Platt Perspective on Business and Technology

Rethinking innovation in an age of online social media 4: reframing demand-side and supply-side perspectives in general terms

Posted in macroeconomics, social networking and business by Timothy Platt on October 28, 2016

This is my fourth installment to a series that I see as fitting at the intersection of macroeconomics and economic considerations in general, and the study of the interactive online and social media as a collective source of communicated influence (see Macroeconomics and Business 2, postings 280 and loosely following for Parts 1-3.)

I began addressing this puzzle in Part 3: starting from the supply-side perspective, and stated at the end of that posting that I would continue its discussion here. And I will at least begin this posting in that vein. Then, and as a perhaps more primary topic focus for this installment, I will begin considering a more demand-side approach to innovation drivers, and to how they arise and can be utilized to positive benefit.

I will begin all of this with the fundamentals: a set of macroeconomic fundamentals, and with the issues of information flow and availability and of economic friction as it plays out at a within-business level: business systems friction.

1. Business systems friction, and economic friction in general are functions of information availability and accessibility, and of information quality and timeliness. The less available that essential information is, and for its quality, quantity and timing availability, the more hobbled a business will be and even if it is optimized for performance in essentially all other ways (e.g. where friction has, for example, arisen as more of a short-term anomaly rather than as a long-term ongoing business process-degrading presence, and systems in place are all basically sound.)
2. But setting aside that short term anomaly possibility, and considering friction as more of an endemic part of a business, as it more usually is, this means reduced performance effectiveness, and longer-term it means reduced resiliency in a business’ capacity to change and adapt, and when facing either internally or externally sourced change.
3. Supply-side driven businesses of necessity, have fewer and less capable channels for gaining essential business intelligence, and certainly from their markets and prospective customers and from their already-current customers if from nowhere else.
4. Demand-side driven businesses that actively seek to connect with and communicate with interactive online markets, and through listening as well as through broadcast speaking, at least potentially face opportunities to reduce this market-facing friction and its performance limiting complications.
5. I will at least start to delve into this point, and the issues of turning “potentially” into “realized” here, a bit further down in this posting. But setting that discussion aside for now and considering both supply and demand-oriented sides to this here:
6. Increased friction and the reduced business effectiveness that it creates, increases the risk that would be faced from attempting essentially any type of innovative change – from the inherent uncertainties and expenses that any real innovation always brings with it. And this fully applies when disruptively novel change is considered, even if a business and its leadership sees at least more minor, new product evolutionary and cosmetic change as absolutely essential to their current here-and-now and immediate future.
7. A dominating focus on minor, new product evolutionary and cosmetic change can, in fact so thoroughly absorb any resources that a business sees as available to allocate for change that it can in effect push any more-disruptive or novel change off of the priorities list of initiatives that can even be considered.
8. And this scenario is more likely to arise as a business’ reality, when and as the business systems friction that it faces increases – and even if the perceived competitive threat faced from same-market facing businesses is staying relatively stable. When a business sees the competition it is facing to be severe, and particularly when its leadership sees that as increasing, real and significant change becomes more of an impossibility.

And this brings me specifically to the demand-side of this series and its discussion, and the “potentially” and “realized” of the fifth point of the above included macroeconomic fundamentals list. In anticipation of this larger discussion to come, that I only begin here, I note that:

• Developing and cultivating and using the right interactive online channels, and in the right way and both to optimize information gained and shared, and to more effectively limit the level and scope of business systems friction faced,
• Cannot start with the technology that would be used for this or with a list of social media and related channels to choose from.
• You have to start with a clear determination of goals, and of priorities for what you seek to achieve in connecting through these new-to-you channels.
• And you have to start all of this from a very strategic, long term value creating and sustaining perspective – and then move from there toward tactical, operational solutions and the mechanisms and processes that you would need to deploy to carry through on your strategic vision and understanding.

I am going to start working my way through the to-address points of that list in my next series installment. Meanwhile, you can find this and related postings at Macroeconomics and Business and its Page 2 continuation. And you can also find this and related material at Social Networking and Business and its continuation page too.

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