Ten years after

by Jay Cross on January 10, 2009

The Information Era has arrived. The Machine Age is over. The rules have changed. The sky has fallen in. Human resources are more important than natural resources, brains more important than brawn. Networks are connecting everyone and everything. Clocks run faster.

In this topsy-turvy world, few things are predictable. %&#* happens. Straight-line projections are almost certainly wrong. Absent a long-term perspective, we make decisions on the fly. We trade speed for quality. Most damaging of all, we respond to tomorrow’s questions with yesterday’s answers.

Tossing around on a sea of turbulent change, companies that can’t respond to new situations rapidly are sunk. People at every level must take challenges as they come and solve problems on the spot. Competitors do not afford them the luxury of getting approval from higher-ups or checking for compliance with procedures. To be successful, people must learn to learn. They must shoulder responsibility for learning what they need to know from their experience and from their peers. Not just in class. Always.

Learning has become a corporate survival skill. It is a line responsibility. Learn or die. Machine-age managers complained when employees had downtime because they were in training. Tomorrow’s leaders will understand that learning is not just another discretionary item. In the information age, innovation is the competitive advantage. Learning is the business.  That bears repeating: In the Information Age, learning is the business.

If you are growing impatient, jump ahead to the punchline.

Life cycles

curvesNothing lives forever. Every business has a life cycle. Businesses are born, they grow, they prosper, they mature, they taper off, they die. Corporations used to pass away at 35 or 40. At today’s pace, they burn out more quickly. Half the Fortune 500 of twenty-five years ago are six feet under.

The only way to live beyond your normal lifespan is through your offspring. Your children carry forward your DNA. Successor companies benefit the parent organization’s stakeholders.

The trick is to hand over the reins to the next generation when you’re about to peak out. It’s also a good idea to spawn several children to increase the odds that one of them will be a real winner. These “strategic inflection points,” as Andy Grove calls these transitional moments, arrive when conditions change and existing businesses do not adapt.

The coming of the network age is as big a change as any of us are likely to see. Bob Metcalfe, the inventor of Ethernet and founder of 3Com, said that however much hype you’ve heard about the web – the best thing since sliced bread or the printing press or sex or fire – whatever you’ve heard is simply not enough to describe what’s going on.

In the face of massive change, it’s tempting to sit things out, make a few improvements here and there, watch the 1,000 channels of television when they arrive. As the MIT Media Lab’s Nicholas Negroponte said, “Incrementalism is the greatest enemy of innovation.”

Most businesses have wrung most of the productivity benefits out of their processes. A great year of improving efficiency in a mature business yields what? A 20% improvement on the bottom line? And what can an entirely new way of business, one in tune with the rhythm of e-commerce and the Internet bring in? A 100% improvement? 200%? Revolutionary change calls for revolutionary action. It’s time to lead the charge against the reactionaries.

A corporation investing in training is analogous to a consumer buying a new computer. Damned if you do and damned if you don’t. If you buy the PC now, you will be disappointed when you see the same machine for half of what you paid only a year later. If you forego buying the PC, you don’t gain the advantages a fast, powerful computer can bring to your work and your fun.

Similarly, if you take the plunge investing in performance infrastructure now, you may see equivalent solutions later on for a fraction of the price. Or you may find that you’ve blown millions on dead-end technologies and projects that do not achieve their potential. But it you don’t invest, you may lose competitive advantage, put relationships with customers at risk, fail to meet your business objectives, decrease morale, and extinguish the flame of innovation.

Why is this a management responsibility?
Why can’t the Training Department handle this?

“We’re a Knowledge Business,” say an increasing number of CEOs. “Intellectual capital is more important than financial capital,” they say. “People are our most important asset,” say managers. “The ability of our people to learn and grow is our only sustainable competitive advantage,” say the management consultants.

Corporations must make revolutionary changes to prosper in the new economy. Is the word “revolution” in this context mere hype and bluster? We think not. Consider what businesses must do to win a seat at the riches of the Information Era. Daniel Goleman,  author of Emotional Intelligence and Working with Emotional Intelligence, expresses the challenge this way:

”In the Industrial Age most work was organized hierarchically, and individual responsibility was replaced by systemic controls. Only relatively few people at the top needed to be creative, imaginative and enterprising. Most workers had to be good only at performing highly precise, structured and repetitious tasks necessitating a high degree of discipline but little or no personal initiative.

Understanding by employees of the total business process was deemed unnecessary and actively discouraged… Whereas, today’s successful businesses tend to be highly decentralized and rely on continuous innovation and employee involvement at all levels. Almost all workers have now to be able to think for themselves, take personal responsibility, identify new opportunities and training needs, and understand the relationship of their business to that of others. Workers must be able to adapt rapidly without waiting for external direction.”

Seismic change cannot be delegated. A major purpose of this project is to paint a picture to help leaders how to realize the potential inherent in their people.

What is this Age of Networks and what does it mean to me?

More than twenty years ago, business visionary Stan Davis [1] described a future where no one has to wait, distance disappears, and matter no longer matters. Time shrinks to real time. You can see what’s going on without going there. Ideas replace physical substance. Stan’s crystal ball was right.

Ten years ago, Davis’s book Blur, brought the situation up to date, noting these hallmarks of the age of networks:

  • Speed and agility win out over stability.
  • Everything is connected to everything else [2].
  • Intellectual capital outstrips financial capital in importance.

The result is “blur,” a chaotic world moving so fast that it’s impossible to focus. Most of our assumptions about how things work are out the window. Nothing is predictable [3].  Seat-of-the-pants decision-making crowds out careful planning.

Rosabeth Moss Kanter likens the age of networks to the croquet game in Alice in Wonderland. Think of the mallets as technology and the croquet balls as customers.You discover that your mallet is actually a flamingo that moves its head whenever you try to strike the ball. The balls are rolled-up hedgehogs that run around whenever they feel the urge.

Unsettling? You bet. Crazy? No.

Underneath the confusion, the fundamentals still apply. Love customers. Do a better job. Outperform the competition. Enjoy life. And what about those unpredictable flamingos of technology? Don’t worry; be happy. Technology is not the driver here; people are. Relationships with people drive the age of networks. The technology objective is to select the best flamingos to build and strengthen relationships with customers [4]. Some of the rules of the new game:

  • Nothing is ever finished. Learning is forever. No one ever graduates. Everything flows.
  • Abundant information obsoletes the concept of rank. Everyone bears responsibility. Information empowers the individual.
  • Customers and employees are two sides of the same coin. In a learning relationship, their roles blur into one. Learners are customers; customers become learners. Focus shifts from inside organizations to outside
  • Leaders gain control by giving control.
  • Chaos happens. It’s a nonlinear world. Miniscule changes trigger monumental events. Things are going smoothly until the straw breaks the camel’s back. Andy Grove calls these moments “inflection points.” Economist Thomas Schelling calls them “tipping points.”

Phase change

Forbes Publisher Rich Karlgaard asks, “When does one rock rolling down a hill cause an avalanche?When does freezing water turn to ice? When does audience clapping coalesce around one rhythm?”

In the Age of Networks, customers can vanish and knowledge workers cross the chasm in the blink of an eye. To cope with discontinuous change, businesses must continually innovate and be light on their feat.

Convergence works both ways. It’s not as if the monolithic TimeWarnerMicrosoftCisco Consortium is going to provide all the entertainment, training, phone calls, and news you’ll ever need. Au contraire, the common denominator of digits enables one to deconstruct industries and “value chains” whose parts were Epoxied together inextricably in the analog world. In the digital world, we can reassemble those parts in new configurations, cutting  out the middle man or building new entities from these business Legos. Networks, human and electronic, are the glue that holds all the pieces together.

I believe that the moment is near when, by a procedure of active paranoic thought, it will be possible to systematize confusion and contribute to the total discrediting of the world of reality. – Salvador Dali, 1930

What happens to traditional training?

Industrial Age Age of Networks
Training
Passive
Listen
Alone
Teaching
Just in case
Classroom
Absorb
Graduate
Learning
Interactive
Learn by doing
Community
Apprenticeship
Just in time
Anywhere
Experiment
In perpetuity


Lessons of e-Business for Learning

Customer loyalty is the goal. Make your outposts on the web “sticky” so you can hold
on to them.
·         Make learning irresistible.

Do what you do best & outsource the rest.
·         Most companies should outsource development, delivery, and maintenance of training.

Not all your customers are equal. Weyerhouser knows which bring in the big revenues and which don’t. Then they prune.
·         Focus training efforts where they’ll generate the largest return.

Technology is not always the impediment. In some cases, it’s stodgy corporate culture. “For many older exectives, converting to e-business is like changing their religion.”
·         Organizations have to put the fear of God in the way of executives who support of “training as usual.”

The greatest danger is that business units will act independently, and the results will be piecemeal. The last thing you want is tack-on technology.
·         Optimal learning requires a systematic, big-picture apporach.

By offering new services, companies not only expand sales but also install customer loyalty.
·         By offering new courseware, companies not only expand learning but also instill learner loyalty.

“If you’re surviving on schmoozy sales relationships, you are not going to make it. The buyer also wins.
·         Learners are right. They will choose the form(s) of learning that fits their needs from a menu of approved learning spaces. Freedom of choice and time allowed to learn will attract new talent. Learning opportunities will be considered compensation.

Don’t rely solely on an e-business cyberstore. There is synergy among channels. The more successful retailers supplement e-commerce with direct mail, call centers, stores, advertising, and buyer’s clubs. Many people will not buy without interacting with a human.
·         Don’t rely solely on online learning. Supplement it with on-job learning, coaching, mentoring, apprenticeship, buddy systems, study groups, electronic libraries, and opportunities to try things out in the “real world.”

Personalized customer service pays. Furniture.com began providing operator assistance to customers buying by phone. This took 20% longer than purely automated learning but yielded 50% higher ticket sales.
·         Add a human touch to automated learning. Employ guides to help learners make choices and link up with the right resources.

Amazon’s model is 1. customer focus, 2. customer-centric, and 3. customer obsession.
·         Effective training focuses on the learner, is learner-centric, and obsesses on learners.

Organizations

Charles Handy: “Corporations should be membership communities because I believe corporations are not things, they are the people who run them.”

Why should financiers have such power and talk the language of ownership just because they provided the money? People don’t own people and corporations are people. It’s all part of the Machine Age model.

In order to hold people inside the corporation, we can’t really talk about them being employees anymore. To hold people to the corporation, there has to be some kind of continuity and some sense of belonging. We also have to talk about commitment, but we have to talk about it both ways–corporation to member, member to corporation. With the way corporations are evolving–with all this virtual business and all these alliances–my worry is that unless we develop a more sophisticated model of the organization, the corporation will become just a box of contracts with no commitment on anyone’s part at all.

Just as documents have changed from linear,  one-step-after-another to jump-around, multi-pathed hyperstructures, organizations are shifting from rigid hierarchies into loosely linked, flexible hyper-organizations.
hyper

Moving beyond threaded e-mail and videoconferencing, future collaborative tools will combine historical data, predictive analysis and real-time discussion to create a decision-making process that is more rapid and better informed.

Network bandwidth growth will be multiplied, in effect, by sophisticated compression algorithms and hardware that will make rich media streams fit into available channels. Content analysis tools will make it easier to identify relevant experience and expertise.

People

Knowledge is power. Most people are reluctant to give it up. But sharing knowledge with one another is the key to leveraging intellectual capital. In the Information Age, everyone in the organization is a learner and a mentor and a coach. To get ahead in the world to come, organizations must respect and incent the recording, sharing, and intake of learning. Inertia will drag many old-style companies to the grave.

America’s school system grants high school diplomas to people who cannot read a bus schedule. Half of a high-school grads lack the fundamental skills required of an entry-level knowledge worker. Corporations of the future will often need to train their own in basic skills. Underskilled employees will flock to corporations with respected educational programs.

Workers are learners, and learners are workers. The two activities are becoming indistinguishable. When things didn’t change much, workers could get by with periodic updates. Now that change is rampant and new information gushes forth day and night, learning is continuous. No longer can organizations imply that learning has lower status than work – by asking people to study on their own time, not to read books or kick back to reflect between 9 and 5, and to keep the kibitzing in the coffee room to a minimum.

Today, all knowledge workers are free agents. Tom Peters counsels readers to think of themselves as individual corporations. Fast Company touts You, Inc. Even executives have said, “We are all temps.”

Progress has brought us longer hours, less security, more stress, shorter vacations, and unhappy lives on the job. Recognition that something is not right will fuel a new way of thinking about how organizations should work.

Waves of screenagers, accustomed to computers and electronic games from infancy, are joining the workforce absent the blinders of their parents. Some youth will often surpass the productivity of their elders in short order.

Ubiquitous information makes people at all levels responsible for making unaided decisions. “An individual without information cannot take responsibility; an individual with information cannot help but take responsibility.”[1] Employees become members, stakeholders.

As people’s performance and potential for performance becomes paramount, training will cease to be a staff function. Creating and maintaining an innovative, flexible, challenged, and enthusiastic workshop will become a basic function of management.

Recognizing that soft skills (or “emotional intelligence”) count twice as much in success as technical competence and IQ combined, performance improvement initiatives will make much more use of collaboration, team learning, small group activities, etc. Medieval (but generally accepted) accounting principles will be shoved aside by measurement systems that treat knowledge as an asset, training as an investment, and inflexible infrastructure a liability. Reports on customer relationships and what’s happening outside of the company will become more important than internal bean-counting.

Managers become leaders and coaches instead of watchdogs and controllers. In most industries, they will be paying more attention to knowledge than to hard assets, inspiring rather than cracking the whip. Groups will find that their front-line members know more about how the company’s working than their insulated supervisors.

Customers increasingly pump their own gas, get answers to their questions without asking others, and interact directly with corporate systems. The more the customer knows, the more overhead they lift from the corporation’s shoulders. “Training” extends outside the firewall.

People will work where it’s convenient to work. Offices will be used for meetings with customers and colleagues. Most “office work” will be done from people’s homes or nearby cube farms. When you’re not tethered to a phone line, and hi-res telecom brings a co-worker on the other side of the world as close as someone down the hall, geography becomes immaterial.

Oversimplifying the work of Harvard Professor Chris Argyris, people will be more authentic and honest. Valid knowledge crowds out dysfunctional BS.

Corporations need responsive, proactive, engaged, problem-solving people who continually learn how to better serve their customers. What they’ve got today is often an organization made vulnerable by resting on lip service rather than reality, dated systems held together with Scotch Tape and bailing wire, and outmoded schools of thought.

Technology in a nutshell

  • All of us will be connected to the net all of the time.
  • Broadband and fiber will put video on most desktops in the office and at home.
  • Bionic ID and virtual private networks will make the net secure.
  • Wireless connectivity will free us to work wherever we please.
  • Application software and files will migrate from the PC to the net.
  • “Thin client” devices and information appliances will replace PCs.
  • Software agents will continuously crawl the net, feeding
  • information to our personal portals.

The Punchline

”As the century closed, the world became smaller. The public rapidly gained access to new and dramatically faster communication technologies. Entrepreneurs, able to draw on unprecedented scale economies, built vast empires. Great fortunes were made. The government demanded that these powerful new monopolists be held accountable under antitrust law. Every day brought forth new technological advances to which the old business models seemed no longer to apply. Yet, somehow, the basic laws of economics asserted themselves. Those who mastered these laws survived in the new environment. Those who did not, failed.”

A prophecy for the next decade? No. You have just read a description of what happened a hundred years ago when the twentieth-century industrial giants emerged. Using the infrastructure of the emerging electricity and telephone networks, these industrialists transformed the U.S. economy, just as today’s Silicon Valley entrepreneurs are drawing on computer and communications infrastructure to transform the world’s economy.” [5]

None of the ideas in this post are new. In fact, I wrote them ten years ago.

When the web was giving birth to eLearning, my gut told me wrenching changes were in store.  I spent months exploring scenarios for a future I naively thought was a scant three years away. (That’s why the ten essays I excerpted for this post look back at the future from the vantage point of 2002.) I thought the opportunities for improvement in learning and improvement, fueled by mushrooming networks and exploiting services too cheap to measure, were going to drive businesses into a new era in record time. I was so optimistic, I even figured that Y2K would push for change in the right direction:

By 2002, we’ll have Y2K behind us, with no financial meltdown or panic in the streets. The few glitches that do arise will have made software developers more holistic and users, more cautious. Looking back, we’ll see more and more outsourcing of training. Patching up and testing systems before 2000 ate the capacity to support training initiatives in-house. Training and marketing departments were forced to bypass in-house LANs for support. They turned to programs delivered over the Internet. Frustrated by firewalls, many employees shifted training activities to their homes. As the frenzy of Y2K passed, many corporations found that outsourcing both development and delivery of training worked. Employees who had been too harried when trying to learn on the job found the barking dogs and shrieking children at home almost soothing in contract.

When I look back at what has taken place over the last ten years, I find that my vision of the future has held up remarkably well. The problem is that a lot of it is still in the future. I woefully underestimated the power of paradigm drag. The industrial age may be drawing to a close, but many corporations are in denial. Their senior managers are operating as if the rules haven’t changed since the 1970s, and people they learned those rules from shaped their worldviews in the pre-computer boom times following World War II.

At the risk of mimicking the boy who cried wolf, once again I’m going to say that the sky is falling in. Really. This time I mean it.

legoworld

The corporate structure of yore is falling apart. My work this year will focus on reassembling the pieces of businesses in this window when the threat to sustainability has forced them to be open to change.

Want to join me?
Jay’s original 1999 essays

      1999 Age of Networks..> 09-Jan-2009 08:35  275K
      1999 Business.pdf       09-Jan-2009 08:36  210K
      1999 Frameworks for ..> 09-Jan-2009 08:36  126K
      1999 Knowledge Manag..> 09-Jan-2009 08:36  270K
      1999 Learning.pdf       09-Jan-2009 08:36  621K
      1999 Organizations .pdf 09-Jan-2009 08:36  187K
      1999 People.pdf         09-Jan-2009 08:37  160K
      1999 Research notes.pdf 09-Jan-2009 08:37  182K
      1999 Technology.pdf     09-Jan-2009 08:37  751K
      1999 eLearning.pdf      09-Jan-2009 08:36  172K
      Envisioning

[1] Stan Davis, Future Perfect, 1987. A remarkably prescient book. First use of the term “mass customization.”
[2] Kevin Kelly, New Rules for the New Economy. As Kelly poetically puts it, “a cloak of glass fibers and a halo of satellites are closing themselves around the globe to bring forth a seamless economic culture.” In an interconnected world, everything is relative.
[3] The Truth is not out there.
[4] Later in this report, we’ll look at a variety of playing fields to enable you to consider which work best in your situation.
[5] Opening paragraphs of Information Rules by Carl Shapiro and Hal Varian

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