Author Archives: Geoffrey Moore

About Geoffrey Moore

Geoffrey A. Moore is an author, speaker and business advisor to many of the leading companies in the high-tech sector, including Cisco, Cognizant, Compuware, HP, Microsoft, SAP, and Yahoo! Best known for Crossing the Chasm and Zone to Win with the latest book being The Infinite Staircase. Partner at Wildcat Venture Partners. Chairman Emeritus Chasm Group & Chasm Institute

If Inertia is Not Your Friend Then Time is Your Enemy

If Inertia is Not Your Friend Then Time is Your Enemy

GUEST POST from Geoffrey A. Moore


As managers, because we are always in the middle of something, we can easily forget how much our operating model depends on inertia for its success. We count on our supply chain to deliver more or less as promised, we expect our quarterly bookings to be pretty much as forecasted, and we count on our customer churn to be within its normal range. This is the world of the Performance Zone and the Productivity Zone, one we measure largely based on its financial performance, something that is made possible by inertia, the tendency of objects in motion to continue in motion, albeit with well-timed well-directed boosts from ourselves and our partners.

Disruptive innovation breaks this pattern. When successful, it can generate spectacular momentum with early adopters, but that fizzles out when things hit the chasm. The whole point of crossing the chasm is to restart the engine of inertia, first around a single compelling use case in a single beachhead target market, then building out to adjacent use cases and segments. Wherever inertia can get established, reliable supply chains, forecastable bookings, and manageable churn will follow.

But here is the thing to keep in mind while this effort is underway: the clock is ticking! That’s why we say, when inertia is not your friend, time is your enemy. As a consequence, whenever you are managing anything disruptive, be that an external offering to customers or an internal revamping of your business model, operating model, or infrastructure model, you must prioritize time to tipping point over all other variables.

The single most valuable tactic for staying on top of your time budget is establishing a cadence of weekly commits. Each commit is tied to a change in state that will be brought about within the next seven days, each change in state representing a meaningful step towards the tipping point. You can’t afford to ignore your finances, but do not let financial metrics distract you from prioritizing time to tipping point. Until you have established inertial momentum, financial performance is ephemeral, and not a good predictor of business health.

Finally, because weekly commits is a challenging discipline, it is critical to enlist your team in the higher cause that warrants extraordinary efforts on their behalf. It does no good to shame people who have missed a commit. Rather the motto is win or learn. Either make the commit and take the next step, or understand the root cause of why you missed the commit and adjust accordingly. Do not get discouraged. Be resilient.

That’s what I think. What do you think?

Image Credit: Gemini, Geoffrey Moore

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How to Design a Horrible, Terrible, No Good, Very Bad User Experience

How to Design a Horrible, Terrible, No Good, Very Bad User Experience

GUEST POST from Geoffrey A. Moore


Some of you may know that early in my career I taught English at the college level. The freshman writing requirement was always a challenge as textbook publishers struggled valiantly to find some reading material that would actually help students write better. One of their best efforts was an essay titled “How to Write an F Paper.” It turns out we learn better from failure than from success—who knew?

With that thought in mind, and taking liberties with the title of one of my favorite children’s books, I want to review an actual user experience delivered to me by the manufacturer of a luxury automobile. The vehicle itself performs admirably, so kudos to the product engineers. It is the customer experience team that needs to be taken to the woodshed.

Here’s how the experience starts. I get in my car, start it, and back out of my garage, benefiting as always from the rear camera system. The system stays on when I shift into drive until I get onto the road and have gone perhaps fifty yards. At that point, the multimedia display presents the following:

An update is ready for installation on your multimedia system. The following conditions must be agreed to before installation.
(READ NOW) (LATER)

Well, I am driving the car, so I don’t think READ NOW is a very good option. I hit LATER, the screen returns to normal, and I get on with my day. To tell the truth, I forget about the whole experience until the next day when, after backing out of my garage and getting onto the road, I get a replay of the same message. Astoundingly, I am driving my car again, so again I push LATER.

Now, as my spouse will testify, sometimes I am a slow learner, so it is not until the better part of a week has passed that I realize the only time I am going to get this message is the first time I start the car in the morning and have driven around fifty yards. At this point, I decide to pull over and push READ. Here is what I got in reply:

Software update for your infotainment system — In order to read the terms and conditions, please park the vehicle safely, switch off the ignition and apply the parking brake.

Well, as it turns out, the reason I got in my car and drove that first fifty yards is that I actually have someplace I need to get to on time, so the idea of switching off the ignition does not appeal. I go back, push the LATER button (feeling a bit like Neo in the Matrix at this point), sub-vocalize a few choice words for the vendor, and carry on with my day.

I won’t testify as to how many days after I had the same introductory message appear and pushed LATER because you guessed it, I actually had somewhere to go and wanted to arrive there on time. But, one day I had the opportunity to be parking somewhere for a good while, so that day I did not push either button until I got to the lot. (“You can fool some of the people all the time, and all of the people some of the time, but you cannot fool all the people all the time.”) Once parked, I did switch off my ignition and applied the parking brake, and was rewarded with the following messages.

Software update for your installation system

Notes
The installation process requires several minutes and cannot be canceled or closed. Individual functions and buttons in the vehicle are not available for use during the installation or their use is limited. The multimedia display does not support display messages.

In the unlikely event of a technical error during installation, functional restrictions of the multimedia system and the above-mentioned functions may persist and make it necessary to consult a workshop.

This is what happens when you let the legal team review the customer communications text. Fresh from their latest efforts with the Safe Harbor statement from the prior quarter’s earnings call, they are fiercely protecting their enterprise from any and every liability risk. Heartwarming as these words were, they actually felt they were not protection enough because they were followed by:

Warnings

During installation of this update, the multimedia system is not available. In particular, this includes systems such as the navigation system, phone, reversing camera, 360 camera, Active Parking Assist, Remote Parking Assist, PARKTRONIC, and the switch for DYNAMIC SELECT.

There is an increased risk of accident.

Installing the update while operating the vehicle may distract you from the traffic situation.

There is an increased risk of accident.

Carry out the installation

And yes, that last line is a call to action, clearly meant to benefit from the wave of inspiration created by the earlier sentences. My only surprise was that it did not append the phrase “at your own risk.”

Now, to be fair, I did carry out the installation, and it took about seven minutes or so, and it was fine. So again, the product engineers know what they are doing. But where in the name of all that is holy is the customer experience engineering? Who in their right mind would ever want their customers—and remember this is a luxury vehicle with some pretty high-end customers—to go through such an experience? And most importantly, what are the takeaways that will keep us from going down the same path?

Here are three that come to mind:

  1. Design the experience. Work backward from the end in mind, making sure each element is contributing to the desired outcome.
  2. Test the experience. Make this a real-world test, not a lab test. Recruit vehicle owners to participate. Capture their feedback.
  3. Eliminate friction. All hygiene processes entail some amount of friction. In such situations, your job is not to delight your customers here but rather to avoid annoying them. Do so by respecting their time.

In this case, what if the car company had sent me an email first? That could have included all their liability stuff. It also could coach me on when and how to best install the update. Once I replied I had read the stuff, then they could have sent a much simpler message over the multimedia system, or maybe just triggered the download on my behalf when my car was safely in my garage. The point is, there was clearly a better way, and just as clearly, nobody at the car company cared enough to advocate for it.

That’s what I think. What do you think?

Image Credit: Pexels, Geoffrey Moore

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The Trapped Value Playbook

Creating and Closing Multi-million Dollar Deals

Trapped Value PLaybook

GUEST POST from Geoffrey A. Moore


Dear Readers,

I want to forewarn you that this article is quite long. For those of you who prefer delving into it at your leisure, I’ve arranged for a downloadable version. Happy reading, and I look forward to your insights and discussions in the comments section.

The Concept

Most ROI comes from productivity improvements, and most productivity improvements come from releasing trapped value. The reason is simple. All systems trap value all the time, the only question is, where is it getting trapped today? That is, systems are implemented to help make people more productive than they were, and they do so with varying degrees of success. But to whatever degree that success has been achieved, that simply resets the bar. The old bottlenecks have been addressed, but that just surfaces the new bottlenecks. There is no such thing as a system with no bottlenecks (see Second Law of Thermodynamics 😉), so there is always the opportunity to release trapped value.

Let me give some examples:

  • On a macro scale, much of the trapped value that IT released in the 1980s and 1990s was in the supply chain. The technology that broke through the bottlenecks of communication and coordination included ERP systems for global commerce, the internet for global communications, and client-server infrastructure for standardized universal enablement.
  • In the 2000s attention shifted from the supply chain to the delivery chain with a focus on consumer markets, and especially those that dealt in services and digital goods. Here traditional media, broadcast advertising, and retail distribution, as powerful as they all were, represented massive waste as well as lost opportunity because they could not close the loop with the prospect nor serve them in the moment they were ready to transact. Smart mobile devices, cloud computing, machine learning, predictive analytics, real-time transaction processing, and home delivery were able to close this loop and thereby transform whole swaths of the consumer economy.
  • In the current era, at the macro level, the trapped value of highest priority has shifted back to enterprise markets, in particular those that require professional engagement to deliver products, sales, services, and customer success. Here generative AI and data amalgamation look to be game-changing resources, the former enabling untrained users to interact directly with the most sophisticated IT systems available, the latter feeding those systems with an ever-broadening stream of real-time data and transaction history. The trapped value to be released is tied to the current lack of user empowerment in the moment of engagement. That is, while predictive AI has for some time been able to come up with the right answers, most professionals are unable to access that help in real-time; and while ML and AI could be fed some of the data it craves, much more was trapped in data silos and thus not available in any timely manner. As a consequence, although we have had business intelligence for some time, we have largely been unable to translate it into operational intelligence in a scaled way.

There is one final point to make at the macro level before we transition to major account selling. How does releasing trapped value translate into customer return on investment, and how does that in turn help vendors set a good price? Here’s the deal. If you help your customer release a dollar of trapped value, they are happy to give you a dime. If you ask for fifteen cents, they hesitate, if you ask for twenty cents, they begin to think you’re gouging. So, let’s use ten percent to set our sights if for no other reason than it makes the math easier. The equation is simple. You want a million-dollar deal? Find a way to release ten million dollars of trapped value. You want a ten-million-dollar deal? Find a way to release a hundred million dollars worth. You want a hundred-million-dollar deal? Find a way to release one billion dollars in trapped value. Yes, these are very large numbers, but the larger the target enterprise, the more plausible they become, so this playbook is directed toward the Global 2000 and the public sector, two places where billions of dollars of trapped value are commonplace.

Creating the multi-million-dollar deal

So much for the macro level. Multi-million-dollar don’t happen there. They happen at the level of specific accounts, in specific industries, in specific geographies, at specific points in time. The question we need to answer is, how does trapped value show up locally?

It turns out this is a tough question to answer. After all, it is not as if your prospects haven’t been trying to improve their productivity already. Nonetheless, simply by asking the question from an outsider’s perspective, and by being intellectually curious as to where the real answers might lie, account teams can bring unique value-add to their target customers. Specifically, they can help construct a trapped value map.

A trapped value map is analogous to what oil companies create when their exploration & production divisions are prospecting for petroleum reservoirs. It’s very expensive to come up empty in that business, and so they invest considerably in seismic studies before they commit. By contrast, how many sales interactions have you witnessed where the team, to stick with the oil industry analogy, begins by presenting their drilling history, then demos their oil rigs, and then, because they always want to be closing, asks the prospect when they can get started drilling? They call it “solution selling,” but they don’t even know what the problem is.

Co-creating a trapped-value map

The goal is to co-create this map with your target customer. They are stuck, so they need you to help them get unstuck. But you need them too, not only because they have the domain knowledge as to where the bodies are buried, but also because it is their buy-in that will drive the deal. Both of you need to bring imagination, intellectual curiosity, and attention to detail to this effort because it won’t be easy. Wherever the trapped value is, it is not obvious, or it would have already been detected and dealt with.

One way to start the journey is to begin by just asking people. You want to engage with a cross-section of managers, work teams, and executives. In each case, the dialog is informal, the questions you pose are open-ended. Start with “What is working well?” Be sure to capture their answers because this is the stuff you will likely want to protect. Then move on to, “What is holding you back?” Sometimes they know and can tell you, sometimes they know but are reluctant to tell you, and sometimes you just have to hold up a mirror so they can see it for themselves. Regardless, you need to spend time walking in their shoes, observing what they do, inspecting the way they are using their systems, and just as importantly, how their systems are using them. You need to bring a beginner’s mind and design thinking to develop a fresh perspective that could support taking novel actions. Specifically, you are looking for the intersection of their trapped value with your disruptive innovation, the one that will release the trapped value, the place where you will drill for oil.

To give you a closer look at the work involved, here is an outline for a typical trapped value discovery workshop:

Kickoff

  • Explain the concept of releasing trapped value as the foundation for ROI.
  • Use the example of Amazon Prime as compared with brick-and-mortar retail, or the example of Amazon Web Services as compared with enterprise data centers.
  • Share personal experiences of trapped value—e.g. stuff that gets in the way of you doing your best work or getting things done expeditiously.

Brainstorm trapped-value bottlenecks in your enterprise’s operating model from multiple points of view, including those of:

  • A customer
  • A customer-facing employee
  • An internal-facing employee
  • A partner
  • An investor

Identify bottlenecks in your overall industry’s operating model, examining things like:

  • Resource-consuming regulatory regimes
  • Fragmented installed bases
  • Locked-in customers
  • Process steps that add more cost than value
  • Dropped connections due to latency delay
  • “Brittle” communication mechanisms that cause outages
  • Absence of telemetry and lack of available data
  • Prioritization disconnects leading to poor implementations

Prioritize bottlenecks in terms of potential ROI from removing them:

  • Target the “big rocks”
  • Don’t “major in minors”
  • Don’t try to solve these problems yet
  • Do try to quantify them and put them in rank order

Double-click on the top priority items:

  • Employ a “Five Whys?” approach to begin to get at root causes.
  • Identify “interventions” that could materially improve things.
  • Discuss past attempts that may not have succeeded.
  • Discuss the potential impact a disruptive technology could have
  • Discuss customer examples or war stories that reflect successes.

Summarize and outline next steps.

Sometimes you may find that the trapped value is glaringly obvious, but that might just mean you don’t really understand the trap. In other words, if the right answer is staring everyone in the face, but no one is doing anything about it, then it is likely for some reason there is no permission to pursue it. It may be political, it may be cultural, but intransigent resistance to change is at least part of the problem. Now, do you still want your multi-million-dollar deal? Well then, you not only will have to break the bottleneck at the operational level, you’ll have to solve for the change management problem as well.

That said, keep in mind that your goal at this point is not to solve the problem. Rather, it is to understand it deeply. You are doing diagnosis, not prescription. Eventually, you will convert to prescription, but know that when you do, you will also be capping the size of the deal. That is, one of the barriers to closing a multi-million-dollar deal is to close a million dollar deal instead. Everything has to close eventually, and sometimes the right thing to do is to take the million dollar deal (or the one hundred thousand dollar deal, or even the ten thousand dollar deal) today, and kick the multi-million can down the road. But don’t kid yourself. You don’t get a lot of bites at the apple, and the probability is, once you have set your price envelope, it will not get expanded any time soon.

The trapped value map, by contrast, represents an open-ended narrative, one that can be taken on in chapters, with more to come. At present, we don’t know what the answers will be. Nobody does. We are just assessing whether the problem is material enough to spend the time, talent, and management attention necessary to come up with a feasible solution. Facilitating this assessment is a gift that the account team can bring to the prospect. When conducted with integrity and skill, it positions your company as a trusted advisor, regardless of whether this particular effort bears fruit or not. That’s because you and the customer have been sitting on the same side of the table, working together to co-create something that uniquely describes their challenges in a way that makes them more actionable to address.

Transitioning to the Proposal: Co-creating a V2MOM

A great way to transition from the trapped value map to a full-on proposal is to use the V2MOM framework as a template for getting everyone on the same page. Working one-on-one with your customer sponsor, or in an ideation workshop with a small customer team, address the following:

  • Vision. What is the outcome we are seeking to bring about? Where is the trapped value today? What will things look like once the trapped value has been released? Why is this a big deal?
  • Values. What values get realized if we accomplish our vision? One of these should highlight the financial ROI, but the others can be more qualitative. Will this effort improve our ability to deliver on our mission? Will it help us fulfill one of our brand promises? Will it free our workforce to be more effective? Will it help us recruit and retain the talent we need?
  • Methods. What are all the things we have to get done in order to secure the outcome promised by our vision? The goal here is to describe the whole product, which includes not only whatever products and services are funded by the proposal but also any other deliverables from partners or from the customer team itself that will be required to achieve the desired outcome.
  • Obstacles. For each method in the whole product, what are the challenges we anticipate having to overcome? What is our current thinking about how we will do so?
  • Measures. What are the measures that will confirm we are realizing the outcome promised in our vision? What are the intermediate milestones that will ensure we are progressing toward that goal in a timely fashion?

It is hard to overestimate the positive impact of doing this work with the customer prior to developing a proposal. Not only does it get everyone on the same side of the table, all pulling together, but the level of confidence that the vision can be achieved goes way up, as does the sense of inclusion resulting from simply being heard.

Converting the V2MOM into a formal proposal

Creating major proposals is something account teams do for a living, so we don’t need to address all that here. What is needed, however, is a playbook that constructs that proposal from the outside in rather than from the inside out.

Bad proposals are all about you. They are inside-out presentations and documents that explain what a great company you are, how wonderful your products are, how many references and endorsements you have, why you are so superior to the competition, and why all those bad things they say about you aren’t true. Just remember one thing — nobody cares!

Great proposals, on the other hand, are all about the customer:

  • They start with grounding everyone in the problem to be solved or the opportunity to be captured. They do so in an authentic way that is neither slanted nor self-serving but genuinely positions the customer to make good, if challenging, choices.
  • They “size the prize.” The co-creation team gives its best assessment of the trapped-value costs it seeks to eliminate as well as the unrealized gains it seeks to achieve. Taken together these constitute the targeted ROI and set the 10X mark for positioning a fair price for the solution.
  • They map the solution to the problem, not the other way around. Each plank in the proposal has a clear reason to be, all based on releasing trapped value.
  • They address the whole product, focusing on the sold products and services, but also including both the roles of partners and allies and their responsibilities to the customers themselves, thereby giving the customer a complete picture of what it will take to succeed.
  • They position the proposed solution relative to reference competitors who represent the best alternatives to what is being proposed. These alternatives are honored for what they are. At the same time, the proposal makes clear why they fall short and why what is being proposed is preferable instead.

Building a Stairway to Heaven

Multi-million-dollar deals have grandiose objectives that capture the minds and hearts of visionaries, raise skeptical hackles with pragmatists, and scare the pants off of conservatives. Getting them funded normally requires building a coalition of the willing across all three constituencies. The framework for so doing is called a stairway to heaven.

Here’s the framework:

Capitalizing on Disruption

The point of the framework is that all four steps will play a part in capturing the total ROI from the proposal. Conservative personas will be most interested in the bottom stair, pragmatists under duress, the second one up, pragmatists with options, the third, and visionaries, the topmost. To build the kind of coalition of the willingness necessary to fund a multi-million dollar deal, you meet with as many key stakeholders one-on-one as you can, directing their attention to the stair that is of most interest to them, and showing how the plan will meet their needs, when and where that stair is expected to be addressed, and what measures will verify and validate that this has been achieved.

Conclusion

Freud is famous for saying, “Sometimes a cigar is just a cigar.” The same is true of frameworks. By themselves they achieve nothing. People do all the work. But people can often work at cross purposes not only for each other but for their intended objectives as well. Good frameworks can help them align to be more effective, and with that thought in mind, let me wish you and your team great success.

That’s what I think. What do you think?

Image Credit: Pexels, Geoffrey Moore

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Aesthetics – Part Two

Aesthetics - Part Two

GUEST POST from Geoffrey A. Moore


From The Cambridge Dictionary of Philosophy entry on Aesthetics

Philosophy of art has also dealt with the nature of taste, beauty, imagination, creativity, representation, expression, and expressiveness; style; whether artworks convey knowledge or truth; the nature of narrative and metaphor; the importance of genre; the ontological status of artworks; and the character of our emotional responses to art.

This is in essence a laundry list of the things I find compelling about esthetics, and in this essay, I plan to dig into each one of them.

Taste

Here’s how the Oxford English Dictionary defines taste relative to esthetics:

OED: 8. The sense of what is appropriate, harmonious, or beautiful; esp. discernment and appreciation of the beautiful in nature or art; spec. the faculty of perceiving and enjoying what is excellent in art, literature, and the like.

Note the struggle here to insert an analytical capability into a pre-linguistic experience. Sense is pre-linguistic, discernment and appreciation are post-linguistic, and faculty is an attempt to unify the two as an analytical skill. In my view, esthetic experience is a two-step process, where sense governs step 1, and discernment governs step 2. This is directly analogous to Coleridge’s primary and secondary imagination, the former coming up with innovations, the latter imposing shape and form upon them. Provided we maintain a disciplined separation between the two steps, we can indeed call this a faculty.

This begs a bigger question, however. How does the pre-linguistic capability of sense recognize what is appropriate, harmonious, or beautiful in the first place? What is the connection between the external and the internal?

Beauty

This is as close as we are going to get to the external pole of esthetic experience, the thing that causes the impact on the internal pole, our conscious self.

OED: 1. Such combined perfection of form and charm of coloring as affords keen pleasure to the sense of sight.

OED: 2. That quality or combination of qualities which affords keen pleasure to other senses (e.g. that of hearing), or which charms the intellectual or moral faculties, through inherent grace, or fitness to a desired end.

Look how out of its depth the OED is here! It is forced to use the word charm twice to invoke little more than inexplicable magic. It is not that I disagree with the word, but what the hell does it mean? OK, let’s ask the OED again:

OED: 3. Any quality, attribute, trait, feature, etc., which exerts a fascinating or attractive influence, exciting love, or admiration.

OK, I agree that beauty has charm, but that does not explain its force, it only labels it. Why is beauty charming? What is it that is fascinating or attractive, exciting our love or admiration?

At the material level, with visual arts, the consensus is that it is due to a combination of color and form that strikes us as harmonious, another word that I agree with but that also seems mystical. But here I think we can make a connection with the experience of mindfulness by asserting that the harmony involved in both experiences is the same. That would suggest that beauty is a spiritually refreshing experience, that it homeostatically returns us to a state of well-being. One virtue of this notion is that it makes it easy to bridge to other arts, like music, where form and color are not the active ingredients, but venturing out and returning to a state of well-being is still in play.

To be fair, for some at least, well-being itself may also be a mystical term, foreshadowing the possibility of an infinite regress of definitions as the analytical intellect struggles to engage with ineffable experiences, but I am willing to stop here and say, from a Darwinian perspective, it makes sense to me that homeostasis is real and relatively prevalent, that it is core to well-being, and that evolution would select for experiences that reinforce it as conferring competitive advantage in human affairs.

Imagination and Creativity

Both these topics extend far beyond the domain of esthetics and the philosophy of art and, if pursued at length, will lead us far off-topic. Within the domain of esthetics, both terms communicate admiration for the ingenuity of the artists who have in some way surprised us with their work. Surprise itself is an integral part of esthetic experience which we will address subsequently.

What we want to investigate here is the presence of the artist in the esthetic experience. In one sense, the artist is not present. We experience the artwork in their absence. But as we engage with multiple works from the same artist, we develop a sense of their style, their values, their topics of interest, and the like. We say things like, “I love Dylan,” or “I can’t stand Proust,” and both statements serve to summarize our esthetic experiences of their work. Where this goes awry, in my view, is when we drag the artist out onto center stage, creating a cult of personality—not a bad thing in itself necessarily, but outside the bounds of esthetics.

Representation, Expression, and Expressiveness

This collection of three terms manifests a tug of war between the Enlightenment and Romanticism about where to anchor the esthetic experience. The Enlightenment focuses on representation as the interaction between the art object, the experiencing subject, and the world at large, positioning art as a subject-object experience that upon absorption reshapes our subject-world experience. In this context, the role of esthetics is to critique the art in relation to the world—how well does the art represent the world to us, and how much has it changed our perception of things? The artist is not directly part of this equation.

By contrast, in the Romantic esthetic, the artist does take center stage. Art is positioned as a subject-object-subject experience, the artifact bridging between the artist and us rather than us and the world. Expression refers to what the artist puts into the artifact, and expressiveness refers to how much of that comes out of the experiencer’s end. For Romantics, this is at the heart of the esthetic experience. For followers of the Enlightenment, it is more of a distraction. They are looking for a solo experience that centers them with respect to the world at large, not a dialectic experience that destabilizes that relationship.

Style

Style is a secondary attribute of esthetics in that one can have style without esthetics, as with a cartoon, as well as esthetics without style, as with a natural landscape. That said, for the Romantics, with their focus on artistic expression, style does indeed “maketh the experience.” It serves as a bridge into the artist’s vision of the world, a way of seeing and being that can be transformative for the experiencer. For the Enlightenment, on the other hand, style is more of a societal asset. It has classic roots in proportion and harmony, attributes that are taken to transcend individual experience, understood instead as autonomously real. Both of these traditions make style more central to art than it was taken to be in the Early Modern period. At that time poetry was said to “teach and delight,” with commentators calling out style—the Elizabethans would have said rhetoric—as one of the chief sources of delight. Indeed, there were handbooks galore about how one could decorate one’s writing and speech with beautiful figures. This represents an early stage of playful euphoria when vernacular languages were displacing Latin across the entire spectrum of European culture.

Today, while all three of these views are still in play, contemporary criticism is often more interested in a fourth—style as a medium for communicating subtext, a mechanism for teasing nuances out of the more overt dimensions of the artwork. Juxtaposition of seemingly unrelated elements reframes our experience of what otherwise would be familiar and taken for granted. The work engages the experiencers’ analytical facilities in the midst of the fantasy experience, a distancing effect that makes them both participant and observer at the same time, accentuating their perception of irony, a cornerstone of the modern esthetic.

Do artworks convey knowledge or truth?

Although this question is intended to help us learn more about art, it introduces two very elusive concepts of its own, namely knowledge and truth, so we need to tread carefully. Nonetheless, the question is a valid one, and we owe it an answer.

To the degree that knowledge and truth are understood to consist of language-enabled statements, the answer is no, artworks do not convey either one. This is the Enlightenment’s position, one that caused it to turn to the concept of taste instead. By contrast, to the degree that knowledge and truth are conceived to transcend language-enabled understanding, meaning that they can reside beyond the scope and ken of reason, then the answer is yes. This is Romanticism’s claim, one that called it to substitute art for religion as a portal to spiritual experience.

Both these positions, however, are unsatisfactory. To be fair, the Enlightenment self-corrected itself in part by directing attention to the sublime, something that since antiquity had always been conceived as transcending reason. But at the end of the day, that did not open any new path to incorporating esthetic experience into one’s overall understanding of the world. The barrier of taste stood firmly in the way. The Romantics, by contrast, embraced transcendence wholeheartedly. Its problem was that it could not access it reliably. That is, neither nature nor art is able to consistently evoke the spiritual refreshment that Romantics value so highly. One is left in a state of anticipation, broken by occasional inspirational moments, but how and when they come at some times and not at others is a mystery. Indeed, the whole claim is a mystery, one that is hard to reconcile with any claims to knowledge or truth.

Contemporary culture, specifically the post-modern wing, dodges these issues by calling into question the reality of both knowledge and truth. Pragmatically, this is just a mistake. The reason we have words for both knowledge and truth is that they represent forces at work in the world that are relevant to our strategies for living. The fact that they are hard to come to grips with does not warrant dismissing them altogether. With that in mind, let us return to our original question: do artworks convey knowledge or truth?

Set aside the incidental communication of information that might accompany an esthetic experience, and focus instead on the experience itself. An external force has, with your permission, taken possession of your faculties and is manipulating your mind to its own ends. This force can be extraordinarily effective at creating belief. Whether that belief represents knowledge or truth cannot be determined from within the experience. Once the experience is over, we can analyze our memory of it, and in that context determine if it warrants being called “justified true belief,” which is philosophy’s gold standard for defining knowledge.

The nature of narrative and metaphor

Narrative and metaphor are two of humanity’s superpowers. Narrative is our most ubiquitous problem-solving tool. Each step in a story implies a cause-and-effect relationship that then can be tested by analytics for credibility. That’s the core function of criticism. Similarly, metaphor is one of our most ubiquitous innovation tools. Each instance proposes a strategic correlation between apparently dissimilar domains, whereby the tactics that have proven successful in the first domain are implicitly applied to address unsolved problems in the second. Again, this too must be tested, either by analytics or experiment.

In this context, what are the esthetic dimensions of narrative and metaphor? What makes for a good story or a good metaphor? I would vote for an experienced tension between expectations and fulfillment which both surprises and enlightens. In narrative, think of Sir Gawain and the Green Knight. What we expect is going to happen in that final encounter and what actually does happen is both surprising and enlightening. Similarly, with respect to metaphor, think of Ezra Pound’s “In a Station of the Metro”:

The apparition of these faces in the crowd:

Petals on a wet, black bough.

In this most industrial of situations, we are surprised and enlightened to find a kind of beauty we thought belonged only in nature.

The importance of genre

To the degree that surprise and enlightenment are core to esthetic experience, genre somewhat surprisingly takes center stage. It sets audience expectations through its established conventions. If it is a comedy, we know that our protagonists will be OK in the end; if it is a tragedy, they will not. To the degree that a given work of art fulfills our expectations, we are pleased but not enlightened. Indeed, if there are no deviations at all—what is often called the domain of stock response—we are likely to get bored and maybe even offended. At the other end of the spectrum, if the work refuses to provide any signals as to genre, we typically ignore it as we have not been invited to participate. However, when a work of art creates expectations and then deviates from them as it unfolds, we can experience a variety of reactions—intrigue, annoyance, doubt, curiosity, and others. The point is, it has engaged us. We are having an esthetic experience whether we like it or not.

Genre creates the bulk of its expectations around beginnings and endings, the former inviting us to open up our minds to engage with and be manipulated by an external force, the latter to bring that experience to a close and initiate any reflections we may have about it. The extent to which art invades our privacy is extraordinary, and so it is natural that we have developed defenses against it. Genres offer an implied contract with respect to what is within bounds and what is off limits. This allows us to prepare ourselves for what is to come, including the option of excluding it altogether (I do not watch horror movies, for example).

Norman Holland gave us a great acronym for understanding this relationship: DFT, which stands for Defense, Fantasy, and Transformation. My contribution is to add an E to it, making it DEFT, where E stands for Expectation. The esthetic experience, in other words, unfolds through four stages, as follows:

  1. Defense. Because art is inherently intrusive—indeed, manipulative—we all have psychological defenses against letting it in. The function of movie trailers, book covers, and online reviews is to get us to take down our defensive barrier and let this particular artwork in. We should keep in mind that this is a relatively rare occurrence. Most shows we do not watch. Most books we do not read. Most museums we do not attend.
  2. Expectation. The way art gets past our defenses is by using genre signals to create an expectation of getting an experience we would like. We know we are being “sold,” but we also are looking for experiences of some sort, and so we are potentially willing to “buy.”
  3. Fantasy. This is the pay-off, the essence of the esthetic experience. The term applies most directly to fiction where we internally imagine scenes based on nothing more than words we are reading. But visual and performative arts also enlist our imaginations, personalizing our experiences such that no two are identical, not even when we are the experiencer both times. These experiences are so intimate and engaging that we have developed an entire discipline to help us interpret them. It is called criticism.
  4. Transformation. Transformation is the business of criticism. We seek to extract from the residue of our fantasy experience ideas that we can incorporate into our strategy for living. We do this both through reflection and conversation, but regardless of the mode, the only evidence we have is our memories of the fantasy experience, and every one of those memories is unique, not only in place (whose memory) but also in time of recall (because memories change every time they are reexperienced). Nonetheless, we persist because these memories are now part of who we are, and if we fail to understand them, we fail to understand ourselves.

Genre participates directly in each of the four steps above, helping bypass our defenses (hey, it’s just an action movie), creating expectations (and it’s from the Marvel universe), teeing us up for fantasy (the viewing experience in which we let the movie take over our mind), and triggering a transformation conversation when it is over (I think Iron Man may need some counseling, or maybe I do).

The ontological status of artworks

Art consists of artifacts whose primary purpose is to deliver an experience as opposed to accomplishing a task. Typically, they do so by engaging the imagination of the participant in a fantasy shaped through either a sensory stimulus (painting, sculpture, dance, music, and the like) or a language act (stories, poetry, novels, and the like) or a combination of the two (plays, films, opera, and the like). We assign these artifacts a special status because we evaluate them not only on their craft but also on the quality of the experiences they evoke. Assessing that quality, its impact, and the contribution that craft makes to it is the purpose of esthetics.

The realm of esthetics extends well beyond the fine arts. In contemporary culture, for example, cuisine has taken center stage, for even as it performs a utilitarian task, it also creates emotional experiences of considerable force, particularly when tied to family, ethnic, or personal traditions. Proust’s Madeleine is a famous psychological example, but today the focus is more on cultural ties, where esthetics helps promote cross-cultural connections that can reinforce social cohesion. Similar esthetic circles form around cars and personal attire, really any field of life where identity binds itself to experiences that go beyond utility. The dialog is typically a mixture of the practical and the esthetic, the two fusing into a kind of expertise that goes viral on digital media, which brings us to our last topic.

The character of our emotional responses to art

One way to characterize our responses to art is in relation to our emerging knowledge of how our brains actually work. Our consciousness resides in the neocortex, that part of the brain we see from the outside that looks something like a cauliflower. The neurons in the neocortex are optimized to perform two functions:

  1. Engage with the things and events that are happening around us and initiate appropriate responses to them, and
  2. Imagine how such things and events might be different, and what such differences might lead to in terms of alternative responses.

It turns out that the very same neurons that perform function 1 also perform function 2, which makes for some interesting implications:

  • Each function trains the other one. That is, experience in the world feeds the imagination with material to work on, and imagined experiences expand the repertoire of alternatives our engagement function can draw upon.
  • Because the exact same neurons are used in both cases, the functions are mutually exclusive, meaning you can’t engage with the world when you are imagining, and you can’t imagine things when you are engaging with the world.

These implications cast important light on two elements of our response to art. The first is that we are drawn to it naturally. That is, evolution favors constructive use of imagination, and imagination is enhanced by engaging with art. Esthetics in this context investigates the specifics of the attraction itself, what elements in the art motivate us to attend to it, and the impact the experience has on our ability to engage with the world thereafter.

The second point, that we cannot both imagine and engage at the same time, speaks to the question of whether there is a specific attitude one must take in order to appreciate art. The answer is, yes, but it is totally involuntary. The notion that one must train oneself to adopt the appropriate attitude is yet another example of the analytical intellect overstepping its bounds. Analysis is fundamental to Transformation, but it has no role in Fantasy.

Our emotional responses to art touch all four phases of the esthetic experience. That is, our Defense against art we don’t like is driven by an emotional rejection we often are unable to explain. In contrast, our Expectation that some art will please us is driven by desires we are only too willing to explain. Regardless of our expectations, our Fantasy experience is highly varied with respect to emotion, which often correlates with how much or how little we value the art in question. Finally, our Transformation experience seeks to assess the impact of whatever emotion we did experience when recollected in tranquility.

That’s what I think. What do you think?

Click here to Read Part 1 if you missed it

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Aesthetics – Part One

Aesthetics - Part One

GUEST POST from Geoffrey A. Moore

The Infinite Staircase offers readers a metaphysics and an ethics shaped by the 21st century’s understanding of how the world came to be. It has little to say, however about esthetics, and that is too large a part of human experience to neglect. With that in mind, I am going to address the topic in two short essays.

The first essay, the one you have in hand, is an interaction with The Cambridge Dictionary of Philosophy’s entry on the topic. I found myself constantly quarreling with it, and I wanted to sort out why, hence this piece. What I see now is that I was clearing a space to dig deeper into the issues I truly care about. That’s what the second essay is intended to do.

Of course, this begs the question, do you even need to read this essay? I mean, just because I have to clear my throat before I speak doesn’t mean you have to listen to it. That said, if you are academically oriented, or have ever taken courses in philosophy, I suggest you do read this if only to clarify your own point of view. If, on the other hand, you are simply interested in the nature of the esthetic experience itself, feel free to ignore this piece, but do keep an eye out for the next essay.

Essay #1: A Dialog with Cambridge

NOTE: The format of the dialog is to present the Cambridge material in blockquote format and my responses to it in normal text.

Aesthetics: the branch of philosophy that examines the nature of art and the character of our experience of art and of the natural environment.

The purpose of esthetics, as of any academic discipline, is to investigate a body of forces in order to better understand its nature and determine how best to incorporate it into our strategies for living. In the case of esthetics, the forces under study create psychological experiences, and it is these experiences that provide the data upon which the discipline is based.

Because the concept of experience is central to the understanding of esthetics, we need to get clear about its meaning. In particular, we need to distinguish between two common understandings of the term, one of which is central, the other of which is tangential to our purposes.

Here are the two definitions, taken from the Oxford English Dictionary:

  1. The actual observation of facts or events considered as a source of knowledge.
  2. The fact of being consciously the subject of a state or condition, or of being consciously affected by an event.

Definition 2 is the one that is central to our purpose. We are interested in the impact of an object on a subject, what it is like to be “consciously affected,” something that depends very much on the properties of both the subject and the object. We investigate this experience first by examining the residue of its impact on the subject and then by seeking attributes in the object that account for it.

This is where Definition 1 comes in. It is a tactic we use in pursuing a better understanding of what is happening under Definition 2. But we need to be careful here as we cannot objectively observe the facts in question—they are inherently subjective and can only be contemplated internally or reported externally. That means there can be no purely objective basis for esthetics. We must keep both subject and object in view at all times, focusing specifically on what is happening when we are being internally affected by an externally occasioned event.

It emerged as a separate field of philosophical inquiry during the eighteenth century in England and on the Continent. Recognition of aesthetics as a separate branch of philosophy coincided with the development of theories of art that grouped together painting, poetry, sculpture, music, and dance (and often landscape gardening) as the same kind of thing, les beaux arts, or the fine arts.

The fine arts are indeed all within the scope of esthetics. As a group, however, they are highly refined. Their force tends to be more ethereal than many people can experience, particularly modern audiences that are more global and less privileged than the eighteenth century thinkers who created the concept initially. As a result, we should not position the fine arts as the centerpoint of our category but rather at one end of a more inclusive spectrum, albeit one we have as yet to define.

Baumgarten coined the term ‘aesthetics’ in his Reflections on Poetry (1735) as the name for one of the two branches of the study of knowledge, i.e. for the study of sensory experience coupled with feeling, which he argued provided a different type of knowledge from the distinct, abstract ideas studied by “logic.” He derived it from the ancient Greek aisthanomai (to perceive), and “the aesthetic” has always been intimately connected with sensory experience and the kinds of feelings it arouses.

“Sensory experience coupled with feeling” is as good a starting point as any for capturing the full spectrum of aesthetic experience. It is still too general, as there are many such experiences that are not aesthetic, but it gives us a point of departure. The challenge is that when we try to convert any such experience into knowledge, of necessity we must express ourselves in language, and this can be confusing because the experience itself is pre-linguistic.

That is, to use the framework of The Infinite Staircase, sensory experience coupled with feeling takes place on the stairs of desire, consciousness, values, and culture—all prior to the stairs of language, narrative, analytics, and theory. When we use these higher stairs to explain what is happening on the lower ones, we are prone to imposing their structure in ways that ride roughshod over the subtleties of the actual experience. This is reflected throughout the list of questions that follow.

Questions specific to the field of esthetics are: Is there a special attitude, the aesthetic attitude, which we should take toward works of art and the natural environment, and what is it like?

The answer is no. This is an example of analytics seeking to reposition experiences that arise from below by proposing that they descend from above. That is, the refined analytical intellect is positioning itself at the center of an experience during which it was not even present. This is a big mistake, one that implies aesthetic experiences are reserved for the few who possess refined sensibilities when in fact they are universal.

Is there a distinctive type of experience, an aesthetic experience, and what is it?

The answer is yes, and in the lexicon of philosophy, it falls into the category of qualia. The entry on qualia from Wikipedia provides a useful introduction, defining it as subjective conscious experiences, examples of which include the perceived sensation of pain of a headache, the taste of wine, and the redness of an evening sky. As qualitative characteristics of sensation, qualia stand in contrast to propositional attitudes, where the focus is on beliefs about experience rather than what it is directly like to be experiencing.

Now, to be fair, pain does not qualify as an aesthetic experience, but the taste of wine and the color of red certainly do. The key point is that all the examples stand in contrast to propositional attitudes, the domain of analytics, which can be about aesthetic experience but not integral to it.

Is there a special object of attention that we can call the aesthetic object?

Yes, there is. It is whatever body of forces that are creating the impact on the subject, be that the wine, the evening sky, a painting, a story, or a piece of wood. But the object alone cannot be said to be inherently aesthetic. Only after it has evoked a sensory experience coupled with feeling can it be so termed, and then only with respect to subjects in whom that experience has been evoked.

Finally, is there a distinctive value, aesthetic value, comparable with moral, epistemic, and religious values?

Yes, there is. To put things in perspective

  • Moral value consists of behavior that is beneficial to others and consistent with social norms.
  • Epistemic value consists of justified true beliefs that lead to effective action in the world.
  • Religious value consists of spiritual experiences and commitments that provide sacred and undeniable guidelines for life in the world.

In such a context, aesthetic value consists of pleasurable, contemplative, non-utilitarian, resonating experiences that we characterize as beautiful, refreshing, and inspiring.

Some questions overlap with those in the philosophy of art, such as those concerning the nature of beauty, and whether there is a faculty of taste that is exercised in judging the aesthetic character and value of natural objects or works of art.

The nature of beauty is indeed an elusive topic, one where we need to be humble, but with respect to the faculty of taste, we can be more assertive. In the eighteenth century, judgments of taste were appropriated by a social class that privileged refinement and intellect over sensibility and joy. In the nineteenth century, the Romantic movement aggressively worked to overthrow and reverse this polarity, and in the twentieth, cultural relativism worked to deny the validity of any aesthetic judgments that extended beyond the personal preferences of the person making them within the norms of the culture they are inhabiting. All three positions contain an element of truth, and none by itself does a good job of accounting for the overall nature of beauty. The good news is that they are not incompatible with one another, so a synthesis of all three can potentially provide a stable foundation for esthetic theory.

Aesthetics also encompasses the philosophy of art. The most central issue in the philosophy of art has been how to define ‘art’. Not all cultures have, or have had, a concept of art that coincides with the one that emerged in Western Europe during the seventeenth and eighteenth centuries. What justifies our applying our concept to the things people in these other cultures have produced?

It is justifiable to apply our concepts to our experience of things other cultures have produced and how they stack up against our cultural norms. We just should not apply them to their experiences or the status of the things in their culture. The temptation to do so derives from seeking to locate the aesthetic force solely in the object. That is not a tenable claim.

There are also many pictures (including paintings), songs, buildings, and bits of writing that are not art. What distinguishes those pictures, musical works, etc., that are art from those that are not?

They do not evoke the pleasurable, contemplative, non-utilitarian, resonating experiences we call beautiful, refreshing, and inspiring.

Various answers have been proposed that identify the distinguishing features of art in terms of form, expressiveness, intentions of the maker, and social roles or uses of the object.

None of these topics is off limits, but each one can take us down a rabbit hole if we try to use it as definitive of what constitutes art. That begs the question of how we would define art, but we will leave that to the second essay.

Since the eighteenth century, there have been debates about what kinds of things count as “art.” Some have argued that architecture and ceramics are not art because their functions are primarily utilitarian, and novels were for a long time not listed among the “fine arts” because they are not embodied in a sensuous medium. Debates continue to arise over new media and what may be new art forms, such as film, video, photography, performance art, found art, furniture, posters, earthworks, and computer and electronic art. Sculptures these days may be made out of dirt, feces, or various discarded and mass-produced objects, rather than marble or bronze. There is often an explicit rejection of craft and technique by twentieth-century artists, and the subject matter has expanded to include the banal and everyday, and not merely mythological, historical, and religious subjects as in years past. All of these developments raise questions about the relevance of the category of “fine” or “high” art.

When discussing esthetics in general, over-rotating to fine or high art is simply a mistake. It is a valid subcategory, but not to the exclusion of other sensory experiences coupled with esthetic feelings. Once again, we see the analytical intellect overstepping its bounds, seeking to impose itself as an arbiter of aesthetic value when its proper role is to be an interpreter of aesthetic experience.

Another set of issues in philosophy of art concerns how artworks are to be interpreted, appreciated, and understood. Some views emphasize that artworks are products of individual efforts, so that a work should be understood in light of the producer’s knowledge, skill, and intentions. Others see the meaning of a work as established by social conventions and practices of the artist’s own time, but which may not be known or understood by the producer. Still, others see meaning as established by the practices of the users, even if they were not in effect when the work was produced. Are there objective criteria or standards for evaluating individual artworks?

All these views are legitimate in their own right, provided we surface the context in which the judgment is made. What is not legitimate is to overrule a rival approach, asserting one’s own as the only valid one. Overall, the goal is to get as much insight as possible into the body of forces at work in an esthetic experience, any way we can.

There has been much disagreement over whether value judgments have universal validity, or whether there can be no disputing about taste if value judgments are relative to the tastes and interests of each individual (or to some group of individuals who share the same tastes and interests). A judgment such as “This is good” certainly seems to make a claim about the work itself, though such a claim is often based on the sort of feeling, understanding, or experience a person has obtained from the work. A work’s aesthetic or artistic value is generally distinguished from simply liking it. But is it possible to establish what sort(s) of knowledge or experience(s) any given work should provide to any suitably prepared perceiver, and what would it be to be suitably prepared?

With respect to this question, we should acknowledge that university degree programs in the humanities do purport to teach this kind of knowledge and thereby suitably prepare the perceiver to appreciate the works being studied. As a practical exercise, this is invaluable. Where things can go astray is when the judgment “this is good” floats free of its moorings in culture-specific subject-object relationships and imposes itself as objective fact.

It is a matter of contention whether a work’s aesthetic and artistic values are independent of its moral, political, or epistemic stance or impact.

They are independent. Clearly works of art can have moral, political, or epistemic dimensions, but these are outboard of the aesthetic dimension. When criticism seeks to interpret art through these kinds of filters, be they Marxist, feminist, deconstructionist, or the like, we have left the realm of the humanities behind and ceded authority instead to the social sciences.

Philosophy of art has also dealt with the nature of taste, beauty, imagination, creativity, representation, expression, and expressiveness; style; whether artworks convey knowledge or truth; the nature of narrative and metaphor; the importance of genre; the ontological status of artworks; and the character of our emotional responses to art.

The paragraph above represents a laundry list of what for me are all the interesting topics. It warrants an entire essay of its own. That will be the subject of the essay to follow.

Work in the field has always been influenced by philosophical theories of language or meaning, and theories of knowledge and perception, and continues to be heavily influenced by psychological and cultural theory, including versions of semiotics, psychoanalysis, cognitive psychology, feminism, and Marxism.

Here we see more ceding of authority to the social sciences. It is not that they have nothing to add. It is that they are appropriating the aesthetic experience to promote another agenda. That agenda may indeed be worthwhile, but it cannot substitute for aesthetic analysis.

Some theorists in the late twentieth century have denied that the aesthetic and the “fine arts” can legitimately be separated out and understood as separate, autonomous human phenomena; they argue instead that these conceptual categories themselves manifest and reinforce certain kinds of cultural attitudes and power relationships. These theorists urge that aesthetics can and should be eliminated as a separate field of study, and that “the aesthetic” should not be conceived as a special kind of value. They favor instead a critique of the roles that images (not only painting, but film, photography, and advertising), sounds, narrative, and three-dimensional constructions have in expressing and shaping human attitudes and experiences.

And this is the ultimate ceding of authority to the social sciences, to which I am viscerally opposed.

That’s what I think. What do you think?

Part Two coming soon!

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Unlocking Trapped Value from the Technology Adoption Lifecycle

Unlocking Trapped Value from the Technology Adoption Lifecycle

GUEST POST from Geoffrey A. Moore

For some time now I have been making the case that investment decisions, be they made by customers engaging with a new product and vendor or private equity firms backing a new technology and entrepreneur, should begin with finding the intersection between the innovation at hand and a pool of trapped value it can release, thereby creating the return on investment. That said, one of the core principles of investing is called risk-adjusted returns, meaning that the greater the risk you take, the higher the return needs to be. My expertise is in the risks related to technology adoption, where the risk factors change over the course of a new technology’s deployment. With that thought in mind, here is how the trapped value thesis needs to risk-adjust to adapt:

  • Early Market: very high technology adoption risk. The prize here has to be quite large indeed. Typically it will come in one of two forms. For B2B investments, it will be like an oil reservoir that, if tapped correctly, will produce a gusher. Regulated industries have pockets of trapped value all over the place that fit the bill. Also, industries like automotive and real estate, which are restructuring their relationships with dealers and agents, would qualify. By contrast, B2C investments tap into trapped value that looks more like shale oil—no deep pockets, but incredibly broad presence. Media, transportation, and hospitality have funded extraordinary returns for Netflix, Uber, and Airbnb, not because the trapped value was severe but because it was so pervasive. The point is, early-stage venture investing needs to target home-run bets to warrant the risks it takes. Same goes for visionary customers in B2B markets who are the early adopters of these technologies. They are taking on significant risk so they need to be targeting outstanding rewards.
  • Crossing the Chasm: high technology adoption risk, but readily mitigated. The challenge here is that the technology has great potential for any number of use cases but needs some additional support in every case to achieve the desired end result. The chasm-crossing playbook focuses on a single use case in a single industry and geography in order to create a killer “whole product” that nails the use case and to build a coalition of customer references and partner successes that will keep the market growing even as the technology vendor expands into other segments. Here the trapped value should be intense but narrowly confined, designed to meet three critical success factors:
    1. Big enough to matter (it should be able to generate 10X your current year’s billings target)
    2. Small enough to lead (if you crush your plans, you should get 50% segment share)
    3. Good fit with your crown jewels (if you win, nobody is going to displace you).

    As you can see, there is risk here, but it is manageable through market focus and disciplined execution, the key risk reduction factor being how compelling is the customer’s reason to buy.

  • Bowling Alley: modest adoption risk. The challenge here is to expand beyond your first “beachhead” vertical into adjacent use cases with the same segment as well as adjacent segments with the same use case. Part of the source of reduced risk is that you have a working playbook from the first vertical. Much of the source, however, comes from the emergence of local ecosystems of partners who complete the whole product solutions for each use case. These partners make their living supplementing the technology vendor’s product or platform, and their extra talent, domain expertise, and segment focus represent a major risk reduction. As a result, the trapped value rewards have a lower hurdle to clear to garner investor interest and customer buy-in.
  • Tornado: low adoption risk. The risk here is the opposite—getting left behind as the world embraces the shift to a new normal. The trapped value that drives a tornado is released by “killer apps.” These apps may not release the most trapped value, but they represent a sure winner to start with, making the buying decision a no-brainer. The point is, if you want to get any traction in the tornado, you have to lead with a killer app, a no-regrets offering that delivers simple-to-consume rewards and gets everyone onto the new platform. That means the trapped value must be easy to target and the value of releasing it must be obvious to all, especially to the end users who will be the prime beneficiaries.
  • Main Street: very low adoption risk. The primary adoption challenge here is converting conservative end users who simply do not want to switch to yet another new technology. The trapped value now exists in nuisances, little bits of inefficiency that have workarounds but are annoying. From the point of view of productivity, the cost savings from eliminating them are minimal. But in terms of the user experience, as well as customer satisfaction, the impact can be substantial. B2C enterprises spend most of their R&D here focused either on eliminating “hygiene” issues or innovating with new “delighters,” both of which can increase demand, the cornerstone for volume operations success. B2B enterprises use six-sigma analytics to scout their value chains for bottlenecks that increase latency, something that adds risk without adding value, and frustrates even their most loyal customers.

The key takeaway is that there are different kinds of trapped value, each occupying a different sweet spot in the Technology Adoption Life Cycle. As a vendor and potential leader of a go-to-market ecosystem, you must be crystal clear about the kind of trapped value you are targeting, the kind of risk-taking it warrants, and the kinds of solutions that will get the most traction.

That’s what I think. What do you think?

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Accelerating Change in Consumer Packaged Goods

Accelerating Change in Consumer Packaged Goods

GUEST POST from Geoffrey A. Moore

I had the pleasure of engaging with a team of executives from a Global 2000 Consumer Packaged Goods (CPG) company, and as always from such encounters, I learned something new.

The team is focused on accelerating change, and I was sharing with them the zone management model, and how each zone is intended to keep a characteristic pace. The Productivity Zone, by design, goes the slowest because its job is to take extra time in order to reduce risk and cost. The Incubation Zone, again by design, goes the fastest because its job is to take extra risk and pretty much ignore cost in order to reduce time.

What the team made me realize is that, given all the change coming at them (and, yes, we had been talking a lot about Generative AI and related technologies), they needed their Productivity Zone to speed up, come what may. The more I thought about it, the more I realized that this is not just a single CPG enterprise talking. Every Volume Operations enterprise at its core runs on processes. There is no other way to operate at scale, which means the Performance Zone is completely dependent on them. But here’s the thing—all those mission-critical processes are invented, maintained, and improved by the Productivity Zone.

So, here’s the challenge in a nutshell: How can you possibly speed up something that is inherently designed to go slow? Or, to make the goal more specific, how do you incubate a truly disruptive process and then, at the right moment, use it to transform your most conservative organizations?

Readers of this blog will not be surprised to hear me advocate for aligning the zone management framework with the Technology Adoption Life Cycle as a roadmap for how best to navigate these waters. Here’s how it plays out in four acts:

  1. Act One: Incubate, focusing on early adopters who are looking to explore the opportunities, leveraging a project model. You intend to prove the feasibility of the new process, and you will do whatever it takes to do so. Your goal is to show what good could look like while at the same time taking technical risk off the table, leaving adoption risk as the primary remaining challenge.
  2. Act Two: Transform, focusing exclusively on a single underperforming function led by pragmatists in pain, leveraging a solution model. You intend to use the breakthrough technology to completely revamp the process in question, taking it from underperforming to stellar. Your goal is to create a credible set of references to support your transition to Act Three.
  3. Act Three: Perform, focusing first on processes adjacent to those addressed by Act Two, ones that are performing adequately but could definitely be improved, led by pragmatists who are reluctant to change until they see others go first. You intend to create a groundswell of adoption that will convert their reluctance to change into a fear of missing out. Your goal is to lead with a “killer app,” highlighting whatever portion of your technology that can deliver a quick win, and then follow that up with a complete roll-out.
  4. Act Four: Secure, focusing on the revamped process end to end, monitoring quality from final deliverable back through each step, working with process managers who will be maintaining their portion of the new system. You intend to continuously improve following a data-driven approach supplemented with whatever analytics and AI can provide. Your goal is to operate at scale with unprecedented productivity and agility.

The key point of this framework is that it is linear. You take it one act at a time, and you do not skip over any acts. Your key metric is time to complete, both at the level of each act and of the whole play. With respect to anything transformational, know that most people appreciate it may take more than one year, and no one will give you three years. So you have a maximum of eight quarters to get to Act Four (which will be ongoing thereafter).

That’s what I think. What do you think?

Image Credit: Pexels

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Are Humans Just a Fleshy Generative AI Machine?

Are Humans Just a Fleshy Generative AI Machine?

GUEST POST from Geoffrey A. Moore

By now you have heard that GenAI’s natural language conversational abilities are anchored in what one wag has termed “auto-correct on steroids.” That is, by ingesting as much text as it can possibly hoover up, and by calculating the probability that any given sequence of words will be followed by a specific next word, it mimics human speech in a truly remarkable way. But, do you know why that is so?

The answer is, because that is exactly what we humans do as well.

Think about how you converse. Where do your words come from? Oh, when you are being deliberate, you can indeed choose your words, but most of the time that is not what you are doing. Instead, you are riding a conversational impulse and just going with the flow. If you had to inspect every word before you said it, you could not possibly converse. Indeed, you spout entire paragraphs that are largely pre-constructed, something like the shticks that comedians perform.

Of course, sometimes you really are being more deliberate, especially when you are working out an idea and choosing your words carefully. But have you ever wondered where those candidate words you are choosing come from? They come from your very own LLM (Large Language Model) even though, compared to ChatGPT’s, it probably should be called a TWLM (Teeny Weeny Language Model).

The point is, for most of our conversational time, we are in the realm of rhetoric, not logic. We are using words to express our feelings and to influence our listeners. We’re not arguing before the Supreme Court (although even there we would be drawing on many of the same skills). Rhetoric is more like an athletic performance than a logical analysis would be. You stay in the moment, read and react, and rely heavily on instinct—there just isn’t time for anything else.

So, if all this is the case, then how are we not like GenAI? The answer here is pretty straightforward as well. We use concepts. It doesn’t.

Concepts are a, well, a pretty abstract concept, so what are we really talking about here? Concepts start with nouns. Every noun we use represents a body of forces that in some way is relevant to life in this world. Water makes us wet. It helps us clean things. It relieves thirst. It will drown a mammal but keep a fish alive. We know a lot about water. Same thing with rock, paper, and scissors. Same thing with cars, clothes, and cash. Same thing with love, languor, and loneliness.

All of our knowledge of the world aggregates around nouns and noun-like phrases. To these, we attach verbs and verb-like phrases that show how these forces act out in the world and what changes they create. And we add modifiers to tease out the nuances and differences among similar forces acting in similar ways. Altogether, we are creating ideas—concepts—which we can link up in increasingly complex structures through the fourth and final word type, conjunctions.

Now, from the time you were an infant, your brain has been working out all the permutations you could imagine that arise from combining two or more forces. It might have begun with you discovering what happens when you put your finger in your eye, or when you burp, or when your mother smiles at you. Anyway, over the years you have developed a remarkable inventory of what is usually called common sense, as in be careful not to touch a hot stove, or chew with your mouth closed, or don’t accept rides from strangers.

The point is you have the ability to take any two nouns at random and imagine how they might interact with one another, and from that effort, you can draw practical conclusions about experiences you have never actually undergone. You can imagine exception conditions—you can touch a hot stove if you are wearing an oven mitt, you can chew bubble gum at a baseball game with your mouth open, and you can use Uber.

You may not think this is amazing, but I assure you that every AI scientist does. That’s because none of them have come close (as yet) to duplicating what you do automatically. GenAI doesn’t even try. Indeed, its crowning success is due directly to the fact that it doesn’t even try. By contrast, all the work that has gone into GOFAI (Good Old-Fashioned AI) has been devoted precisely to the task of conceptualizing, typically as a prelude to planning and then acting, and to date, it has come up painfully short.

So, yes GenAI is amazing. But so are you.

That’s what I think. What do you think?

Image Credit: Google Gemini

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Making Ring-fenced Funding Work

Toughest Challenge Series: Episode 2

Making Ring-fenced Funding Work

GUEST POST from Geoffrey A. Moore


Inspired by the HP Incubations Team

Here’s the challenge. Everyone gets that you need to ring-fence funding for incubating Horizon 3 initiatives. At the corporate level, with the CEO’s direct sponsorship, this can be managed as a separate operating unit with its own budget. The challenge is when the incubation is nested. That means it is being funded out of the operating budget of a Performance Zone business unit, not from some special set-aside allocation.

Nested incubation represents the majority of internally funded Horizon 3 investments. (M&A is a different vehicle, funded out of capex not opex, and is not subject to the challenges we will discuss here). The reason there is a strong preference for nested incubations is that, if successful, they are of immediate interest to the business unit’s current customer base as well as its partner ecosystem. That is, while there can be high technical risk, there is little to no market risk. That said, it is still early days, the technology is not proven, product-market fit still needs to be determined, so it is in no position to generate ROI in the current fiscal year.

The challenge comes to the fore in a tough year where the corporation has to cut back on its operating expenses. Everybody is expected to take a haircut, tighten their belts, suck it up, and carry on. The problem is, when it comes to managing incubations, this simply does not work. Incubation is all about getting and maintaining momentum. If at any point you take your foot off the accelerator, you will lose momentum, and you will never get it back. Instead, you will salvage what you can from the R&D and write the whole thing off to bad timing. But let’s be clear: this is not management, this is mismanagement.

So, what’s the fix? It starts with the business unit surfacing its incubation opportunity during the annual budgeting process. It proposes to set aside a portion of its next year’s budget dedicated to funding the incubation, with funding released on a VC-model based on milestone attainment. This is documented and agreed to at the Executive Leadership Team level. If bad times hit, the choice is never to take a haircut; it is either to carry on or cancel things altogether, and it is made in dialog with the ELT since either way it could have a material impact on the enterprise’s market valuation.

Once the nested incubation has been agreed to, then the business unit leader is responsible for ensuring its funding stays ring-fenced. In particular, this means that resources assigned to the incubation effort cannot be “borrowed” by the current product lines to temporarily address an urgent need. Again, this is all about maintaining momentum.

To ensure this works as planned, here is a tip from a long-time friend and colleague who is the CFO at a major enterprise:

All ring-fenced items are documented and agreed upon at the ELT level. The way it works is the finance team who work with the budget holder is the guardian of all ring-fenced spend. When changes need to be made, they can’t touch ring-fenced spend. Of course, you have to limit the number of ring-fenced items to give freedom of execution to the leaders, but it’s an effective mechanism.

That’s what he thinks. And that’s what I think too. What do you think?

Image Credit: Google Gemini

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VC-Backed Firms in Regulated Industries

The Times They Are A-Changin’

VC-Backed Firms in Regulated Industries

GUEST POST from Geoffrey A. Moore

This week I have had conversations with executive teams of VC-backed firms working in three different regulated industries: Healthcare, Telco, and Financial Services. All of them reported that their sales pipelines were around 3X what they were a year ago. We didn’t dig into why, although I expect that it means the incumbent providers are under increasing pressure to modernize their operating models and streamline their infrastructure models to meet customer demand and pricing pressure.

The reason we did not get to discuss why this is happening is that each of the teams was more focused on how — how do we adapt our playbook to this new development? You might not think an upsurge in demand would be a problem, but all three of these firms are at least an order of magnitude sub-scale to properly address the demands of their target customers. How do you ride such a wave demand without wiping out? How do you scale and not break your company?

Understanding the Dynamics of the Situation

The easiest way to see what is going on here is to examine it through the lens of the Hierarchy of Powers. Here’s how it plays out:

  • Category Power. The category is shifting from resisting the next wave to embracing it, albeit reluctantly, because the status quo is deteriorating, and it is clear something has to change. This leads to the upsurge in RFPs and RFIs that each company is now seeing. Budget is being created whereas before it had to be scrounged. This is great news for each enterprise, but it has its challenges.
  • Company Power. Compared to the Tier 1 prospects each of these companies is targeting, their own is tiny indeed. All of them lack the global reach and depth of personnel their customers require. Nonetheless, these are their most valuable prospects, so they must find a way to engage. That’s the core of the challenge.
  • Market Power. Each company has already focused on a single vertical—that is how they got as far as they have. Now they are going to have to focus even more rigorously in order to control their exposure to too much demand coming at them too fast and too soon. To secure market power, to become the go-to vendor for their category of offer for this vertical, they must prioritize the right subset of prospects and do whatever it takes to get them over the line.
  • Offer Power. This is where each company shines. It is why they are each attracting the attention of companies that a year ago were not returning their calls. Their products, however, are highly complex, and the implementations even more so, so they cannot support runaway growth. Moreover, the regulated industries they serve impose rigorous, one might even say onerous, demands, creating a whole series of hoops to jump through before they can get to the other side. How do you “catch the wave” when the sign on the beach says “proceed with caution”?
  • Execution Power. At the end of the day, this is the crux of the challenge. How can a subscale company with a world-class offer meet the demands of a regulated industry dominated by behemoth enterprises? How should it adapt its playbook?

Adapting the Playbook

Given this change in dynamics, here are the kinds of adaptions that are called for:

  • Control your destiny by narrowing your focus. The key for all three enterprises is to win a handful of Tier 1 accounts that the rest of the industry looks to for best practices. Winning these accounts will establish them as the go-to choice for the industry as a whole. This objective trumps all others, and every organization inside the company needs to reprioritize its workload accordingly.
  • Hold fast to your priorities. This is an internal transformation that requires strict discipline to execute. In the past, it was OK to step off the path to address an impromptu request because the demand for everyone’s time was less insistent. Now it is not. Use weekly commits as a way to make workloads visible, and intervene whenever they are drifting off course.
  • Stay very focused on your top-tier target accounts. Every one of them is a priority, even when they may not be giving you all the reception you want. Conversely, all other prospects are a distraction even when they are inviting you in.
  • Continue to serve your existing customer base. These are not the Tier 1 players we are targeting, but they are references that can help win those accounts. In addition, they are the early adopters who put their faith in you. You must do right by them.
  • Align with a big friend. Your target customers need you to bring many more resources to the table than you have inside your company. The good news is that these same customers work with global service providers who specialize in helping them on-board next-generation offers. You need to secure strong support from at least one of these, and you probably cannot easily support more than one, so pick one you think you can trust, and go all in with them on your go-to-market planning.
  • Let the big friend help you clear your regulatory hurdles. Time is your scarcest resource, and unfortunately, regulated industries are not good at moving swiftly. It’s a mismatch in operating models. VC-backed companies take risks to save time; regulated industries take time to reduce risk. This is not something you are well positioned to deal with. Global services firms, on the other hand, already have relationships with the regulatory authorities you must interface with, not to mention the bandwidth to work through the mandated processes. Do whatever you can to get their help in expediting whatever needs to be done.
  • Create the solution playbook that you and your GSI friend will co-deliver. Do not let the GSI take over the implementation. You know a lot more about what it takes to make your solution work than they do. But you can make sure that the work is profitable for them by giving them the playbook and letting them bill for their time. You don’t need the services revenue anywhere near as much as you need the Tier 1 account win.
  • Defer inbound requests that take you off strategy. You don’t have to say no. You just have to say, not yet. Given the amount of stress that any Tier 1 engagement will put on your firm, taking even one account that is off-script risks breaking your camel’s back.
  • Defer inbound interest around an acquisition. You are at an inflection point in value creation that is potentially extraordinary, the very outcome you and your investors have been preparing for. This is not the time to let go of the reins, particularly if they are going to get handed to an established enterprise whose culture is likely to clash with yours. Moreover, you cannot afford the distraction of all the due diligence that M&A discussions necessarily entail. M&A cannot solve your Tier 1 problem. You have to do that yourself.

Now, to be clear, there are exceptions that could overrule any one of the prescriptions above, so each team needs to review them in light of its own history and circumstances. The key point is that when the market is shifting from a state of scarcity to one of abundance, there is a short time window to catch that wave. The large competitors cannot move fast enough to do this themselves — that is why they are interested in making an acquisition. You are agile enough to do so, but you are painfully subscale — hence the need for the somewhat drastic prescriptions above. Navigating this part of the journey is tricky, but if you stay focused on winning (and keeping!) a handful of Tier 1 accounts, you are making the best bet.

That’s what I think. What do you think?

Image Credit: Google Gemini

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