Branding and Symbolism
Business Plan Research
Electronic Commerce
Innovation

John Fraim, GreatHouse Company

John Wiley & Sons, 1999

"I am pessimistic about systems and optimistic about individuals."
James Cameron

"Everyone thinks of changing the world, but no one thinks about changing himself."
Leo Tolstoy

There's a memorable scene in the 1975 film One Flew Over the Cuckoo's Nest where the inmates of an asylum commandeer a boat. For a brief few moments, the dull, repetitive life inside the asylum is forgotten and the inmates are able to see life in a new way. They forget the control and fear in their lives wielded by Nurse Ratched who runs the asylum. Only one person doesn't fear Nurse Ratched. This is inmate Randle McMurphy played by Jack Nicholson. He has instigated the boat takeover and brings fun into the dreary lives of the inmates.

Leading web strategist David Siegel plays the role of a modern Randle McMurphy in his new book Futurize Your Enterprise. Only now, the asylum is old line corporations headed by Nurse Ratched type of management structures with "inmates" as corporate employees and customers. As Siegel notes, "It is becoming clear that communist-style, hierarchical management structures are not getting the job done. It's time to let the inmates run the asylum."

For Siegel, letting inmates run the corporate asylum means enabling employees and customers to talk to each other, decide how they want to run it and make the key strategic decisions on a company's direction. Its accepting the unusual proposition that a company's best sales people might just be its most enthusiastic customers rather than its VPs of Sales and Marketing. At a time when the word "customer" has become little more than a fashionable buzzword mantra in business, Siegel stands alone in putting "customer" in a whole new light.

Siegel's previous books Creating Killer Web Sites and Secrets of Successful Web Sites are the "bibles" of web design for many leading internet strategists today. Siegel is also president of Siegel Vision, an E-strategy company (www.siegelvision.com) and former chairman of Studio Verso (www.verso.com), a web design firm he co-founded which includes clients like Lucent Technologies, Office Depot, Amazon, Apple, Cisco, Stanford Research Institute, Hewlett-Packard and Sony.

With Futurize Your Enterprise, Siegel moves from the technology of web design to a far broader holistic approach centering around web philosophy and its relationship to current (Old Line) management structure. The book is really about attitude, not tools. As Siegel observes the one thing that stands out is that "90 percent of the problems companies have on-line are caused by management, not technology."

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The book is divided into four parts: Part 1 - Principles, Part 2 - Practice, Part 3 - Prototypes and Part 4 - Predictions. Parts 1 and 2 describe the tools and methodologies needed to transform management-led organizations into a customer-led company. Parts 1 and 2 are uinique because while books like Customers.Com talk about the importance of the customer, Siegel's book lays out 6 key meetings that transform a company into a customer-led organization. Part 3 uses fictional case studies to show these principles at work. Part 4 is a trip into the future when the internet is no longer a tool but a "platform for work, community-building, and individual empowerment."

The first parts of the book center around the interesting idea that markets are conversations. In this sense, it a crucial function of modern e-business to enable conversations by creating internal employee communities as well as external customer communities. Ultimately, the distinction between internal and external communities should disappear.

So far, though, most corporations attempt to isolate themselves from their customers and stifle communication between employees. Siegel offers up a personal example with a problem computer purchased from Fujitsu Computer. After getting no response from customer service, he finally got through to the Vice President of Marketing whose first surprised response was "How did you get my number?"

The process of creating these communities is described by Siegel as a process of turning beginning customers (first site visitors) into intermediate ones and then experts (loyal, returning "sticky" customers). Interestingly, Siegel suggests that web content relates to these three levels - the first site visitors or beginning customers need more content while the intermediate and expert site visitors (customers) need greater tools and more specific and interactive communities. Siegel suggests that, "The customer-led strategy is deep not wide."

According to Siegel, corporations should structure home pages around key customer communities rather than the "false idols" of products, process, brands, channels and managers. This is not just theory from Siegel but what leading companies such as Microsoft (www.microsoft.com) and Dell Computer (www.dell.com) are doing right now. He notes the recent announcement of Levi Strauss to stop selling on-line (because of fear of offending its retail channel) as an example of placing greater importance on channels than customers.

And, just because a business has a dot.com behind it does not magically impart membership in Siegel's new e-business economy. There are many web companies which practice old style management under the guise of new economy corporations. The recent book Net Slaves vividly points this out by exposing the hidden "sweat shops" of programming and coding behind many new internet start-ups.

The real challenge is giving power of corporate direction to employees and customers. The function of CEOs and managers are more as enablers and shepherds rather than army drill sergeants. Companies which separate themselves from their customers and employees fight against the evolutionary process currently in process. As Siegel notes, managers must remember "It is not their job to transform their companies ... It is their job to create the environment and set the examples that allow the transformation to take place."

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While the first two sections are fascinating in their revolutionary perspective on customers, employees and management, it is in the final two sections where Siegel moves from revolutionary to visionary.

Section 3 "Prototypes" looks at eight fictitious companies as case studies and applications of Siegel's customer-led approach today. While they all sell different products and services they apply the principles in the first parts of the book as they move from management-led "Old World" businesses to customer-led businesses of the future. In every case the companies make the change by examining their customer groups. As Siegel notes, "Identifying a company's primary customer groups ... and then following their lead - is the most visionary aspect of the process."

Part 4 "Predictions" is the most visionary part of the book. Whereas Part 3 concentrates on the emerging present and the near future (2000 - 2003), Part 4 is "food for thought," presenting "a natural extension of the customer-led revolution and the changes that will take place by 2010. It is part science fiction, part scenario planning and part a description of what is already happening today in some areas. Overall, it rises high above the current flood of e-commerce "how to" books to present some of the most insightful speculation on the future connected world yet put into print or hypertext. In ten various scenarios, Siegel provides a breathtaking journey over a new landscape where everyone has a web site.

The basis of this new land is when a few billion people are on the internet with their own home pages and extensible markup language (XML) is the common internet language. Industry-standard XML vocabularies provide the means for one company to transact with many other companies without having to establish, engineer, and implement many separate interchange mechanisms. The description of XML described in "The Frequent Flyer" chapter is worth the price of the book's admission by presenting one of today's clearest, non-technical explanations of XML.

Yes, the new world just around the corner may be similar to a lot of the predictions (like a paperless world) we've heard. But Siegel's speculations go far beyond the tools of technology to the synergy of connected communication. It is this synergy that the world is approaching in a non-linear, faster and faster way. He cites Metcalfe's Law as the real driving force behind the Customer-Led Revolution. Metcalfe, one of the fathers of computer networking, noted The value of a network increases with the square of the number of users. "When billions of people are conducting billions of conversations," notes Siegel, "the scenarios in Part 4 won't just be real, they'll be trivial."

* * *

Recently, Siegel has put much of his consulting work on the "back burner" to travel around the nation and spread his evangelical new ideas. Like a Paul Reviere or Thomas Paine of the internet. Or, yes, like a Randle McMurphy stirring up employees inside corporate "asylums," provoking them to conversations and community building among themselves and customers of their companies. In many ways, the purpose of this radical new book on e-business is to practice what it preaches by engendering conversation and maybe hot debate.

As revolutionary and visionary as this book is, Siegel is not a lone wolf howling into the night. His ideas find reinforcement and agreement in an internet movement known as Clue Train based around the Clue Train Manifesto posted onto the web in Spring 1999 and set for book form in early 2000 (www.cluetrain.com). In ways, Clue Train is a type of "open source" Cathedral and Bazaar manifesto for employees and customers rather than programmers.

In the film One Flew Over the Cuckoo's Nest, Randle McMurphy makes a bet with other inmates that he will completely and utterly destroy Nurse Ratched's routines. All the inmates tell him this will never happen. McMurphy makes a fool of himself by being loud, destructive and dangerous. This leads Nurse Ratched to give McMurphy shock treatment. But this does not break him. In the end, he has formed a strong bond with everyone in the asylum and they begin to smile, once again. Nurse Ratched feels her reigns slipping and her unbreakable hold over the inmates begins fading away. The asylum's "customers" began to take over.

Ultimately, the customer-readers of Siegel's bold new book may began to take over.

© Copyright 1998, 1999, 2000 John Fraim - Greathouse Company
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