What is the alternative to the Industrial Age way of thinking?

The problem for most executives in an Industrial Age corporation is that they do need a concrete plan before taking any positive action. They abhor uncertainties or unknowns. For anyone brought up in and exposed only to this type of corporate culture, it might be difficult to see how a potential business situation can be approached without a plan. It wouldn't make sense to just do something without knowing what is going to happen next. It seems irrational to work without tangible, well specified goals or visions.

A corporate planner in an Industrial Age setting, usually makes business plans based upon past events of some kind. Such plans revolve around a process of extrapolating these past events into the future in order to anticipate or make predictions. This is deduction, applying the known generalities to predict instances. Practically all Industrial Age business and management courses are based upon this kind of deductive reasoning when making plans.

To suddenly find yourself in a world full of change and uncertainty, where the past isn't a guide to the future can be truly disorientating. How can you have a business venture without a plan? This is the dilemma for the Industrial Age mind set.

The trick is to make the same distinction between a plan and a strategy that was made in the introduction. Substituting a strategy for a plan, can make a move into the future begin to look decidedly more purposeful. Think of the strategy of the professional poker player in chapter 1. The professional would have no idea what the next cards would be. No idea as to whether or not he would be encountering a winning situation. No pre set ideas as to how the hand might progress. His strategy is just to get into the game and wait for a favorable run of the cards. Of, course, he does not just wait hopefully. The wait is calculated, it is a wait of anticipation and reasonable expectation that a favorable change will occur.

The professional poker player will be constantly monitoring other cards to see if the odds of a change are improving or reducing. Any sign that he has got into a dead end (such as the aces back to back player getting another ace) and he will fold his hand immediately and wait for another opportunity to come along in another hand. Decisions are not programmed. They are made on the fly, at the turn of events.

For the Industrial Age corporate planner, the fly in the ointment is the risk factor. If the cards do not fall favorably the game is lost. There is no way back, no insurance or cover if things go wrong. However, the poker player plays with a strategy that is not considering a single hand hand in isolation but a number of hands. His strategy will be based upon the net result of many games: a whole evening,s play, maybe a number of evening's play. The more games that are played the more chance for the professional,s strategy to be successful.

Unfortunately, the idea that business success is measured as an aggregate outcome of many business ventures is not something that is bred into the corporate culture of the Industrial Age. An executive's career might end abruptly at a single try if it doesn't work out successfully. However, there is more to a poker player's strategy than just winning and losing. With his strategy size is important.

The professional poker player,s winning strategy also ensures that the pots (total amount bet in a hand) he wins are higher than those he loses. In other words, he will try to force up the size of the bets in the hands where he feels he has better chances of winning. In this way a few wins of high pots can more than offset a larger number of hands where he loses. In business parlance, they,d say: "One winner pays for a lot of losers". In investment circles they,d say: "Cut your losses short and let the winners run". This is a very important element in entrepreneurial strategies and will be equally important in e-business, where progress is going to made as a result of much probing and experimentation.

One of the most intriguing aspects of the Internet is the ability to create parallel worlds. This is the trick of running many situations at the same time when in the real physical world they can only be run one at a time. We shall meet this later when we deal with communication strategies but for the moment let,s apply this transformation to the poker player's strategy.

The poker player is limited to sitting in only one hand at a time, the hands (games) are played in sequence, with one hand ending before another hand starts. In business it need not be that way, businesses can be run in parallel. Several can be run at the same time. Similarly, several variations of a business can be run concurrently. In this way, the risks associated with experimenting with different businesses and business variations can be spread out so that no individual failure can have any significant effect. This, we shall be covering in more detail in a later chapter.

In the physical business world of the Industrial Age, such a strategy would likely be impractical for a corporate manager. It would involve a variety of different plans, much organisation and probably incur high costs. In the world of the Internet, the cost of trying several different business approaches at the same time is far easier and very much less expensive. Losing businesses can be terminated quickly: at the first sign of running into a dead end. Any businesses showing promise can be left to run.

In this way, a business venture on the Internet can be constructed as a series of independent business experiments, with the net result determined by an aggregate outcome. Looked at in this way, a business strategy can be likened to that of the open play of the professional poker player: winning not every game, but, winning over a series of many games.

There is of course no way to predict which business or business experiment will prove to be successful from the start, they will all appear to have an equal chance succeeding. Only emergence, the unpredictable effect of the unknowns will determine the winners and the losers. This means that the only skill required by the initiator is to make sure that there are at least some winners and that these winners (or winner) more than pay for the losers.

Lets look at the concepts involved here:

1) The player gets into the game to look for an emergence: a development which will throw the odds in his favor

2) Promising situations are continued and losing situations quickly terminated.

3) The overall result is determined by an aggregate, where winning is determined by the average outcome of several plays.

If this philosophy is applied to e-commerce it would see as a nonsense that a company should invest all its effort, or, proportion a large slice of capital to any singe project. With so many unknowns, with so much change and uncertainty, a more pragmatic strategy might be to invest in many small experimental ventures and wait to see which start to develop most promise.

This is not the strategy of the careful, aces back to back, poker player, or the Industrial Age corporate manager who is playing to the book. This is the strategy of the open player, the calculated risk taker: typified by the classic entrepreneur. Could it be that the strategies of the entrepreneur are superior to those of the corporate manager for competing and succeeding in the world of e-commerce? Could these be the optimum strategies to use in the Information Age?

Perhaps it is to the world of the entrepreneur that we should next start to look for clues? However, before we do, it may be wise to get a few more concepts under our belt because the world of the entrepreneur is another area that cannot be explained with a series of bullet point lists.