There’s a buzzing chorus reverberating across industries, from tech realms to manufacturing hubs: “Innovate or perish.” More firms, innovators and thought leaders are challenging traditional business operations to tap into a world of possibilities. The catalyst? Innovative strategies. These tactics have the capacity to disrupt existing industries and birth new paradicms. Today, we’ll examine some of these game-changing strategies with an analytical lens, focusing on two case studies to drive the point home.
1. Systemic Innovation with a Human-Centric Approach
Emphasizing systemic innovation means understanding that an industry’s fundamental frameworks and processes aren’t exclusive compartments but interconnected systems. Today’s innovators are levering this invision and merging it with a focus on enhancing human experiences – customers, communities, and the workforce.
Case Study: Airbnb
Consider Airbnb, which flawlessly implemented this strategy to disrupt the global accommodation industry. Airbnb realized that the essence of travel was not just in accommodation but an enriching, personalized experience. It redefined the customer experience by leveraging underutilized resources—vacant rooms and homes, allowing homeowners to become service providers. The travel industry: disrupted – the user experience: elevated.
2. Harnessing Advanced Technologies for New Value Propositions
Advanced technologies have wired us into a new era of business. They are powerful tools offering novel ways to deliver value. Beyond product improvements, they offer newer models of business, partnerships, and customer engagements.
Case Study: Tesla
The automotive industry is a poster child for such disruption, with Tesla, Inc. at the forefront. Tesla harnessed advanced battery technologies and stepped outside the internal combustion engine’s boundaries. Tesla’s innovation didn’t stop at product; it extended to challenge traditional dealership models by selling directly to the customer, thus fostering a closer customer relationship. Additionally, they leveraged software to provide continuous improvements via over-the-air updates, turning their cars into upgradable software platforms.
3. Embracing Strategic Alliances, Collaborations and Open Innovation
Innovative corporate strategies no longer limit companies to go about their innovative journey alone. Strategic alliances, collaborations or open innovation are reshaping products, services and the nature of competition itself.
Case Study: Microsoft and Linux
In the IT world, an example of profound disruption is Microsoft’s admission into the Linux Foundation. Once fierce competitors, Microsoft realized the power of Linux’s open-source software and adapted an open innovation strategy that embraced collaboration over competition. The unexpected alliance shook the industry and spurred Microsoft’s evolution.
Conclusion
These case studies are simply enlightening tips of the disruptive iceberg. Innovative strategies are not about obsoleting traditional models. Instead, they’re about deconstructing, questioning, and re-imagining traditional systems to create new pockets of value. From a holistic perspective, our mandate as business leaders should not just be to ride the wave of industry disruption, but to seek, facilitate, and manage these waves of transformation.
Adopting innovative strategies may not be optional anymore, but the exciting reality is the capacity for every organization to become a change-maker, a disrupter, and a leader in its own right. You might just be a game-changing strategy away from rewriting the rules of your industry.
Bottom line: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.
Image credit: misterinnovation.com
Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.
Effective change management strategies to address resistance and encourage adoption of disruptive ideas
GUEST POST from Art Inteligencia
In today’s fast-paced business environment, organizations that fail to adapt to change risk falling behind the competition. Designing for disruption requires a forward-thinking approach that challenges the status quo and embraces innovative ideas. However, implementing disruptive strategies can often be met with resistance from employees who are comfortable with the way things have always been done. In this thought leadership article, we will explore effective change management strategies to address resistance and encourage adoption of disruptive ideas, using two case studies to illustrate how organizations can successfully navigate the challenges of change.
Case Study 1: Uber
One of the most disruptive companies in recent years, Uber revolutionized the transportation industry by introducing a technology-driven platform that connects riders with drivers. However, implementing this disruptive idea was not without its challenges. Taxi drivers and traditional transportation companies vehemently opposed Uber’s entry into the market, leading to regulatory battles and public protests.
To overcome resistance, Uber employed effective change management strategies that focused on communication, collaboration, and empathy. The company engaged in open dialogue with stakeholders, including government officials, to address concerns and find common ground. Uber also invested in training programs to educate drivers on the benefits of the platform and provided support to help them adapt to the changing landscape.
By taking a proactive approach to managing resistance, Uber was able to successfully navigate the challenges of change and establish itself as a disruptor in the transportation industry.
Case Study 2: Airbnb
Another example of a disruptive company, Airbnb transformed the hospitality industry by offering homeowners the opportunity to rent out their properties to travelers. Despite its innovative business model, Airbnb faced resistance from traditional hotels and regulatory agencies that viewed the company as a threat to their business.
To address resistance, Airbnb implemented a series of change management strategies that focused on education, transparency, and collaboration. The company launched a public relations campaign to educate the public about the benefits of the sharing economy and worked with regulators to create policies that balanced the needs of both hosts and guests.
By building relationships with stakeholders and demonstrating the value of its platform, Airbnb was able to overcome resistance and establish itself as a disruptor in the hospitality industry.
Conclusion
Designing for disruption requires a proactive approach to managing resistance and encouraging adoption of innovative ideas. By implementing effective change management strategies, companies can address concerns, build trust, and inspire employees to embrace change. Through open communication, collaboration, and empathy, organizations can successfully navigate the challenges of disruption and position themselves as industry leaders. As Uber and Airbnb have demonstrated, overcoming resistance is possible with the right approach and a commitment to driving positive change. By adopting these strategies, organizations can design for disruption and thrive in an ever-changing business landscape.
Bottom line: Futurists are not fortune tellers. They use a formal approach to achieve their outcomes, but a methodology and tools like those in FutureHacking™ can empower anyone to be their own futurist.
Image credit: Pixabay
Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.
Discussing the role of emerging technologies like AI, IoT, and blockchain in designing for disruption
GUEST POST from Art Inteligencia
In today’s fast-paced and ever-changing world, disruptive design has become a key differentiator for businesses looking to stay ahead of the curve. With the rapid advancement of technologies such as artificial intelligence (AI), Internet of Things (IoT), and blockchain, designers now have more tools at their disposal than ever before to create innovative and groundbreaking solutions.
AI, in particular, has revolutionized the design process by enabling designers to analyze vast amounts of data and identify patterns that would have been impossible to detect just a few years ago. By leveraging AI-powered algorithms, designers can now predict trends, personalize products, and streamline the design process to deliver more meaningful and impactful experiences for users.
One such case study that exemplifies the power of AI in disruptive design is the fashion industry. By utilizing AI to analyze customer preferences and behavior, companies like Stitch Fix have been able to create personalized clothing recommendations that cater to individual styles and needs. This not only enhances the customer experience but also drives sales and customer loyalty.
Similarly, IoT has opened up new avenues for disruptive design by connecting physical devices and sensors to the internet, allowing for unprecedented levels of data collection and automation. For example, companies like Nest have revolutionized the home automation industry by creating smart thermostats that learn from user behavior and adjust to optimize energy efficiency. This not only saves money for consumers but also reduces carbon emissions and contributes to a more sustainable future.
Lastly, blockchain technology has the potential to disrupt traditional design practices by enabling secure and transparent transactions, streamlining processes, and enhancing collaboration between stakeholders. For instance, companies like Provenance are using blockchain to trace the origins of products and ensure ethical sourcing practices, providing consumers with greater transparency and trust in the products they purchase.
Conclusion
The role of emerging technologies like AI, IoT, and blockchain in disruptive design cannot be understated. By harnessing the power of these technologies, designers have the ability to create innovative solutions that challenge the status quo and drive positive change in the world. As we look towards the future, it is clear that the intersection of technology and design will continue to shape the way we live, work, and interact with the world around us.
Bottom line: Futures research is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futures research themselves.
Image credit: Pexels
Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.
In today’s digital age, businesses face the constant challenge of adapting to the fast-paced environment of technological disruption. Change management plays a critical role in helping organizations navigate this disruption and harness the power of digital advancements to stay competitive. In this article, we will explore two case studies that highlight the importance of effective change management in successfully implementing digital transformations.
Case Study 1: Blockbuster vs Netflix
One of the most classic examples of a company failing to adapt to technological disruption is the case of Blockbuster and Netflix. Blockbuster, once a dominant force in the video rental industry, was slow to embrace the digital revolution. As Netflix emerged with its online streaming platform, Blockbuster failed to recognize the significance of this shift and the changing preferences of consumers. Despite being offered the opportunity to buy Netflix in its early stages, Blockbuster declined the offer.
The failure of Blockbuster can be attributed to a lack of effective change management. The company failed to recognize the need to adapt its business model to the changing landscape of digital media consumption. Blockbuster was heavily invested in physical stores and rental services, and its reluctance to embrace digital streaming led to its downfall. In contrast, Netflix successfully implemented change management strategies by digitalizing its operations, adopting a subscription-based model, and investing in content creation. Today, Netflix is a global leader in the entertainment industry, while Blockbuster is merely a memory.
Case Study 2: General Electric (GE) and the Industrial Internet of Things (IIoT)
Another example that highlights the importance of change management in the digital age is the case of General Electric (GE) and its transformation through the Industrial Internet of Things (IIoT). GE, a multinational conglomerate, recognized the potential of IIoT to revolutionize industrial processes and unlock new opportunities for efficiency and productivity.
To fully leverage the power of IIoT, GE had to undergo significant changes in its operations, systems, and culture. Change management played a vital role in guiding GE’s digital transformation. The company implemented structured training programs to equip its employees with the necessary skills to embrace the digital technologies. Additionally, GE focused on developing a culture of innovation, collaboration, and agility to adapt to the rapidly changing digital landscape.
Through effective change management, GE successfully transformed its business by incorporating IIoT solutions into its product offerings. This resulted in improved operational efficiency, advanced data analytics capabilities, and enhanced customer experiences. By embracing digital disruption, GE was able to stay ahead of its competitors and maintain its position as a leader in the industrial sector.
Conclusion
The digital age has brought about rapid and widespread technological disruption, which poses significant challenges for businesses. The case studies of Blockbuster and General Electric demonstrate the critical role of change management in successfully navigating this disruption.
Organizations must be proactive in recognizing the need for change and embracing digital transformation. This requires effective change management strategies, including engaging employees, fostering a culture of innovation, and investing in the necessary resources and training. By doing so, businesses can leverage the power of digital advancements to stay competitive, deliver value to customers, and thrive in the digital age.
SPECIAL BONUS: Braden Kelley’s Problem Finding Canvas can be a super useful starting point for doing design thinking or human-centered design.
“The Problem Finding Canvas should help you investigate a handful of areas to explore, choose the one most important to you, extract all of the potential challenges and opportunities and choose one to prioritize.”
Image credit: Pixabay
Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.
The rapid evolution of technology has transformed countless industries and redefined the ways we live and work. The digital age has brought immense opportunities for innovation, but it has also created significant disruption for traditional businesses. Navigating this disruption is crucial for companies to survive and thrive in an increasingly digital world. In this article, we will explore two case study examples of companies that have successfully embraced innovation in the face of disruption.
Case Study 1: Netflix
Netflix, initially founded as a DVD-by-mail rental service in 1997, navigated the disruption caused by the emergence of streaming platforms like YouTube and Hulu. Realizing the changing landscape of media consumption, Netflix transitioned from a physical DVD rental company to a leading player in the streaming industry.
Anticipating the shift in consumer behavior, Netflix started streaming movies and TV shows in 2007. This move allowed them to provide instant access to a vast library of content, eliminating the need for physical discs. Moreover, Netflix leveraged user data to personalize recommendations, creating a unique user experience that set them apart from their competitors.
By embracing digital innovation, Netflix not only survived but also thrived in the face of disruption. They disrupted the traditional video rental market and became the dominant force in the streaming industry, paving the way for other streaming giants like Amazon Prime Video and Disney+.
Case Study 2: Tesla
The automotive industry is no stranger to disruption, and Tesla has been at the forefront of innovative change. Founded in 2003, Tesla recognized the growing demand for electric vehicles (EVs) and set out to revolutionize the automobile industry.
Tesla’s innovation in EV technology, particularly their battery technology and autonomous driving capabilities, has shaped the future of electric mobility. By investing heavily in research and development, Tesla was able to overcome challenges such as limited driving range, slow charging times, and lack of charging infrastructure.
Moreover, Tesla adopted a direct-to-consumer sales model, bypassing traditional dealership networks and enabling them to control the entire sales process and customer experience. This approach disrupted the existing distribution system, putting Tesla in direct competition with established automakers.
Through their innovative approach, Tesla has not only disrupted the automotive industry but has also become the most valuable car manufacturer in the world, surpassing long-established giants like Toyota and General Motors.
Lessons Learned
These case studies demonstrate the importance of embracing innovation to navigate disruption successfully. In both cases, companies recognized the changing landscape of their respective industries and adapted to meet new consumer demands.
Key takeaways for businesses facing disruption in the digital age include:
1. Embrace new technologies: Keep an eye on emerging technologies and trends that could disrupt your industry. Proactively invest in research and development to remain ahead of the curve.
2. Leverage data and personalization: Utilize user data to provide personalized experiences and recommendations. This can help differentiate your business, create loyalty, and attract new customers.
3. Challenge traditional business models: Don’t be afraid to challenge long-standing industry practices. Disruptive innovation often comes from questioning the status quo and finding new ways to meet customer needs.
4. Stay agile and adaptable: Embrace change and be willing to pivot your business strategy when necessary. The ability to quickly adapt and respond to market shifts is crucial for survival in the digital age.
In conclusion, innovation is vital for navigating disruption in the digital age. By studying successful case studies like Netflix and Tesla, businesses can learn valuable lessons on how to embrace innovation and thrive in the face of disruption. The digital age presents endless opportunities, and those who are willing to adapt and innovate will be well-positioned for success in the ever-evolving digital landscape.
Bottom line: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.
Image credit: misterinnovation.com
Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.
In today’s rapidly evolving digital landscape, innovation is the key to success. With technology continually reshaping industries, companies must embrace digital disruption to remain competitive. Digital disruptors are those forward-thinking individuals and organizations that actively challenge traditional business models, transforming industries and creating new opportunities. In this article, we explore two case studies to understand what it takes to be a successful digital disruptor.
Case Study 1: Uber – Revolutionizing the Transportation Industry
Uber, founded in 2009, has disrupted the traditional taxi industry by leveraging technology and creating a peer-to-peer ridesharing platform. By simply connecting drivers with passengers through a user-friendly mobile app, Uber has revolutionized the way people commute.
One of the key factors behind Uber’s success is the integration of technology into their business model. They capitalized on the widespread adoption of smartphones and built an app that provides ease of access and convenience to users. Additionally, Uber’s use of GPS technology enabled them to optimize ride routes, resulting in quicker and more efficient trips, which became a significant competitive advantage.
Moreover, Uber’s disruption of the industry was driven by its ability to identify pain points. By recognizing the challenges faced by commuters, such as long queues, unreliable service, and lack of affordability, Uber was able to provide a seamless and cost-effective alternative. They turned a fragmented and highly regulated industry into a user-centric service that offered reliable transportation at the tap of a button.
Case Study 2: Netflix – Transforming the Entertainment Industry
Netflix, founded in 1997 as a DVD rental-by-mail service, disrupted the traditional video rental industry and eventually transformed the entertainment landscape. Recognizing the potential of streaming technology, Netflix transitioned from mailing DVDs to offering an online streaming platform, which has now become a household name.
The success of Netflix can be attributed to its innovative approach to content delivery. By capitalizing on technological advancements and increasing internet speeds, they facilitated on-demand access to a vast library of movies and TV shows. This not only eliminated the need for physical stores but also provided subscribers with the freedom to watch what they want, when they want.
Furthermore, Netflix’s disruptive nature can be seen in its investment in original content. By leveraging data analytics and user preferences, they have been able to create highly engaging and binge-worthy series like “Stranger Things” and “House of Cards.” This strategic move has allowed them to not only compete with traditional media giants but also establish themselves as a major player in the entertainment industry.
What it Takes to be a Successful Digital Disruptor?
Both Uber and Netflix exemplify the characteristics required to be a successful digital disruptor. Here are some key takeaways:
1. Technological Integration: Embrace technology and leverage it to create innovative products and solutions. Digital disruptors constantly seek ways to utilize technology to improve user experience, increase efficiency, and disrupt existing markets.
2. Customer Focus: Identify pain points and seek ways to address them. Successful disruptors prioritize the user experience, understanding the needs and desires of their target audience to create seamless and user-centric solutions.
3. Agility and Adaptability: Disruption requires the ability to adapt to changing circumstances and market conditions. Successful digital disruptors remain agile, constantly innovating and evolving their business strategies and models.
4. Data-Driven Decision Making: Utilize data analytics to understand user behavior, preferences, and market trends. Data-driven insights enable disruptors to make informed decisions and drive innovation in their respective industries.
The digital disruption landscape is constantly evolving, and staying ahead of the curve is crucial for success. By embracing technology, focusing on customer needs, remaining agile, and leveraging data, upcoming disruptors have the potential to reshape industries and create remarkable opportunities.
Image credit: Unsplash
Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.
But, they’re also curious given all the great tools in the Change Planning Toolkit™ that can fundamentally transform how we plan our projects and change initiatives, helping individuals and organizations move beyond theory to practice, whether I’ll ever create anything similar to help companies increase their innovation success.
The answer to both questions is a resounding YES!
I am pursuing, in parallel, the Define, Design, and Develop phases on a number of different tools to form the basis of a Human-Centered Innovation Toolkit™ for organizations to leverage in pursuit of my evolution of value innovation.
If you’ve attended one of my innovation keynotes or workshops you’ve seen how my innovation viewpoint (Innovation is All About Value) leads to all types of innovation, including disruptive innovation, and how it links to LEAN methodologies so that organizations can organize and execute across the entire spectrum of improvement and innovation possibilities.
At the same time, I am also finishing efforts to define a new Innovation Intervention service offering to help organizations who have started an innovation effort or built an innovation program, only to see it go off the rails. I will work with organizations in an Innovation Intervention to help them get back on track towards success and build a foundation capable of sustaining continuous innovation. Forward-thinking organizations that haven’t begun an innovation program or a focus on innovation and want to get off to a strong start will be able to leverage this upcoming Innovation Intervention service too.
Finally, when I do write a third book, it will probably dig deeper into how to build an organization wired for continuous change, including successfully executing a digital transformation and sustaining full spectrum innovation and improvement excellence.
It is not too often that the leader of a Fortune 500 gives you an insight into how their company achieves competitive advantage in the marketplace in a letter to shareholders, instead of launching into a page or two of flowery prose written by the Public Relations (PR) team that works for them. The former is what Jeff Bezos tends to deliver year after year. This year’s letter is particularly interesting.
The two key insights in this year’s letter were that:
#1 – Amazon strives to view itself as a startup champion riding to the rescue of customers
#2 – Amazon chooses to be customer-obsessed, not customer-focused or customer-centric, but customer-obsessed
Both of these are crucial to sustaining innovation, and are supported by Jeff’s other main pieces of advice:
– Resisting proxies
– Embracing external trends
– Practicing high velocity decision making
But, I won’t steal Jeff’s thunder. I encourage you to read Jeff’s letter to shareholders in its entirety, check out the bonus video interview at the end, and add comments to share what you find particularly interesting in the letter.
Keep innovating!
—————————————————————- 2016 Letter to Amazon Shareholders
April 12, 2017
“Jeff, what does Day 2 look like?”
That’s a question I just got at our most recent all-hands meeting. I’ve been reminding people that it’s Day 1 for a couple of decades. I work in an Amazon building named Day 1, and when I moved buildings, I took the name with me. I spend time thinking about this topic.
“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”
To be sure, this kind of decline would happen in extreme slow motion. An established company might harvest Day 2 for decades, but the final result would still come.
I’m interested in the question, how do you fend off Day 2? What are the techniques and tactics? How do you keep the vitality of Day 1, even inside a large organization?
Such a question can’t have a simple answer. There will be many elements, multiple paths, and many traps. I don’t know the whole answer, but I may know bits of it. Here’s a starter pack of essentials for Day 1 defense: customer obsession, a skeptical view of proxies, the eager adoption of external trends, and high-velocity decision making.
True Customer Obsession
There are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.
Why? There are many advantages to a customer-centric approach, but here’s the big one: customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf. No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it, and I could give you many such examples.
Staying in Day 1 requires you to experiment patiently, accept failures, plant seeds, protect saplings, and double down when you see customer delight. A customer-obsessed culture best creates the conditions where all of that can happen.
Resist Proxies
As companies get larger and more complex, there’s a tendency to manage to proxies. This comes in many shapes and sizes, and it’s dangerous, subtle, and very Day 2.
A common example is process as proxy. Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing. This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right. Gulp. It’s not that rare to hear a junior leader defend a bad outcome with something like, “Well, we followed the process.” A more experienced leader will use it as an opportunity to investigate and improve the process. The process is not the thing. It’s always worth asking, do we own the process or does the process own us? In a Day 2 company, you might find it’s the second.
Another example: market research and customer surveys can become proxies for customers – something that’s especially dangerous when you’re inventing and designing products. “Fifty-five percent of beta testers report being satisfied with this feature. That is up from 47% in the first survey.” That’s hard to interpret and could unintentionally mislead.
Good inventors and designers deeply understand their customer. They spend tremendous energy developing that intuition. They study and understand many anecdotes rather than only the averages you’ll find on surveys. They live with the design.
I’m not against beta testing or surveys. But you, the product or service owner, must understand the customer, have a vision, and love the offering. Then, beta testing and research can help you find your blind spots. A remarkable customer experience starts with heart, intuition, curiosity, play, guts, taste. You won’t find any of it in a survey.
Embrace External Trends
The outside world can push you into Day 2 if you won’t or can’t embrace powerful trends quickly. If you fight them, you’re probably fighting the future. Embrace them and you have a tailwind.
These big trends are not that hard to spot (they get talked and written about a lot), but they can be strangely hard for large organizations to embrace. We’re in the middle of an obvious one right now: machine learning and artificial intelligence.
Over the past decades computers have broadly automated tasks that programmers could describe with clear rules and algorithms. Modern machine learning techniques now allow us to do the same for tasks where describing the precise rules is much harder.
At Amazon, we’ve been engaged in the practical application of machine learning for many years now. Some of this work is highly visible: our autonomous Prime Air delivery drones; the Amazon Go convenience store that uses machine vision to eliminate checkout lines; and Alexa, our cloud-based AI assistant. (We still struggle to keep Echo in stock, despite our best efforts. A high-quality problem, but a problem. We’re working on it.)
But much of what we do with machine learning happens beneath the surface. Machine learning drives our algorithms for demand forecasting, product search ranking, product and deals recommendations, merchandising placements, fraud detection, translations, and much more. Though less visible, much of the impact of machine learning will be of this type – quietly but meaningfully improving core operations.
Inside AWS, we’re excited to lower the costs and barriers to machine learning and AI so organizations of all sizes can take advantage of these advanced techniques.
Using our pre-packaged versions of popular deep learning frameworks running on P2 compute instances (optimized for this workload), customers are already developing powerful systems ranging everywhere from early disease detection to increasing crop yields. And we’ve also made Amazon’s higher level services available in a convenient form. Amazon Lex (what’s inside Alexa), Amazon Polly, and Amazon Rekognition remove the heavy lifting from natural language understanding, speech generation, and image analysis. They can be accessed with simple API calls – no machine learning expertise required. Watch this space. Much more to come.
High-Velocity Decision Making
Day 2 companies make high-quality decisions, but they make high-quality decisions slowly. To keep the energy and dynamism of Day 1, you have to somehow make high-quality, high-velocity decisions. Easy for start-ups and very challenging for large organizations. The senior team at Amazon is determined to keep our decision-making velocity high. Speed matters in business – plus a high-velocity decision making environment is more fun too. We don’t know all the answers, but here are some thoughts.
First, never use a one-size-fits-all decision-making process. Many decisions are reversible, two-way doors. Those decisions can use a light-weight process. For those, so what if you’re wrong? I wrote about this in more detail in last year’s letter.
Second, most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.
Third, use the phrase “disagree and commit.” This phrase will save a lot of time. If you have conviction on a particular direction even though there’s no consensus, it’s helpful to say, “Look, I know we disagree on this but will you gamble with me on it? Disagree and commit?” By the time you’re at this point, no one can know the answer for sure, and you’ll probably get a quick yes.
This isn’t one way. If you’re the boss, you should do this too. I disagree and commit all the time. We recently greenlit a particular Amazon Studios original. I told the team my view: debatable whether it would be interesting enough, complicated to produce, the business terms aren’t that good, and we have lots of other opportunities. They had a completely different opinion and wanted to go ahead. I wrote back right away with “I disagree and commit and hope it becomes the most watched thing we’ve ever made.” Consider how much slower this decision cycle would have been if the team had actually had to convince me rather than simply get my commitment.
Note what this example is not: it’s not me thinking to myself “well, these guys are wrong and missing the point, but this isn’t worth me chasing.” It’s a genuine disagreement of opinion, a candid expression of my view, a chance for the team to weigh my view, and a quick, sincere commitment to go their way. And given that this team has already brought home 11 Emmys, 6 Golden Globes, and 3 Oscars, I’m just glad they let me in the room at all!
Fourth, recognize true misalignment issues early and escalate them immediately. Sometimes teams have different objectives and fundamentally different views. They are not aligned. No amount of discussion, no number of meetings will resolve that deep misalignment. Without escalation, the default dispute resolution mechanism for this scenario is exhaustion. Whoever has more stamina carries the decision.
I’ve seen many examples of sincere misalignment at Amazon over the years. When we decided to invite third party sellers to compete directly against us on our own product detail pages – that was a big one. Many smart, well-intentioned Amazonians were simply not at all aligned with the direction. The big decision set up hundreds of smaller decisions, many of which needed to be escalated to the senior team.
“You’ve worn me down” is an awful decision-making process. It’s slow and de-energizing. Go for quick escalation instead – it’s better.
So, have you settled only for decision quality, or are you mindful of decision velocity too? Are the world’s trends tailwinds for you? Are you falling prey to proxies, or do they serve you? And most important of all, are you delighting customers? We can have the scope and capabilities of a large company and the spirit and heart of a small one. But we have to choose it.
A huge thank you to each and every customer for allowing us to serve you, to our shareowners for your support, and to Amazonians everywhere for your hard work, your ingenuity, and your passion.
As always, I attach a copy of our original 1997 letter. It remains Day 1.
Sincerely,
Jeff
———————————
If you’d like dive deeper into the mind of Jeff Bezos, then check out this interview with him conducted by Walt Mossberg of The Verge last year at Code Conference 2016:
And here is another fascinating peek inside the mind of Jeff Bezos from 1997:
Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.
Meanwhile, the tireless invention and innovation efforts of research teams in companies around the world have helped to keep the pace of technological advancement in computer processing power at or above Moore’s Law for several decades. This has given technology companies the ability to put more computing power than the entire Apollo space program into the pockets of more than a billion people around the world.
It seems like everything has become digital, including music, books, and even movies. Increasingly intelligent digital technologies and mercurial customer expectations threaten both people and enterprise at every turn. With all of this technological change, the last few decades have been an amazing time for consultancies, full of revenue and opportunities. Clients desperate for solutions to help them cope with these challenging times helped management consulting firms grow in size and scale, expanding to cover multiple technology, and even marketing, specialties.
But the same technologies that have led to the growth of consulting companies over the last couple of decades, will begin to lead to a shrinking of those same consulting firms. The increasing diversification of the large global consultancies into other specialties is the first step to what is an inevitable shrinkage forced upon the industry by the three factors I detailed in my last article titled Consulting Industry Caught in the Crossfire.
The same forces that are causing a feeling of disequilibrium for the firms that consultancies serve are also causing the same unease, trepidation and challenge for the consulting firms themselves as they find themselves attacked on three sides from:
In my previous article on the Consulting Industry Attacked on Three Sides I looked at each attack in turn, but in this article I would like to dig a bit deeper into the final threat.
Artificial Intelligence
Roboadvisors, chatbots, and other implementations of artificial intelligence have captured people’s imaginations and led to both an increase in the number of articles written about artificial intelligence, but also in the practical implementations of artificial intelligence. People are becoming increasing comfortable with artificial intelligence thanks to the recommendation engines on Amazon and Netflix and IBM Watson’s appearance on the game show Jeopardy and battles against chess grandmasters.
But what does consulting have to fear from artificial intelligence?
Perhaps viewing this short video might give you a glimpse:
In the short run, maybe consultants don’t have as much to fear from artificial intelligence as workers in transportation, retail, or manufacturing. But, in the grander scheme of things, over time enterprising technology vendors will inevitably build upon publicly available artificial intelligence frameworks made publicly available by companies like Microsoft and Google (who are seeking to increase the sale of cloud services) to automate some of the tasks that recently minted undergraduate analysts or Indians perform now for the large consulting firms.
What we are starting to see is exactly what Roger Martin described in his landmark book The Design of Business, from which I would like to highlight one of the key concepts called The Knowledge Funnel highlighted in the image from the book below.
Source: The Design of Business by Roger Martin
The key point here is that as we understand our business and our interactions with our customers well enough, what was once a mystery we start to identify patterns inside of (heuristics), which then eventually allows us to create algorithms that can be captured in Standard Operating Procedures (SOP’s) and then eventually in code. The power of artificial intelligence is the ability to move the role of the machine to the left in The Knowledge Funnel, away from pure manual coding by a human, to computer programs that write themselves and eventually to heuristic identification and algorithm creation at some point in the near future. This is what crowd computing, machine learning and deep learning ultimately make possible, and which I explored in a previous article titled Welcome to the Crowd Computing Revolution in more detail. The fact remains that as computer programmers and the artificial minds they create become more adept at watching the work that consultants do and recognizing the patterns in their recommendations, the pressure on consultancies will build.
Conclusion
These are challenging times for large consultancies and small independent consultants as consultancies are forced respond to these attacks from three sides. Part of that three-pronged attack will come from a growing legion of automation engineers taking to cubicles around the world to design people out of jobs. In the same way that mechanical engineers build robots to replace our human muscles with machine muscles, automation engineers are computer programmers tasked with creating inexpensive machine minds with sufficient artificial intelligence to replace our more expensive human minds. Professions like that of the automation engineer will attract increasing numbers from workforces around the world, but not nearly enough to offset the losses in job opportunities that these individuals are tasked with eliminating. Only time will tell how quickly and how broadly artificial intelligence (AI) threatens the core business of consultancies.
If you are in the consulting industry, what is your strategy for responding to this threat?
Because, make no mistake, the threat is real. The only question is how quickly it will materially impact your bottom line.
BONUS:
You might enjoy this interview with David Cope, the creator of Emi (Emily Howell) the algorithmic composer, whom he later killed:
Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.
As part of Bill Jensen’s series of interviews with the Top 75 Disruptive Experts from around the globe, I had the opportunity to sit down with Bill and discuss several different questions about disruption in this video interview, including:
Introduction
My Favorite Disruptive Hero
My Value Innovation Framework
My Favorite Disruptive Change
The Disruptive Change I Struggle With
Some of the key points I make in the video are importance of recognizing opportunities and seizing them, the impact of online services on how we all relate to each other and conduct our lives, my view on the key components to creating innovation success, and finally some thoughts on how evolving mobile capabilities are already changing our lives and how mobile will continue to change us (aka the mobile-centered human experience). Hope you enjoy it!
If you would like to schedule an interview with me for your online, television, print, or radio program, please contact me.
Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.