Mike Diliberto

For the month of March, I’ve been contributing to my “750 Words” page, a private brain dump where I put 750 words per day.  It’s fantastic, especially when done at the end of the day.  You can even share stats from your writing.  As I suspected would happen, there have been times where my brain dump resulted in a blog post.  Like now…

Generation Y is a very different generation than our predecessors.  I know every generation says that, and in fact, it’s mostly true.  But the acceleration of the gap between generations is absolutely startling.  It’s like something of a “Moores Law” of generation gap, that is to say, with every generation, the gap between it and the previous generation seems to widen by a growing margin.  Good golly, what is generation Z going to look like? But seriously, I’ve been thinking about generation Y a lot recently, and I’ve come to some conclusions.  You saw a few in my video post yesterday, and here’s another.

The generation Y mind is a young mind.  Not to say that we are immature, but young in a different way, in outlook and in how we interpret the world.  In my video post yesterday I mentioned that one of the hallmarks of Generation Y is that we are not afraid to fail.  One of the reasons that artists are successful is that they are not afraid to fail either.  Bad photo?  Take another.  Bad sculpture? There’s always more clay.  Pablo Picasso said that “all children are born artists, the problem is to remain an artist as we grow up”; Generation Y, has, I think, stayed artists far longer than previous generations.

My mother worked for the World Book encyclopedia company.  You remember them, right?  They authored huge volumes of information and placed that information into lovely red-leather bound books with gold leaf edges.  Working for World Book meant that my mom brought home an endless supply of encyclopedia volumes for me to read.  Which was fine by me, geek that I was.  I could not get enough of them, I read everything that I could get my hands on.  I realize now that it is only through the acquisition of knowledge that we learn to make rational decisions.  I learned to learn by reading books.  Lots of books.  Today, people are doing the same thing by via the internet.

I’ve always loved computers as well. I had my first computer by about age 5 and as you can imagine my ability to write code in Basic on my TRS-80 was a real hit with the ladies.

I remember telling my mom that someday, all of the information in those heavy encyclopedias would be available right on the screen of a computer. She thought I was absolutely bananas.

Look who is laughing now mom!

Just kidding.

But seriously, the amount of information that is available to everyone, at almost any time, is startling.   Think about that.  I mean, I remember hearing about “Mosaic” from the guys in the computer lab, and after I had a play with it, I brought a copy back to my dorm room on 13 floppy disks.  I was hooked.  Really. I cracked open notepad and starting writing web pages a few days later. There we were, witnessing the birth of the internet;  sadly Al Gore never really did get his figure back.  And now here we are, less than 2 decades later, and look at how far we have come.  It’s almost easier to talk about the things that are not on the internet than it is to do it the other way around.  It’s funny to say, but really, I find myself doing that all the time.

Generation Y has access to all of this, basically the world of knowledge, right there in front of them.  They have grown up in a world where they have had to search for information, fail, and try again until they found it.  This action changes people.  I recently attended a speech where the presenter put forward his theory that people, it seemed, were changing the internet to mirror their behaviors.  That “these kids today” invented twitter because 140 characters is the limit of their attention spans.  I’m pretty sure he’s wrong, and in fact, I think the exact opposite is true. It is the internet that has enabled generation Y to evolve into what they are, a group of people that are hard wired to try, fail, and try again without getting bogged down. You know, like artists.

My recent video response for a call for submissions by Ryan Paugh

Distermediation is a term that may be familiar to veterans of the dot com boom; it’s a fancy way to say the same thing that infomercials have been telling us for years:  “We cut out the middleman and pass the savings on to you” Which is great, because everyone loves a bargain.  Back in the dot-com boom, all of these new fancy websites told us they were going to “cut out the middleman”;  we were promised web based storefronts to appeal to every man, woman, and child, that would allow us to buy products directly from the manufacturer and bypass the costs that are tacked on by all of those pesky middlemen.  Why did we want to cut out the middlemen? Because everyone knows that the more people that stand between the customer and the manufacturer, the more expensive that product will cost.

In the enterprise there are also middlemen but what these middlemen add is something far more destructive:  Confusion

Remember playing telephone is grade school? It’s a simple game that illustrates a powerful point.  The game starts with the first person telling something to the next person, who then tells it to the next, and so on until you reach the end of the line.  Inevitably, you start with something simple, like “little jimmy smells”, and by the time it gets to the last person in line, it ends up as “purple monkey dishwasher”.  How did that happen?  There’s the rub;  this drastic change happens gradually, so much so that nobody notices the change along the way, but it’s easy to notice when comparing the starting phrase to the ending one.  This is the concept of Cumulative Error, which tells us that even small errors compound one another to produce drastic differences between input and output.

This same issues of Cumulative Error is present in many businesses today.  With each layer of management between the user of a technology and the provider of that technology, a little more confusion is added to the mix.

I’ve worked with a number of corporate clients, and in almost every case, we have not had to dig far to find the results of these Cumulative Errors in their organizations.  I often advise managers to look for employees “building bridges” around these errors.  In the past, more entrepreneurial employees would get around their corporate limitations by emailing spreadsheets, building Access databases or installing Media Wiki on a makeshift server under an employee’s desk.  Today, these same bridges are being built using E2.0 tools.  Employees build bridges over their IT department, legal department, and other layers that previously existed between the firm and their customers.  By using E2.0 tools, individual departments can easily and quickly deploy their own CRM, Collaboration, and messaging solutions.  These bridges, regardless of their materials, serve as signposts to tell us where and how we as an organization need to change.

E2.0 Changes Everything.

There.  I said it.  Hate me if you want to, but it’s true.  Never before have consumers risen to such an all-powerful status, nor have employees had the ability to get their work done without involving 20 layers of management.  Let me show you what I mean.

Lets talk about the IT department.  In my workings with large corporate clients, many seem to have a relationship with IT that is tenuous at best.  To be fair, the IT department has a lot on their plate.  Obviously, the connection of every desktop PC to the LAN and internet, plus in many cases, an IP phone system, and 3+ years worth of legacy hardware (or 20 years, in the case of the AS/400 wonderland that was Circuit City).  In the 90s and early millenium, all you heard about in every B-school case study was how we needed to maximize the efficiency of the enterprise by consolidating activities.  We suddenly saw the IT department saddled with the responsibility for fixing everything from a dead laptop to an installation of MS-Office.  The pileup of responsibility led to a department that does many things and has little or no bandwidth to help out with that marketing department skunkworks project in Social Media.

So, as always, employees do what they need to do to get things done, which these days means using cloud services to build bridges around an efficient yet inflexible enterprise.

Which brings us to our point.  Buying cloud apps or using social media at work need to stop being looked at as “workarounds” and we all need to realize that we are standing at the forefront of a new order of things. The cloud has driven costs down for serious business applications to a level that no longer requires the CFO and CIO to argue;  now you have a choice: you can buy a million dollar, custom made CRM or you can buy salesforce for your team at $65 per person, per month.  In the past, in order to make a significant expenditure, firms had to build a cross functional team to argue incessantly debate the features needed for the new software or hardware;  spec-ing and building a custom solution took years.

Those days are over.

Now is the time for each team or line of business or insert-silo-here to choose their own solutions.  Does marketing have their own special needs and desires for CRM? Great, let them be responsible for buying and updating the Saas app that they will use for their CRM system.  The relative low cost of these cloud apps makes it harder to argue for platform standardization in the name of efficiency.

IT needs to become one thing: a provider of connectivity.  Make sure that I can turn on my computer, open a browser, get online, make a phone call, and use my blackberry.  Why do I continue to argue for the reduction of the IT department to a provider of dumb pipes?  Because SaaS is only going to become more prevalent going forward, and web connectivity will be more important than ever.  On top of that, more and more workplaces are allowing, if not downright encouraging, their employees to work remotely some or all of the time; it behooves these firms to ensure that all of the applications used by their employees are accessible from either side of the firewall.  And if everything is accessible from both sides of the firewall, why have a firewall in the first place?

There are those that say the position of CIO is doomed, I disagree.  The last thing I would advocate for is some sort of work free-for-all of SaaS software;  someone still needs to stand at the top and govern these cloud apps: those who say different have never had to terminate a disgruntled employee at a company that uses dozens of unconnected cloud applications.

There are many organizations for whom this is not going to be an easy change.  It was Machiavelli who famously said:

It must be considered that there is nothing more difficult to carry out nor more doubtful of success nor more dangerous to handle than to initiate a new order of things; for the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order; this lukewarmness arising partly from the incredulity of mankind who does not truly believe in anything new until they actually have experience of it.

There are still many out there that have not experienced the advantages that they will gain through this disintermediation.  There are many that are not convinced of the power of Social Media, of cloud apps, of SaaS.  This change is, I argue, inevitable.  In subsequent posts I will talk more about some of our success stories and some steps you can take with your firm that can show, at low or no cost, the advantage of corporate disintermediation.

I remember years ago listening to a publisher friend of my parents lamenting the invention of the modern word processor.  He went on to elaborate what he saw as the major issue:  the barrier to entry was now far too low to prevent bad writers from creating and sending manuscripts to every publishing house they could find. Add this to the list of things that our children will not understand;  the concept of having to correct typing errors by applying liquid paper to the page will sound to them about one level more advanced than chiseling our cuneiform into clay tablets.  The word processor allowed far more people to write rapidly, and reproduce endless copies of those documents at a low cost.

We’re facing a similar issue now in media;  the rise of social media tools has lowered the barrier to entry for broadcasting your voice to the masses, and this is not necessarily a good thing. First, let me say that I am not against social media, nor do I deny the power of giving a voice to the people.  The elections in Iran proved the value of social media in empowering people who previously did not have a voice, I am not disputing this.

What I am saying however, is that social media has allowed people to define their status without earning their status. This issue goes far beyond groups of facebook users suddenly calling themselves social media experts, to a complete collapse of our traditional methods of searching for and identifying experts or authorities.

In the past (“the past” being 2 or more years ago) when a person held a position of authority, there was a clear understanding about how they got there.  A professor of Entrepreneurship with a Ph.D. followed a known path of study, published articles in peer reviewed journals, and defended their thesis before a panel of people that had followed that same path before.  Without getting stuck in the mentality of doing something because that’s the way it has always been done, the reasoning behind going through all of these steps is more than just tradition, it is a method for establishing personal authority in a particular topic or course of study.

I have started my own company;  I learned a lot about the mechanical and the personal effects of being an entrepreneur;  does that mean, based on my experience, that I now teach a class on entrepreneurship?  Should I start a consulting firm, and use my experience starting one company to advise others on how they should run their own firms?  Yeah, probably not.  I remember visiting the office of my grad school entrepreneurship professor.  In addition to the degrees on the wall, he also had shelves of books that he had written (I remember he was working on his 26th when I visited his office) as well as displays showing all of the products produced by him and his partners (He invented the Crest SpinBrush, among other things).  Suffice it to say, he had the credibility to back up the advice that he gave to us.

What is happening today in the social media space is a breakdown of these traditional avenues of expertise recognition;  we have not yet established the social media equivalent of the peer-reviewed journal or the Ph.D. , as a result, some people are gaming the system, using social media tools to create a following or maybe execute one “big win” and then parlaying that into an implied expertise in whatever field it is that they are in.

In no way am I implying that social media is a bad thing or that the net impact of this increased communication is negative.  As with many technological advancements, it is possible to for first movers to exploit the advantages given to them.  What I am saying is that this breakdown of authority warrants increased scrutiny before we accept the work of these “experts”.  There are plenty of people in positions of authority blogging, twittering or otherwise using social media, and there are even more narcissists speaking from a position of self appointed authority.  The crazy guy in the street corner now has the ability to publish his writing for the world to see;  that doesn’t make him any less nonsensical.

It’s that time of the year again, time to vote on the proposed panels for the 2010 South By Southwest Conference.  This year I have proposed a panel to briefly discussion the concept of Commercial Open Source, a model being followed not just from within the software industry (although software is our focus) but from many innovators in a diverse array of fields.

Click Here to Vote!