Tag Archives: politics

We Need to Solve the Productivity Crisis

We Need to Solve the Productivity Crisis

GUEST POST from Greg Satell

When politicians and pundits talk about the economy, they usually do so in terms of numbers. Unemployment is too high or GDP is too low. Inflation should be at this level or at that. You get the feeling that somebody somewhere is turning knobs and flicking levers in order to get the machine humming at just the right speed.

Yet the economy is really about our well being. It is, at its core, our capacity to produce goods and services that we want and need, such as the food that sustains us, the homes that shelter us and the medicines that cure us, not to mention all of the little niceties and guilty pleasures that we love to enjoy.

Our capacity to generate these things is determined by our productive capacity. Despite all the hype about digital technology creating a “new economy,” productivity growth for the past 50 years has been tremendously sluggish. If we are going to revive it and improve our lives we need to renew our commitment to scientific capital, human capital and free markets.

Restoring Scientific Capital

In 1945, Vannevar Bush, delivered a report, Science, The Endless Frontier, that argued that the US government needed to invest in “scientific capital” and through basic research and scientific education. It would set in motion a number of programs that would set the stage for America’s technological dominance during the second half of the century.

Bush’s report led to the development of America’s scientific infrastructure, including agencies such as the National Science Foundation (NSF), National Institutes of Health (NIH) and DARPA. Others, such as the National Labs and science programs at the Department of Agriculture, also contribute significantly to our scientific capital.

The results speak for themselves and returns on public research investment have been shown to surpass those in private industry. To take just one example, it has been estimated that the $3.8 billion invested in the Human Genome Project resulted in nearly $800 billion in economic impact and created over 300,000 jobs in just the first decade.

Unfortunately, we forgot those lessons. Government investment in research as a percentage of GDP has been declining for decades, limiting our ability to produce the kinds of breakthrough discoveries that lead to exciting new industries. What passes for innovation these days displaces workers, but does not lead to significant productivity gains.

So the first step to solving the productivity puzzle would be to renew our commitment to investing in the type of scientific knowledge that, as Bush put it, can “turn the wheels of private and public enterprise.” There was a bill before congress to do exactly that, but unfortunately it got bogged down in the Senate due to infighting.

Investing In Human Capital

Innovation, at its core, is something that people do, which is why education was every bit as important to Bush’s vision as investment was. “If ability, and not the circumstance of family fortune, is made to determine who shall receive higher education in science, then we shall be assured of constantly improving quality at every level of scientific activity,” he wrote.

Programs like the GI Bill delivered on that promise. We made what is perhaps the biggest investment ever in human capital, sending millions to college and creating a new middle class. American universities, considered far behind their European counterparts earlier in the century, especially in the sciences, came to be seen as the best in the world by far.

Today, however, things have gone horribly wrong. A recent study found that about half of all college students struggle with food insecurity, which is probably why only 60% of students at 4-year institutions and even less at community colleges ever earn a degree. The ones that do graduate are saddled with decades of debt

So the bright young people who we don’t starve we are condemning to decades of what is essentially indentured servitude. That’s no way to run an entrepreneurial economy. In fact, a study done by the Federal Reserve Bank of Philadelphia found that student debt has a measurable negative impact on new business creation.

Recommitting Ourselves To Free and Competitive Markets

There is no principle more basic to capitalism than that of free markets, which provide the “invisible hand” to efficiently allocate resources. When market signals get corrupted, we get less of what we need and more of what we don’t. Without vigorous competition, firms feel less of a need to invest and innovate, and become less productive.

There is abundant evidence that is exactly what has happened. Since the late 1970s antitrust enforcement has become lax, ushering in a new gilded age. While digital technology was hyped as a democratizing force, over 75% of industries have seen a rise in concentration levels since the late 1990s, which has led to a decline in business dynamism.

The problem isn’t just monopoly power dominating consumers, either, but also monopsony, or domination of suppliers by buyers, especially in labor markets. There is increasing evidence of collusion among employers designed to keep wages low, while an astonishing abuse of non-compete agreements that have affected more than a third of the workforce.

In a sense, this is nothing new. Adam Smith himself observed in The Wealth of Nations that “Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.”

Getting Back On Track

In the final analysis, solving the productivity puzzle shouldn’t be that complicated. It seems that everything we need to do we’ve done before. We built a scientific architecture that remains unparalleled even today. We led the world in educating our people. American markets were the most competitive on the planet.

Yet somewhere we lost our way. Beginning in the early 1970s, we started reducing our investment in scientific research and public education. In the early 1980s, the Chicago school of competition law started to gain traction and antitrust enforcement began to wane. Since 2000, competitive markets in the United States have been in serious decline.

None of this was inevitable. We made choices and those choices had consequences. We can make other ones. We can choose to invest in discovering new knowledge, educate our children without impoverishing them, to demand our industries compete and hold our institutions to account. We’ve done these things before and can do so again.

All that’s left is the will and the understanding that the economy doesn’t exist in the financial press, on the floor of the stock markets or in the boardrooms of large corporations, but in our own welfare as well as in our ability to actualize our potential and realize our dreams. Our economy should be there to serve our needs, not the other way around.

— Article courtesy of the Digital Tonto blog
— Image credits: Unsplash

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Top 10 Human-Centered Change & Innovation Articles of August 2023

Top 10 Human-Centered Change & Innovation Articles of August 2023Drum roll please…

At the beginning of each month, we will profile the ten articles from the previous month that generated the most traffic to Human-Centered Change & Innovation. Did your favorite make the cut?

But enough delay, here are August’s ten most popular innovation posts:

  1. The Paradox of Innovation Leadership — by Janet Sernack
  2. Why Most Corporate Innovation Programs Fail — by Greg Satell
  3. A Top-Down Open Innovation Approach — by Geoffrey A. Moore
  4. Innovation Management ISO 56000 Series Explained — by Diana Porumboiu
  5. Scale Your Innovation by Mapping Your Value Network — by John Bessant
  6. The Impact of Artificial Intelligence on Future Employment — by Chateau G Pato
  7. Leaders Avoid Doing This One Thing — by Robyn Bolton
  8. Navigating the Unpredictable Terrain of Modern Business — by Teresa Spangler
  9. Imagination versus Knowledge — by Janet Sernack
  10. Productive Disagreement Requires Trust — by Mike Shipulski

BONUS – Here are five more strong articles published in July that continue to resonate with people:

If you’re not familiar with Human-Centered Change & Innovation, we publish 4-7 new articles every week built around innovation and transformation insights from our roster of contributing authors and ad hoc submissions from community members. Get the articles right in your Facebook, Twitter or Linkedin feeds too!

Have something to contribute?

Human-Centered Change & Innovation is open to contributions from any and all innovation and transformation professionals out there (practitioners, professors, researchers, consultants, authors, etc.) who have valuable human-centered change and innovation insights to share with everyone for the greater good. If you’d like to contribute, please contact me.

P.S. Here are our Top 40 Innovation Bloggers lists from the last three years:

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

Four Transformation Secrets Business Leaders Can Learn from Social and Political Movements

Four Transformation Secrets Business Leaders Can Learn from Social and Political Movements

GUEST POST from Greg Satell

In 2004, I was managing a major news organization during the Orange Revolution in Ukraine. One of the things I noticed was that thousands of people, who would normally be doing thousands of different things, would stop what they were doing and start doing the same things all at once, in nearly complete unison, with no clear authority guiding them.

What struck me was how difficult it was for me to coordinate action among the people in my company. I thought if I could harness the forces I saw at work in the Orange Revolution, it could be a powerful model for business transformation. That’s what started me out on the 15-year journey that led to my book, Cascades.

What I found was that many of the principles of successful movements can be applied to business transformation. Also, because social and political movements so well documented—there are often thousands of contemporary accounts from every conceivable perspective—we can gain insights that a traditional case studies miss. Here are four principles you can apply.

1. Failure Doesn’t Have To Be Fatal

One of the things that amazed me while researching revolutionary movements was how consistently failure played a part in their journey. Mahatma Gandhi’s early efforts to bring independence to India led to the massacre at Amritsar in 1919. Our own efforts in Ukraine in 2004 ultimately led to Viktor Yanukovych’s rise to power in 2010.

In the corporate context, it is often a crisis that leads to transformational change. In the early 90s, IBM was nearly bankrupt and many thought the company should be broken up. That’s what led to the Gerstner revolution that put the company back on track and a similar crisis at Alcoa presaged record profits under Paul O’Neil.

In fact, Lou Gertner would later say that failure and transformation are inextricably linked. “Transformation of an enterprise begins with a sense of crisis or urgency,” he told a groups of Harvard Business School students. “No institution will go through fundamental change unless it believes it is in deep trouble and needs to do something different to survive.”

What’s important about early failures is what you learn from them. In every successful transformation I researched, what turned the tide was when the insights gained from early failures were applied to create a keystone change that set out a clear and concrete initiative, involved multiple stakeholders and paved the way for a greater transformation down the road.

2. Don’t Bet Your Transformation On Persuasion

Any truly transformational change is going to encounter significant resistance. Those who fear change and support the status quo can be expected to work to undermine your efforts. That’s fairly obvious in social and political movements like the civil rights movements or the struggle against Apartheid, but often gets overlooked in the corporate context.

All too often change management efforts seek to convince opponents through persuasion. That’s unlikely to succeed. Betting your transformation on the idea that, given the right set of arguments or snappy slogans, those who oppose the change that you seek will immediately see the light is unrealistic. What you can do, however, is set out to influence stakeholders who can wield influence.

For example, in the 1980s, anti-Aparthied activists activists led a campaign against Barclays Bank in British university towns. That probably did little to persuade white nationalists in South Africa, but it severely affected Barclays’ business, which pulled its investments from South Africa. That and similar efforts made Apartheid economically untenable and helped lead to its downfall.

In a corporate transformation, there are many institutions, such as business units, customer groups, industry associations, and others that can wield significant influence. By looking at stakeholder groups more broadly, you can win important allies that can help you drive transformation forward.

3. Be Explicit About Your Values

Today, we regard Nelson Mandela as an almost saintly figure, but it wasn’t always that way. Throughout his career as an activist, he was accused of being a communist, an anarchist and worse. When confronted with these accusations, however, he always pointed out that no one had to guess what he believed in, because it was written down in the Freedom Charter in 1955.

Being explicit about values helped to signal to external stakeholders, such as international institutions, that the anti-Aparthied activists shared common values. In fact, although the Freedom Charter was a truly revolutionary document, its call for things like equal rights and equal protection would be considered utterly unremarkable in most countries.

After Apartheid fell and Mandela rose to power, the values spelled out in the Freedom Charter became important constraints. If, for example, a core value is that all national groups should be treated equal, then Mandela’s government clearly couldn’t oppress whites. His reconciliation efforts are a big part of the reason he is so revered today.

Irving Wladawsky-Berger, one of Gerster’s key lieutenants, told me how values played a similar role during IBM’s turnaround years. “The Gerstner revolution wasn’t about technology or strategy, it was about transforming our values and our culture to be in greater harmony with the market… Because the transformation was about values first and technology second, we were able to continue to embrace those values as the technology and marketplace continued to evolve.”

4. Every Revolution Inspires A Counter-Revolution

After the Orange Revolution ended in 2005, we felt triumphant. We overcame enormous odds and had won. Little did we know that there would be much darker days ahead. In 2010, Viktor Yanukovych, the man we took to the streets to keep out of power, was elected president in an election that international observers judged to be free and fair.

While surprising, this is hardly uncommon. Similar events took place during the Arab Spring. The government of Hosni Mubarrak was overthrown only to be replaced by that of Abdel Fattah el-Sisi, who is possibly even more oppressive. Harvard professor Rita Gunther McGrath points out that in today’s business environment, competitive advantage tends to be transient.

The truth is that every revolution inspires a counter-revolution. That’s why the early days of victory are often the most fragile. That’s when you tend to take your foot off the gas and relax, while at the same time those who oppose the change you worked to build are just beginning to plan to redouble their efforts.

That’s why you need a plan to survive victory from the start rooted in shared values. In the final analysis, driving change is less about a series of objectives than it is about forming a common cause. That’s just as true in a corporate transformation as it is in a social or political revolution.

— Article courtesy of the Digital Tonto blog
— Image credit: Pixabay

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Four Ways Governments Can Accelerate the Digital Transformation of Their Economies

Four Ways Governments Can Accelerate the Digital Transformation of Their Economies

GUEST POST from Art Inteligencia

In today’s digital world, governments have a critical role to play in accelerating digital transformation. As technology continues to evolve, governments must find ways to embrace and apply new technologies, while also ensuring that their citizens have access to the most advanced digital services.

To ensure success, there are several key steps that the government should take.

1. Governments Should Invest in Digital Infrastructure

By investing in the infrastructure necessary to support digital transformation, the government can create a platform for innovation and adoption of new technologies. This includes things like high-speed broadband, 5G networks, and cloud computing capabilities.

2. Governments Should Provide Incentives to Spur Digital Adoption

This could come in the form of tax breaks, grants, and other incentives to organizations that are investing in digital transformation. This will help create a climate of investment and innovation, which will in turn help accelerate the transformation process.

3. Governments Should Create a Supportive Regulatory Environment

This means creating laws and regulations that are conducive to digital transformation, such as data privacy and security laws. This will help ensure that organizations can safely and securely adopt new technologies and services.

4. Governments Should Invest in Digital Literacy and Education

By investing in digital literacy and education, the government can ensure that citizens have the tools and knowledge necessary to take advantage of the digital transformation. This can include programs such as coding boot camps and digital literacy courses for adults.

Conclusion

By taking these steps, the government can create an environment that is conducive to digital transformation and help accelerate the process. In doing so, the government can ensure that its citizens have access to the most advanced digital services and technologies, and that organizations can take advantage of the opportunities that come with digital transformation.

Image credit: Pixabay

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3 Things Politicians Can Do to Create Innovation

3 Things Politicians Can Do to Create Innovation

GUEST POST from Greg Satell

In the 1960s, the federal government accounted for more than 60% of all research funding, yet by 2016 that had fallen to just over 20%. During the same time, businesses’ share of R&D investment more than doubled from about 30% to almost 70%. Government’s role in US innovation, it seems, has greatly diminished.

Yet new research suggests that the opposite is actually true. Analyzing all patents since 1926, researchers found that the number of patents that relied on government support has risen from 12% in the 1980s to almost 30% today. Interestingly, the same research found that startups benefitted the most from government research.

As we struggle to improve productivity from historical lows, we need the public sector to play a part. The truth is that the government has a unique role to play in driving innovation and research is only part of it. In addition to funding labs and scientists, it can help bring new ideas to market, act as a convening force and offer crucial expertise to private businesses.

1. Treat Knowledge As A Public Good

By 1941, it had become clear that the war raging in Europe would soon envelop the US. With this in mind, Vannevar Bush went to President Roosevelt with a visionary idea — to mobilize the nation’s growing scientific prowess for the war effort. Roosevelt agreed and signed an executive order that would create the Office of Scientific Research and Development (OSRD).

With little time to build labs, the OSRD focused on awarding grants to private organizations such as universities. It was, by all accounts, an enormous success and lead to important breakthroughs such as the atomic bomb, proximity fuze and radar. As the war was winding down, Roosevelt asked Bush to write a report to continue OSRD’s success peacetime.

That report, titled Science, The Endless Frontier, was delivered to President Truman and would set the stage for America’s lasting technological dominance. It set forth a new vision in which scientific advancement would be treated as a public good, financed by the government, but made available for private industry. As Bush explained:

Basic research leads to new knowledge. It provides scientific capital. It creates the fund from which the practical applications of knowledge must be drawn. New products and new processes do not appear full-grown. They are founded on new principles and new conceptions, which in turn are painstakingly developed by research in the purest realms of science.

The influence of Bush’s idea cannot be overstated. It led to the creation of new government agencies, such as the National Science Foundation (NSF), the National Institutes of Health (NIH) and, later, the Defense Advanced Research Projects Agency (DARPA). These helped to create a scientific infrastructure that has no equal anywhere in the world.

2. Help to Overcome the Valley of Death

Government has a unique role to play in basic research. Because fundamental discoveries are, almost by definition, widely applicable, they are much more valuable if they are published openly. At the same time, because private firms have relatively narrow interests, they are less able to fully leverage basic discoveries.

However, many assume that because basic research is a primary role for public investment that it is its only relevant function. Clearly, that’s not the case. Another important role government has to play is helping to overcome the gap between the discovery of a new technology and its commercialization, which is so fraught with peril that it’s often called the “Valley of Death.”

The oldest and best known of initiative is SBIR/STTR program, which is designed to help startups commercialize cutting-edge research. Grants are given in two phases. In the first, a proof-of-concept phase, grants are capped at $150,000. If that’s successful, up to $1 million more can be awarded. Some SBIR/STTR companies, such as Qualcomm, iRobot and Symantec, have become industry leaders.

Other more focused programs have also been established. ARPA-e focuses exclusively on advanced energy technologies. Lab Embedded Entrepreneurship Programs (LEEP) give entrepreneurs access to the facilities and expertise of the National Labs in addition to a small grant. The Manufacturing Extension Program (MEP) helps smaller companies build the skills they need to be globally competitive.

3. Act As a Convening Force

A third role government can play is that of a convening force. For example, in 1987 a non-profit consortium made up of government labs, research universities and private sector companies, called SEMATECH, was created to regain competitiveness in the semiconductor industry. America soon regained its lead, which continues even today.

The reason that SEMATECH was so successful was that it combined the scientific expertise of the country’s top labs with the private sector’s experience in solving real world problems. It also sent a strong signal that the federal government saw the technology as important, which encouraged private companies to step up their investment as well.

Today, a number of new initiatives have been launched that follow a similar model. The most wide-ranging is the Manufacturing USA Institutes, which are helping drive advancement in everything from robotics and photonics to biofabrication and composite materials. Others, such as JCESR and the Critical Materials Institute, are more narrowly focused.

Much like its role in supporting basic science and helping new technologies get through the “Valley of Death,” acting as a convening force is something that, for the most part, only the federal government can do.

Make No Mistake: This Is Our New Sputnik Moment

In the 20th century three key technologies, electricity, internal combustion and computing drove economic advancement and the United States led each one. That is why it is often called the “American Century.” No country, perhaps since the Roman Empire, has ever so thoroughly dominated the known world.

Yet the 21st century will be different. The most important technologies will be things like synthetic biology, materials science and artificial intelligence. These are largely nascent and it’s still not clear who, if anybody, will emerge as a clear leader. It is very possible that we will compete economically and technologically with China, much like we used to compete politically and militarily with the Soviet Union.

Yet back in the Cold War, it was obvious that the public sector had an important role to play. When Kennedy vowed to go to the moon, nobody argued that the effort should be privatized. It was clear that such an enormous undertaking needed government leadership at the highest levels. We pulled together and we won.

Today, by all indications, we are at a new Sputnik moment in which our global scientific and technological leadership is being seriously challenged. We can respond with imagination, creating novel ways to, as Bush put it, “turn the wheels of private and public enterprise,” or we can let the moment pass us by and let the next generation face the consequences.

One thing is clear. We will be remembered for what we chose to do.

— Article courtesy of the Digital Tonto blog
— Image credit: Pixabay

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Top 10 Human-Centered Change & Innovation Articles of September 2022

Top 10 Human-Centered Change & Innovation Articles of September 2022Drum roll please…

At the beginning of each month we will profile the ten articles from the previous month that generated the most traffic to Human-Centered Change & Innovation. Did your favorite make the cut?

But enough delay, here are September’s ten most popular innovation posts:

  1. You Can’t Innovate Without This One Thing — by Robyn Bolton
  2. Importance of Measuring Your Organization’s Innovation Maturity — by Braden Kelley
  3. 3 Ways to Get Customer Insights without Talking to Customers
    — by Robyn Bolton
  4. Four Lessons Learned from the Digital Revolution — by Greg Satell
  5. Are You Hanging Your Chief Innovation Officer Out to Dry? — by Teresa Spangler
  6. Why Good Job Interviews Don’t Lead to Good Job Performance — by Arlen Meyers, M.D.
  7. Six Simple Growth Hacks for Startups — by Soren Kaplan
  8. Why Diversity and Inclusion Are Entrepreneurial Competencies
    — by Arlen Meyers, M.D.
  9. The Seven P’s of Raising Money from Investors — by Arlen Meyers, M.D.
  10. What’s Next – The Only Way Forward is Through — by Braden Kelley

BONUS – Here are five more strong articles published in August that continue to resonate with people:

If you’re not familiar with Human-Centered Change & Innovation, we publish 4-7 new articles every week built around innovation and transformation insights from our roster of contributing authors and ad hoc submissions from community members. Get the articles right in your Facebook, Twitter or Linkedin feeds too!

Have something to contribute?

Human-Centered Change & Innovation is open to contributions from any and all innovation and transformation professionals out there (practitioners, professors, researchers, consultants, authors, etc.) who have valuable human-centered change and innovation insights to share with everyone for the greater good. If you’d like to contribute, please contact me.

P.S. Here are our Top 40 Innovation Bloggers lists from the last two years:

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

What’s Next – The Only Way Forward is Through

What's Next - The Only Way Forward is Throughby Braden Kelley

The world needs you. The United States needs you. Your family needs you.

Both your heart and your mind are needed to work on potentially the greatest innovation challenge ever put forward.

What is it?

We must find a solution to the division and lack of meaning that has become the American experience.

I’m not sure about the country you live in, but here at home in the United States we are more divided than we have been in a long time – if ever. People are feeling such an absence of meaning and purpose in their lives that they are finding it in opposing ‘the other’.

In the most extreme cases, we are so divided that brothers and sisters, and parents and children are no longer speaking with each other or getting together for holiday meals.

We speak often about the importance of diversity of thought, diversity of group composition for innovation, but when a society reaches a point where people cannot productively disagree and debate their way forward together, innovation will inevitably begin to suffer.

When there is no dialogue, no give and take and a culture begins to emerge where opposition is mandatory, progress slows.

As long as the current situation intensifies, there will be no progress on other areas in desperate need of innovation:

  • Climate change
  • Gender equity
  • (Insert your favorite here)

We all need your help creating the idea fragments that we can connect as a global innovation community into meaningful ideas that hopefully lead to the inventions that will develop into the innovations we desperately need.

The innovations that will move social media from its current parallel play universe to one which actually encourages productive dialogue.

The innovations that will help people find the renewed sense of meaning and purpose that can’t be found making Sik Sok videos, watching other people play video games on Kwitch or investing in cryptocurrency pyramid schemes.

Meaning of Life Quote from Braden Kelley

Our entrepreneurs have made a lot of cotton candy the past couple of decades and people are starving, people are hangry.

There are certain constants in the human condition, and when we as a species stray too far away, it creates huge opportunities for innovators to create new things that will bring us back into balance.

But we can’t ignore where we are now.

We must acknowledge our current situation and fight our way past it. The only way forward is through.

As a thought starter, here is an ad campaign from Heineken from 2017:

We need everyone’s help to address the meaning crisis.

We need everyone’s help to bring America (and the rest of the world) back into productive conversation and connection – to end the division.

Are you up to the task?

Are you ready to help?

Let’s start the dialogue below and get that pebble rolling downhill in the winter, gathering snow as it goes.

I would love to hear your thoughts in the comments on:

  • other great thought starters
  • good idea fragments to build on
  • the way through

Image credit: Pixabay

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We Were Wrong About What Drove the 21st Century

We Were Wrong About What Drove the 21st Century

GUEST POST from Greg Satell

Every era contains a prism of multitudes. World War I gave way to the “Roaring 20s” and a 50-year boom in productivity. The Treaty of Versailles sowed the seeds to the second World War, which gave way to the peace and prosperity post-war era. Vietnam and the rise of the Baby Boomers unlocked a cultural revolution that created new freedoms for women and people of color.

Our current era began with the 80s, the rise of Ronald Reagan and a new confidence in the power of markets. Genuine achievements of the Chicago School of economics led by Milton Friedman, along with the weakness Soviet system, led to an enthusiasm for market fundamentalism that dominated policy circles.

So it shouldn’t be that surprising that veteran Republican strategist Stuart Stevens wrote a book denouncing that orthodoxy as a lie. The truth is he has a point. But politicians can only convince us of things we already want to believe. The truth is that we were fundamentally mistaken in our understanding of how the world works. It’s time that we own up to it.

Mistake #1: The End Of The Cold War Would Strengthen Capitalism

When the Berlin Wall came down in 1989, the West was triumphant. Communism was shown to be a corrupt system bereft of any real legitimacy. A new ideology took hold, often called the Washington Consensus, that preached fiscal discipline, free trade, privatization and deregulation. The world was going to be remade in capitalism’s image.

Yet for anybody who was paying attention, communism had been shown to be bankrupt and illegitimate since the 1930s when Stalin’s failed collectivization effort and industrial plan led him to starve his own people. Economists have estimated that, by the 1970s, Soviet productivity growth had gone negative, meaning more investment actually brought less output. The system’s collapse was just a matter of time.

At the same time, there were early signs that there were serious problems with the Washington Consensus. Many complained that bureaucrats at the World Bank and the IMF were mandating policies for developing nations that citizens in their own countries would not accept. So called “austerity programs” led to human costs that were both significant and real. In a sense, the error of the Soviets was being repeated—ideology was put before people.

Today, instead of a capitalist utopia and an era of peace and prosperity, we got a global rise in authoritarian populism, stagnant wages, reduced productivity growth and weaker competitive markets. In particular in the United States, by almost every metric imaginable, capitalism has been weakened.

Mistake #2: Digital Technology Would Make Everything Better

In November 1989, the same year that the Berlin Wall fell, Tim Berners-Lee created the World Wide Web and ushered in a new technological era of networked computing that we now know as the “digital revolution.” Much like the ideology of market fundamentalism that took hold around the same time, technology was seen as determinant of a new, brighter age.

By the late 1990s, increased computing power combined with the Internet to create a new productivity boom. Many economists hailed the digital age as a “new economy” of increasing returns, in which the old rules no longer applied and a small initial advantage would lead to market dominance.

Yet by 2004, productivity growth had slowed again to its earlier lethargic pace. Today, despite very real advances in processing speed, broadband penetration, artificial intelligence and other things, we seem to be in the midst of a second productivity paradox in which we see digital technology everywhere except in the economic statistics.

Digital technology was supposed to empower individuals and reduce the dominance of institutions, but just the opposite has happened. Income inequality in advanced economies markedly increased. In America wages have stagnated and social mobility has declined. At the same time, social media has been destroying our mental health.

When Silicon Valley told us they intended to “change the world,” is this what they meant?

Mistake #3: Medical Breakthroughs Would Automatically Make Us Healthier

Much like the fall of the Berlin Wall and the rise of the Internet, the completion of the Human Genome Project in 2003 promised great things. No longer would we be at the mercy of terrible terrible diseases such as cancer and Alzheimer’s, but would design genetic therapies that would rewire our bodies to find off disease by themselves.

The advances since then have been breathtaking. The Cancer Genome Atlas, which began in 2005, helped enable doctors to develop therapies targeted at specific mutations, rather than where in the body a tumor happened to be found. Later, CRISPR revolutionized synthetic biology, bringing down costs exponentially.

The rapid development of Covid-19 vaccines have shown how effective these new technologies are. Scientists have essentially engineered new viruses containing the viral genome to produce a few proteins, just enough to provoke an immune response but not nearly enough to make us sick. 20 years ago, this would have been considered science fiction. Today, it’s a reality.

Yet we are not healthier. Worldwide obesity has tripled since 1975 and has become an epidemic in the United States. Anxiety and depression have as well. American healthcare costs continue to rise even as life expectancy declines. Despite the incredible advance in our medical capability, we seem to be less healthy and more miserable.

Worse Than A Crime, It Was A Blunder

Whenever I bring up these points among technology people, they vigorously push back. Surely, they say, you can see the positive effects all around you. Can you imagine what the global pandemic would be like without digital technologies? Without videoconferencing? Hasn’t there been a significant global decline in extreme poverty and violence?

Yes. There have absolutely been real achievements. As someone who spent roughly half my adult life in Eastern Bloc countries, I can attest to how horrible the Soviet system was. Digital technology has certainly made our lives more convenient and, as noted above, medical advances have been very real and very significant.

However, technology is a process that involves both revealing and building. Yes, we revealed the power of market forces and the bankruptcy of the Soviet system, but failed to build a more prosperous and healthy society. In much the same way, we revealed the power of the microchip, miracle cures and many other things, but failed to put them to use in such a way that would make us measurably better off.

When faced with a failure this colossal, people often look for a villain. They want to blame the greed of corporations, the arrogance of Silicon Valley entrepreneurs or the incompetence of government bureaucrats. The truth is, as the old saying goes, it was worse than a crime, it was a blunder. We simply believed that market forces and technological advancement would work their magic and all would be well in hand.

By now we should know better. We need to hold ourselves accountable, make better choices and seek out greater truths.

— Article courtesy of the Digital Tonto blog
— Image credit: Pixabay

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Whither Innovation in Indiana?

Whither Innovation in Indiana?Now that I’ve got your attention, let’s talk about homosexuality and whether it has any impact on innovation. There probably are two no more polarizing topics in the United States than homosexuality and abortion. But the truth is that if both sides of the political and religious spectrum focused on the golden rule, there would be less corruption, we’d all be a lot happier, probably have more innovation, and our politics would be more productive.

Today we have another great case study for how short people’s attention spans have gotten, how the government can help or hinder innovation, how little investigative journalism still remains in the United States, and how easily people are swayed by a soundbite that runs contrary to (or in support of) their own personal religious or political beliefs.

But this article isn’t going to be some diatribe in support or opposition to Indiana’s Religious Freedom Restoration Act (RFRA) legislation (referred to by the media as an anti-gay law) because I freely admit I don’t fully understand all of the implications of a similar federal law and whether federal protections for gays apply to the state law.

Instead I’d like to focus briefly on what this controversy brings to mind for me in regards to the efforts of hard-working folks attempting to stimulate innovation in Indiana (and elsewhere).

Point #1: People Must Feel Safe to Innovate

If we take Maslow’s Heirarchy of Needs as gospel (okay, maybe that’s dangerous word choice), then safety is one of the most important needs for people, and in order to innovate people must feel safe. True innovation usually requires taking risks and doing things in a new way, and if people feel that trying something new or even just being different has a high price, then people won’t step out of their comfort zone and push the boundaries of conventional wisdom. So if we are truly trying to do everything we can to inspire innovation in our region, shouldn’t we also try to do everything we can to make it feel like a place where it is safe to be different and where that difference is potentially even celebrated?

Point #2: Diversity is Important (to a point)

We all look at the same situation through different eyes and a different history of experiences, values and beliefs. This diversity can help create different idea fragments that can be connected together to create revolutionary new ideas with the potential to become innovations. But at the same time, having some shared experiences helps to make it easier to communicate and to have a higher level of trust (assuming those experiences were good ones). So if we are truly trying to do everything we can to inspire innovation in our region, shouldn’t we also do everything we can to make different groups of people look to our region as a good place to move to so we have a diverse talent pool?

Conclusion: If Culture Trumps Strategy, Environment Trumps Startups

The world is changing. It used to be that companies started and grew in the community where they were founded, hiring increasing numbers of people from the surrounding areas and attracting others from elsewhere. Now, an increasing number of companies (especially digital ones) are moving to more distributed models where they create satellite offices where the talent is rather than trying to attract all of the talent to a single location.

Economically this is meaning that it is becoming less important that the next Facebook starts in your town than it is for the next Facebook to want to have an office in your town. This means that for cities, counties, states and countries, the greater economic impact is likely to be made not from trying to encourage lots of startups, but instead from trying to create an environment that young, talented people choose to live in.

And when you create a place that is attractive for smart, creative people to move to, you know what, you’re likely to end up not just with more growing digital companies seeking a presence, but also a larger number of startups than if you started with the goal of specifically trying to encourage startups.

Does your region focus on creating startups as the primary goal or on making itself an attractive place for a young, diverse and talented population to live?

Does this uproar help Indiana establish its as an attractive place to be, or work against that perception?

I’ll let you decide!

P.S. If you’re curious, here are The Metro Areas With the Largest, and Smallest, Gay Populations (for what it’s worth, Indianapolis isn’t on either list)


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Unlock Marketing Innovation with a WGAS Focus

Unlock Marketing Innovation with a WGAS FocusBack in 2011 when election season was fast approaching, one thing that you heard repeatedly during election coverage was analysts talking about the importance of the undecided vote. Often in an election it is the undecided who swing the vote for one candidate over another. As a result, there is an incredible amount of focus placed on understanding why people are still undecided between two major candidates (think Obama vs. Romney) and so as a result campaign strategists and speech writers are obsessed with capturing the imagination of the undecided. But, there is a lot of complexity in those undecided numbers, as they include:

  • People that are truly undecided
  • People that don’t want either candidate to win
  • People that didn’t even know there was an election going on
  • People that feel the whole system is corrupt
  • People that can’t tell the difference between the two candidates
  • And so on

So if the undecided are so important in politics, why shouldn’t they be in business?

If we are the Coca Cola company, do we really think that an advertisement or a marketing campaign is going to turn a loyal Pepsi drinker into a Coke drinker? Are we going to be able to turn Red Bull or milk drinkers into Coke drinkers?

People prefer to drink a lot of other things over something thick and syrupy like Coke and Pepsi most of the time, and while a lot of people may drink Coke either regularly or occasionally, a lot of people don’t and won’t. So if we are the Coca Cola company we are advertising to:

  • Remind Coke drinkers how great Coke is
  • Make occasional Coke drinkers think about having one again soon
  • Convince people that aren’t sure about Coke that they should really try it

This reminds me of the old saying “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” (John Wanamaker)

Personally, I believe the percentage of waste is much, much higher than fifty percent because:

  • Probably less than fifty percent even see the advertisement
  • Twenty percent or more will never buy the product no matter what you do
  • Twenty percent or less already buy the product
  • Leaving MAYBE ten percent of the people exposed to the advertisement to be swayed by it

The above are just my intuitive estimates. I’m sure someone out there probably has done the research on this and could share a more precise number, and if that’s you, please share in the comments!

A lot of this waste comes from the fact that we as marketers focus on the volume of exposure we can achieve for a product or service, even if we’re using complicated segmentations, personas, and/or behavioral targeting. No matter what, we always end up coming back to the volume of exposure we are able to achieve, because it is something we can measure. We try to segment the market and target our chosen segments with a carefully crafted message and creative, but ultimately most marketers attack the problem by asking this question:

  • What do the people who buy my product look like?

When we should all be asking the question:

  • Who gives a @*!%?

I like to call this WGAS marketing.

The premise behind it is that there is only a very small, diverse subset of people out there who have any interest in what it is that you’re selling. And so, by trying to talk to everyone that looks like that subset – by age, gender, race, tax bracket or whatever other segmentation parameters you might select to target based on, then you’re still wasting a huge amount of time – and money. Instead, we should be looking at creative ways to expose only those people who have a need (or maybe a want) that we can satisfy with what we’re selling.

Jobs-to-be-Done Isn’t Just for Innovation

We talk about identifying unmet needs and jobs-to-be-done when it comes to innovation, but there is no reason why we shouldn’t keep that line of thinking in mind when it comes to our marketing of a potential innovation (or any product or service). Thinking about the jobs-to-be-done or the needs that the customer is trying to satisfy instead of the commonalities of prospective customers from a targeting/segmentation might change the kind of marketing strategy and execution that you come up with.

You might think in different ways about what success looks like, or consider marketing methods you might otherwise skip. For example, while doing in-store demos of a new food or beverage may cost more per potentially engaged person than traditional advertising, you are much more likely to turn the people you do engage with into customers, and to have a conversation with them, so is it really more expensive?

Or you might do something like what Safeway has started doing, as shown in this New York Times article. Safeway is using its vast amounts of shopper data to engage in WGAS Marketing by offering variable pricing – offering different prices to different customers on the same product. But unlike, the variable pricing of airlines that is based on availability and timing, Safeway is varying the price based on individual shopper behavior.

Done properly, pull marketing can use content as a WGAS Marketing strategy. The key of course if to create content that your WGAS audience will find value in and that will cause them to either take action or to develop a stronger affinity for your brand so that when they are ready to take action that you are either the only brand that they will consider, or firmly planted at the heart of their consideration set.

Another way of engaging in WGAS Marketing is to engage in activities that your WGAS audience will engage with. Companies like Red Bull and Life is Good use events very successfully as a WGAS Marketing strategy mixed together with a traditional segmentation and targeting approach. Red Bull focuses so much on their WGAS audience that their product isn’t even featured on their home page.

For better or worse Camel cigarettes and McDonald’s identified kids as the ‘undecided’ potential customers in their markets and chose to target them as a way of increasing their current and future sales. Larry Popelka in his book Moneyball Marketing talked about how Clorox identified new mothers as a group of ‘undecided’ potential bleach buyers who had something that they wanted really white (diapers) that Clorox could target and grow into long-term profitable customers.

So, as you can see, one of the keys of WGAS Marketing is to not just identify what your current customers look like and to try and attract more of them, but to identify the underlying reasons why someone may have a need to consider your solution (think jobs-to-be-done), or become open to a new solution such as yours because their life circumstances have changed.

So, WGAS about your product or service? Or WGAS about the problem that your solution addresses (if it is something new or innovative)?

Finding the answer to one or both of these questions is the key you need to unlock a source of tremendous new revenue and profits for your business. Are you ready to look for the things that will cause people to care? Are you open to considering alternative marketing approaches that will help you reach the people WGAS?

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