Thomas Friedman - The World is Flat

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 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. As more 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 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 was only one global parcel delivery service operating in the Arab world: DHL, today owned by the German postal service. Ghandour's idea was to approach American companies, like Federal Express and Airborne Express, that did not have a Middle East presence and offer to become their local delivery service, playing on the fact that an Arab company would know the region and how to get around unpleasantries like the Israeli invasion of Lebanon, the Iran-Iraq war, and the American invasion of Iraq.

“We said to them, 'Look, we don't compete with you locally in your home market, but we understand the Middle East market, so why not give your packages to us to deliver out here?” said Ghandour. “We will be your Middle East delivery arm. Why give them to your global competitor, like DHL?” Airborne responded positively, and Ghandour used that to build his own business and then buy up or partner with small delivery firms from Egypt to Turkey to Saudi Arabia and later all the way over to India, Pakistan, and Iran-creating his own regional network. Airborne did not have the money that Federal Express was investing in setting up its own operations in every region of the globe, so it created an alliance, bringing together some forty regional delivery companies, like Aramex, into a virtual global network. What Airborne's partners got was something none of them could individually afford to build at the time— a global geographic presence and a computerized package tracking and tracing system to compete with that of a FedEx or DHL.