Transforming Organizations for the Subscription Economy

Starting from Scratch

Alexander Manu

• Editorial: Routledge
• Año: 2017
• ISBN:
  9781351983730
• Edición: 1
• Categoría: Business
• Categoría: Consumer Behaviour

The emerging present is a fast-changing context for incumbent organizations, especially in market segments where online behavior is replacing physical proximity, and users engage with digital platforms for the acquisition of products and services. These are platforms that allow users to behave, to leave a mark, and to participate in the community of others, which are the values people now seek.

Transforming Organizations for the Subscription Economy: Starting from Scratch aims to prepare executives for a world in which everything is social, augmented and autonomous; objects and spaces will have multiple purposes, capabilities and meanings. This is a new territory full of opportunity which is generally discussed only at the level of technology involved instead of the intellectual level, where the real understanding of the need for transformation resides. The book reveals ideas about what is possible if we transform the present. The narrative is organized around what is actual and what is potential; what is the probable future that we can arrive at through change, and what is the possible future that we can build through transformation. When engaging in transformation, the following strategic question develops: if you were designing your organization today, how would you design it? In other words, how would you go about it starting from scratch?

This book provides the intellectual framework that empowers organizations to understand and navigate the emerging present, and to develop and deliver products and services of intrinsic value to users.

Part I
The experienced present

1 When history turns a corner

We are at the moment when history turns a corner. Behind us we saw the age of mass manufacturing and industrial might be represented by large multinational corporations, giants that could bend steel and transform it in airplanes, ships, trains and bridges. Those were impressive days, the days in which we built the infrastructure of the world, as we thought these variables would be a constant of civilizations to come. We covered the ground with asphalt, redefined communities around the automobile and redefined the way we connected people-to-people and people-to-goods and services. These were physical manifestations of a moment in history, but we regarded them as history itself, having a hard time imagining how things could be different.

All we have defined so far as the indispensable infrastructure for our way of life might simply not exist in the industrialized world 50 years from now, because just around the corner we are seeing the first signs of a life in which everything is social, everything is augmented and everything is autonomous.

In this new context, life becomes a subscription to moments, curated invisibly by virtue of our past actions, and our sets of preferences. This is life subscribed.

It happens almost every time I meet someone new, in social situations or on the golf course. Anytime I get to spend time with someone, for more than 10 minutes. The invariable question ‘What do you do for a living?’ This leads to a deep pause on my part, as I have to weigh the answer, trying to make it sound normal, and as clear as possible without being pretentious. ‘I future-proof organizations,’ I offer. ‘What do you mean?’ is the next natural question, which forces another explanation. The future is not as ambiguous as we are told to think. The future is already present, in the behaviors we see everyday and in the use of technologies developed under our eyes, changing us in predictable ways. Predictable because we are human – and we tend to react in predictable ways when encountering any new medium, any new tool or extension of ourselves – and also predictable because we know the story of technology. In time, everything becomes smaller, more efficient, cheaper and exploited into everyday life.

Human invention in the form of technology has always become a condition of our existence. In this, we are not different than any other animal, as we appropriate as ours the tools, machinery and shelters we have developed over the years and which by now have all become conditioners of our life, the infrastructures that dictate what and when, we do what we do. This is how we arrived to being conditioned by Facebook, Google, Amazon, Wi-Fi, Bluetooth, GPS, mobile phones, all unthinkable even by science fiction standards as recently as 20 years ago and all part of everyday life now. In this process, our tools as extensions of ourselves have transformed human life, society and the economic system.

And this is how the present always contains the future, as humans grow understanding how these technologies will transform them and allow them to achieve a new level of becoming. Every experience is a bridge to another new experience, and technology functions the same way: as a bridge to the next technology. Foresight does not future proof by determining which technology is next, but by painting a comprehensive picture of the human experiences we might want to engage with next. Once we know that, we can build the technology.

Beware before: foresight vs. forecast

Future proofing – foresight – is not about forecasting but about foreseeing. The difference is in the starting point: Foresight deals with what has already happened, a phenomenon that is active and manifest, but has yet to make its full impact. Foresight deals with the possible consequences of the phenomena in a variety of situations and subjected to a variety of external forces. It is common on a golf course to warn fellow players of a ball that was mishit, and is on its way to perhaps hitting someone in the head. Once the ball has left the club, and the trajectory is clearly not the intended one, the player shouts ‘FORE’, terminology that has its roots in the military, where artilleryman will warn infantry of shells overhead by yelling ‘beware before’.¹ This is precisely what foresight methodology does: it makes organizations beware before the full impact of a disruptive behavior or technology. The critical aspect is the recognition that the ball – projectile – has left the golf club.That is the FORE part. Through multiple scenarios we can then imagine the forces that will be unchained – the series of events – if the ball lands on different impact areas. That is the SIGHT part. We can imagine the projectile landing on a tree, a cat, or on someone’s head, with totally different consequences. If the foresight practitioner is wrong about what is around the corner, organizations don’t have to worry about anything. But if he/she is right, they have to worry about everything.

In foresight, the same attributes that created the thing/phenomena are the forces moving it forward – the scenarios just imagine a maximization of use and users. By contrast, in forecast, the forces are extrinsic to the phenomena (wind extrinsic to the clouds, social and political forces extrinsic to the corporation and possibly affecting outcomes).

Corporations are anxious about the future because people – users which were formerly their consumers – are now connecting with life in a different way, and consuming less and less of the goods and services that defined life in the past 120 years, since industrialization. The infrastructure we built – minus telecommunications – does not make sense anymore in a life cycle where we try to connect deeper with others and ourselves. Just ‘being human’ does not consume in traditional ways. We consume less material things while consuming more and more experiences, and experiences are not supported by physical infrastructures, but are dependent on a narrative framework that engages us in both breadth – the duration of the experience – and depth. So the challenge is how do we create a deep experience and how do we connect users with moments of surprise and delight, engaging them intellectually and emotionally?

By seeking deep experiences, we seek a deeper life, and this is the role technology – through augmentation, sociality and autonomous features – is starting to play: maximizing humanity, by reassigning repetitive tasks from users to their devices, freeing humans from habitual chores and creating a new relationship between objects, places and people, which transforms society and culture. This is the emerging context; a brand new canvas for rethinking what human life can be about, mediated by new tools and resymbolized by new concepts. What frameworks do we need to construct these new concepts? To answer this question, we have to look around and find what has already happened that has yet to reach its full effect, what behaviors and technologies are unquestionably converging in transformative ways, affecting our quality of life and the providers of the goods and services we depend on. The framework I propose as an answer is Everything Social, Everything Augmented and Everything Autonomous.

Now: everything social

Our interactions, our activities and our information are now shared with a larger audience than ever before, in a context that converges the physical and the real world. We are presenting to this world a social self at the core of every interaction and at the core of every daily transaction, as a projection of the ideal self, an entity constructed through our actions everyday, in front of our virtually real audience. At the same time, we have deployed technologies that have added this social layer to objects and places, which in turn are now becoming social. A social entity behaves, engages in manifest actions that leave a trace and compounds, and transforms the economic system into a behavior economy. We, together with our objects and places behave, and the result is a dynamic and synchronic economic system. In his seminal work The Wealth of Nations, Scottish economist and moral philosopher Adam Smith called the human activity the human economy. We exist in the measure in which we engage. The more we engage, the more we exist, and nowadays engagement being possible in a passive way – our location and activities being tracked by our wearable devices – we are now passively participating in the economy of behavior.

Passivity in this context is not a disadvantage but an opportunity, as it gives us more time to pursue an enhanced purpose for the self, in a transparent environment, where we can measure our purposes against our peers, giving our pursuit more meaning and more authenticity, while at the same time maximizing our humanity. Everything social means an economy in which everything is shared – crowd-funded social commerce, Airbnb, Kijiji, Etsy, Kickstarter, Indiegogo – and it also means virtual identities – Facebook, LinkedIn, Snapchat, Twitter, Tumblr, Tinder, YouTube and Amazon. The social layer is the connectivity we seek with the world that surrounds us.

The Internet is a behavior

The social nature of our interactions on the Internet defines what the Internet is and what it is not. The Internet is not a technology; the Internet is a behavior. And the Internet was a behavior from the very beginning: people connected to the issues that define them, to the ideas they wanted to explore and expand and to the people they cared about. The behavioral product we know as the ‘Selfie Stick’ is not about the stick but about the self, the self-memorializing for others. The self and its desire are to participate in the life of others by sharing moments. People behave and create the new economic engine of the behavior economy.

One could argue that we always lived in a behavior economy, as it is human behavior that generates economic transactions: our desires, wants and needs motivating our actions.² But what we are witnessing today are passive behaviors originating in intrinsic motivation – passive in the sense that no material value is exchanged between a user and a social media platform – triggering vast economic transactions between multiple parties.

Google Earth typifies the behavior economy³ by being a platform for intellectual engagement, continually upgrading its value for the user and involving the user at all times in its growth. It is a knowledge platform with multiple layers of information that can be turned on or off in one’s control, at any time. This is value deliveryin its most intrinsic form, as the motivation for using has an urgency residing and originating deep within the individual. A platform for behavior on which value is dynamic and increases with a number of behaviors is possible. In the behavior economy, engagement platforms are value variable. The growth of companies that develop behavior platforms is not connected to how many platforms they make, but to how many users are connected to this platform. Growth is also connected to the depth of engagement, the relationship a user has to the platform and the multiple layers of experience that one can participate in while on the platform. Summing up: in the behavior economy, growth is conditioned by behavior, not by technology.

Next: everything augmented

Augmented products and services as well as augmented places add value through nonphysical elements, by providing new layers of insight and new dimensions of experience. Augmentation gives us the ability to extend our perception and deepen our understanding of reality, giving it a new dimension into a mixed reality, in which technology plays the role of translator of meaning without interference. This is the augmentation of experience and the opportunity to create...