The Broadband Explosion: are you ready?

Five steps you should factor into your contingency plan are highlighted, including creating return on investment for new technology.
Use whatever analogy you want—bedrock, keel, foundation, guiding light—an effective strategy allows you to make decisions. By rigorously analyzing your environment, core strengths, customer requirements and competitive offerings, you develop a strategy that enables decision-making regarding how to invest resources, where to direct energy and how to manage time. Most important, it makes rapid decisions possible, without the hesitation that allows windows of opportunity to slam shut or competitors to gain a lead.
If the strategy includes thorough contingency planning, it can facilitate decision-making even when there is a massive disruption in your environment, customer base or competitive ranks. A few years ago, the Internet blew apart strategic planning because it introduced technology that exploded every element of an organization’s business. Amongst the swirl of hype, buzzwords and VC excesses, many companies experienced strategic paralysis. The dust has now settled, allowing key strategic considerations to come into focus, and companies have begun to grasp how to integrate the Internet into their overall strategy. Unfortunately, contingency planning has remained a challenge and, if the writers of a new book are correct, is about to become much more difficult.
The authors of The Broadband Explosion, Stephen Bradley and Robert Austin, suggest that the age of true broadband may be finally arriving. They define the broadband explosion as: “the coming together of real-time communication and rich media technologies to produce a truer form of interactivity across geographic distance than has been possible up until now.” They argue that this explosion has implications for “how business strategy, production technologies, and marketing—to name just a few—may be changed dramatically.”
In an interview with the Harvard Business School newsletter, Austin offers three insights that he hopes business leaders will gain from the book:
  1. There will be a qualitative shift in what we can achieve when reliable bandwidth reaches a certain point. While there is debate about where the point is, even at 10 megabits per second (20x faster than a cable modem), we will begin to find new ways to add value and “this will change a lot about how businesses operate and also about what they can sell and how they sell it.”
  2. Most of the broadband benefits will arise from things we can’t see clearly right now. We witnessed the same issue when people received massive increases in computing power, and used it to do the same things faster—like process pay cheques—before visionaries used that power to change the way we interacted with computers. “Back then, people who said, ‘What will we use all that computing power for?’ were surprised by how useful it was and the ways it turned out to be useful,” says Austin. “Today we have some skeptics saying pretty much the same thing: ‘What will we do with all that bandwidth?’ I suspect the answers will be similarly surprising.”
  3. Increased bandwidth will create a more interactive experience in communication. “This has the potential to supercharge innovation, because we can prototype more ideas and share them with each other much more rapidly,” observes Austin. “That's on the supply side of the economy. On the demand or marketing side, the new technology may allow us to match more customers with just what they want, by employing a strategy that Eric Clemons and his coauthors in a chapter in the book call ‘Hyperdifferentiation.’”
So how does technology that will alter essentially all elements of your Internet strategy factor into your contingency planning? Clearly, you can’t ignore broadband. But if the best minds at a Harvard colloquium don’t know what its implications will be, and the technology isn’t yet a reality, you probably don’t need to factor it into next quarter’s plan.
Steps you should take today, however, to begin factoring broadband into your contingency plan and Internet strategy include the following. It’s all going to seem like common sense, but as we saw with the first advent of the Internet, common sense was the first casualty (Remember the customer-free business models?).
  1. Make sure your strategy is up-to-date, disseminated and is guiding decision-making. One value of impending disruption, like the advent of broadband, is that it creates a compelling motivation for the entire organization to take strategy seriously. Take the dust test: if your copy of the strategic binder has any on it, it’s time for a refresh. Also, if there’s only one binder, you may need to get the team together so the strategy is being shared and utilized. Finally, if there’s no binder at all, the first step is obvious.
  2. Ensure you are maximizing existing Internet technology. As the old saying goes: “Now is not the time to be doing nothing.” Whenever pundits espouse massive change, there can be a tendency to take a “wait and see” attitude and put projects on hold while committees study potential implications. Very few organizations are maximizing such available opportunities as blogging, which Prescient Digital Media’s President, Toby Ward, has been very passionate about evangelizing. Maximizing the technology doesn’t mean investing in software, hardware or integration, either. It could be better understanding how you are interacting with customers or what processes you have put in place to utilize Web-enabled technology.
  3. Know your customers. There has never been a more important time for ensuring that customer knowledge/intimacy/satisfaction are not just clichés in your organization. The Internet has taught us the value of permission-based marketing, but it has also demonstrated the importance of customer permission: how will your customers permit you to communicate with them and what will your customers permit you to sell to them. The Internet spawned exciting new companies like Amazon which found innovative ways to communicate with and sell to customers. It also rewarded existing players that grasped how to reinvent themselves while still delivering a consistent brand experience. And it punished companies that disappointed customers by behaving in ways in which their customers had not permitted. As Bradley and Austin point out, broadband will fundamentally alter how you communicate with customers and what you sell to them. But as we discovered with the first wave of the Internet, no technology allows a company to make decisions that don’t include a detailed knowledge of customer permission.
  4. Ensure your team is educated and sharing knowledge. Whether it’s on-line learning, reading books like the Broadband Explosion, taking bricks-and-mortars courses or attending seminars, there have never been more educational resources available to employees. With downsizing, e-mail overload and an explosion in information, unfortunately, there has never been less time to utilize those resources. Nonetheless, statistics consistently demonstrate that learning organizations outperform their competition.  You need to ensure that your performance management system includes objectives for constant education, and your communications infrastructure permits team members to efficiently share their knowledge. In our experience, this is an area in which many companies can still score quick wins. Too few companies that have deployed a Content Management System, for example, are enjoying the full benefits of the system, and leading companies are only now beginning to fully create productivity gains from such innovations as integrating blogs into a community of practice.
  5. Know how to create an ROI for new technology. Possibly the single biggest lesson of the Internet is that you can’t ignore the bottom-line: every dollar you spend must result in more than one dollar being saved or earned. The Internet and web-enabled technology complicate ROI calculations, because they often require calculating seemingly intangible factors, but it can be done. One encouraging sign for us is that the most popular download on our busy web site is the Finding ROI White Paper. When broadband really hits, those organizations and managers that have come to grips with creating an ROI for their CMS or Intranet will have a significant edge on their competitors who will be only beginning to climb the learning curve of this complex and important task.
This advice is all common sense, but it’s also a lot of work. That effort, combined with our gerbil-on-a-wheel lifestyle, probably explains why everyone knows they need to take these actions, but few get around to them. Nonetheless, we all know examples of companies which have taken the time to put a strong strategy in place, complete with a thorough contingency plan, and are then able to make effective, quick decisions when their world changes. We’ve also seen companies in which the leadership team sits in the boardroom, looks at each other and says: “What’s going on, and what are we going to do…?”
The threat and opportunity that will be created by the impending broadband explosion should motivate us to engage in the fundamentals of strategy, especially contingency planning. We may not know when the broadband explosion will occur, and what the impact will be, but we do know that it will require us to make decisions. And history has shown us that the organizations that make the best decisions have the best strategy.

Prescient Digital Media is a veteran web and intranet consulting firm with 10+ years of rich history. We provide strategic Internet and intranet consulting, planning and communications services to many Fortune 500 and big brand clients, as well as small and medium-sized leaders.