There’s no question we have entered a transformative age, with major shifts in technology, resources, demography and migration. Over the next decades, we will have to move from digital from post-digital, from carbon to zero-carbon and from the Boomer values to those of Millennials and Zoomers. Migration will strain societies’ social compact.
Unfortunately, we’re really bad at adapting to change. We’ve known about the climate threat for decades, but have done little about it. The digital revolution, for all the hoopla, has been a big disappointment, falling far short of its promise to change the world for the better. Even at the level of individual firms, McKinsey finds that the vast majority of initiatives fail.
One key factor is that we too often assume that change is inevitable. It’s not. Change dies every day. New ideas are weak, fragile, and in need of protection. If we’re going to bring about genuine transformation, we need to take that into account. The first step is to learn the reasons why change fails in the first place. These three are a good place to start.
read more…
I have a friend who was once ambushed on a TV show panel. Being confronted with a clearly offensive remark, she was caught off-guard, said something that was probably unwise (but not untrue or unkind), and found herself at the center of a media-driven scandal. It would cost her enormously, both personally and professionally.
I often think about the episode and not just because it hurt my friend, but also because I wonder what I would have done if put in similar circumstances. My friend, who is black, muslim and female, is incredibly skilled at bridging differences and navigating matters of race, gender and religion. If she fell short, would I even stand a chance?
We are encouraged to think about matters of diversity in moral terms and, of course, that’s an important aspect. However, it is also a matter of developing the right skills. The better we are able to bridge differences, the more effectively we can collaborate with others who have different perspectives, which is crucial to becoming more innovative and productive.
read more…
In 1954 the economist Paul Samuelson received a postcard from his friend Jimmie Savage asking, “ever hear of this guy?” The ”guy” in question was Louis Bachelier, an obscure mathematician who wrote a dissertation in 1900 that anticipated Einstein’s famous paper on Brownian motion published five years later.
The operative phrase in Bachelier’s paper, “the mathematical expectation of the speculator is zero,” was as powerful as it was unassuming. It implied that markets could be tamed using statistical techniques developed more than a century earlier and would set us down the path that led to the 2008 financial crisis.
For decades we’ve been trying to come up with algorithms to help us engineer our way out of uncertainty and they always fail for the same reason: the world is a messy place. Trusting our destiny to mathematical formulas does not eliminate human error, it merely gives preference to judgements encoded in systems beforehand over choices made by people in real time.
read more…
Not long ago I was participating in a discussion on the social audio app, Clubhouse, and I said something a lady didn’t like that triggered her emotions. “Obviously, you need to be educated,” she said before subjecting me to a prolonged harangue riddled with inaccuracies, logical gaps and non-sequiturs.
Yet putting the merits of her argument aside, her more serious error was trying to overpower, rather than attract, in order to further her argument. If anything, she undermined her cause. Nobody likes a bully. Perhaps even more importantly, silencing opposing views restricts your informational environment and situational awareness.
This is why Gandhi so strictly adhered to the principle of ahimsa, which not only proscribed physical violence, but that of words or even thoughts. Everyone has their own sense of identity and dignity. Violating that will not bring you closer to success, but will almost certainly set you on a path to failure. Self-righteousness isn’t a strategy, but the lack of one.
read more…
In his book, Thinking, Fast and Slow, Nobel laureate Daniel Kahneman explained that there are two modes of thinking that we use to make decisions, which he calls “System 1” and “System 2.” The first is more instinctual and automatic, the second more rational and deliberative. We need to use both to make good decisions.
Businesses also have two systems, which can sometimes conflict. One is immediate and operational. It seeks to optimize processes, gain market share and maximize profitability. The second builds capacity for the long term, by investing in employees, building trustful partnerships and creating new markets to compete for the future.
Obviously, these are not mutually exclusive. Just as we can step back and think rationally about instinctual urges, we can invest for both the short and the long term. Yet given that every business eventually matures and needs to renew itself, many end up taking the wrong path. Here are four signs that your industry might be in the process of being disrupted.
read more…
The story of the Garden of Eden is one of the oldest in recorded history, belonging not only to the world’s three major Abrahamic faiths of Judaism, Christianity and Islam, but also having roots in Greek and Sumerian mythology. It’s the ultimate origin archetype: We were once pure, innocent and good, but then were corrupted in some way and cast out.
As Timothy Snyder points out in his excellent course on The Making of Modern Ukraine, this template of innocence, corruption and expulsion often leads us to a bad place, because it implies that anything we do to remove that corrupting influence would be good and just. When you’re fighting a holy war, the ends justify the means.
The Eden myth is a favorite of demagogues, hucksters and con artists because it is so powerful. We’re constantly inundated with scapegoats— the government, big business, tech giants, the “billionaire” class, immigrants, “woke” society—to blame for our fall from grace. We need to learn to recognize the telltale signs that someone is trying to manipulate us.
read more…
The Argentinian writer Jorge Borges had a fascination with a concept known as the infinite monkey theorem. The idea is that if you had an infinite amount of monkeys pecking away at an infinite amount of typewriters, they would randomly create the collected works of Tolstoy and every other masterwork ever written (or that could be written).
The theorem, which has been around for at least a century, is troubling because it calls into question what it means to be human. If we can be inspired by something that could so easily be randomly generated, then what does it mean to be meaningful? Is meaning just an illusion we construct to make ourselves happy?
In recent years, the rise of artificial intelligence has transformed this theoretical dilemma into an intensely practical issue. In a world in which machines are taking over work long thought of as intensely human, what is the role of human labor? How do we create value that is distinct from what machines can do faster and cheaper? The answers will shape our future.
read more…
In the 1990s, a newly minted professor at Harvard Business School named Clayton Christensen began studying why good companies fail. What he found was surprising. They weren’t failing because they lost their way, but rather because they were following time-honored principles, such as listening to their customers, investing in R&D and improving their products.
As he researched further he realized that, under certain circumstances, a market becomes over-served, the basis of competition changes and firms become vulnerable to a new type of competitor. In his 1997 book, The Innovator’s Dilemma, he coined the term disruptive technology.
It was an idea whose time had come. The book became a major bestseller and Christensen the world’s top business guru. Yet many began to see disruption as more than a special case, but a mantra; an end in itself rather than a means to an end. Today, we’ve disrupted ourselves into oblivion and we desperately need to make a shift. It’s time to move toward resilience.
read more…
At the beginning of this year, I wrote that the theme for 2022 would be Surviving Change and I think that’s been borne out. We’ve had so many shocks to the system that all of the happy talk about disruption has become not only juvenile and naive, but downright irresponsible. If anything, we’ve learned how hard change really is.
Still, it’s undeniable that big changes are underway. Certainly, we’re in the midst of a major generational shift as the Millennials begin to take over, with the Zoomers coming up right behind them. Also the CHIPS Act and other legislation passed represent the biggest investments in our future that we’ve made for generations.
When I look back at my most popular posts over the last year, two themes begin to shine through. First, that change is hard and we need to be much more methodical in how we pursue it. Second, that we have an incredible capacity to fool ourselves that we need to be vigilant about. Take a look through for yourself and let me know what you see emerge.
read more…
“Don’t believe everything you think” has become something of a mantra of mine. It’s a simple idea, but desperately hard to accomplish. Once we get an idea in our heads, confirmation bias kicks in and we go looking for evidence that supports it while ignoring facts which would point us in another direction.
What makes the problem even more pervasive is that we tend to get our ideas from people around us who are exposed to the same information sources we are. So our social networks reinforce our biases and increase our level of certainty. That’s how we end up going in very wrong directions and making big mistakes.
One way out of the trap is to read widely. Looking through the books I’ve read over the past year I’m struck by the contrasting points of view and how different they are from past lists. Every year is an opportunity to learn more and see farther, which is what Borges probably meant when he said, “I have always imagined that Paradise will be a kind of library.”
read more…
