The changing media environment (consumption patterns by consumers) has forced strain upon the decades old business model. The investment banking business model, created many decades ago is seemingly experiencing drastic, sudden change. The software business model is beginning to feel threatened by open source but not so much that it is pervasive yet. Daily deliveries by milkmen are distant memories. The blacksmiths and coachmen of the 18th and 19th centuries were ubiquitous once and each lost social empowerment at a different rate of speed. It's not only technology that drives social change. Steam engines and systems for labor organization for detailed manufacturing were known long before the sudden boom in industry after the civil war in the US. Social momentum is an essential component of change in how we do things when gathered in groups. How we view an uncertain future (collectively, and seen as a moving average) is indicative of social mood. What is the larger meaning of the changes happening all around us right now to both business and even socially? And can this be applied to specific challenges and circumstances to create competitive advantage in our enterprises?
Socionomics, the science of social change, will one day have a much broader level of awareness and this discussion is aimed at stretching my use of this set of ideas on as many specific problems as I can. And while many topics here (the Root Trend) remain more general or theory-ish than, say, my latest blog about media evolution; both serve to deliver more condensed ways of thinking about this social science and its everyday relevance to our enterprises.
In a very immediate sense social mood does not seem entirely responsible for the changes in business enterprises I mentioned at the start. In my own view, what is better captured and described is the "social momentum" created during both inflection points in social mood as well as developing trends. So, yes, social mood is changing rapidly right now . The point I am making is more about how any body in motion; the larger it is, the more energy it will take to slow it or change direction. This social circumstance <momentum> is naturally created during inflection points in social mood...like when social mood ends a long trend and begins a new one. Suddenly we are captivated by new ideas, interests, and concerns about things we agreed upon not long ago. As we gather together in all the groups we associate with regularly, we share these <often less than overt> attitudes and offer our own energy to the "social whole". It's really not so esoteric....it just sounds that way when described initially. It's about optimism and pessimism expressed in a social context.
Social mood is changing rapidly right now and we are collectively, creatively, shifting gears from an over stretched period of social expansion into what I feel is best described as a social correction.
In the present moment, let's describe a social correction as a series of socially supported changes in how we values things. The fact that our perspectives are changing is supported socially. Agreement is another story entirely. So if you want a short cut to seeing social mood right now, simply upload this thought:
How we value things changes as social mood changes (things of all kinds and this need not be measured in money)
If you hang on to this thought as you ponder your business' competitive environment and your own company's position within that environment, then you may begin to appreciate how changing social mood is impacting the market(s) your vertical serves.How do these changing social forces manifest in the markets you serve?
A major frustration in writing the Root Trend is how general I am forced to stay because of constraints on brevity and delivering a point. It is not my intention to make this a textbook. Robert Prechter offers the essential introduction and this is an extended application of those ideas...my version of how it may be used. This is also why I am writing the media blog and compiling it as a book. Social mood manifests broadly in what he calls socionomics. I call it the root trend for short hand and it is analytical tool chest for seeing the markets you serve with better clarity. My experience in the media environment compliments this understanding so I offer it up in a new discussion to demonstrate how specific these insights are and how they may be used. I submit to you that a renewed focus into a vertical's metrics as kept over a long time will result in very specific insights that are actionable and highly instructive. Metrics are not the holy grail, however, and there can be no better substitute for deep industry knowledge when applying this perspective on markets. With it your visions can grow far sighted.
So in a very broad sense, when media consumption patterns change and investment banking opportunities vanish quickly (or seemingly so) and services we once attached to a normal and convenient lifestyle are no longer wanted or needed, it is most likely that despite changes in technology, it is more likely we are seeing the result of focused social momentum of an ever changing social mood. That these changes all happen at different rates of speed is a topic for another post that discusses "degree of trend" of the social behavioral impulse being reflected, and is best done in the confines of a specific market/business enterprise.
The social correction we have entered is big and pervasive. It will touch everyone in many different ways because how we create on all levels of a society changes during a social correction.
When a business is in tune with its market, in general, the competitors are profitable and the competition focuses upon adding efficiency to the market's offerings to satisfy existing <social> demand. When businesses are out of tune with demand in their markets, they lose profitability in the aggregate, go out of business, and generally struggle to adjust because they are not capable of offering what people really want. This significance seems basic but is demonstrable in so many places right now. That is the core of the insight here when a social correction is underway in a society: We change our outlook collectively so business must begin to change along with us but this general observations can be made so much more specific with some effort. What is happening is part of a larger cycle....an endless cycle that expresses who we are as a group. As much as we are all individuals, we will always be part of a larger group of social animals expressing that fact. This group dynamic exerts a powerful influence no matter how independent we feel.
I put these ideas out now in the spirit of sharing and in the hope that collaboration will take us from generality to actionable directives for enterprises. Think "cooperation". That is the real message behind all social media, and it is the basis for creating competitive advantage in any vertical. So sudden and massive changes in our bug industries are always a sign that demand has changed which is a symptom of social mood changing. And while the correlation between demand in an industry and social mood is not expected to be noiseless or even consistent, when it is combined with deep industry knowledge, it is a tool with great potential. In this work, history is usually the instructor only we must use it in a manner that reveals actionable insights. No matter what vertical your enterprise competes in today, it can benefit from the observations I characterize loosely as the Root Trend. Dave.
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