The National Center for the Midmarket recently posted an interview with Bharat Anand, a Harvard Business School professor and advisor to leading global companies. Anand’s just-released book, "The Content Trap: A Strategist’s Guide to Digital Change," offers lessons for any middle market company navigating digital transformation. He fervently believes that connections and user-centrism will define business success in our digital age, not products
Chuck Leddy conducted the interview with Anand which you can read below in an edited form. The full interview can be found here http://middlemarketcenter.org/expert-perspectives/connections-are-key-strategist-and-author-bharat-anand-on-navigating-digital-transformation-1
Chuck Leddy: What is the content trap?
Bharat Anand: It’s a mindset that companies fall into when confronting digital change. Their behaviors and decisions may seem rational at first but turn out to be flawed. First, companies might try to make the best product. Second, they might operate with increased discipline on what they do best, to deepen their focus. And third, they might track competitors and mimic them. All seem like plausible behaviors, but none actually work.
Connections matter more. So what wins in digital worlds isn’t making the best product but making products that connect people. Companies also need to recognize that value may migrate to new arenas where you should be playing, so just increasing your focus won’t work. Finally, mimicking your competitors won’t let you win, while being different might.
Leddy: How is the content trap relevant for middle market companies?
Anand: These behaviors operate regardless of whether you’re a market leader or an entrepreneur or a middle market company. I do think there’s a classic tension between what’s been called forget and borrow. Organizations confronting digital change must forget existing habits when needed and borrow existing strengths when needed, such as their brand or other assets. Very large companies find it extremely hard to forget, while very small companies have nothing to borrow. So middle market companies may therefore be in a better position to navigate this tension. They’re in a strategic sweet spot.
Leddy: What are “network effects” and how might they create opportunities for middle market companies?
Anand: I talk a lot about this is my book. Network effects describe settings where the value of a product to a user depends upon the number of other users of that product. This is in contrast to traditional products where we measure the value in terms of quality and price. With networked products, the number of other users matters a lot. Think about purchasing an operating system or a multi-player game, where other users impact your buying decision. If you get ahead of others and win the network, it can be winner-take-all proposition and your growth can be exponential.
Leddy: Many middle market companies prefer saying “yes” to customers, but your book makes the strategic case for saying “no.” Why?
Anand: You must prioritize which customers you seek to cater to, because you can’t cater to everyone. Wal-Mart, for example, offers its customers value for money and a wide product selection. But a near-universal customer complaint about Wal-Mart is its bad store ambiance. But if Wal-Mart invested in improving its store ambiance, they’d sacrifice what they do best, low prices and wide selection. Saying “no” on certain things allows you to say “yes” to others.
Boston-based Chuck Leddy is highly collaborative, versatile communications professional with a proven track record as both a journalist and business communications trainer for Fortune 500 companies. As a reporter and freelance writer for the Harvard Gazette and Boston Globe, he's published hundreds of stories, features, profiles, and interviews. As a business communications trainer in Boston, he's worked with C-level executive from around the globe, helping them improve their business English skills in writing, presentations, negotiations, and other forms of communication. Leddy graduated from the University of Massachusetts at Amherst, then graduated from Boston College Law School in 1991, after which he practiced law in Greater Boston for three years. He's been a journalist and teacher since 1995.