Posted by Dave Lorenzo - Business Coach
Carnival of Career Intensity – Post Three
Brandon Peele presents What the Media Industry Tells Us About Business Strategy and Our Lives posted at GT.
The media business was first to demonstrate that inauthenticity, values-less intermediaries and fear have no future place at the table. Taking their place is a current of creativity, fulfillment, values and self-awareness. This is not a phenomenon unique to the media industry as there are profound business and personal insights to be gained through its study.
In the media business there are two competing forces - forces which compete for their piece of the economic pie. These forces are content and distribution/technology. The people behind content are writers, directors, actors, editors, producers, musicians, painters, craftspeople, etc. The people behind technology and distribution are theatre owners, cable television executive, cable service providers, movie studios, production studios, art galleries, radio stations, etc. These forces can be more broadly characterized as talent and talent enablers. The job of talent is to self-express, i.e. be creative. Creativity is synonymous with self-awareness and happiness, though many creative people are only self-aware and happy while creating.
The enablers choose not to create, rather determine how others create and are rewarded for their creations. Enablers take a percent of the creative earnings for their work of enabling. Distribution networks like cable and movie theaters take home around 50% of the revenue, leaving the remainder to the creative forces to cover their costs and make a profit. Talent agents, managers, deal makers, production costs, etc. eat up the majority of the other half.
The industry is set up in this manner so that the creative types can focus on their core competency - creating, and the distribution/technology types can handle the less glamorous aspects of the business, including meltdown management, which would otherwise detract from an artists ability to be artistic. These enablers are usually very important to the lives of the talent - witness the sad careers of Jeff Beck, Dwight Gooden and Mr. T minus the proper enabler/manager.
However, the net result is that the actual creative talent, because the costs of delivering the product are traditionally so high, gets very little of this pie. Witness the heartbreaking bankruptcies of TLC, Joe Frazier, MC Hammer, etc. The exceptions being the big name creative talents like Tom Hanks and U2, but they represent less than 1% of those engaged in professional creative pursuits. The power is in the hands of the enablers, especially, the distribution/technology entity.
This picture I’ve just painted is 20th century media landscape. The 21st century shows us something dramatically different. Distribution/technology costs have come way down, as Digital Video cameras, mixxing and editing software and production equipment can now be had for pennies on the 1980 dollar. Proprietary distribution technologies have given way to technologies demarkated by the qualifiers “open source” and “free”. Google/YouTube is our interactive program guide and distribution mechanism in one. And it’s free.
Thus, the barrier to entry in the media distribution business has been all but eliminated. Studios are no longer as needed to facilitate the creative process, as the value they provide now has been substantially reduced. Linear programming and channels aren’t half as effective as the popularity/recommendation mechanisms of Google/YouTube. As such, any artist can perform, edit and collaborate without wondering how his/her work will reach a broad audience. If its good it will get eyeballs. Though the advertisers haven’t quite figured out the business model for compensating creativity online, endeavors such as AdSense, YouTube and Revver should present compelling economics shortly.
Google/YouTube and all the tech/dist advances subsequent to it, have altered the landscape such that content is and will likely always be king. In the entertainment business, king content is that which is expertly acted, written, edited and produced. Collaborative creativity yields king content.
So what does this tell us about business and our lives? First, the media business is significant because it is the first business to violently disintermediated by web technology. That is, the internet shook up the economic structure so much so that power is changing hands at an ever frequent pace. The media distribution/technology business, regardless of whether we’re talking TV, theatres our Googtube, is merely the transfer of data. One’s and zero’s from a source to your brain. The internet made this much efficient.
The lesson is, that if a business is a gatekeeper of information in some fashion, i.e. the value they provide is knowledge transfer, they will be marginalized by lower cost providers. Markets such as eBay, bidquest, eloan, etc. have brought prices and profitability way down for commodity items. Technology expedites commodity. And it is doing so at an ever quickening pace. While certain technologies may dominate a market for a time, such as AOL, Microsoft, Apple, IBM, Google, they do not do so forever. Thus investment in terms of time and capital into technology will continue to deliver fewer and fewer returns as newer better technologies come to market faster and faster.
I’m reminded a middle-aged woman expending vast amounts of effort and money in her aesthetics to regain what is lost, instead of investing in the one thing which only appreciates, her intellect/character/personality/depth. The lesson for business is to create, to produce something or some peice of information which is novel, to lead by design, by values.
In industries outside of media, content means design and values. How creative and innovative is the product or service? What was done to deliver it? These two very different questions are answered by one strategy. Self-awareness.
Creativity is found only when happiness and self-awareness intersect. That is, creativity, happiness and self-awareness are synonymous. Where you find one, you shall find the other two. To nurture creativity and innovation in an organization, we must nurture the long-term well-being of people, by making them happy and nurturing their search for themselves, for meaning. Values are also the result of self-awareness. The deeper one looks at his/her self, the stronger one feels about one’s purpose and what one is willing to do (values) to execute upon it. Moreover, self-awareness ultimately yields a re-identification, or rather an expanded sense of identity to include other people, the environment and eventually, all that is.
So what do this new age mumbo jumbo have to do with business? As the media has shown, content is king, and therefor distribution and technology are being commoditized. But media isn’t the only place this is happening, it was just the first. As Thomas Friedman, so astutely observed, the world is flat. Mundane business processes such as call-center, telemarketing and accounting services, even high-touch services such as financial research, software development, legal research and medical diagnoses are finding their way to the lowest cost provider in a cadre of developing nations. These technologies, values-less technologies, are being commoditized. The bane of the white collar worker is evaporating.
Harvard Business School articulates this shift with the proclamation: MFA is the New MBA. This reasoning resonates with the shift presented by a meta-analysis of historical business strategies which describe the trend towards increasing levels of integrity, awareness, service, creativity and innovation within organizations.
The extent to which an individual or organization thrives is governed by innovation and values, such that they can create faster than their creations are commoditized. Thus, a particular technology/product/service, or even portfolio of technologies/products/services, are not as important as the processes which produce them.
Business must therefor nurture a values-driven co-creative culture of innovation. Prevailing fear-based business conventions delay the inevitable cultural emergence by playing catch up and holding onto dwindling market share through agressive pricing, M&A, patents, litigation, etc. However, as liquidity improves, barriers to market entry are lowered and new financial vehicles are developed - everything from microfinance to private offerings of equity and debt to alternative forms of capital - large corporate sponsorship will no longer be a requirement for success. The longview suggests that innovation and values are clearly a more sustainable philosophy than a fixer-up strategy of acquisition, litigation, patents, etc. Content is king.
Moreover, the speed with which talent and competitive advantage evaporates is quickening. With blogs, social networks and reputation technologies like LinkedIn and iKarma, inauthenticity, myopia and incompetence with respect to creating a values-driven culture of creativity reveal themselves instantaneously. As the labor market gains greater liquidity, coincidentally through the same technologies which provide transparency - blogs, social networks and reputation technologies, and individuals become brands and assets themselves, talent (values-driven, innovative humans) can easily abort cultures which do not nurture their self-expression.
Conclusion:
For business: Nurture a culture of self-awareness, values and innovation. Develop cutting edge professional/personal development programs, co-create and frequently modify the firm’s vision, mission and values and implement a business strategy to remove obstacles for employees such that they can spend an increasing proportion of their time on self-expression (innovation) on the the firm’s behalf.
For business people: nurture self-awareness. Make it a practice. For best results develop an integral transformative practice touching on psychodynamic, contemplative, kinesthetic and cognitive lines of development. Take up at least one creative pursuit to nourish the creative impulse and begin your own experiential study of creativity/happiness/self-awareness.
Filed under: Career Options
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