Sunday, June 15, 2008

net.gain


..or "how to (try) and make the new economy work like the old one"

I recently borrowed John Hagel III and Arther G. Armstrong's Net Gain: Expanding Markets Through Virtual Communitiesfrom a colleague for a quick read.

It was published in 1997 by McKinsey & Company, and I must say it kinda shows. The book suffers from a myopic pre-occupation with the dual assumptions that:

  • organisations must race to establish virtual communities: the spoils will go to the fast and the bold
  • the aim is to profit from transactions conducted by the community while also garnering peerless customer loyalty

Ah, the golden days of the internet bubble! This is an interesting read if for no other reason than to see how far we have come; how much has been learnt, and how much we have yet to learn.


As I studied the authors' recipe for profitable community-building I found myself challenging the principle that success requires an imposition of control by an organisation: the company studies the market, decides what community should be built, writes a business case for it, and appoints the expert team to design, build, launch, and market the community.

This is an astonishing proposition given the book's initial premise:
The rise of virtual communities .. has set in motion an unprecedented shift in power from vendors of goods and services to the customers who buy them.

"Over my dead body!" I can hear the voices echoing from the boardroom - undoubtedly the prime audience for this book, which I think could reasonably be subtitled "how to (try) and make the new economy work like the old one".

The idea of a "community" that is both external to the organisation while remaining under its control permeates the book, and is perhaps the primary misconception that has taken the past 10 years to rethink and recognise for the oxymoron that it is.

This is closely related to the fundamental yet unspoken assumption of a hard boundary between the corporation and the customer/community. In parts of the book that consider the use of communities within the corporation, the emphasis is very much on within the corporation, or at most, between business partners.

My comments have been a little disparaging, and it is perhaps unfair to find fault in failing to predict the future accurately. It does mean that this book is now little more than a historical curiosity.

However, the book I would be very interested to read is a "10th anniversary rewrite". For my money, I'd say that's Wikinomics: How Mass Collaboration Changes Everything (any other recommendations? I'm keen to hear..)

For now, I think I'll let Geek and Poke have the last word...

Geek and Poke


Originally posted on It's a Prata Life

1 comment:

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