Ian Morrison, president of the Institute for the Future, in Menlo Park, Calif., has spent more than 10 years preparing forecasts for a wide range of leading corporations. In his new book, The Second Curve: Managing the Velocity of Change (Ballantine Books, 1996), Morrison writes that businesses must change from traditional operating models to forms that deal with new technologies, new consumers, and new markets. According to Morrison, it's that radical change that moves a company from the first "curve" to the second. Morrison recently spoke to Inc. Technology about some steps that companies can take to reach the second curve.* * *
On strategic empathy:
Smart companies today are finding answers with customers, not selling solutions to them. That's because companies discover new products and new uses for products when they hang out with users. They need to spend time with customers, get on the other side of the transaction, find out how their products are used. It's a much more interactive process than traditional customer service.
Many companies in the temporary-help business, for example, are "co-locating" with large clients -- literally setting up on-site with their partners. Interim Services, based in Fort Lauderdale, Fla., which places both commercial and health-care temporary workers, has been opening branch offices on the premises of its large customers. As a result Interim is discovering all sorts of ways to add value to its services. Because it has an on-site facility at GM, for instance, Interim is now furnishing the physicians and nurses who provide occupational-health services to the factories. Other examples of what we call Trojan horses are travel agencies that develop a presence within large corporate customers, McDonald's restaurants that locate inside hospitals, and Wal-Mart stores that embed their electronic data interchange system within their vendors' systems.* * *
On the value of brands:
Brands will become more important as the concept of brand gets redefined. In the future it's going to be more and more difficult for a high-tech company, for example, to sustain its success because companies aren't going to be able to sustain the technological competitive advantages they've had in the past. That's why branding the product is going to be crucial to success. Branding explains the success of a company like Intuit, which has always managed Quicken as a brand business. Successful companies grow through their ability to create value in the mind of the end user.
On how small companies should strategize:
There is an irrational, inefficient distribution of resources in almost every business and industry just waiting to be exploited by second-curve opportunists. To take advantage of that, managers should draw a map of where the money goes and who gets it in their industry. Starting from where the product or service originates and ending with where it's delivered to the customer, entrepreneurs should map out all the different steps in the process and just keep asking, "And then what happens?" Then the question becomes "Where in that chain could I do something differently, particularly by leveraging technology?" And "Where in that process could I use a PC or the Internet to carve out something that I could do better than anyone else?"