Only Dead Fish

Conformity Has A Higher Value Than Diversity

Image courtesy

"So many innovation processes are simply toxic to creating conditions in which people feel moved to acknowledge real needs. Bureaucracies flourish by subordinating spontaneous human responses and awareness to standardised systems. Organisational hierarchy means we're going to be guarding our status before we share anything resembling our vulnerability"
Johnnie Moore

I think we consistently underestimate the power of conformity in organisations and industries. It is almost always valued more than diversity. The barriers to change that it creates - fear of failure, fear of the unknown, fear of isolation - means that in cultures that attempt to 'manage' innovation it can take a lot of courage to innovate because, as Johnnie goes on to say, "innovation goes with disruption and disruption is what 'processes' (typically) endeavour to eliminate".

Great ideas often have lonely childhoods and, as Hugh MacLeod has pointed out, they often alter the power balance in relationships and so are always initially resisted. This I think touches on the real strength of social technologies in connecting agents of change within organisations and across industries. Groups with shared values, common interests, objectives, passions. Groups that are willing to challenge the toxic assumptions and sacrifice the sacred cows. Social technology helps to spread learning, refine opinion, share stuff that works. It helps people spread change and break down the silos that "help restrict organisational potential". It offers interaction and inspiration but just as importantly, it offers validation - as this simple presentation from Sacha Chua captures rather succinctly:

Smarter Work: Why Social Networks Matter

View more documents from Sacha Chua.

But it's worth reflecting on the other side to this coin. In The Element, Sir Ken Robinson talks a lot about the role of diversity and dynamism in creativity and an important distinction between finding and being in your tribe, and being part of a crowd:

"We aggregate as groups for the same essential and primal purposes. The upside for us is that groups can be tremendously supportive. The downside is that they encourage uniformity of thought and behaviour".

Research has shown that innovative ideas tend to emerge more readily in communities in which people work in small and relatively isolated groups where early stage, incomplete and vulnerable ideas are given space and time to mature. But an overabundance of connections, where everyone is connected to everyone else, can reduce diversity and keep radical ideas from taking hold.
So find your tribe, but avoid the crowd.

The Candle Problem

Rob left an insightful comment to my post on failurephobia:

"...in a world where companies budget by week - let alone by quarter - is it really surprising that only certain industries and categories happily invest in R & D (or should I call it 'adventures in failure')?"

Rob's point is that having the confidence to fail comes with an attached cost to business that has to be understood and appreciated by all stakeholders (the company, shareholders, clients) in order for this kind of culture (for it is a cultural thing) to really succeed.

It's a great point. And one that I've talked of before. Business model innovation is a very different type of innovation from product or process, and one that established competitors find difficult because when they're chasing the next quarter's number, it often doesn't make economic sense. To paraphrase Costas Markides the real issue is not discovery, it is organisational.

If you're sitting in a small, agile business that embraces failure, it probably seems like the most natural thing in the world. If you're not, you'll appreciate the scope of the challenge that this presents.

It's about challenging toxic assumptions - the kind of assumptions that are deeply inherent in a business and deeply unchallenged. It's about understanding the difference between technical change (focused on process, providing solutions, clarifying roles, restoring order, maintaining norms) and adaptive change (identifying the challenge but resisting the urge to clarify, asking the right questions rather than providing the solution, challenging current roles and unproductive norms). It's about being comfortable with ambiguity, something that big business is not good at. It's about admitting that you don't know all the answers (something else that big business is not good at) but that instead it is often enough just to frame the question. And it's about understanding that what works, and what doesn't, is often counter-intuitive.

I read a great example of this yesterday in this post by RSA CEO Matthew Taylor describing a TED Global talk by Dan Pink, the central theme of which was that crude incentives (like big financial bonuses) damage performance in complex tasks. He goes on to describe an example given by Pink in his talk - the famous candle problem:

"In this exercise subjects are shown a picture of a table next to a wall. On the table is a candle, a book of matches and some drawing pins in a box. The task is to attach the candle to the wall over the table, light it, but not let it drip wax on the table.

On average it takes people about ten minutes to identify the solution. This is to take the drawing pins out of the box, pin the box to the wall, then stand the candle on the box so the wax drips on to it rather than the table. This requires the subjects to make the lateral leap of seeing that the box holding the pins is not just a receptacle for another object but an object in itself.

In this test those who are offered a cash prize for completion perform less well than those who are simply asked to solve it as quickly as they can. Fascinatingly, if the test is made easier - by taking the pins out of the box so it can be seen from the start as an object in play - then those offered incentives perform better than those not."

Matthew goes on to make a great point in relation to the banking crisis ("why is it that powerful people in important jobs don't want to discuss research showing that being given big rewards might damage their performance. The answer, of-course, is in the question."), but as I said in the previous post, acheiving change of this type has a lot to do with how you define and reward success. To quote Sir Ken Robinson: "If you're not prepared to be wrong, you'll never come up with anything original"

Making Money From Free

In case you missed it, there's been a mild spat going on between two heavyweights in cultural thinking. In the blue corner, Chris Anderson is out launching his new book on 'Free' (The Future of A Radical Price) : marginal costs trend to zero in a world of ubiquitous choice and rapid technological advancement; the economics of abundance require fundamentally different thinking; incentives can be nonmonetary (reputation, attention, status). In the red corner, Malcolm Gladwell argues that Anderson takes little account of the actual cost of goods sold (e.g. it costs You Tube a lot to serve up the amount of video content they do), and that we'll still pay through the nose for goods and services we really need.

I saw Chris speak about his book earlier this week (most of what he talked about is included in the original 'Free' article which you can read here). One of the things that he acknowledged right at the beginning of his talk was the degree of suspicion with which concepts surrounding free are greeted. He's certainly not wrong about that. A typical and perhaps natural reaction to concepts involving free is to concentrate on value-destroying aspects. But to paraphrase Kevin Kelly, the internet is a copy machine producing copies of everything with a degree of permanence but without friction or cost to create the super-distribution network that we all know. So this is not new.

So perhaps it is more productive to focus on the value-generative aspects to Chris's argument. Kevin Kelly argues that when copies are super abundant, they become worthless so it is stuff which can't be copied that becomes scarce and valuable. The uncopyable tends towards the intangible (so qualities like trust, for example, are impossible to copy). He goes on to identify eight categories of intangible value that we buy when it could be free. Eight generatives that "demand an understanding of how abundance breeds a sharing mindset, how generosity is a business model, how vital it has become to cultivate and nurture qualities that can't be replicated with a click of the mouse". They are: immediacy, personalisation, interpretation, authenticity, accessibility, embodiment, patronage, and findability.

Chris is not saying that everything should be free (Henry Blodget is wrong), and in that sense, Gladwell and Anderson are (disappointingly) not so far apart. Whilst Gladwell says that the information wants to be free model doesn't work when applied to small, high value markets, Chris argues that "just because products are free doesn't mean that someone, somewhere, isn't making huge gobs of money"  and often that value comes from niche, and the more niche the better.

For what it's worth, I think Chris is right - for niche, read relevance. Relevance comes from time, place and context - delivering the right service or product or message or information or advice at the point in time when people need it most, in the place people need it most, and in the most relevant form and context. If that is a piece of content, or (dareisayit) a piece of advertising, I'm more likely to give it my attention and engage with it. If it is useful or relevant enough, if it gives me status, if I love it enough, if it lowers risk, if it saves me time, then there's a good chance I'm going to pay for it. This, is inherently why content producers need to think of their content in a different way - as a service rather than a product.

As Seth says: "People will pay for content if it is so unique they can't get it anywhere else, so fast they benefit from getting it before anyone else, or so related to their tribe that paying for it brings them closer to other people." 'Free' is a relatively cheap way of getting attention. Attention is a good platform from which to derive value.

When Is a Revolution A Revolution?

What's been happening around #iranelection has been truly remarkable. The State Department even asked twitter to delay a planned upgrade that would have cut daytime service to Iranians disputing the election. The role of social tools in major global events just seems to get bigger, and deeper.

One of my favourite Clay Shirky quotes is about how tools "don't get socially interesting until they get technologically boring". In his May TED talk, which has just been posted, he talks about the scale of change we are amidst - the change from 20th century media - media that is good at creating groups but no good at creating conversation (broadcast), and media that is good at conversation but no good at creating groups (like the telephone), to "the largest increase in expressive capability in human history" where "innovation can happen anywhere that people feel that we're in this together".

I've read a couple of things recently bemoaning the 'social media revolution' as a misnomer. Clay is right - the real change is in the connectivity of the modern world. Is this a revolution or is it not a revolution? It doesn't matter. The point is that things have changed for good.

The Economics Of Ideals

I've long been a fan of Umair Haque's writing. He's never been afraid to ask the big questions, challenge the big assumptions, propose the radical. This 6 minute interview conducted by Dennis Howlett sums up Umair's approach to the 'economics of ideals':

"What ideals force us to do is to confront the issue of outcomes. Business is very good at focusing on incomes...terrible at producing good outcomes...We need to build our organisations to consider outcomes in the first place."

Well worth 6 minutes of your time.

Toxic Assumptions

Image courtesy

Change, as we know, is a constant. But right now it feels like the change that is with all of us is both constant and all consuming. And often necessary. The hunger for a deeper understanding of how best to deal with massive change is tangible. I went to a seminar on the subject yesterday and you could almost feel it the room. Perhaps because the change that many organisations are faced with right now is more fundamental than simple behavioural change and is more like a cultural metamorphosis. Which is more about how people feel and think, the values they hold, what they believe.

In the seminar they described the difference between 'technical' change, which is often focused on process and where the leader's role is about providing solutions, clarifying roles, restoring order, maintaining norms, and 'Adaptive' change where leadership is about identifying the challenge, asking the right questions (rather than providing the solution), letting the organisation feel the pressures (within a range), challenging current roles, resisting the urge to clarify, exposing conflict, challenging unproductive norms. Adaptive change is about being comfortable with ambiguity, admitting that you don't know all the answers, but that instead it is enough just to frame the question.

There were a couple of interesting metaphors used in association with this including that of a lily pond, to illustrate the fact that companies often focus on the visible behaviours 'flowering' on the surface, rather than the values, norms and preferences that support them (the stems which are only visible through the water) and the hidden root system of shared basic assumptions that nourishes the whole plant. I'd say the same was true of whole industries.

A useful model is to think about organisational change as a cycle between contentment (characterised by arrogance, complacency), denial (something or someone else is responsible), confusion (lots of uncoordinated initiatives at once) and renewal (constructive, collaborative, dynamic). The challenge of-course is to lead people and organisations through this cycle, because there are no short-cuts.

One phrase that I particularly liked was 'toxic assumptions' - the kind of assumptions that are deeply inherent and deeply unchallenged. Like the fact that there will always be a market for what you do, that people out there really care about the stuff you're producing, that the way things have always been done are still valid. The example used was 90's Marks & Spencer whose mental model was that it was invincible in the UK, automatically stood for quality, had a loyal core customer base, that it didn't need to accept credit cards, or advertise, or stock brands, or have January sales.

Cultural change takes far longer and is much harder to achieve than just about any other type of change. It strikes me that in order to progress with the kind of fundamental change that is needed in many areas of our business, we have to look closely at our own toxic assumptions, and be comfortable with the fact that when we're embarking on a journey we don't always know where it will end (if indeed it will), but that shouldn't ever stop us from just getting going.

Constructive Capitalism

This is an important post for me. I've been carrying it around in my head for a while, struggling to articulate it. Thankfully someone else has done it for me. The video below is a talk by Umair Haque who has been doing some important writing on the subject of the current economic malaise. Like me, Umair believes that what we are seeing is somewhat more than a 'normal' recession, and more than a financial crisis. It's a crisis of rigidity, of conflict, of stagnation, of nihilism, and a crisis of depletion.

If you're at all in any doubt about that last one, read this feature from New Scientist ("It has taken all of human history for the economy to reach its current size. On current form it will take just two decades to double."), and click on the visual below (if you can't read the annotations on the lines, they relate to things like population, CO2 emissions, water use, species extinctions, average surface temperature, loss of tropical rainforest and woodland. The time scale across the bottom is about 250 years. The unbelievably exponential increase is over the last 50).

 

Image courtesy

Umair's point is that we are faced with a crisis of interaction. Interaction has exploded. Changed the way we form institutions. Whatever happens now things will never be the same again. Like how we define value. And how we define growth. Capitalism itself is changing, and there is a better way to compete, and a better way to interact, based on new principles:

• Strategy is a commodity
• Competition is obsolete
• There is nothing more assymetrical than an ideal
• Tommorrow is today
• Connections not transactions
• People, not product
• Creativity, not productivity
• Outcomes not incomes
• Advantage is in the DNA
• The next revolution is institutional

A new set of rules are forming, and it is all of our opportunity to help shape that. I believe community can make a difference. And the We20 initiative that Johnnie posted about is not a bad place to start. This video is long, at an hour, but I urge you to watch it. If you can't do it now, bookmark it, and come back to it when you can. But do watch it.

Umair Haque @ Daytona Sessions vol. 2 - Constructive Capitalism from Daytona Sessions on Vimeo.

Sacrificing The Sacred Cows

Image courtesy

Giles makes the point that in these tough times companies have two choices - to innovate their way out of recession, or to retrench their way through it. He's right of-course, and I know which way I'd rather go. It almost goes without saying that innovation can not only get you through a recession, it can see you come out the other side in a stronger competitive position, like the Satir change model that Jonathan blogged about suggests:

Unlike most of the people I work with, I've worked in a recession. In fact I came out of education right into the middle of one and I remember the bleakness of the graduate recruitment market and the apparent lack of opportunity at the time. But you make your own opportunity, and that's what we call innovation, and there's never been a better time to remember that.

But it's not quite so simple. The real question for businesses of-course is what type of innovation - product innovation is one thing, but the real game-changers come from stuff that changes the rules of a market. Stuff that changes the business model. Most business model innovations come from newcomers to an industry. Most established competitors find this type of innovation difficult because it often doesn't make economic sense for them. They're too focused on reaching next quarter's number.

This is a huge challenge. For one thing the numbers are stacked - for every established business trying to develop a new model there might be hundreds of entrepreneurs trying to do the same thing. And even if you can harvest the good ideas from your organisation, it's tricky to grow them in an environment where you are trying to accomodate two divergent and potentially conflicting games that operate to very different rules. So ideas are one thing, action quite another.

In Game Changing Strategies, Constantinos Markides talks about this in terms of the need to create what he calls a "positive crisis". It's not enough to actively and continuously question what you do, he says, because even when people intellectually accept the logic of doing so, they very rarely act on it - so you have to generate action that breaks the inertia.

As Seth Godin talks about in Tribes, the real difference in today's environment is leverage. One person has the leverage to change everything. And whilst this might be the worst enemy you ever had, it could also be your best friend. The ability to connect people to form a Tribe has never been greater, and leaders can come from anywhere. But maybe the leaders of the future are sat within your organisation. And maybe you are too focused on management to enable leadership, because you know what? There's a big difference:

"Management is about manipulating resources to get a known job done...leadership is about creating change you can believe in...Leaders have followers. Managers have employees" Seth Godin

Everyone sat inside those organisations has the leverage to transform the model of the business they are in. When they try, the temptation is for the business to wrap such ideas in short-term ROI, judge it by existing rules, implement it through an existing structure, make it fit an existing process. You don't manage innovation. You need to get the organisation, with all that process, all that hierarchy, all those assumptions, out of the way. In other words, in order to create a purple cow, you have to get rid of a few sacred ones first.

Goodness & Happiness (2)

I've been mulling the subject of what it means for business to be more generous for some time. I've written a couple of posts on it, but I figured it was time I gathered it all together and put down something more coherent. When I started writing, somehow it ended up as a presentation, but that's no bad thing.

At the heart of this is the belief that business needs to fundamentally shift its approach in the interactions it has with its customers. That it needs to readjust to the new balance of power that characterises a hyperconnected world. By nature, business is not generous. But in the context of the systemic meltdown we have just witnessed, it is time to begin thinking about what Umair Haque calls "next generation business". So this is about marketing. It's about personal outlook. But it's also about the function of business, and the great big fat opportunity that business has to interact with the world in a different way.

As usual, I am indebted to some great thinking and writing which has helped form my own thoughts on this, notably from: Mark, Faris, Umair, David, Eaon, Charles, Asi, Seth, JP, Paul and Paul, whom I credit in the presentation.

This is something I believe in.

Goodness And Happiness - Why Generosity Is The Future Of Marketing Strategy

View SlideShare presentation or Upload your own. (tags: marketing socialmedia)

Myth Of The Near Future

Great video from Faris that ties in rather nicely with his recent Campaign piece and also his IPA piece. Go Faris.
2010: Entertainment and Communication from Faris Yakob on Vimeo.