15 of 16 people found the following review helpful:
4.0 out of 5 stars
A topical, provocative book replete with real-life anecdotes, June 3, 1996
By A Customer
The business book is as ubiquitous an item as a laptop computer in
airplanes. In every flight that I've ever been on in the US, there are
legions of rent-an-MBAs, wearing grey Hickey-Freeman suits and Cole-Haan
wingtips, sipping a beer and grimacing as they try to ingest the latest
idea from Tom Peters. They've learned about searching for excellence,
the discipline of market leaders, constructing a virtual corporation and
being part of a learning organization. They've been folded, spindled,
mutilated and re-engineered. They have ridden the third wave and
preached the fifth discipline. They have read the machinations of
Machiavelli, the homilies of Dale Carnegie and the leadership secrets of
Attila the Hun. They know that if they meet the Buddha on the road, they
should kill him; that if it ain't broken, they should break it; that the
future is always shocking and that you always swim with sharks.
It was therefore with some cynicism that I picked up a new business book
off the shelf at Keplers this weekend. Even the title put me off. "The
Second Curve - Managing the Velocity of Change," by an Ian Morrison, who
bore the grandiose title of President of the Institute of the Future.
But I had some familiarity and liking for the writing of Paul Saffo, who
works at the same institute. And my stack of books at home was getting
quite short. So I took a twenty-five dollar bet.
I am glad I did. "The Second Curve" kept me engrossed through the
afternoon and the night, and I stayed up till two finishing it,
something I do increasingly rarely nowadays. Mr. Morrison is that rarest
of birds, an original thinker. More importantly, he is not an armchair
theorist. Almost all his writing is bolstered by real-world anecdotes
and experience from twenty years of being called upon as a consultant.
In tone, it is reminiscent of "The Art of the Long View", another book
that I highly recommend.
The author's principal thesis is that technology is causing a sea change
in almost every facet of our lives. The first curve is the one that
people are used to and which still shows a reasonable pace of growth.
Think, for instance, of the full-service brokerage services offered by a
place like Merill-Lynch. The second curve is the one that understands
that, in essence, such a company does nothing more than transactions and
brokering information. Both of these can be automated and done much
cheaper via the Internet. Enter Lombard OnLine. All transactions for
twenty bucks! Unlimited company reports for free! After all, the only
things you're consuming is a few extra cycles of cpu and a few extra
kilobaud of bandwidth.
Financial institutions still think of themselves as their physical
presence - brick and mortar and oak veneer. But they are really nothing
more than a conduit for electric impulses; credit A's account here,
debit B's account there, feed the earnings report to a browser, download
a mortgage calculation applet. As users get more aware of how they can
access information themselves and manage their own financial affairs,
paying huge percentages as fees is going to seem quaint. Dean-Witter and
Smith-Barney have no idea how badly they are going to be hurt.
To the authors credit, he strongly advises against expecting the change
to happen tomorrow. A line that appears in many places in the book is
that we always overestimate the change that will occur in one year and
underestimate the change that will occur in ten. So a key chapter in the
book is devoted to transition strategy from the first curve to the
second. How do you gauge when a supposed second curve is in fact a
mirage (the Newton, picture telephones, personal helicopters)? How do
you surf a first curve to its entirety (the plain old telephone, video
rentals, mainframes)? When does it pay to bet the farm on a new paradigm
(there, I used that word)? When is it too risky to?
There are some common-sense ideas here. One, that technology makes it
possible to do most things faster, better and cheaper. Think of the fax
machine and electronic mail replacing the US mail and memos. Two, that
the new consumer expects exceptional service as a birthright. He or she
wants to be able to order a pair of jeans from L.L Bean at midnight or
to choose from six kinds of crackers at Safeway. Three, that the new
consumer is not necessarily Caucasian or Japanese. In the next fifteen
years, there will be 122 million middle-class households (incomes
greater than $25K per year) springing up in South Asia, China, and Latin
America.
In addition, there are many provocative theses. One is that any industry
that trafficks in information (insurance, publishing, recorded music) is
going to get decimated if it does not adapt to the second curve. You can
no longer live off your history as an authority figure. Gangsta rap
artists will not automatically go to Time-Warner because of its history
in the information business. Doctors can no longer expostulate that
their long training makes them worth two hundred dollars an hour. The
HMO down the street will just take that doctor off its database and cut
his or her business by three-quarters. Medicine is not that lucrative a
profession any more.
The second is that the real power in a value chain is no longer with the
manufacturer of a product but with the retailer. Wal-Mart can dictate
the selling price of a toy much more than Mattel can. All it has to do
is threaten to withhold shelf-space for the Mighty Morphin Power
Rangers. In like vein, CompUSA decides which is a bestselling CD-ROM
much more than Broderbund does, by the way it spends its advertising and
display dollars. It is going to become increasingly important to own
your channel or have very strong partnerships with it. And remember that
with the Internet, the eighteen-year old in the garage can still bypass
all established channels and go straight to the consumer. Id Software
provides a sterling lesson in this in the way it sold "Doom".
I judge a book by how many of its ideas resonate in my head when I drive
to work the next morning. By this unscientific metric, "The Second
Curve" is a very worthwhile read.
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5 of 7 people found the following review helpful:
2.0 out of 5 stars
Pretty obvious, formula-driven, consultant-speak stuff., July 11, 1997
By A Customer
Sort of like a combination of "In Search of Excellence" and in search of flatulence -- companies that win and companies that lay an egg. All this 1-2-3 wave business can make you seasick. Basically it would make a good set of business school cases. But the cases don't really fit into an overarching framework that has the explanatory power Morrison pretends
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