Wednesday, April 23, 2014

Thanks to porn...

Alright, so yes, I'm going to talk about porn, but only partially to make you pay attention.

Michael Porter and many other management "gurus" out there would have you believe that if you plan well, understand your environment (via competitive analysis, an alignment of your market with your strengths, etc.) and execute your strategy correctly (translating, adapting, and  sustaining the strategy well), that you will be successful.

I think that while certainly, companies need to perform these analyses and execute their strategies as completely and capably as possible, this does overestimate the ability of us, as mere mortals, to control matters. There are and will always be black swan scenarios. Or even normal scenarios that just tip the other way, and destroy a company in the short-term. Yes, foreign policy analysts could detect the signals that Russia was going to go after the Ukraine (especially after that Georgia incident...)-- but there are not always times that we can know the future. What if he'd gone for Belarus instead? Does that mean that they'd read the signals incorrectly? Or just that we can't always perfectly predict complicated matters of strategy?

Porn has had a huge hand in tipping the situation in one direction vs. another, particularly - and not surprisingly- in the media industry. A widely cited example of this is Betamax. This was a technology released a year before VHS, and widely believed to be better technology than VHS. However, VHS overtook Betamax in the 80s, and never looked back. This was in large part due to the porn industry: it produced videos in VHS instead, thereby popularizing, if shamedly, the VHS. In the same way- with less abashment- the porn industry panned the HD DVD, instead giving way to the Blu-Ray format.

The porn industry could very well be seen as contributing to the fall of AOL via AOL Instant Messenger (AIM), given its contributions to live chat. The popularity of AIM in the late 90s was huge-- but who wanted to keep typing "a/s/l" in weird chat rooms when they could go to pay-for-play video chat? (Skype and Gchat quickly followed, decimating AIM's community with the exception of some old people that had never really used anything more than the mail feature of AOL.) -- As an aside, many things contributed to the fall of AOL- but its loss of popularity is certainly prescient among them.

Porn is cited for driving innovations and popularity of other technologies, chief among them The Internet the list also includes broadband, spam, malware, streaming, and electronic pay systems. Without this relatively overlooked segment, usability and the speed to market of internet technologies would be very different today. Who knows how many of these have killed incipient technologies or changed the market in a way that a company could no longer capture it with its current strategy, regardless of how well implemented? Maybe companies should be looking to porn as a driver of specific technologies, or as a source that makes their market more adaptive, in order to better analyze their current strategic options.

Are these just examples of disruptive technologies embraced by a quiet majority? Is the lesson that these industries should be looking more to porn? Or do you, like me, believe that Michael Porter and cohorts are just excellent BS masters, and that we can't quite control our destiny to the extent described in their strategy articles?


Sources used but not linked above: 
http://gizmodo.com/5800437/remember-when-aol-instant-messenger-was-our-facebook?tag=aim
http://dupress.com/articles/dynamic-strategy-implementation-delivering-on-your-strategic-ambition/

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