(The Intelligent Brand - Part Two is here.)
A revolution in intelligence
[…] an evolutionary turning point: one from a straight back-and-forth communications network to a new form of media … The Net began to resemble a complex and highly adaptive life form, with a personality composed of many different interests and motivations. With each new advance in technology and each new use that was found for the Net, the whole of the thing adapted and grew.
Andrew Zimmerman, Coopers and Lybrand Telecom and Media, 1997
A great leap forward
We’ve framed our changing environment in terms of three distinct but overlapping eras: Industrialism (up to say 1960), Late Industrialism (up to say 2000), and Informationalism (from say 2000 to today). We’re especially concerned with the period since data processing entered the picture, and after that, what changed since the emergence of the Web.
While we can usefully continue to use the term Informationalism to contrast with Industrialism, as our narrative evolves it becomes increasingly problematic to think in terms of today’s environment as The Information Age. Given that the new dynamics we need to grasp revolve far more around the dynamics of the Web, and given also that the central role of information in business predates the Web by, we could argue, well over a century, I believe it’s more accurate to think in terms of The Network Age.
An ideal commentator to help us here is the academic who has, over several decades, significantly advanced our understanding of how networks impact culture and commerce, Manuel Castells. He writes, with co-author Pekka Himanen in their 2014 book, Reconceptualizing Development in the Global Information Age, of:
... a new form of socio-techno-economic organization that became fully constituted on a global scale in the early twenty-first century. Informationalism did not replace capitalism. In fact, it powered a new form of capitalism now prevalent everywhere […] What characterizes informationalism is the widespread use of microelectronics-based digital information and communication technologies that allow the diffusion of networking forms of organization in all domains of economic and social life. It also powers information processing and digital communication, enabling the expansion of the knowledge base of the economy and of the information society. […] Networking is an essential component of informationalism. This is why the dominant social structure of our time can be characterised as a global networking society.
The role and value of information have steadily changed over centuries, accelerating sharply since the 1960s, right up to the emergence of our current Web. But we haven’t - and this in many ways is the heart of this work - yet appreciated just how very profoundly this paradigm has disrupted the rules of value creation.
There’s been, only over the past ten to fifteen years, a discontinuous great leap forward whose radical impacts and implications - again, perhaps because most of us have lived and worked in the midst of this revolution - remain under-articulated and misunderstood. It’s no longer more and better, of more or less the same thing. It’s a new thing altogether.
Evolving intelligence
Core to coming to understand this is the way information has been captured and applied to evolve and expand intelligence for business. We can usefully think in terms of five phases, all but the last of which are more or less familiar and self-explanatory.
- Product intelligence: how to design and build a mousetrap, then a better one;
- Business intelligence: the accounting and logistics required when the market, and firms within it, professionalise;
- Market intelligence: competitive insights and statistics that inform innovation, marketing and sales;
- Customer intelligence: which came into vogue towards the tail of Late Industrialism giving rise, among other changes, to direct or database marketing;
- Network intelligence: rising floods of information entirely redefine the new marketplace, defying Late Industrial efforts to make sense out of them.
One startling realisation here is that information, in its commercial role of enabling increasing types and amounts of intelligence for the market and the firms within it, has quietly shifted from primarily being about the business processes that create the value (i.e. in the Late Industrial model) to become about the value itself.
We could say, more pithily, that information has moved from being previously about resources to now becoming a resource in its own right. It’s worth pausing to reflect on the significant implications of this change.
Think about the type of data processing work done by the world’s largest corporations using IBM’s revolutionary System/360. Now think of the sprawling server farms of today’s tech giants. The paradigm shifts from information being about the workings of the business, to just being the business.
In the Web age, information also, for the first time, becomes an empowering and enabling resource for customers, the implications of which we’ll explore further below. Every one of today’s smartphones exceeds the power and range of the room-sized monoliths of 50 years ago.
We had expected to be able to carry over the same concepts that emerged in the customer intelligence period - when information remained scarce, and thus both easy to manage and make sense of for competitive advantage - across to The Network Era. We can now begin to replace these misconceptions, with a model of thinking that reflects the extreme discontinuity of the Web, while combining the appealing merits of simplicity and sophistication.
Network Intelligence
A simple definition
Intelligence has many definitions, perhaps too many. For our current purposes, we’re concerned with what we can call the ‘functional intelligence’ that gets results.
While a person we might refer to as intelligent could be a scatty academic, a ruthless fraudster, or a precocious child, the aspect of intelligence that arguably matters most - not just in business but in the today’s world - is quite simply an ability to make sense of things to generate intentional outcomes that are beneficial. In this sense, intelligence and power are not far from each other.
When we speak of actionable information, we’re referring to an increase in our available intelligence: in fact, the actionability more or less entirely determines the value of information.
We’re thinking of intelligence, therefore, in terms of the ability to find, articulate, and also to act upon, meaning.
When thus equipped, we are able - as a single person or a large corporation - to assess, to decide and to do what’s best. To further our own interests, and in some instances, those of others.
A road to clarity
Tracing the history of intelligence in business, its journey from the happy simplicity of the quest for a better mousetrap, through to the unimaginable complexity and velocity of today’s Web, offers an urgently needed sense-making lens through which we can, perhaps for the first time, fully grasp the nature and scale of the enormous shift we are experiencing.
We’ve been hung up on the data, and looked to the data scientists to make sense of it for us. Understandable, but impractical. Our current hopes and expectations of Artificial Intelligence are underpinned - for now at least - by the same magical thinking.
We’ve turned to network theory and network scientists to help us understand the dynamics of the Web. They can tell us how and why networks grow, and how they’re made up of nodes and links. But they remain - as do we - in the foothills of articulating what makes the Web work.
The insight that matters - the one that gives leadership the picture on the box of the puzzle we’ve all been puzzling over - is how business intelligence itself has been transformed by the collision of billions of human lives and minds with a global network that now carries some 95% of all the world’s information. And in turn, how this impacts the daily experience and expectations of our customers.
From there, the implications for how we structure business and its brands - to meet the newly empowered customer where they now live - begin to emerge. This informs the philosophy for our own transformation. We can also begin to frame what shapes and determines customer value from here on. Which helps us make more sure-footed, faster decisions about innovation.
A power shift
As we’d expect, business intelligence, in four of the five phases outlined above, has been applied exclusively to optimise outcomes for the corporation. And this happens - naturally, if not ideally - at the expense of what may be best for customers. But the rise of networked intelligence has already significantly tipped the balance the other way.
Customers are now - in ways we may already fail to appreciate due to their ubiquity - well-equipped to work out and find what’s best for them. The new network intelligence that so informs and empowers has introduced reach, range and transparency that now directly affect all corporate concerns - from pricing right up to purpose.
The turning point we have reached is one where business can no longer just apply intelligence to get what it wants at the expense of what others - “people and planet” - want.
This line of thought points us, usefully, towards what will, as we’ll see below, prove to be the most desirable and mutually beneficial value-creating market behaviour of The Network Age - active collaboration and co-creation. Surely the most valuable of all commercial intelligence enables a brand to optimally serve a customer at the time and place - in the context - of current need.
Now that we are beginning to understand what we had failed to previously grasp, we are infinitely better equipped to step across the aisle and look at modern value through the skeptical eye of the modern customer.
How can the firm and the customer best apply network intelligence to balance and achieve what’s best for them both? As we’ll now see, there are already widespread behaviours that clearly point the way forward.
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