Our Job is to Invent the Future

The business environment is changing – that’s something we should have our heads around by now. How should we respond? I was on a panel at an event sponsored by the Queensland Branch of the American Chamber of Commerce in Australia discussing exactly this issue at the end of last month.

The title of the session was: The Business World is Changing: Adapt or Perish.

It was only after it finished that I realised that I forgot to make an important point – those aren’t the only two choices.

Here is how Jim Collins put it in How the Mighty Fall:

In December 1983, the last U.S.-made Motorola car radio rolled off the manufacturing line and into Chairman Robert Galvin’s hands as a reminder.  Not as a sentimental memento, but as a tangible admonition to continue to develop newer technologies in an ongoing process of creative self-renewal.  Motorola’s history taught Galvin that it’s far better to create your own future, repeatedly, than to wait for external forces to dictate your choices.

That’s the third choice – if we’re innovators, our job is to invent the future.

In other words, we can create the changes in the business environment ourselves, not just respond to them.

Oc course, Collins then goes on to describe how Motorola completely failed in this endeavour – inventing the future is never a certain thing.

What Should We Do?

If we’re going to invent the future, there are a few things that we need to do.

First, experiment.  Mike Masnick makes this point in a post today about Clay Shirky’s latest discussion of the news industry’s response to digital disruption:

It turns out that running a successful media business is not an easy thing.

And, of course, the nature of innovation often involves a lot of experiments, many of which will fail before people find the things that do work. So while I hesitate to jump on the singular failure of Kushner’s OC Register efforts as signalling much more than a single failure (in the same way that Digital First Media’s troubles may only really be indicative of the unique issues that company faces), Shirky’s overall point is still an important one. While experimenting with new business models and new ideas are important in this ongoing effort to figure out what might work (and discovering first hand what doesn’t work), if you’re going to experiment, you have to experiment with an eye towards the future, rather than nostalgia for the past.

People blame the internet and technology for a lot of things, like social isolation, which have clearly been around for a long time.  As humans, most of our problems and most of our needs haven’t really changed that much over time.

The second thing to do is to focus on these core problems, needs and desires, not technology.  There is no point in innovating simply to do something new.  The whole idea is to create value – if we don’t do that, we’re not innovating.

In the case of newspapers, democracies need journalism to keep people informed, and to hold governments to account.  These needs are essential parts of the system.  But this doesn’t mean that we need physical newspapers to fulfil these needs.

If we focus on the needs, we might find a better way to achieve these goals.  Figuring out how to do this will be messy.  There will be experiments that work, and ones that don’t.  Experimenting goes hand-in-hand with meeting needs.

The third skill we need is the ability to amplify weak signals.  This is one of the issues that has come up in the discussion this week about Jill Lepore’s New Yorker article attacking the concept of disruptive innovation (more on this in my next post).

Peter Klein makes an important point on this:

… disruptive technology, in Christensen’s definition, must not only behind the cutting edge in some technical dimension, but also satisfy unmet consumer demands. The latter must be uncertain ex ante, otherwise the market leaders would also be developing the disruptive technology. Christensen advises incumbents to “disrupt themselves,” but this assumes they know which technologies will eventually be disruptive. Because they don’t, they must choose among several alternatives, including “do nothing” (i.e., try to exploit late-mover advantage).

The incumbent’s decision, contrary to Christensen’s reasoning, reflects entrepreneurial judgment, which may or may not be correct. There is no formula for managing disruptive technologies.

This is also what makes the “adapt” choice in “adapt or perish” tricky – we often don’t know to which changes we must adapt.  That’s why signal amplification is an important part of dealing with uncertainty.

So. Let’s sum up:

In a changing environment, our choices are create the future, adapt or perish.  I prefer the first choice.  If that is the one that we wish to follow, we are entering risky territory.  But then, when things are changing, innovation might be the least risky option.

The skills we need to help cope with this risk are: experimenting, a focus on genuine human needs, and amplifying weak signals.  These are all things that make it a little bit easier to find a way through – they are part of the entrepreneurial judgment that Klein talks about.  They are part of inventing the future.