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Beware of random collisions with unusual suspects. Unless, of course, if you want to learn something new. In that case seek out innovators from across every imaginable silo and listen, really listen, to their stories. New ideas, perspectives, and value creating opportunities are in the gray areas between unusual suspects. It seems so obvious and yet we spend most of our time with the usual suspects in our respective silos. We need to get out of our silos more.
It’s human nature to surround ourselves with people exactly like us. We connect and spend time with people who share a common world-view, look the same, enjoy the same activities, and speak the same language. We join clubs to be with others like us. I want to belong to the non-club club. The only tribe I want to be in is a tribe of unusual suspects who can challenge my world-view, expose me to new ideas, and teach me something new. I founded the Business Innovation Factory to enable random collisions of unusual suspects.
I am reminded of the power of this simple idea as my friend Bill Taylor launches his new book,Practically Radical (a must read for all innovators). Bill is a magnet for innovation stories and a master storyteller. I’ve been a Bill Taylor fan since he founded Fast Company and was surprised when he showed up at BIF-1, our very first Collaborative Innovation Summit, back in 2004. I shouldn’t have been surprised. Bill loves searching for compelling innovation stories among the unusual suspects. He has attended all but one of our six annual summits to-date including co-chairing several of them. There have been countless random collisions. As I started reading Practically Radical I was immediately hit with a powerful reminder.
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Saul Kaplan: Practically Radical
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It’s rare that a book so enhances your world-view that you think the author has taken up residence in your head. Henceforth What Technology Wants shall be known as my new playbook for understanding technology. It’s a must read for innovation junkies trying to sort the infinite possibilities of the 21stcentury. Many have tried to help us understand the meaning of technology. Few get below the buzzwords.
What Technology Wants captures the essence of our technological revolution and provides a lens to understand its origins. It provides a unique view from technology’s perspective shedding light on what technology wants and where it can take us. It’s a call to action reminding us of the opportunity and responsibility to remake our world in a way that deeply honors technologic potential around us. I expected the book to be great. Kevin Kelly has been an innovation hero of mine dating back to his days as the founding editor of WIRED. Every story during Kevin’s tenure at the magazine was a voice from the future that seemed to be speaking directly to me. It was a thrill to spend an entire day with Kevin when he came to the Business Innovation Factory recently to discuss What Technology Wants. Talk about being a kid in a candy store. My head is still spinning.
Kevin Kelly’s visit and book discussion stretched my thinking in both comfortable and uncomfortable ways. Let’s start with the comfortable leap. Kelly clearly asserts that humans are the evolutionary conduit connecting the cosmos, bios, and technos. He paints a compelling narrative arc asserting that the concentric creation stories of the universe, life, and the man-made world all share the same inexorable evolutionary path. I now know what Stephen Johnson meant by taking a long zoom view. Kelly traces the four billion year history of life through transitions marked by ever-increasing complexity of information flows. From molecules to single-cell organisms to language based societies to writing and printing to agriculture to scientific method, to mass production to ubiquitous global communication. It’s all one grand evolutionary arc and we are center stage.
I have always been fascinated by biomimicry, a design discipline that emulates or takes inspiration from nature to solve human problems. In What Technology Wants, Kelly helps us make the connections and intellectual leap necessary to see evolution as a connecting process, seamlessly working its magic across both the natural and man-made world. Technology doesn’t just mimic nature it’s a natural evolutionary extension of the human mind, which in turn is a direct extension of our cosmic beginnings. Kelly invites us to become one with technology. It’s a far easier invitation to accept knowing we share a common evolutionary process and limitless opportunities to explore the adjacent possible together.
The leap I am less comfortable with and still trying to process is Kelly’s assertion that there is an inherent direction to the evolutionary process. He claims evolution is a predictable process with predetermined tendencies. His argument isn’t theological but science based. It’s enough to make your head explode. Kelly claims there is an aspect of structural inevitability or predetermined outcomes built into the evolutionary process. He suggests that if somehow we could replay four billion years of evolutionary process over again we would see roughly the same outcomes. How can that be? The notion goes against everything I am wired to believe. I grew up incessantly arguing with my mom, who must have said a million times, if it is meant to be it will be. To which I always countered in full-throated argument, the only things meant to be are things we make happen. I never bought into mom’s fatalistic life view preferring the self-deterministic outlook that has shaped my life.
And yet What Technology Wants advances a compelling argument that complex adaptive systems will converge into recurring solutions given enough time. Kelly is claiming that evolution is reproducible. He sites the convergent evolution of eyesight as evidence. Evolutionary biologists have determined that a camera like eye evolved not just once but independently six times over the course of life on Earth. It seems that eyesight is an inevitable evolutionary outcome not a random event. Many other examples are highlighted in the book pointing to similar evolutionary convergence across the natural world including flapping wings which evolved independently three times in birds, bats, and pterodactyls.
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Saul Kaplan: What Technology Wants
Yesterday morning I found myself at Goodwill looking for a sports jacket to purchase that I had donated last week thinking it was a different — and much older– sports jacket that no longer fit me rather than the new sports jacket I bought as a present for myself over Christmas.
I was even willing to “buy back” my sports jacket –but still was going to be shrewd about it. After all, it was Goodwill and I did make the mistake of donating the wrong sports jacket but I was not willing to pay full price and was going to explain to the manager what happened and ask for a discount under the circumstances. I was even going to point out, if I needed to, that I didn’t take a “Donation Receipt” last week to declare a tax deduction when I donated the wrong sports jacket.
This is called “pre- planning” and “postioning” in negotiation strategy and is always important to do in every kind of negotiation. I figured it would probably be on sale for between $60 and $75 dollars but I had decided beforehand that my starting offer to buy back my sportsjacket would be $20 and the absolute most I was willing to pay for it was $40. In negotiating tactics this is called your “anchor price” for beginning a negotiation and your “walk away price” or your “best and final offer” (or BAFO).
I was really pleased with myself that I was remembering all of these important negotiating strategies from a course titled “Negotiations” that I took over a decade ago while pursuing my MBA. And I was grateful I had such a great professor for that class, Dr Tom Byrd at Bellarmine University.
Unfortunately, Dr Byrd never told us to avoid putting ourselves into really stupid negotiating situations like the one I had gotten myself into. That would have been really helpful to me now–even more helpful than all the great negotiating tactics he taught us. I think I’ll suggest Dr Byrd include this pointer about avoiding dumb negotiating situations for his future classes.
As it turned out Goodwill no longer had my sports jacket. But I would have been ready to negotiate adroitly for it if they had. And apparently someone got a really good deal on a nice new sports jacket before I could buy it back at a discounted price applying what I had learned in my Negotiations MBA class.
But to tell you the truth, I now wish I had taken the course in “Bargain Shopping” instead of that silly negotiations course.
During my six years as an accidental bureaucrat, after spending twenty-five years in the private sector, my friends often wondered how I could do it. They routinely asked versions of the question: doesn’t government move too slowly for you? My standard reply was that, yes, the public sector moves slowly – but then, big companies don’t move so quickly either. And come to think of it, I teased my friends in higher education, colleges and universities move more slowly than either business or government! The point is, all institutions move slowly.
What surprised me wasn’t how slowly the different institutions moved, but the different language, behavior, secret handshakes, and views of each other I found across sectors. Xenophobia runs rampant within public, private, non-profit, and for-profit silos. Each silo has created its own world completely foreign to inhabitants from other sectors. Visiting emissaries are always viewed with skepticism. (”I’m from the government and I’m here to help …”)
One epiphany from my immersion into the non-private sector is how strenuously social sector organizations resist the notion they have a “business model”. Non-profits, government agencies, social enterprises, schools, and NGOs consistently proclaim that they aren’t businesses, and therefore business rules don’t apply.
Well, I’m sorry to break the news, but if an organization has a viable way to create, deliver, and capture value, it has a business model. It doesn’t matter whether an organization is in the public or private sector. It doesn’t matter if it’s a non-profit or a for-profit enterprise. All organizations have a business model. Non-profit corporations may not be providing a financial return to investors or owners, but they still capture value to finance activities with contributions, grants, and service revenue. Social enterprises may be mission-driven, focused on delivering social impact versus a financial return on investment, but they still need a sustainable model to scale. Government agencies are financed by taxes, fees, and service revenue, but are still accountable to deliver citizen value at scale.
The idea that business models are just for business is just wrong. Any organization that wants to be relevant, to deliver value at scale, and to sustain itself must clearly articulate and evolve its business model. And if an organization doesn’t have a sustainable business model, its days are numbered.
It may be, however, that the model is implicit rather than explicit. It’s amazing how few organizations can clearly articulate their business model. Can yours? If you ask any ten people in your organization how it creates, delivers, and captures value, will the answers even be close?
If not, it’s probably because, in the industrial era when business models seldom changed and everyone played the game by the same set of well-understood industry and sector rules, it wasn’t as important to be explicit about business models. Business models were safely assumed and taken for granted.
That won’t work in the 21st century when all bets are off. Business models don’t last as long as they used to. New players are rapidly emerging, enabled by disruptive technology, refusing to play by industrial era rules. Business model innovators aren’t constrained by existing business models. Business model innovation is becoming the new strategic imperative for all organization leaders.
Perhaps the most important reason for developing common business model language across public, private, non-profit, and for-profit sectors is that transforming our important social systems (including education, health care, energy, and entrepreneurship) will require networked business models that cut across sectors. We need new hybrid models that don’t fit cleanly into today’s convenient sector buckets. We already see for-profit social enterprises, non-profits with for-profit divisions, and for-profit companies with social missions. Traditional sector lines are blurring. We’re going to see every imaginable permutation and will have to get comfortable with more experimentation and ambiguity.
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Saul Kaplan: Business Models Aren’t Just For Business
I have had the privilege several times in the past year of being around Jack “Goose” Givens on a business matter.
Our fist interaction was through an email introduction that asked me if I knew Jack Givens and copied him. I responded, “Are you kidding me? I’ll never forget the night back in 1978 when Jack Givens and I combined for 41 points and UK won the NCAA championship.” And then added, “Of course, Jack was on the basketball court that night and I was just one of 20,000 fans in the stands –but it was a great night for both of us.”
That was how I knew “Goose” Givens. 41 points and the cover of Sports Illustrated. Oh, and baseball enthusiasts are quick to point out that those 41 points was without the 3 pointer.
But that was a long time ago. I can’t say I know Jack Givens well…but after a few brief interactions I have become less impressed with Jack Givens the UK basketball star a lot more impressed with Jack Givens the smart and savvy businessman, the community and civic leader, and just all around great and gracious guy.
I am glad I have gotten to see the “other” Jack Givens. Without the UK uniform. The post-game Jack Givens. Who in his personal and professional life regularly posts the equivalent of 41 point games –and has been quietly doing so for a very long time now.
The record Jack Givens has compiled off the court since his NCAA Championship game is more impressive to me than his making the cover of Sports Illustrated for one amazing night.
And, by the way, has also been done without the 3 pointer.
In his State of the Union Address, President Obama made a big deal about manufacturing jobs as a central part of his economic vision for the country. “Our first priority is making America a magnet for new jobs in manufacturing”, he proclaimed. I support the president’s aim and passion to revive manufacturing, but to accomplish it we first have to jettison industrial era thinking. The industrial era and the 7.1 million manufacturing jobs lost in the U.S. from 1979 to 2012 aren’t coming back. We must create new 21st century manufacturing jobs that leverage what America is great at, creativity and innovation. Manufacturing will grow in the U.S. when we accelerate the use of technology to increase productivity, enable new business models designed for mass customization and unleash the manufacturers in all of us.
To begin, we need to recognize that manufacturing isn’t an industry sector, it’s a capability with plenty of opportunity for innovation. We take industry sector definitions for granted. As if industries were clubs with exclusive admission criteria and secret handshakes only revealed to companies that agree to play by understood rules. The industrial era was defined by clearly delineated industries, making it easy to identify which sector every company was competing in. It was all so gentlemanly really, as if competition was governed, like boxing, by a code of generally accepted Marquess of Queensberry rules. Companies were all assigned a numerical Standard Industrial Classification (SIC) code (now North American Industry Classification System, or NAICS) identifying which industry sector they fit in to.
Those days are over. Industries don’t work that way any more, the industrial era isn’t coming back. Is Google a manufacturer or a service provider or both? Their acquisition of Motorola Mobility and U.S. production of the Nexus Q home media player suggest Google is serious about building manufacturing capability. Is Apple a manufacturer or a service provider or both? It’s hard to tell the difference between a manufacturer and a service provider and the distinction is limiting. Today the lines are blurring. Think iPod. Apple didn’t bring the first MP3 player to the market. It changed the way we experienced music by delivering on a value proposition that bundled product (iPod) and service (iTunes). Apple didn’t view the competition as other product manufacturers. Apple is a market maker not a share-taker.
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Saul Kaplan: Tech is Destroying the Line Between Manufacturing and Services
This morning as I walked briskly from the parking lot to my first meeting I saw my reflection in a store window and thought to myself,
“I may be 51 but I have the gait of a 40 year old. Bam!”
When I see a guy wearing a “slim fit” shirt I know it is because he is genuinely slim. (I also know that I probably won’t like him and definitely don’t trust him.)
But when a guy wearing a “slim fit” shirt looks at a guy wearing a “classic fit” shirt, I wonder if he knows that “classic fit” is really just a euphemism for “out-of-shape and portly?” And if so, is feeling sorry for us and knowing we are not a threat part of the reason slim-fit guys seem inclined to like and trust us?
I have just finished going off a medication and suffering withdrawals that no woman should ever have to endure. And that many men shouldn’t ever have to endure either. And I am in that group of men.
Do you remember being stuck at the kids’ table for Thanksgiving dinner growing up? I do. There were always too many of us to all sit around one dinner table, so we had a secondary table off to the side, sometimes even in a separate room, to which the younger generation was relegated. I remember asking every year if I would be able to sit with the grownups. The conversation at their table ranged from sports to politics to family gossip, and whatever the topic it was always more animated and intense. I know why now: it’s because adults love to talk about the state of their world and how it should get better. But what an irony: those of us with the biggest stake in the future-the kids-were not even hearing the conversation. Back then, all I understood was that the main table was where the action seemed to be, and I wanted in.
These days, I do get to sit at some main tables, but I try to stay mindful of whose voices aren’t being heard there-particularly when they are young and presumed not to have anything to add. I feel this most acutely in the debates around education reform. We keep kids off to the side while the adults talk and talk and talk about how to improve student experience and outcomes. And there’s another similarity to Thanksgiving meals: a lot of loud conversation and not much action! The talk at the grownup table never stops, yet year after year the education system in the US continues to atrophy and our students fall further behind the global curve. Every 29 seconds in America another student gives up on school, adding up to nearly a million high school dropouts a year.
What if we put students at the center of the education innovation conversation? Could we get past our suspicion that they would make ignorant or irresponsible suggestions, and tap into what they know better than any of us: what works for them as learners? If we engaged kids in the problems facing schools, and gave them access to design tools, they might imagine a learning experience they would be more likely to engage in and commit to. What if we didn’t stick our youth at the kid’s table?
The notion of bringing kids into the conversation about what serves them best is beginning to take hold in various quarters. Ellen Galinsky did it in the midst of a cultural debate on whether children were better or worse off when their mothers entered the workforce. The audacious approach of her study became the title of her book Ask The Children. Architects who design the places where kids spend their time are doing more asking, too. Check out, for instance, these photos of the Erika-Mann Grundschule II in Amsterdam. “The school’s recently revamped environment is amazing,” wrote one commentator, “perhaps not surprisingly as it was designed by the kids themselves ….”
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Saul Kaplan: The Kids’ Table
Companies fail at business model innovation because they’re so busy pedalling the bicycle of current business models they leave no time or resource to design new ones.
Most companies focus innovation efforts on new products and on driving efficiencies into current models. These are important activities, but not sufficient in the 21st century when business models don’t last as long and face disruption. This means business model innovation is the new strategic imperative. In this post I outline the top 10 reasons why businesses fail to innovate.
CEOs don’t really want a new business model
The most obvious reason companies fail at business model innovation is because CEOs don’t want to explore new business models. They are content with the current one and want everyone in the organisation focused on how to improve its performance. The clearest indication is when any discussion about emerging business models is viewed and treated solely as a competitive threat.
Business model innovation will be the next CEO’s problem
Let the next guy or gal handle it. There may be a disruptive business model on the horizon but we can beat it back, pass laws to slow it down and treat it as a niche player. Sound familiar? Today’s leaders have never had to transform their business model. Tomorrow’s leaders will. Disruptive technology is everywhere and trying to outlast it is a risky strategy. Leaving the challenge to the next CEO is not a good idea.
Product is king. Nothing else matters
The lines are blurring between product and service business models. Take the iPod. Apple didn’t bring the first MP3 player to the market. Yet, the company changed the way we experienced music by delivering on a value proposition that bundled product (iPod) and service (iTunes). Industrial era thinking forces a false choice between product or service focus. A proud product heritage can get in the way.
Information technology is only about keeping the trains moving and lowering costs
“I’m from IT and I am here to help you … ” Many companies fail because IT resources are disproportionately allocated to support legacy systems. Deploying new capabilities takes a back seat. The prevalence of enterprise systems is a barrier to business model innovation.
A change anywhere within the organisation affects every function, making it difficult to develop new capabilities, let alone an entirely new business model. Enterprise systems increase the efficiency of the current business model but can be a straightjacket-constraining business model innovation.
Cannibalisation is off the table
It’s hard enough being at war with competition, so why compete internally? When executives look at new business models they see them through the lens of the current business model and view them as competition. Organisations fail at business model innovation because they blindly take cannibalisation off the table, even if a new business model may have significant upside potential.
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Saul Kaplan: 10 Reasons Companies Fail at Business Model Innovation
How many times have you heard the expression, you’re preaching to the choir? As if engaging with people who share your values and relate to your point of view is a limiting or bad thing. The adage implies that we should find other people, not yet indoctrinated, to engage with. It took me a while to figure it out, but the age-old adage is wrong. You should preach to the choir because that’s the only way to mobilize transformational change. If you want to transform anything find people who want to change, connect them with each other in a purposeful choir, and enable them to create an entirely new song. Proselytizing doesn’t work. You can’t make people join the choir if they don’t want to. Focus on people who want to be in the choir and make it easier for them to sing.
I used to believe that proselytizing worked to catalyze transformational change by convincing people who didn’t know they had to change that they needed and wanted to change. Over a thirty-year career spanning industry, consulting, and government I believed in and implemented a proselytizing model to enable change. For years I believed that if I just yakked long and loud enough, if I just put together and presented one more smart consulting deck, and if I adopted what I call my ‘Jewish Aunt” approach to management by nudging I would ultimately wear you down and you would change. It didn’t work. If people don’t want to change they don’t. Sure, there was the occasional convert and a solid track record of enabling incremental change to the way things work today. However, my goal has always been and remains transformational change. No matter how hard I tried, no matter how smart and eloquent I deluded myself into thinking I was, people who didn’t want to change, didn’t change. The 21st century screams for transformation not tweaks. We need a new theory of change worthy of the 21st century.
I have completely changed my approach and theory of change. Ten years ago I founded the Business Innovation Factory (BIF) to put this new theory to work in the real world enabling leaders to design and test new transformational business models in education, health care, and government. Now, instead of proselytizing I believe in a catalyst model of change. Don’t waste time trying to convert those that don’t want to change, find people who want to change and preach to the choir. You will make more progress that way. Allow your choir to grow organically. Trust the choir to create the playlist. Inspire everyone in the choir to be a songwriter. Celebrate and welcome diversity in your choir. The more diversity the better because the gold and best value-creating ideas are in the grey areas between our silos, sectors, and disciplines. The most effective choirs for change welcome voices from every range, weight, and timbre.
Leadership and mobilizing transformational change in the 21st century is about being a catalyst. It’s about getting a reaction started and then getting out of the way.
I remember back in high school and college chemistry learning about catalysts, the reagents used to get chemical reactions started. We need more human catalysts to help us get the transformation we all know we need started. Catalysts know the reaction isn’t about them. They know they’re starting something bigger than themselves. The social system transformation we need is bigger than any one of us. Catalysts have an important role to play but know social change will only happen by getting the choir started and getting out of the way to let the choir’s siren songs work their magic. I also remember from science class that the catalyst doesn’t get used up in the reaction surviving to catalyze another day!
A catalyst model of change is about creating the conditions so people who want to change can connect with others like them to create purposeful choirs. Leadership is no longer about command and control or about moving human capital around the organizational chessboard. Leadership is about inspiring random collisions and connections in purposeful ways to solve real world problems. It’s about creating the conditions to catalyze engaged choirs both within and outside of the organization. A catalyst model of change isn’t about pushing ideas down trying to convert the uninterested masses it’s about pulling ideas up to find their choir. We need to catalyze self-organized choirs around the world enabled to explore and test transformational ideas and approaches at a scale equal to the scope of the social challenges we face. Go ahead and preach to the choir.