What if there is no equilibrium?

One result of an increasingly interconnected world — and we humans who are leveraging this network, adding ourselves as nodes to it — is that hundreds of thousands or millions of changes are occurring everywhere. Change is being accelerated because people can help people; ideas are propagated at the speed electrons can traverse the ‘net; and thoughts inform others thoughts which build upon one another quickly.

New companies are popping up all over, industries are being disrupted globally, and the fear most status quo holders have is about the disruption we will NOT see.

I’ve been observing this massive change enabled, in no small part, by the Internet-as-a-platform, Web/Enterprise 2.0 space and have slowly realized that no one, no analyst organization or set of thought leaders is going to be able to track and even identify disruption and emergence everywhere on our planet.

When I think about industries that have been disrupted by quickly emerging competitors in the past: railroads; vacuum tube companies; minicomputer makers; today’s newspaper and television providers; or even the printing industry my 94 year old father-in-law worked in for his entire career; I see now that disruption occurred but there was ample time for adaption. Companies adapted, industries figured out how to stay relevant or go away, economies discovered new revenue streams, and equilibrium was reached.

But what would happen if equilibrium is no longer within reach?

John Hagel is a guy I follow who is doing something new that he writes about in this post: “About six weeks ago, I joined Deloitte & Touche USA LLP with a mandate to establish a major new research center in Silicon Valley. The Center will explore key business issues created by the intersection of business strategy and information technology.

The thing that hit me in his post is the concept of equilibrium and how the rate of change in an Internet-centric, information technology world is shifting the balance so quickly that Hagel seems to posit that incumbent industries or disciplines will have an increasingly difficult time adapting (i.e., reaching equilibrium) in this time of accelerating change.

The practice of most major organizations simply buying up the most promising startups that emerge isn’t how to reach equilibrium. This has been the acquisition strategy employed by most companies I’ve been a part of in the past, but it doesn’t seem to be working in quite the same way today. One example is the acquisition of MySpace by News Corp. in an attempt to corner-the-market in a virtual space where Millenials are increasingly investing their attention — and perhaps a market segment less attractive to advertisers.

Next comes the alleged $1B+ offers for Facebook that have been turned down by CEO, Mark Zuckerberg, and their subsequent platform play that has been an explosive development with the fastest ecosystem adoption of anything I’ve ever seen. This strategic move of theirs has undoubtedly positioned themselves in wholly new ways meaning that being absorbed by a bigger company is more of a moot point than ever.

Equilibrium and cornering the market in Millenials’ attention is still far, far out of reach for incumbent, status quo media companies.

A world where equilibrium is difficult or impossible to reach means chaos in markets, industries, and countries as more of us try to control our respective destinies and livelihoods. It may be decades until the third world reaches parity in income levels making on-shoring of jobs more attractive. It may be never when any given country will hold the best and brightest creating and manifesting the products and services of tomorrow.

I’ll be interested to stay tuned to what Hagel will be delivering…

1 Comment

  1. Paul on June 27, 2007 at 9:54 pm

    Hi Steve,

    Two thoughts come to mind about this. One is that equilibrium does arrive, but the calm patches are much much smaller. More like micro pauses in a storm of change.

    The other is that globalisation is creating complexity at an exponental level. That is Equilibrium is soo transient because of there are so many more factors. For instance, in the 1950’s Walmart or who ever, used to define their market as New York, or even New York state. Now its much much broader because of the amount of influence.

    In our market here, just realised just how dated our controls are of the economy. Our Fed is trying to interven, but Japanese ma and pa money traders (way out of our control) are distoring our currency. Equilbrium will come back, but only when its ready



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About Steve Borsch

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