When IBM first debuted its Watson system on the game show Jeopardy! in 2011, it was like something out of science fiction. Here was a computer that could not only understand spoken questions, but answer them faster and more accurately than the best human players. Nobody had ever seen anything even remotely like it before.
Today, less than a decade later, artificial intelligence has been transformed from the incredible to something approaching the mundane. Not only do we have capabilities that are similar to the original Watson system on our phones, we can access top-notch resources from a number of companies, often for free.
Yet probably the biggest difference from those early days of Watson is how AI has evolved from a system to an ecosystem. Much like the evolution from mainframes to personal computers, companies now can access different components to build a system designed specifically for their business. That’s how a technology becomes transformational.
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In early 2004, Viacom announced it would spin off Blockbuster Video, leaving CEO John Antioco master of his own fate. He moved quickly to meet the threat posed by Netflix head on, launching Blockbuster Online in 2004 and, after successfully testing the concept in a few markets, ending late fees in early 2005.
Still, not satisfied with playing catch-up, Antioco searched for model that would return his company to dominance. He found it in 2006 with the Total Access program. Within a few weeks of announcing the promotion, Blockbuster was winning the majority of new subscribers, outstripping Netflix for the first time.
It was a textbook case of sound strategy and execution meeting a disruptive threat, but it would not end well. In 2010 Blockbuster would declare bankruptcy and become a cautionary tale. We tend to think that driving change is merely a matter of coming up with a clever plan and executing well. Yet that isn’t enough. You also need learn how to survive victory.
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Every year, IBM publishes its list of five innovations that will change the world in five years. There aren’t just predictions, but represent grand challenges that the company intends to take on. As IBM’s Chief Innovation Officer Bernie Meyerson once put it to me, “What we’re really aiming for isn’t to predict the future, but to change the future.”
Last year, for example, the “5 in 5” included combining crypto-anchors with blockchain to secure the world’s supply chain and IBM formed a joint venture with Maersk to help bring that about. It also included a new form of encryption, called lattice-based cryptography and more transparent AI algorithms, all things its scientists are actively working on.
This year’s “5 in 5” is different in several ways. First, rather than a horizontal overview, it focuses on one industrial vertical: the food supply chain. Second, rather than focusing exclusively on information technology, it foresees an intense collaboration between the computer industry and other fields. Third, it marks a break from business as usual to a new era of innovation.
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In 2009, Jeffrey Immelt set out on a journey to transform his company, General Electric, into a 124 year old startup. Although it was one of the largest private organizations in the world, with 300,000 employees, he sought to become agile and nimble enough to compete with high-flying Silicon Valley firms.
It didn’t end well. In 2017, problems in the firm’s power division led to massive layoffs. Immelt was forced to step down as CEO and GE was kicked off the Dow after 110 years. The company, which was once famous for its sound management, saw its stock tank. Much like most startups, the effort had failed.
Somewhere along the line we got it into our heads that large firms can’t innovate and should strive to act like startups. The truth is that they are very different types of organizations and need to innovate differently. While large firms can’t move as fast as startups, they have other advantages. Rather than try to act like startups, they need to leverage what they have.
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When Laura Baldwin arrived at O’Reilly Media in 2001 as Chief Financial Officer, she was well equipped for the job. She had previously held the same position at Chronicle books and then spent a few years as a consultant for BMR & Associates, a firm that specializes in helping media companies.
The challenges at O’Reilly, however, were somewhat unique. Over the years the company had become something akin to the official publisher of Silicon Valley and had ridden the dotcom boom to prominence. Now that the boom had turned to bust, O’Reilly was in dire straits and banks were calling in loans.
So Baldwin did what a good CFO does, she instilled better financial management and within a few years the company had returned to profitability. Yet she and the firm’s founder, Tim O’Reilly, began to see an opportunity to truly transform the business. Today, as President, she focuses not just on publishing books, but on everything that comes after.
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Market watchers like to follow trends because they are often a good indicator of what will happen next. The near future usually does look like the recent past, but not always. Sometimes we hit an inflection point. That can make things veer sharply from the trend and that change things in a way that can be truly transformational.
For example, for the first two decades of the 20th century, electricity and the internal combustion engine had limited impact, but around 1920 they became transformative and drove a 50-year productivity boom unlike anything before or since. Something similar happened with digital technology around 1995.
Today, we are likely on the cusp of three major inflection points in energy, synthetic biology and computation that will have that kind of transformative power. The impact of any one of these is hard to foresee, but when you take all three in tandem it raises the possibility of entering a completely new era. The future may be unlike anything we’ve ever seen before.
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By the mid 90s, Microsoft ruled over the technology world. Through its Windows operating system, which ran roughly 95% of the world’s computers, it was able to leverage control over much of what other companies did and built commanding positions in productivity software and other facets of the industry.
Yet even as the tech giant was at its peak, a danger loomed. Like barbarians at the gate, hordes of developers banded together in online communities to collaborate on their own software. Unlike Microsoft’s proprietary products, nobody owned these and anybody was able to alter or customized them as they pleased.
Steve Ballmer would come to regard open source software as a cancer. Yet where Microsoft’s CEO saw danger, two entrepreneurs saw an opportunity. They created a company called Red Hat that was focused wholly on the Linux open source software, a seemingly crazy idea at the time. Today, however, it has grown into a major global enterprise. Here’s how they did it.
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When Mohandas Gandhi was a young lawyer he was so shy that he couldn’t even bring himself to speak in an open courtroom. He was also impulsive and had a nasty temper. Nelson Mandela started out as an angry nationalist, who argued vigorously about joining forces with other racial groups in a coalition to fight against Apartheid.
Yet as I explain in my book Cascades, both men learned to conquer themselves and evolved into inspirational leaders that achieved transformational change. Movements, as the name implies, must be kinetic to be successful. They need to start in one place and end up somewhere else, evolving and changing along the way.
The same is true for an organization. To create a real impact on the world, you first must drive change internally. That’s not easy and it doesn’t happen all at once, which is why most transformations fail. However, successful leaders understand that to bring true change about it is not enough to simply plan and direct action, you have to inspire and empower belief.
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One of the most damaging myths about creativity is that there is a specific “creative personality” that some people have and others don’t. Yet in decades of creativity research, no such trait has ever been identified. The truth is that anybody can be creative, given the right opportunities and context.
If you don’t believe me, take the least creative person in your office out for lunch — someone who doesn’t seem to have a creative bone in their body. Chances are, you’ll find some secret passion, pursued outside of office hours, into which they pour their creative energies. They just aren’t applying those energies to their day jobs.
The secret to unlocking creativity is not to look for more creative people, but to unlock more creativity from the people who already work for you. The same body of creativity research that finds no distinct “creative personality” is incredibly consistent about what leads to creative work, and they are all things you can implement within your team.
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On April 3rd, 1921, a handful of journalists went to interview a relatively unknown scientist named Albert Einstein. When they arrived to meet his ship they found a crowd of thousands waiting for him, screaming with adulation. Surprised at his popularity, and charmed by his genial personality, the story of Einstein’s arrival made the front page in major newspapers.
It was all a bit of a mistake. The people in the crowd weren’t there to see Einstein, but Chaim Weizmann, the popular Zionist leader that Einstein was traveling with. Nevertheless, that’s how Einstein gained his iconic status. In a way, Einstein didn’t get famous because of relativity, relativity got famous because of Einstein.
This, of course, in no way lessens Einstein’s accomplishments, which were considerable. Yet as Albert-László Barabási, another highly accomplished scientist, explains in The Formula, there is a big difference between success and accomplishment. The truth is that success isn’t what you think it is but, with talent, persistence and some luck, anyone can achieve it.
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