"Given how much our culture depends on finding out what’s new, it’s surprising that few have figured out how to be smart about it. If you’re a creator, the truth remains what the truth has been ever since Yahoo tried to sort the web by hand: the best way to make a hit is to build something for the smallest viable audience and make it so good that people tell their peers."
Trecho retirado de "Who is good at discovery?"
No país onde se espalharam estes cartazes:
No país onde se teimou em fazer dos cidadãos, obedientes seguidores das orientações superiormente pensadas e decididas pelos xamãs (ministros, autarcas, ...).
No país que agora reconhece que afinal, tal como o Brasil, não tem economia para suportar um confinamento quanto mais dois, a maioria dos eleitores, pela idade ou profissão, não depende da iniciativa privada, e pretende jogar bilhar como qualquer amador: "Novo confinamento está a ganhar adeptos".
Que sensação de schadenfreude...
Jorge Marrão começava a sua crónica no JdN do passado dia 15 com esta frase: “Os fundos europeus serão o remédio para manter uma doença incurável da sociedade.”
Talvez um segundo confinamento tenha o dom de acabar com este regime para espanto à posteriori dos defensores desse mesmo confinamento. Quantos direitos adquiridos sobreviveriam a um segundo confinamento?
Em Dezembro de 2008 escrevi:
"Eu, que não tenho a informação que têm os governos, e que não tenho medo de eleições que não disputo, proporia uma receita diferente.
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Apoio mínimo às empresas de qualquer sector, os consumidores que decidam quem tem direito a sobreviver como empresa.
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Em contrapartida, apoio máximo às pessoas e sobretudo aos desempregados."
Julgo que já escrevi aqui no blogue algo do mesmo tipo este ano por causa da pandemia.
Agora no FT apanho "Support people rather than jobs for a more resilient post-Covid economy":
"What should we protect during the coronavirus pandemic: jobs or the people who hold them? Different answers to this question largely explain huge variations in unemployment figures around the world. In the years ahead, they are also likely to distinguish between successful and sluggish recoveries from the crisis.
European countries have generally focused public support on jobs. Various job retention schemes and short hours programmes have kept employees attached to their employers and off the unemployment totals.
The EU unemployment rate has risen only a little,
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By contrast, generous US support in the form of enhanced jobless benefits has been given to individuals, until this fell victim to political infighting. With the support attached to the person rather than the job, the US unemployment rate leapt from 3.5 per cent in February to 14.7 per cent in April before falling to 8.4 per cent in August.
The underlying conditions in the European and US labour markets were similar, but the type of support had vastly different effects on the unemployment statistics. More importantly, the gulf between the policy approaches will have meaningful and lasting economic effects.
Early in the pandemic, there were many advantages in the European approach. When coronavirus lockdowns appeared to be a short-term emergency response needed to buy time to beat the virus, job subsidies were a smart way to minimise disruption and eventually allow a return to normal. This sort of public insurance works best when the crisis is short, the affected companies require skilled workers and the jobs at risk are high value.
The longer the world has to live with social distancing and the more sectors are unlikely to return to their former glory, the more important it is to find a different solution. In that case, we need to support workers rather than jobs, helping them find alternatives rather than simply waiting and hoping that their old jobs come back. The US strategy now seems preferable.
Supporting people rather than jobs also works better when the roles at risk are lower skilled because fewer months of training are lost when people switch to other positions. With the pandemic disproportionately hitting the lower-skilled and worse-paid retail, hospitality and travel sectors, it is increasingly workers who deserve our support more than their employers.
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Europe, meanwhile, should now begin to switch away from keeping people attached to jobs that will not return quickly and towards supporting workers find new employment. As time passes, job retention schemes will, in any case, become more and more unfair, because they provide much greater support for those who previously had jobs than for young people who are entering the labour market for the first time.
Recognising that the pandemic has moved into a new phase, the OECD this week urged all its member countries to adjust their responses to Covid-19 “gradually to support workers rather than jobs”. This was not to cut costs, the international organisation emphasised. Rather, governments should be seeking to give people the best possible chance at maximising their earnings over time by helping them find new roles now."
Interessante notícia, "Vinyl records outsell CDs in US for first time since 1980s":
"Vinyl records have outsold CDs in the US for the first time since the 1980s, according to data from the Recording Industry Association of America (RIAA).
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A report on the first half of 2020 across the recorded music industry reads: “Vinyl album revenues of $232m were 62% of total physical revenues, marking the first time vinyl exceeded CDs for such a period since the 1980s.” The report acknowledged that vinyl records accounted for only 4% of total recorded music revenue.
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US listeners are also increasingly willing to pay for premium services to listen to music ad-free, up from 58.2m in the first half of 2019 to 72.1m in the same period this year.
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Vinyl’s popularity also continues to grow in the UK, with sales increasing in 2019 by 4.1% on the previous year, though the rate of growth has slowed following the “vinyl revival” boom in the middle of the last decade."
Registos de um percurso:
"The reality is that we are in an era ruled by uncertainty. In one recent survey, more than 80 percent of business leaders said that they were likely to make significant and long-lasting changes in how they organized work and interacted with and served customers. [Moi ici: Remember the punctuated equilibrium and sudden shifts] Opportunities to redesign the business and do something substantially different usually come only after an event such as a merger or when a startup suddenly scales. But the wide-ranging effects of the coronavirus pandemic give all businesses the impetus for change.
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How do you as a company leader design for this different world? When the ground shifts beneath you, the first thing to do is find a solid place to stand — and that is your value proposition. Customers come to you for a reason: because you’re innovative or top-quality, because you’re a one-stop shop, or because you build deep relationships.
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1. Segment your customers. “The customer is always right” is one of the oldest and most misleading adages in business. The customer is always right only if you have the right customer. [Moi ici: Something that we defend here long time ago: here and here] Has your “right customer” changed? [Moi ici: Something we spoke about last Monday] Through no fault of yours, businesses you’ve worked with or customers whose needs you successfully met may have temporarily retreated or changed to a new model. How can you still be “right” for each other?
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Consider Panera Bread — a fast-casual restaurant chain, meaning it’s a cut above fast food but is not at the level of waitstaff service. Panera’s value proposition emphasizes food made fresh from sustainably sourced ingredients. Its right customers have traditionally been office workers: individuals picking up a bagel and coffee for breakfast or meeting a colleague for lunch; groups for which it caters a selection of sandwiches and salads for meetings. That right customer is no longer in the same place; she is probably working from home now, and is likely to continue doing so at least some of the time for the foreseeable future. Lunch around the conference table? Well, maybe next year.
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You might also find that your company has new right customers: These might be people or companies that have changed in ways that could benefit you if you design ways to connect with them, or that have been stranded by the incapacity of others, or that are worth your attention now although they weren’t before."
Excerpts taken from "Forget about the “new normal”: Design something different"
Em pleno desenrolar da crise económica, decorrente do confinamento vivido, o ministro das Finanças de Portugal, mais uma personagem que nunca teve de pagar salários, comunicou ao país: "João Leão defende aumento do salário mínimo "com significado"".
Entretanto, na Grécia que se prepara para voltar a ultrapassar Portugal, "Greece lowers taxes to boost employment"
Pelos vistos o governo de Portugal diz que vai pedir um estudo de actualização do relatório Porter, mas para não ser surpreendido, como foi o governo de Cavaco, já indica o que quer ver no resultado do relatório:
"O objetivo é identificar as “potencialidades da economia portuguesa e definir políticas públicas que permitam melhorar o perfil de especialização e a estrutura do nosso tecido industrial“. Mas há um foco: o Governo está especialmente interessado nos “domínios e setores emergentes, como, por exemplo, nas baterias“."
Quanto às políticas públicas para melhorar o perfil de especialização e a estrutura do nosso tecido empresarial - recordo esta tese.
Como os macacos não voam, e a via irlandesa é blasfémia para os partidos da geringonça, teremos torrefacção de dinheiro nas baterias et al, as futuras "Artlant".
É tão fácil começar a ouvir aqueles poetas citados nestes podcasts a descreverem mais uma sociedade arruinada.
"Ask executives to list traits of great leaders and they will probably name vision, honesty, or the ability to execute change. Rarely mentioned is one critical capability that leaders need most in turbulent times: sensemaking, the ability to create and update maps of a complex environment in order to act more effectively in it.
Sensemaking involves pulling together disparate views to create a plausible understanding of the complexity around us and then testing that understanding to refine it or, if necessary, abandon it and start over.
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Leaders need to know what’s happening around them in order to drive organizations forward. Today this task is harder than ever, given the ever-increasing rate of change in technology, business models, and consumer tastes — and it is now further complicated by the global pandemic and its related economic and political aftershocks.
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Rather than immediately jumping to solutions, we must start with collecting data and scrutinizing it for trends and patterns that point to better solutions; rather than ignoring warning signs of failure, we should learn from others what those warning signs might be. This is not the time to do less sensemaking — it is the time to supercharge your organization’s ability to do more."
Certainly a symptom that the world in which organizations operate is in one of those phases of the punctuated equilibrium where everything undergoes sudden shifts leading to radical change.
Other recent posts on the subject:
"First, develop a comprehensive set of processes to actively sense new insights (whether internal or external) that could affect the business, and hence identify threats or opportunities [Moi ici: Attention, threats and opportunities are not intrinsec qualities of context issues, they are a function of the current strategy. Covid 19 is a threat or an opportunity? It depends] as early as possible. Second, organize in response to those threats or opportunities; this is likely to involve reallocating resources, revamping processes, filling capability gaps, and aligning the company’s structure and governance. Third, capture value by revising business models and restructuring relationships with other players in various ecosystems. And fourth, renew the organizational capabilities needed to create and capture value by continuing to monitor and assess results and making small adjustments over time — while also preparing for the major disruptions that require a more comprehensive overhaul."A text taken from "Plotting Strategy in a Dynamic World". A text in line with:
"Do you think we should consider covid 19 as an external factor?"Of course yes!!! Which organization was not affected by Covid 19?
"In early March, when Covid-19 began to take hold of the globe, something changed in the world of gardening.
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On March 16, the British government ordered people to avoid pubs, restaurants and non-essential travel. That morning, David Robinson, Managing Director of Suttons Seeds in Paignton, Devon, settled in for his usual Monday ritual of checking weekend sales numbers. He had a shock. “I said, ‘I think we have a problem with the sales numbers, it looks like they’ve been double or tripled.“”
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Converted gardener Sonja Ruetzel: “I was feeling anxious during the lockdown, and gardening makes it look like you have an area where you have a little bit of control”
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But the numbers were right: suddenly millions more people went online to find out what they could develop. In the weeks that followed, Suttons experienced days when sales were 20 times higher than the same day a year earlier – with lettuce, beetroot and cilantro seeds being the bestsellers.
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Sowing a seed or renovating an overgrown garden was a balm to the pain of foreclosure, offering hope for some foods that didn’t have to come from an overcrowded and under-supplied supermarket, and the opportunity to improve and to embellish the little pockets of greenery around us.
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Food culture YouTuber Charles Dowding has seen a huge spike in popularity, with 2.8 million views between March 24 and April 23 and 37,000 new subscribers. The Candide gardening app saw an average increase in the number of new members of 50% compared to the same period last year.
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This wave of new gardeners is already bringing change to an industry that is slow to embrace a new audience. Garden designer and TV presenter Diarmuid Gavin started a daily live gardening conversation on Instagram during the lockdown that caught the attention of TV production companies, and he ended up doing a six-part TV show. titled Gardening together who tapped his mind to taste.
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“There is a whole new breed of gardener who is so enthusiastic and hungry for information,” he says. “It’s less about the tricks of journalism and more about listening directly to people trying their hand at themselves.”
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Will this shift to gardening last or is it a short-lived phenomenon caused by unique circumstances? Everyone I interviewed is optimistic that many of the newcomers will persist.
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As Gavin says, “What we’ve heard from garden centers, compost makers and seed growers is that these new customers are coming back and coming back. They really want to know how to do it right. They are really invested because it means something to them. Once they have grown a spud, they will never stop. “"
"Major economic downturns hit most companies. And manufacturers who sell to their customers through channel partners, such as retailers or value-added resellers, face additional challenges. Under-capitalized partners may be unable to get products to customers — or worse, could go bust. With the current pandemic, the situation appears dire, with even more bankruptcies predicted than occurred during the global financial crisis of 2008-2009.Enquanto conduzia, ouvia este artigo e visualizava o business model canvas:
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For manufacturers, success when emerging from a major downturn requires rethinking channel strategy. Manufacturers who simply plot a “return to the way it was” may not fare well."
"As the world has gotten more science driven and data obsessed, the formal educational system is teaching certainty with ever more confidence. The message being transmitted to students is, crunch the data and you can determine “the truth.” And we wonder why political positions have become more entrenched! Instead we need to inculcate a belief in the benefits of balancing the manipulation of quantities with the appreciation of qualities. Because science requires numeric quantities and mathematical methods for manipulating those quantities to determine “the truth,” we intensively teach the manipulation of quantities—starting with addition, then subtraction, then multiplication, then division, then algebra, then calculus, etc. This causes our students to become highly experienced and skilled in seeking out quantifiable variables and crunching data so as to determine “the truth.Trechos retirados de "When More Is Not Better" de Roger Martin.
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Very little in our formal education system helps students become skilled in the appreciation of qualities. It happens in literature, fine-arts, and design courses, in which students are helped to make finer and finer distinctions in the qualitative attributes of their subject matter.
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As a consequence, we produce students who systematically lack balance. They are strong in the manipulation of quantities and weak in the appreciation of qualities. They are overly certain of the correctness of their models and their analyses based on those models and are equally certain of the incorrectness of opposing points of view. They are confident that they have looked at all data that is relevant to a position and that other variables, by definition, are not at all relevant.
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We need to arrest these tendencies. We need to teach students to balance the manipulation of quantities with the appreciation of qualities. We need to teach them that their conclusions are interpretations, not fact or truth, and that alternative interpretations might be equally meritorious and/or contribute to generating a still more meritorious interpretation. That is the only way they will be prepared to work productively in a complex adaptive system."
"Entrepreneurs are always trying to stand out, and understandably so -- after all, there is a lot of competition out there. The need to stand out becomes even more vital in light of the recent Covid-19 pandemic. [Moi ici: Recordar que a pandemia apenas veio acelerar o que já estava em curso]
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So what's the best way to stand out, especially if your business operates in a particularly crowded niche? The solution isn't to try to go bigger. Instead, it's the opposite.
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Identifying with more passionate audiences.
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While it is true that many sub-niches have a smaller potential audience than the broader niche, these smaller segments tend to be more tightly connected. If your product or service is a hit, it is more likely to take off on a community-wide level.
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Underserved sub-niches tend to have less competition, because many brands deem the smaller market as not being worth targeting.[Moi ici: Recordar a VW e as carrinhas eléctricas]
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Targeting a smaller niche also gives you the opportunity to reevaluate and strengthen your brand.
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Mourreau explained that generalist photographers rarely become the best in their niche. Those who focus on a particular subcategory of photography are eventually seen as the go-to resource when those types of photos are needed. Because they have put in the time and effort to develop that particular skill, there is far greater demand for their services than if they had remained a generalist.
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Niching down gives you the ability to identify your brand's strengths and weaknesses.
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By shifting your focus to your area of strength, you can continue to develop that ability and be better able to deliver high-quality results for your clients. Satisfied clients will naturally lead to referrals, growth from repeat customers and the ability to charge a higher premium for your services.
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Finding the right sub-niche for your brand.
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Not all sub-niches are created equal. Finding the right sub-niche requires evaluating your own brand's strengths and weaknesses, identifying gaps in the market and ensuring that there is a sizable enough audience for you to reach.
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Shrinking your potential target audience may feel counterintuitive at first. But it ultimately gives you the chance to become a big fish in a much smaller pond. By strategically pursuing the sub-niches that will work best for your brand, you can increase your profitability and better define what makes your company unique."
"The job of educators should be to prepare students for a complex adaptive system, not to make them capable of operating only a narrow part of a complicated machine. We need to equip our youth for a world that isn’t about perfecting a machine but rather about achieving a balance—an endless journey of transitory improvements rather than definitive solutions. That is the only way we will produce the citizens that we need and the business executives and political leaders to pilot productively.
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At present, the formal education system predominantly teaches certainty; that is, that there is one right answer and many wrong ones.
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Despite humanity’s long and painful history of being shown to be wrong about what was previously held to be certain, we keep teaching models as if they are not models but rather reality—the true unshakeable reality, rather than what they are: the best interpretation of reality humanity has been able to come up with yet.
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Instead, we need to teach students—at all levels—that all models are wrong, otherwise they wouldn’t be models in the first place. Rather than teaching students to uncritically adopt models, with all their implicit flaws, we need to teach students how to critically evaluate models. Even more important, we need to teach students how to build new ones. That is what human advancement is about: building better models.
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Theorizing is important. It is what we do to make sense of the world around us and build models for taking action. But theorizing on the back of someone else’s interpretations is never going to be as powerful as theorizing on the basis of your own interpretations of real interactions with your subject—whatever that subject happens to be.
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Rather than teaching students that data is restricted to numbers that appear mysteriously for the student to analyze, or teaching the accumulation of quantitative data via arms-length surveys, educators need to teach students that data, both qualitative and quantitative, gleaned from watching real people engage in real activities, is the most powerful tool for building better models for how the world works. Those models can be tested quantitatively to refine them. But the attempt to build models of our complex adaptive world purely on the basis of quantitative analysis of data will lead to narrow"
"What we do know, but are not treating urgently enough, is the serious damage that has already been done to Europe’s corporate economy. Many companies’ balance sheets have been hurt so badly as to put in doubt their ability to return to normal, let alone contribute to renewed growth. Even an unrealistically best-case scenario — where the virus recedes and activity bounces back — leaves serious problems.
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Welcome to the zombie economy. The steepest downturn in generations forced many European companies to run down cash reserves and increase debt to the point where their solvency is threadbare.
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A large number of undercapitalised companies will hold back Europe’s economic performance in two ways.
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First, they do not invest.
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Second, many businesses whose revenues largely go to debt service can, at best, hope to delay their inevitable insolvency. The wider economy’s interest in what happens to such companies is mixed. Keep them alive for too long and you stop workers and capital from moving to more productive activities — the process optimistically known as “creative destruction”. But a wave of insolvencies could also bring destruction without the creation..
As employer-employee relationships are severed, accumulated company-specific knowledge is lost; machines and skills atrophy as they wait to find new uses. In addition, the financially weakest companies are not always the same as the least productive ones."
"The actors in the system are continuously driving adaptation of the system. By the time we decide what to do, it is quite possible, if not likely, that the system has changed in a way that renders our decision obsolete by the time it is acted upon. And by the time we have figured that out, the system will have changed again. Because of that adaptability, our design principle must be to balance the desire for perfection with the drive for improvement.
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In a machine model, the pursuit of perfection makes sense. It is sensible to analyze the machine in every detail in order to understand how to maximize its performance and, once that optimum performance level has been achieved, then defend against any attempt to change the way the machine works—because it is performing as well as it possibly can. At this point, any failure in the machine’s performance is likely to be interpreted as pilot error or not giving the machine enough input or time. This is what philosophers call a justificationist stance. There is a perfect answer out there to be sought, and when that perfect answer is found, the search is over. The task then turns from searching for the perfect answer to protecting the perfect answer against any attempt to alter it. It feels noble to aim for, fight for, and protect perfection.
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However, in an adaptive system, there is no perfect destination; there is no end to the journey. The actors in it keep adapting to how it works. In nature, this happens reflexively, as with a tree that turns to the sunlight due to the force of nature, and by growing taller obscures the sunlight for those in its increasing shadow. In the economy, adaptation “happens reflectively. People take in the available inputs and make choices, and those choices influence the choices and behaviors of the other humans in the system.
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So, although the pursuit of perfection may seem like a noble goal, in a complex adaptive system it is delusional and dangerous. In a cruel paradox, seeking perfection does not enhance the probability of achieving said perfection. In a complex adaptive system, it is not possible to know in advance the organized, sequential steps toward perfection. Guesses can be made. Better and worse vectors can be reasonably chosen. But perfection is an unrealistic direct goal, with the problematic downside of creating a paradise for gamers. As justificationists staunchly defend a system they perceive to be perfect, gamers are only given more time and space to enrich themselves at the system’s long-term expense."
"Há 12 anos éramos 500 pessoas e tínhamos cinco clientes activos. Hoje somos 160 e temos mil clientes activos"Sintomático que, julgo que em 2018, a empresa de onde provinha esta citação tenha encerrado.
"Vamos entrar numa Fase 4Como é que isto acontece? Mudando de modelo de negócio!
O número de empresas vai voltar a diminuir
A quantidade de pares produzidos vai voltar a diminuir
O número de trabalhadores vai voltar a diminuir
O preço médio por par vai novamente dar um salto importante"
"Nearly everything sold by Stòffa, a Manhattan-based maker of classic luxury menswear, is made-to-order or made-to-measure.
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Building such a business takes time and patience. First, they had to establish relationships with manufacturers and suppliers in Italy that were willing to work this way. [Moi ici: Este modelo de negócio não assenta na presença nas clássicas feiras. As empresas portuguesas poderão tirar partido da marca "Made in Portugal" e da sua flexibilidade e rapidez de resposta] Then, they had to build up a client base, which they did through their own networks and city-by-city trunk shows.
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But it wasn’t until Lever Style began working with newer brands that he transformed the way the company was managed and operated by focusing less on achieving minimums with one large brand and more on servicing many brands in a more efficient manner. Today, 50 percent of Lever Style’s sales come from brands that require quicker turnaround and smaller runs of product. Some of the companies he works with generate just a few million dollars a year in sales.
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Last year, Lever Style’s gross margin was 29 percent; higher than the industry average for a manufacturer that doesn’t have its own consumer brands."
"While Grosso understands that part of her official job is to transmit a body of content from her head to those of the students, she thinks her real job—her most important job—is to help students become capable of thinking in a complex and uncertain world. To her that means embracing the messiness of the world and not attempting to simplify it for students as if students can’t deal with messiness.Lembro-me da perplexidade da minha amiga Marina, que na altura estudava Biologia na universidade, ao perceber que tinha saído um artigo numa revista científica que desclassificava o que ela tinha aprendido numa aula na semana anterior.
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That means helping them learn both how to build models (rather than handing them prebuilt ones) and how to build better ones together. She introduces them to the ladder of inference, a framework from business and education theorist Chris Argyris, which describes how humans reason, starting with selecting which data to take into account and then making increasingly specific inferences about the selected data—up the rungs of a metaphoric ladder to reach a conclusion on the subject of their thinking, at the top of that ladder. Grosso creates an exercise by which she writes different fragments of a story on a number of paper fish that she hides around the classroom. For example, the story may be about why she arrived at school grumpy one morning, and one fish may say “woke up late” while another may say “forgot marked tests at home,” and so on. Student groups go on a fishing expedition to find and collect the fish, and then attempt to come to a conclusion based on the fish that their group happened to find.
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Since different groups find different data-laden fish, the groups come to different conclusions. Instead of judging which conclusion is “right,” they explore how collecting different data means that each group might come to a different conclusion. Grosso highlights that although we can never collect all the data ourselves, we make our model more robust by being curious and asking questions of others who may have access to data that we don’t. By rejecting the need for one “right” answer, Grosso’s students become more confident. They gain the confidence to share their thinking, because if their answer is different from others’, it might just be because they collected different data or interpreted the data differently, not because their answer is “wrong.” The process also encourages students to make and think about connections—between what they and other students know—so that they can integrate multiple insights.
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Beth Grosso’s approach underlies the agenda I propose here for educators to help preserve American democratic capitalism and enhance its ability to sustainably deliver broadening and rising prosperity. The job of educators should be to prepare students for a complex adaptive system, not to make them capable of operating only a narrow part of a complicated machine. We need to equip our youth for a world that isn’t about perfecting a machine but rather about achieving a balance—an endless journey of transitory improvements rather than definitive solutions. That is the only way we will produce the citizens that we need and the business executives and political leaders to pilot productively. Currently, the formal education system produces overconfident reductionists who don’t see that they are operating in a complex adaptive system and are altogether too sure of the quality and usability of their piece-part solutions. The purpose of education needs to shift, as Beth Grosso illustrates, toward producing sophisticated yet humble model integrators. To do so, educators must do four things.
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Temper the Inclination to Teach Certainty
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At present, the formal education system predominantly teaches certainty; that is, that there is one right answer and many wrong ones”
"Executives dream of becoming the next John D. Rockefeller, who built a monopoly in the oil-refining business in the late nineteenth century. Eliminating the competition feels like a natural goal; it means you’ve won. ... Managers feel more secure when their customers have no alternative to the product or service they produce. Given that American monopolists from Rockefeller to Bill Gates to Mark Zuckerberg have become among the richest men in history, the appeal of establishing a monopoly is understandable. But it has a downside. Monopolies don’t last in the natural world, and they don’t last in business either.
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Monopolies don’t last in nature because they don’t adapt, [Moi ici: Claro que monopólios protegidos, pelo estado, têm a possibilidade de serem eternos] and the fundamental rule of nature, as posited by Charles Darwin, is survival of the fittest—by which he meant those most able to adapt to the environment and its changes. And what drives adaptation in business? It is learning from one’s customers how to provide better value for them. Customers, not those who serve them, define value. Providers can only hypothesize about what constitutes customer value. Providers learn based on customer feedback, and therefore customer feedback is the linchpin of positive adaptation. It is very difficult to become a better provider of a given product or service in the absence of real customer feedback.
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It is not the mere existence of customer feedback that produces positive adaptation. Listening to customer feedback and taking action on it are both necessary preconditions for positive adaptation. But change is never easy. It is tiring and expensive. As a consequence, most companies, most of the “time, will listen to customers only when they must, and they have to only when the customer can credibly threaten to become an ex-customer if the provider doesn’t listen and change.
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Therein lies the fundamental sustainability problem for monopolists. They don’t have to listen to their customers. ... In the end, monopolists exist to serve themselves, not to serve their customers. They don’t get the training that customers normally provide, because the monopolist doesn’t have to train.
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As a consequence, monopolies stultify over time. They may have virtually unlimited resources, but they don’t have the motivation to deploy them productively. When the environment in which they operate necessitates major adaptation, they are unable to adjust, because they are out of practice."
