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A new organising principle

Posted on: Monday 12th of September 2016

When steam power began to make way to electricity, factory owners would rip out the steam engines at the heart of their factory and replace them with electric engines instead. It took a while for them to realise that electricity made a completely different approach to production possible.

Steam-powered factories were organised around the need to put certain machines close to the steam engine. Access to power was the organising principle of the factory. But with electricity, production lines could be organised to enable the most logical flow of materials and work. Only when factories were reorganised to address the logic of the work rather than the logic of access to steam power did electrification unleash a productivity revolution.

 

Similar story

Today, we’re witnessing the same with information, especially as it relates to customer engagement and value. Companies have embraced online and digital processes mostly to replace or enhance existing ones, creating multi-channel retailing, online access to pre-existing accounts, adding online advertising to traditional media, and so on.

These are all significant operational challenges. But they retain the old organising principle of product push while the really big changes and opportunities stem from a new and different organising principle: consumers accessing and using information for their own purposes.

The information age is making it possible to meet previously unmet consumer needs – information-intensive tasks such as making better decisions, planning and organising tasks and processes like ‘manage money’, ‘move home’ or ‘organise holiday’. Traditional products and services are either being subsumed into these broader offerings, or how consumers find out about and choose them is being transformed.

Consumer time and attention is migrating to new places such as Facebook which enables peer-to-peer networking and Google whose search services are a key driver of modern consumer decision-making processes. But that’s just the beginning. The more consumers embrace PIMS (Personal Information Management Services) the more organisations will have to adjust what value they offer, and how, to meet customers’ information and decision-making priorities.

 

Which response?

In some cases, the best response is to become a PIMS-provider in your own right. In others, to develop or be part of enabling infrastructure and platforms focusing on issues such as consents and permissions, identity and data sharing. In others, it’s simply to connect existing businesses to the new models. We’ll be exploring the implications of this shift at our Achieving Growth Through Trust conference in London, Sept 29.