Tag Archives: Ross

What I’m Reading: Week of 3/20/17

I’m going to try to post something weekly about what I’ve been reading, just because I like to share and you know what they say, sharing is caring.

 

  1. You might have see my two entries on Medium about blockchain (generally on blockchain and then applications of blockchain to connect EHR systems).  Back in February, McKinsey published a piece on applying the blockchain to public section data management.  I think it is a really good read and recommend it to those looking for a good read.
  2. The New York Times published a story on how self-driving cars could really benefit those who can’t drive, especially the elderly who sometimes lose their licenses.  This is one of the big benefits I really hadn’t considered and expands the market for who cars are for, which I think is pretty neat.   Wish I had thought about this before publishing my story “Cars of the Future” on Medium, but that’s life.
  3. Starbucks CEO Howard Schultz handed the reins of Starbucks over to his successor and COO, Kevin Johnson.  Should be interesting to see what kind of things change with Schultz taking a less active role.
  4. ESPN Magazine  published a piece about a new addiction that is hitting locker rooms all around the NBA and it isn’t what you expect.  My friends got a chuckle out of this story and I think you will too.
  5. Scientists from Harvard Medical School are having success with a drug that reserves aging in the DNA of mice.  They’ve published their findings in the journal Science, but there is a more layman friendly story about this in Time Magazine.

Where’s the Sharing Economy Headed?

I thought that the sharing economy was something very generational and that the millennial generation and those younger are interested in participating in. Thumbing through Fast Company online today, I found an article suggesting a different pictures and set out to investigate.

Globally, more than two-thirds of people want to share or rent out personal assets for financial gain, according to a Nielsen survey of Internet-users in 60 countries. Similar numbers want to use products and services from other people.

The Fast Company cited a Nielsen Study that states that 68% of people surveyed around the globe are willing to share or rent personal items including power tools, bicycles, clothing, sports equipment, cars, outdoor camping gear, furniture, homes, motorcycles,  and pets.  The study found that Millennial Generation and Generation X were the most likely to use the sharing economy globally.  Baby Boomers were willing to use the sharing economy at a higher than expected rate.  The study found that globally, 7% of Baby Boomers were willing to use the sharing economy for goods and services compared to 42% of  the Millennial generation and 17% of Generation X.

What exactly does this mean and why on earth is this important?  The markets for start-ups like Uber, Sidecar, Lyft, Airbnb, BlackJet, Neighborrow.com, Taskrabbit, and the like in the sharing economy are larger than I expected.  It also means there will be some major changes in consumption that will be a disruptive force to the global economy.

The companies I’ve listed above as well as other companies in the sharing economy may want to look to ways to gain market share from Baby Boomers and Generation X.  Marketing to these populations will have to be different from what is being used to attract the Millennial generation to these services (word of mouth primarily).  A small, but targeted traditional media campaign using things like billboards, radio ads, and print media ads would go a long way to inform these consumers of their services.

These companies provide services that both of these aging generations need, but they haven’t been told why.  For example, both of these generations may have doctors appointments, but don’t have an easy way to get there sometime.  Services like Uber and Lyft are both affordable and convenient for these users.  The ride-share business has an incredible opportunity to expand into this market as well as create partnerships with hospitals and other medical centers.

Above is just one example of how the sharing economy can develop and position products for aging generations and it barely scratches the surface.  For people who enjoy DIY projects, the ability to rent large tools from others in their area rather than a big box store like Home Depot is not only more convenient, but can help develop synergies for those planning a project.  If I plan to build a shed and need to borrow a circular saw from someone, they may have some advice I didn’t even think of.

Not everyone is a fan of the sharing economy though.  The current regulatory climate for the shared economy could be the doom for these young start-up ventures. The Guardian pulled no punches in their recent article about the sharing economy.

“Insofar as Airbnb is allowing people to evade taxes and regulations, the company is not a net plus to the economy and society – it is simply facilitating a bunch of rip-offs.”

The essential element for success for the sharing economy is to get ahead of regulations.  Companies in the shared economy will have to work together and ask to be regulated in ways that are fair and allow their business model to continue to succeed.

Beyond this, the lingering question is how to turn all of this into long-term success.  Some point to pre-recession excesses in consumption as a driver of today’s sharing economy.  Some suggest that more limited consumption in the future will drag down the ability for the shared economy to succeed.

In the end, I predict that more limited consumption will force drastic changes in manufacturing that will completely change the way we look at goods, services, and ownership.  We will own fewer things, but have access to a greater diversity of products and services.  The future won’t be about ownership, but access if Millennials have anything to say about it.

The Zappos Experiment

Zappos, the Amazon subsidiary that sells shoes and clothing online announced that they would put an end to using traditional job posting boards.  This is another big step away from traditional business actions that make Zappos a unique player in the marketplace.  I think this action solves one of the biggest concerns I had for Zappos, but to understand why, we have to take a step back.

In January, Zappos announced that they would rid their company of managers and the traditional corporate hierarchy. The Las Vegas based company would move to a system called holacracy.  Holacracy was developed as a system that depends on teams, rather that typical departments. This system also distributes authority throughout an organization unlike traditional top down systems and more recently popular bottom-up approaches.  In order for this new system to work, teams must develop that can perform at a high level to complete projects using clearly defined processes, following clearly implemented governance and operations standards.

Holacracy.org has a really great graphic that encompasses everything that is part of an organization being a holacracy:

Zappos is growing quickly and had an identity that it didn’t want to lose.  They saw this as a way to keep their character.  They brought in Tony Hsieh to help move them forward under this new organizational structure.

“As we scaled, we noticed that the bureaucracy we were all used to was getting in the way of adaptability,” says John Bunch, who was brought on to advise Zappos CEO Tony Hsieh.

 

Zappos is by far the largest company to adopt this new model. Years ago, I can remember hearing about consulting firms approaching a model with some of the same elements, but not to the degree of Zappos.  A flatter organization like this could lead to innovation and keep Zappos from creating silos.  Even with these benefits, I’ve had my concerns.

My biggest concern for Zappos is created from one of the benefits.  As people adjust to the teams of a holacracy, you will have employees that will find niches that are nearly impossible to replace.  People will fill positions without titles, but with skills that aren’t typically found together in a traditional recruiting approach.  Replacing employees following turnover would not only be incredible difficult, but also incredibly costly. The new recruiting strategy Zappos is rolling out to find new employee in a huge step in the right direction towards a solution.

Rather than using typical job posting boards like Monster and Career Builder, Zappos has created a social network for its candidates.  Positions won’t be posted the way they typically are, but rather candidates will have to talk to the teams they want to join.  In the blog entry posted today on the Zappos website, the post states,

” Instead of posting jobs, we are simply asking people to find a department they are interested in and make an introduction. By introducing themselves, people get to become a Zappos Insider and can actually… you know… talk to us.”

 

Zappos is going to have the opportunity moving forward to get a better feel for fit of potential employees before they even come in for an interview. They’ll have an easier time being able to find the right applicants and free up their recruiters to work on strategies to retain some of their current employees as they continue to try to expand.

I look forward to watching Zappos expand.  I want to see how their new recruiting model will work in practice.  I’m not sure how long it will take before it makes a significant impact at Zappos, but I think it is an incredible opportunity to be one step ahead of their competition and I applaud them.  Who knows, they may be creating the recruiting model of the future.

Sources:

http://online.wsj.com/news/articles/SB10001424052702304811904579586300322355082?mg=reno64-wsj

http://www.forbes.com/sites/stevedenning/2014/01/15/making-sense-of-zappos-and-holacracy/

http://www.washingtonpost.com/blogs/on-leadership/wp/2014/01/03/zappos-gets-rid-of-all-managers/?utm_content=buffer93d6c&utm_source=buffer&utm_medium=twitter&utm_campaign=Buffer#!

http://blogs.zappos.com/blogs/zappos-family/2014/05/27/goodbye-job-postings

http://holacracy.org/