The Content Trap: A Conversation with HBS Economist Bharat Anand

02/01/2017 12:33 pm ET

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For those obsessed with culture, tech, and everything related -- observing connections, patterns, and trends can be a favorite pastime.

Bharat Anand, Harvard Business School professor and Chair of HBS' digital initiative HBX, has created a career out of studying these connections and using them to inform media executives on strategy. What's great about Professor Anand is that as an HBS professor he is naturally research and strategy heavy. However, he gets culture and media quite well, making a conversation with him insightful on multiple levels.

Anand recently released his first book, The Content Trap: A Strategists' Guide to Digital Change that captures, among other things, some of the central insights from the HBS executive media program he chairs. The core of the book is a powerful and provocative argument that serves as a warning to everyone in the business of creating content. Anand identifies three versions of the Content Trap: believing that "the best" content always wins in digital worlds; focusing your efforts or defining your business around content creation, and indiscriminately embracing initiatives that work for other content creators. These are all seemingly rational behaviors, Anand argues, that turn out to be flawed. Instead, he urges content creators to focus attention on "connections", which he defines in three ways -- user connections looking at how users not only interact with each other but how their buying patterns correlate; product connections which looks at how various products drive or impact the purchases of others; and finally, functional connections which look at how decisions made in an organization are inter-connected.

The book, in standard HBS form, is loaded with case studies and climaxes in a chapter titled, A Strategy Process for All Seasons. The chapter lays out a simple yet powerful process coupled with a paradigm shift to help readers clarify their unique place in the market. The magic of it all is that while discussing strategy and digital change -- there are parallels that can be drawn and applied to key issues on both the business and personal landscape.

CREATE got to chat with Professor Bharat Anand just before the holidays.

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CREATE: When I first read the preview for The Content Trap and it spoke about connections, I thought it was referring to social connections. However, you actually define connections in a number of ways?

Anand: Yes, that's exactly right. Social is just one part of it. To step back: there are all these seemingly different ideas around digital strategy that have emerged over the last two decades around things like platforms, bundling, networks, complements, even basic ideas around activity maps and strategy. Yet there is an important thread going through many of these ideas which has to do with the simple question of don't miss the forest for the trees.

As an example, often times we get caught up in this trap of trying to make a decision on something very particular, like pricing your mobile app or deciding as an organization whether you should separate digital activities from print. That's the way we define the decision, then we look at others who are making similar decisions to draw conclusions. But context - recognizing the connections between different decisions you make - is fundamentally important. The same principle applies to consumers: Often times, their decisions on a range of digital products - for example, around what content to consume, what social network to use, what product to buy, or where to list your house for rent - are intimately linked to those that other users make. So the idea of connections is an umbrella term that refers to three forms: it's really about connecting people, connecting products, and connecting functions.

On the part about connecting people, yes social is just one element. Think about the famous Microsoft vs Apple wars in personal computers. The reason Microsoft won, initially, actually had nothing to do with social. It was just because we wanted to share files with friends or colleagues. You had these feedback loops between customers who were buying PCs and app developers who were creating stuff for the PCs. Nothing about that story is social, so social is just one part of the bigger picture. Similarly, the reason most renters would consider Airbnb is not because it's a social site - it's just that that is where everyone lists and rents.

You can look at the cost side too -- for example, if I lose one customer in a fixed cost business it affects my profitability from all other customers. That's a very different form of connections that, again, has nothing to do with "social". Yes, social has ended up being a dominant theme, obviously, in conversation but it's one part of a bigger picture.

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ON STRATEGY

CREATE: The part that I loved the most was about functional connections and creating context.

Anand: Do say more?

CREATE: It brings it all together and provides a process readers can use to apply context in making decisions in their own organizations.

Anand: You described it very well, it brings it together. In some sense, the first two parts, user and product connections, are talking about broader forces or ideas that might apply to anyone out there. The third part - functional connections - is saying ok, now that you understand these ideas, what should you do?

The challenge, which is particularly amplified in digital worlds is that there are a million people who are looking at similar ideas and might come up with similar products. So what makes you different? What is it you can do differently or better than everyone else -- the focus is really about you as an entrepreneur or as an organization.

What is it you can do differently or better than everyone else? The focus is really about you as an entrepreneur or as an organization.

CREATE: That's what I loved -- you actually wrote about how to identify the difference by looking at your strengths as an organization or entrepreneur. You break down this elusive trap and how there's no one size fits all but there IS a process that you can follow to help find your right answer.

Anand: That's particularly important because the danger is to think that anything goes. The moment you say context matters it can be tempting to say, "Oh, if it's not a one size fits all, any solution works." That couldn't be further from the truth. Another question that companies often struggle with is that if many different solutions might work, how do we figure out what's right for us? That leads to the question of process.

In a sense -- and this is the part that was interesting - when you look across different cases, settings, and companies you see very different outcomes but at some fundamental level they're asking the same questions. Who are we going after? Who are our customers? How can we deliver? What's right for us? And how does it match with our capabilities and strengths?

ON CULTURE

CREATE: In your work, you focus on media and culture. How do you see culture fitting into strategy?

Anand: The question of culture is really interesting. When we look at a lot of these companies and how they react to different technologies, there's a few things that are striking. A popular narrative that we often hear is that these companies simply don't get it because they don't see these technologies coming along, or they don't know what the right answer is. And therefore they fail.

It turns out that when you actually look at what's happening in many of these organizations the answer is more nuanced. Often times they actually see these technologies beforehand. It's not that Blockbuster didn't see Netflix. Netflix existed for seven years before Blockbuster started facing problems in its business. It's not that the cable companies or the television studios don't see over the top streaming. They see it, right now. It's not that the publishers didn't see that e-books were coming on the horizon. A year and a half before the Kindle came out you had the Sony e-Reader. In so many of these companies, managers see these technologies, and often times they even understand their effects on behavior.

The bigger challenge for these companies ends up being, I think, two-fold. First, there's a particular mindset through which we often view new technologies - we view them through the lens of competition. We look at new technologies coming along and we say -- this is going to have a negative impact on our core business. It's harder to see opportunity. And this goes back a long time -- radio comes along 100 years ago and the music industry the recording studio essentially said, "This is the death of music. Why would you pay for music when you can listen to it for free?" Which is a natural reaction. They fight this technology all the way to the Supreme Court but commercial radio wins out. And, fortunately for them, it ends up being one of the best things that happened to the industry. They learn, later that free music on the radio acts just like a promo. You see the same thing with VCRs, the studios thought this was going to kill the movie business. It actually ended up helping it. You saw the same thing with MTV and the music industry. We think it's going to hurt us and it actually helps.

We use terms like cannibalization, substitution, threats, disruption and that language can often define how we react. This is the first part of culture, which is the language we use to actually even view how the world is changing that affects our mindset.

..language can often define how we react. This is the first part of culture, which is the language we use to view how the world is changing -- that affects our mindset.

The second part is that often times, even when companies know what the right answer is they can't get the organization to move. Because they have routines built in, they have processes, they have budgeting systems. Companies are set up for large projects, they're set up for predictability and certainty. They're not set up for experimentation and failure. They're not set up to embrace ambiguity. And if you look at all of these different aspects, you realize - and I'm not the first person saying this - that there are a large number of organizations that actually see the problem but can't move. And that goes to the core of culture and leadership.

CREATE: Interesting, you spoke about culture as it related to mindset and ability to move.How about how as it relates to the arts?

Anand: My interest in culture as it relates to the arts, entertainment and media arose for a simple reason: culture encompasses the things we do every day - what we read, what we see, what we hear - and therefore seems profoundly important to understand. The "business of culture" (or cultural industries) has been at the forefront of digital change for nearly a quarter-century now. Other sectors (eg., education, manufacturing) are only starting to experience the impact of digital more recently. So my interest in cultural industries arose from trying to see what we've learned from experiences of individuals, entrepreneurs, and businesses that shape culture that might inform digital efforts in other parts of the economy.

It is in this sense that the cultural industries are the canaries in the coal mine, the harbingers of things to come.

Cultural industries are the canaries in the coal mine, the harbingers of things to come.

CREATE: That's a great answer.

Anand: Thank you.

ON STARTUPS

CREATE: What about startups? In a startup, you don't necessarily have the time and money to strategize like that.

Anand: That's a great question, let me offer some points on that. When you think about all of these companies -- in most of these cases they don't have this amazing strategic blueprint on day one that guides them forever after. I'd say in fact, that in more than 90% of the cases, what they have is a pretty clear understanding of three things -- Who they are trying to target, what they are trying to win on, and how they are trying to deliver on that.

After that, basically, there are a lot of pivots. A lot of flexibility, but it's not flexibility in a vacuum. It's not that we pivot every day the moment a new signal comes along that says we might want to change a decision. We're doing it with context in the background. And that's where strategy - knowing the direction you want to go in - is important.

I think that there is a myth that says, strategists operate in a world which is very different from the entrepreneurial world. All strategists have to experiment - that's virtually a law of business. Things keep changing. Similarly, all entrepreneurs have to think a little a bit about what they're going to jump into and why. In other words, the same fundamental questions apply to startups and mature organizations-- where do we play and how do we win?

CREATE: What I am hearing you say is there's a balance -- entrepreneurs have to prioritize and larger companies have to..

Anand: Have to experiment.

CREATE: It's the intermingling of the two.

Anand: That is exactly the tension -- every startup has to prioritize and every large organization has to experiment somehow. How you balance this, I think is key.

ON WOMEN AND PEOPLE OF COLOR IN TECH

CREATE: What is your perspective on women in leadership and tech -- Specifically in relation to your research, what you're learning about connections, and potential strengths women may have as businesses shift?

Anand: What a big - and important - question. Is there something more particular you had in mind, or about .how you are thinking about this?

CREATE: I'm thinking about it from a few perspectives, one -- the foundation of my work is looking at the intersection of culture and tech. And when I say culture I define it two ways - the way you described it in terms of company culture but also looking at popular culture and what is relevant as a way of resonating with what's real for people.

For example, as a black woman looking at tech as an industry that wants to diversify, is it a culture that I can feel a part of, over time. This is particularly important when you speak of the leaky pipeline that tech experience. What can we do to make the culture more inclusive?

The second component builds on the first and looks at the freedom and space to play to one's strengths.

For example, Carnegie Mellon did a study on what factors increase a group's intelligence and they found that women's ability to connect, listen, and collaborate actually led to the increased intelligence of the group.

This is just an example but the crux of the conversation is -- are we creating a culture that acknowledges and intrinsically values unique strengths that diverse groups bring to the table?

Culturally whether it's conscious or subconscious there can be a tone of to do well one must think or act like a man, specifically a white man -- which creates a leak in our intellectual capital in the United States and probably beyond.

Anand: I love this question and the way you're thinking about it. And while the main idea of the book - The Content Trap - is not squarely focused on this particular issue, perhaps I can offer some initial thoughts about how it relates - with the caveat that I'd need to think about it some more.

The book was really framed as: if you're starting or managing a digitally-touched business -- if you're in the business of culture as a creative type, as an artist, or if you're a manager leading one of these businesses confronting digital change, for any of these audiences -- what are some interesting lessons.

There is a different lens through which to view these very same lessons which might have some resonance in our personal lives. And I am being very humble when I say this -- but in a sense I do think the lessons in the book probably transcend simply thinking about digital strategy.

For instance, take this idea of "managing without control," of learning to live without control. Or the related idea idea of acknowledging and embracing ambiguity in relationships. For example we often see our competitors in terms of as black or white, whereas the reality is that many competitors today are also your partners or complementors. Complements also compete with you.

You can take these lessons and can draw a line extending them to see whether they might have relevance towards thinking about certain gender differences. Are women or men for instance, better equipped to deal with these kinds of issues. I don't know the answer, or the research on it, but I think that is one -- that's one direction you might take the ideas.

Another direction is probably a little closer to the core theme of the book and one of its headlines, Everyone is a Media Company. This applies not just to celebrities, book authors, or political candidates. Everyone has a voice today.

Now that's something that I think can be pretty empowering for people who don't necessarily face the easiest road in organizations. Organizations have hierarchies -- change can take time,

years, and sometimes decades. This is where if you view the possibilities in the digital world through the lens that everyone is a media company, or in terms of how networks get created -- you begin to see how small triggers and actions can have great impact. That's very different than the traditional world where there was a career path. I got my first job, I did what I had to do, I did well, I got promoted, and I kept going up the food chain.

Then there's this idea of "creating to connect". If you look at organizations where we use the word minority -- who is the minority in this organization or that one -- many people in many different organizations are in some kind of minority. The moment you think about connectedness - I think it allows possibilities to break constraints that exist. I could be a single South Asian in an organization or the only woman in a particular organization. If I define my world as that organization that is very different than if I define my world as connected with everyone out there. If I define my world through this larger frame, I can be connecting with the one South Asian or the few women in every other organization. Connectedness allows a whole set of possibilities to break existing constraints.

Connectedness allows a whole set of possibilities to break existing constraints.

Those are a few preliminary thoughts, but let me underscore that some of these ideas would require more work or research to know how they actually play out. And I don't know if they're helpful to answer your question.

CREATE: They're very helpful, thank you very much. I love the piece about looking at connectedness because that's part of what I think about often. How can I connect people in a way that creates impact and influence in a lasting way?

Anand: That's a very powerful thing to aspire towards. I'd like to think that some of these ideas -- the idea that everyone is a media company, or the idea of connectedness - allow all of us to break certain constraints within which we otherwise operate.

In a world of connectedness the smallest action can spread. You have one person sitting in a dorm room creating what essentially becomes the largest community of social conversation in the world. You have a few friends, starting with nearly no resources, basically creating the largest consumer video aggregator in the world (YouTube), and on which any other single individual can amass millions of followers. You have one person who, from essentially the closet in his home, creates one of the most important educational platforms there is today (Khan Academy). In a connected world, any single person can have a formidable amount of impact today - that's pretty empowering.

CREATE: You're right. Thank you so much for your time today.

Anand: Thanks, and I really enjoyed our conversation too.

This post originally appeared on CREATE.

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