• by Douglas Rushkoff , November 28, 2006

How being great at what you do is great for business

Like a pot of water brought to a boil, it all looks pretty messy and bubbly right before the system changes and reaches new order.

Any of you involved in media over the past decade now knows that computers and networks offer more than a new way to deliver content or ads: They give everyone more opportunity to assume the roles of authors — of creative participants — in an increasing variety of venues. But most of us are still scared of all those “everyones.” We still don’t “get it” enough to change the way we conduct our communications. Instead of rejoicing at the possibility of a connected community, we panic at the seeming loss of control.

The real opportunity here is to turn every interaction that a so-called “consumer” has with your company into a chance for him or her to express and extend this newfound capability of authorship. By doing so, you will allow your enterprise to be experienced as an enabling rather than a restricting force in their lives. You will also stand to benefit from the immense outpouring of creativity that both customers and employees produce, often with no expectation of anything in return.

In short, by recognizing this renaissance for what it is, rather than attempting to squash its complexity, you can exploit the unstoppable energy of this era as a source of innovation. By embracing the creative capacity of those whose actions you may have formerly sought to control, you allow a different sort of coordination to emerge. Yes, networking, self-determination, and autonomy lead to a certain amount of chaos. But, as what I’ve come to call our new media “renaissance” is teaching us, chaos is not disorder at all, but a way that systems reach higher states of complexity and self-regulation.

Thanks to computers and the systems theory they enable, the ocean, the weather, and even the media and the stock market are understood as systems with behaviors. Scientists no longer explain the tremendously sophisticated organization of everything from slime mold to anthills as a result of a hierarchy.

Behaviors on one level of experience, when allowed to manifest fully, lead to organization on a higher dimensional level. It’s pure renaissance: the rebirth of the old in a new context.

The caveat is that part about allowing them to manifest fully. People can’t be coerced to emerge at a higher level of organization. They can be forced to stand in a line or behave in a certain way, but the result is a less coordinated collective, incapable of responding to anything without orders from central command. The most complex, stable, and self-regulating organizations in nature, from the coral reef to the rain forest, organize from the bottom up.

What all complex systems have in common is that they are highly networked. While members of these systems may not be taking direction from a centralized authority, they are in constant communication with one another. Each member is capable of listening to his fellows and, more importantly, feeding back his own observations to the rest. A message from one organism in a coral reef can spread hundreds of miles, from member to member, in a matter of hours. This is how the entirety of the reef can “decide” it’s time to reproduce or hibernate.

Emergent order only happens when a system becomes chaotic enough to reach the next level of organization. Like a pot of water brought to a boil, it all looks pretty messy and bubbly right before the system changes state and reaches new order. Of course, putting a lid on the pot and weighing it down doesn’t prevent any disorder; it only prevents the new, higher level of organization from emerging.

But this is precisely how most businesses respond to the challenge of a networked office and marketplace. Instead of promoting the cross talk and feedback required for a higher level of organization to emerge, managers use technology to reduce complexity by monitoring and restricting the behavior of employees. Taking their cue from the stopwatch management theories of the past, they count keystrokes and treat office cubicles like boxes on a spreadsheet. Technology is used to regiment the workplace instead of liberating it.

Meanwhile, customers are reduced to their purchasing profiles. We may see our customers as individuals, but only insofar as we believe that if we can only crack each consumer’s personal profile, we will be able to appeal to his own needs and wants. We want to market one-to-one. We even see this process as empowering to the consumer, as a renaissance of his autonomy. What more could he want than to have his individual desires addressed?

But the only way the consumer is allowed to give feedback is through purchasing decisions. The consumer self-expresses by buying Tide instead of Cheer. This is not authorship, at all; it’s equivalent to deciding which of two sitcoms to watch. The idea that consumer empowerment is the right to choose between existing products is indicative of a top-down model of technology, and a broadcast model of media. Yes, every individual has his own perspective on the great problems of laundry detergent, pain relief, and every other consumer dilemma. But simply having one’s own opinion and brand of choice is no longer an adequate expression of who we are.

Participants in today’s renaissance, empowered by the proliferation of networked authoring tools, no longer define themselves by their perspectives, but by their contributions. That’s why it’s so futile, say, to think we can fulfill people’s deepest needs by re-engineering a brand or corporate identity that is more compatible with one new value or another. It’s not about reflecting their perspectives; it’s about giving them the chance to reflect and express it themselves.

And there’s no better place to practice this new ethos and watch it play out than on the Internet. On each of the main landscapes of business, the Internet can be used either in a vain attempt to restore order or to encourage authorship and the innovation that comes with it. The Internet gives us a new way to relate to our employees, our customers, and even our products — as well as the ideal laboratory for experimenting with strategies applicable to the renaissance society into which our interactive technologies have helped bring us.

That’s why the danger for most marketers entering the computer age is that, like bad managers, they see these tools as ways of updating and reinforcing the automated, captivating practices of the past. Instead of acknowledging the way human beings are moving beyond their predictable identities as members of single consumer tribes, market researchers claim that, with their state-of-the-art computing skills and algorithms, they can keep up with the complexity of our shifting populations. They cannot succeed, nor should you hire them to try.

For decades, market research firms like Claritas and Acxiom have kept detailed records on a great majority of America’s households. Yet no matter how many market segments these companies develop, they still amount to a tremendous oversimplification of the marketplace, and strategies that contradict the overwhelming ethos of our renaissance to promote complexity and boundary crossing. It leads to little more than personalized junk mail or Web site suggestions. And from a consumer’s perspective, I don’t know which is worse — for them to miss the mark or to hit it too precisely. Is it comforting that the junk mail universe has discovered you are overweight or have a fertility problem?

Stickiness is not attraction; as the advertisement suggests, it is a form of captivity. The experience of a Web banner is that of an obstruction on the windshield one is using to navigate the Internet. Stickiness is a roadblock. Placing ads on the Internet slows the actual experience of obtaining and sharing information. The sponsor of such ads will not be seen as a benefactor, but as an impediment. This is not a good way to establish customer relationships.

The next frontier of stickiness will be the wireless arena. We have yet to see whether Verizon will be able to maintain its own sticky policy of preventing its cellular customers from leaving the closed Verizon universe. Photos taken on Verizon cell phones, for example, can’t be uploaded to a computer or sent to a non-Verizon subscriber without going through Verizon’s own Web site — for an additional fee. Users can’t download programs or games except from Verizon’s own vendors, and communications features such as Bluetooth have been partially disabled on Verizon’s version of Motorola and other phones, preventing users from exchanging files, songs, or videos with people subscribing to competitors’ phone services.

Verizon is able to enact such policies because, as yet, it has the best coverage in the United States. But numerous Web sites and online groups have already been working hard to “crack” the locks Verizon has put on its phones, and to defame the company wherever possible.

Cell phones also pose the next challenge, and probable hazard, for marketers. Since young people are spending an increasing amount of time talking to one another, rather than watching television, companies looking to reach them have charged their advertising agencies with penetrating this new conversational environment. To do so could, again, be a crucial error in judgment. If a marketer has done his job right, those kids will already be talking about his product. To interrupt the conversation with an ad is to defeat word of mouth. than watching television, companies looking to reach them have charged their advertising agencies with penetrating this new conversational environment. To do so could, again, be a crucial error in judgment. If a marketer has done his job right, those kids will already be talking about his product. To interrupt the conversation with an ad is to defeat word of mouth.

This doesn’t mean marketing of one sort or another can’t happen online or even on phones. It just won’t look like advertising or be based on the reductive, sticky tactics of yesterday’s marketers.

Amazon.com’s best marketing strategy costs it almost nothing, because its users take care of it. By creating a forum for customers to rate and write reviews of any book in the system, Amazon turns an otherwise ordinary online bookstore into a community of book critics. The consumer is recognized as the ultimate arbiter of a product’s quality, and the online store becomes a vehicle for millions of pages of individual expression.

Likewise, instead of offering any product of its own, eBay simply enables the transactions of others and systematizes the process by which people can trust one another enough to send checks and items to each other through the mail. eBay is a listing service, but more importantly, it is a ratings system. eBay’s participants have no motivation to rate merchants after a successful sale, except for their knowledge that it makes the community a better place to do business in the long run. By encouraging an ethos of trust and responsibility, eBay comes to represent these values in the greater online community. No advertising necessary.

It’s the People, Stupid

The greatest danger for any business looking to enter the interactive-media space is that, like any business in an increasingly transparent marketplace, the Internet can turn almost any product or service into a pure commodity.

For once a business puts itself online, its goods, services, and, most of all, prices, can be compared quite mechanically against anyone else’s. Shopping aggregators, like Yahoo Shopping and Epinions, do this automatically. Once a shopper knows the product he wants, he types it into one of these engines, and the site presents a list of online retailers offering the item, in order of price, including shipping and handling. A ratings system of stars indicates whether other consumers have found the merchant to be reputable, and the consumer goes to the least expensive one. That’s transparency.

But it also spells doom for companies that have no competitive advantage other than to shrink their margins down to nothing. Without a real strategy for taking advantage of interactivity, and doing so in a way that complements rather than stifles the customer’s sense of agency, most businesses would do well to stay away lest their cost structure deteriorate irreparably.

The Internet has seen a number of battles between companies providing complementary goods and services. They attempt to turn one another into commodities. By 1998, some companies were offering free computers to anyone who signed up for an Internet Service Provider (ISP) contract. Meanwhile, computer manufacturers were giving away a year of ISP service to anyone who would buy one of their computers. This only succeeded in turning both products into potential commodities in the minds of consumers.

Hi-tech companies that can’t find any true competitive advantage usually try to compensate through a version of stickiness called “loyalty incentives.” The worst of these are currently being employed by the most commodified of technology businesses: the cell phone providers. In return for a discount on a phone, customers must sign up for lengthy contract terms with stiff penalties for early cancellation — often up to $300 or $400. The wording on these contracts is so opaque that the American Association of Retired Persons (AARP) is currently considering either taking action against providers on behalf of its members or offering its own low-cost cell phone service, with more transparent terms.

The greater effect of the Internet and the mentality that comes with it has been to break down the bonds of customer loyalty. An America’s Research Group study showed that the number of customers who believe that brand names are “extremely important” for choosing holiday gifts has been decreasing by about 10 percent a year. Advertisers are beginning to find that their ads tend to benefit their whole category more than their own offering within it.

That doesn’t mean the Internet can’t still be used to a business’s advantage. I consulted to Dell Computers as it was attempting to migrate its home and small business customers from phone orders onto the Internet. It was a tough transition for the company because it didn’t want to end up head-to-head against retailers that offered products that were indiscernibly different on the surface, for very discernibly lower prices. Meanwhile, Dell was losing market share to Gateway, which had made quite a splash with its “cow” campaign and homespun brand image. In the home user sector, Gateway seemed friendlier.

The answer I gave the Dell Executives was to send to the Web not just their product line, but their competitive advantage, as well. Dell made its name on ease of ordering. A single phone call to a knowledgeable sales rep and you’d get the computer you’d need. So we worked on a new Web site, appropriately (but rather uncreatively) called Dell4Me, through which users could enter the sorts of needs they had from a computer and then receive a recommendation for a whole system. Unlike other sites that spoke only in gigabytes and megahertz, the Dell4Me site would humanize the technology on offer, rather than technologizing the humans coming to shop. We demonstrated Dell’s competitive advantage — knowledgeable, human customer service — in the online environment. Dell’s sales quickly retook the number-one position in that category.

It’s the simplest lesson of the Internet, and one that Internet companies seem to be the last to get: it’s the people, stupid. We don’t have computers because we want to interact with machines; we have them because they allow us to communicate more effectively with other people.

Transparent Authority

Most businesses are still looking at this renaissance through the lenses of the last one. They can’t help but want to reduce complexity and create order. Restoring order, however, whether in the office, marketplace, or production floor, means enforcing obsolete policies, restricting creativity, and putting up walls between people. In an age of innovation, this is just putting one’s head in the sand. Worse, thanks to the transparency of the networked age, everyone can see you doing it. Resistance is futile.

Our interactive networks are responsible, at least in part, for the liberation of the consumer and worker alike. We evolve from controllable cogs to human beings behaving with agency. As this process is just beginning, we are all the more conscious of the people and institutions that are standing in the way.

We reward Amazon.com because it makes the book-buying experience transparent. We can see what real people, just like us, think about the books we are considering purchasing. Going “meta” on this evaluation process, we can judge the value of a particular review by seeing how many other users found it “helpful.” We can even look up the reviewer’s other postings to judge for ourselves whether we agree with his perspectives. Once we’ve read a book, we can join in the community and establish our own reputation by writing reviews ourselves.

But Amazon’s transparency goes beyond that. Much to my own chagrin, Amazon serves as an aggregator for used booksellers around the country. Pretty much anyone who has a copy of one of my books and wants to sell it can fill out a simple form on Amazon. It’ll then list the availability of used copies of my books, right on the book’s main page. Click on a link, and the customer sees the used copies, listed in price order, with customer ratings of the reliability of each vendor.

Amazon positions itself not just as a bookseller but as a promoter of reading — even if it means undermining the sales of a particular title, or the number of new books my publisher can print. In the end, Amazon promotes the expression of its online customer-authors more than that of the authors whose books it sells. And in a bottom-up renaissance, it wouldn’t be any other way.

Sales of ringtones actually far exceed the sales of music files through services like Apple’s iTunes. Why? Because ringtones aren’t just listened to, they are played for others. Not everyone has the ability to write a song or even “scratch” like a DJ, but a great many young people still want the experience of authorship and self-expression that communications technologies suggest. So while they may not write novels, they do participate all afternoon in “instant message” sessions with their friends.

The Internet was never about the computers or the content they carried. It was about elevating people to the role of creators, and letting them interact with one another in this new capacity. Companies that allow and, hopefully, even encourage this to happen will find themselves giving birth to entire cultures that transcend the boundaries between what they formerly thought of as employees and customers. They’ll reach a level of organization beyond what they could have implemented by design. And they’ll find an emergent stability that far exceeds anything they could have enforced from above.

Then maybe, just maybe, they’ll finally get it.

Get Back in the Box: How Being Great at What You Do Is Great for Business, by Douglas Rushkoff. © 2005 by Douglas Rushkoff. Published by arrangement with HarperCollins Publishers