by Tom Goodwin
Taking on the consensus
These vast questions combined with the unlimited education available on the internet should lead to great debate. Yet I don’t see it happening.
I see casual consensus on most fronts. My passion for writing this book comes from a great sense of frustration. I feel passionately that so much of what we speak of in the broader business environment is utter nonsense and that so much of the writing of today is merely groupthink. I feel passionately that better questions lead to better work and more significant progress. I get frustrated with the vacuousness of conversations and the lack of discourse for good. In times when things seem chaotic, most people are so keen to feel that they understand the world, that they blindly accept what appears to make sense without challenging it. I’d prefer a little more Socratic debate and a little less thoughtless and automatic retweeting.
When I read about the worlds of business and marketing, advertising or technology, I’m bowled over by the lack of real conversations about the big issues, and by the platitudes and the quasi-academic thinking that is rife in so many business books. In this book I’m going to be inquisitive and subversive. I’m going to question the works of people far brighter, far more experienced and far more knowledgeable than I am. Hopefully I’m going to challenge you. I’m going to get you to ask deep, existential and even naive questions. The questions people don’t ask because they know they are so hard, it seems both stupid and rude to ask them. I’ve always believed that the best innovation consultants don’t stick endless post-it notes on a wall or do three-part mapping exercises or sit on funky sofas with a white board: they are like eight-year-old kids who never stop asking why, don’t know any better and are unforgiving of excuses because they are idealists.
The journey starts here
It took four years of thinking and research to write this book in six months. It’s been written on trains in Norway, in conference centres in Peru, hotels in Sydney, bars in rural Turkey. Elements come from the top floor of skyscrapers in Dubai, others from weird street cafés in Delhi or small villages in Umbria. I’ve been inspired in Auckland, confused in Colombia, and enlightened in rural Romania.
I’m lucky to have a role that allows me to speak, write, observe and listen around the world, and I learn the most from listening. My job is to connect dots, to see commonalities and differences. This book is based on what I’ve learned from reading the local newspapers in Canada, listening to worried workers in Shenzhen, speaking to government officials in Spain or chatting over dinner in Curitiba. Ideas and themes in this book have come together from this breadth and depth.
Having done this, I find it impossible not to see the common themes, the panic, excitement and energy all over the world. What increasingly bonds people, in ways they perhaps don’t know, is the contrast between hope and fear, the sense of confusion about change. This book is designed to make the complexity of this moment feel simple. It is meant to separate the changes that matter from those that don’t. It’s designed to draw from the past in order to understand the future, to look at what is changing and, most of all, what is not. It’s here to be angry with what we’re currently doing, because what we can soon accomplish will be amazing. More than anything else, this book is for those keen to have their hand held through the chaos of this moment of peak complexity.
This book has been a balancing act. I’ve tried to weave a path between personal opinions and more substantiated and academic thinking. I’ve aimed to cover enough material to keep it interesting, but in enough depth to make it useful. I hope to ask questions, seed ideas and cover potential solutions, yet this book is not here to provide all the answers. It’s not my place to do that. I’ve written it the only way I know how. I’ve made it challenging, personal and hopefully light-hearted. It is deliberately irritating, because this is a time when we need to challenge conventional thinking, to explore tensions we prefer not to, and I’m happy to aggravate to get vital conversations started.
So, sit back. I hope you are as wildly irritated as you are inspired. I hope you are entertained and informed. I hope you agree wildly and disagree massively at different points on this journey, and more than anything else, I hope I inspire you to think differently and share your opinions on these stimuli, with me and anyone else you see fit.
For the majority of industries, those with key roles in business face two choices. Manage the decline or rebuild and prosper. I know which one I’d rather do and this book is here to help.
THANK YOU
I want to thank my family and friends, so long as they forgive me for being a terrible person to be around for the last year. Having a book inside you is like being pregnant in your head. I’ve carried this in my brain for so long that it’s made me selfish, grumpy and inside myself.
I want to say thank you for the replies I got from my provocation on social media that led to so many conversations that I learned from.
I want to thank my Mum and Dad, for basically always believing in me, but putting no pressure on me. For making me the pain in the neck with good intentions that I am, for instilling in me the belief that everyone and everything should be challenged, but in a nice way, and that listening is more important than talking. I want to thank Shann Biglione, Nick Childs and Adi Kurian for their advice at key times in the making of this book.
And I want to especially and specifically thank Adriana Stan, who believed in me from day one and when I didn’t. For spotting a degree of talent in me and for nurturing it. You inspired and supported me to write several years ago and you are behind (in some shape or form) pretty much all of the success I have had today in writing and speaking.
01
Business in the age of disruption
‘I wouldn’t start from here’
There is a tale about a man who, lost in the deepest country lanes of rural Ireland, approaches a passer-by herding sheep along the single-track lane. Winding down the window, the man asks for directions to Dublin. The local takes a long deep breath and thinks long and hard before replying, ‘Well sir, if I were you, I wouldn’t start from here’.
It’s not the best joke, but it’s a reasonable metaphor for business today. When faced with the winds of change, many of us are unstable, saddled with a legacy of what were well-intentioned and reasonable decisions but which now, in retrospect, feel unwise. This resulting cumulative effect means many businesses are simply not fit to compete with other younger companies today. With no clear sign of a path ahead, I wonder how many businesses wish they could start from somewhere else?
Companies, like people, are manifestations of all the decisions ever made. They are the result of years of accumulating employees, acquiring businesses, inheriting assets, systems, cultures. For many years the pace of change was sufficiently slow that these lumbering beasts could adapt over time. Leaders would construct new units, managers would start new initiatives, change could be bolted on. Yet three things have happened.
The world has changed
As a species, human beings are designed to live in a world that is local and linear; yet the pace of change has increased, change is now global and exponential, yet companies are largely the same. The world appears to change more drastically and more quickly than ever, and in many ways that pace of change is accelerating. At the same time, the ability of many companies to change and adapt has not speeded up. So many companies are not agile enough to reconfigure, re-engineer or otherwise change as quickly as consumer expectations and the business environment demand, or as fast as their competitors can.
Secondly, the advantages of size have slowly crumbled. Big companies have forever leveraged huge advantages over smaller companies. They could negotiate vast discounts on costs of goods, they could leverage their position to gain distribution, they could spend vast sums on advertising, attract the best staff, borrow money whenever needed. The internet and changing business dynamics now mean that slowly many of the benefits of being large are being wiped out. In fact, increasingly, what once
made companies powerful, like ownership of assets, expertise, large workforces, historical brands, are to some extent becoming liabilities and make change harder.
Thirdly, we’ve seen thrusting insurgent companies built for the modern age change the market. We’ve observed the rise of companies that have ignored all known wisdom. They have built themselves with the latest technology at their core, they have skirted round or ignored prior regulations and bent the rules. They are constructed on new economic principles and counter-intuitive business models that have treated legal and societal responsibility as externalities. These companies often have lower operating costs, scale fast, and have often removed value from entire markets. Experience has always been seen as a good thing, yet now it is those companies built most recently, with the latest technology embedded deeply at the very core of their business, that seem to offer the best structure for growth in the future.
It’s these three changes – rapid global change, the irrelevance of size, and the rise of insurgent companies – above all else that now make life different. They mean that companies have to think hard, be bold and challenge themselves. In this chapter I want to introduce the main concepts of Digital Darwinism, how it can drive and contextualize business transformation, and better address change in the modern world. I want to get businesses to start asking the right questions: the hard, existential ones. This chapter is about understanding the context and reason for change, while providing a wider foundation for concepts that I build on in later chapters.
It’s time to ask the hard questions
The most profound and the very best questions we never dare to ask are: what would your business look like if it was created today? What would it do? How would it do it? How would it make money? What would you still have done and what would you never have created? These are questions about your company’s very existence, best posed in a holiday home in a foreign land, or staring out of the train window, well removed from the realities of day-to-day working.
If your answer is that your business would be exactly the same if set up today, then either you are not thinking hard enough, or you’ve set up your company this weekend, or most worryingly, you are ignorant of many of the changes in the world and what is now possible.
The answers will most likely be annoying. You probably feel irritated now. You may feel a little judged and misunderstood and don’t like the tone I am using. Your department or business has probably worked extremely hard to weather change, to adapt incrementally, and to create a sensible balance between modernization and capital expenditure. More than likely it’s not perfectly placed for today’s world, but not so badly placed that people are enduring frequent sleepless nights. It’s likely positioned considerably worse for the future, but the day-to-day struggles mean you rarely get a chance to look that far ahead.
Your company probably never really had a 10-year plan. Its mission statement is probably one that kept everyone happy, not one that was surgically focused and empowering. Your company is unlikely to have done future planning to see change coming and build for it. Your company is likely to be the best that could be done, given modern realities.
Most companies are like the tax code or Heathrow Airport. They are the aggregation of countless alterations, additions, patches and workarounds that have accumulated over years. Each incremental change is based on sound thinking and the realities of each moment and each one allows the business to just about work. Yet the UK tax code is 17,000 pages long; Heathrow is a mess and in the wrong place. Both would be far better if they could be started again.
The next question to ask is: can you carry on like this? At what point in size or inefficiency does it make sense to go back to the drawing board? Your business may be able to function each day, but for how long will that be the case? We know deep down that, one day, Heathrow won’t exist, that car makers will need to make electric cars, that many retailers will need more efficient mechanisms to supply direct online. We know that TV companies will have to change at some point, that banks can’t carry on as they are. Advertising and marketing will one day have to rethink its structure, as will energy or tobacco companies, but for how long can they resist? There are of course some sectors that may not face great change: mining, timber, farming, water provision will of course face change, but probably not to the same level of chaos, threat and opportunity.
These questions are best followed by more progressive and helpful questions. What can you do to get to that place? Can you get there with what you have, or do you need to start again? Who and what will help make this happen? How can this realistically be done?
The Silicon Valley idiom of ‘building the plane while you’re flying it’ is rather nonsensical, but somehow companies do need to think of their succession strategy. Do they build a new system and switch over to it one day, or can they re-engineer what they have? Perhaps they should just create a new entity in a new category. As these chapters progress, my intention is to fan the flames of intrigue, be irritating to the point of bringing desire to change, but then follow up with reasonable steps of how to get there.
We have to get better at looking forward. We can learn from the past and the failure of Kodak or Nokia, Blockbusters or Borders, but these stories have been told many times over and the dynamics of today are different. For years physical retailers didn’t worry about Amazon because it was different, it was for ‘online shopping’ – how silly this looks now. If Facebook has access to 2 billion people on this planet, it can quickly become a retailer or entertainment company; if people trust Google, there is nothing to stop it becoming a bank. A key part of preparing to change is looking forward, not backwards.
Remember what is not changing
The hardest part of my role is maintaining balance. While things may be changing faster, the reality is that not everything is different; in fact far, far more aspects of our lives are the same. You are still looking at a dead tree with ink right now (unless you have the e-book edition!).
Change is indeed here, but not uniformly distributed. The lives of middle-class people in Mumbai, Sydney, Manila, Tokyo, New York and London seem to become ever more similar to each other, while becoming ever more different to the lives of those in the rural areas surrounding them. Increasingly, rural dwellers around the world are facing challenges which are more similar to each other than those facing rural and city dwellers in the same country.
Because of the nature of the world, most people who will be reading this book are going to be rather more like me and like each other than what we might term ‘typical’. Equally, we would probably be regarded as ‘atypical’ in comparison with ‘average’ folk. Even in 2018, even in developed nations, the ‘average person’ does not buy groceries online, they do not rent apartments on Airbnb. An average person does not send others money via their phones or own a ‘smart speaker’. We need to remember that one-third of people in the USA still rent and buy video on DVDs (Rodriguez, 2017), and as late as mid-2015 only one in seven of US adults had used Uber, Lyft or another ride-sharing platform (Smith, 2016). We ‘non-average’ readers live massively unrepresentative lives and we need to remember this and change our viewpoint.
Trend lines are important. It’s likely that DVDs will die out, ride-sharing will become more popular and spread out to rural areas. It’s likely we will use our voices more to interact with computers. We will continue to buy more stuff not from physical stores but online, electric propulsion will change the face of car-making and the businesses that serve it. Yet the underpinning of human civilization will not change. Brands and our need to form social bonds by expressing who we are, or to aid selection by trust, are not going to vanish because of Amazon. Airlines are not going to go bankrupt because they don’t have staff wearing augmented reality (AR) headsets, hotels won’t suddenly implode because they don’t have connected speakers in the room.
When I sit drinking a Pilsner in a Frankfurt beer hall, it’s obvious that family-run breweries that hark back to 1695 are not facing
looming existential crises. I don’t think they need innovation sessions to establish what 3D printing or virtual reality (VR) headsets could mean for their company, just as I don’t think they suffer sleepless nights about what the ‘Uber of beer’ could be for them.
My role is to decide what is changing and what matters, knowing what to change and also what not to. I firmly believe it is not necessarily the case that technology has changed everything or will do so in the future. If you are a milk brand, a baker or hairdresser, it’s not obviously the case that radical change is on the horizon, or that when it does appear it will be rapid and catastrophic. Companies that own coffee brands and make ground coffee for retailers don’t necessarily need to become ‘tech companies that happen to make coffee’. Not every company will look manifestly different.
We tend not to hear nuanced views on the future because in words widely attributed to Bob Hoffman, ‘Nobody ever got famous predicting that things would stay pretty much the same’ (The Ad Contrarian, 2017). Yet even those who presume change won’t affect them, even those who are furthest away from the technologies we read about most often, would still be wise to keep their eyes open ahead, even if it’s so they can be manifestly more comfortable changing nothing, or so they can embrace the power of what’s next, despite not having to.
Change is a threat at a core level
When we ask what your business would look like if it was started today we have to be brutal and honest. We have to penetrate to the core of what companies are about, we have to question the foundations of companies and then look at that in the context of the changing world. We have to examine the reason companies exist and the core tenets and principles on which they are built.