Random finds (2016, week 13) — On disruption, interest-driven learning, and formal fluidity
Every Friday, I run through my tweets to select a few observations and insights that have kept me thinking over the last week.
I’m sorry, but can I disrupt the buzzword industry for a moment?
“If you go to a startup conference these days, you can’t even get in the door without a pitch that has the word ‘disrupt’ leading the way like a ship’s prow slicing through an uninviting ocean. You can’t simply have invented a better way of drying your hair or collecting your laundry — you need to disrupt the hair-drying industry and the laundry industry,” writes Daniel Gelernter, a professor of computer science at Yale, in A Little Less Disruption, Please (The Wall Street Journal). A few quotes …
“What I really want is something that unifies and simplifies the many threads of my life.”
“I need products that will release me from the tedium of management — from the chore of being my own file clerk. I need products that help me pull it together and make sense of it all, not ones that wreck the familiar.”
“With disruption thundering all around, I don’t need more of it. How about some technological peace and quiet? Simplify, please.”
When to cook the golden goose
According to Merijn Helle and Fawn Fitter in Digital Disruption: When to Cook The Golden Goose, the question for most companies isn’t whether to adopt new digital business models alongside their legacy businesses. It’s how to survive the transition.
“Before introducing a new business model that supplements or supplants the old one, companies need to understand how their customers will compare the old and new business models. Is the new digital strategy so obviously superior that customers will welcome it? Or will customers consider the digital business model inferior to the legacy product or service, whether or not it actually is? The answers will shape both the strategy itself and its implementation over time.”
The strategy is simple but not easy. It calls for careful attention to the amount of change customers can tolerate at once, as well as a plan for keeping them happy while the change occurs. There’s no reason to force your current customers into the new business model unless you can afford to lose them, and few companies can. In other words, while you spin up the growth of your new revenue model to attract new customers who are innovators and want to take advantage of new trends, you still have to manage your existing revenue stream, even though it’s shrinking.
Digital transformation is not about a specific product or service as much as it is about preparing your company and its infrastructure for both the immediate changes that you know are necessary and for the unknown challenges that inevitably await in the future!
“Moving carefully calls for market segmentation that aligns with the product’s evolution,” the authors write. “Perhaps your earliest adopters should be your newest customers, or your most innovative ones, or your lowest-value customers whom you wouldn’t mind driving back to the legacy product if the new digital offering doesn’t appeal to them. As you achieve greater market penetration or add features and functionality, you can then expand into other market segments.”
Unfortunately, there’s no magic mathematical formula to apply to determine just how much time you have to roll out a new offering or disruptive technology, and to whom, before your legacy customer base or income stream collapses. In the end, you simply have to begin. “Let’s give ourselves a break and admit that this is hard and that we’re going to make mistakes, but don’t let that stop us making the moves,” says Michael Liebhold, a senior researcher and distinguished fellow at the Institute for the Future.
In their article, Helle and Fitter refer to Kodak, as so many others do when they want to give an example of a company that has clearly missed the next wave.
“Unwillingness, or inability, to recognize that truth did irreparable harm to one of the most recognizable brands of the 20th century. Kodak invented the digital camera but failed to commercialize it for fear of eating into the film portion of its business, reports The New York Times. That gave other companies the opening to create a market for digital photography that quickly shunted film out of the mainstream. Kodak’s sales plummeted from US$19 billion in 1990 to $2 billion in 2015. What remains of the company’s film business is now almost entirely in niche markets like the movie industry.”
But in Many Companies Still Don’t Know How to Compete in the Digital Age, Ron Adner sheds a different light on Kodak’s fall from grace. He writes that, although Kodak had a slow start, it did, in fact, manage a miraculous, successful digital transformation. By 2005, Kodak ranked no. 1 in U.S. digital-camera sales (no. 3 globally), and by 2010, it had clawed its way to no. 4 in the inkjet-printer market, where it joined the likes of HP, Lexmark, and Canon. Kodak did the wrenching hard work of changing from an analog-printing profit base to a digital-printing profit base. Yet it still failed. So what went wrong?
“Kodak was so focused on its own technology transition,” Adner writes, “that it missed the fact that the improvements in the very same components that gave rise to digital printing would, with further progress, undermine its very basis.” When Kodak undertook the painful process of embracing disruption and transforming itself into a digital company, its planned destination was a new way of printing photos on paper. The blind spot in its strategy and the root cause of its collapse, was its failure to see how progress in the other components of its ecosystem would eliminate the value of the end goal. Indeed, even as Kodak took advantage of these improvements to develop and sell digital picture frames, its leaders saw these as revenue-enhancing novelties rather than precursors of the game-changing shift to come. If Kodak’s leaders had appreciated the dynamics of the broader ecosystem, they would likely have made different choices.
Kodak’s lesson for today’s leading firms is that risk lies not only in a lack of attentiveness to disruptive change but also in embracing the wrong part of the change. Adler predicts that this pattern of ecosystem-based disruption — failure driven by shifting pieces rather than competition from direct rivals — will become increasingly common in the coming years as the Internet of Things evolves. From finance and manufactured goods to farms and pharmacy, the digital revolution enabled by sensors, connectivity, and distributed intelligence will upend competitive positions and strategies across the ecosystem.
If Kodak’s leaders had appreciated the dynamics of the broader ecosystem, they would likely have made different choices.
Companies that learn the right lesson from Kodak’s failure — that learn to approach their competitive strategy with a wide lens that captures ecosystem dynamics — will be more likely to respond effectively to this new generation of disruptive challenges. Those that don’t risk suffering Kodak’s fate.
Joi Ito on interest-driven learning
In a recent interview, Joi Ito, director of MIT Media Lab, talks about the growing importance of anti disciplinary thought, and empowering people to learn as they need it.
“What’s interesting about the Media Lab is that the core DNA that Nicholas Negroponte and Jerome Wiesner planted 30 years ago is consistent and relevant today. A key component of that is what we call ‘antidisciplinary.’ ‘Interdisciplinary’ is when the biologists and the engineer talk to each other. Antidisciplinary is all the space that’s none of the above. In the past, it was when media and digital were converging. Then we saw it happening in social networks and big data, and now it’s happening in biology.”
Ito considers himself traditional-education disabled. “There’s a certain set of people who are very good at learning through a traditional structure, and the system is well designed for them, mostly. But there’s a set of us — we call them ‘interest-driven learners’ — who are just not able to sit through and learn things unless we know how we’re going to use them.” What interest-driven learners need is a purpose, a project. In pursuit of that project, they’ll learn everything they need to learn in order to get it done.
By empowering people to think and pull the resources as they need them, you gain the ability to search and discover in ways that you couldn’t before.
According to Ito, MIT Media Lab’s learning model has been built around this idea of learning through doing and learning through pulling things as you need them to learn the process. “I think that model works really well in the current world,” he continues, “because our kids know more than the adults, so it’s very difficult to tell kids exactly what they should know, because the technology’s moving way too fast. What you want is to coach the kids and empower them to learn as they need it. And not just kids, but the people in your company. […] By empowering people to think and pull the resources as they need them, you gain this ability to search and discover in ways that you couldn’t before.”
Ito was interviewed by Alison Sander, the head of BCG’s Center for Sensing and Mining the Future. (No doubt one of the coolest jobs in the world.) Here she is in a TED talk, explaining how to spot growing trends and gives five tips on how companies can use trends to their advantage.
A bit more …
Dame Zaha Hadid, the Iraqi-born British architect whose soaring structures left a mark on skylines and imaginations around the world and in the process reshaped architecture for the modern age, died on March 31st, aged 65.
“The are 360 degrees, so why stick to one?” — Zaha Hadid
“She […] liberated architectural geometry, giving it a whole new expressive identity. Geometry became, in her hands, a vehicle for unprecedented and eye-popping new spaces but also for emotional ambiguity. Her buildings elevated uncertainty to an art, conveyed in the odd ways one entered and moved through those buildings and in the questions her structures raised about how they were supported. Her work, with its formal fluidity — also implying mobility, speed, freedom — spoke to a worldview widely shared by a younger generation. “I am non-European, I don’t do conventional work and I am a woman,” she once told an interviewer. “On the one hand all of these things together make it easier — but on the other hand it is very difficult.” (New York Times)
You’ll find some of Hadid’s stunningly beautiful buildings here (The Guardian): http://www.theguardian.com/artanddesign/2016/mar/31/zaha-hadid-10-best-buildings-in-pictures.
“I think an architect must be a change expert, because you have to shape change. Therefore, you must know what is happening in the world. Before I became an architect, I was a journalist. And actually I’m still investigative journalist. I observe. My life is one big string of anthropological and sociological explorations. I’ve always had a particular attention to what is neglected. So I wrote my book about New York in the late seventies, when everyone had written off the city.” — Dutch architect Rem Koolhaas in an interview with the Belgium newspaper De Tijd.
In When Architects Swim, Peter Vander Auwera has translated the juiciest chunks and added his personal context around that.
Read here (Medium): https://medium.com/@petervan/when-architects-swim-12e5e8c1b89b#.4sjg1g74j.
In Design as Participation, Kevin Slavin shares a consideration of design as a form of participation in complex adaptive systems. This started with a drivetime conversation about contemporary design with (again) Joi Ito. Stuck in traffic a question emerged about designers: This new generation of designers that work with complex adaptive systems. Why are they so much more humble than their predecessors who designed, you know, stuff?
“The answer is another question, a hypothesis. The hypothesis is that most designers that are deliberately working with complex adaptive systems cannot help but be humbled by them. Maybe those who really design systems-interacting-with-systems approach their relationships to said systems with the daunting complexity of influence, rather than the hubris of definition or control.”
“The designers of complex adaptive systems are not strictly designing systems themselves. They are hinting those systems towards anticipated outcomes, from an array of existing interrelated systems. These are designers that do not understand themselves to be in the center of the system. Rather, they understand themselves to be ‘participants’, shaping the systems that interact with other forces, ideas, events and other designers.”
Slavin’s essay is an exploration of what it means to participate.
Read here (PubPub): http://www.pubpub.org/pub/design-as-participation.
In the late 1620s, about a decade before he coined Cogito ergo sum (“I think, therefore I am”) — the slogan that would establish him as the founding father of modern Western philosophy — the great French philosopher, scientist, and mathematician René Descartes (March 31, 1596–February 11, 1650) set about delineating the rules of critical thinking. Of the 36 rules Descartes planned to write, he only penned 21, the first twelve of which outlined the principles of the scientific method.
“In order to separate out what is quite simple from what is complex, and to arrange these matters methodically, we ought, in the case of every series in which we have deduced certain facts the one from the other, to notice which fact is simple, and to mark the interval, greater, less, or equal, which separates all the others from this.” — René Descartes
Read here (BrainPickings): https://www.brainpickings.org/2016/03/31/descartes-rules-for-the-direction-of-the-mind/?utm_content=buffer9a11c&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer.
A bit more on René Descartes, 800 words to be precise, in The Philosophers’ Magazine:
“Descartes did destroy Aristotle, but his own programme was a failure. However, this failure hardly lessens the importance of Descartes’s approach — the radical nature of his strategy and the way in which he attempted to execute it. His emphasis upon mathematical certainty and universal law had a profound effect upon science. This soon found profitable expression in Newton’s hands. Descartes’ individualism propelled philosoph into modernity. But the sceptical spectre of the evil demon still haunts modern philosophical work — it is a possession that no one has yet managed to exorcise, except by neglecting to consider it in the first instance. Descartes was the making of science and the downfall of philosophy.”
Read here (TPM Online): http://www.philosophersmag.com/index.php/tpm-mag-articles/11-essays/33-descartes-in-800-words.
“No original ‘big idea’ ever starts out that way. It’s starts out with one person seeing something only they see.” — Nilofer Merchant
