When more than 50% of products and services are routinely either customized by a company or personalized by an individual, we have reached the Personal Economy.
Our guess is that this tipping point will occur in the neighborhood of 2018.
By this point, 50% of education will no longer take place in traditional classrooms. 50% of medical care will no longer be focused on diagnosing a condition rather than caring for an individual. Businesses will no longer be able to focus their energies on marketing certain products rather than serving certain customers.
Competing in the Personal Economy will require flexibility and an entirely different mindset than most companies currently possess. Take asset management firms, for example, who currently pitch their Equity Fund A or Fixed Income Fund B to investors. That won’t work much longer. Instead, firms will have to customize investment (and reporting and service) offerings for each valuable investor.
The Personal Economy would sound like science fiction if not for the fact that so much of it has already come true. But the drivers of innovative personalization have mainly been a new breed of companies that include Amazon, Google, and thousands of other start-ups. Not it’s time for more established organizations to either jump on the bandwagon or start to fade away.
We have fairly extreme views about the changes that are coming, even as we understand that change sometimes takes longer than its proponents assume. For example, we expect that school systems will change dramatically over the next ten years, and that some districts will actually sell some school buildings to finance investments in technology that both accelerate learning and give students more time outside of classrooms.
The trap is to think incrementally about the changes at hand in your organization and industry. There is no smooth and safe transition possible. Personalization is being driven by disruptive technologies that completely transform entire industries. Organizations have to take chances.
We don’t have all the answers, but we do have many questions that your organization needs to be exploring right now.