One of the “after dinner speeches” that I give is called “My Five Revolutions” based on the experiences that I have had helping to launch or proliferate major new technologies including home video games, personal computers, cell phones, the Windows operating environment and the Internet. Unlike Al Gore, I don’t claim to have invented any of these technologies but I was part of a small group of people who was working in all of these industries before they became mainstream. By spending thirty years (jeesh did I really say that?) on the front lines of innovation, I have had a chance to see a number of trends, cycles, and fads run their course. Each is very different and requires a significantly different response from your company. Reading them right gives you a huge opportunity. Reading them wrong costs you money and may cost you your company.
Trends, Cycles and Fads–What’s the Difference?
There are three types of environmental change that come at your business: trends; cycles; and fads. People often use the words interchangeably but they are fundamentally different and require different responses. Trends are fundamental changes in the long-term dynamics of a business. They may have fits and starts and ups and downs but the long-term trend is relentless. Cycles are disturbances caused by normal market swings or, more often by economic cycles. Think about how the sales of SUVs is affected by the price of gasoline. Finally fads are those inexplicable manias that sweep through society like a thurnderstorm on a hot afternoon. All sound and fury and then gone. Acceptance is sustained not by intrinsic merits but by a form of peer pressure–people do it because “everyone’s doing it”. Occasionally, though rarely, one type of change is transformed into another.
Frankly, I’ve never liked playing fads. They are a game of chance and too ephemeral to be the basis of a business with any real value. With cycles, the key is leverage them on the way up and to cut costs quickly on the way down.
The five technology revolutions that I have been part of represented fundamental long-term changes in business and society. Significantly, these trends are rooted in real human needs that are unmet with current solutions. Sometimes though it takes people a while to figure out how new technology solves old problems.
No one wanted PCs or cell phones
In 1977, I did market research on the first personal computers. No one was interested. Actually the same thing happened in 1984 when I researched early cell phones. Ditto for Windows and the Internet. So what happened? Eventually people realized that PCs could free them from the tyranny of the IT department and that cell phones could keep them from standing in the rain using dirty pay phones. With increased sales volume, prices came down and more supporting accessories and applications were developed. Then adoption increased again and the virtuous circle took off again. At the start of every trend, industry leaders have the opportunity to participate. Yet they rarely do. Incumbents worry about competition from “guys like us” and miss the bigger threat from the outside. At one time IBM focused on the BUNCH (Burroughs Univac NCR Control Data Honeywell) as their primary competitors. Even though they triggered the rapid growth in PCs, they did not realize that they were unleashing a major sea change in how companies manage information.
This Trend And What You Can Do About It
As you read this website, you are part of a trend. People are getting more and more of their information online and less of their news in print or on television. That’s how they’ll find their mate, their apartment, their next car and their next job. Your customers and prospective employees are better informed than ever before.
Think about how the proccess of buying cars has changed. Now the customer walks into the dealership knowing the True Market Value of the car they are buying and of their trade-in thanks to Edmunds.com.
How should you respond to this? First, don’t confuse this trend with a fad or a cycle. The toothpaste is not going back into the tube. Learning how to market your business on the web and how to make your company visible to the search engines is a core skill for every business manager. You also need to view the web as your primary tool for recruiting and keeping great people.
We”ll Do Our Part
AllBusiness.com has committed to a year-long effort to help you master these skills. We’re going to show how you can master search engine optimization, search engine marketing, and e-commerce and web marketing. We’re also going to show you how to build and manage your team better using the web. Part of this effort will be case studies of other businesses with challenges like yours. We’ve had more than 300 companies apply to be part of our “Six for ’06” business coaching program. We’ll announce the winning companies during March.