Random Musings:

Information Commerce: What People Were Thinking About 10 Years Ago?

In 1990-1991, the Association of American Publishers co-sponsored a series of public workshops on Mapping the Future of Publishing that I conducted with my then colleagues at NCRI. Later on, I morphed these public workshops into Mapping the Future of Information Commerce. After I departed NCRI at the end of 1995 my former colleagues ran additional installments of the Information Commerce workshop in 1997. Thanks to the Wayback Machine at the Internet Archive, the report is available on the net here.

I thought that it might be a very interesting and possibly useful exercise to return to those days of yesteryear and see what knowledgeable industry participants thought about the future of the information industry and with the benefit of 20/20 hindsight compare their thinking to what actually happened and where we are now.

The Future of Information Commerce workshops used a highly interactive scenario planning process that in these pages is called Scenario Mapping. In addition to the discussion in the report itself, an overview of the Scenario Mapping methodology can be found in this presentation.

In brief, a Scenario Mapping workshop  combines "simulated hindsight" with a highly prepared meeting to leverage the collective intelligence of workshop participants. By simulated hindsight I mean that we assume the future is now and ask how the world got to be this way: what were the key milestones, actors, motives, drivers, etc. that led to this world rather than some other.

By highly prepared meeting, I mean that the facilitators in conjunction with workshop sponsors prepare several coherent descriptions of future outcomes or Endstates and a set of hypothetical Events. Each Event has a headline, date, and brief description.

In this series of blogicles, I'll provide snapshots of the Endstates used in the 1997 Information Commerce workshop, summaries of the deliberations, and report on how participants voted on the Endstates and Events. I'll also focus on the "compares and contrasts" with the present.

Blodgett on the Impact of Recession

Former Merrill .com bubble cheerleader Henry "Amazon at $400" Blodget  writes thoughtfully about the impact of a recession on advertising dependent companies such as Google and Yahoo. See his blogicle for assumptions etc. Here's his take on Google:

Google. In our "GOOD" scenario, revenue growth merely slows--to 20% a year.  (Google fans will argue that Google's growth won't slow at all because advertisers have perfect visibility into ROI, half of the business is international, etc.  There are counter-arguments to each of these points, but you can make your own assumptions).  Expense growth in this case also slows to 20%.  Google is a supertanker whose expenses are currently growing more than 65% per year, so slowing expenses this much would be very "GOOD." In any case, in this scenario, Google's margins hold and operating profits grow 20%--nice, but short of what Wall Street is probably expecting.

In our "BAD" Google scenario, revenue flattens, and the company reigns in expense growth to 10% year (heroic).  In this case, revenue stays the same, but the operating margin drops from 29% to 21% and operating profit drops by a third.  (Imagine how Wall Street will react to that).  We won't tell you about the UGLY case--you can see for yourself.

 

China threatens 'nuclear option' of dollar sales

Writing in the Telegraph (UK), Ambrose Evans-Pritchard has an article (top o' the hat to Farbers IP list) indicating that China is threatening to engage in what some might call "economic warfare."

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Saber rattling to be sure. Since we are a huge market for China, it's not clear that they would take steps that would adversely affect their own economy. China seems nothing if not pragmatic of late. Still, this news increases uncertainty all around.

Paul Saffo on Forecasting

I don't do forecasts or predictions. Indeed, the strategy work I've done using Scenario Mapping / Future Mapping consciously avoids making forecasts, preferring instead to consider alternative and divergent outcomes and what would have to happen for each outcome to become reality.

Nevertheless, I've almost always liked Forecaster / Futurist Paul Saffo's work. His recent article on Six Rules for Effective Forcasting in the Harvard Business Review is no exception. The article is short, accessible, and to the point, so I won't try to summarize.

One idea and ensuing discussion concerns Rule 5: "Look Back Twice As Far As You Look Forward:"

Deloitte Technology Fast 500 CEO Survey: Talent Scarcity

Deloitte has published a survey of its Technology Fast 500 CEOs. A major problem is the scarcity of talent:

This year's big story is people. Baby boomers are beginning to retire in droves and there simply are not enough young people to replace them. This problem is particularly severe in developed countries, where decades of declining birth rates and shifting education patterns are producing chronic talent shortages in science, technology, engineering, and healthcare--fields at the very heart of the Deloitte Technology Fast 500.  This talent crisis--which is expected to last for decades--has the potential to make the dot-com talent crunch of the late 1990s look like a walk in the park.

CEOs in the Deloitte Technology Fast 500 remain confident about their companies' near-term growth prospects. As was the case last year, more than 80 percent say they are "very confident" or "extremely confident" about sustaining their high level of growth over the next 12 months. Their biggest challenge will be "finding, hiring quality employees" as the factor that most contributed to their companies' growth, and over half of the respondents plan to expand their workforce by more than 25 percent in the next year.

Scenario Planning for M&A, Portfolio Management

Scott Moeller, coauthor of a book on the use of business and military intelligence in M&A deals and CEO of Executive Education at Cass Business School in London, England, points out that Scenario Planning can be helpful in thinking about M&A deals. Exactly so.

Scenario Planning is "fractal." It can be used to address risk and uncertainty at the product, business unit, and corporate levels. Understanding possible trajectories for industries, markets, portfolio companies, and possible acquisition targets enables CEOs and Directors to evaluate possible futures and to choose their most desirable future and identify the key events and milestones leading to that future.

Sometimes it's useful to look a the future of the key business units and then at the future of the company and its portfolio of companies. Such a  sequence of Scenario Planning projects can help the CEO and Directors approach acquisition and divestiture using more rigorous tools to evaluate many possible outcomes.

For example, one project for a Fortune 500 company convinced the CEO that he should sell a particular business unit because the competencies needed for success were fundamentally different than his other portfolio companies. His principal businesses essentially required making bets on 30 year capital investments in manufacturing plants where technologies evolved slowly. The business sold required competence in managing in markets whose technologies and structures were rapidly evolving.

 

Here Yesterday, Gone Today

The Heralds of Resource Sharing film is, sadly, no longer available from either Google or from Lauren's site. Copyright issues, apparently.

WSJ Tribute To Peter Druker

The WSJ Online has an extensive tribute to the late management consultant Peter Drucker here [Subscription required, I believe]. In addition to articles of praise, the tribute also includes, among several other of Drucker's pieces, the full version of the Five Deadly Business Sins article.

Failing Your Way To Success - More Quotes

Earlier I pointed to Paige Arnof-Fenn's article on success and failure. I happen to come across some more quotes that reinforce her message.

Failing Your Way To Success

As readers know, I'm a big fan of Paige Arnof-Fenn, founder and CEO of strategic marketing firm Mavens & Moguls. Entrepreneur.com has published an Arnof-Fenn article, "Failing Your Way to Success: Don't let a failed startup kill your entrepreneurial dreams." Couldn't have said it any better. Snippets:

You can't separate the successes from the failures--it's all part of the same journey. Optimism can be learned; choose happiness and see how it feels the next time you get down. It may be hard at first but I guarantee you'll enjoy the journey a lot more trying it this way. By carrying around a lot of bitterness and anger, you'll never lead a full life. Forgive, forget and move on. This quote from E.B. White should give you the courage to at least try it: "I wake up every morning determined both to change the world and have one hell of a good time. Sometimes this makes planning the day a little difficult."

 

Cordesman on Bioterrorism

Anthony Cordesman has been cited in this pages previously. He is the author of the article relating terrorism to the Buffyverse, the world of Buffy the Vampire Slayer and the rules that seem to govern in the universe inhabited by Buffy and the other characters created by Joss Whedon.

The World Peace Herald has published a Cordesman article on the reality of bioterrorism, Outside View: Crying wolf on bioterror? Snippets:

Moreover, the ease with which bioterrorism can be put into practice is growing.
   
The Internet provides a growing list of sites claiming to provide literature on the manufacture of biological agents and toxins in a wide variety of languages. The dissemination of biotechnology and of dual-use food processing and pharmaceutical equipment is steadily expanding the range of options for producing and weaponizing biological agents.
   
At the same time, biotechnology is advancing the range of different agents that can be used. Genetic engineering is moving from cutting edge science to commercial practice, immune and semi immune strains of major diseases are becoming more common, and new biowar approaches like attacking human immune systems are beginning to be practical. The worst cases for biological warfare are becoming more possible and their results can be truly grim.

 

Prediction Markets

Art Hutchinson, a former colleague when we were both at NCRI, writes frequently about prediction markets. Yesterday's article is about expert vs "man-on-the-street" opinion. Worth a read.