When change strikes, be ready

“Communications in the 21st century will become a basic human right. There will be a continued push on price and distribution to take costs out and to spread communications services to an ever wider demographic. The forces of change will shift the focus of global markets to China, India, Brazil and other emerging regions,” explains Andrew Zolli. “Therefore, the next set of global consumers is going to need to engage at radically reduced price points.”

Achieving greater affordability is largely an engineering problem, believes Zolli, who points to the ‘One laptop per child’ project to validate this idea. Engineering will reduce the price of communications products and services exponentially.

At the other end of the scale, in mature markets, service providers face a different challenge. “Every day that goes by in mature markets is another day in which yet another competitor with similar products at similar price points walks onto the field and makes it more crowded and noisy,” Zolli says.

“Service providers are on a quest for differentiation and they need to do it fast. Our own research shows that five or six years ago, products were being developed in China within about four months. Today it’s three to four weeks, or even days.”
 

Ways to differentiate

“We are also heading towards a carbon constrained economy with new legislation. We will see design for disassembly and re-use being just as important as design for assembly. The environmental performance of organizations and their products and services will be a key dimension for differentiation.”

“Furthermore, organizations, particularly those such as service providers with less tangible touch points, need to differentiate in their communications and clearly articulate what they stand for in ever increasing marketplaces.”

Planning for change

In his consultancy role, Zolli works with major organizations to encourage them to think about longer term change and how to plan for that, especially in recessionary periods when companies think short term, responding to immediate shareholder demands.

“Sometimes opportunities need us to plan five to ten years in advance. Who the customers are in the future will change and what they demand will change. It makes sense to plan for change in advance to create a seasoned leadership team that can operate well in the coming age, rather than just in the current one,” says Zolli.

Start thinking in network terms

An idea that Zolli uses in his speeches is the need to ‘think in network terms’. But what exactly does he mean by this?

“The network is the fundamental organizational principle of the 21st century,” he explains. “Yet most business leaders do not understand social network analysis or how to think about networks and how to leverage them. This is a big problem because it’s the basic way in which markets and customers will be organized.”

“Networks have been governed by Metcalfe’s Law which originally stated that the value of any given network is equal to the square of the number of nodes in that network. You can argue whether that formulation is right, but the important thing is that it shows the rationale for growing the network and that as it expands, its value grows faster.”

“But now we are seeing a 21st century corollary to Metcalfe’s Law, which we call the Participation Equation. It is not just the size of the network that determines its value, it’s also the amount of participation you can generate, whether it’s a network of employees, customers, competitors or other members.”

Participation is crucial

“As an example, the value of social networks such as Facebook lies not just in the huge volume of users, but because they are able to foster increased interactions. They are not just growing networks by adding nodes, they are deepening the value of the network by encouraging participation.”

Zolli believes that service providers have huge advantages with their tremendous depth of knowledge about their customers, yet they often add very little value.

“Service providers have a huge opportunity, but it will take a real cultural change and desire to innovate. For instance, I have elevated all my day-to-day business communications to Instant Messaging (IM). Everybody in my office uses IM. Yet my local operator has absolutely no idea what I am doing. It has never talked to me about my needs.”

“Once traditional operators begin to provide benefits that go beyond basic connectivity there will be a cascading effect and a great rush will follow, because it will fundamentally change the business model of all service providers.”

Experiencing true innovation

Zolli identifies local services as providing the next step in communications. “Location information, RFID and m-commerce will bring a very different user experience,” he says.

And he ends with practical advice about looking for innovation. “Spend time in advanced mobile markets like Korea and Japan, but also in sub-Saharan Africa where tremendous innovation will happen by necessity.”

Who is Andrew Zolli?

Often tagged in the press as a ‘futurist’, Andrew Zolli actually dislikes the term, which he says is “misleading”. His company ‘Z-Plus Partners’ does not make predictions but instead works with major corporations to help them consider long term influences of change and how to manage them.

Zolli is also curator of the PopTech conference, an annual gathering of thought leaders that explores the social impact of technology and the shape of things to come.

And as a Fellow of the National Geographic Society, Zolli is leading an initiative to explore what life may be like in 2040 to 2050.