Innovation is not going to save your company. Because innovation has become a commodity? Nope.
Innovation is dead. Innovation as we have known it for many happy years, tragically died on 12.21.2012, but hardly any of us noticed.
In my book ‘ Managers The Day after Tomorrow’, I describe how we have left the Old Normal in which things were pretty simple and all interactions between companies and people were either one-on-one (1.0) (salespeople for example, you certainly still meet them from time to time) or one-to-many (2.0): companies broadcasting how magnificent they are and how amazing their products. The good old USP game, that we have been playing for a long time. We may even have thought it would last forever. It did not.
The good old 2.0 broadcasting made life simple for business. The rules of the game were well known and business models evolved slowly. The fat got fatter. The key to mass broadcasting was money and money was the result of mass broadcasting. If you spent enough money, sooner or later you would hit the jackpot. And then you could spend even more money. Companies were in control. But one-to-many has lost its power, companies lost control and business environment stopped being simple.
How did this happen?
That happended not only because mass one-way communication in itself has lost its impact, because new media took over (Remember real time television? You know, that thing before there was Netflix? When you had to live with ads? Are you old enough to remember those paper things called magazines and newspapers?), but merely because customers no longer want to be that faceless, nameless and powerless receiver of messages they did not believe anyway. (Happiness in a bottle? Really? And 5 blades on your shaver are better than 4? Why not 19 blades just to make sure?).
The Maya Calendar and the person of the year.
Customers were given the internet, smartphones and social media and while companies still dreamt these technologies would be cheap broadcasting tools and that this would create some kind of marketing paradise, consumers took the power in their own hands and became the extreme centre of their very own universes. The world flipped upside down. Companies may think this is still the good old world, but it is not. Things may look the same, but the connections are completely different. The Maya were absolutely right. The world has ended and that must have happened somewhere around 12.21.2012.
Xmas 2006: Companies could have known.
Time Magazine picked YOU (yes, you) as person of the year on Xmas 2006 (you control the Information Age. Welcome to your world). This is the very proof that companies do not read Time Magazine and not even look at the cover.
Today most companies still think they are the centre of it all.
Do ”You’ need proof that companies have not even considered ‘You’ as the centre of the world? Read their mission statements and count the number of times they mention themselves and the number of times they mention ‘You’. If only ‘You’ had a tool to claim your place.
An axe, a sword and a smartphone.
The tools are there. Yes in the palm of your hand: your smartphone and the social media platforms. In 2006 the iPhone was not there yet. That happened in 2007. Steve Jobs presenting the first iPhone as ‘your life in your pocket’. That smartphone became the most powerful tool since the axe and the sword and social media would change society for ever.
One-to-many broadcasting (2.0) became many-to-one (3.0) extreme customer centricity. Do not be mistaken here. Customer centricity is extreme. By definition. And it is irreversible. This has got nothing to do with customer focus or customer intimacy, which are the things we used to tell customers and ourselves in the Old Normal. These were just actions that companies use to take for customers untill customers simply took over. They left companies with no choice at all: companies can do nothing more than adjust. And nothing less. No more being in control.
Social media did not turn into that new one-to-many cheap miracle solution that companies thought it would be. Social media pushed companies even further out of the centre until there was no more centre at all. The many-to-many (4.0) world was a natural result. For the first time in human history over 4 billion people are connected, without there being a central authority to hold them together. The world is no longer simple and slow. It is VUCA and fast. Companies are no longer in control. Companies are no longer the leading character in their very own novels. Nobody writes the script. The script is being written by all of us.
(The CIA model, Managers The Day After Tomorrow)
Now let us go back to that thing formerly known as innovation. Companies dedicated not only time to being innovative, but also money and resources. In all kinds of formats. And now innovation is dead.
Innovation was this simple formula: one took a picture of the market one wanted to target (scoping and building ‘the case’) and started to develop a product, a service, a solution, a concept in a process driven straight line (development). In a slow evolving world of one-to-many, that was the way to go. By the time the result was achieved (gate 4), the picture taken at the very start was still more or less valid (testing and validation) and marketing and sales would do the rest (launch). Goals needed to be SMART and managing innovation was reduced to that good old checklist stuff that was called management.
In a fast moving world though, having your eyes on that one single picture is a ridiculous waste of time. The market is no longer a pond. It is a fast and wild river. It is like that cloud of birds in the sky. None of the birds is the leader. They are all potential leaders, influencers and at the same time followers. It are not the individual birds that make the cloud change, but the close formation of flight. The connections between the dots, but not the dots. Although every dot can be the cause of the changing shape, none is in control.
Once you may think you know where that cloud is moving to, the cloud changes direction. Or not. And again. And again. Or not. And than again. Businesses have to forget fixed frames (a photo), and have to realise that what they are looking at is a (fast forward) rollercoaster movie, which is an endless series of connected frames and happenings.
We can only conclude that process driven good old innovation is dead. Innovation as in a department, a meeting, a session or whatever format, is completely useless. Innovation should no longer be something that changes the way you do business. Innovation should become the very business model. That seems like playing around with words. It is not.
The Eastern mindset is going to win this game.
The end of traditional innovation is one of the main reasons why the Eastern mindset is far better adapted to this new Normal than a Western one. This is why we have to not only learn from China by imitation, but why we have to really adopt their mindset. Fast. We need to develop a mindset that doesn’t need to think about innovation. As in ‘The mindset is innovation’. The very moment we have to think about innovation, we are doomed. It is like ‘authenticity’. One can not ‘become authentic’. One is. Or is not.
Read the book. Twice.
A few years ago, I did quite a lot of work for Microsoft in The Netherlands as an independent consultant. (Yes, I have been a consultant, I admit.) I was asked to bridge business and IT and IT and business. That is how I got to know my business partners Peter Hinssen who had just written this most impressive book ‘Business/IT fusion (impressive not only because it is extremely heavy, but because the content was way ahead of its time) , Steven Van Belleghem, who I admired for his Conversation Company (and the fact that companies started to call themselves conversational companies by the dozens), and Nancy Rademaker, who was my link within Microsoft at that time. At some point I came across the reading list of Microsoft CEO Satya Nadella.
One of the books on this list (I bought most of them) is ‘The Geography Of Thought’ by Richard E. Nisbett.
I started reading it a couple of times and never really succeeded in digesting the content. I did not see the real value of the book for myself until a few weeks ago, being in China, on a nexxworks Inspirational Tour.
I was flabbergasted by China. Once more. But also like never before. One may say that ‘I saw the light’.
I had been in China very regularly in between 2004 and 2009 for Domo Contract Flooring, a company I used to run, as we tried to sell carpet tiles over there and I only went back in 2017 and 2018, for nexxworks. In 2009 Europe still seemed like being 20 years ahead of China. At least. Last year it seemed like the Chinese would overtake Europe in due time. A few weeks ago they were clearly already 10 to 15 years ahead of us. In all aspects. They evolve at lightspeed. They are that wild river, we are the pond.
The world is no longer that framed picture. It is no longer a pond. It is a fast forward movie, it is a wild waterfall. In Europe we are still chasing the pictures we took a few months or years ago, in China businesses just keep on going … with the flow. Go with the flow.
I re-read the book. With different eyes. I read it twice. You should do so too. Twice. And this is why.
VUCA is just a Geography of Thought.
The book ‘The Geography of Thought’ is not about innovation. It is about mindset. Literally. Reading the book confirmed what I had realised: Chinese are so much better adapted to change and thus to this VUCA New Normal.
Nisbett describes how the Eastern mindset has three main principles that are related:
1. The principle of change. ‘The Eastern tradition of thought emphasizes the constantly changing nature of reality. The world is not static but dynamic and changeable. Being in a given state is just a sign that the state is about to change. Because reality is in a constant flux, the concepts that reflect reality are fluid and subjective rather than fixed and objective.’ (p 174)
This a perfect description of the Volatility and Uncertainty of this VUCA world that has become our daily reality and is the major difference between a picture and a fast forward movie.
2. The principle of contradiction. ‘Because the world is constantly changing, oppositions, paradoxes and anomalies are continuously being created. Old and new, good and bad, strong and weak exist in everything. In fact opposites complete each other and make each other up.’(p 174)
One can not find a better way to explain and describe the Ambiguity in VUCA .
3. The principle of relationship, or Holism. ‘As a result of change and opposition, nothing exists in a isolated and independent way, but is connected to a multitude of different things. To really know a thing, we have to know all its relations.’ (p 175)
This is the Complexity in VUCA.
Innovation is embedded in the very Geography of Eastern Thought: ‘Change produces contradiction and contradiction causes change, constant change and contradiction imply that it is meaningless to discuss the individual part without considering it’s relationships with other parts and prior states.’ (p175-176)
VUCA it is not disruptive, frightening, disturbing,.. to the Chinese. It is just in tune with their natural mindset. It is just exactly how they perceive the world anyway.
Eastern and Western minds are very different worlds.
When the West strives for innovation
1. There is a steady, linear progress towards a clear target
2. Once the target is reached, it becomes a permanent state (maintain and scale)
3. It is reached through human effort rather than a non controlled happening
4. the target is usually based on a limited set of assumptions (the picture)
These features are in many ways the very antithesis of ‘innovation’ as it might be conceived by the Eastern mind, although it is not even perceived as innovation being a process. In the West, we perceive the world in a very specific way. We believe we are the protagonists in our very own novels, that we write ourselves. Asians see themselves rather as cast members in movies that just touch on their existences by accident.To Western business, the business environment is simple and you only have to keep your eye on the ball in order to achieve something. Execution is all important. Focus on one thing (the framed picture) and execute is what we need to do.
But if business is perceived as complex and subject to the unexpected and to constant changes (the cloud of birds) it may not matter where the ball is. Business is simply…not simple. Asians are not attempting to control the situations. They are more likely to try to adjust to them. Constantly.To Asians, the world is a complex place, composed of continuous happenings, and as such only understandable in terms of the whole rather than in terms of the parts (the cloud and not the birds), and subject more to collective than to personal control. To the Western Geography of Thought, the world is relatively simple, composed of defined objects that can be understood without their context, and highly subject to a controlled environment. Very different perceptions of the world, yes indeed.
Nisbett is a scientist. He proves that in general Easterners and Westerners have fundamentally different ways of seeing themselves and the social world. For me that was the prove of what I experienced in China. I was convinced that the Chinese business mindset is far better adjusted for the new 4.0 hyper connected, ever changing world of consumers and I can only explain the speed by which they keep changing is because they do not innovate. They just have the right geography of thought.
Let me summarize once more the most important differences between East and West when it comes to adapting to a VUCA world.
1. Different patterns of attention and perception. In the West we have more eye for detail and objects, the East is more attending to environment. The East is far better in detecting relationships between events and things.
2. Different assumptions about the composition of the world. The West sees objects, the East substances.
3. In the West we believe to be able to control the world while the East has no need to
4. The West sees stability, the East sees change
5. The West explains events by focusing on things, while the East focuses on the connections between things
6. The West organizes the world by categories and the East by relationships
7. The West prefers logical rules to understand events, while the East has no need to
What do we need to do?
Western entrepreneurs have to adopt this new geography of thought before it is too late. It seems pretty simple and yet is going to be extremely challenging. To learn, first we have to unlearn what we have learned.
We have to believe in constant change: We have to even think in constant change.
As a result we can no longer keep our eyes on just one ball, one event, one object, one thing, one goal. We need to pay attention to a wide range of events. We have to constantly look for relationships between things and have to realise one can not understand the part without understanding the whole. We have to unlearn the believe that the world is simple and deterministic. We have to unlearn to focus on isolated people or objects or events instead of the larger picture. We have to unlearn to try to control events because we think we know the rules of the game that govern the behaviour of things.
Of course this is a generalization. Not all people in the West nor the East are like this. I never realized it myself, but reading this book, made me understand I happen to have a more Eastern mind rather than a Western one. It kind of explains my constant struggles with my business environment in the past and why I was ‘different’. It also explains why I feel at home in this VUCA world.
27 July 2018