第 54 页

at least survive in this new environment. Just as individuals need a strategy for

coping with the flattening of the world, so too do companies. My economics tutor Paul

Romer is fond of saying, "Everyone wants economic growth, but nobody wants change."

Unfortunately, you cannot have one without the other, especially when the playing

field shifts as dramatically as it has since the year 2000. If you want to grow and

flourish in a flat world, you better learn how to change and align yourself with it.

I am not a business writer and this is not a how-to-succeed-in-business book. What

I have learned in researching this book, though, is that the companies that have

managed to flourish today are the ones that best understand the triple convergence

and have developed their own strategies for coping with it-as opposed to trying to

resist it.

This chapter is an effort to highlight a few of their rules and strategies:

Rule #1: When the world goes flat-and you are feeling flattened- reach for a shovel

and dig inside yourself. Don't try to build walls.

I learned this valuable lesson from my bestfriends from Minnesota, Jill and Ken Greer.

Going to India gave me an inkling that the world was flat, but only when I went back

to my roots and spoke to my friends from Minnesota did I realize just how flat. Some

twenty-five years ago Jill and Ken (whose brother Bill I profiled earlier) started

their own multimedia company, Greer & Associates, which specialized in developing

commercials for TV and doing commercial photography for retail catalogs. They have

built up a nice business in Minneapolis, with more than forty employees, including

graphic artists and Web designers, their own studio, and a small stable of local and

national clients. As a midsize firm, Greer always had to hustle for work, but over

the years Ken always found a way to make a good living.

In early April 2004, Ken and Jill came to Washington to spend a weekend for my wife's

fiftieth birthday. I could tell that Ken had a lot on his mind regarding his business.

We took a long walk one morning in rural Virginia. I told him about the book I was

writing, and he told me about how his business was doing. After a while, we realized

that we were both talking about the same thing: The world had grown flat, and it had

happened so fast, and had affected his business so profoundly, that he was still

wrestling with how to adjust. It was clear to him that he was facing competition and

pricing pressure of a type and degree that he had never faced before.

"Freelancers," said Greer, speaking about these independent contractors as if they

were a plague of locusts that suddenly had descended on his business, eating

everything in sight. "We are now competing

against freelancers! We never really competed against freelancers before. Our

competition used to be firms of similar size and capability. We used to do similar

things in somewhat different ways, and each firm was able to find a niche and make

a living." Today the dynamic is totally different, he said. "Our competition is not

only those firms we always used to compete against. Now we have to deal with giant

firms, who have the capability to handle small, medium, and large jobs, and also with

the solo practitioners working out of theirhome offices, who [by making use of today's

technology and software] can theoretically do the same thing that a person sitting

in our office can do. What's the difference in output, from our clients' point of

view, between the giant company who hires a kid designer and puts him in front of

a computer, and our company that hires a kid designer and puts him in front of a

computer, and thekid designer with a computer inhis own basement? . . . The technology

and software are so empowering that it makes us all look the same. In the last month

we have lost three jobs to freelance solo practitioners who used to work for good

companies and have experience and then just went out on their own. Our clients all

said the same thing to us: 'Your firm was really qualified. John was very qualified.

John was cheaper.' We used to feel bad losing to another firm, but now we are losing

to another person!"

How did this change happen so fast? I asked.

A big part of their business is photography-shooting both products and models for

catalogs, Greer explained. For twenty-five years, the way the business worked was

that Greer & Associates would get an assignment. The client would tell Greer exactly

what sort of shot he was looking for and would "trust" the Greer team to come up with

the right image. Like all commercial photographers, Greer would use a Polaroid camera

to take a picture of the model or product he was shooting, to see if his creative

instinct was right, and then shoot with real film. Once the pictures were taken, Greer

would send the film out to aphoto lab to be developed and color-separated. If a picture

needed to be touched up, it would be sent to another lab that specialized in

retouching."Twenty years ago, we decided we would not process the film we shot," Greer

explained. "We would leave that technical aspect to other professionals who had the

exact technology, training, and expertise-and

342

a desire to make money that way. We wanted to make money by taking the pictures. It

was a good plan then, and may be a good plan today, but it is no longer possible."

Why? The world went flat, and every analog process went digital, virtual, mobile,

and personal. In the last three years, digital cameras for professional photographers

achieved a whole new technical level that made them equal to, if not superior to,

traditional film cameras.

"So we experimented with several different cameras and chose the current

state-of-the-art camera that was most like our [analog] film cameras," Greer said.

"It's called a Canon Dl, and it's the same exact camera as our film camera, except

there's a computer inside with a little TV-screen display on the back that shows us

what picture we're taking. But it uses all the same lenses, you set things the same

way, shutter speed and aperture, it has the same ergonomics. It was the first

professional digital camera that worked exactly like a film camera. This was a

defining moment.

"After we got this digital camera, it was incredibly liberating at first," said Greer.

"All of the thrill and excitement of photography were there- except that the film

was free. Because it was digital, we didn't have to buy film and we didn't have to

go to the lab to have it processed and wait to get it back. If we were on location

and shooting something, we could see if we got the shot right away. There was instant

gratification. We referred to it as an 'electronic Polaroid.' We used to have an art

director who would oversee everything to make sure that we were capturing the image

we were trying to create, but we would never really know until we got it developed.

Everyone had to go on faith, on trust. Our clients paid us a professional fee because

they felt they needed an expert who could not only click a button, but knew exactly

how to shape and frame the image. And they trusted us to do that."

For a year or so there was this new sense of empowerment, freedom, creativity, and

control. But then Ken and his team discovered that this new liberating technology

could also be enslaving. "We discovered that not only did we now have the

responsibility of shooting the picture and defining the desired artistic expression,

we had to get involved in the

343

technology of the photograph. We had to become the lab. We woke up one morning and

said, 'We are the lab.'"

How so? Because digital cameras gave Greer the ability to download those digital

images into a PC or laptop and, with a little magic software and hardware, perform

all sorts of new functions. "So in addition to being the photographer, we had to become

the processing lab and the color separator," said Greer. Once the technology made

that possible, Greer's customers demanded it. Because Greer could control the image

farther down the supply chain, they said he should control it, he must control it.

And then they also said because it was all digital now, and all under his control,

it should be included among the services his team provided as the photographic

creators of the image. "The clients said, 'We will not pay you extra for it,'" said

Greer. "We used to go to an outside service to touch up the pictures-to remove red-eye

or blemishes-but now we have to be the retouchers ourselves also. They expect [red-eye]

to be removed by us, digitally, even before they see it. For twenty years we only

practiced the art of photography-color and composition and texture and how to make

people comfortable in front of a camera. This is what we were good at. Now we had

to learn to be good at all these other things. It is not what we signed up for, but

the competitive marketplace and the technology forced us into it."

Greer said every aspect of his company went through a similar flattening. Film

production went digital, so the marketplace and the technology forced them to become

their own film editors, graphics studio, sound production facility, and everything

else, including producers of their own DVDs. Each of those functions used to be farmed

out to a separate company. The whole supply chain got flattened and shrunk into one

box that sat on someone's desktop. The same thing happened in the graphics part of

their business: Greer & Associates became their own typesetters, illustrators, and

sometimes even printers, because they owned digital color printers. "Things were

supposed to get easier," he said. "Now I feel like I'm going to McDonald's, but instead

of getting fast food, I'm being asked to bus my own table and wash the dishes too."

He continued: "It is as if the manufacturers of technology got together

with our clients and outsourced all of these different tasks to us. If we put our

foot down and say you have to pay for each of these services, there is someone right

behind us saying, 'I will do it all' So the services required go up significantly

and the fees you can charge stay the same or go down."

It's called commoditization, and in the wake of the triple convergence, it is

happening faster and faster across a whole range of industries. Asmore and more analog

processes become digital, virtual, mobile, and personal, more and more jobs and

functions are being standardized, digitized, and made both easy to manipulate and

available to more players.

When everything is the same and supply is plentiful, said Greer, clients have too

many choices and no basis on which to make the right choice. And when that happens,

you're a commodity. You are vanilla.

Fortunately, Greer responded to commoditization by opting for the only survival

strategy that works: a shovel, not a wall. He and his associates dug inside themselves

to locate the company's real core competency, and this has become the primary energy

source propelling their business forward in the flat world. "What we sell now," said

Greer, "is strategic insight, creative instinct, and artistic flair. We sell inspired,

creative solutions, we sell personality. Our core competence and focus is now on all

those things that cannot be digitized. I know our clients today and our clients in

the future will only come to us and stick with us for those things... So we hired

more thinkers and outsourced more technology pieces."

In the old days, said Greer, many companies "hid behind technology. You could be very

good, but you didn't have to be the world's best, because you never thought you were

competing with the world. There was a horizon out there and no one could see beyond

that horizon. But just in the space of a few years we went from competing with firms

down the street to competing with firms across the globe. Three years ago it was

inconceivable that Greer & Associates would lose a contract to a company in England,

and now we have. Everyone can see what everyone else is doing now, and everyone has

the same tools, so you have to be the very best, the most creative thinker."

Vanilla just won't put food on the table anymore. "You have to offer something totally

unique," said Greer. 'You need be able to make

345

Chocolate Chip Cookie Dough, or Cherry (Jerry) Garcia, or Chunky Monkey"-three of

the more exotic brands of Ben & Jerry's ice cream that are very nonvanilla. "It used

to be about what you were able to do," said Greer. "Clients would say, 'Can you do

this? Can you do that?' Now it's much more about the creative flair and personality

you can bring to [the assignment] . . . It's all about imagination."

Rule #2: And the small shall act big. . . One way small companies flourish in the

flat world is by learning to act really big. And the key to being small and acting

big is being quick to take advantage of all the new tools for collaboration to reach

farther, faster, wider, and deeper.

I can think of no better way to illustrate this rule than to tell the story of another

friend, Fadi Ghandour, the cofounder and CEO of Aramex, the first home-grown package

delivery service in the Arab world and the first and only Arab company to be listed

on the Nasdaq. Originally from Lebanon, Ghandour's family moved to Jordan in the 1960s,

where his father, AH, founded Royal Jordanian Airlines. So Ghandour always had the

airline business in his genes. Shortly after graduating from George Washington

University in Washington, D.C., Ghandour returned home and saw a niche business he

thought he could develop: He and a friend raised some money and in 1982 started a

mini-Federal Express for the Middle East to do parcel delivery. At the time, there