GUEST POST from Paul Sloane

How well-informed are you about the state of the world? Please try this short quiz.

How did you get on? Most well-educated people do badly in this little test. The average person gets only two or three questions right out of 13. This is because we generally hold a distorted view of the world – we see the world as much poorer and less developed than it really is. We seem unaware of the great improvements which innovation, science, capitalism and international trade have made.

The recently deceased Hans Rosling together with his son and daughter-in-law have written a powerful book, Factfulness. In it they argue that most people in the West are deceived by a global illusion that things in the world are bad and getting worse with the poor getting poorer and the world running out or resources. They claim that most people think the world is more frightening, more violent and more hopeless than it really is. In fact, real poverty in the world has been dramatically reduced and most people live in middle-income countries with good access to education, electricity, mobile phones and healthcare.

Why do we have such a gloomy and pessimistic view of the world? It is probably because newspapers and 24-hour rolling TV news programs report on natural disasters, wars and misery in distant countries. A tsunami, a car bomb or a rebellion all make for sensational news but stories about steady improvements in living standards do not. Life expectancy in Kenya increased by 10 years within the ten period of 2003 – 2013. This is quite remarkable but not newsworthy. Have you ever seen a newspaper headline stating, ‘The number of people in extreme poverty in the world has fallen by over 130,000 every day for the last 25 years’? It is an incredible but true statistic. More remarkable facts are shown in this short video:

Bill Gates is a big fan of the book Factfulness and in his blog he says that we should no longer talk about the Developed and Developing Worlds.

Another fine book which Gates likes is Enlightenment Now by Steven Pinker which makes the case that we should stand up for the great achievements of science, optimisim and reason against the voices of populism, pessimism and despair. We should make decisions based on evidence not myth or feelings. We know what works – mixed capitalist economies, the rule of law, education and trade.

Human progress over the last 50 years has been truly extraordinary. Don’t let the gloomy pessimists dominate the argument. We should sing the praises of science and innovation and trumpet the evidence of their progress.

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

GUEST POST from Paul Sloane

In 1973 Mr and Mrs Page, who both worked at Michigan Sate University, were blessed with a son.  The father was a Professor of Computer Science and the mother taught programming.  They called their son Lawrence though he was known as Larry.  At the age of six the boy was given a home computer, one of the very first models, and soon he was programming.  Larry was a precocious child and went on to study Business and Computer Science at his parent’s University.  He then applied to MIT but was rejected so instead he went to Stanford, which proved a happy choice.  It was during his orientation program in 1995 that he met second year graduate student Sergey Brin.   The two hit it off together and became friends.  They were both smart, rebellious and geeky.  They argued a lot. Page later said, “I thought Sergey was pretty obnoxious. He had really strong opinions about things, and I guess I did, too.”

Brin was born in Moscow in 1974. Both his parents were mathematicians but their prospects in Russia were limited because they were Jewish.  In 1979 they emigrated to the USA.  In a similar fashion to Larry Page, the young Sergey received a Commodore 64 as a present and programmed it.  He graduated from the University of Maryland with a degree in Mathematics and Computer Science.  In another significant coincidence he also was rejected by MIT before going to Stanford.

They were both fascinated by the World Wide Web which was exploding in use in the mid 1990s.  Page’s dissertation topic was how to assess the relative importance of different web pages.  He borrowed an idea from his parent’s world – academic research.  On way to judge the importance of a research paper is to count how many other research papers reference it as a source.  Page wanted to do something with web pages but although it was easy to see how many links went out from a page it was not easy to see how many other sites linked to it.  Then he conceived an audacious question, ‘What if we could download the whole of the World Wide Web and analyse all its links?’

At that time in early 1996 there were over 100,000 web sites, with over 10 million documents and around a billion links.  And it was growing exponentially.  Page was undaunted.  He built a Web crawler, a program which went through site by site and stored links and addresses.  The project was called Backrub and it quickly grew to huge proportions.  It absorbed over half of Stanford’s entire web bandwidth and caused the university server to crash but the University authorities were lenient and allowed him to continue.  Brin was amazed at the boldness of the project and eagerly joined in.

They were still building a Web analysis tool.  Page later said, ‘Amazingly, I had no thought of building a search engine. The idea wasn’t even on the radar.’  They built smarter ways to assess the value of a page based on the number and quality of incoming links. It then dawned on them that they had discovered the basis for a search engine of higher value than anything else around.  They developed their approach so that they not only counted the number of incoming links but assigned a higher value to a link coming from a site with many incoming links.  This was a novel and recursive method which gave greater accuracy in assessing the relative importance of sites.

Page and Brin called their search engine Google.  They wanted to use the word Googol which is the number 1 followed by 100 zeros.  But Googol.com was already taken so they settled for Google.com.  In April 1998 they published a paper explaining their approach without giving away the exact details.

In order to commercialise the project, they approached the CEOs of the leading search companies of the day – Yahoo!, Alta Vista, Lycos and Excite.  They presented their case and asked for $1m to licence their patents and tools.  In each case they were turned down. Page said later, ‘It was not a significant expense to them. But it was a lack of insight at the leadership level. A lot of them told us, “Search is not that important.”  Why did the big players make such a mistake?  They believed that the key to gaining traffic and advertising was to add more content.  They thought that people would explore the web rather than search the web.

After being turned down, Page and Brin started their own company, Google.

Insights for Innovators

Bring in an idea from another field.  Page’s great idea was borrowed from academia – using the number of external references to rank a document’s value.

Challenge assumptions by asking an outrageous ‘What if?’ question.  ‘What if we could download the entire internet and analyse all the links.’  It sounded impossible but they did it.

Find a collaborator who will provoke and challenge you. Brin and Page were both opinionated, smart and at times ‘obnoxious.’

If you can buy up a small company with a great new technology then do so before they become the competitor that kills you.

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

GUEST POST from Paul Sloane

It is clear that the internet has transformed how we shop.  More people are buying more products and services on-line than ever before.  High-street retailers and big brands are suffering at the hands of on-line merchants large and small.  There is one often overlooked innovation which has enabled this trend.  It is buyer/seller feedback.

A key component of any business transaction is trust.  Hundreds of years ago you would typically trade only with someone you could meet face to face.  Say you were a small business in Boston making shirts in 1800 and someone from Washington wrote to you wanting to order 20 shirts, how would you react?  Washington was many days ride away and you knew no-one there.  If you sent the goods would you ever get paid?  If you asked for upfront payment how will the buyer know that you will deliver?  How can you trust a complete stranger?  Much better to trade locally and swap the goods for the money with people you can see face to face.

Of course, traders took action to build trust using banks, distribution partners and retailers but there was still considerable risk that you would ship goods and not be paid or pay for goods and not receive them.

Fast forward to 1995 and there is a nascent on-line auction company called Auctionweb based in San Jose.  Its founder was a French-born Iranian computer programmer called Pierre Omidyar.   The internet allows someone with something to sell to find someone who wants it on the other side of the country but how can you trust a complete stranger?  In 1997, two years after it was launched, the company introduced the idea of buyer/seller feedback.  Both parties rated the other after a transaction. It was a simple but brilliant concept which allowed sellers in particular to build a ratings history and engender trust – a key component of business.  It was the key advance which enabled the dramatic growth of the company which in the same year of 1997 changed its name from Auctionweb to eBay.

Online feedback is now so commonplace that we take it for granted.  It is fundamental to all sorts of businesses.  Think of Airbnb.  Would you rent a room from a stranger without references?  Probably not.

We tend to think of e-commerce innovations in terms of big technology advances like Paypal or blockchain.  We tend to think of the value of service innovations in terms of faster service or reduced cost.  Buyer/seller feedback was technically simple.  Its benefit lies in improving an intangible – trust.  Buyers use feedback ratings to judge whether to use an Uber driver, whether to use a Taskrabbit worker, whether to select a hotel on Tripadvisor or a book on Amazon.

By 2018 eBay had revenues of $10B with 170 million users and 1 billion items listed.  And all because of an innovative feature which increased trust between buyer and seller.

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

GUEST POST from Paul Sloane

Spigit is a leading innovation management software company.  They recently published a research paper entitled ‘Quantifying a Culture of Innovation.’  Northwestern University’s Kellogg School of Management carried out a study of data from 154 corporate customers of Spigit over a five year period.  The findings are instructive.  They report a significant correlation between ideation rates (generating good ideas) and profit growth.  They found that four factors were particularly important for success with innovation and growth.

1. Scale of activity – the more people who participated and the more ideas the better.

2. Frequency – the more brainstorm and ideation events the better.

3. Engagement – the more active participation by people the better.

4. Diversity – the more diverse the participants in terms of roles and departments the better.

They use a metric called Ideation Rate which they define as the ration of winning ideas to active participants.  A winning idea is an idea submitted for a specific challenge which is voted upon by colleagues and rated as promising by evaluators.  The study found a significant correlation between Ideation Rate and profit growth.  They give a good Ideation Rate as 500 ideas per 1000 users per year.

They measured engagement by the level of peer voting on ideas – on average this is about 5 votes per user per year.  In the top 10 most successful companies there were 10 votes per user.

Another finding was that higher concentration of ideas – from a small active group – was much less effective than broad participation from diverse fields.

They found that focusing on process or product innovation or between sustaining and disruptive innovation made little difference.  The most important factor was that the more people who actively participate the more valuable the ideas that emerge.

The paper is 14 pages long and contains brief case studies from AT&T, United Health Group, Pfizer and EDF Energy.

Click here to download Quantifying a Culture of Innovation.

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

GUEST POST from Paul Sloane

Many organizations have top-level goals for innovation but struggle to measure progress toward them.  How can you assess the current state of your innovation capability?  There are three critical areas to consider.

First, you should measure your ability to fill the pipeline by monitoring the number of new ideas being generated.  If you have a suggestions scheme you can scrutinize how many submissions you get each month.  If you are canvassing ideas from outside your organization (e.g. through social media, competitions or open innovation) monitor the numbers coming in.

Secondly, check the efficiency of your innovation evaluation process by monitoring how many ideas make it through the initial selection and into the next stage as projects.

Thirdly, check how many projects become prototypes and how many prototypes become new products.  Of these how many are incremental new products or extensions of existing lines and how many are radical innovations?

Other useful metrics include:

• What is the innovation cycle time i.e. how long does it take for an idea to go from conception to implementation?
• How many people are engaged in innovation activities?
• How much money are we spending on innovation?
• What is the projected value of the projects in the innovation funnel?
• What is the ROI on the new products and services launched this year?
• How does the actual return compare with the original projected return on these projects?

Most companies have innovation targets which can only be measured in hindsight – e.g. what percentage of revenues come from new products.  You need to select some of the metrics above to assess your current state of health.

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

GUEST POST from Paul Sloane

Why do we find it so hard to change our minds?  Why are we so critical of people who do change their minds?

John Adair, the leadership expert, says that the most important (and often the most difficult) sentence for a leader to utter is, ’I admit that I was wrong.’  But on the rare occasions when political leaders change their minds they are accused in the media of flip-flopping, of doing a ‘U-turn’ or of lacking conviction.  But there is no value in having convictions if they are for wrong-headed ideas.  Joseph Stalin and Robert Mugabe just kept pressing on with the wrong precepts.  Their obstinate and single-minded approaches impoverished their peoples. We need leaders who are open to new evidence and who are prepared to change direction.

Innovation means trying new things, some of which do not work.  When that happens we have to confess that our idea was flawed and change or drop it.  But many business leaders are reluctant to admit that any of their pet projects have failed so they press on.

Part of the problem is that we all suffer from confirmation bias which is the tendency to search for, recall and prefer information that confirms our pre-existing beliefs or hypotheses. The effect is stronger for emotionally charged issues and for deeply held positions. It leads us to interpret ambiguous evidence as supporting our beliefs.  For example, when a mass shooting occurs in the USA proponents of gun control see it as proof of the need for restrictions on gun ownership whereas opponents of gun control see the same incident as evidence for the need for more people to carry guns so as to quickly shoot the assailant.  Similarly when there is savage snowstorm some people see it as clear evidence of climate change and others as proof that global warming is a myth.

Confirmation bias leads to overconfidence in personal beliefs despite contrary evidence.  In 1992 Rachel Nickell was brutally murdered on Wimbledon Common in London.  The police brought in an expert who constructed what he claimed was a psychological profile of the killer.   The police found a suspect, Colin Stagg, who walked his dog on the Common and who fitted the profile.  There was very little evidence that he had had anything to do with the crime but the police became convinced that he was the murderer and they laid an elaborate ‘honey pot’ plan to encourage him to confess.  This did not work but they brought him to trial where the judge threw the case out.  Eventually in 2008, Robert Knapper was convicted of the killing of Rachel Nickell.  Knapper had been questioned in 1992 but wrongly eliminated.  Stagg, who had spent 13 months in custody, was given a public apology and over $1 million in compensation.  It is clear that once the police officers became convinced that Stagg was guilty they ignored contrary evidence and confirmation bias set in.  They redoubled their efforts to build a case against him.

Let’s consider some people who had the courage to change their minds and thus changed the course of history.

Saul of Tarsus persecuted the early Christians until he had his famous revelation on the road to Damascus. He became a powerful proponent of Christianity and helped build the nascent religion. As St Paul he is revered as one of the greatest Saints.

Constantine was a Roman Emperor who initiated many reforms.  He converted to Christianity and stopped the persecution of Christians. Christianity flourished in the Roman Empire.

Mikhail Gorbachev was a dedicated Communist party officer who rose to be leader of the USSR. He saw the many problems of the Russian system and changed his mind, introducing the radical policies of Perestroika and Glasnost. This led to independence for the former Soviet satellite states and the fall of the Berlin Wall.

F. W. De Klerk was the last President of Apartheid South Africa. He had been a strong advocate of apartheid but changed his view and took the courageous decision to release Nelson Mandela and start the transition to a multi-racial society.

We cling to our beliefs because it is easy and comfortable to do so.  We conform to the norms of our group and subscribe to the group beliefs and principles.  We see this as strong-minded and purposeful. But the world is moving fast and some of our beliefs might be outdated or just plain wrong.  We need to be open to different viewpoints and courageous enough to change our minds on important issues.  Take Gorbachev and F W De Klerk as your role models – not Stalin and Mugabe.

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

GUEST POST from Paul Sloane

Henry Charles Keith Petty-Fitzmaurice (1845 – 1927), the 5th Marquess of Lansdowne, was a distinguished British statesman who held senior positions in both Liberal Party and Conservative Party governments. He had served as the fifth Governor General of Canada, Viceroy of India, Secretary of State for War, and Secretary of State for Foreign Affairs. He was a pillar of the British aristocracy, steeped in the values of the establishment.

In November 1917 the First World War had raged for three savage years with millions dead. Lansdowne, whose son had been killed in action, became convinced that the war was a threat to civilisation itself and that the total destruction of Germany was not a worthwhile objective. Impelled by his conscience, he circulated a paper to the Government, in which he called for an end to the bloodshed and a negotiated peace with Germany. His proposal was summarily rejected by his colleagues. He invited the editor of The Times, Geoffrey Dawson, to his house and asked him to publish a letter expounding his case. Dawson was “appalled” and refused. Lansdowne then offered the letter to The Daily Telegraph, which published it on 29 November 1917. It stated:

“We are not going to lose this war, but its prolongation will spell ruin for the civilised world, and an infinite addition to the load of human suffering which already weighs upon it…We do not desire the annihilation of Germany as a great power … We do not seek to impose upon her people any form of government other than that of their own choice… We have no desire to deny Germany her place among the great commercial communities of the world.”

Condemnation was swift and almost universal. Lansdowne became a pariah who was shunned and vilified by politicians, commentators and military leaders. His letter was condemned as a “deed of shame”. It was completely at odds with popular opinion which wanted nothing less than the annihilation of Germany. His career was over and he was seen by many as a traitor. In the face of such opprobrium he maintained his views but to no avail.

Most likely he was right. His views should have been considered. If peace could have been negotiated with Germany countless lives would have been saved. Furthermore the onerous reparations forced on Germany after the Treaty of Versailles would have been avoided. Many historians believe that the terms of this treaty laid the seeds for the rise of Hitler and the horrors of WW2.

A parallel story occurred half a century after Lansdowne wrote his letter. Konrad Kellen (1913 – 2007) was a German Jew who studied law before emigrating to the USA in 1935. He had a brilliant mind and became an intelligence officer working for the US army and later for the RAND Corporation, an influential think tank started by the Pentagon to perform high-level defence analysis. In the 1960s he studied interviews with hundreds of captured Vietcong fighters in order to interpret the morale and intentions of North Vietnam. Conventional wisdom in the Pentagon was that the morale of the Vietcong forces was low and that additional US forces and bombing would shortly bring about Vietcong collapse.

Kellen’s painstaking analysis led him to conclude that, contrary to prevailing assessments, enemy morale was high and that the war was not winnable. In 1965 he and others wrote an open letter to the U.S. government urging withdrawal of troops.  His arguments were disregarded by the U.S. Administration which maintained its optimistic view that the war was winnable because of low enemy morale. With hindsight we can see that Kellen was right and many lives would have been saved if his approach had been adopted. Why did he get it right and so many other advisors get it wrong? Author Malcolm Gladwell notes that Kellen was a truly great listener who could listen objectively without filtering what he heard through biases or predispositions.

We can easily forget how difficult it is to voice an opinion contrary to the universal view. There has been many cases where whistle-blowers in government bodies, hospitals and large organizations have faced tremendous hostility and opposition even when acting in the public interest.

It takes great courage to challenge the powerful and the popular. We need that courage time and again. We should not disdain and ignore contrarian thinkers like Lansdowne and Kellen. They should be encouraged to speak up and their views, however unpopular, should be examined with dispassion.

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

GUEST POST from Paul Sloane

Have you ever seen an idea in action and thought, ‘Why didn’t I think of that?’  Let’s look at three recent innovations which might surprise you.

Washing machines can be very heavy. This is because they contain concrete blocks weighing about 25 kgs which are needed as counterweights to keep the machines stable during spin cycles.  Researchers at Nottingham Trent University have developed a plastic container to replace the concrete blocks.  It is empty and light until delivery when it is filled with water.

This simple idea reduces the initial weight of the machine by about 30% making it easier to handle and cheaper to transport.  It is also better for the environment as CO2 is released when concrete is produced.

Wine and spirits are traditionally stored in oak barrels which impart flavor as the contents mature.  A small family business in Bellheim, Germany has just won a design award for a rectangular oak wine vat called a rebarrique.  Unlike a barrel it can be easily assembled and reassembled.  It also takes up much less floor space and is easier to transport.

The insides of oak barrels have been ‘toasted’ or lightly burned to diffuse aromas to the wine or spirit.  But a traditional barrel can only be used a few times before this effect diminishes and the barrel has to be replaced.  The rebarrique can be disassembled and the oak shaved and retoasted so that the same container can be used many times.  This saves money and oak trees!

Listed in Time Magazine’s 25 Best Inventions of the Year is the Bempu.  It is a bracelet which is attached to the wrist of a newborn baby.  It continuously monitors temperature and sounds an alert if it is too high or too low.  It is made by an Indian startup company called Bempu and costs around $28. So far, the device has helped an estimated 10,000 newborns, in over 25 countries.  In India alone, 8 million prematurely-born underweight babies every year are at high risk of developing hypothermia. Maintaining a newborn baby’s body temperature is critical to its survival.

What is surprising about these simple but effective ideas is that nobody had thought of them before.  Wine has always matured in round barrels, washing machines have always had concrete blocks and babies temperatures were always measured intermittently with a thermometer if one was around.  These things were taken for granted.  It just goes to show that everything else we take for granted – whether a product, a service or a process can and will be replaced by something better.  Innovation marches on, driven by a little lateral thinking and a big dose of entrepreneurial action.

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.