Digital Darwinism

by Tom Goodwin

  Get better at knowing when to call and when to e-mail, when to pop over for a chat, which partner meetings to never accept. A lack of bureaucracy doesn’t mean chaos, it’s about focusing on the best way to make a difference and sometimes that means anarchically barging into a meeting to get someone to make a decision.

  I often think teams are too big. We’ve long heard about two pizza teams, but let’s be more flexible. Tom Peters talks about the need to recruit the very best talent and pay the world’s best compensation. Steve Jobs was widely reported to have stated that a small number of A+ people can outperform any large teams of B players (Keller and Meaney, 2017). I see a lot of time and energy spent bringing people into the loop, people being part of things to look important and not adding clear value.

  Celebrate failure

  I would love to see a key performance indicator as ‘the biggest failure’ each year and what you’ve learned from it. If you have not messed up in a rather large way, you’ve not been pushing hard enough. In the Swedish town of Helsingborg near Stockholm there is a small museum, which, rather than showcasing success – companies, works, designs or artwork that worked – does the opposite. In a world that loves the winners, it celebrates the world’s absolute disasters. The Museum of Failure advocates that we should idolize those who tried. Worrying about failure makes us tight, unhappy, uncreative. We need to imbue within all of us a sense of discovery and adventure. Well at least those who have thinking-based roles.

  We need to accept imperfection. Good may be the enemy of the great but perfect is the enemy of getting stuff done. There is a vulnerability in many environments if you are to share things that are not quite perfect or perfectly thought through. The idea of presenting a new product without showing reams of research to show that it definitely will work is contrary to how most people think. The idea of not having an answer to every question that could be asked is scary, as is dreaming a little bigger or differently to others. Most companies feel like they need people who are professionals who can defend everything, who have thought through every single scenario.

  We need people to embrace messiness, to accept that real progress comes from things that are never done perfectly the first time. Young companies talk about the idea of a minimal viable product (MVP) which are ideas developed enough to see if there is something worth exploring further. Today we have processes like rapid prototyping or design sprints, or other ways to conceive, develop and test proposals far, far faster than a culture of perfection would ever allow.

  Arguably, the innovation process in China is by nature faster and bolder thanks to its spirit of chabuduo which means ‘it’ll do’ and meibanfa, aka ‘can’t be helped’. On the one hand it means things are never done perfectly, but on the other it allows rapid progress. Unlike in the West, people don’t freak out if something doesn’t work perfectly. China has a higher acceptance of imperfection, and that’s reassuring if you are trying things that may totally mess up!

  Maximize outcomes, don’t minimize risk

  Increasingly I feel that what drives a lot of work and roles is plausible deniability: it’s less about making a difference and more about showing you did the right thing, even if it messed up. I know someone who works in A&R (artists and repertoire) for a record label (yes, still!) and whose role used to be very creative. It was about feeling and smelling which artists would break. They would listen to kids in playgrounds, go on online forums, sneak into gigs, go to sneaker stores, stalk people on Facebook. It was very emotionally driven and they were amazing at it. Now they’ve been asked to do it differently. They run programs that analyse sentiment online, they track trend lines and look at modelling, they scan social network size and clout. They now present the findings in meetings as data. They have never been less successful but they feel safer in their jobs than ever before. As Rory Sutherland says, ‘It’s much easier to be fired for being illogical than being unimaginative’ (Sutherland, 2017). We have to change this. If you succeed thanks to a reckless emotional outpouring people think you were lucky; if you do something based on data and it screws up, people feel far less vulnerable. We have to create cultures that love oddness.

  We need to get way better at being comfortable with being uncomfortable, with hating consensus and loving chaos and energy.

  A sensible view on data

  My (true) story that kicked off this chapter is a powerful example of the danger of data. Data can only reflect the reality of today, which is a terrible problem in a world that appears to change faster than ever and best rewards those who are first to new things.

  A disease of the modern age is the need to support arguments with data. If we only ever built bridges where we could see people swimming across rivers, we would have not built many. We live for data-driven insights and I’ve never seen one. Data-supported arguments are fine but these days we don’t treat data with enough scorn.

  We need to have a more disdainful attitude towards most of the data that we see. Most data about the future is based on the linear interpolations of incorrect questions. If you ask people about that propensity to buy something that doesn’t yet exist, you get something worse than useless – you get something damagingly misleading.

  Create a process to change

  Steps to transformation

  I’ve seen a lot of documents outlining a magical number of steps to ‘transformation’. They are all rooted in research and smart thinking, I’m just not that sure we’ve got time. When something new arrives in the world, we set up specialist units to deal with it. We cordon off a part of the building or set up an office in Austin. We buy funkier and brighter sofas, employ people who are younger and wear more casual clothes and we buy neon signage, all to deal with the new thing. First it was interactive, then it was mobile, then social, then maybe a content wing or chatbot practice.

  We employ people to lead this charge, we get a chief innovation officer (gulp), or a head of digital strategy, we employ people to drive this change. As these units take root we fund them. We set up innovation labs. We buy 3D printers and a drone and stick them in a room with a robot vacuum and a VR headset. Trust me. We get experts in to come and speak. It’s easy to do it this way. Innovation is compartmentalized and sanitized and merchandised. But it’s not the way to effect change.

  The more you are ‘outside’ the company, the easier it is to look vital, to evangelize, to be funky and to signpost to the outside world that the company is taking innovation and disruption and technology and change seriously. But the harder it is to actually get stuff done. To bring about change you need to be in meetings, you need to understand the problems faced, the reality of how things get done. You need to have authority to be a total pain and to challenge. To barge into meetings. It’s less about a 5,000-cell spreadsheet showing interesting start-ups; it’s more about playing golf with the CEO, infiltrating a private dinner, barging into a key meeting uninvited. Change is tough.

  So while I believe in the ‘many steps’ theory, I think the ultimate goal of heads of innovation is the same as a head of digital in 2010 or a head of computerization in 1995 or a head of electricity in 1940: it’s to make themselves redundant. To create a culture of innovation in everyone. The first step in that journey is to show everyone your intentions, to employ such a figurehead, but with the clear goal of moving out of the way and behind everyone.

  We see lots of companies really failing to make alterations at a deep enough level. They tend to give up. For example, many banks or insurance companies will create a digital bank subsidiary. It’s clearly the easiest step to undertake because it’s moving everything messy to one side, but it’s the integration that’s hard – the politics, the interfaces between data on old systems and new.

  The other approach often seen is building a newer digital facade onto the old structure and company. We see airlines with amazing snazzy new mobile apps, that look very slick, but won’t allow you to change flights because that relies on the back end to be rebuilt.

  Wo
rk like a start-up, but mean it

  With the culture in place, and a process for change in place, how hard can this be? Well, now you have to get people working like you.

  I’ve worked with a few large clients over the years, and while they loved the idea of working like a start-up, it was a bit like wanting to go to Glastonbury, but only if you got to avoid everything about a large music festival. The allure of working like start-ups, but in a sort of polite, 9–5, big corporate backing kind of way. They wanted to work like a start-up, but had $100 million to spend. They wanted to be agile and nimble, but with a complex approval process. We want to challenge everything, but with the data to support it. Let’s go crazy, but please use existing marketing partners, let’s break new ground but ‘our competitors haven’t done it yet’.

  ‘We’re going to act like a start-up’ is a new corporate mantra. What would the founders of Klarna do here? How would Spotify market this? How can we replicate WeWork’s approach? Yet it never works that way. Spreadsheets need to be filled in showing target user numbers, someone back-fills profitability requirements, someone calculates projected revenue, and automatically an investment level is found.

  All with no idea that this is all the antithesis of start-ups. Start-ups hustle, they ask favours, and they use the limitation of money to force themselves to try risky things.

  The role of IT

  Most corporate IT systems are relatively complicated, and they know that the CEO is unlikely ever to question it. We have roles like the chief information officer (CIO), who never wants the headache of really investigating a new system, when the old one will just about do. Rather like the idea that no one ever gets fired for buying an IBM, no one ever gets promoted for doing something that takes time, money, and doesn’t really need to be done yet. But as we saw at the end of 2017, with a computer glitch that allowed all American Airlines’ pilots to take time off over the Christmas holiday, the role of IT is incredibly central to what needs to be done, yet budgets are near impossible to get. CTOs now have budgets that are divided between keeping the show on the road, and providing functionality. Legacy system upgrades can only be achieved at the expense of investments in newer systems elsewhere. As a result, what happens is like all innovation: it’s the front-end systems that are favoured. While it makes sense that the customer’s system is shiny and new and built by the best teams with the best software, the reality is that most people’s experience is somewhat reliant on the more boring, less visible systems behind this. Those needing quick fixes for archaic sites use tools like XML-based web services, middle-wear technology, and portal frameworks that enable them to prolong the life of the fundamental operating systems that underpin many of the early 1980s systems.

  The role of IT has always been seen as a support function. Rather like the human resource department, it is behind the scenes and noticed only when it doesn’t do things well. We need to think of it in a different way: less as a support function and more as an investment vehicle for leading a path through change. IT should be one of the most vital departments of any company. It should be full of people excited about the future, investigating the latest software to do their expenses, enthusiastically testing new timesheet programs, or better ways to manage invoices. Many companies are let down by legacy systems that, even though they work, take up a lot of time.

  Hack legislation

  There is an incredible relationship between regulation and rules, and innovation.

  Companies have often referred to the Fosbury Flop as a way to show what happens when people think differently. Over the years, various athletes had been setting high-jump records with the straddle jump, or the barrel roll. By 1978 the bar had been set so high and improvements had become so slight, that the record appeared unlikely to change much at 2.34m (7ft 8in).

  The story is that Dick Fosbury dared to think differently, reached much greater heights and created a world record by going over the high-jump bar backwards. Something that is never really mentioned in this story is the role of rules, and the technology involved. It was only because mattresses had been allowed to get thicker that the entire notion of the backwards jump suddenly made sense. In fact, many people had been very keen to jump this way for years, but they just knew it would probably injure them.

  Lyft first broke taxi regulations by asking for donations, not demanding payment. Airbnb basically lives on the edge of the law at all times. Many new innovations can thrive at the edge of legality. Vaping is entirely disruptive because nobody knows what laws to regulate with, drones live in a weird area with poor legislation, intellectual property law is woefully behind the times.

  What new businesses need to do about this is understand that regulation and the legal system will always be behind the pace of technology and society’s development. Companies can understand the implications of this, and either seek to maximize what they can gain in the grey space, or at least quickly realize the degree to which they can stick to the spirit and not the letter of the law.

  What do insurgents wish they had?

  At this moment in time it’s very easy to be overwhelmed at the success of the Amazons and the Facebooks of the world. It’s very easy to look at the way they have been able to grow, and feel pessimistic about your opportunities. It’s easy to think that life is unfair, and they have all the benefits.

  The reality is that most existing companies have many assets that they take for granted. If you’re a retailer, having a physical premise on every High Street or Main Street is obviously costly, and feels like a disadvantage. But at the same time it offers incredible advantages, whether it’s the amount of trust that it creates, the ability to provide immediate delivery, or the ability to upsell people at the point of purchase. Companies like banks need to realize that their very physical manifestation endows them with extraordinary trust with the members of the public. Through their staff, they have built long-term and significant relationships with their customers.

  So it is imperative that companies today consider things from other companies’ perspectives. They need to map out ‘What does Amazon wish that they had?’ and explore, and exploit, that gap. They need to think ‘What do car makers with hundreds of years of experience wish they had?’ Maybe it’s a dealership network. Maybe it’s a long history of knowing how quickly the prices of their vehicles will depreciate with age. Every company needs to seek out what their competitors wish they had and really focus on that point of difference.

  Leverage the power of expert generalists

  Francis Crick and James Watson were not particularly well-regarded scientists. They had shown no more promise than others. What they had was something that nobody else did: a width of expertise across different fields. As pretty much the only people alive who had knowledge of X-ray diffraction, chemistry and biological expertise, they had skills in all the required areas to enable them to join the dots and discover the structure of DNA.

  We tend to fall in love with the idea of the expert. We tend to assume that new technology needs a deep expertise. We think that everything that arrives is more complicated than we can imagine, and that we need to place our trust in people who understand everything about these technologies and these changes. Increasingly, the real success comes from building different bridges between different lines of thoughts – by connecting dots between two different disciplines. While it’s always going to be important to have specialists, industry probably needs to celebrate more the people who can span these different areas, apply creative thought, learn from one area and apply it to another.

  I suffer from back pain a lot. I know of no doctor who knows enough about it all to know who I should best seek treatment from. Instead I have to meet chiropractors, physiotherapists, neurosurgeons, orthopaedic spine surgeons; each will claim the solution they have to offer is just what is needed.

  Car companies now need people who understand software design and how people drive. Retailers need people who understand browsing behaviour and how people behave at the
point of sale. TV companies need to understand how to make great TV, but also how younger people’s behaviours have changed and what streaming technology allows.

  ‘When all you have is a hammer, every problem looks like a nail’ is a very true saying. A key thing for businesses as they look forward to the future is to find ways to encourage curious people to think differently about problems, to apply creativity in new ways, and to challenge everyone to think differently.

  Use imagination

  We tend to only really understand new technology when viewed through the frame of the old. The very first TV shows were radio plays with cameras pointed at them. Websites today look pretty similar to digitalized forms of paper in the past. Our imagination is pretty weak. Even a creature like the unicorn, designed to represent something new, mythical, and outrageous, is still based on two existing animals combined.

  No one ever predicted the internet before it existed. It was like nothing we had ever seen before, and nothing we could possibly imagine. No one ever really conceptualized the idea of cryptocurrencies, or decentralized banking systems, because those notions didn’t exist, at all, before.

  Companies need to get much better at thinking about the future, less in terms of combining existing elements, and more about creating things that have never existed before. This obviously places incredible demands on our imagination and the creative process, but it’s essential for companies if they wish to get the benefit of ground-breaking thinking – that they are able to do something radically different to anything that’s been done before.