The industrial revolution was a pretty good deal. Here’s what we got: stable jobs with better pay, paid annual leave and union-improved working conditions; improved housing with automated heating and cooling; homes filled with labour-saving devices and disposable widgets; free entertainment projected directly into our living rooms; personal motorised transportation and a national transport infrastructure; a garage filled with toys; air-conditioned supermarkets selling packaged goods with long shelf lives; big box retailing; government sponsored education, medical innovation and public hospitals; jet aircraft that could fly us through the clouds; and a life expectancy beyond the age of 35.

It’s no surprise that people living in industrialising countries clamoured to gain the benefits of a longer and wealthier life. The only rational choice was to sign up for it. The benefit of an improved life expectancy on its own was quite compelling. But when we added the layers of conspicuous consumption and free entertainment on tap it was a real human high ground.

So we handed in our craftsman and artisanal skills to help build the one-size-fits-all economy and the consumables that fill it up. It was the only way all of us would be able to own everything. It meant we had to trade in the very personal touch of a craftsman and become part of the machine itself. By becoming part of the machine we were able to have more. We were handed everything earlier generations could only dream about, a standard of living beyond that of gentries and kings when we take into account the upgraded living standards we all acquired. But there was a price to pay: we had a job to do. Our job was to help churn out the items that built the industrial world and to buy the items we churned out. We had to become consumers.

Terms and conditions

The industrial revolution didn’t come with a set of terms and conditions; however, there were some unspoken rules that weren’t covered in the text book. The textbook was so focused on how to make widgets and money, it forgot about why any of that mattered.

We abided by these terms for the best part of 200 years. The two most important terms were:

We’ll enable a more materialistic lifestyle

but

You’ll need to follow the rules set by the owners of the capital.

This was a simple way of saying that our individual creativity can’t compete with the industrialists’ aggregated efficiency. It’s something that goes against the basic human spirit — our need for collaboration, creativity and nuance, which is imbedded deeply into our past and, thankfully, our future.

Consumers and creators were two different classes in the industrial world. The industrialists owned the factors of production. The ability to create independently was taken away from workers and re-engineered so it belonged only to the capital class. Without saying it, the deal was: ‘You let us design, make, distribute and advertise and in exchange we’ll give you a higher standard of living.’ They left out the bit about keeping all the profits for themselves.

This economic model worked well until we reached the point where we owned everything we needed. But now the deal has entered its final phases and the gig is up. The industrial revolution is putting itself out of business. I wonder if they had a planned-obsolescence in mind.

Unlearning

The methods used by corporations became so effective at generating more for less that they’re making their own era an obsolete business method. Companies that want to thrive during the technology era need to seriously revise their economic playbook. The efficiencies these corporations generated have made high-end technology disposable, or at the very least, low cost. It’s difficult to make a profit when products have to improve each year and cost less than they did last year.

It means the only way of achieving revenue upside is to sell more units, but there are only so many mobile phones and televisions a person can own. This means that in the new economy we’re all required to do some unlearning to stay profitable and relevant.

A new business infrastructure

The entire economic, political and social infrastructure is going through a 200-year shift from the industrial era to the technology era. All of the elements that make up our economic infrastructure are experiencing a technological disruption. These changes are not the comfortable, incremental ones we’re accustomed to, but step changes that — for the unprepared — hurt careers and kill businesses. Products and services, distribution systems, pricing methods, advertising and promotion are all following a transition away from clustering and aggregated power structures. They’re moving from a one-size-fits-all model to small, distributed, specific, customised platforms that deliver to a one-size-fits-one model. Previously stable economic systems are now fragmenting rapidly.

The 4Ps

In order to understand the changes in our economic system, we need to investigate the changes in parts. The simplest way is by looking at the parts that make up what’s known as the ‘marketing mix’. This is called ‘the 4Ps’: Product, Price, Place and Promotion. While modern marketing mavericks will try to displace these simplest of production-related business factors, there’s nothing in business that can exist outside of these four parameters. We’re limited to using the 4Ps when it comes to configuring what we hope to sell. User experience, community, interface, responsiveness — take your pick — they all sit inside and are part of the marketing mix and they go back to the foundation of economics, the Ws: What, Where, Who, How much and for Whom. The 4Ps are the only levers we can use for building anything in business for a profit: they’re the factors of production in their simplest form. All four parts are changing rapidly and forever. A simple explanation of each of the 4Ps will help create a context for the journey in this book.

• Product. This is what we sell, whether it’s a widget, a service, an event or an idea. It’s what we use to generate revenue from.
• Price. This is the price we sell a product for, even if that price is attention or privacy. Price also includes the impact of demand and supply, finance, currency considerations and payment systems — anything that must be considered when money changes hands or there’s a transaction.
• Place. This tells us where we can get the product and how it’s delivered to us, both physically and virtually. It includes all considerations for distribution systems in exchanging goods and services between people and organisations.
• Promotion. This is anything to do with communication about what’s available and why people may want it; for example, the tools of information exchange and media among people, brands, organisations and governments.

The 4Ps form the interdependent system, or ‘mix’, from which we do business. In fact, it’s the same marketing mix that people employ when they earn their living, but most people don’t have the presence of mind to see it in such simple terms. While certain brands and companies often focus heavily on a particular part of the mix to create a point of difference, it’s getting them to work in concert that leads to a profit advantage. And when all of them are changing rapidly we need to pay attention and reset our mode of operation. What it comes down to today is that a business is either disrupting these factors of production or it’s being disrupted by a new competitor trying to put the incumbent out of business. When the factors of production change, the world we live in changes too. Where we work changes, so where we live also changes. It impacts the support systems around the economy as well: the financial system, the education system and even government policy.

The greatest innovation we’ve seen since the commercial internet was born in the early 1990s has been the rebuilding of infrastructure. That’s why everything is up for grabs. Until now, many industrial legacy organisations have remained unaffected by the change. It was a temporary situation for them. But all of the 4Ps are — and will continue to be — disrupted.

The first example of disruption affected the fourth P, promotion. This was to be expected, given the world wide web (the web) is all about interacting in a new way; it’s a form of media in itself. It was the easiest of the 4Ps to disrupt, thanks to our new internet technology.

legacy media: the traditional media outlets that were common before the internet, including television, radio, newspapers and magazines

The biggest and first P to be hit hard by the technology revolution was legacy media. But open communication does more than just disrupt the media: it’s the bellwether for rapid innovation. Knowledge exchange affects everything and redesigns the systems and infrastructure around us. The corporate infrastructure that used to provide a layer of protection now forms a legacy of financial burden in the form of assets that can rapidly become redundant and costly to carry. Probably for the first time since the commencement of the industrial revolution in the late 1700s, it’s better to be small than big in business. So the question any company should be asking is:

Would I build this same infrastructure today given the choice of a clean slate?

The simple reality of the technology revolution that we’re living through is that it requires ‘clean-slate’ business strategies. Piecemeal legacy adaptation is the fast track to irrelevance and financial disaster.

Clean-slate business strategies are not only needed because everything around us is changing. They’re needed because, unlike other revolutions, this one will be a global revolution. The change is so rapid and global this time that developing nations will skip right past their industrial era and straight into technology-driven economies.