Business will never be usual again
Like all of us, I have been trying to make sense of the dramatic shifts that have come to all our lives in the last year. What we face has been described in predominantly economic terms — and we’re all feeling (most of us, at least) less wealthy and secure. But clearly, across the board, we are entering a very different world in all aspects of our lives.
We understand how we got here: We’ve lived beyond our means, greed outpaced reason and the pendulum politically will swing to quantity of regulation versus the quality of it. To paraphrase perhaps my favorite of all Buffettisms: When the tide goes out, we see who’s swimming naked.
Proven true throughout history is that a steely focus on very basic, commonsense human behaviors is the most reliable rudder of where to steer one’s boat. It has amazed me how many smart gurus and ceos think that what we are experiencing is merely a cyclical change, albeit harsh. That, eventually, we will go back to business as usual. The ceo of Goldman Sachs — one of the most prestigious financial institutions in history, who got within a hair’s length of receivership and is now fundamentally a bank — recently stated the company’s historic strategy remains fundamentally sound.
Not one industry — especially ours in media, entertainment, information and marketing — will be the same. But, more importantly, this is not new. Well before the economic tide went out many media executives thought they could hold onto business as usual, perhaps with incremental changes, regardless of broader shifts that were happening prompted by new ways of meeting clear, commonsense human behaviors.
In the same way so many analysts today say the times we’re in were so predictable (forty-to-one debt ratios were unsustainable in any financial institution; people making $100,000 a year shouldn’t buy a million-dollar house, etc.), it hasn’t been hard to see what the future of media and marketing will be. We have all long known what the future would hold for businesses reliant on print classifieds, on general video advertising that interrupts programming at set times during the day, on physical distribution of music forcing folks to buy songs they may not want, and so on. If we started from scratch, with today’s technology, would much of the current media and marketing rules be created, let alone defended? Very few.
It feels like the abyss to many of us, and certainly to those of us who are of the age to barely remember previous recessions and have never seen a depression. But any sense of history shows that it is in fact moments like these, when the cost of change finally becomes less than the cost of business as usual, that an unprecedented opportunity exists to retool not for the world that was, but for the worlds that have long been on the way.
Innovation will continue to come from the start-ups and enterprises unencumbered by the desire to protect a legacy of business practices. But there will be notable surprises of innovation among established enterprises that see the world as it is.
A major newspaper will shut off the printing presses and create remarkable, trusted, interactive experiences with a new model; significant video ad product innovation will serve marketing messages to the right people at the right time without interrupting or annoying users but, rather, engaging them; “broadcasters” and music creators will embrace a software-like model of unlimited access to give people what they want on their terms; marketers and their agencies will move beyond size-for-size’s-sake buying because it’s “easy,” and create experiences that are useful to targeted and relevant audiences.
Who’d have thunk big media would invent Hulu?
For those waiting for the return of business as usual, the most cherished names in media and advertising will wash away with the Lehmans and Bear Stearns.