Power of the Crowd– Ultimate Betrayal: When Wisdom of the Crowd Turns Into Madness of the Mob…

Much has been made of the wisdom of crowds; it’s the notion that the crowd often knows better than individuals… But when individuals in the crowd take their opinion from the crowd, the result is a feedback loop that drives the aggregate opinion ever further from reality, and it becomes more of a madness of the mob… According to Henry David Thoreau; the crowd never comes up to the standard of its best member but on the contrary degrades itself to a level with the lowest. Ironically, as soon as a crowd is regarded as a source of wisdom it ceases to be so…

The crowd doesn’t know anything; it’s merely a reflection of the average emotional state of its participants. And since we know that individuals typically have emotional states that are usually myopic, and often irrelevant… you certainly shouldn’t consider this average emotional state as a guide to prudent opinion. According to Gustave Le Bon; crowds can never accomplish things that require a high degree of intelligence, and they are always intellectually inferior to the isolated individual…

In the article Power of the Crowd by Jason Van Bergen writes: It’s important to realize that ‘crowd’ is comprised of individuals, each one prone to competing and conflicting emotions… and in various degrees of optimism and pessimism, hope and fear… these emotions exist in each individual at different times and in multiple individuals at the same time. Their story is familiar one; an enduring belief that a ‘trend’ cannot ever end… However, when such group thinking becomes an over reaction it can acquire the form of a ‘mania’… which eventually things collapse on itself and turns into ‘panic’… 

Due to the overwhelming power of the crowd the rational individual person is faced with a conundrum: Does he/she follow the strength of the rampaging hordes or strike out defiantly with the assumption that his/her individually well-analyzed decisions prevails over surrounding madness? The solution to this dilemma is actually quite simple, i.e.; follow the crowd when its opinion jives with your analysis, and cut your losses when the crowd turns against you! Never fight the power of the crowd, but always be aware of how your individual decisions relate to the power of those around you…

In the article Madness of the Crowd by Gary Drenik writes: Crowd psychology can create an emotional feedback loop whereby dissent may be stifled as the crowd, not wanting to miss out, hears only what they want… According to Charles Mackay; it’s common throughout history that whole communities suddenly fix their mutual minds upon one thing, and go mad in its pursuit; and that millions of people become simultaneously impressed with one delusion, and run after it till their attention is caught by some new folly more captivating than the first… Money has often been a cause of the delusion of multitudes… Mankind, it has been well said; think in herds and they go mad in herds, and they only recover their senses slowly– one by one…

In the article Wisdom and Madness of Crowds by Noah Smith writes: Social scientists are fascinated with crowds… Crowd wisdom is often cited as the justification for the idea of good decision-making, or so the story goes. But there’s danger in relying on crowds for prudent decisions since, under certain circumstances, group wisdom can break down and becomes group madness. Crowd wisdom works because people’s mistakes are haphazard and uncorrelated– each individuals guess may be different, and when you combine guesses true knowledge shines through while the random errors tend to cancel out... Any number of studies confirms the general principle– once people start talking, arguing, and persuading each other… crowds turn into herds, and the magic disappears…

In the article Wisdom of the Crowd; Myths and Realities by Philip Ball writes: In an age routinely denounced as selfishly individualistic, it’s curious that a great deal of faith still seems to lie with the judgment of the crowd, especially when it can be far off the mark. Yet there is some truth underpinning the idea that the ‘masses’ can make more accurate collective judgments than expert individuals…

So why is the crowd sometimes right and sometimes disastrously wrong? According to James Surowiecki; the essence of crowd wisdom is simply when the average collective judgment converges on the right solution… Researchers found that as individual participants are given more information about each others guesses, the range of guesses get narrower, and center of range tended to drift further from the true value… In other words, groups dynamics go towards consensus, to detriment of accuracy…

This research challenges a common view in management and politics, i.e.; it’s best to seek group consensus in decision-making… In theory this sound great but instead this consensus decision can end-up herding towards relatively arbitrary position. Just how arbitrary depends on the pool of opinions you start-off with… It has long been argued that the wisest crowds are most diverse… According to Scott Page; in a theoretical model of group decision-making, a diverse group of problem-solvers made a better collective guess than that produced by the group of best-performing solvers…

In other words, diverse minds do better, when their decisions are averaged than expert minds… This suggest that knowing who is in the crowd, and how diverse they are, is vital before you attribute to them any real wisdom, e.g.; the dangers of herding among poorly informed decision-makers should be clear– it’s copycat behavior… According to James Surowiecki; the herding effect is likely to be even greater for deciding issues for which there are no objectively correct answer… And that perhaps explains how companies and countries occasionally elect such astonishingly inept leaders…

Perils of the Blame Game- When Things Go Wrong: Stop Shifting the Burden, Stop Finger-Pointing, Stop Making Excuses…

We live in a blame culture: Watch the news on any given night and everyone from political pundits to sportscasters… point the finger of blame at one villain, or another… Politicians are blamed for things that go wrong in their jurisdictions, police are blamed for failure to lower crime rates, sports figures are blamed for losing, company leaders are blamed for poor business performance… According to Marty Kaplan; when things go wrong the first question that’s usually asked is; Whose fault is it? When there is a problem a natural reflex seems to be– blame someone… According to Jim Nortz; it just seems to feel good to settle the mystery of who is at fault and to dispense justice accordingly… But blame game culture in the workplace comes at a high price; more often than not it results in poor business performance…

Blame is an easy and artificial solution to complex issues. It provides a simplistic view of how people in the workplace and beyond– think, act, fear… Finger-pointing is not the solution for resolving issues…. Blame makes inquiry difficult and reduces the chances of getting to the root cause… Yes blaming someone may get psychological closure, but then you may miss the bigger picture of what is really going on in the organization… This is not to suggest there should not be accountability for screw-ups… Instead when things go wrong, avoid finger-pointing and take the opportunity to create a learning culture that engages in candid and open discussion about all the contributing factors…

In the article Eliminating Culture of Blame by Andrew Lawson writes: A culture of blame can run rampant through organizations.  When people deflect attention from real issue either by finger-pointing and looking to blame others– there can be a toxic workplace in the making… Blame, excuses, denial… become the norm and this in turn negatively affects workplace performance… A culture of blame can impact an organization in a variety of ways, e.g.:

  • Blame has an emotional context: Cultures of blames usually operate with emotions of fear, anger and resentment which create dysfunctional relationships and poor staff morale…
  • Blame shifts energy and focus: As a result of fear-based emotions linked to blame, staff shift their energies from the interest of the group towards self-preservation…
  • Blame creates biases: As mental energies shift to defending one’s own position, biases are introduced that can alter an accurate perception and assessment of situations…
  • Blame inhibits creativity: When blame is prevalent, fear exists and individuals tend not to take risks or to think creatively, favoring instead the avoidance of blame…
  • Blame is expensive: Blame adds real costs to an organization via poor quality, service failures, lost customers… Lost opportunity costs due to low innovation, inability to create better products, quality and service will lead to a substantial negative impact on the revenue streams of the organization…

In the article Overcome an Excuse Mentality by Mark Murphy writes: Constructive leaders focus on fixing problems and mistakes instead of on affixing blame… Blame, denial, excuses are all stages leading up to accountability that are part of an excuse mentality…The antidote to an excuse mentality is accountability where people take ownership, fix problems, bring solutions… Accountability is where most leaders wants their people to be. But accountability is not an either/or kind of phenomenon. There’s a lot of psychology behind why people fall back on– blame, denial, excuses… Here’s an overview of what they look and sound like:

  • Blame is when there is acceptance of an issue but responsibility is heaped on someone else. One clue that you’re hearing blame is the use of a proper noun, e.g.; ‘I hear that we have a problem but you need to go talk to accounting, or marketing, or someone else about it…’
  • Denial is a mental state that rejects accountability with a refusal to acknowledge that there is an issue. It sounds something like this.; ‘I don’t want to know anything about it and I refuse to listen…’ One clue people are stuck in denial is when they don’t want to hear about bad news…
  • Excuses are more equivalent to the ‘dog ate my homework’ and typically sound something like this: ‘I get there’s an issue and I’ll even accept that it’s my issue, but it’s not totally my responsibility because there were mitigating circumstance.’ People often resort to excuses out of a fear of being blamed…

In the article Adopt a No-Blame Approach by Alan Sharland writes: One of the greatest obstacles to resolving a difficult situation or conflict in the workplace is blame... A no-blame approach in the workplace is a focus on learning from mistakes, failures, mishaps… The most successful and sustainable organizations adopt approaches that embraces failure and mistakes, as opportunities for learning… Focusing on ‘what happened’ rather than ‘who did it’– encourages reflection, learning, and more constructive resolution…

Screw-ups are inevitable but when approached correctly they can provide opportunities for learning and growth. Seeking to blame others is an enormous drain on resources and inhibitor to creativity, growth… Whereas a ‘no-blame’ approach provides a more creative, constructive, realistic response to successful resolution… According to Marilyn Paul; where there is blame there is no learning… where there is blame, there are closed minds, where there is blame an inquiry tends to cease… Blame costs money. Blame rarely enhances an understanding of a situation, and often hampers effective problem solving…

Unlike other games, the more often you play the ‘blame game’, the more you lose… Every organization, every team, and every leader gets stuck from time-to-time. When it happens, they have a choice to make: They can lead with anger, frustration, blame, or they take responsibility, work with the team, and resolve the issue together: Choose wisely…

Age of Neo-Feudalism– World at the Crossroad: Governance of the Rich, by the Rich– While Worker Gets Replaced by Robots…

Neo-feudalism refers to a theorized contemporary rebirth of policies of governance, economy, public life… reminiscent of those in medieval age feudal societies… Feudalism was when ‘land’ was basic unit of capital; more ‘land = more wealth’… Royalty (1%-ers) owned the land, while serfs/workers (99%-ers) worked for the landowner and received just enough compensation to survive: Sound familiar? Welcome to the ‘age of the neo-feudalism’. According to Aglaya; the landless have little or no political power, but they are guaranteed a basic set of rights… 

In the feudal age, the basic contract is that the majority of workers will be content to remain relatively uneducated, unambitious… And their only demand is a job through which they can feed, clothe, house their families… Also they do expect a basic level of fairness and protection by the ‘landowner’ and perhaps some government entitlements, e.g.; healthcare, free education, and ability to retire with some level of dignity before death… In return, the landowner (holder of capital) is allowed to get richer, more comfortable and be separated from the majority, so long as they provide the basic measures of subsistence to the landless. Although to most people this arrangement may appear to be grossly unfair and extremely repressive, it has nonetheless proven unequivocally to be most successful social contract in history, in terms of pure longevity…

In the article Neo-Feudalism In Modern Corporate: by Sajjan Singh writes: Feudalism means different things to different people and its origins depend on its meaning: Narrowly defined, feudalism is a system in which a weak central government distributes its power to people who support it… The strength of the system is that a problem that develop at a local level can be dealt with faster than it could be if the central government had to mobilize to deal with it…

According to Dredd; feudal society was a military hierarchy in which a king or ruler offers a fief (worker) a unit of land to control in exchange for military service… The feudal society was constructed for one reason: Security. The nobles wanted security for maintaining control over their far-reaching kingdoms, and likewise the workers, who worked the land for the nobles, wanted security from robbers, marauders, barbarians… But all this came at great expense for workers: They gave-up freedom for security… 

In the article Corporations Are Feudal Manifestations by Russ writes: Contrary to popular belief there’s nothing modernistic about the corporation; on contrary the concept is a carryover from feudalism Feudalism grew out of– practices, precedents, codes of values, and aesthetics that developed into ‘chivalry’ in the West, and ‘bushido’ in the East… The basic characteristics of feudalism have been passed on to modern-day corporations… According to Ted Nace; most aspects of the employer-employee relation continues to be regulated by a common law legal structure that enforce principles of privilege and hierarchy derived from the feudal society of the late middle ages…

In the article Corporate Feudalism by Steve Lovelace writes: Though brilliant in concept, feudalism was a biased hierarchy of authority, rights and power that extended from monarchs downward, creating intricate network of obligatory situations that infringed on almost every basic human right… Hence with the growth of commerce and industry, feudalism gradually gave way to the class system as the dominant form of social ranking… What used to be middle-class and working-class not so long ago, are now merely workers who exchange freedom for security… Who spend a day of hard work in buildings which are the modern-age replacements for the toils of farming…

In the article Rich Get Richer and Workers Get Replaced by Robots by Vincent Del Giudice, Wei Lu write: Working class is falling further behind; the ‘rich-worker gap’ is becoming much greater… It’s the difference in annual income between households in top 20% and those in the bottom 20%… According to Bloomberg; this gap has grown from $29,200 to $189,600 between 2010 and 2015… primarily due to computers and robots replacing workers, boosting productivity, and are more cost-effective. This shift into technology will continue for the foreseeable future with devastating consequences for the less-skilled worker…

According to PwC; about 38% of U.S. workers are at high-risk of automation by the early 2030s with less-educated workers facing the biggest challenge… The study showed many workers who are being replaced by technology are moving into lower-paying administrative, retail, health care positions… These workers had positions that paid $60,000 to $68,000 per year and when transitioned to other fields the new work only paid $25,000 to $37,000 per year… At these wages many workers fail to keep-up with– costs of living, housing, basic expenses, retirement, children’s education…

According to Christopher Mims; ‘Uber’ isn’t the Uber for rides– it’s the Uber for low-wages. A large portion of the world population now have two choices; become worker for the rich, at low-to-minimal wage, or starve to become one of the rich landowners, themselves…  The idea that low-wage work is merely a short-term part of the rung towards a better life is largely illusory: Upward worker mobility is very illusive and the world of economics is rapidly fallen into the age of neo-feudalism…

Perversion of Capitalism – Rise of Pseudo-Capitalism: Cronyism, Corruption, Collusion, Greed…

How perverted has capitalism become? How meaningless? As always; sound analysis begins with definition of terms. What is ‘capitalism’? Capitalism is competition: Capitalism is free markets: Capitalism is a system of equal (economic) opportunity, an inevitable byproduct of having free markets and competition… However, according to Jeff Neilson; instead what you see the opposite of competition: You see economies that are almost entirely carved-up into the domains of a handful of mega-oligopolies. You see the opposite of free markets: You see markets where multinational, cartels, monopolies… collude with governments to dominate markets for the benefit of a greedy few…

You see the opposite of equal opportunity: You see an economic system where the deck is ridiculously stacked in favor of the few… According to Richard Branson; capitalism was created to help people live better lives, but sadly over the years it has lost its way a bit. The short-term focus on profit has driven most businesses to forget about the important long-term role they have in taking care of people and the planet…

In the article Perversion of Capitalism by Jeff Nielson writes: There are two economic models which are both (universally) described as capitalism. Yet not only are they different (i.e., entrepreneurial capitalism and neo-feudalist capitalism), they are opposite to each other… Capitalism, as the word directly implies, is a system of capital, financial assets, where organizations, corporations, individuals… invest their wealth (i.e. capital) directly into the economy; it’s a clean system. Every penny of that capital goes directly into generating economic growth, new jobs, new wealth, and more prosperity. But instead there are versions of capitalism that are grossly perverted, totally parasitic, hopelessly unsustainable…

In the article Crony Capitalism by Nick Sorrentino, Hunter Lewis write: Crony capitalism and real capitalism, if not opposites are fundamentally opposed… Crony capitalism is the marriage of private special interests with influential entries, e,g, government… Some people call the arrangements– corporatism, mercantilism, fascism, or even communism. We will call it ‘crony capitalism’, but by whatever name– it’s ‘phony’ capitalism. Over years the public has been taught that many of the issues it faces on a day-to-day basis such as; lack of jobs, rising prices, corruption… are a result of capitalism and if so, it’s a perverted capitalism…

These unsavory realities are largely the result of government and private ‘partnerships’… Whether in banking, agriculture, housing, energy, transportation, manufacturing, or nearly any other facet of the economy, the ‘unsavory’ parts are often the result of public and private collusion. Genuine capitalism in comparison, is quite simple: Capital is invested by organizations, individuals to further– ideas and enterprises that these investor thinks will create fair return-on-money invested. Hence, if the venture in question is a good one, both investor and business win; but if not, better luck next time… It’s clear: It’s simple: It’s moral… However, once greed takes hold– things start to morph, twist… and for sure coercion and corruption take hold.

In the article Rise of Casino Capitalism by Chris Hedges writes: The cultural embrace of illusion, and the celebrity culture that has risen up around it have accompanied the awful hollowing out of society… There is shift from culture of production to culture of consumption. It’s a system of ‘casino capitalism’ with its complicated, unregulated deals of turning debt into magical assets, to create fictional wealth for the many and vast wealth for the elite… We have internalized the awful ethic of corporatism, one built around the cult of the ‘self’ and consumption as an inner compulsion– and to believe that living is about individual advancement and happiness at expense of others…

The free market is the ‘god’, and government has been taken hostage by organizations and corporations, which are the same groups that entice us daily with illusions of grandeur though mass social media, entertainment industry, popular culture… According to Willy De Backer; we live in age of proliferating political zombies.. it’s age of authoritarianism parading around in the name of freedom and liberty…

So how justified is the disillusionment with capitalism? According to Lawrence Summers; it depends on the answers to two  questions: 1.) are the issues of economic inequity and freedom inhere in capitalism? 2.) is there a better economic systems? The issues confronting society are genuine, but do they reflect the inherent flaw in capitalism? According to Keynes; these are magneto issues– liken to those of a car with a small but critical problem in its electrical system, and the job of the economist is to figure out how to repair a technical problem, and not necessarily replace the whole car…  

Hence at one-level answer is simple– insist on more political will, courage… However at a deeper-level, citizens of the world who live in capitalistic societies are right to wonder; why increasingly do affluent societies need to roll-back levels of social protection… Paradoxically the answer lies in the relative success of capitalism: When economic outcomes are unsatisfactory, as they surely are for many, there is always a debate between– those who believe that the current form of capitalism, with all its flaws, needs to be embraced with greater vigor… and those who argue that current form of capitalism is not acceptable and needs radical change…

However the debate is beside the point:  Where capitalism has been applied its been an enormous success (yes, some would say, but just for the few)… According to Dorian Scott Cole; the form of capitalism is up to us… It’s up to us to make capitalism serve us… But first we have to understand what we embrace… Each form has its own reward but when it’s simple gluttonous greed, it will end in the destruction of us all, because we are simply competing against ourselves… Whereas a form of capitalism that is embraced to benefit us all (yes all), will benefit us all…

Nemesis of Modern-Day Organizations– Backseat Drivers: Managing from Backseat– Empowerment or Chaos…

Traditional leaders are the drivers– the practice of leadership in far too many contemporary organizations involves the anointed manager who is essentially ‘driving the proverbial bus’, which relegates subordinates to go along for the ride as captive passengers. While leaders, managers typically lead from the front-seat, there are also times when taking a backseat and affording others the opportunity to lead represent a prudent leadership style… According to Robert S. Fleming; when you are the individual who has agreed to be the driver on a journey, you can fairly quickly become challenged by what is often called the ‘backseat driver(s)’…

These are people who find the need to ‘tell you how to drive’ while seating in the backseat… According to Kelly Hamm; most leaders are constantly working to improve an organization performance, and as such, they are far too focused on driving and getting to a destination, that they forget to pay attention to who’s sitting in the backseat… Do they have the ‘right’ passengers for the journey? Do they have the ‘right’ driver? Does everyone  on the journey know and understand where they are going? Why they are going there? How are they going to get there? The backseat is probably the most important seat on the proverbial bus...

In the article Back Seat Drivers by Lakecia Carter writes: A backseat driver is uncomfortable or impatient with the driver’s skills of the driver while they are driving… A backseat driver within this context can be very annoying and counterproductive… However, most great leaders are backseat drivers, in the sense that they empowering others in the organization to drive (or take control) of a specific responsibility… Through their action (or non actions) great leaders influence and inspire others to lead even though they are not in the driver’s seat. Here are a few tips to keep in mind while driving:

  • Create value for the driver from where you are: Recognize that you do not need to be in the driver’s seat to influence positive outcomes. Learn how to release the need for direct control to be comfortable without control over the task at hand. True value comes not from position, but from power to influence positive change…
  • Support the driver: Be supportive of the driver even though you would drive differently. There are three ways to support the driver: Listen, Learn and Serve. Help the driver to be productive in his/her role…
  • Empower the driver: Equip others with the tools they need to succeed. Allow the driver to fail and help them recover from the failure. Drivers who experience freedom and empowerment are more confident and effective in their leadership role…
  • Coach and Encourage the driver: Encourage the driver in two simple ways: Ask, then Tell… Compliment, then Construct… You don’t need to tell others how to do their jobs. On the contrary, you can offer suggestions for improvement. You can also build the driver’s confidence through encouragement and timely feedback…
  • Watch out for danger signs that the driver may not see: Because you are not in the driver’s seat, you have a full view of what’s going on– ahead, above, around and behind. You can add value by raising yellow flags and helping remove the roadblocks that may get in the way…

In the article Mastering Empowerment From Back Seat Driver by BRS writes: There is nothing worse on any journey than an annoying back seat driver who doesn’t know when to shut-up… You know the type– they bark instructions in your ear like ‘turn left’ or ‘turn right’… even though in many situation they are clueless, yet they continually insist on telling the driver– where, when, how… to go!

However, having a good backseat ‘navigator’ who knows where they are going or at least knows how to read a map, and can give clear, accurate directions is invaluable for success on a journey. Leadership is the same– they empowers people with effective navigation to reach their destination, rather than just noisy backseat driving… According to Michael K. Moore; when leaders choose to empower others, they are choosing to transfer individual power to someone else, hence allow them to drive (lead) to the desired destination…

 In the article Back Seat Listener by Julie Hyde writes: Most people have had an experience with a backseat driver! Those people who tell you how to drive, what lane to be in, when to brake, how fast you are driving; it can be very annoying… But then there is the backseat ‘listener’… You can learn so much from listening and watching and not making a sound… Great leaders are great listeners; they listen to how you drive to achieve your responsibility in the organization, they listen to how you change gears, and how erratic you are… backseat ‘listeners’ are quiet but they observe…

Backseat drivers are comical in fiction only; in real life, it’s hard to overstate the irritation they can provoke… But hold your tongue: As backseat passenger you may not like the way someone else drives: Maybe they don’t notice when the light turns green as fast you… Or, maybe they are slower than you when pulling into traffic or merging… However unless there’s an immediate danger you’re pretty sure the driver hasn’t noticed, proper etiquette is to remain silent even if it makes you stew inside…

When you are back as the front seat driver you can drive how you like… Hectoring those who don’t drive like you won’t change their ways. It’s just going to create stress and may even make them drive unsafely. Maybe you do know a fast way to reach the destination, but ultimately it’s not your call. It’s fine to give advice if it’s sought; just don’t nag imperiously… You may in fact be a much better driver, but since you are not driving, it really doesn’t matter. Grin and bear it: Everyone will be the happier for it…

Digital Sharecropping– Social Media is Ultimate Fool’s Game: Most People and Organizations Don’t Even Realize It…

You are ‘digital sharecropping’ and you don’t even know it… You are building the business on someone else’s land… Digital sharecropping means creating content that you publish on sites you don’t own–like; Facebook, Google, LinkedIn, Instagram, Twitter, YouTube, Pinterest… Just like the ‘plantation sharecroppers’ of old who tended the land of others and lived at mercy of large landowners, similarly today many organizations and individuals use social media that revolves around websites of other owners in powerless position and at the mercy of large social networks… According to Nicholas Carr; when posting content on Facebook, Twitter… and thousands of other social media sites, you are giving away a valuable part of your intellectual property and getting minimal return for your creative work…

It’s worth remembering that the business model of Web 2.0 social networks is a sharecropping model… It’s similar to plantation system where owners made money in two ways; leasing both land and tools to sharecroppers… It’s no different now in the digital age; the payments for land (i.e., web page) and tools (i.e., video, widget…) are not paid  through crops or cash, but rather indirect through the sale of ‘ads’… but the idea is same… Ultimately, you have to decide which is more important; build your own brand or build the brand of websites, like; Facebook, Google, LinkedIn, Instagram, Twitter, YouTube…

In the article Digital Sharecropping? by Jared William writes: Digital sharecropping is creating content on someone else’s property, i.e.; you do the work; you create content… while other websites (land owner) keep all of the benefits. The modern-day plantation owners make it easy, e.g.; just click here to sign up, add name, email address, add content… and you have now become a sharecropper.

That means you can– scream, yell, rant, play, show off your work, join conversations, constantly check your account to keep up with all of the other folks doing the same things… But all of this still belongs to the land owner… It’s enticing, it’s easy, but it’s delusional. When all is said and done, you’re creating content on someone else’s digital land… And so what happens when the digital landlord changes the rules, or even ceases to be the place that draws a crowd? You are screwed…

In the article Digital Sharecropping by Marion Jacobson writes: Organizations and individuals are posting ‘tons’ of content on the powerhouse sites, such as; Facebook, Google, LinkedIn, Instagram, Twitter, YouTube, Pinterest… daily, for free… But these powerhouse social media firms are in business to create communities, apps… not out of altruistic desire to help their fellow-citizens– it’s business stupid… They are using your content to make money; and that’s perfectly fine with many people, in fact, millions of people… because for many people it’s an ego thing– being recognized on a popular website has a celebrity feel to it…

However, if you have a business page on Facebook (and you should), promote your content along with other engaging posts… But just remember that having a ton of original content on Facebook will not help you in the search engine results contest… But it will help you engage with customers, fans… and a great way to increase brand visibility… But protect your original content– it  belongs to you…

In the article Sharecropping: Sucker’s Game by Scott Baradell writes: If your social media campaigns revolve around, e.g.; Facebook… and if you spend the bulk of your marketing dollars driving people to a Facebook page, you are merely tending land owned by Zuckerberg and helping his audience grow, and helping his users become more engaged, and ultimately helping his revenues to skyrocket… It’s a sucker’s game for two reasons:

  • Lack of audience ownership: Just as sharecroppers of the past were stuck on someone else’s land, so when you are strategically centered on someone else’s website it leaves you dependent on that website, e.g.; if you send all of your audience to Facebook rather than to your own website– you own nothing…
  • Lack of predictable outcomes: You have no control over other land owners’ property, such as; Facebook… You have very little control in how these properties are managed and very little say about the outcome of your labor…

The vast majority of organizations and individuals using social media are happy with the model because they see their primary interest in garnering ‘attention’, and not in capturing ‘value created’. Most people futz about on how many followers they have, and not that they are building an empire for others… But perhaps more starkly, most believe that ‘being socially famous’ is more valuable than the billions of dollars that successful social networks are earning by leveraging your content…

However, the real question is; after all the effort that you put into creating content– do you own the fruits of your labor? When you built something of value; is it really ‘yours’?  According to Anita Campbell; purpose of business is to create value for your enterprise… but if you are only creating value for others then you are defeating the purpose for your existence… Remember that sharecropping is a sucker’s game, and it continues (alive and well) in today’s digital age and it’s up to you to take control your own ‘value added’…

So what’s the solution? It’s simple– invest in building your own website with fresh, interesting, relevant content– frequently updated, smartly promoted… that attracts your targeted audience… As for Facebook, Google, LinkedIn, Instagram, Twitter, YouTube, Pinterest, and the rest of them… yes use them, but with the purpose of leveraging their audiences to build your own property... Hence the message is simple; build your own empire– one you can truly be proud of…

Go-To-Market Strategy Is Tough: Separates Business That Succeed from Those That Don’t…

A  ‘go-to-market’ strategy is the ‘how’ an organization delivers its unique value proposition to its target customers, and ‘how’ it creates competitive advantage… It’s ‘how’ an organization creates value; ‘how’ it delivers value; ‘how’ it captures value… A ‘go-to-market’ strategy brings together all key elements that drives an organization, i.e.; sales, marketing, pricing, brand, consumer insights… It’s a strategic action plan that clarifies how to reach target customers, and better compete in the market…

Figuring out an approach for going to market is no trivial exercise and it’s one of the toughest things for any organization to do. But without understanding it, it’s almost impossible to get things right… According to Steve Jobs; most people start with the product, instead, they should start by figuring out how to get the product to customers… Starting with an effective ‘go-to-market’ strategy provides the ‘how’ a specific innovation– product or service– can be delivered and scaled… It’s the go-to-market strategy that separates the organization that succeed from those that don’t…

In the article What is Go-to-Market Strategy by Peter Buscemi writes: The term ‘go-to-market’ has become a common buzzword with meanings that span a wide range of interpretations… What is even more confusing it that meaning of marketing strategy and go-to-market strategy are often used interchangeable when they are in fact very different concepts… Go-to-market strategy has focus on ‘how’ an organization– enters/penetrates a market(s)…

It’s a super-set of marketing strategy and it impacts all the major functions in an organization with the goal of preparing the entire organization for ‘how’ it’s going to compete in a market…  A key point to stress is that go-to-market is not an event– it’s a product launch that is focused on the entire product life cycle from initial concept to final obsolescent… Developing a go-to-market strategy is a mission critical process and must be managed properly with focus on core issues…

In the article Go-To-Market Entry by Vijay Mahajan, Subhash Sharma, Robert D. Buzzell write: Go-to-market strategy is all about market share, i.e.; how much share can be achieved with new ‘entrants’ or retained by ‘incumbents’… It’s about understanding the dynamics of markets, anticipating future trends, selecting directions… it’s about the knowledge base required to– act, react, defend, control... competitive go-to-market position… According to Kenneth J. Cook; in markets that are easy to enter… sources of competitive advantage tend to wane quickly, whereas, markets that are more difficult to enter… competitive advantage last longer…

Two factors that drive a go-to-market strategy include: 1. reaction of incumbents to new entrants… 2. type of barriers that prevails in the market… According to Steven D. Peterson; when you  enters a new market, you must expect to face some barriers as you seeks to compete with already-established organizations. At the same time, think about how you are going to building barriers of your own in an effort to up-the-ante for competitors seeking to follow you into the market All organizations strive to develop some competitive advantages or barriers… but relatively few are successful over the long periods…

In the article Build Go-to-Market Plan by Janet Brey writes: The go-to-market plan is a subset of the marketing plan and addresses ‘how’ to execute on a specific growth strategy. Every company, regardless of size should have a marketing plan. Whereas a go-to-market plan is not always needed– only when you are looking to enter a new markets, sell new products /services, or do both… Not all growth strategies require a go-to-market plan. To get started, consider four growth strategy approaches:

  • Penetrate: Sell more of existing product/service to the existing market. This is the lowest risk approach to growth as you know the market and how your product/service delivers value. Hence,  marketing strategy and marketing plan is required…
  • Expand: Sell existing product/service to a new market. To be successful with this strategy, you need to understand the new market. Marketing plan and go-to-market strategy are required…
  • Innovate: Sell a new product/service to existing market. To be successful with this strategy, you need to understand the pains, gains, value delivered.. Marketing plan and go-to-market strategy are required…
  • Aggressive: Sell new products/services into new markets. This is the highest risk and requires the most effort to be successful. To be successful with this strategy, you need to understand the new market and how the new offer delivers value… Marketing plan and go-to-market strategy are required…

An effective go-to-market strategy is based on the art of delighting the customers… It’s important to thoroughly walk through the vital steps that gives your organization the greatest chance of success, e.g.; How does your organization connect with customers? How do you deliver unique value to target customers? How do you go from the initial connection with a customer to fulfillment of the brand promise?  Should you have direct sales force or sell indirectly through others? Should you bundle maintenance and other services, or sell separately? Can you get the product to market through other channels? What about pricing? The list goes on…

The problem is that these questions are fundamentally wrong to begin with… They focus from perspective of the organization, but to succeed you must first understand the customers in order to understand how to approach the market. You must know what the customers are trying to achieve and what problems they are looking to solve… Then think about ‘how’ the product can help them achieve their goal… Once you take these steps, then you can begin to experiment with a go-to-market strategy with the expectation that you’ll continue to refine and change it based on experience and further insights…

It’s Official! Sustainable Competitive Advantage is Dead: Rethink Your ‘Edge’, It Ain’t What It Used To Be…

Competitive advantage is what separates organizations from the rest of the herd. It’s what keeps organizations alive and growing. In short, it’s the end game that counts– it’s continuously creating new competitive edges… Organizations that sustain edges are continuously looking for ways to achieve and secure enduring value. They focus on the things that can really make a positive impact or difference… They hone competencies through long-term sustainability– vision and innovation… They maintain an organizational culture based on values by investing, engaging– employees, suppliers, partners… continuously creating new competitive advantages realizing that traditional ways of sustaining competitive advantage are dead…

The ‘holy grail’ of strategy for many years was by creating a sustainable competitive advantage, i.e.; you find an opportunity, you throw up entry barriers like crazy and presumably you get to enjoy it for long period of time… But increasingly this no longer works or even makes sense due to– globalization, digital disruptions, social behavior… In response to shifts, organizations must create temporary or transient competitive edges where they– seize opportunities, develop them, learn and rethink the next stage of their competitiveness... According to Rita Gunther McGrath; organizations need to think differently about competitive strategy... they need to shift thinking from long-term, to transient competitive advantages when targeting markets…

In the article Finding Your Competitive Advantage by Jaynie Smith writes: The list of once-storied organizations that are gone or are no longer relevant is a long one. Their downfall is predictable outcome that are designed around the concept of sustainable competitive advantage… The problem is that deeply ingrained in most organization are structures and systems designed to extract maximum value from a competitive advantage when, in fact, a constantly changing market environment requires instead the capacity to surf through waves of short-lived opportunities… To compete in these volatile and uncertain environments, organizations need to do things differently… Bear in mind the following:

  • Competitive advantage is objective, not subjective: How many times do you hear a company say; You should do business with us because we deliver good quality and great customer service? Well, your idea of quality and my idea of quality may be galaxies apart. This kind of boast is subjective and tells you nothing. In fact, words like– quality, reputation, trust… when used to describe competitive advantage are so hackneyed you tune them out…
  • Competitive advantage is quantifiable, not arbitrary: Which statement is more compelling; We have great customer service, or Ninety-five percent of our business comes from referrals? When an organization makes objective, quantifiable statements such as these, the customer is more likely to believe your claims. Your company may be trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, rave, clean, reverent… And your customers may appreciate those traits. But they don’t buy from you for your ‘Boy Scout’ traits. In fact, in today’s marketplace, they have come to expect them as given…
  • Competitive advantage is not a cliché: It’s not good idea to boost that your organization ‘exceed your customer’s expectations’… How do you know what their expectations are? Your customers expect good service. How do they define good service, and how do you? These definitions are not the same. After all, who would admit to providing bad service? Again, be specific; if you provide service twenty-four hours a day, seven days a week– and the others guys don’t– say so…

In the article Rethinking Competitive Advantage by David Goldsmith writes: One of the deadliest enemies organizations will have to face is that the larger they become the greater the hidden gravity pull to stay the same, not take risks… The reality is sitting tight, not making a move, waiting to see what happens, not admitting they are losing the ‘edge’ that set them apart from the competition… has destroyed many organizations and well established brands… When everything around is changing except your organization, then trouble is not far behind…

Think about it; the presumption of stability creates all the wrong reflexes… It allows for inertia and power to build up along lines of an existing business model. It allows people to fall into routines, habits of mind. It creates the conditions for organizational rigidity. It inhibits innovation… A competitive advantage is transient, not sustainable… Organizations must constantly reassess their assumptions about how the world works, and rethink their playbook to compete and succeed…

In the article Creation Of Competitive Advantage by Jay Deragon  writes: In a world of rapid change, what matters is not what your competitors are doing but more importantly what you are doing for the customer, and how well are you doing it… Management far too often think the heart of strategy is beating the competition: Not so. Yes, being better than competition is critical to be sure, but finding and filling customers need better than anyone else is real challenge. 

When you measure against current competition you are measuring against the wrong thing.  If a competitor is currently better than you then simply copying what they do, and how they do it won’t give you an advantage… Management teams must dig deep to identify their true competitive advantage. Too often organizations create a generic version of what they perceive to be the competitive advantage… Creating the ‘right’ competitive advantage must match what the organization can realistically deliver and relevant to the markets it serves…

Achieving sustainable competitive advantage requires the constant monitoring of the competitive landscape, and management’s openness to rethinking current advantages, especially when things appear to be moving in the right direction… The business graveyard is full of once highly successful companies whose competitive advantages became obsolete and no longer effective, and still they refused to rethink the changes that were needed to keep them competitive…

According to Leslie Back; organizations must accept the reality that many of their original– ideas, beliefs, assumptions… may now very well be obsolete. They must shift thinking and focus-on anticipated future market realities, and re-imagine the competitive advantages that are required to shift, adapt… to changing markets and consumer behavior and expectations…

Collusion is Ubiquitous– It Forms a Basis of Most Business, Government… Relationships: Illegal, Immoral, or Way of Life?

Collusion is a word we’ve all come to hear on a regular basis these days… But what is collusion? According to Black’s Law Dictionary: Collusion, n: Where two persons (or business entities through their officers or other employees) enter into a deceitful agreement, usually secret, to defraud and/or gain an unfair advantage over a third-party, competitors, consumers, those with whom they are negotiating. It can range from small shopkeepers, to multinational companies, to major league sports team owners… 

Most common forms of collusion include; price fix, limit production, divide markets, limit opportunities, wage fix, kickbacks… Collusion is progressive drug; participates need to lie and collude more and more to maintain the false feeling of emotional safety. When they collude, they are ever fearful that they will be ‘found out’… Colluding is exhausting, requiring inordinate amount of– physical, emotional, psychic energy… continually shoring-up relationships that have no true foundation built on trust or truth…

In the article Is Collusion Illegal? by Lee Lofland writes: The crime of collusion (assuming it can be proven) falls under heading of antitrust law (also called competition law)… and it’s used to protect consumers from shady business practices, ensuring that fairness in competition exists in marketplaces, and is enforced in U.S. under Sherman Act… However, now days the act of collusion is being applied to political issues. But is it relevant or crime when it involves political activities? Consider the following:

  • Taking advantage of what another person or group does during an election is not illegal. It’s maybe a bit of political ‘not-so-nice’, but it’s not a federal crime to do so…
  • Asking someone to release information about political opponents is not illegal unless parties asking obtained information illegally, i.e.; wiretaps, illegally recorded conversations, etc.). Still, the act of asking to release information is not in itself a crime…
  • A person or group of people supporting a political candidate is not a federal crime, even if that person(s) releases potentially damaging information about politicians running for office, e.g.; favoring one above the other: Not illegal = no crime…

In the article Collusion Between Companies by Ronald Kimmons writes: Collusion results when companies get together to make secret agreements that are possibly unethical or illegal because they operate to the detriment of a third-party. While laws and regulations exists to help deter collusion between businesses, such activities are common practices, either overtly or covertly… Also, a practice known as ‘conscious parallelism’ also produces the same effect as outright collusion…

The practice of ‘conscious parallelism’ may not be strictly collusion because it does not come as result of an actual agreement between firms but it produces same results. For example; when one petroleum company raises prices due to increased production costs, then other petroleum companies may follow suit even if they don’t face increased production costs… This allows them to stay price competitive and increase their profit margin without fear of being undercut by the competitor…

In the article Collusion, and Bad Management by Peter Vajda writes: In everyday working world, there are various forms of collusion… Collusion is ubiquitous they are things like; ‘giving to get’, ‘scratch my back and I scratch yours’, ‘going along to get along’, ‘one hand washing the other’… Others include;

  • Collude is when you support an unethical or incompetent leader, manager, supervisor, direct report or co-worker so you both can feel emotionally safe with each other…
  • Collude is when you share insider information with only a select few so you’ll be viewed as caring about them and they will feel they’re special. You become duplicitous and inappropriate in your actions of giving and receiving…
  • Collude s when you verbally gang-up on a third-party through bullying, sarcasm, or gossiping, experiencing a false sense of connection and camaraderie with your co-colluder at the expense of the third-party…
  • Collude is when you withhold honest and forthright comments about inappropriate behavior for fear of alienating another whose work you respect…

In the article Collusion Between Business and Government by Eric Banfield writes: Much political rhetoric centers over whether a particular policy is ‘favorable to business’, or whether a candidate is ‘pro-business’. When politicians speak about being ‘pro-business’, they try to create the impression they will do things to benefit the business climate; that help can come in two forms: One form is the promise of deregulation, or promise to fight new regulations, or taxes that will potentially harm the economy, or industry, or firm… This is generally ‘negative’ help, i.e.; the politician will focus on what the government should not do regarding a business’s activity…

The second form of ‘pro-business’ help is ‘positive’, i.e.; the government takes some action that specifically helps business or industry, usually at expense of others, e.g.; government creates some law or regulation that allows business to do, or have something it could not otherwise do, or have in a true free market… Hence it grants what amounts to privileges– bailouts, subsidies, trade protection… All  privileges are perfectly legal, as business lobbyists and activists quickly point out; but legal doesn’t mean moral…

Many in business, organizations, government, politics… see the process of collusion, as simply– ‘the way things are done’ or’ that’s how to play the game’… Collusion is a fact of the real world it allows greedy groups to empower themselves at others’ expense. It’s a ‘gray area’ but knowing what is morally right is not…

Cartels– Sinister-Side of Dominating $3.5 Trillion Markets: Slippery Subject, Dicey Business Strategy…

Cartels are silent extortions that undermines the efficient functioning of markets– they monopolize industries, markets… globally. And it’s the collusion side of cartels that’s the most serious form of anti-competitive behavior. According to aliakber; cartels are formed to exploit markets, industries… to control, enhance profitability… they eliminate, manipulate competition to achieve their goals… Without competition they can– fix prices, limit supply, rig contract bids… these anti-competitive strategies can be extremely profitable but long-term most fail…

 A survey of hundreds of published economic studies and legal decisions of antitrust authorities found that the median price increase achieved by cartels in the last 200 years is 25%… Private international cartels (those with participants from two or more nations) had an average price increase of 28%, whereas domestic cartels averaged 18%…

However, cartels are economically unstable there is an incentive for members to cheat by selling at below the agreed-on price or selling more than the agreed-on production quotas… According to Jeffery Fear; there is no mystery as to their objective– their aim is to dominate industries, but research suggests that over the long-term they fail more often than not, due to greed…

In the article Businesses Ruled By Cartels by Rakesh Sharma writes: A cartel is an association whose members typically control commodity pricing in targets market by controlling supply, demand… members span the value chain and monopolize an industry… And history is rife with examples of major players in an industry colluding to set prices and control supply… This is because some nations and organizations look to circumvent competition, which negatively affect them by driving down prices and reducing margins… In some industries, e.g.; diamonds… cartels are result of individual players that collude to protect their economic interests, and slow-down the pace at which an industry moves toward commoditization…

In the article Business Cartels by Pauline Yu writes: Businesses that form cartels usually trade in prime commodities, e.g.; basic minerals, sugar, rice… They start by hoarding a commodity causing a fake shortage in the market. By doing so, the demand for the commodity increases due to shortage and after a period of time these businesses will start to release the commodity into the market bit-by-bit at much higher prices… There are many documented cases of such activities in many countries around the world, e.g.;

The Philippines had once fallen prey to rice hoarders who would store the rice in large warehouses and they would keep it stored until prices go up before they start releasing their products to the market. Even criminal elements form cartels to capture and control markets, e.g.; drug traffickers… Essentially, forming such arrangement  manipulates the market by controlling the availability of supply… While this is an effective way to control markets, maximize profit… they are illegal in many countries…

In the article Cartels and Collusion by David A. Mayer writes: Cartels go through periods of cooperation, competition. When prices and profits are low, the members have an incentive to cooperate and limit production… But when the cartel is successful it gives individual member an incentive to cheat. Under these circumstances individual membersdriven by self-interest (greed), begin to exceed quota, rise prices… and in effect break the cartel’s code of conduct…

The incentive to break the agreed code of condition is contiguous, once one member cheats then others usually follow and eventually prices fall as they collectively cheat… However cartels do find ways to discourage members from cheating, e.g.; drug cartels use assassination, kidnapping… whereas, OPEC uses something a little more civilized… But generally cartels contain seeds of their own destruction… Most are unstable and eventually disbanded, and allowing industry to return to a more normal competitive environment…

Cartels are a surprisingly slippery subject; there is no mystery as to their dynamics, yet those dynamics are not sufficient to explain any given formation… According to Jeffrey Fear; the weight of research stresses why cartels fail, rather than why they endure… Research shows how difficult it is to maintain them in face of market forces, innovation, technology advances… For example; following World War II several agreements were struck to govern trade in commodities, e.g.; wheat, sugar, tin, coffee, olive oil… During these times several nations and organizations negotiated deals to stabilize commodity price levels, but all of the agreements eventually collapsed with the notable exception of OPEC, which itself is now slowly unraveling…

The cartel question highlights the trade-offs between costs of stop-go, boom-and-bust volatility under capitalism and the benefits of moderate stability and risk management, between price and quality, between consumer and producers– trade-offs not easily answered. According to Graham and Richardson; while competition is familiar to most organizations, few reflect deeply on cooperation, e.g.; strategic partnerships, alliances, joint-ventures… Cartels provide one forum for reflecting on how and when cooperation can be efficient, innovative…      

Subtle Shifts in Business, Leadership, Management, Organization, Strategy, Innovation– Bring Big Results…

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