A really interesting concept from this blog post on the recent very-avoidable crash of a private jet:
Social normalization of deviance means that people within the organization become so much accustomed to a deviant behavior that they don’t consider it as deviant, despite the fact that they far exceed their own rules for the elementary safety. People grow more accustomed to the deviant behavior the more it occurs. To people outside of the organization, the activities seem deviant; however, people within the organization do not recognize the deviance because it is seen as a normal occurrence. In hindsight, people within the organization realize that their seemingly normal behavior was deviant.
This is a pretty good explanation for what happens inside organizations. At the small and relatively harmless end, you have the slow growth of meetings that happens in every organization (hence Percolate’s meeting rules) and in the large and dangerous end you have something like Enron or VW. The phenomena is essentially about feedback loops: The deviant behavior slowly slips in and over time becomes more and more acceptable, meaning that the intensity can also increase. In the case of meetings what starts as a one-off meeting to discuss something, becomes a weekly meeting for 15 minutes, eventually with more people involved, and eventually you have 15 people spending an hour together without any real sense for what they’re talking about or why.
This is a pretty good picture of what makes it so tough to scale organizations: It’s hardly ever the big stuff you’re watching out for, it’s almost always the small stuff that is built up over time. (As an aside, although I’m not crazy about him, this is also why Clayton Christensen’s boiling frog analogy is such a good one. It’s a perfect way to understand that it’s the slow rolling boil that kills you, not the big explosion.)
While I don’t agree with Paul Krugman’s Bitcoin is Evil post from the weekend, his next post on Bitcoin did include this nugget I had never considered:
It occurs to me that part of the disconnect is that Bitcoin solved a major technical problem, one that people had been thinking about for about 20 years, and we nerds just can’t believe that it doesn’t also solve an economic problem. The technical problem is double spending–if I have some digital money, it’s easy enough to verify cryptographically that it’s real, but if I give it to you, how can you tell that I haven’t also given it to someone else? Until Bitcoin, the answer was to have a bank that knew which coins were valid, so you’d present my coin to the bank, which would check its database and if it’s valid, cancel it and give you a new one. Bitcoin has its decentralized blockchain which is a very clever recasting of the problem so that the state of the “bank” is whatever the majority of bitcoin miners agree that it is. Getting enough of the miners to agree is known as the Byzantine Generals problem, and has a technical history of its own.
As simple as it seems, splitting out the technical achievement from the economic one is a really interesting way to think about it. I haven’t really spent enough time thinking about Bitcoin to have a strong opinion about it specifically, but I do think the idea of a crypto-currency not attached to a specific nation is something bound to happen. In a way, I feel like Bitcoin and Google Glass have a lot in common: Early experiments in form and style that signal what’s to come.
There is an interesting little article on innovation and Picasso over at Medium. Basically it suggests that radical innovation happens when the market is most receptive to it:
Sgourev’s analysis of Cubism suggests that having an exceptional idea isn’t enough: if it is to catch fire, the market conditions have to be right. That’s a question of luck and timing as much as it is of genius. The closest modern analogy to Picasso’s Paris is Silicon Valley in the early days of the dotcom boom, with art dealers as venture capitalists and entrepreneurs as artists.
This reminded me a lot of Duncan Watts’ research on influence on the web, where he concluded, “large scale changes in public opinion are not driven by highly influential people who influence everyone else, but rather by easily influenced people, influencing other easily influenced people.” In fact, Watts also used a fire to explain the dynamic in his conclusion:
Some forest fires, for examples, are many times larger than average; yet no-one would claim that the size of a forest fire can be in any way attributed to the exceptional properties of the spark that ignited it, or the size of the tree that was the first to burn. Major forest fires require a conspiracy of wind, temperature, low humidity, and combustible fuel that extends over large tracts of land. Just as for large cascades in social influence networks, when the right global combination of conditions exists, any spark will do; and when it does not, none will suffice.
The challenge, of course, as Watts points out in his research, is that consistently finding and predicting this environment is all but impossible. We may understand some of the factors, but the situation is just too complex to be anywhere near accurate. As much as we give credit to innovators who capture those radical moments, we also need to appreciate the role of luck in their success.
Yesterday James, my co-founder at Percolate, sent me over a really interesting nugget about how Apple structures its company about 35 minutes into this Critical Path podcast. Essentially Horace (from Asymco) argues that Apple’s non-cross-functional structure actually allows it to innovate and execute far better than a company structured in a more traditional, non-functional, way. As opposed to most other companies where managers are encourages to pick up experience across the enterprise, Apple encourages (or forces), people to stay in their role for the entirety of their career. On top of that, roles are not horizontal by product (head of iPhone) and instead are vertical by discipline (design, operations, technologies) and also quite siloed. He goes on to say that the only parallel he could think of is the military, who basically operates that way. (I know I haven’t done the best job articulating it, that’s because as I listen again I don’t necessarily think the thesis is articulated all that well.)
Below is my response back to James:
While I totally agree with what he says about the structure (that they’re organized functionally and it works for them), I’m not sure you can just conclude that’s ideal or drives innovation. The requirement of an org structure like that is that all vision/innovation comes from the top and moves down through the organization. That’s fine when you have someone like Jobs in charge, but it’s questionable what happens when he leaves (or when this first generation he brought up leaves maybe). Look at what happened when Jobs left the first time as evidence for how they lost their way. Apple is a fairly unique org in that it has a very limited number of SKUs and, from everything we’ve heard, Jobs was the person driving most/all.
My question back to Horace would be what will Apple look like in 20 years. IBM and GE are 3x older than Apple is and part of how they’ve survived, I’d say, is that they’ve built the responsibility of innovation into a bit more of a cross-functional discipline + centralized R&D. I don’t know if it matters, but if I was making a 50 year bet on a company I’d pick GE over Apple and part of it is that org structure and its ability to retain knowledge.
Military is actually a perfect example: Look at the struggles they’ve had over the last 20 years as the enemy stopped being similarly structured organizations and moved to being loosely connected networks. History has shown us over and over centralized organizations struggle with decentralized enemies. Now the good news for Apple is that everyone else is pretty much playing the same highly organized and very predictable game (with the exception of Google, who is in a functionally different business and Samsung, who because of their manufacturing resources and Asian heritage exist in a little bit of a different world).
Again, in a 10 year race Apple wins with a structure like this. But in a 50 year race, in which your visionary leader is unlikely to still be manning the helm, I think it brings up a whole lot of questions.
Rei Inamoto, who’s in charge of creative at the agency AKQA, has an interesting piece on how agencies need to act more like startups. While I don’t agree with everything in there, I have always been interested by the relationship between the advertising and startup world described by Cindy Gallop:
This contradiction, and this identity crisis, however, doesn’t just exist within the ad industry. Gallop points out a core contradiction inherent in the startup space: just about everyone in the tech world hates ad people’s guts. They all believe that advertising is a very bad thing and that ad people are very bad people. Yet, their entire business model in many tech ventures is built around advertising. Take Facebook, for example. The bulk of its $3.7 billion revenue comes from advertising. Google, a company that shunned advertising for many years, built its business around advertising.
Good roundup from The Economist on why big companies are actually much better at innovation than people give them credit for: 1) Growth is driven by big ecosystems, 2) globalization makes size a bigger factor, and 3) innovation is expensive (and big companies have more money than little ones).
Jim Romenesko (guess he’s back to blogging) does a nice look back at the hype that was Segway (aka IT aka Ginger) ten years ago. He goes back and talks to some of the journalists that covered it and asks them to try and see now what they missed then.
Malcolm Gladwell’s New Yorker review of the new Steve Jobs book is excellent. In it he makes a point I haven’t seen elsewhere, essentially categorizing Jobs as an innovator, not an inventor (Gladwell calls him a tweaker, but who’s counting):
In the eulogies that followed Jobs’s death, last month, he was repeatedly referred to as a large-scale visionary and inventor. But Isaacson’s biography suggests that he was much more of a tweaker. He borrowed the characteristic features of the Macintosh—the mouse and the icons on the screen—from the engineers at Xerox PARC, after his famous visit there, in 1979. The first portable digital music players came out in 1996. Apple introduced the iPod, in 2001, because Jobs looked at the existing music players on the market and concluded that they “truly sucked.” Smart phones started coming out in the nineteen-nineties. Jobs introduced the iPhone in 2007, more than a decade later, because, Isaacson writes, “he had noticed something odd about the cell phones on the market: They all stank, just like portable music players used to.”
I know I must sound like a broken record at this point, but I feel like the distinction between invention (creation of a new thing) and innovation (commercialization of an invention) is a great way to understand how things really come to be.
Fast Company posted an interesting infographic from the folks at Help Remedies documenting the insanity that is the pharmacy, specifically the headache medication aisle. The article explains:
Each of the myriad offerings laid out, whether its gel-caps or something else, was intended to produce a slight edge on a tightly packed, insanely competitive store shelf where virtually identical products can be found just an inch away. As drug makers compete for more and more differentiation, what you get is simply overwhelming. An innovation process that started with the original intention of offering better products leads to anoverall product experience that’s horrible.
Which immediately reminded me of a quote I found when I was working on that innovation presentation. It’s from a very good Harvard Business Review article from 1980 titled “Managing Our Way to Economic Decline”:
Inventors, scientists, engineers, and academics, in the normal pursuit of scientiﬁc knowledge, gave the world in recent times the laser, xerography, instant photography, and the transistor. In contrast, worshippers of the marketing concept have bestowed upon mankind such products as new- fangled potato chips, feminine hygiene deodorant, and the pet rock….
I don’t think it’s quite this simple, but the ebb and flow of markets like this is really interesting. Help’s take is that you need less choice, not more, and they seek to simplify the conversation. But clearly at some point the conversation was simple (it had to start somewhere). I wonder where the turning point is in a category: When does the variety of products for different use-cases start to hurt overall sales? Or maybe it doesn’t, maybe all the specialized products only serve to strengthen the leading brand when confused consumers turn to what they know. (I’m sure someone with experience in this sort of CPG knows the answer to it.)
After posting the other William Gibson quote about the difficulty we have in imagining the past I wasn’t sure whether I should post a second quote from his very long interview with the Paris Review. However, now that Kevin Kelly has riffed on it, I feel I have no choice (it’s Kevin Kelly talking about William Gibson, what else is a geek to do?). First, Gibson’s quote:
There’s an idea in the science-fiction community called steam-engine time, which is what people call it when suddenly twenty or thirty different writers produce stories about the same idea. It’s called steam-engine time because nobody knows why the steam engine happened when it did. Ptolemy demonstrated the mechanics of the steam engine, and there was nothing technically stopping the Romans from building big steam engines. They had little toy steam engines, and they had enough metalworking skill to build big steam tractors. It just never occurred to them to do it. When I came up with my cyberspace idea, I thought, I bet it’s steam-engine time for this one, because I can’t be the only person noticing these various things. And I wasn’t. I was just the first person who put it together in that particular way, and I had a logo for it, I had my neologism.
In Kelly’s words:
When it is steam-engine-time, steam engines will occur everywhere. But not before. Because all the precursor and supporting ideas and inventions need to be present. The Romans had the idea of steam engines, but not of strong iron to contain the pressure, nor valves to regulate it, nor the cheap fuel to power it. No idea – even steam engines — are solitary. A new idea rests on a web of related previous ideas. When all the precursor ideas to cyberspace are knitted together, cyberspace erupts everywhere. When it is robot-car-time, robot cars will come. When it is steam-engine-time, you can’t stop steam engines.
This makes me think of two things: First, it kind of changes the whole thought of the inventor. They’re no longer this solitary player who has an “aha moment,” but rather part of the network of ideas that is the current time. The inventor makes a few connections within the network and they’ve got this new thing that never could have happened without all these other circumstances to assist their creation.
With that said, my second thought is that maybe my first thought is all wrong and this has to do much more with the distinction between invention and innovation. Economist Josef Schumpeter wrote this in his book The Theory of Economic Development:
Economic leadership in particular must hence be distinguished from “invention.” As long as they are not carried into practice, inventions are economically irrelevant. And to carry any improvement into effect is a task entirely different from the inventing of it, and a task, moreover, requiring entirely different kinds of aptitudes. Although entrepreneurs of course may be inventors just as they may be capitalists, they are inventors not by nature of their function but by coincidence and vice versa. Besides, the innovations which it is the function of entrepreneurs to carry out need not necessarily be any inventions at all. It is, therefore, not advisable, and it may be downright misleading, to stress the element of invention as much as many writers do.
It seems more likely that steam engine time is not so much about invention, but rather innovation: The idea that ideas come to life when the network is in place to support them and generally the people that win are the ones that align the pieces correctly, not necessarily the ones who create the new widget. Maybe a small distinction, but it seems like an important one.