by eye of einstein
Facebook and The Future of Competition:
Last week, I discussed Facebook’s relentless evil, how that was a profound strategic error, and why the costs of evil are starting to outweigh the benefits – for everyone, not just Facebook.
Now, that’s a pretty unorthodox argument, and I took a lot of heat for it: what is evil, anyways? Does it really have any relevance to the real world of backslapping, boardrooms, and bonuses?
After all, business exists in a kind of Nietzschean state beyond good and evil – it has to, because it’s only when we ditch the suffocating dictates of morality that we can think in terms of economically meaningful concepts, like utility, efficiency, and productivity.
Right? Wrong. The problem with failing to call evil, well, evil is simple: we can never really do good unless we’re able to judge what’s evil. And doing good is fast becoming a strategic – not just a moral – imperative.
There is a very interesting discussion going on over at Harvard Business online. It is about the very nature of companies, on whether they are good or evil.
While the terms are pejorative, the discussion is about what works best in the Information Age. Industrial Age approaches were all about gaining complete control and zero-sum games. Now, in a networked world, the most successful companies are those that make it easiest for their customers. Otherwise they will move to the one that is easier.
Creating walled sandboxes will not be as successful as open playing fields. At least if the leaders of this discussion are right.
But, truthfully, the importance is to have the conversation. While they may not be exactly right, the dialogs can get them to the right answer sooner. Sometimes being provocative can speed things up.
Here are a few more things he wrote:
It’s that, in fact, yesterday’s lumbering dinosaurs are actually smartening up faster than Facebook. Even textbook cases of pathological evil like Starbucks and Wal-Mart have decided to play the tiresome, zero-sum games of competitive strategy less and less.
What’s really going on here? There’s a massive tectonic shift rocking the economic landscape. All these players are discovering that the boardroom’s first and most important task is simply to try always and everywhere do less evil. In the dismal language of economics: as interaction explodes, the costs of evil are starting to outweigh the benefits.
That’s really what Facebook’s mini case is all about: no amount of competitive strategy can help Facebook gain advantage – because advantage is built on putting good before evil.
As Starbucks and Wal-Mart are discovering, orthodox strategy was built for an industrial world – an equilibrium world of oligopolies, soulless “product”, and zombified “consumers”. But that’s not today’s world. Playing the games of orthodox strategy in a world whose economic fabric is being rewoven isn’t just small: the opportunity cost is never discovering newer, better approaches to strategy.
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