The Second Curve

The business book is as ubiquitous an item as a laptop computer in airplanes. In every flight that I've ever been on in the US, there are legions of rent-an-MBAs, wearing grey Hickey-Freeman suits and Cole-Haan wingtips, sipping a beer and grimacing as they try to ingest the latest idea from Tom Peters. They've learned about searching for excellence, the discipline of market leaders, constructing a virtual corporation and being part of a learning organization. They've been folded, spindled, mutilated and re-engineered. They have ridden the third wave and preached the fifth discipline. They have read the machinations of Machiavelli, the homilies of Dale Carnegie and the leadership secrets of Attila the Hun. They know that if they meet the Buddha on the road, they should kill him; that if it ain't broken, they should break it; that the future is always shocking and that you always swim with sharks. It was therefore with some cynicism that I picked up a new business book off the shelf at Keplers this weekend. Even the title put me off. "The Second Curve - Managing the Velocity of Change," by an Ian Morrison, who bore the grandiose title of President of the Institute of the Future. But I had some familiarity and liking for the writing of Paul Saffo, who works at the same institute. And my stack of books at home was getting quite short. So I took a twenty-five dollar bet. I am glad I did. "The Second Curve" kept me engrossed through the afternoon and the night, and I stayed up till two finishing it, something I do increasingly rarely nowadays. Mr. Morrison is that rarest of birds, an original thinker. More importantly, he is not an armchair theorist. Almost all his writing is bolstered by real-world anecdotes and experience from twenty years of being called upon as a consultant. In tone, it is reminiscent of "The Art of the Long View", another book that I highly recommend. The author's principal thesis is that technology is causing a sea change in almost every facet of our lives. The first curve is the one that people are used to and which still shows a reasonable pace of growth. Think, for instance, of the full-service brokerage services offered by a place like Merill-Lynch. The second curve is the one that understands that, in essence, such a company does nothing more than transactions and brokering information. Both of these can be automated and done much cheaper via the Internet. Enter Lombard OnLine. All transactions for twenty bucks! Unlimited company reports for free! After all, the only things you're consuming is a few extra cycles of cpu and a few extra kilobaud of bandwidth. Financial institutions still think of themselves as their physical presence - brick and mortar and oak veneer. But they are really nothing more than a conduit for electric impulses; credit A's account here, debit B's account there, feed the earnings report to a browser, download a mortgage calculation applet. As users ge