Intelligent Economy

Remember when Rome fell? It wasn’t long ago, actually. It was in July of 2004 that Harrah’s Entertainment announced that it would acquire Caesers Entertainment, an institution that once symbolized the glamour and wealth of Las Vegas.

With that impressive move, Harrah’s became the single largest and most profitable gaming company in the world. Gary Loveman, the company’s CEO and mastermind of its path-breaking strategy, would offer us a glimpse of what is to come in the next economy – the Intelligent Economy.

Take a walk down the Vegas strip. You will be mesmerized by the visual delights all around you. You will see volcanoes erupting and pirate ships at war. You will be dazzled by extraordinary replicas of Paris, Venice and New York, New York. And you will miss the point entirely.

You see, Harrah’s decided to forego the flash. Instead, it decided to track and observe the behavior of its customers. It actively accumulated data from its properties in Las Vegas, Atlantic City and many other locations to better understand its customers and their real desires. It then deployed this intelligence to test new marketing offers and provide individualized attention to these customers. It took calculated risks – and broke the rules. Like the protagonist in Plato’s Cave, Harrah’s recognized that there was a hidden, unexplored reality that defied all conventional wisdom.

The reality was that the most enduring profits were to be generated not by building grand amusements and catering to high-rollers, but rather, by personalizing its service to doctors, machinists, retired teachers and all other people who could be counted on to regularly enjoy a weekend of sensible gambling and entertainment.

The success that Harrah’s symbolizes is now playing out in a whole array of industries and fields of endeavor. The truth, we are learning, is out there. It’s just not something that can be discovered by playing the old game. As Michael Lewis demonstrated wonderfully in his best-selling book Moneyball about the analytical innovations of Billy Beane and the Oakland A’s, our eyes and intuitions can fail us. We must also rely on the disciplined gathering and operationalization of intelligence.

Smart companies are now “Competing on Analytics,” as Tom Davenport informs us in a recent article in the Harvard Business Review that is proving to be wildly influential. One recent Business Week cover story makes the case that “Math Will Rock Your World.” As the article contends, “The world is moving into a new age of numbers. Partnerships between mathematicians and computer scientists are bulling into whole new domains of business and imposing the efficiencies of math.”

These are the hidden patterns and market shifts that we intend to bring to light in this forum. As enterprises of all kinds embrace new and far-reaching approaches to analytically minded competition, we intend to explore the key trends, levers of change and results they experience in the real-world. We'll tell the stories of the organizations that must face the cultural barriers and the professionals who must bear the risks associated with executing an intelligence-driven strategy. We also intend to show how these trends are playing out in terms of overarching economic change, hence “Intelligent Economy.”

We believe some of the key drivers of this global movement are competitive, regulatory and customer-initiated. We will explore each of these dimensions and will welcome your participation in this forum as we seek out further ways to clarify and illustrate the implications of this transitional moment.

Finally, it’s important to note that intelligent economies are driven not merely by the intelligence of producers, but consumers as well. As consumers get smarter, more aware and more active, they force enterprises to respond in kind. Smart consumers will Google their needs and desires, shop around and extract value. They will Tivo the 30-second spot out of existence. They will rapidly commoditize products and render companies obsolete if the leaders of those institutions fail to intelligently act.

Just take a look at the sad state of GM and Ford, American and United. Their CEOs look like decadent and exhausted emperors, helplessly waiting for the vandals to strike. They have been acting like truly stupid companies, struggling to merely survive in a bewildering new era. We are focused here on ways to actually thrive – and win.

Welcome to the Intelligent Economy. Join us. Participate. Share your thoughts, insights and experiences. Let’s have some fun as we pursue the truth -- let’s get out of Plato’s Cave and take a long walk together in the warm sunlight.