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    Shift happens

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    Paradigms shift. Empires fall. Today’s wisdom is tomorrow’s folly. Shift happens. We’ve compiled our top seven rule-bending trends from 2007 to help you succeed in 2008.

    Not so long ago, the staff at Anthill were wowed by an online video clip that simply scrolled through a number of statistics, accompanied by an emotive soundtrack, highlighting the extent to which the world is changing… every day. For example, did you know that the smartest 25 percent of the Chinese population (the 25 percent with the highest IQs) already outnumbers the entire population of North America? Translation: The Chinese have more honours students than North America has students. At the conclusion of this brain-boggling but masterfully simple item of internet flotsam, two words were left remaining. ‘SHIFT HAPPENS’.

    As 2007 draws to a close, we figured it was about time to review the big changes in thinking that captured Australia’s attention over the past 12 months (even if many of these ideas were years in the making – think ‘global warming’). So, what now? Best-case scenario: you’ll soon be brimming with ideas about how to embrace these concepts and improve your business. Worst-case scenario: you’ll sound annoyingly smarter at dinner parties. Either way, get on board. Shift happens.

    1. HURDLE THE GENERATION GAP

    The generation gap seems to confound… well… every generation. In 2007, the papers, telly, magazines, taxis, coffee-shops, hairdressers, you name it, were filled with chatter among members of the baby boomer and X generations about what to do about them pesky members of Gen Y. (Members of Gen Y, on the other hand, were busily preoccupied discussing lip gloss, why their employers didn’t understand them and how to conquer the world.)

    Superfluous observation #1:

    The pear-shaped ‘hourglass’

    According to the Australian Bureau of Statistics, the age with the most number of people in Australia is currently 34 years. This corresponds to children born during the baby-boom ‘echo’ in the early 1970s and represents the peak of Generation X. Therefore, it shouldn’t come as a shock that a similarly popular age is 58 (the parents of X). What generally does come as a surprise is the stampede of 22 year-olds, who are about to give this hour-glass population breakdown a good shake-up, concluding with a very heavy bottom end. Yes, within ten years the structure of the working population could look, simply, pear-shaped, with Generation Y representing close to half the workforce. The peak age groups will be 32, 44 and 68, in that order.

    As the first generation of Australians to have never experienced economic hard times or serious local conflict (unless you consider one of the following tantamount to civil unrest: Mark Latham’s post election political tanty, ethno-religious tensions in Cronulla and/or Tarasai’s ‘controversial’ eviction from Australian Idol), members of Gen Y, born between 1977 and 1992, have grown up with certain expectations. Like the proverbial only child born into a rich household, Generation Y wants everything… like… NOW!

    Employers have struggled to deal with this generation. According to a poll of 315 owners of small and medium-sized businesses across Australia, conducted by Smart Company and Roy Morgan Research, along with Dunn and Bradstreet, Gen Y cops a great deal of criticism from employers.

    “We found that almost 70 percent of them reported dissatisfaction with the Gen Y employees’ performance, particularly in spelling, grammar [and] that they didn’t understand what constitutes appropriate corporate behaviour,” said Smart Company publisher Amanda Gome in a recent media release. “They also said that the communication skills of the Gen Y staff were disappointing and 37 percent complained that they actually lacked professional skills, the acceptable technical skills they needed to do their job.”

    According to Gome, employers sometimes feel they are babysitting their Generation Y employees and that Australia’s skills shortage leaves them with little choice but to employ them. “The feeling was it’s the baby boomer parents’ fault, that these kids have grown up at home – they’re babied,” she said.

    But it’s not all bad news. Firstly, it should be acknowledged that every generation is critical of the one that follows (“things were always better in my day”). Secondly, as an Anthill reader, you’ll be among the first to agree that change is a good thing.

    4 WAYS TO SUCCEED WITH GEN Y

    1. Acknowledge that “Y” is individualistic and resourceful. Indeed, if “X” was alienated and numbed, “Y” is optimistic, even passionate. If your Generation Y employees believe that they can achieve greatness, why not allow them to dedicate a certain percentage of their work time to pursue goals that you might find unrealistic? Your next Generation employee might reinvent the company!

    2. Generation Y-ers are known for their ability to multitask. They seek out creative challenges and view colleagues as vast resources from whom to gain knowledge. Y-ers aren’t eager to bury themselves in a cubicle and take orders from others in the workforce. Give them small goals with tight deadlines so that they can build ownership of tasks and take responsibility.

    3. Generation Y-ers want to make an important impact immediately on projects they are involved with. They are looking for immediate gratification and an opportunity to excel. If you’re not tech savvy (and even if you are), perhaps challenge them to find technological solutions to everyday issues. Use their skills and enthusiasm to make measurable differences.

    4. Lastly, realise that your market is shifting – the behaviours and attitudes of your customers and clients are changing because your customers and clients are more and more likely to be members of Gen Y – cynical of brands and distrustful of large enterprise. Go niche, give back and embrace these values. Your actions won’t just pay off. They might even make the world a better place.

    2. STOP COMPETING IN ‘RED OCEANS’

    If there’s one business book that attracted more chatter than [a Tim Shaw infomercial] in 2007, it was Blue Ocean Strategy (even if it was first published in 2005).

    The philosophy of this book is simple. According to its co-authors W. Chan Kim and Renee Mauborgne, “blue oceans” are untapped and uncontested markets, which provide little or no competition for anyone willing to dive in, since the markets are not crowded.

    A “red ocean”, on the other hand, refers to a saturated market where there is fierce competition, already crowded with companies providing the same types of services or producing the same kind of goods. The idea here is to do something different from everyone else, producing something that no one has yet seen, thereby creating a “blue ocean”.

    While this seems easier said than done, what continues to strike a chord with most readers is the authors’ focus on a methodology, an essential aspect of which is that the innovation (in product, service, or delivery) must raise and create value for the market, while simultaneously reducing or eliminating features or services that are less valued by the current or future market.

    For example, the game-changing moves of Australian wine brand Yellow Tail demonstrate how a blue ocean strategy can be applied. Yellow Tail gave US consumers less of what they didn’t want (over-blown descriptions of wine and complex palates) and more of what they did want (an easy-to-understand and no-nonsense table wine) and, in the process, they cut their own costs, attracted unprecedented demand and re-defined the wine market.

    The authors’ critique Michael Porter’s idea that successful businesses are either low-cost providers or niche-players. Instead, they propose finding value that crosses conventional market segmentation, offering value and lower cost. In doing so they re-defined the way many people evaluate a new business idea or evolve their own products.

    Rather than compete in a bloody ocean, why not create a blue ocean, ripe for fishing?

    COMPANIES THAT CREATED THEIR OWN BLUE OCEANS

    Cirque du Soleil: Gave customers less of what they don’t want (expensive star performances, animal shows, aisle concession tickets and multiple rings) and more of what they do want (unique performance, theatre performances, corporate appeal, worthy of a price premium).

    Virgin Airlines: Gave customers less of what they don’t want (mediocre meals, seating class choices, in-flight entertainment) and more of what they do want (friendly service, point-to-point flights, inexpensive tickets).nudie Ffruit Juice: Gave customers less of what they don’t want (expensive marketing and commoditisation of fruit juice) and more of what they do want (product with emotive appeal, preservative-free juice, worthy of a price premium).

    Nudie Fruit Juice: Gave customers less of what they don’t want (expensive marketing and commoditisation of fruit juice) and more of what they do want (product with emotive appeal, preservative-free juice, worthy of a price premium).

    3. DON’T FORGET THE PLANET

    Talk of global warming flooded Australian offices this year like so much rising water from our melting poles. Like the impetus of so many mind-shifting trends, warnings about the effects of global warming are not new. What is new is the broader acceptance of the issue in 2007 and the fervour of Australian companies to embrace the green message as part of corporate strategy. Now, companies can buy carbon credits to offset their carbon ‘footprint’ and individuals can do the same, purchasing credits to offset activities from catching a plane to watching TV. Most noteworthy has been the use of this trend by large companies, in particular, to promote their own corporate social responsibility activities.

    However, while there’s plenty of evidence to now support the fact that global warming is occurring (even if you don’t believe that humans are the cause), what is less concrete is the available evidence to suggest that green initiatives actually help businesses – unless those activities have a direct and measurable impact on a company’s bottom line (such as the reduction of energy usage and, therefore, energy bills).

    According to one of Anthill’s national network of roving informants, one of Australia’s leading energy companies recently trialled a direct mail campaign in Queensland that offered potential customers two alternatives: A five percent discount of the customer’s energy bill, where the customer would use regular energy, or a three percent discount off the customer’s energy bill, where the customer would use green energy. In short, would the customer sacrifice two percent of cost savings to do ‘their bit’ for the planet?

    When push came to shove, approximately 80 percent opted for the five percent saving.

    While we have absolutely no hard evidence to back this story, our ‘woman-in-the-know’ has little to gain from fibbing. So, what’s the moral of the story? In 2007, with encouragement from Al Gore and an armada of eco-scientists, Australian business woke up to the fact that global warming is real and sought win-win programs to encourage more environmentally-friendly behaviours. And it is without doubt that private enterprise will continue to pursue and find new ways to improve business performance and profit from environmentally-sustainable endeavours.

    But the challenge in 2008 will be to implement activities that have the greatest positive impact on the planet and a company’s bottom-line, because, in this debate, whether you like it or not, commercial sustainability will always come first.

    3 WAYS TO HUG TREES WITHOUT GETTING SPLINTERS

    1. While programs to improve a company’s reputation might not attract new customers, they do have a measurable impact on employee morale and employee retention.

    2. There is no easier way to improve a company’s performance while helping the planet than through the reduction of energy. Most carbon trading organisations, such as Cool Company Finalist Carbon Planet, can stage an energy audit on your organisation for as little as $3,000. Their recommendations can then be used to identify cost-saving initiatives, thereby allowing companies to recoup the cost of the audit, sometimes several times over.

    3. Anthill has put together a free 10-part email series on easy ways to get your business green. You can join this email newsletter program by visiting www.anthillonline.com/newsletters and be sent practical tips on how to reduce your environmental footprint every month, for ten months.

    4. HARNESS THE ‘LONG TAIL’

    While some readers will no doubt be critical of the inclusion of this trend (as the Long Tail was actually coined by Wired Magazine journalist Chris Anderson in 2003), some ideas float around the world for years before the full weight of their meaning settles in Australia. This is one of them, and appears to have only gained traction this year, in response to the renewed confidence of Australian entrepreneurs in e-commerce and online business models.

    A direct reversal of the Pareto principle (also known as the 80-20 rule), Long Tail theory demonstrates how a business with massive and cost-effective distribution power, generally created by efficiencies shaped by the internet, can sell a greater volume of otherwise hard to find items at small volumes than of popular items at large volumes.

    The traditional model is that 20 percent of a company’s products or services will account for 80 percent of its revenues and 100 percent of its profits. This makes sense if you think about a traditional book store, where the most popular 20 percent of books will usually generate more revenue than all the shop’s obscure books combined. Hence, it makes sense for the bookstore owner to be choosey and stock only popular books, to maximise its ROI on shelf space. In other words, where the opportunity cost of inventory storage and distribution is high, only the most popular products are sold.

    Anderson noted that this traditional model didn’t apply with respect to some new economy companies. For example, he discovered that companies like Ecast, a provider of digital jukeboxes to venues, is more likely to generate 80 percent of its revenues from obscure one-off purchases, because the cost of sourcing and distributing each song is virtually nothing and, therefore, the choice to the consumer can be made theoretically infinite.

    How does this apply to Australian entrepreneurs looking to succeed in 2008? Firstly, it seems that when infinite choice is offered, an infinite variety of customers will emerge. Secondly, the Long Tail has implications for producers of content, especially those whose products could not – for economic reasons – find a place in pre-internet information distribution channels. Thirdly, if you add these two developments together, the theory compels business owners to review their own product range and the implications and opportunities that cheaper distribution models might have.

    If you’re still confused, perhaps you should ask the Amazon employee who recently described the Long Tail as follows: “We sold more books today that didn’t sell at all yesterday than we sold today of all the books that did sell yesterday.” Umm… enough said.

    LONG TAIL PUBLISHING?

    Not so long ago, members of the Anthill staff were invited to a Grange wine tasting, courtesy of Canon Australia. The wine was highly memorable but the take-home with the real lasting resonance was Canon’s newly developed capacity to produce short print run books or magazines at a relatively low cost. The demonstration of Canon’s new imagePRESS C7000VP printer inadvertently demonstrated the potential application of Long Tail theory to publishing, an ‘old economy’ industry and, therefore, a sector assumedly immune from Long Tail rules. If Long Tail theory is correct, and if infinite variety creates infinite demand, the world could be facing a publishing revolution as significant as the changes to the music industry caused by the advent of digital recording. With equal parts excitement and dread, you can be sure that Anthill will be watching the evolution of this trend, with bated breath.

    5. EMBRACE THE SILVER SURFER

    Ryan Heath upset a lot of people when he published his controversially titled, Please just F* off: it’s our turn now – Holding baby boomers to account, in February 2006.

    This manifesto-come-rant made the bold (although largely true) claim that the Australian baby boomer generation is not only hogging the wealth (if you have a young family and are thinking of buying a home within 20 kilometres of your nearest CBD, you’ll know what I mean) but they also continue to dominate cultural commentary in Australia, pushing tired methods and ideas recycled from the 70s and 80s. Heath asserts that his generation is very different to boomers – better educated, more diverse, more socially responsible, switched on to new technologies and more attuned to working through networks rather than within outdated hierarchies. But there’s something that Heath overlooks.

    Baby boomers are perhaps the most flexible, progressive, open-minded and outgoing generation of cultural and business leaders that the world has ever seen. Never before has a generation looked so closely at the evolving patterns of behaviour brought about by younger generations. Never before have older generations embraced the cultural and technological changes brought about by a younger wave of artists, programmers, engineers and other creative economy workers. Yes, they gripe about certain attitudinal deficiencies, as they see it (See above: “Hurdle the generation gap”). But this generation of parents and grandparents is very curious and excited about the potential of the future. They predominantly welcome change.

    Further, this group of aging Australians also represents one of Australia’s most cashed-up growth markets. If you are not thinking about how to market your products and services to the baby-boomer generation as they contemplate retirement, you are neglecting one of the world’s richest socio-economic groups.

    Opportunity knocks

    According to a report in the Boston Globe, the American spicy food industry has entered a golden era. Why? The taste buds of baby boomers are dulling with old age and, as a result, they are spending big on fiery flavours to compensate. If friends are always commenting on how good your peri peri sauce is, perhaps it’s time to bottle it and get a website. Whooweey!

    4 WAYS TO PROFIT FROM THE SILVER SURFERS

    1. Interactive media publisher eMarketer estimates that there are 33.2 million people online in the US between the ages of 50 and 64, many of whom are boomers. That’s triple the number of 65-plus online users. The contrast comes about because most of our current seniors retired before internet access became commonplace in the workplace. Baby-boomers use the internet at work. They use it at home. And they represent your next big online customer.

    2. In the last 12-months, the internet has witnessed the rise of the silver surfer (and we’re not talking about the Marvel Comic turned blockbuster movie). Baby-boomer-specific websites have propagated in abundance, such as Age Exchange, Baby Boomer Bistro, I Don’t feel 50, Laterlife, Over50s.com, The University of the Third Age and, my favourite, Hell’s Geriatrics. So, why are most websites designed for people in their early twenties?

    3. As baby-boomers move into retirement, many will be seeking part-time employment. This is a great thing for business owners, who’ll be able to score years of knowledge and experience without the hefty price tag of full-time employment (or the payroll tax!) by engaging baby-boomers as consultants, advisors, directors and investors.

    4. Lastly, let’s not forget that a range of retirement specific services will be sought in greater demand, and they will not generally reflect the stereotypes. Sure, nursing homes will increase in numbers (and let’s not forget Grey Innovations’ new stylish, sensor-enabled incontinence nappy for adults). But most retiring baby-boomers will be looking for products and services to reflect their aesthetic sensibilities and desire for rewarding and enjoyable experiences. Face it. The opportunities are endless.

    6. TOPPLE THE ‘TIPPING POINT’

    This article, Shift Happens, is all about concepts that ‘tipped’ in 2007. If you don’t know what we’re talking about, it’s probably about time you got your head between the covers of Malcolm Gladwell’s international bestseller, The Tipping Point, and discovered what all the chatter was about in 2007.

    Superfluous observation #2:

    Cultural necrophilia

    Since when were the 1980s cool? Whoever actually liked the Dukes of Hazard first time around? And what’s the purpose of having a calculator watch anyway? While aging generations will generally be inclined to reminisce and while younger generations have historically sought inspiration from movements past, cultural commentators observed in 2007 that the theft and exploitation of old trends has become a trend in its own right. So, what’s the big idea about reviving old fashions and fads? Isn’t Emo just a new brand of Grunge (formerly Goth, formerly punk)? Ask Quentin Tarantino. It seems that it’s now avant-garde to pinch other people’s ideas (Oh, the irony). Yup, it’s official. Cultural necrophilia is the new black.

    Yes, we’re sure that a few of our readers will now be muttering, “But I read that book years ago!” It’s to be expected. You’re a visionary lot. So, if you are one of those few, pat yourself on the back. If not, Gladwell’s book was first published in 2000 and became an instant bestseller in North America. Even former US President Bill Clinton referenced The Tipping Point in a White House press conference in June of the same year. In Australia, however, its star quickly faded, alongside entrepreneurial optimism, as post-dot-com hibernation set in and business interests shifted toward the more promising, nascent resources boom.

    However, with the rise of web 2.0 and the emergence of a booming online industry, talk of ‘tipping’ returned, along with renewed interest in this highly influential business book.

    So, what is this ‘tipping point’ to which Gladwell refers? Simply, it’s that magic moment when an idea, trend or social behaviour crosses an invisible threshold and spreads like wildfire. As the term was originally developed to describe the spread of social and viral epidemics, the fact that Gladwell’s theory has since ‘tipped’ into common business parlance is testament to his insight and the observations made in his book (he clearly preaches what he practices).

    And how can a company get an idea, product, service, advertisement, slogan or any other business device to ‘tip’? Unfortunately, determining the set of factors needed to make something instantly popular is about as simple as isolating the global effects of a butterfly flapping its wings in Brazil, otherwise every new concept would be an instant success. But Gladwell does offer and analyse three common origins of a contagious idea.

    GET YOUR IDEA TO TIP

    In case you haven’t read The Tipping Point, Gladwell identifies a number of key factors that have the power to influence social epidemics.

    Three types of people have disproportionate influence over the spread of social phenomena, and, without their aid, such dissemination is unlikely ever to occur. This is called “The Law of the Few”. These three ‘influencers’ are: “Connectors” (people with wide social circles), “Mavens” (knowledgeable people, whose opinions are trusted) and “Salesmen” (charismatic people with powerful negotiation skills).

    Some ideas or products are more attractive or interesting than others and they will grow exponentially for some time. Gladwell refers to an idea’s “Stickiness”. Even with the aid of an ‘influencer’, an idea that is not ‘sticky’ is unlikely to spread.

    Human behaviour is strongly influenced by external variables of context. For example, ‘zero tolerance’ efforts to combat minor crimes such as fare-beating and vandalism on the New York subway led to a decline in more violent crimes. The perception of increased vigilance altered the behaviours and attitudes of the passengers. This is called The Power of Context.

    Research suggests an individual can only have genuine social relationships with 150 people. Likewise, groups larger than 150 are prone to fragmentation. Most hunter-gatherer villages, as well as military companies intuitively stay just shy of this number. This is called “Dunbar’s number”.

    7. GIVE IT AWAY NOW

    Business used to be so simple. You offered a product or service and people paid money for it.

    While this business model still endures in retail (when was the last time you walked out of the supermarket with a trolley full of groceries without paying?), the model for knowledge-economy companies is now infinitely more complex.

    Face it folks, great swathes of the population now expect all sorts of stuff for free that they once happily paid for. And yes, the internet is largely to blame. Individuals are building up their personal brands by giving away content for free and then making money through consultancy and public speaking. Internet giants such as Google and Yahoo are giving away their suite of services in return for a healthy cut of the advertising pie. Airlines and hotels are slashing their prices in a bid to win customers. In fact, it’s never been a better time to be a consumer.

    As a starting point, every business owner should ask how they can generate revenue beyond their core offering. Whether you’re used to selling widgets or dreams, chances are it’s become a tougher sell lately. Consider whether selling advertising, sponsorships or alliance packages fits into your business structure. If you offer a product, is there an accompanying service of value you can on-sell? If you offer a service, think about product tie-ins. We’ve entered the age of the integrated sell.

    Seth Godin coined the term “permission marketing” back in 1999 to describe the process of attracting potential customers to opt-in to receive digital marketing correspondence. At its core, permission marketing usually involves giving away a useful product or service in return for the permission to digitally market to the recipient. The concept may not be new, but guess what? It still works. Open up doors to new business by creating useful giveaways (documents, multimedia, events) that show off your expertise.

    Don’t underestimate what an icebreaker useful free stuff is with consumers. Just remember to follow through if you want to get paid. It’s not about you, it’s about them.

    Microsoft versus Google

    Microsoft built its empire on selling software programs, such as email manager Outlook and spreadsheet tool Excel. Now, companies such as Google are building their own equivalents and giving away the spoils of their toils in return for the right to present users with intuitive advertising. In fact, there are very few software applications that can’t be sourced as freeware from the bountiful ocean that is the world wide web. While wave surfing is for freedom seekers, it seems that web surfing is now for people seeking free stuff.

    Consultants versus service Providers

    What’s the best way to hook a new potential customer? If you are a student of the ‘permission’ school of marketing, the answer is to give away advice for free. Based on customer requests for ‘free’ information, permission marketers are able to determine a customer’s needs and, therefore, their probable buying patterns and habits. Coupled with the trusting relationship that permission marketers develop with their customers (by providing only relevant information), these savvy ‘consultants’ are able to capture the attention of customers with targeted products and services at times when the customer is in the market and frame of mind to buy.

    Record labels versus radiohead

    The music industry determines how much we pay for music, right? Well, not anymore. Ever since the advent of iTunes and other music e-commerce websites, artists have been given greater and greater freedom to choose how much they can charge for a song or album. Recently, British rock band Radiohead made world news by taking this trend one step further. Following their departure from a traditional music label, Radiohead decided to trial a new concept, which they called ‘Pay what you want’, by asking their fans to do just that. Did it work? According to reports, the album “sold” 1.2 million copies in its first day of sale at an average of $10 per copy. You do the math.

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