educational

New Solutions Require a Bullheadedness, Different Process

New Solutions Require a Bullheadedness, Different Process
Thierry Arrondo

Each January we lead a small group of industry leaders on a tour of the crazy innovations at the Consumer Electronic Show in Las Vegas. It’s a grind on our bodies. We all train for it beforehand. At the end of the day we check our activity trackers (25,000 steps).

Physically exhausted we gather for dinner (Piero’s is a favorite spot) and reflect on what the innovations will mean for us.

‘You’ve got to be pretty bullheaded to do something new,’ I tell people when they complain about lack of innovation in our industry.

“How real did the latest virtual reality feel? How much of our lives will be lived within it? In the future will we visit places in VR and stop travelling as much?”

“How comfortable did you feel in the self-driving car? What will self-driving cars not change? What is going to happen to the taxi and truck drivers?”

“Did those robots really self-assemble and attack each other? How much longer do humans have until the robots cage us up in zoos?”

Each of the innovations we discuss are incredible feats. Behind them are uncountable hours of effort and unbelievable optimism in the face of the unknown. They move us forward.

Each year at the CES dinner another question circles the table, “Why isn’t radical innovation happening here in our industry? We have a history of innovation (VHS, early internet, affiliates, etc.). Why is it so hard to do new things now?”

“You’ve got to be pretty bullheaded to do something new,” I tell people when they complain about lack of innovation in our industry.

But why do you have to be so stubborn and so tough to come up with something new? I’ve been asking that question about my own efforts to do new things over the last several years.

Here Are Five Reasons It's Hard To Do New Things:

1. Old things have momentum.

There is an enormous force pushing you to do what you already do well. Your clients want you to do what you do ... but even better. So do you. It pays your bills. Your competition is always right at your heels. So, the smart thing to do is what you are already doing ... just a little bit better.

At the earliest stage of any industry, ours included, there was nothing but opportunity. It was a frontier. There were no systems. It was a period of invention. As an industry we created a lot of new things.

Now that those new things have existed for years, even decades, they have become old things. Old things require a great deal of energy to maintain.

2. Old things have good return on investment.

If you want to lower the risk of return on an investment then just keep doing what you are already doing.

To improve on old things doing requires hard work and persistence. You need to keep your head down and focus. That’s the way to get a 10 percent improvement over what you are already doing. You know what to do because you’ve been doing the same thing for a long time. A measurable, predictable amount of hard work will get it done.

3. Old things are easy to communicate.

It’s easy to communicate with staff and clients about what you are already doing. It’s an incremental improvement. You can say, “We used to do X and we got Y result ... now we do X slightly better and Y is up by 5 percent.”

Put anything you want in that equation.

“We used to offer Tour X and we got a 1 in 1,000 conversion on a certain type of traffic ... now we have a better Tour X and our conversion rate is 1 in 950.”

It’s good. Your stakeholders (anyone with a stake in your company from clients to suppliers to staff to your family) are happy with a steady stream of small improvements.

4. Old things are organized.

We’ve set up our companies to make these types of gains. We want clear goals. We want focused effort. We assign resources to projects that have clarity. We need it to communicate with each other. We have tight deadlines. We build accountability and reporting structures.

These are requirements for making improvements. You have to do them.

There are lots of companies in our industry that don’t do anything new. Imagine you were invited to spend a week in their offices. You got to talk with the staff. You attend meetings. You really get to see how they work. I bet you would find they have very good processes for incremental improvements.

Their accountability is clear. Lines of authority are known to everyone. They have tight deadlines. Yet, they aren’t doing anything really new. Their stakeholders are waiting patiently and losing faith that they will ever see anything new from that particular combination of people.

5. Innovation is different work.

The problem is that every one of the things you need to do to make incremental improvements on old things stifles and kills new things.

They are the wrong approach for the early stages of the development of new things. They work for things that are already established and working well. New things aren’t established. To treat them like they are is to kill them before they can grow.

Creativity is fragile. It requires inspiration. It’s often a physical, non-verbal process. You feel it in your gut.

The range of motion on a new thing is 360 degrees. For a well-established thing that needs improvement the range of motion can be 1 or 2 degrees. The energy that goes into a new thing is enormous and diffuse. Most of it is wasted, if seen from the perspective of old things.

With old things you know a lot. You’ve learned what works and what doesn’t. So it is easy to know where to put the effort. You can easily sort the many ideas that are bad from the few that will move you closer to your goal.

New ideas are unknown. The learning hasn’t happened yet. So you have to try out the lots of ideas and go some distance in all directions, all 360 degrees, before finding what may work.

I said at the beginning that you have to be bullheaded to do new things. It’s true. Smart people don’t usually waste their time with efforts that are unlikely to bear fruit. They get frustrated early. They stop things that are unlikely to generate a return. But the bullheaded person is trying to solve a different problem. The person trying to do new things uses a different energy source. Their energy comes not from the rewards of small improvements to ROI but from a rejection of the status quo.

To do a new thing requires a deep frustration with the old thing. You can’t think that you can fix the old thing by making it slightly better. You have to want to replace it completely. You have to see a huge gap between the old way and the new way. Most people don’t see it. They work with the world as it is. And they have lots of good reasons for doing that. Those reasons are reinforced by our society in the form of status and money and security that comes to people who make old things a little bit better.

Or, at least, they were.

We are now entering an age of fast change. It’s coming at such speed that incremental changes don’t work. Hillary Clinton offered a slight improvement on Obama’s approach. More of this, less of that. She got lots of votes, more than Trump. But why did Trump get so many votes ... enough votes as it turned out?

There are lots of reasons, of course, but one view is that he was something new and she was something old.

Voters facing big changes in their lives (lost jobs, declining hope for the future, dying younger than their parents, etc.) didn’t want the old solutions. They understood them and weren’t interested in a slight improvement. It wouldn’t make a difference to their lives. They were in a new situation — a place they had not been before, a scary place — and they wanted new solutions.

They were willing to put up with the uncertainty around Trump because they were so dissatisfied with the results of minor improvements. They wanted disruption. We’ll see if they are happy with what they get in the end. But in the meantime they dropped a bomb on the old. They’d had enough.

Our industry is entering a period of accelerating change. Old ways aren’t going to work. They worked in the past. This is now and tomorrow is the future. Only new solutions will work for us. And those solutions require a bullheadedness and a different process than we have used in the past.

That process is difficult for a company. How do you spend the time needed to maintain your current system while also continuing to make improvements ... and at the same time to do disruptive work? Create new things?

Google has a solution. Invest enormous amount of effort in crazy moonshot efforts to not become irrelevant and stuck in the past. Larry Page studies the death of once great companies to learn what not to do. I do the same with once great billing companies.

There’s a lot to learn from those companies about the perils of not innovating. But it’s not easy to create the new. It requires a split mind. On the one hand you need to be focused and rational, like the left brain. On the other hand you need be creative and free associate, the hallmarks of the right brain.

Fortunately each of us have both sides of the brain. Now we need to make them work together inside a tough bull’s head and charge ahead into the unknown. That’s where the new is. We already know the old and it’s place is in the past.

Thierry Arrondo is the managing director of Vendo, which develops artificial intelligence systems that allow merchants to dynamically set prices for each unique shopper.

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