Back in Boston
It’s good to be back in Boston after 3 months of travelling around the world– finally back in my own bed, back with my friends, and back to being able to write on this blog.
I’m not sure what I expected to happen to the business environment whilst I was away, but I think it’s safe to say that no one would’ve expected the deterioration that’s happened over the last few months. Since I’ve gotten back, it’s been interesting to see the various different viewpoints I’ve heard on what the current recession is, and how long it may last – everything from a very doom and gloom “10+ years of darkness” from Mark Turrell, my former CEO – to rather more optimistic visions of “over by this summer” from one of my former clients.
All we ever really know about recessions however, is that they very rarely conform to the timelines we predict for them, with things getting worse quicker than expected, and likewise businesses recovering faster than we expected – no one ever comes out with an accurate prediction (that I know of– by all means let me know if any of you find a reliably accurate source!). One would think that with the pace of change still at breakneck speeds however, that the pace of change/recovery within the markets would be equally quick – with the effect of information flow and arbitrage essentially magnifying the classic economic indicators – on the one side magnifying the negative effects of the banking problems we’re currently still facing – but then probably helping us to come out of the other side that much quicker too…
It was then with interest that I read a blog post by my friend, Donald Smith on his “Perspectives on Connected Innovation” Blog. The post, entitled “The Race to the Top – Information Arbitrage” – details a new goal in organizations as they embrace social media to both save money at the bottom, and look for value-adding advantages from unique information sources at the top.
As he puts it:
“Today, value comes from the following statements:
“Did you see?”
“I found…”
“Check this out…”
Information is driving a “race to the top” in terms of value. Each newly discovered tweet, story, or theory could be the nugget that wins recognition, fame, or accomplishment. So we mine Twitter and read RSS dumps trying to identify the tidbit that will be most valued by the organization. ….. No longer do I need to spend hundreds of dollars on professional groups to network in my industry or thousands of dollars to bring in consultants. The web makes this information more accessible and in most cases free. The challenge for employees is to make the information palatable for the organization to devour.”
Don, and I say this with unabashed extreme jealousy, has the enviable situation of being on a paid sabbatical to explore the whole world of innovation and social media for his company – to essentially develop and disseminate a flow of information on this subject for the corporation’s benefit. There was a time, not that long ago, where a company doing something like this was not that alien (pre-2001 for example..) but now? During a recession?
Combine that then with my experience on a recent job interview with a large company (and former client) for a role where I would be leading a team to drive a flow of innovations into the organization to solve problems 3-4 years out. Based on my previous experience, companies generally expect roles like this to generate some form of identifiable value every year in order to justify budgets and also as a prime measurement of performance amongst other things. But this company was different – it seems that they see value in simply establishing a flow of new insights, innovative thoughts, and information even if it doesn’t lead to actual executable implementations. Again, in a so-called massive recessionary environment – this is either incredibly progressive – or incredibly reckless – thinking.
Unless, of course, we’re all wrong about where we are in the economic environment. Could actions like the one exhibited by Don’s company and the one I interviewed with be a sign that the market has bottomed out?
As I commented on Don’s Blog – the point at which companies stop looking at the bottom line and start valuing input other than cash is typically only seen when a company is growing and prospering. Could the development and recognition of information flow as a source of value be a sign that the recession is beginning to finish? Some may think of that as optimistic – but it’s not the only signs out there – and the ramifications for a business world that embraces the massive information flow that is driving the social world at the moment is quite…interesting to say the least.
Has anyone else had similar experiences? – if so – please share!
The Complete Innovator 
Hi Boris,
Good and thoughtful post. Last October, when the stock market was hitting absolute rock bottom, I was sitting in my company’s yearly Innovation Showcase, listening to employees from around the world share their ideas as part of a global innovation contest. Many of these employees work in the trenches for my company (EMC – an information technology company) and had been flown in for their ideas to be judged in person. Most of the ideas had to do with managing and/or controlling the flow of information. The best ideas were selected and are now being pursued as products offerings.
As to your point: I believe this is progressive and not reckless. Perhaps the biggest benefit is the most intangible: employee motivation and initiative.
Steve
Great post Boris.
With the abundance of information, good and bad, it’s hard to really understand just what the situation is, other than a recession.
However, at times like this, being able to separate yourself from the competition is going to be the key for companies, big and small.
Innovation is critical, recession, depression or not…….
Wallace Carothers invented Nylon for DuPoint and IBM created a new R& D department during the great depression. Also look at what JetBlue, Six Apart and Apple were able to do when the dotcom bubble burst.
It’s great to hear that senior executives are still thinking about the long term rather than today’s bottom line.
It’s an interesting point Boris. The flow of information is absolutely key to growth and survival. With travel bans in place, training budgets slashed – people are not going to be exchanging ‘ideas’ etc. as much as they had done before. How many times have we heard the story how something came about through some kind of network experience?
I heard a great presentation by Karen Stephenson last week, who has done some fascinating research on networks and how important they are to companies. Her arguments that companies don’t realize where the value of these social and innovation networks (amongst many others) exist and who have the key roles (including their teams) in delivering and bringing value into companies were quite illuminating. Now that we see companies restricting network movement as well as redundancies without understanding where this value is within their companies will see some companies at a real disadvantage in surviving and in the up-turn. Those that do will be much better placed to come out of this well and will leave competitors behind when growth returns.
Information flow is without question key to an organization’s survival, especially in challenging economic times.
This is why I have been so concerned about the problem of Information Overload, a $900 billion per year problem (to the U.S. economy alone.
Thanks to Information Overload, information does not end up flowing to those who either need it or would benefit from it. This can result in a slower response to the competition, missed opportunities, and throttled innovation.
Thanks for that Jon – in the past of course, information overload has always suffered from being an intangible cost – and thus easily ignored, especially during troubling times when, as you mentioned, it probably increases in importance and impact. However, I would agree that seeing companies starting to focusing on intangible issues like this would also constitute a diversion from looking at bottom line figures, and thus a potential indicator of a bottomed out market – do you happen to have any cases you can talk about of companies starting to actively address this issue currently?
-Boris
I agree Matt – again another good example of intangibles that companies need to focus on – however, how many companies are currently looking at finding ways of expanding their virtual (cheaper) networks? One would expect companies like Imaginatik et al – or at least open source versions of it – to start expanding in use as companies figure out cheaper ways to maintain network stability and exploitation – is that the case at the moment?
Hi Steve – thanks a lot of your comments! Very interesting to hear that your company too has been investing in new ideas and information flow during the troubling times, and like you, I’d like to believe that it is progressive thinking that’s driving this. I saw a research study sometime last year (apologies for not remembering the source, 3 months of personal travel will do that to your memory :p) – that talked about how the companies that have survived and thrived during and post recessionary periods are the ones who have consistently invested more money in innovative activities and processes than their rivals. Now I’ll be the first to point out that quantity of money spent on these activities is a poor indicator of the effectiveness of that spending – but it certainly says something for their commitment to developing new “stuff” and to taking advantage of panic stricken competitors to jump ahead of them whilst they’re all scrambling with cost reductions. Here’s hoping the ideas EMC collected result in some great new offerings!
Boris
I certainly see it that way Boris. I think we will see more virtual networks being forged between companies and other stakeholders as the core is ‘prunned’. Companies just wont have the infrastructure to deal with everything and will have to extend to regain stability. Most of my conversations these days are not about the core but how a company can work with its external networks – I predict this demand is only going to get bigger.
Boris, Interesting that in discussing information flow as a resolution to the current recession that the bottleneck of information overload becomes the focus of the discussion. Addressing the need for filtering what is important and useful for each individual as networks explode creates exponential diversity of options. Quality is what matters, but how can you identify much less trust any specific resource. Specialization creates so many tiny threads of connectivity it becomes difficult to determine what kind of fabric is being created, the integrity and utility of the cloth comes into question and without foundation resolution or progress is stymied. If we measure value by addition at what point do we establish specific beneficial dependencies? Check the box mentalities and short term thinking are reactions to prevent overload. Ideas are only tools until executed and proven valuable.
Agreed David! Even more interesting is that a lot of these issues are the same ones we tackled back in the late 90’s when “knowledge management” was the big topic – and “information overload” was such a hot spot. The only real difference now is that within the information flow world we’re looking beyond the intellectual capital of a company’s employee base – to a concept of global intellectual capital – and the social tools we have today have made this capital much more accessible and readily available than ever before…have we/are we coming back round full circle maybe?