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Lean Forward Down the Mountain

You’re high up on a snow-covered mountain, wind whipping through your hair as you ski past a blur of pine trees down towards a pristine alpine lake.  The terrain suddenly dips and a bolt of fear sprints up your spine as your eyes widen at how steep the slopes look.  Your instincts take over, and you start to pull back, to shift your weight to your heels and run from danger.  But just before you fall on your butt, your brain kicks in and you remember to lean forward to keep from falling, and you accelerate down the hill, in from the ride of your life.

When faced with challenging times, people, companies, and nations often instinctively lean back towards safety.  They become less risk averse and revert to their core business and customers, postponing or killing R&D efforts (yes, this applies to the US too.)  Instinctually this makes sense.  Why spend millions on fundamental research that sounds frivolous  in the middle of a recession?  But I would argue we need more crazy research like this, not less.  Here’s why.

We are bad at predicting the future.

We have observed that things get better over time, and so we naturally fit a linear curve to this and ingrain this into our expectations.  Up and to the right!  We expect steady, constant progress.  But if you zoom close enough into anything that appears smooth, you’ll find that it’s actually quite bumpy.  Here’s what that line should actually look like.

Though the overall slope is the same, this curve suggests that you will have times when progress is almost flat and times when growth is phenomenal.  That’s because technological progress is made, not through linear extrapolations of present technology but through new and fundamental shifts.  That’s why we don’t have steam powered trains taking us to the moon.  Instead we got the computing revolution followed by the internet revolution.

What this also means is that we will always be growing slower than we imagine we should.  That’s the flat part of the curve.  We’ll miss growth forecasts because the last revolutionary world changing technology that came out will start to settle out.  When the smartphone came out, growth was extraordinary.  Profits galore.  But now that everyone on the planet has one, and they don’t change all that much each year, growth has slowed.  This should not be a surprise.  When growth is gone, it is impossible to double your profit every year by reducing costs on a commodity.  Instead, growth will come from the value created from a yet unimagined new product or service.  It’s your job to invent it.

So when growth slows, it is a sign that the current technology is done.  You need to accelerate down that hill, invest more in R&D and innovation, so that you can make the jump to the next technology that will reimagine our world and create extraordinary amounts of value and opportunity.  So get bold.  Get crazy.  Our world can continue to go upward and to the right, but to do so will require continued innovations and investment in research that seems so frivolous it might just be genius.

The Quantum Mechanics of Innovation

Predicting the future is really hard.  However, creating the products that will shape the future requires us to imagine the world of that future.  For instance, if you’re planning to revolutionize transportation, the cost of gasoline, existence of roads, and population density 20 years from now is probably important.  Market researchers will often take current trends, draw a straight line into the future, and then gladly take your $1000 per report.  A slightly more sophisticated model might take all the quantifiable expert predictions and then average them out to give you a high number, a low number, and the average or “right” number.

Averaging works well when looking in the near term, but tends to fall apart when trying to predict long term events, especially in the areas of interest for innovators.  Statistics for topics such as the number of computing devices or the number of fax machines per capita tend to go off the rails in either direction.  If you decide to base your business on the average expected values, then in either case, you lose.

Here’s a simple analogy.  You’re traveling down a road on the way to grandmother’s house.  You can see up ahead that there is a T-intersection where the road dead ends.  You can either go to the right or to the left but have no way of knowing which will take you to your destination.  What do you do?  The answer is probably not to take the average and go straight through the dead end and into the brush.  But what is the right path?

We often run into the case where we don’t know if a technology or an assumption is will be proven.  A new drug in the works may eradicate malaria or not.  Fusion may make energy free or not.  Data storage has met its fundamental limit or it will increase by orders of magnitude due to new technologies.  Population will skyrocket due to growing wealth or we will have a labor shortage as the economics of an urbanizing world change.  Which is right?

They both are.  At the time of unknowing, the future is unwritten, and both possibilities exist.  This kind of thinking is mirrored by physics.  In quantum theory, superposition states that when we don’t know the state of an object, it is actually in all possible states simultaneously. It is the actual measurement or observation that causes the object to be limited to a single possibility.  The famous Schrodinger’s Cat example describes this using a cat in a box which has (as determined by a random relay) possibly been poisoned.  However, according to quantum theory, until someone looks into the box (or determines the cat’s state in any other way), the cat is both alive and dead at the same time.  Yes, this is crazy sounding, but there is one thing that would be even crazier.  The cat is not the average of alive and dead.  There is zero possibility that the cat is half-dead.

This means that when we design for the future, we often have to hold two opposing views of the future as both true.  Ideally, we design for both cases.  This can mean splitting the effort and doing two solutions, or trying to find a solution that succeeds in both cases.  But what if you have to take a bet, and you can only choose one solution for one possible outcome?  The temptation is to take the middle road, but sometimes an average outcome makes no sense (like a half-dead cat).  In this case, you should simply choose the outcome which is better for you.

Is light a wave or a particle?  This used to be a much debated topic, but it turns out, that for most people it doesn’t really matter.  When you want it to be a wave so that you can use electromagnetic equations and make LED’s, then it acts like a wave.  If you want it to be a particle so that you can make giant solar sails to travel the galaxy, then it’ll be a particle.  Choose to view it in the way that is most useful for you at this time.

But can you really have your cake and eat it too?  How can the future have free energy AND an exponential rise in energy costs?  Which is right?  Let’s play the odds.  Say both outcomes  (let’s call them A and B) have a 50% probability of being right.  If you have one tech solution (a) that will make you $100B if A is true and another possibility (b) that will make you $100M if B is true, then it is clearly in your best interest if A is true.  You should go with (a) because the pot odds are 1000 times higher.  However, this does not mean that A is more likely than B.  For a different project, the pot odds may dictate that you go with a project bb which relies on B being true.  You can bet on both A and B, and you should.

The future is a world of endless possibilities.  For the inventors of the world, it is most useful to think of those many branches as opportunities.  We should be comfortable believing that all futures exist and pick the ones which allow for the most constructive inventions at the time.  We must resist the urge to average the future into a straight line extrapolation of the present.  In doing so, we unlock a powerful mindset for innovation.

Three Rules for Breaking the Rules

It has become accepted conventional wisdom that you need to “break the rules” to create innovative breakthroughs. This concept resonates very well with the “Rebel Archetype” that pervades American culture. We love the idea of the maverick who challenges authority and not only gets away with it, but shows those old fools that his irresponsible but passionate actions were right.  In fact, in movies from Top Gun to Harry Potter, the heroes break rules more often than they follow them.  While it’s true that the best innovations fundamentally change an accepted belief, blindly breaking rules is not a recipe for success (unless your goal is to wind up in jail).  For guidance, I am presenting without irony, “Three Rules for Breaking the Rules”.

1. Learn the Rules Before You Break Them
2. Pick the Rules that Want to Break
3. Only Break One Rule at a Time

Learn the Rules Before You Break Them

It’s really easy to look at something you’ve seen for the very first time and think “That’s stupid.”  But if you just decide to break convention and do things differently, you’re not really “breaking the rules”, you’re just doing random stuff.  Imagine you’re a high school basketball coach and you get a novice on your team.  If she doesn’t follow any of your rules on how to play positions, then you just have someone running around the court messing things up.  Now imagine that player has worked hard for three years and has become your star point guard. That’s given her insight into how the defensive strategy works, and when she suggests a radical new formation, you really listen. This breaking of the rule is no longer just messing around, it’s an educated decision that can win championships.

People who break the rules often spend years following them first.  It is easy to look at modern art and think “My two year old could do that.” But modern art wasn’t created randomly. Manet and Monet were both classically trained artists and spent years learning “academic art” from sculpture to painting.  It was from this experience, and the development of new techniques beyond the standard syllabus that birthed the most important innovation in art in all history.  

Pick the Rules that Want to Break

Rules were never written in stone.  There is a lifetime to every rule.  As conditions change, certain rules start to become irrelevant and ripe for change.  Instead of picking rules you don’t like and trying to break them by sheer will, it is easier to look for the ripe fruit that is just about ready to fall off the branch.

Find all the rules that an industry is based on.  Then look for the assumptions that underpin them.  These are things like “CapEx is more expensive than operating costs” or “Credit is cheap” or “Scale manufacturing is cheap” or “Local is better”.   Have any of these changed, or are any of these about to change?  If so, the rule based on an assumption or rule that is already known to be changing… that’s the rule to break.  

Only Break One Rule at at Time

Rule breaking is risky.  When trying to bring innovative products and services to the world, you’re allowed to change one major preconception at a time.  Focus all your energies on that one paradigm shift.  There will be a lot of resistance from entrenched products and services, and by only changing one thing, you can still leverage the momentum from everything else.  For instance, Apple breaks a lot of rules.  But they do it slowly.  When they launched the iphone, they removed the keyboard.  This was a big step, a real rule-breaker.  They could have also removed USB syncing of the device or decided not to sell through a carrier, but these changes would have added more risk when the keyless phone was already a revolution.  Many users were skeptical of giving up tactile buttons.  Letting them continue to buy through AT&T and sync their music like they’re used to helped them accept this change.

You can also see this impact in Science Fiction.  Most Sci-Fi novels focus on one major conceit (e.g.  “time is money”, “everyone lives through surrogate robots,” “genetically engineered kids”, “Your OS is your girlfriend”).  But to focus on this one conceit and the repercussions, other “societal rules” are often left the same so as not to distract from the core message.  For instance, if you’re reading a book on robots raising your children, then counting time in seconds instead of hours, having unpronounceable names, having a third gender, genetic enhancement of plants, virtual reality escapades, and doing this all on a spaceship can distract the reader if these are not central to the plot.  The writer needs to ground the reader in the familiar to highlight what is different.  In the same way, an innovator needs to wrap a controversial upheaval in the comforts of the known.

The best innovators are rule breakers, but they aren’t irrational mavericks that can’t follow the rules.  They’re hard workers who truly understand the rules of an industry, find a paradigm that is ready to shift, and then focus on building and launching the innovative products and services that will reshape our world.

Strategic Thinking and a Thousand First Steps

First steps are the best steps

I am a strategist by nature.  I love to imagine the wondrous world of the future and plot out the complex web of technological innovation, cultural shifts, and geopolitical developments that will get us there.  One of my favorite novels growing up, was Isaac Asimov’s Foundation series.  The book’s premise is that Harry Seldon is mathematically able to predict thousands of years into the future and creates a small society to be ready for when that future arrives.  Seeing the future is exhilarating and intoxicating.  It is also of course, ridiculous.

Our ability to predict the future is HORRIBLE.  Sure, it’s easy to predict the future of something like a basketball game by a few seconds (most of the time).  But how about for every city, every nation, and the whole world.  Webs start to get interwoven in complex ways that are impractical to model.  And with each second you add, more branches form.  They multiply logarithmically until it becomes impossible to track even a simplified model of the world in even the largest computing systems.  Now try doing this in your head.

But there is always a better way.  Luckily, most people already do the first part.  First, imagine the future you want.  Then build the ladder to getting there by deducing what needs to happen.  You need to build this out both forward in time from where we are now and backward in time from the goal to make sure the paths meet.  Map out a few alternatives.  Do many of them share the same first step?  Great.  Pick the best plan, and start executing.

Now this is where many organizations and people fail.  The plan has been made, and now it’s time to make it happen.  That means indoctrinating people in “The Path Forward”, putting our heads down, and executing until the goal is achieved.  After all the “The journey of a thousand miles starts with a single step.”  Just keep swimming.  This is great if your goal was to walk a thousand miles on a treadmill.  You’re plan can be as simple as: 1) Get on treadmill 2) Press start 3) Walk.

You can put on your headphones and safely close your eyes.  But what if your goal was to walk to New York from LA?  Sure, you need to make a plan.  You plot out your route, plan stops, book hotels, and pack supplies.  But you’re not going to do this one with your eyes closed.  You know that you might have to change your plans because of fatigue, weather, or just plain boredom.  And if you’re really smart, you’ll plan to reevaluate your plan and make modifications at specific points along the way.  Why don’t you just make those modifications now?  The plan is already the best plan you can make given the information you know right now.  But you’ll learn more once you get started.

It’s a recursive loop.  First pick your goal.  Then plot a path.  Take the first step.  Reassess your goal.  Replot your path.  Repeat.  That strategic thinking is crucial for picking the first step so that it fits a plan.  But that’s it.  Your strategy should have a lifetime of one step.  After that one step, the world is different.  You have also hopefully gained new skills and knowledge.  Reassess your strategy, make a new plan, and find your next “first step”.  By iteratively strategizing and acting, you will be able to constantly adapt until the future you seek is only one step away.

Most organizations find this hard because they separate the strategists from the implementers.  Someone comes up with a strategy and then throws it over the fence for the monkeys to implement.  They don’t return until the goal is achieved… or isn’t.  Innovative organizations deal with ambiguous futures that require constant pivoting and modifications to the strategy.  And thus, it is important to develop a culture and a process where the team can bounce back and forth between periods of exploratory strategizing and evaluation and heads down implementation.  They are very different tasks, and so you need to be deliberate about switching between them and maintaining a one to one ratio between strategizing and implementing.  Plan to rebuild your strategy after the first step.  Then take first steps until you’ve arrived at the future you created.

Make Knights, Not Castles: a modern allegory

Image from pixabay under creative commons license

Once upon a time, in a land far far away, there were two twin brothers who grew up in a small, poor village.  Castille was older by ten minutes and never let the younger brother, Nico, forget it.  They were always competing to see who could be stronger and dreamed of one day living in the castle on the other side of the hill.  As they grew older, they assembled some friends and trained hard to turn them into a band of brave knights.  One day they attacked the castle and won it, achieving their childhood dream.

But then things fell apart.  Having won such a prize, Castille wanted to keep it to himself.  He grew jealous and paranoid of his brother’s friendships with the knights.  One day,  Nico was out hunting with his best knights, when Castille barred the gates and shut him out.  

Having won the prize, Castille worked to secure it.  He added bigger stones to the castle walls, so that it would not be so easily taken.  But his brother did not come.  So the next year, he added more stones to his wall, building higher and higher.  Still his brother did not come.  Fearing Nico was building a large army, Castille built another wall around his castle and then another.  It was a very impressive castle, but slowly people trickled away, as there was nothing to do but build walls.   As he grew old, Castille began to regret shutting Nico out, worrying that he had died without the shelter of the castle.   But then one autumn morning, his brother stood at his gate.

Nico had no army, and had traded his chain mail for a linen suit.  He looked happy, not angry, and so Castille invited him in for breakfast.  Nico told him that being locked out of the castle was the best thing that could have happened to him and his knights.  Nico’s face glowed with excitement as he described the vastness of the world outside the castle walls and regaled Castille with stories of adventure and triumph.  Together with his loyal friends, Nico had conquered a few more castles.  But then seeing more opportunity in trade, they transformed into merchants and built a vast empire across the seas.  They then became businessmen and entrepreneurs.  They had built companies that made technical wonders that Castille did not believe were possible until Nico pulled a seemingly magical device from his pocket.   Castille was amazed, so proud of his brother and insanely jealous at the same time.

And then Nico left, and Castille was left alone in a castle that no longer felt like a prize but a prison instead.  Nico and his friends had conquered the world, one in which his castle was no longer relevant.

The world is constantly changing.  Castles (capital infrastructure) can seem like an advantage, but relying on what you own can limit your thinking and box yourself in.  Instead, invest in building up people.  Teach your teams how to think innovatively so that they can solve any problem and adapt quickly to changing environments.  Together, you can conquer the world, and maybe you won’t be left renting out your castle on airbnb.

Mindset Equality and Innovative Thinking

Last week, someone who runs an after-school program for disadvantaged kids reminded me of something very important.  She told me that the kids she works with aren’t exposed to the kind of thinking I talk about in my blog.  Even in the heart of Silicon Valley, with Facebook a mile away, the idea that they can improve their lives through thinking through a problem is foreign.  At the very core of innovative thinking, what has powered the rise of companies worth trillions of dollars, is one central belief: there is a better way.

Before you slap me with a label that reads “obvious”, remember that much of what you believe is a product of your culture and environment.  This is water.  And the water is different for different people.  I recently visited some rural areas of Morocco, and I was struck by how little things have changed over the centuries and how much is dictated by tradition.  Many cultures in the world prize tradition and the knowledge and community it promotes.  But over-adherence to social rules kills the belief that there is another way, a better way.  In other communities, it is not tradition, but hopelessness that creates this mindset.  If you don’t see change and progress in your community, then why believe in it?

Closely related to the belief in positive change is the belief that you, as an individual, are in control of your life and can thus create positive change.  In 7 Habits of Highly Effective People, Stephen Covey describes this as the first habit of being Proactive.  Before you can make things better in your life, you must first accept responsibility for it.  This book, and others like it, have helped millions of people improve their lives with a change in mindset.

In Outliers: the Story of Success, Malcolm Gladwell points out the impact of upbringing and its impact on future success.  Upon visiting the doctor, a wealthy parent may teach their child to ask the doctor questions.  A child from a less fortunate family may feel less entitled and just accept the authority of the doctor without pointing out any concerns (like a hidden rash).  This taught mindset can have real impact later in life.  Gladwell tells the story of Chris Langan, a genius with a 195 IQ.  He ended up dropping out of college, essentially because his truck broke and he could no longer get to campus early in the morning.  It sounds crazy, but he passively accepted the conditions and limitations and didn’t fight for his teachers to accommodate a simple change in his schedule. This snowballed into getting kicked out of school.

Innovative thinking is built on the foundational though that you can make things better.  It requires you to challenge the status quo and current “authority”.  But this type of thinking is not taught equally across our society.  Parents with limited formal education and strapped budgets do not discuss NPR stories with their friends.  They do not read Outliers or the 7 Habits of Highly Effective People in their spare time.  And they do not expose their children to these ideas.

In contrast, wealthy kids are taught to challenge authority and the status quo.  They are shown by example that they can make things better.  They are given the core mindset for innovative thinking.  Income inequality is growing, but to solve this, it’s not just about moving money around (welfare, minimum wage, taxes).  It’s also about mindset equality.  We need to work to expose all children to stories of innovation and inspire in them the belief that they can make a difference in their own lives and in the world.  We need to bring innovative thinking into our schools and into our media.  We need to teach the teachers and the parents about mindset.  We need to find ways to break down the social barriers and inject our poor communities with hope and empowerment.  In this way, we can create a more diverse and equal generation of innovators to solve the challenges of today and tomorrow.