The following are approximately the first 1000 words from Chapter 13 of Jonar Nader’s book,
How to Lose Friends and Infuriate People.

Come do the nanomation with me:

How to swallow your market whole

What is the single most important function of technology? Think about it and you will realise that its most important function is to create an advantage. It is the notion of advantage that has perplexed many chief executive officers (CEOs) who have been promised a competitive advantage if only they would sign the requisition for that expensive computer with custom-built software.

In the networked world, there is no such thing as a competitive advantage through technology. Not even so much as a comparative advantage. Perhaps a convoluted advantage, but no more.

In the public sector, the best that technology can do is reduce wastage. In the business environment it can, at best, reduce operating expenses; not create an advantage. No competitive advantage can be created with technology unless it is exclusive, powerful, and absolute — yet, can you name a technological device or system that can deliver all three? I know of only one. The only technology that is exclusive, powerful, and absolute is the nuclear bomb. This technological marvel is exclusive in that it is regulated and expensive, putting it out of reach of all except the licensed or the outlaws. It is unquestionably powerful. Its devastation is absolute — meaning that once it has made its impact, there is nothing that can be done to reverse its effects.

Leaders need to realise that distractions emanating from stupendous technological, mechanical, and electronic development tend to lead us to suspect, erroneously, that promises of supremacy come from physical weaponry. That might be so in situations where brute force is all that matters. In the networked world, the scary thing to face is that power does not come from the physical. Excellence needs to be present before it can be enhanced with equipment. Although a carpenter’s craft can be refined with better tools, no amount of technology can substitute the essence of carpentry — just as no amount of money can buy love. The technology within our reach can be used to duplicate skill, but not to replace it. It can be used to refine processes, but not to invent them.

In the networked world, those looking for a competitive advantage need to understand that it does not come from anything that is tangible. Even the most tangible and flexible of all assets (cash) is no hero on the business front. Cash is useful, but it cannot help because it has no charter. Cash is in itself helpless. It sits there until it is expended. The outcome is determined by how it is used, not by the fact that it is used.

Owning computers or sponsoring the push for office automation does not offer an advantage. In the networked world, the laws of nature reign supreme. The law that governs advantage is the law of annihilation.

The law of annihilation

The law of annihilation states that anything that offers a supposed advantage to one organisation can offer the same supposed advantage to its competitor. Any qualified executive that one group employs can be matched by the other group. Any discount that one goon offers can be topped by another fool’s. This law resonates well with the saying, ‘Anything you can do, I can do better.’

These days the window of opportunity is more like a door that slams shut very quickly. Taking advantage of market opportunities requires speed. However, organisations have become so complicated and bureaucratic that speed is now faintly known in concept, not in deed. Furthermore, opportunities that are generated by external tangible devices (such as technology) are easily annihilated because the competitor can copy your every acquisition and follow closely in your footsteps.

At this point, some of you might suspect that competitive advantage comes from those things that cannot be bought by the competitor such as goodwill, patents, and copyright, including brilliant technologies or intellectual property that no-one can legally copy. If only this were true. Sadly, the S-Class can be matched by the 7-Series; Reebok by Nike; Compaq/HP by Apple; and Chanel by Armani. These things are surrounded by an air of intangible qualities that are encapsulated by their respective formidable brand. Ultimately such intangible brand values manifest themselves into tangible goods that exhibit the final qualities that impress the customer. Therefore, these intangibles cannot reign supreme because the qualities of their physical manifestations can be copied easily. So, as you can see, this is not what is meant by supremacy through intangibles.

Creating an advantage through intangibles

If traditional intangibles no longer cut it in the rude and brutal marketplace, where could a competitive advantage come from? The secret of competitive advantage exists within the intangibles known as atmosphere and attitude. These two intangibles are stubborn, merciless, and shy compounds that are magical — not in the mushy sense, but in the ruthless sense. If your compounds are good, they will always be magical. If they are bad, they will always be ruthless. There is no middle ground.

Atmosphere and attitude disappear without warning the moment that one articulates them. They evaporate the instant that they are put on display. They explode into smithereens the moment that they are captured in some company mission statement. In the Academy-Award winning movie, Life is Beautiful, the main character meets a man who loves mental puzzles. One of the puzzles goes along the following lines: what disappears the moment you mention its name? The answer is ‘silence’. Once its name is uttered, silence no longer exists. This puzzle can help to describe the phenomenon of atmosphere and attitude. These two intangibles will haunt any company that dares to describe their character. Yet, these two intangibles form the organisation’s arsenal for victory in the networked world.

Atmosphere and attitude are non-negotiable. They either exist on their own terms or they do not exist at all. You cannot compromise them. They operate in two stubborn states — good or bad; right or wrong; on or off. Nothing could be simpler. Nothing could be as potent.

Each organisation has its fair share of atmosphere and attitude. Each department and every office might have a different set, but the corridors and boardrooms will foster the worst that exists within an organisation to the point where the ugliest, left to brood, will proliferate to contaminate everything in sight.