The post-hype economy.

• Author: Hall, Robert
• Position: Marketing Solutions - Management in post-hype economy

The "new economy" turns out in retrospect to have been mostly the "hype economy." Like "the perfect storm," the hype economy was a series of trends converging to create a once-in-a-lifetime happening. Shareholders were hyped--and went on to hype each other--about stock values with no upper limit. Management hyped the prowess of their products, the size of their markets, the competitive advantage of their technology, and their "owned" customers--sometimes fudging the revenue and earnings reality. They hyped their employees with incentives that often were thinly disguised bribes to perform unnatural acts like pushing product, extracting fees and slimming down service. They hyped customers nonstop with thousands of advertising messages a day. Hype ruled, at the expense of substance.

Now we are settling uneasily into the post-hype economy. The revolution has come and gone. In its wake, management must now replace hype with new leadership.

For many management teams this is an abrupt turn. Although most were able to stay within the bounds of law, there is no question the rules have changed. For managements that have operated under the rules of the hype economy, what will the post-hype regime look like and how will they operate differently? Five key areas beg for greater substance:

Size: For the past two decades we have heard that "bigger is better." Big companies could reap huge economies of scale by outspending the smaller on technology, marketing/advertising, R&D. The goal to be large was mistaken for competitive strategy. But economies of scale got trumped by diseconomies of skill (not knowing how to make a large organization effective or how to deliver distinctive value). To date, bigger has been mostly slower, less customer centric, less profitable and much harder to manage.

Speed: When the attention of the whole enterprise is riveted on the next quarter, inordinate resources are spent on what will move the needle in 90 days. So many organizations today are desperately trying to break the adrenalin addiction to quarterly sprints, and seeking a strategic aim to align organization efforts. Rarely has the corporate strategic agenda been so barren as today, even as management...