How paradigms form – NYT article

During a conversation with Denis Dutton (of the always good Arts and Letters Daily) he pointed me to a fascinating article about the formation of the current paradigm that surrounds popular thinking on diets and heart disease. There’s a great extract which gets to the heart of the matter (excuse the pun – which you’ll understand if you read the article) :

We like to think that people improve their judgment by putting their minds together, and sometimes they do. The studio audience at “Who Wants to Be a Millionaire” usually votes for the right answer. But suppose, instead of the audience members voting silently in unison, they voted out loud one after another. And suppose the first person gets it wrong.

If the second person isn’t sure of the answer, he’s liable to go along with the first person’s guess. By then, even if the third person suspects another answer is right, she’s more liable to go along just because she assumes the first two together know more than she does. Thus begins an “informational cascade” as one person after another assumes that the rest can’t all be wrong.

Because of this effect, groups are surprisingly prone to reach mistaken conclusions even when most of the people started out knowing better.

So what does this lead to?

The informational cascade morphed into what the economist Timur Kuran calls a reputational cascade, in which it becomes a career risk for dissidents to question the popular wisdom.

What “popular wisdom” will you question today?

Economist special report on innovation

Fresh off the virtual presses is a special report on innovation from The Economist.  My colleague – and founder of Innovaro – Tim Jones was interviewed for the section and shares an insight on innovation in the mobile industry in Africa.

At the moment the whole report is available as a free download here.  First glance looks damn interesting, with a plethora of bloggable insights… (stay tuned)

Gary Hamel on management innovation

The HBR is publishing excerpts from Gary Hamels latest book. It’s an interesting read, especially when he starts discussing management innovation.

Not all types of innovation are created equal. When focused on big, chunky problems, management innovation possesses a unique capacity to create difficult-to-duplicate advantages. Why? Become some heresies are more heretical than others. You, for example, would probably find it easier to adjust your fashion preferences than to transpose your religious beliefs. Similarly, most executives find it easier to acknowledge the merits of a disruptive business model than to abandon the core tenets of their bedrock management beliefs.

This discussion leads naturally to how you break paradigms. In my experience across a number of sectors this is extremely hard to do. As Gary points out, it’s akin to challenging religious beliefs. However once you do change a management system, the results can be very powerful – a conversation with Ricardo Semler would be proof of that.

You can’t tell people to change a paradigm, especially when they are not even aware that they are stuck on one. If you take the view that most people in senior management are intelligent and capable of learning, then you have to lead them on a path of discovery. First hand exposure to new business models, discussions with people outside their sector and experiential learning are all methods that I’ve found very effective. It’s possible to kick start the thinking in a three day event (just don’t call it an ‘off-site’), and then support it over a longer period. Once you see the changes starting, it’s extremely rewarding (on many fronts).

The new symbol of innovation – the daffodil bulb

Over at Endless Innovation Dominic points out that GE, “the very company that gave birth to the light bulb is scaling back its light bulb business,” as energy efficient bulbs take over.

Dominic points out that as a symbol of innovation, the light bulb is completely overused, and I thoroughly agree. He poses the question – if GE is killing the lightbulb what is the new symbol of innovation?

Here’s my suggestion – the Daffodial.

Now those of you who aren’t thinking – “Damn – that’s brilliant!” , are probably saying “What the hell??”

It’s quite simple really – there’s so many parallels between innovation and daffodials :

  1. Daffodials are bulb flowers that get planted in the ground with a lot of energy and fuss, and then forgotten about for a while.
  2. Because they’re planted underground, people can quite happily walk over them until something starts to appear.
  3. Some of them die off when they are still deep in the ground, but nobody worries too much – it’s part of the process.
  4. When they flower, people smile.
  5. Flowering daffodials attract crowds.
  6. When they do flower, they look fantastic, and people gather around to make sounds which generally include the letters “a” and “h”. As in “Aaahh, don’t they look great.”
  7. Some people try and pick some of the flowers to take with them hoping that they will have a little of the magic. They forget about the months the plant spent underground.
  8. Daffodials come from bulbs, bulbs were the old symbol of innovation and so….well…you get the idea.
  9. Daffodial flowers look great. Almost as good as the margin created when an innovative product disrupts a market.
  10. And last but not least, too much manure will kill the daffodial.

The symbol of innovation

Inspiration in unexpected places

From an article in the FT (admittedly a while ago, but I’m playing catchup) comes this great little quote about the Edinburgh Fringe Festival:


Holidaying executives, hoping to recharge amid all this artistic experimentation, might not expect to pick up ideas to take back to work with them in September. But perhaps they shouldn’t switch off their business brains altogether. As William Taylor and Polly La Barre pointed out last year in their entertaining book, Mavericks at Work: “The Fringe is more than performance art. It is a colourful symbol of the performance of open-source innovation.”

Humility

Slightly off topic, but worth noting an article in the recent issue of Technology Review. It’s an extract from the autobiography of James Watson.

Never be the brightest person in a room

Getting out of intellectual ruts more often than not requires unexpected intellectual jousts. Nothing can replace the company of others who have the background to catch errors in your reasoning or provide facts that may either prove or disprove your argument of the moment. And the sharper those around you, the sharper you will become. It’s contrary to human, and especially to human male, nature, but being the top dog in the pack can work against greater accomplishments.

Leapfrog Innovation – Zune vs iPod

Apple is a great example – probably the best – of a company that keeps one step ahead of everyone. While other companies rush to copy the current product line, Apple is already about to release the next “big thing.” It not only releases a new product, but it kills off the older lines -the ones the others are copying.

For example while companies were trying to copy the iPod Mini, Apple brings out the Nano. The Mini was the most successful MP3 player of all time. And Apple killed it off.

Now, while others are trying to emulate the iPod Classic, it brings out the iPod Touch. One of the companies desperately trying to play catchup is Microsoft, with it’s Zune player. It has just released a new version of the player – a scant few weeks after Apple leapfrogs once more.

The BBC has an article which contains a quote which captures this nicely :

“This device with the all-too-familiar dial wheel compares reasonably favourably with last generation iPod players,” said Mark Mulligan, analyst with Jupiter Research.

“Microsoft needs to come at Apple from an unexpected angle but at the moment it is Apple with its new iPod touch and nanos that is shaking up the market,” he said.

So how does Microsoft do this? By ignoring what the others are doing, and starting to explore outside the normal design boundaries. At Innovaro we do this with our ‘Futures’ programmes which bring in perspectives from sectors seemingly unrelated to that at hand. For example, with the current Technology Futures programme we ran for Shell Gamechanger this year, we had insights from world experts in areas as diverse as genetic engineering, architecture and superconductivity.

As with the last programme we ran in 2004, this has produced a series of invaluable inputs to Shells strategic planning, so much so that we will now be running the programme with a much shorter gap between the iterations.

But back to Apple – my bet is that within the next 18 months Apple will kill off one it’s current iPod lines and release something that is again revolutionary – and which will catch competitors off guard.

Microsoft trys to copy Apple, but produces a lemon.

Disruptive business models – the music industry

Radiohead is conducting an interesting experiment in business model innovation. While musicians are known to be creative, their contracts with the more conservative parts of the music industry generally stop them innovating their way out of business. As it is not currently tied to a record label, the band is not bound by the same rules, and has decided that not only can fans download their new album online, but they can also decide how much they should pay for it. A spokesman for the band said :

“Although the idea is that you can decide what you want to pay, most people are deciding on a normal retail price with very few trying to buy it for a penny.”

How would your customers react if you made the same offer to them?

UPDATE : IFTF has more here.