By saher sidhom, firstname.lastname@example.org
This is a paper based on the TEDx Kiruna Talk I did on the 5th of June 2013. The talk could be watched here: http://j.mp/14osKmqThis paper covers slightly more ground with one or two modifications to the talk and more material not in the talk.
I RUN FORGE AT AMV. It is a new division within AMV BBDO London. Its mission is simple: to make new money from new technology. We do so by tracking disruptive technologies that will change the game for our clients and work to explore, experiment and exploit these technologies to create new products and new ventures. This is relatively new for the communication industry. Traditionally, the business model for advertising and production agencies has been time and materials. The fee-based model is becoming
a. Harder to sustain due to the major squeeze clients are enforcing through procurement.
b. It is actually largely irrelevant in a tech led world.
The real shift in my view is how technology has transformed and will continue to transform any business not just the advertising business. At FORGE this presents itself with both a challenge but fundamentally a brilliant opportunity for advancing our industry.
SUSTAINABILITY IS A FALLACY. It’s partly the industry’s fault that it hasn’t evolved as it could have. In many ways, a great deal of effort has been put into sustaining the existing business models of time and materials instead of evolving it. For an industry renowned for its creativity, it failed to imagine a better future for itself. A talented colleague of mine: Andrew Pinkess often points out there is no such thing as a sustainable business model anyway. In the business world competitive advantages that used to be maintained for 40 years are now down to 12, 5 and even one year. The mission should be how to adapt and innovate rather than chase fantasies of sustainability.
CHANGE IS PREDICTABLE. It’s fashionable to bemoan change and how everything is changing. Really? Is that really a new phenomenon? Actually, the way change changes, is highly predictable. It follows a fairly predictable cycle of birth, growth, maturity and decline. However few companies have a dedicated strategy to look for their next business model. The common strategy is sadly no more than playing ‘catch-up’ and often missing the next wave of innovation that will build new business growth areas.
Needless to say, various studies have shown that companies and organizations that constantly look out for their next competitive advantage and have a clear strategy and commitment to innovation succeed and stay in business more than those that just focus on the day to day business and get stuck in low growth over supplied market and shrinking margins.
TO INNOVATE IS TO ADAPT. The evolutionary metaphor is quite apt for the way our tech-based capitalism works today. As the speed of change increases and as models rise and fall in six months it is the fast and the adaptable that will survive. Those that innovate their way out of problems with every technological disruption are those that are likely to survive longer. However, what kind of innovation are we talking about?
THE SANDWICH AND THE SPAGHETTI. The old model of enterprise as a discrete entity that has a beginning, middle and an end is not unlike a sandwich. Neat, packaged, discreet and stand-alone. However, if you consider the way a modern enterprise today has to function it is really hard to distinguish where it begins and where it ends. It has become more like a plate of spaghetti. As technology becomes the base of everything companies cannot afford to think just of their own value chain. The emphasis shifts towards eco-systems of value. Something that perhaps resembles the value net from game theory is more true to today’s business game. A phone manufacturer 20 years ago used to be concerned with developing the physical phones with little or no attention to what might be in them in terms of software. Today a company like Apple makes the hardware and builds an eco-system for external developers to build on its platform. Even Apple with all its might couldn’t have built the billions of apps on its store. Technology forces us to collaborate and ‘open-up’. The open source movement has disrupted industries as diverse as telecoms (skype), software engineering (Microsoft) and knowledge (Wikipedia)
Yochai Benkler the professor of Entrepreneurial studies at Harvard and author of The Wealth of Networks sums this up elegantly:
“The world is becoming too fast, too complex, and two networked for any company to have all the answers inside, this is not fashion this is deep change”
A friend of mine; matt, just launched a startup that uses somebody else’s API. He’s built a wonderful app for estate agents in Berlin, however he couldn’t have built a new product without Apple’s platforms and devices and without the supplier of the open API for the properties he features. By building on each other’s platforms new value is created. In short, I submit that you cannot spell capitalism without ‘api’. The principal applies to the entire way we do business today not just in terms of integrating technical platforms to create something new. Prior to api’s, big data, crowd funding and Apple-style eco-systems the classic drivers of collaborative innovation have been: cost-reduction, globalization and morphing of sciences. Add all that up and it is the perfect storm for collaborative innovation. It is a fundamentally different way of working that sadly despite its necessity and promise has its own barriers for implementation. This is especially true in large and established businesses.
BARRIERS TO COLLABORATIVE INNOVATION IN BIG ENTERPRISES. Throughout the years I often encountered the same barriers to collaborative innovation. Even in small startups that are meant to be the masters of it. The biggest barriers I encountered are actually psychological, not financial or technical. Here are my top three:
Whenever I set out to cast for individuals to be part of a CI team the biggest challenge was finding people who were prepared to be more than their job titles. I’ve seen it time and time again; somebody might walk into the project as; let’s say, a project manager and walks out a designer. The ability to go beyond self-limiting perception of one’s role is one of the biggest things that get in the way of innovation. Scale that to company departments or entire companies and you’ll get personal and corporate identities tied to a specific (and understandably) reliable definition. Yet, the nature of innovation often demands venturing well out of comfort zones to solve problems that realistically nobody has tried within the team. Self-perception of one’s skill and role severely hinders one’s ability to try to do and be what they’ve never been. The second biggest barrier I found was that of trust.
If you think about it most business training whether in business schools or on the job is an elaborate exercise in learning how to compete. Yet, how much training if any is given to executives or potential business leaders on how to collaborate and find win-win models for operation? Whether you are in the communication business or the technology business I am sure you’ll find your own examples of epic battles between giants who clash over patents and over stealing advantage from their own suppliers never mind competitors. Hyper-competition breeds distrust at all levels: at the personal level, at the contract level and at the IP level. The typical innovation lab is run by white men in white coats behind white doors and protected by armies of worried lawyers. I know a famous tech company where you are not allowed to go to the toilet without being accompanied by one of the company’s employees. Hardly inviting of collaboration. Finally, the biggest barrier perhaps is the fear of failure.
Various studies show high mortality rates for startups, new ventures and new technologies. For every instagram, tumblr and a Dyson vacuum cleaner there are millions of failures. In fact the mortality rate of startups is around 75% according to Erik Ries, author of The Lean Startup. Innovation is a high-risk high reward game. Few are equipped with the necessary courage and vision to develop an approach to managing their fear and more importantly inspiring courage and appealing to the innate sense of curiosity in their collaborators. The Swedish explorer Johan Ernst Nilson said this in his TEDx talk,
“The higher the mountain the more difficult to climb the more beautiful the panorama”.
But these mountains are big and scary ..,
… only, if you are climbing them alone.
So what do we do about all that?
HACK AND HUSTLE. TOGETHER. I always believed that a mixed up world is a more interesting place. As our world becomes more x-disciplinary, x-sciences, x-cultural, x-technological and x-border I designed a collaborative innovation process that is essentially a week-long hack week. The first one I did at my current workplace involved
2 in pilot
(My TEDx talk has a Hackumentary of the above experience).
The comment I would make about this is: that despite the hard work and the severe pressure everybody was under; no one would have wanted to be anywhere else or with anyone else. Everybody was there because they wanted to and because they wanted to work together. So here are my basic seven principals for getting diverse talents around a problem to collaboratively innovate.
7 PRINCIPLES FOR COLLABORATIVE INNOVATION. I found these principles incredibly useful in creating the sorts of teams where the thrill of doing something amazing is bigger than the fear of failure.
1. MINDLESS OPTIMISM. No invention is possible without it. I firmly believe that you have to be insanely optimistic in order to innovate. Or if you prefer, crazy enough to think you can change the world. Without a super human will to change the world nothing genuinely original and adventurous is going to happen. One of my favorite examples of this is an ad put out by Ernest Shackelton, the polar explorer, when he was recruiting a crew to journey into the un-known:
“Men Wanted for a hazardous journey, small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful, honor and recognition in case of success.” Ernest Shackleton 4 Brulington st.
Now, you have got to be crazy to apply, … or curious, optimistic, inspired and excited by the un-known and probably terribly bored with the mundane. Think of the perfectly predictable false sense of security that comes with ‘smart’ analysis. For example, the last sales projection you’ve made on a spreadsheet with tons of assumptions that probably have more in common with astrology than astronomy.
Innovation is a long and hard road often with unclear outcomes, if innovators knew what they were doing it wouldn’t be called innovation. Yet, optimism is vital to that journey, it’s infectious, and it’s a virtuous circle that creates the right kind of positive energy that is needed to solve the kind of impossible problems to turn them to possibilities. There are a million reasons why things can’t be done and a million cynics posing as serious know-it-all pragmatists. In my view pragmatism is the enemy of optimism unless it’s fully employed in its service.
Meet my students at Berghs School of Communication in Stockholm. All 25 of them decided to collaborate on a crazy project. They wanted to see how far they could go with their ability to come up with ideas. They set themselves a ridiculous challenge. They invited ten clients to give them a brief each and then they locked themselves up for 25 days with a mission to create 25 thousand ideas. To see and learn and discover everything they can about ideas. Big ones, small ones, silly ones, important ones and impossible ones. It’s probably the best exercise I have seen to train young creative and innovators to learn how to come up with lots of ideas. And be able to handle the variety of possibility and understand the nature of ideas not unlike how a master carpenter knows how to craft beauty out of any type of wood. Each client got 2500 ideas and they have built and sold two of the clients and they are several talks about producing more. This for me is not an exercise in brainstorming this is an exercise in being totally optimistic about the power of creativity. These 25 students have learnt about the nature of ideas in 25 days on their own more than I could teach them in a whole year
Video case study: http://j.mp/19sKIei
The thing about mindless optimism is to ignore the doubters and more importantly the established well laid paths in the ground to discover your own personal and collective spirit of adventure. With that in heart, innovation becomes a lot easier. Just as mindless optimism is essential for innovation the other side of that coin is also vital: avoid the doubters like you would avoid the plague.
2. CIRCLE OF TRUST. There is a romantic comedy: Meet the Fockers, where Robert De Niro is concerned about admitting his new son in law to his family or as he puts it: enter his circle of trust. This is funny in the movie but I find the idea of the circle of trust deadly serious in a collaborative innovation project. In our hack week there were super senior people who run big chunks of business, a 19 year old games designer, a young creative team a not so young world famous creative director and an ex-marines officer, all working at the same level, same room, same table and towards the same goal. They were all part of the circle of trust. The way to overcome the identity barrier I mentioned before is to ensure people connect fundamentally on a human level not with the job titles of the other people in the room. I found two fundamental ways of creating a circle of trust in the team. The first is what I call it Spartan Casting, based on the Greek legend of selecting the best warriors to be part of the best military in ancient times. My way of doing that is ensuring that everybody who was in that team was best in class in what they do regardless of their age, gender or affiliation. In the film industry there’s a saying: 60% of directing is in the casting. If you got the casting right the directing will be a natural process. By getting the best people I can to be in each team, the better the chance they’ll connect with each other because they know they’ve been selected to be part of something special and because they are good at what they do. This generates instant respect, which precedes trust. The second rule for creating the circle of trust is creating social capital in advance of the work. Getting the team together to get to know each other on a level that is utterly informal and un-manufactured gives them the opportunity to connect with each other as human beings not with each other’s job titles. This might sound a bit hippy, but seriously, just try and remember the last corporate away day when you’ve genuinely connected with somebody and felt like you could climb a mountain with them.
3. GIVE THE FREEDOM TO FAIL BUT PLENTY OF ROOM TO SUCCEED. The first thing about understanding what holds people back in collaborative environments is the uncertainty of the outcomes and the ownership of the outcomes. Therefore, before anyone enters the room everybody should be on the same starting point of shared risk, shared reward but ultimately shared expertise. The trust barrier plays a major part here, to overcome any trust issues the ground has to be prepared to protect the contributions of everybody in the room. Years ago I was in a food related startup that was failing miserably and we decided to dissolve it. We got acquainted with an Italian guy who specializes in buying failing companies. He buys them, splits them apart and sells the pieces. When we were in discussions with him I learnt an important lesson from him. Having the wrong contracts can be deadly. He was giving us very little value for our stuff and I argued intensely over it he very calmly said to me in Latin: Verba Volant, Scripta Manant. Which means, words fly, what’s written stays. If it is not in the contract we don’t get it. Since then, I hated contracts because they are usually designed to divide and punish in case of failure. Years later, I decided to write my own contracts in order to do the opposite. To ensure that people’s contributions are protected and more importantly they are motivated to contribute their best ideas because they know they’ll get a fair share of collective success instead of holding back their best stuff. With the right and fair basis for the engagement a different type of contract sets in. A psychological one where success depends on how well we collaborate instead on how well we fight over a share of the idea.
4. BURN YOUR SHIPS. There is a popular piece of mythology in entrepreneurial cultures called burn your ships. The story goes something like this: a navy leader lands on the enemy’s shores, whilst totally outnumbered by the enemy, instructs his sailors to burn their ships. They ask him; ‘why?’ and he says; “the only way is forward, outnumbered or not, we are not going back. If we lose, our enemy will burn our ships anyway so we might as well do it ourselves and win”. I find this interesting because the moral of the story for me is really about intense focus. Without it, distractions, doubt and easy excuses sap the energy and the passion that needs to go into the innovation process. So, in order to make sure that our innovation process works I clearly draw a clear beginning and a clear end for each of the days. Day 1 is totally about locking down the idea by the end of the day, because day two is all about scoping the idea. Day three develop and build etc. Because the teams know that there is no way there can be spillage from day one to day two they are totally focused on delivering on the mission for the day. This intense focus quickly weeds out any in-efficiencies and any redundant thinking or doing. It also sharpens the instincts on getting the right idea and then getting the idea right. One of the development companies I work with has a simple hangman game. Every time somebody distracts a developer from their work a stick is added to the hangman on the board. By the end of the week if any individual adds the final stick they have to buy the entire team dinner. It is a simple illustration of the need for developers and technologists to be given the room to focus totally. There is a reason most of them typically code through the night to avoid the silly distractions of daytime work. The environment itself has to be out of bounds. I ensure that nobody disturbs them during their work, no-unwanted guests. No doubters anywhere near them.
Intense focus is what allows them to get into a state of ‘flow’. The psychologist Mihaly Csikszentmihalyi identified (http://j.mp/1aso6Zw) an optimal experience he calls ‘flow’ where the level of the challenge is high enough and is matched by a high level of skill. When someone is working at a high level of skill and challenge they achieve this almost transcended level of activity. Intense focus, delivers a feeling of ecstasy that allows them to attack the impossible in a way that is; despite its difficulty; highly pleasurable and gives the feeling of something larger than oneself.
Zach Klien; the co-founder of Vimeo has a brilliant way of describing this ‘flow’ / intense focused experience:
“The most interesting place to be is the place that allows you to be most focused. And when you are that way you, I think, are really at your peak. I think it’s when you are most comfortable with yourself. I think it’s when you are most attractive to other people that you are bound to be interested in and you sort of become magnetized, you find also other people who are driven to make the same things and it puts you in a really creative place where there’s no fear, where people are just really happy about the things they are making together. And it’s in this space that you achieve the greatest things creatively.”
Creating a protected environment where the mix of high skills, high challenges and intense focus can give birth to truly brilliant ideas and solutions in a fraction of the time it takes to do things in the fragmented, disjointed and typical processes of everyday work life.
5. SMALL PROTOTYPES FOR BIG IDEAS. Fast progress is essential to harnessing the emotive energy of new ideas. Prototyping quickly and badly is essential in order to bring to life abstract ideas into a real world. Only then we get closer to a version of the truth that we can build on. Prototyping is a vital step in the process. From the moment a problem is clearly defined and ideas emerge getting those ideas to have a physical life is vital for enabling the teams to understand two things: the constraints of the idea and its potential. Most people have been taught to think first before acting or ‘think before you leap’. I would argue the reverse. My position is when you are making something you are actually thinking with your hands. You cannot think your way into a new way of acting but you have to act your way into a new way of thinking. Prototyping is the means to do that. I was told about a problem that is ripe for an innovative solution recently. Large vehicles often have large blind spots that means they cannot see cyclists coming up from behind them. This is a major problem in London due to the traffic, lack of cycle lanes and the noise drivers can’t see, or hear cyclists coming up from behind. This is resulting in an un-acceptable and high level of fatalities. When I first heard about the problem I almost instantly came up with an idea based around restoring the communication breakdown between the drivers and the cyclists by means of using sensors and AV alerts to the drivers to stop or slow down if there was a cyclist in the blind spot and if the cyclist was in immediate danger they can press a smart bell that sends an extra alert to the driver to ensure they are fully aware of the hazard. This project is in research at the moment but the point about prototyping here is important. From the moment I heard about the idea and got the team to make the first prototype it took 8 hours. Four of these hours were spent at Hamley’s the toy store trying to find a fun car to hack for the prototype the other four hours were spent coding and soldering the sensors. The second prototype took 2 weeks; there was a lot more sophistication built into it in terms of developing the right technology given all the real life issues. The third prototype is taking 3 months as it goes through piloting and empirical testing.
After 8 hours …
After 2 weeks …
Prototypes are not the only for testing the concept. They are a means of proving the concept, the technology, the manufacturing process, the in real life application and most importantly the business model that goes with it. I personally see the whole prototyping process as a perpetual way of proving it wrong but making it right. Any innovation product changes shape the minute it is touched by a customer. The whole process is in the spirit of agile development.
For the un-familiar, the agile manifesto serves as a good introduction:
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan
Agile really makes sense for innovation projects when the outcome isn’t entirely known, (as opposed to waterfall or typical gateway led innovation processes). It shifts the focus on the activities that add real value to the innovation itself as opposed to add value to the people who happen to be involved in the project. It purifies the process and puts a huge emphasis on the activities that generate the most value not the ones that takes away value from it. In short, all the virtues of rapid prototyping and agile give us a better and quicker shot at bigger ideas – not bigger projects.
6. ART OF THE POSSIBLE. There is an interesting story about evolution. The theory is of-course accredited to Charles Darwin. It took him 5 years worth of travel and discovery to come up with up with natural selection. But a little known fact is that he actually re-wrote the book on evolution 6 times in his lifetime. The bible of evolution had to evolve and its author had to revisit his grand theory in totality six times.
Another of my favorite stories in that vein is about Sir James Dyson the inventor of the bag-less vacuum cleaner. From the moment he got the initial idea to making his first prototype it only took 1.5 hours. Yet, it took him ten years to launch and sell it in his home country, the UK. He actually had to sell it in Japan under a totally different business model (via catalogues) in order to establish the product and the idea. Only then he managed to get back to the UK and sell it under a more classical retail business model. There will be barriers. There will be people who won’t understand what you are talking about. There will be failures. There will be many twists and turns in the journey. As well as the high failure rate due to many factors, for example: 30% of startup founders leave the original teams. Paul Graham the founder of Y Combinator remarked:
“Startups fail when founders give up”.
But what about those that do not fail? What do they do differently? Do they stick together more? Don’t they get tempted to give up? I looked into this and apart from all the usual stuff around leadership, determination, beliefs etc they all seemed to do something a lot more practical;
Pivoting is giving up. Giving up the original business model or product idea. Finding an alternative way of succeeding that might not necessarily be what they thought they would be doing. Startups or innovations that last for the first ten years change their business model on average four times. They adapt their business model, they change their product, and they might start off doing a consumer product but end up being a data company. They pivot. The ability of a new venture to adapt and flex around what its success profile is an essential part of survival. Ironically, if you look into the histories of large and old and established companies you will find that they made some strategic pivots along the way. Perhaps not as fast or frequently as a tech startup might do (4 in 10) but pivot they did. For example, Nokia started by making paper, then electricity, then rubber, then phones then Internet and no doubt they will change again as the world changes. Innovation and new ventures are surely not for the faint hearted but for those that are blessed with the evolutionary ability to adapt and respond to change. The art of the possible is really about the art of the pivot. Here is a mini list from Mashable of pivots that you probably didn’t expect:
YouTube started as video dating site.
PayPal was originally a way to exchange money via Palm Pilots.
Flickr was had roots as an online-role playing game.
Groupon was originally a cause related enterprise.
Twitter was a side innovation originating from hackathons around podcasting.
Instagram was originally a blend between Foursquare and Mafia wars.
The founders of all these embody the art of the possible. They pivoted. They evolved. And that is; the art of the possible.
7. MASS LINE LEADERSHIP. Typically in most organisations in the world leadership is a one-man job. Often, with titles such as; president, CEO, Chief etc. We have grown up in the business world expecting a singular individual to bear the weight of responsibility for what seems to be, well … everything. But we live in a world of social production, a world where a 26 year old doesn’t have to wait 40 years to lead a multi-billion company, where youth trumps experience, where the collective makes better decisions than experts, where Google effectively outsources relevance to the millions of people using it and deciding in aggregate. Where eco-systems and spaghetti like companies need to be extra capable of having leadership mass distributed instead of bottle necked at the top. Where decisions could be made competently at every level. Where funding could be crowd funding, where software could be open sourced, where access to talent is un-filtered where knowledge is free and accessible and where innovation is truly open to anyone and everyone. One of my favourite examples at the time of writing this article is from Kickstarter, the crowd-funding platform. ARKYD is a people funded satellite. The idea is you can fund it and use it to take your own pictures from space or put images of yourself on the satellite and take pictures of yourself with the real earth as background. It is a really simple and charming idea yet impossible to achieve ten years ago. The good news is; leadership of innovation is no longer constrained to a few experts and locked behind closed doors. Open innovation and collaborative models of innovation are far more exciting than the dreary and closed R and D departments of various companies. Innovation is truly open to each and everyone and what comes with that is the ability not only to collaborate with strangers to concept and develop but ultimately to open up and share the responsibility from one individual to the entire organization and beyond to lead and share the next stage of evolution. I firmly believe; this stage in the innovation history is fundamentally about collaborative innovation. It is really good news if you think about it. Because progress is now up to all of us.
And the future is what ‘we’ can truly make of it.