thing is really not much different than the previous ones. There will be an interesting idea that has real value and most of the companies who jump on it will screw it up and lose a lot of money.

The difference, of course, will be made by the people who are working to solve everyday problems, how they are developed and how they treat each other.