Posted by Adam Gordon on Apr 30, 2012 in all, decision-making, innovation, leadership, managing uncertainty
Ninetendo last week announced a first-ever annual operating loss of 37.3bn yen (about $460m) in the year to March 31.
The company projected sales of 13m Wiis, but moved just 9.8m; and sold about 80% of forecast 3DS handhelds and 50% of forecast DS machines.
In industry foresight we know that projections are reliable when nothing fundamental changes during the forecast period. Where the underlying changes, the forecast becomes ridiculous, leaders look stupid, and investors lose money. That’s why we use non-extraplative tools more suitable to complex situations.
So, what has changed? Rapid, worldwide smartphone and tablet adoption of course, particularly Apple devices. A bespoke hardware-based game company becomes vulnerable when users can play desirable games on the same handheld they use for everything else.
This is familiar ground in media-entertainment, a field that defines itself in part via the ongoing strategy debate of bespoke platform vs. open systems. Yes, if you can win with your own platform, as occurred with Wii, that’s beautiful. But the aggregators like iOS and Android stalk you.
Nintendo is not going to suddenly turn around and license Super Mario and other games for non-Nintendo devices, not least because it has a $14bn cash cushion as a result of the Wii success, so no need to panic.
Cannibalization
When it comes to leaders managing the future, cannabilization of past success in the service of future success, is the hardest thing to do.
But, even leaving aside platform aggregation, there are underlying market change-drivers that are far bigger thanNintendo, that will vigorously shape its future outcomes, which suggest bold leadership moves are required.
These are, first, the inexorable popular drive to ‘social’ – can I easily share what I’m doing, or playing, with others? The second is ‘mobile’ – can I do this wherever I am, and keep doing it as I move through my day and my week?
Reuters reports that a recent survey by mobile gaming site MocoSpace asked 15,000 gamers where they gamed: 53 percent said they played in bed, 41 percent in the living room, 72 percent commuting and 5 percent on the commode.
What goes from the bedroom to the bathroom, to the car, to the office, to the gym, the restaurant, and beyond? The one and only smart phone.
Experience shows that an apparently small leadership move that misses the future can quickly eviscerate a company, no matter what its cash position. Just ask Kodak, or Blockbuster, or even Encyclopedia Britannica. $14bn today… gone tomorrow.
Cursed Pages
Nintendo of course has its plan to turn things around. The company says it will continue its strategy of “Gaming Population Expansion,” growing its market by offering products across age, gender, and gaming experience segments. Later this year it will release the Wii successor, Wii U. Hoping a weaker yen and new games, including Mario Party 8and more Dragon Quest from Square Enix will boost sales, Nintendo’s president Satoru Iwata expects the business will return to profit next year.
In other words, business as usual. But, I look at the new “Spirit Camera” game blurb and I read… “terror from all directions,” “haunted visions,” and “cursed pages,” and I think, yeah, that about sums it up.
read morePosted by Adam Gordon on Apr 4, 2012 in all, Crowdsourcing, emerging markets, innovation
As of today, April 4, the Rockefeller Foundation and Institute for the Future (IFTF) are in the middle of hosting a 48-hour global online Catalysts For Change game that seeks new ideas for global development and poverty reduction.
The organizers are hoping for solutions that will advance prosperity for vulnerable communities worldwide.
Truth is, well-meaning organizations have been tackling poverty for a hundred years–and have spent trillions on it–yet there are still 1.2 billion people living in dire conditions across the globe. The problem is bureaucracy, patriarchy, and kleptocracy in innumerable permutations, and all-too-frequent Western government support for morally and politically bankrupt regimes.
But, yes, to a certain extent one might say it is also lack of fresh thinking, and it is fresh thinking the game is looking for.
Catalyst For Change players introduce idea “cards” of 140 characters or less, and can also build on one another’s ideas. On any card, one can play four kinds of response cards:
Momentum: If we take this path…what happens next?
Antagonism: Disagree? What’s wrong with this path?
Adaptation: Yes, and…how might this path play out differently in your community or region?
Investigation: Curious? Ask or answer a follow-up question
Each card chain improves on ideas as players debate them, extend them, and pose questions about them. The game encourages elaboration and pushback: the longer the chain the more points players win.
The powerful and relatively new thing here is the use of online gaming to enable widespread real-time participation in future thinking. It combines two aspects (1) a platform that allows diverse global interaction and a resulting “wisdom-of-crowds” benefit, and (2) an environment with enough fun implied to get people to be there at all.
Online interface and back-end processing power allows simultaneous multi-user input and real-time multiplication of idea-effects. This is a powerful new tool for thinking ahead, one which has more-or-less wiped out need for comparatively static Delphi studies.
Kathi Vian, IFTF
IFTF, in Palo Alto, CA, has been the pioneer in crowdsourced foresight, particularly via gaming, under Kathi Vian —who led IFTF’s “massively multiplayer” forecasting game Superstruct, and also co-designed the company’s social forecasting platform Foresight Engine on which the current game is hosted. Co-designer of Foresight Engine, and designer of the current game is Jane McGonigal, Chief Creative Officer for SuperBetter Labs.
The game was officially launched yesterday by Dr. Judith Rodin, President of the Rockefeller Foundation via a webstreamed conversation with Bay-Area guests, Mitch Kapor, Jane McGonigal, and Shannon Spanhake.
The game ends tomorrow, Thursday, April 5 at 11:00 EDT. To play, go to play.catalyze4change.org or otherwise follow along on blog.catalyze4change.org or www.facebook.com/catalyze4change or @catalyze4change.
read morePosted by Adam Gordon on Dec 21, 2011 in all, emerging markets, innovation, leadership, management
Stan Litow, Director, IBM Corporate Service Corps
Warren Buffett surprised pundits when he revealed last month that Berkshire Hathaway had acquired a $10bn, 5.5% stake in IBM. “They have laid out a road map and I should have paid more attention to it five years ago… They’ve done an incredible job,” Buffett said during an appearance on CNBC’s Squawk Box.
Many of the dimensions of this incredible job – transition to service orientation and renewal of company culture, initiated by Lou Gerstner and advanced by just-retired CEO Sam Palmisano – have been well chewed over.
But one subtle and no less important part of Palmisano’s legacy has yet to play out. This is the renewal in leadership development itself at IBM, specifically via the IBM Corporate Service Corps (CSC).
Once upon a not very long time ago, IBM, like other classic Western multinationals, structured executives into the field for ex-pat experience in the form of long-term postings: a 1-3 year tour of duty in some far-flung office before recall to the mother ship.
The CSC format, since 2008, forms teams of 6-10 young executives from IBM offices around the world and sends them to emerging market locations where they work intensively for a single month on a high-profile local assignment.
“It’s not a business trip” says CSC Director Stan Litow. “They rent a house, live together, focus 24/7 on the problem. They make an impact. They learn to deliver value on the ground as a team in a global situation.”
CSC programs have run in more than 25 emerging market countries, from BRICS goliaths to African minnows such as Kenya and Tanzania. In Kenya, for example, CSC provided advice on implementing a “Digital Village”; modernized the postal service; and establish a framework for e-government and electronic voting. In Tanzania, CSC helped develop an eco-tourism industry, and has put cutting edge technology into local universities.
About 200-500 IBM employees and executives are in the program at any one time. Teams are composed to represent all major skills in the company: information technology, marketing, consulting, finance. They spend about 2½ months in prep time, and the same afterwards in various forms of debriefing and handover to a new team.
Having this many people on a 6-month ‘sabbatical’ while delivering free consulting expertise and project implementation worth an average $250-400,000 per project, means IBM is footing a big upfront bill. But, aside from the venerable calling of doing good things with technology in the developing world, Litow maintains the costs are handsomely offset by benefits to IBM.
Cost-Benefit
First, the company builds relationships and goodwill on the ground, and so gains a foothold in growth markets, which becomes a platform for follow-on work. Around 30% of IBM revenue is international, a percentage expected to grow rapidly.
Second, program staffers – future IBM leaders – get skills enhanced and perspectives built, in globally sourced teams, via practical immersion, which all closely duplicates the demands of expected future paid assignments. Since inception, 1,400 executives and staff have been through the program; a reservoir of talent that has “been there.”
Third, the program attracts and rewards aspiring talent. IBM gets 8-10,000 internal applications for the few hundred spots on offer, evidence that CSC is popular and relevant in-company. According to Litow, CSC opportunities help retain executive staff and attract new talent to the company.
The positive cost-benefit of the program for IBM is perhaps most proved in requests from a half-dozen other companies – including FedEx, Deere, Dow Corning, Novartis, PepsiCo, and Best Buy – for help in putting together similar programs, or to piggy back on IBM’s program.
In mid-2011, IBM announced a partnership with USAID’s Center of Excellence for International Corporate Volunteerism to provide resources for companies that are interested in pursuing strategies based on IBM’s model.
Posted by Adam Gordon on Jul 5, 2011 in all, emerging technologies, failed predictions, innovation, technology change
Mansueto Library: robots and underground storage vaults
The University of Chicago’s new Joe and Rika Mansueto Library is, it seems, a caricature of futurism. Under a vast glass dome sits an 8,000 sq-ft reading room, complete with flat screens, a circulation desk, ergonomic furniture, and … no books.
Turns out the books, all 3.5 million of them, are packed efficiently – by size – into 2 x 4 x 1.5 ft metal bins stored in vaults below ground. If you need one, you go tap-tap at your keyboard, which sends enormous rolling robots to fetch the right bin and crank it up to the circulation desk, allegedly in less than 5 minutes.
A number of things are interesting here, the first being that this “library-of-the-future” is about paper books at all. In a Google-digitize-the-planet world where Amazon says that more than half of its books sales are for the Kindle, the University of Chicago’s $81m bet on “dead-tree” storage and retrieval is quite a bet.
It is a good bet. Hype aside, it will be still many generations before “paperless” is any kind of on-the-ground reality, as paperless office evangelists have found out. Imbedded human habits and systems just don’t move that fast.
But systems do. Ingrained human preference for tactile objects doesn’t mean that storing, finding, and retrieving of the objects can’t be improved overnight, which is the essence of what is going on here. The automated search-and-retrieval system creates efficiencies as all automation does – by dumping human beings out of the process. Specifically, it copies advanced manufacturing systems such as those used in automobile assembly plants, which effects just-in-time finding and retrieving of components this way.
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The first industry foresight principle at work here is this: where the same problem applies, a solution that creates value in one industry will turn up to create value in another, even if apparently unrelated. Innovation doesn’t respect sector or management thought silos. Ergo, leaders who are able to comprehend challenges at a systemic level and look across industry boundaries for solutions that already exist elsewhere, find the future before competitors do.
Second, although the book definitely survives in the University of Chicago’s forward view of the library, note that the solution is not simply head-in-the-sand “nothing changes.” What changes, they are arguing, is the system aroundthe book, the storage, finding, and shlepping thereof. Moreover, the new system is a radical departure. It turns the status quo upside down, to make the physical book a relatively minor element of the online system, not the other way around.
Finally, the solution on offer is one more piece of evidence that inexorable advances in single-purpose (non-human-like) robotics and sensors are quietly yet absolutely changing the world around us. If we drop the Frankenstein image, and see robots for what they really are in our time, that is, sensors + wheels + software, many imminent changes in industry and society come quickly into focus.
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Posted by Adam Gordon on Jan 18, 2011 in all, innovation, leadership, lifestyles & values, technology change
A photo exhibition, Facing the Impossible, opened at the end of last year in New York. (425 Broadway, 5th floor, NY 10013; to 28 February 2011.)
Just another photography exhibition in NYC? Well, not quite. It’s an industry foresight story too – the survival and revival of Polaroid analog instant photography in a digital world.
Polaroid, for those too young to have heard of it, is a camera system that produces a picture in a few minutes out the back of the camera, no darkroom required.
Polaroid US brought out its first camera in 1948. The company filed for bankruptcy in 2008, closing down its last production plant in Enschede, Netherlands, making 180 employees redundant. But a group of entrepreneurs and ex-employees calling themselves The Impossible Project acquired the plant and have set about making (and improving) Polaroid film. The company reports that 500,000 packs of film, retailing from $15 to over $100 per pack for Polaroid cameras was sold this year. Revenue for 2010 was more than $10m and the number of ex-employees on staff has grown from 10 to 30.
Now a $10m turnover and 30 employees is hardly a business number of consequence for the world. The point is, conventional wisdom says it should not exist at all. Even Kodak stopped making Kodachrome this year, after 70 years. How can anyone be growing sales of analog film in 2010?
The Message in Red Ink
One might say Polaroid US head office could be forgiven for assuming digital media completely trumped its product and exiting the market. But should shareholders be forgiving? Yes the company filed for Chapter 11 bankruptcy amid various complex management issues, but at its heart, red ink is always the product of inability to see and adapt to the future in time (or poor execution, or both.)
What The Impossible Project saw, that Polaroid itself could not see, was that niche, expert, aficionado secondary markets often remain extant and lucrative well after the mass market has moved on. Of course digital photography is the mass product-and-service market of the future. But in the rush to the future, lucrative pockets of specialization remain and this is one of them.
This principle can be seen in the media industry as a whole. Records and record players have not gone away in a CD and iPod world, they have moved to aficionado markets. Printed books and magazines are going this way too. They won’t disappear but they will be a format for niche uses. This is true across other industries and across history too: transportation, for example, has seen eras when horses and bicycles were primary modes of working transport. Their primary function changed, but this opened up lucrative secondary, leisure, and niche industries.
In adapting to the future, opportunities exist in taking retiring mass-market solutions into new industries, or upmarket into niche areas of the same industry.
Creative Adaptation
The irony in this story is that the Polaroid camera and film was always a niche product. It fought giants Kodak and Fuji for a piece of the mass market in analog photography but never became a mass-market solution. (Its competitive advantage was instant-ness; its disadvantage was price and relative quality.) So it didn’t require any great “shift in DNA” by the company leadership to make the moves that Impossible has. But it did require a leadership willingness towards industry foresight and creative adaptation.
Impossible is doing the basics of providing (and improving) film to Polaroid’s installed base of users. It estimates that 300 million working Polaroid cameras still exist. This is the legacy factor. The future doesn’t move as fast as we think.
But more importantly, Impossible is also actively building a future for itself in its new niche — broader artistic and creative industries. In addition to its project space in New York, it has one in Tokyo (and had an exhibition during the Arles Photography Festival.) It is using these spaces as hub for soliciting alliances across visual creative media, promoting analog instant photography in its relationship with other creative industries, including growing beyond Polaroid’s static image legacy.
Promotional projects during the year included the creation of a special film edition with HUGE magazine (Japan), participation at Photokina 2010 Germany with the first 20×24 camera, and cooperation with the band The Decemberists — all growing the future of the product, reaching out to new users and a whole new generation of users.
Posted by Adam Gordon on Dec 16, 2010 in all, innovation, lifestyles & values, social change, technology change
I recently got caught in front of a video on the Future of Money shown at the banking industry conference, Sibos (SWIFT International Banking Operations Seminar) in Amsterdam.
Source: tradefinance-jobs.com
I’d give the video a miss. It’s Gen-Y dude-immersion to the like, max, and what co-producer Venessa Miemis has to say is much more effectively communicated on her site, which is:
“All the decisions about where I spend my time, attention, and money say something about me. For example: I buy organic food from local farms and products and services from local businesses —(I believe in building resilient communities by supporting local economy.) I have a garden, I fish, I hunt, I brew beer— (I find empowerment, gratification, and joy from understanding where food comes from and how to get it myself.) I recycle—(I understand that we live on a planet with finite resources and I want to reduce my impact.) I don’t shop at Wal-Mart. – (I prefer not to buy products that were produced in a country where people’s labor had to be exploited so I could “save” a dollar.)”
The well-identified trend to ethical consumption is at work here, but Miemis is actually expressing a far bigger consumer trend that in industry foresight workshops I call “identity-building consumption” (which may or may not be ethical.) Ref: “All the decisions about where I spend my time, attention, and money say something about me.”
Miemis continues: “Now, what does my bank say about me? Nothing.”
How might a bank go about articulating customer identity?
“Transparency… All I know about the way my bank works is that I deposit my money there, and then they take that money and go make money off of it. Where is that money going? Where is it being invested? Can I have control over how you use my money? Can I set a standard of where I allow you to invest my money, so I can be proud to say my money is being invested in green technology, or local initiatives, or anything that I care about?
“Intelligent Investing Opportunities… Show me opportunities where I can micro-invest in things I care about. Recommend ways I can save money on the things I already buy regularly. Show me how I can leverage my network and invest with a whole swarm of people. (Think Groupon for investing.) And then make each of these investments a part of my digital identity. I WANT people to know. I’ll wear it like a badge. Give me a service that empowers me to invest intelligently and in a way that represents the ethics I believe in, and I’ll tell everybody about it. This information will become part of ‘Social Credit Score,’ which will be more important than our current credit scores one day.
“Social Network Analysis for Co-Production Opportunities… There are a lot of people out there who want to cooperate and collaborate in order to manifest something together and make their lives and the world a better place. How do we find each other? Could a BANK help hook us up and then provide us with the information and resources we need to take an idea to action? Could we display projects we want to work on that are socially responsible and environmentally sustainable, and the bank links us to the investors that can help actualize it?”
Miemes rails against how at Sibos her “Innotribe’s” manifesto was met with no more than a polite “there-there” pat-on-the-head from gray-haired bankers. That’s to be expected. But if there is a solid principle in industry foresight, it is that the next generation wins in the long run (and the long run is becoming shorter.)
Retail banking, like just about every other retail industry, is being sucked with new generations into Web 2.0, the “Social Web.”
And the Social Web is, fundamentally, a self- (and group) identity-building and identity-expression machine.
So the banking sector has to prepare for a near-term future where it plays an active role in the identity construction and identity articulation of its customers. Here they are shown some important ways to do it. That is, they have been gifted a blueprint of the future of their industry.
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