Tuesday, December 23, 2014

Harvard Business Review: "Understanding 'New Power”'

My boilerplate HBR intro, from 2012's "The Unimportance of Practically Everything":
I've previously mentioned that I had all but given up on the Harvard Business Review:
Does Anyone Actually Read the Harvard Business Review?
For years I though it was just me thinking that the HBR was only used by high-buck consultant's to stroke CEO's egos, telling them how smart the CEO was to hire said HBR-spouting consultant.
From Felix Salmon at Reuters...
Once in a while though...

In horse racing 60% of the purse goes to the winner, 20% to the 2nd place finisher and lesser amounts to 3rd through 5th. Does this mean the first place finisher is three times as good as 2nd? Of course not, it's usually fifths of a second that separate the two. In sealed-bid contracting 100% of the contract goes to the better (usually low) bidder while second place goes back to the office with nothing. Again, how much better was first over also-ran?

This division of the spoils isn't confined to business. In life the reward for being second is not much better than for being one of the pack....
A major piece from the HBR:
We all sense that power is shifting in the world. We see increasing political protest, a crisis in representation and governance, and upstart businesses upending traditional industries. But the nature of this shift tends to be either wildly romanticized or dangerously underestimated.

There are those who cherish giddy visions of a new techno-utopia in which increased connectivity yields instant democratization and prosperity. The corporate and bureaucratic giants will be felled and the crowds coronated, each of us wearing our own 3D-printed crown. There are also those who have seen this all before. Things aren’t really changing that much, they say. Twitter supposedly toppled a dictator in Egypt, but another simply popped up in his place. We gush over the latest sharing-economy start-up, but the most powerful companies and people seem only to get more powerful.

Both views are wrong. They confine us to a narrow debate about technology in which either everything is changing or nothing is. In reality, a much more interesting and complex transformation is just beginning, one driven by a growing tension between two distinct forces: old power and new power.
Old power works like a currency. It is held by few. Once gained, it is jealously guarded, and the powerful have a substantial store of it to spend. It is closed, inaccessible, and leader-driven. It downloads, and it captures.

New power operates differently, like a current. It is made by many. It is open, participatory, and peer-driven. It uploads, and it distributes. Like water or electricity, it’s most forceful when it surges. The goal with new power is not to hoard it but to channel it.

The Participation Scale
The battle and the balancing between old and new power will be a defining feature of society and business in the coming years. In this article, we lay out a simple framework for understanding the underlying dynamics at work and how power is really shifting: who has it, how it is distributed, and where it is heading.

New Power Models
Power, as British philosopher Bertrand Russell defined it, is simply “the ability to produce intended effects.” Old power and new power produce these effects differently. New power models are enabled by peer coordination and the agency of the crowd—without participation, they are just empty vessels. Old power is enabled by what people or organizations own, know, or control that nobody else does—once old power models lose that, they lose their advantage.

Old power models tend to require little more than consumption. A magazine asks readers to renew their subscriptions, a manufacturer asks customers to buy its shoes. But new power taps into people’s growing capacity—and desire—to participate in ways that go beyond consumption. These behaviors, laid out in the exhibit “The Participation Scale,” include sharing (taking other people’s content and sharing it with audiences), shaping (remixing or adapting existing content or assets with a new message or flavor), funding (endorsing with money), producing (creating content or delivering products and services within a peer community such as YouTube, Etsy, or Airbnb), and co-owning (as seen in models like Wikipedia and open source software)....MORE