The recent hyperbole about free business models has gotten me more than a little excited.  I have read a great deal about it, though I still haven’t found the time to listen or read Chris Anderson’s new(ish) book.  One of the things though I have noticed that’s absent from debates about ‘free business models’ is the cost that comes with running, developing and diffusing new ideas.  There is a cost.  And that cost is value.

If you want to be a leading writer, you have to write and keep at it until you get good enough.  That will take a lot of time.  If you want to sing and be the best you can, you need to practice.  Anything that’s easy or ‘at hand’ is usually simple to learn and master.   The cost versus the benefit in that equation is something like this:

Simple thing + Low Skill = Low Benefit.

However, if we raise the barrier it should look like this:

Hard thing + hard skill = High Benefit.

However, there is something missing from that equation and it’s this:

Value + Hard thing + Hard Skill = High Benefit.

You could say it this way, the more value increases the higher the cost to you and to your consumers, students, partners, chickens and whatever other relevant category you would to shove in here.

Now I have added another cost to the learning of a skill that has been overlooked.  The free business model idea hinges on value, as do most other ideas.  Without value you can work as hard as you like at giving things away and it won’t matter a damn.   If we take a poorly written book or a bad movie and say, ‘I don’t know how anyone can like that’, the answer is value.

So what is the cost associated with value?

Often when we come to teach at University we think we need to find ‘cool things’ or some trick to get them engaged.  This isn’t true.  Consider Xtranormal.  This first video was my reflection on the semester… I think it worked well and acted as a way to get them talking:

A colleague whom I teach with made one also:

These videos were well received, at least by me   The following was one we made with the whole class, including myself and Alison, inputting their ideas as we discussed them:

The only point I have is this: it doesn’t have to be boring, and it doesn’t have to be trendy, ok that’s two points.  Be clever and work collaboratively, you may be surprised what you learn.

In my previous post on Hits and Misses, I talked about Pipe Size. In this post I plan on talking about ‘engagement’ and why things become popular.

Engagement

The level of excitement we feel for something and the degree of participation that it causes us due to that excitement, is what I like to call engagement.   Engagement is not purely participation, that connotes mere activity; engagement is more an emotional and social response to things that excite us because it provokes activity.  When you watch the news for example there will be a story on it at some point that grips you.  It will grab a hold of you and shake you in some way.  For me, it’s stories on the housing market.  Stories such as how there will be another boom.  It causes me to swear, rise up out of my seat, and wave two fingers at the presenter.  It engages me and causes me to engage.  The biggest reason things fail is lack of engagement.

Examples of lack of engagement

Whether it be the failing of a university program (INFORMATION SYSTEMS) or the decline in interest in television shows, the ultimate failure of any mass produced vehicle is the result of declining engagement.  Great, you say, that’s wonderful… I already knew that.   Ok smart ass, what then is the primary reason why people stop engaging?  Interest?  Probably, I believe it’s because the program in question no longer creates ‘engagement’ space for participants.   This means creating new opportunities for conversations and new examples of how to create those conversations.  A key example of this can be found in the recent movie, ‘Tenacious D: Pick of Destiny.’

The movie itself is largely for fans, herein lies the problem.  The fan base for Tenacious D probably couldn’t generate 40 million dollars worth of movie dollars. Why?  Well the movie didn’t create the engagement space for people who weren’t fans.  Watching it, I loved it because I am a fan, and I could relate to at least 60% of all the jokes on screen.  I had seen it before, I had heard the riffs that are used as cues in important parts of the movie and I was aware of the history.  If my wife watched that she would have no engagement space there because she has no idea about Tenacious D or their history.  In all honesty, Tenacious D probably should have made the movie more accessible to non-fans.   Then again, maybe they still wouldn’t have engaged because they didn’t know who they were anyway?  On the other hand maybe they can’t grow their fan base?

Another example of how to maintain an engagement or to put it simply: keep people talking, can be found in the on-going popularity of Lost.  At each turn they introduced something new, exciting and interesting, that create the engagement space for on-going conversations.  There was a point at which it did seem like Lost was, ‘everything happens for a season.’  But now, the bigger picture is being unveiled and it’s creating conversations.  This doesn’t just apply to movies either, can you do something where you work to create conversations?

Why Things Become Popular

Ok, so I don’t have a social psychology background or enough of an idea to explain why things become super popular.  Here’s what I know, for me it comes down to a few key things.

1. Creating Engagement Space (or creating conversations)

All of human kind communicate.  They share information with each other and have done for centuries.  In order to facilitate the popularity of something you need to have something that people will talk about.  This is why excellent service increases business overtime and why programs fail … it works both ways.  The concept of leverage provides a useful metaphor here.  If you have something that people want, you have leverage and provided you find a way they can talk about it, they will.  This works in the negative and the positive.  For instance, if you have a degree program that is failing the first thing to do is to find out why.  How do you find that out?  By talking at length to participants.  My first instinct is: why aren’t you spreading the word about how great we are?

Sure you might be tempted to make a whole lot of people redundant, transfer load or worst do nothing.  Find out why people aren’t talking positively about your stuff and boom I guarantee you will turn things around… if you catch it in time. Negative leverage is as easy to create as positive leverage… especially in a social network where trust, sharing and conversation abound.

2. Facilitating the conversation

You can’t control what people say but you can control what you do in order to help them say what they say.  Here’s an example: I went to sea-world last year and I wanted a coffee.  What I got was hot watery milk.  I went to Borders the other day and asked for a book (Outliers) and I already had $200 worth of books in my arms.  The lady told me it was out the back and promptly returned to doing something else.  See?  Now I have told you because Borders made it easy for me to facilitate a negative conversation.  Sure, I could just suck it up but I was amazed that they didn’t want another sale… I left after that because I didn’t want to spend any more of my faculties money!  They didn’t want me to spend my money.

3. Making the transition from conversation to action easy

William James said that the truth was something that happens to an idea.  It’s the active part.  When we go from talking about something to using it, if we find it difficult and hard to manage.  When I was in business last time this was the single flaw that stood out more than others.  What I was trying to sell wasn’t easy to use.  I could start conversations but they would always end in a bad experience for the customer.  It isn’t enough to create conversations, you have to make it easy for people to access and use what you are talking about.  Make it hard and the engagement fails and people will begin talking about alternatives.

4. Maintaining the conversation

Once we have access to the material, keep us there.  You know amazon made a fortune of it’s recommendation engine?  It nearly went broke until it realised (or they realised) that selling things to existing customers helps your bottom line.  Maintenance… simple maintenance!  Things become popular and stay there because we ‘maintain’ the conversation.  Stop doing that, yes you who don’t answer your email or respond to customer queries online… YOU, and people will talk about something else.  Keep the flow of customer interaction going.  Don’t believe me?  Go to twitter search and look for a product.  You’ll see why Dell made 3 million dollars off twitter.

5. Creating new spaces for engagement and innovating conversations

In closing this second part it’s important to look for ways to create new conversations and use those to develop innovation.  Things maintain popularity because they keep us talking and constantly create new ways for us to do so.  Without discourse and then action you have nothing.  New conversations must continue the old ones and add something interesting to the existing one.  The Lost people do this by keeping us guessing.  Others are much better at this and do it by testing the boundaries of the audience.

In the final part of my epic blog trilogy I want to talk about the ‘cutthroat island’ problem and some things that are conversation worthy don’t become popular.

The theory of the day is the long tail, a reworking of the Pareto Principle (i.e. 80% of the wealth of Italian landowners is concentrated in the hands of 20% of the people), which seeks to explain why hits and misses wind up where they do.  In real terms the idea is a useful w to explain why, in theory, 80% of all that’s consumed accounts for 20% of all products and so on.  Ironically, this is not a reflection on taste as the following video explains, it’s a reflection of the method of distribution and supply (I call it pipe size).  Yet this is not what determines a ‘hit’.  Not in my opinion.  A hit is determined by many different things… which I will talk about in a minute.

Pipe size has to do with a number of things.  We all have a certain amount of influence and as such we can distribute messages to people via our own methods of communication.  When someone in the family dies or a baby comes along, the pipes of family communication get to work and the word spreads.  Some us are more influential ’sneezers’ as Seth Godin calls them, and we can have a broader impact.  But it’s not a formula and neither is it a constant reason why.  The concept of ‘engagement’ or ‘resonance’ as someone else I know put it, explains why things are spread around.   We participate.  When this occurs on a massive scale the network gets bigger, the pipes get bigger and massive demand is generated.

The long tail works as a technical explanation quite well, that is, it explains how ‘pipe size’ and demand and supply corroborate to create ‘hits’.  Yet, it fails to adequately explain why hits occur.  This fails in the realm of the unpredictability of human ’systems’.   Human systems form groups, make meaning and do what I call ‘engage’.  William James said it this way, ‘the truth is something that happens to an idea… not the idea itself’ (that’s a paraphrase by the way).  While I don’t wish to debate the idea of what truth is, I want to touch on what James was saying in my lateral understanding of it anyway.  Why things become popular can be stated as: they become popular because we engage with it on a massive scale (big pipes), we spread it around and share it (talking –> see Tipping Point, Idea Virus), and we resonate or engage with it.   This latter concept, the idea of engagement is the most understated yet most powerful because big pipes don’t guarantee a hit, engagement does.  What level of participation do people have in an idea?  A high amount, then you have success, a low amount depending on the context you have a different kind of success, or you have a failure.

Success and failure come down to audience engagement yet we cannot ignore pipe size, marketing or methods of supply.  We have to consider these as important, yet the level of engagement, discussion and talk around a product or idea and the overall level of activity, is what propels a product to success.  This is what the publishing, music and other industries know and exploit all the time.  Consider this qoute from a well known literary Agent Donald Maas:

The fact is that roughly two-thirds of all fiction purchases are made because the customer is already familiar with the author.  In other words, readers are buying brand-name authors whose work they have already read and enjoyed.  The next biggest reason folks buy fiction is that it has been personally recommended to them by a friend, family member or bookstore employee.  That process is called word of mouth.  Savvy publishers understand its power and try to facilitate its effect with advance reading copies … samplers, first chapters circulated by email, Web sites and the like.  In most cases, someone reads a novel, gets excited about it, and tells a friend. (Taken from Writing the Breakout Novel by Donald Maas).

Now we know this and we can reliably track all success (yes I said ALL!) down to people.  You know why, everything social is social.  Wow, it took three degrees for me to work that out but it’s true.  Everything social is social.  Nothing happens without people.  We have fancy ideas such as those found on the shelves of Borders yet in reality the process of sharing information and excitement has not changed ever.   What is hard to know is what is likely to be a hit and what is likely to be a miss.  Pipe size has a lot to do with it of course.  The bigger the pipes, the bigger the exposure.  Yet, in this world of media falling apart and the growing disintermediation of media, the pipes are awfully big and the potential for sharing for word of mouth is the biggest and most responsive it has ever been thanks to the internet.   Still this is no guarantee of resonance, or engagement, big pipes don’t guarantee success

I will finish part 1 with a story on the recent television phenomenon Flash Forward.

A colleague of mine pointed me towards twitter search a while ago and sent me a link when Flash Forward was on.  I watched as real time feedback about the show, jokes and other randomness came up one tweet at a time.   I saw people saying what they liked and didn’t like about the show to their friends on the twitter (sorry couldn’t resist) and then sharing with others in other networks these thoughts.  Watching the conversations go through in real time showed me how unpredictable and different we really are, and how the idea of the long tail is relevant.   Now on to Part 2… Coming Soon: Engagement and why things become popular!

“The man with a new idea is a crank… until it succeeds” – Mark Twain

A wise man once told me that there is a high price to new ideas.  I thought he was talking about venture capital!  No, he was talking about the cost of innovation.  It takes great balls of fire to innovate, when it’s easier to do what we have always done in order to succeed.   True innovation is the riskiest risk there is, to use terrible English, because when you are ‘out there’ in the deepest depths (there I go again) of the blue ocean, there is nothing to hold on to.  I am not talking about your small and slow gradual innovations, I am talking about innovations that change things.  The punctuations, the extended uncut directors editions that remodel the ending so it’s new.  I am in a metaphorical mindset at the moment, I should pen a Tom Peters’ guru book … I might just sell two copies. I have a self-created reference for describing this process I call it: Engaging Concepts.   It’s the forefront of innovation, the grey bits inbetween the new stuff where thought and reality congeal for the first time.  It’s a bloody scary place, with very little predictability or repeatability.

The high price of new ideas

New ideas come with a price.  There is adjustment period, rejection or acceptance but there is also a chance for improvement.   There are a few people I know who I would put in the Mark Twain category.  These are people I like to call thought innovators.  You don’t find their papers in the Academy of Management Review, or Management Information Systems Quarterly, no you find them in a shed, outside or putting out their radical ideas into the community somewhere else.  It’s as if people who are thought leaders get punished until enough people come around.  Does this make them special?  No, it does not.  It does make them worth listening to, if you can filter out the strange things they say and the weirdness of their lives.

So where does the cost come in?

The cost comes in when we realise the risk.  Risk management is all about minimising or eliminating risk, it’s not really about innovation.  You have to take tremendous risks sometimes to innovate.  You have to say, ‘to hell with this we have to try it and see what happens – we can’t know the variables in this case’.  I think most of the great innovations were risky and may have even failed.  You know what?  They did it.  They paid the high price of risk of catastrophic failure and now life is better… in short!

New ideas are often risky, sometimes stupid and other times downright crazy… and there is that.  However, as Twain noticed the title of ‘crank’ and ‘genuis’ are one good idea away!

This is a short note about something I read in the dictionary (of all places).  I have been fascinated for a while about intentions.  In particular the motives we have that drive us to take actions.  I looked it up in the dictionary just before and it said a intention was something ‘designed’ or made for a certain purpose:

something that someone plans or intends to do; an aim or purpose

I think the core meaning in the word here is lost in Chambers dictionary. The main thing that bothers me about ‘intent’ is that it sounds like a ‘design’ or something that was made as a fit to a purpose.  To me, an intent is more fluid and therefore inherently more complex.  That is, when I intend to do something I am not completely sure of my purpose.  I may understand an element of it, and have clues as to my intent, but until I take action I am not sure or cannot know what my intent was.   My intentions often become obvious to me after I act. I will often say nasty things to people, then my intent was clear, I wanted to hurt that person (don’t get me wrong I am not Gordon Ramsey!).

Other times you act and the very actions you take reveal what your intention is… it’s not always a matter of pre-defined purpose or action.   So what does this actually mean? I think, it means we won’t always know what we think, until the stuff of life finds you out.  Ok, so this is me ranting… I write obscure fringe papers for a living… what can I say!

Edward De Bono noted in Serious Creativity, that often we pay lip service to creativity but don’t actually do it.   What I have learned should come as no surprise to most, yet it’s what I have found to hinder most creative and liberating efforts to produce organisational learning and innovation, is politics.

Why Politics hinders creativity

Often solutions that should happen aren’t the ones that are implemented.  This is sometimes for reasons beyond our control.  However, it’s been my experience that some solutions that are creative challenge political arrangements.  I have heard it said this way, what is politically attainable and culturally feasible (nod to Checkland) doesn’t necessarily mean the best solution.  Often we dream up the best answers to problems and even in some cases we completely redesign things giving fantastic ideas.  These ideas are wonderful but workplace arrangements and politics hinder there uptake.  In essence an idea can be the ‘best’ answered in theory but through the reality of politics, it will not ever get off the ground.

Creativity isn’t unbounded

The lesson here is the creativity should be nurtured, I cite Google and 3M as examples (see also Semco, Virgin and other such places).   Often though, it isn’t nurtured, it’s squandered and crushed into Dilbert sized cubes.  In the rawest most artistic sense creativity is unbounded but only by itself.  When we apply it to a situation where other people are there to interpret it, it’s subject to their opinions and judgements.  Yet, if the artist is faced with a canvas or a page, they are truly unbounded.  Yet, when the art is released, it’s turn over to the political realities of social structures.  People engage with it, they interpret and reinterpret it and make their own judgements about it.

In essence you can’t predict how creativity will be received even if it seems it really obvious that it’s the best thing to do.  The fact is, there are a lot of areas in our society where we don’t do what is best.  For instance, in abandonded petrol station about a one kilometre from my house were 17 homeless children.  In this country, with our abundant welfare and support it shouldn’t happen but it does.  It’s very sad.

What’s creatively best may not be politically feasible and it may not be accepted socially… even if it’s a great concept.  These realities are not minor hindrances to creativity, they are the foundation of it.  Truly creative solutions must pay attention to things like culture and politics.  If they don’t they run the risk of not being redunant.

In saying all of this, sometimes there is a solution that should be taken up, but often isn’t because of politics.  People protect themselves from change sometimes because of the political structures they build around themselves.  They select the right deputy,  a certain person for a certain task and a cavelcade of yes men and women.  This is an enemy of creativity because it stands in it’s way and hinders it, to no positive end.   Yes, if you have read this far, I have contradicted myself and said that creative solutions need to consider politics and then how political structures hinder it.   Yet, as so often happens in real life, it is contradictory.   We want real change, we seek it because we know we need it, yet we fear it and build structures around ourselves to make sure we don’t change.  What ensues is usually disaster, and we need look no further than recent world events like global warming, financial crises and epidemics.

What can we do to be truly creative?

While we need to be sensitive to politics, social and cultural concerns and we should not ignore them,  on the other hand to be innovative and clever in our practices we need to question our assumptions and learning.  Doing so, offers us the unique opportunity to change.   I have to be cynical at this point and say most people I meet talk of change, but in reality return back to a revised version of the same thing over and over again.  True reframing, political restructure and redesign is rare because it means a complete shift of assumptions, a change in the frame of reference we used to assess things.  Why is this case?  Ask a psychologist, I have no idea!

It is clear to me that people what to be capable of change.  Yet, I am not certain of it.   I hope for it… but I doubt I will see real change in my life time.  There are times when I have seen changes, real creativity at work… yet 95% of the time we fail to change.  I have not given up hope to see real creativity in my life time and as a matter of fact I am committed to see it, wherever I may find it.  However, I suspect that real change and creativity escapes us time and time again.   I would welcome comments with your thoughts.

A few years ago I wrote a post about what I was learning from integrating a Tiki Wiki into the curriculum of a course called Mobile Workforce Technologies.  Time has passed, wheels have churned and work was done.  GUESS WHAT!  A paper came from that experience that started on this very blog…

Read the paper here

The idea that came to me while we were using the wiki, shaped the final outcome here and I am very happy with this paper.  Ideas are not just little things we keep and then throw away.  They are things from which BIGGER THINGS can grow.  Like papers for example.  More than that though, ideas have a way of being carried sometimes way beyond what you intended and can reach bigger and better heights when you let them go.  This small victory is a case in point.

Ideas are important and we need to be constantly building, shaping and guiding the ideas we have.  We need to stretch boundaries, go beyond what we accept and create more about what is known, we need to build better things from the dust of our past failures.  We need to destroy creatively the past sometimes and make new things grow where they need to.  Standing still doesn’t work, observing doesn’t work… it’s action and the engagement of new ideas!  Get out there and build something awesome right now! DO IT!

I am attempting to do something similar to Alison who wrote a list of things she was interested in as an attempt to find focus.   At this point in time I find myself horrendously bored with my work, life and pretty much what I spend 99% of my time doing.   Perhaps, boredom is a larger symptom of a dissatisfaction with life itself… especially since I set out with four goals this year and none of them have been reached.   Yes, I am whining and so what.  You don’t like it … I apologise.   This is not a whine though, it’s a structuring activity, I am attempting to build a list of things that I am interested in.  So here it is… the master list… in glorious technicolour black and white:

A list that makes my previous list feel less adequate

1. The art of starting a business (and not failing!)
2. Internet and internet business
3. Human problem solving and how that works
4. Fiction writing
5. Creativity and design
6. Gaming
7. Technology (cool stuff not fixing or repairing computers or programming… I HATE THAT)
8. Family stuff and values
9. Existence and reality
10. Theology, the human spirit and matters of Faith
11. Music and guitar playing
12. Film (pimpslap!)
13. Aid work
14. Having fun

This is all I could think of right now!  Our lives are rich are they not?  However, in all the fluff I read there is something I have found to be of value. Recently, in our standard occupational health and safety text, I was led to a section on strategic planning. This sectionthat had some interesting information on how to meet objectives.  You have to formulate the steps as a “To” statement (that was my interpretation, upon reflection it probably didn’t say that!!!) To me I think I could summarise what I would want (i.e. the deep down desires) as the following “To” statements:

1. To start new and interesting business ventures
2. To write new and interesting fiction
3. To learn new and interesting things every single day
4. To somehow contribute to the spirituality of people in a positive way

Now comes the next part.  I need the “how”.  Dammit!  Oh well… at least I have begun my life structuring exercise.  I can’t leave it here, I need a how statement of some sort.  The “How” puts legs on the “To” statement. For example how would I learn new and interesting things every single day:

How: Make a conscious effort to seek new opportunities to learn interesting things every day by making time to learn something (basket weaving, French, eschatology, step aerobics or fly fishing for example),  for a small amount of time everyday.

Now this is a commitment.  I am committed!  Learning is a way of life for me and I love it.  But I only love it while it’s new.  Hence, why I want to start new and interesting businesses.  I hate the boredom of repetition found in work  routines and the mundane grind of administration… if I could I would outsource the ruddy lot of it!   In fact I probably do… let’s not talk about that, let’s talk about the how statement.  Now, I must work out the how as I possess more clarity that I previously thought I did when I started writing this thirty minutes ago.   I am ending this post now because I must meditate on the “how”!

Recently I was sent a link to a personality profiler from CareerOne.com.au.  I would think of this tool as obscure, if not more than a little bananas.  HOWEVER, I did the test and it come out with most bizarre answers I have ever seen.  I would recommend you try it if you want to discover how twenty-one questions that are randomly moved and compared to each other can create ideas about your future.  The main outcome for me when I did this test was that I was informed that I like innovation as a way of life.  So, given that the test knows ALL and is ALL KNOWING I decided that I would blog about it.

Phase 1: Don’t stay in the same place

Where most business, universities and the like fail is that they baulk when it comes to change.  Change for the sake of change can be a good thing because it can get you into the mindset that everything can be improved.  Somethings will never innovate (COKE) and in this sense I am not entirely sure that they could change it and have great results.  However, by adding value to the same product (macadamia meet chocolate) you have something innovative.  They added vanilla flavouring to Coke and viola!  We have innovation!  Be prepared to launch.

Phase 2: Staleness is your enemy

According to some authors (Tim Ferriss) you can automate things.  I am wondering if the automation of things makes us forget that some things have a shelf life and a process is only as good as its lifecycle.  If this is so, then I am certain that a lifecycle, has a start and an end point.  Everything gets stale.  Life, marriage, Web 2.0, bananas.  The bottom line is when you allow “staleness” to come and form into predictable patterns you are hindering learning, which in turn hinders innovation.  I have heard it said this way, “a good teacher prepares the cirriculum then bounces their ideas off their students to deliver the best possible course”.  About 4 people said that… and I can’t remember in which order.  That doesn’t matter… what matters is that when we enforce rigidity, patterns and process managerialism we are forced into cycles of defensive mechanisms and staleness is born.

Phase 3: Run towards your fears

I have a lot of fears.  The biggest is that I will remain bored and stuck doing things that I have no interest in (hence the evil survey from careerone nailed my ass on this one).  I have to create new things to do because I am the kind of person who likes new challenges… for this reason I have taught everything from E-Commerce to Occupational Health and Safety.  You could argue that I lack discipline… fatness may also prove this to be so.  However, when you are faced with a fear of change or failure you feel paralysed.  You feel helpless… the key to remaining innovative is to act and to act decisively.   Run towards your fears and go through it with gusto.  Balls out!  This gets the innovation train (hat tip: Alison) chugging along at full pace.  It does… fear is the primary killer of innovation.

Phase 4:  Shift concepts when required

Another key to innovation is to remain open to new concepts.  When we form defenses, we form a solid unbreakable model of the issue at hand and we think that this problem will create for us a genuine threat/opportunity matrix for us to decode.  In reality such things don’t exist… they are mere tools for the analysis of problems.  Are you stuck in an either/or, black vs. white cycle?  Move past either or to AND!  Or simply, take both options you are stuck with and add something that is completely different ala lateral thinking.  Shift!

In closing this short (obscure) post I would like to say that true innovation is a way of life.  If you define yourself too early in the game then you leave yourself with no way forward in the future EXCEPT the past.  A concept has power.  Innovation is measured by actions more than thought… deeds more than models… yet every innovation starts with a single person(s) decision to think about change.  Why don’t you think about change?