Three news events stood out last week.
On a large global canvas it was Revolution and Egypt.
On a technology front it was Nokia partnering with Microsoft.
On a smaller American and content front it was AOL buying Huffington Post.
Three underlying themes connect these events
1.The Power of Networks
The use of Twitter and Facebook to inform and organize between opposition groups and to feed and build on news (Al Jazeera did this particularly well) were further indication of the strength of social networks to truly be revolutionary.
Nokia and increasingly Microsoft are finding themselves on the wrong side of network effects (an irony since with Windows and Office, Microsoft was great at leveraging networks) as Apple and Android are what developers and consumers are thronging to.
Huffington Post understands that it is not content but how you integrate the content into discovery networks (search and social) is where the real value is added.
2.Software over Hardware
Guns and Tanks lost in Egypt against people soft power. Nokia’s hardware focus and manufacturing lost ground against the software of Apple and Android. Huffington Post is much more a software company that optimizes discovery networks to distribute content (search and social networks) rather than a company hardwired in the content business.
We have moved increasingly into a software age where even hardware of every type will be made by software as in the incredible new world of 3 D printing. It is a world where a persons reputation, authenticity and soft people skills will grow to matter as much as their title, clout and position.
3.The Importance of Culture
Nokia and Microsoft appear to have cultural issues in a time of change. Nokia’s focus on hardware and manufacturing efficiencies left a management team unable to grasp the implications of software and design. The focus on Europe and Asia far away from the amazing innovation and speed of change of Silicon Valley came to haunt them. In many ways Microsoft management bleeds Windows and Corporation (that is where the profits have been and where the management came from) in a world where Windows matters less and consumers matter more. Oddly, the biggest recent Microsoft success, XBox, is where they dropped Windows and focussed on the consumer. From afar it appears both companies are filled with amazingly smart people but maybe not early enough powerful dissenting opinions when the winds of change blew.
Mubarak ran a government culture which suppressed dissenting opinions and therefore they were completely overwhelmed when change came. The people of Egypt are proud and they have an amazing historical culture. When their shame and anger at the plight of their country overcame the control and command culture of the government, it was game over.
Finally, Huffington Post started from a culture built on the internet while Aol culture was built on a closed dial up world. Tim Armstrong recognizes this and has been trying hard to upgrade and change the Aol culture in many ways. This latest move where they hope the Huffington Post culture will permeate the Aol culture, is a sign of why culture of a place matters so much.
Implications: All of these trends have important implications for management of marketing companies, whether they be on the agency or media or client side.
First, it is critical that organizations reduce fear and create cultures that allow dissent and feed change. As I visit companies I pay a great deal of attention to the culture of a firm, particularly if the employees are made to feel scared or whisper sweet nothings in the presence of management. The harsher the boss, the more diffident the employees, the more I am convinced that regardless of the other metrics, I am visiting a business on the precipice of decline.
Second, we need to emphasize talent and training which are the software skills of the marketing industry, as much as we focus on platforms, technologies and devices. Without underlying technologies or the plumbing we will not succeed. But if we do not have the water in ideas and innovation to pump into this plumbing we will fail.
Finally, we need to recognize that many of our businesses have been built on old historic networks of clout, global reach, infrastructure of licenses, presses, contracts and other important but maybe legacy and declining assets. How would we start again if we had a fresh sheet of paper?