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Epic Disruptions with Scott D. Anthony | The Innovation Show @ HBS · The Innovation Show

• 0:00
  Welcome back to this special series of the Innovation Show
• 0:03
  here in Harvard Business School.
• 0:04
  I wanna thank you before we start the HBS publishing team, Dave, Ellie, and
• 0:08
  Simona, down the back there as well, and Ry our sponsor of the Innovation Show.
• 0:13
  You can find out more about ndl, K-Y-N-D-R-Y-L, and don't forget,
• 0:17
  you can download the Ry Institute app where there's a plethora of
• 0:20
  amazing content available for you.
• 0:22
  Today's guest is, has a special place in my brain.
• 0:26
  I wasn't gonna say in my heart, but in my brain because at a time when I was
• 0:30
  struggling to understand innovation, I stumbled across a book that he
• 0:33
  co-authored with the Great Clayton Christensen, which was seeing what's next.
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  And he has a brand new book out.
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  It's called Epic Disruptions, and we're joined by Scott D. Anthony.
• 0:43
  Aiden, it is
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  my
• 0:44
  pleasure to be here.
• 0:45
  Great to have you back again, man.
• 0:46
  Just
• 0:46
  sad it wasn't a special place in your heart.
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  I mean, special place in your brain is great, but heart would be even
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  better.
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  You're getting there, man.
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  You're getting there.
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  Well, I have something which might give me a better place
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  in your heart at the moment.
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  So a little gift from Ireland.
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  This is a special whiskey you can't get in the States.
• 1:00
  That's for you, man.
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  You can use it for the Christmas cake if you want.
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  There's also a pin, you know, the way I, I wear a pin as a practice.
• 1:07
  This one is, the future is intersectional, not quite.
• 1:11
  Innovation happens at the Intersections, which we'll talk
• 1:13
  about in this series today.
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  And then the last thing is, I know you're a huge Pearl Jam fan, so a
• 1:20
  book of Pearl Jam song lyrics as well.
• 1:23
  So that's another little Christmas gif for you, for Under The Tree Man,
• 1:26
  one of the, the Running Family Jokes is that I have lyrics.
• 1:30
  I, I do not actually know the lyrics of any song that I like.
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  I just kind of mutter.
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  So this will be great help.
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  Thank you very much for all of these great
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  gifts.
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  Pleasure.
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  A pleasure man.
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  It's great to have you.
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  We're here to celebrate this book today, epic disruptions, but I thought one of
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  the things you caught out in the book is.
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  A lot of what we consider is resistance from people in any kind of
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  transformation efforts is actually a misunderstanding or misalignment on
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  terms that you're even using like the term innovation in the first place.
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  But you call out these terms like innovation, disruption,
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  and disruptive innovation.
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  I thought we'd be on the same page.
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  For these two shows by getting your definition of those terms.
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  So let me start at the top with innovation.
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  So innovation I define as something different that creates value.
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  It's a very simple and intentionally broad definition
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  that you can break into two parts.
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  Something different is vague.
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  It creates space for big bang, things like hypersonic planes and day-to-day
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  things that make the world a better place.
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  Both are forms of innovation, creates value.
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  Reminds people that innovation is different than invention and creativity.
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  Those are ingredients into, but until you are producing revenues, profits
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  have more satisfied in place, whatever, in my mind, you have not innovated.
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  So that's the baseline of innovation.
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  Disruption or disruptive innovation then is a category of that.
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  Let me illustrate that with a short little story.
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  So my father was born in 1947.
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  In 1947, there was one count them, one computer in the world.
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  It weighed 20 tons.
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  My father would never hope to see it.
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  I was born in 1975.
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  Now there are tens of thousands of computers in the world.
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  Many computers, largely in large corporations.
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  They're still complicated and expensive, so I would never see one.
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  My daughter, Holly, was born 18 years to the dates in 2007.
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  Happy birthday, Holly.
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  Happy birthday, Holly.
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  Indeed, in 2007, now there are hundreds of millions of personal computers and
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  laptops, and of course, that's the year where Steve Jobs and team introduced
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  this, the first version of the iPhone.
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  Now, there are billions of computers in our pockets, in our pumps.
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  That's disruptive.
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  Innovation.
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  Take things that were complicated and expensive, make
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  them simple and affordable.
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  Change market dynamics.
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  Drive explosive growth.
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  So those are the terms of reference for the conversation.
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  Brilliant.
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  And they're so important for the book.
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  They echo the whole way through the book where Scott gives us an example
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  of an epic disruption and then applies it to the modern world and
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  applies it to those themes as well.
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  In Clay's research, he highlighted two types of innovation,
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  sustaining innovation, and then disruptive innovation as well.
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  I thought we'd just give the contrast of those thi things because again, a lot of
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  executives, even in organizations think they're talking about the same thing when
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  they're going, we are being innovative, and you're kind of going, you are.
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  But that's a different type of innovation.
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  No, exactly right.
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  And and what you said, it just hits the nail on the head.
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  The executives are correct.
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  But they're limited.
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  They are doing one thing well, but they're missing something else.
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  So Clay had this very famous line diagram that first appeared in the mass markets
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  in 1995 in a Harvard Business Review article co-authored by Joe Bauer, who
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  you of course interviewed many times and was the thesis advisor to Clay and
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  the co-author of the first article.
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  And that line diagram showed the two forms of innovation, one moves you along an
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  established trajectory in a marketplace.
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  Clay and Joe call this a sustaining innovation because it takes
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  that which exists and makes it better along dimensions that
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  historically mattered to someone.
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  So if you go back to the Apple iPhone, when version seventeen, eighteen,
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  nineteen, twenty of the phone comes out, each time it sustains the.
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  Foundation that Apple built, it's better performance along the
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  improvement trajectory that Apple established a disruptive innovation,
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  disrupts and redefines performance.
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  In the diagram, it actually has lower performance along the dimension that
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  historically mattered in the mainstream.
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  So if you look at the original Apple iPhone, if you compare it to a computer.
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  A lot less processing power if you compare it to other phones.
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  A lot lower battery life, a lot worse.
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  Ability to interact because it didn't have a physical keyboard.
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  So it lowers performance on one dimension to give new benefits
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  along other dimensions, and that's what makes it disruptive.
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  Number one, it redefines performance number two to the market leader.
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  At first it looks inferior because it's offering worse performance along
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  the dimensions that they care about.
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  That's why Clay called his first book The Innovator's Dilemma.
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  Those disruptive innovation don't make sense to the market leaders.
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  They don't invest in them.
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  They ultimately get better and they cause all sorts of trouble.
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  So let's bring that a little bit more to life.
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  The idea of the sustaining innovation versus the disruptive innovation.
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  It's really a context change and the West way I read about it actually was
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  in another one of your books, dual transformation with Clark Gilbert, and
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  Clark talks about that as well, that you, you're successful, but it's now
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  the context that has changed because of this new technology, for example.
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  I think that that's a nice lens to be able to see it differently
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  and kind of going, okay, now I understand that they're, they're not
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  existing on the same plane anymore.
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  No, that's exactly right.
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  And you can look at any of the classic disruptive innovations and you can see it.
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  Let's look at at one that people like to talk about a lot.
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  Netflix.
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  Netflix versus Blockbuster competing in completely different ways.
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  Blockbuster did a very certain job and did it very well.
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  It was Friday night, you didn't know what to do.
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  You went to a store.
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  There's lots of things you browse, et cetera.
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  Netflix does not give you instant gratification when it starts.
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  Of course, ultimately it gets streaming and it can do that, but in the early
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  days, you had to wait to get a movie sent to you through the mail, but you
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  had infinite selection and you could then look at things in different sorts of ways.
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  So very different context, competing in different ways, competing along
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  different dimensions that at first.
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  Doesn't make sense to the market leader, but makes a ton of sense to
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  the consumer who says, I actually really like this new dimension of
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  performance that's being introduced.
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  One of the terms, again, and this is going back to innovator's dilemma,
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  was the idea of a value network.
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  So for example, I as Blockbuster don't see any value in Netflix and I'm kind of
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  going, there's very little margin there.
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  There's very little market there.
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  Michael Rainer said, for example, sometimes as a bank, say for example
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  you're a a challenger bank and you take these lower end customers that
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  are of no value to me, or the ones that I go, I'll send you 12 red
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  roses to take them off my hands.
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  Thanks very much and.
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  By doing that, I hand you a cohort and then you build capability and
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  you get better and better over time.
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  And I think it's a dynamic.
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  I'd love you to share because you wrote about this again in a previous
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  book, and this is our focus, epic disruptions, but in each sleep innovate.
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  When you talked about DBS for example.
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  No.
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  So there's a, a couple things that we can unpack here.
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  So, first of all, I'll accommodate, and one of the great things about
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  talking with you, it's like all my friends are in the room because you've,
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  you've talked to just about everybody.
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  So you bring 'em into the conversation in different parts, which is a lot of fun.
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  But you know, the idea of a value network.
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  This is another reason why it's really hard for market leaders to respond to
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  disruptive change because they have what my colleague at Tuck, Ron Ner
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  would call an ecosystem around them.
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  They've got all these reinforcing things.
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  They've got suppliers, distribution networks, and so on, all of which
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  work really well to deliver today, but don't do really well when
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  you're trying to deliver tomorrow.
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  So you have to fight not against yourself only, but against all the
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  people that you're working with if you're trying to do something different.
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  So it makes it doubly difficult.
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  And then you have, you've hit on something really important that Ron also identified
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  in his doctoral research, this kind of ugly word called asymmetry, where
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  a market leader doesn't want to do the exact thing that an entrant wants to do.
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  When Michael Rainer is saying, Hey, you get the challenger bank going after
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  the underbelly of the industry, they're motivated to serve that marketeer.
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  The market leader is motivated to exit that marketeer.
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  And the problem, and this is what Clay identified in this research,
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  is technology develops faster than people's lives can change to utilize
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  the advancements they provide.
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  So something that's not very good in the beginning and can only serve
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  those worst customers gets better.
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  Gets better, gets better, gets better.
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  To the point where like Netflix, it can provide both infinite content and
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  immediate consumption, which it couldn't do in the beginning, but as it went up
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  its own improvement trajectory, it was a better solution than the market leader.
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  So that a symmetry makes it really hard because it appears to be pretty rational.
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  The market leader says, I'm gonna leave my worst customers behind.
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  People who invest say, great, your market, your profitability is going up.
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  It looks like you're a better business.
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  We like all of that.
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  You go to the next act and it still looks good until it doesn't.
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  And that again is the essence of the innovator's dilemma.
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  You mentioned there about iPhone seventeen, eighteen, nineteen, twenty,
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  and the point again, you talked about in this book, but also talked about with
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  clay, which was overshoot, is so when does it come to a point where like going, you
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  know what, it was okay when it was 17 or.
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  The fact that it's 17 and the fact that say Holly turns 18, she has a
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  new iPhone, you go, well actually we'll give her like a cheaper
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  phone because she's gonna break it.
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  You know that challenge that you go through as a parent and you're kinda
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  going, I'll just give 'em a cheaper phone 'cause they don't have to
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  change the screen or whatever it is.
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  Overshoot plays a role there and it's another term that is a strategist
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  you have to really understand.
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  Absolutely.
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  And as you described it is one of the big drivers of the innovator's
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  dilemma because you do what you're supposed to do, which is you listen
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  to your most demanding customers, you innovate to meet their needs, you.
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  Puts the pedal on performance improvements, you make
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  it better and better.
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  Everyone applauds until they don't.
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  And I really do think we're getting there in the smartphone space, I can't
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  really tell the difference in the camera between this version that I've got
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  in my pocket and the version before.
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  And Holly's not the one I worry about breaking her phone.
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  It's her 14-year-old brother Harry.
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  That is the one we worry about.
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  Although he has demonstrated to me how tough the phones are.
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  Yes, because it has fallen and cracked so many times you can
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  actually see through the back of it, but it still somehow functions.
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  But uh, it's a different topic.
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  But you know, so as you get to the point where people no longer will pay premiums
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  for improved performance, it creates the possibility that maybe someone comes
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  up with a completely different value proposition for a phone or maybe there's
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  a fifth wave of disruption coming in.
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  Computing, we've gone from mainframes to minis to personals to phones.
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  Is there a fifth?
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  If you watch Black Mirror, the AI device ends up being the thing
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  that we put on our forehead.
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  Johnny, ive and OpenAI, who knows what the heck they're gonna come up with.
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  We'll see
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  to finish the terminology and get us all on the same page.
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  There was also two other terms and they showed their face in
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  some, in a lot of the books.
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  One of them you talked about before was the idea of a non-consumer and if there's
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  a, a disruptive innovation that may kill a market at creative destruction.
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  Joseph Schumer, but also creates a brand new market and kills a market.
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  So in Prosperity Paradox, where the Foso o Jmo Clay wrote about
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  this, where it's market creating.
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  Disruptions as well.
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  So maybe those two terms, non-consumer and market creation.
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  The two are two sides of a coin.
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  So the idea of a market creating innovation is that you are
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  going and breaking a barrier to non-consumption to allow a broader
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  population to enjoy something.
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  And I remember back in the days when I was a consultant,
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  we would use the acronym swot.
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  There are other ones that are out there, but SWOT is skills,
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  wealth, access, and time.
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  Those are barriers that can sometimes make it hard for people to consume.
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  You need expert skills, you have to have a lot of money.
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  You have to go somewhere to access something or it takes
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  a lot of time to consume.
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  I think one way to visualize this today is a very popular use for things like chat.
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  PT is for therapy because many people either don't have access to, can't afford
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  or maybe don't want the social stigma.
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  That can sometimes come from seeing a therapist.
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  You're doing something in your pocket with your phone.
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  It's a very different sort of thing.
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  Or you're in a market that doesn't have a developed healthcare system.
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  All of a sudden through artificial intelligence, you have access to
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  someone who can provide health advice.
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  It's pretty classic non-consumption, driving growth in very different contexts
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  and non-consumer.
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  Like if we take, keep it in the phone example where say I am Xmi or one of these
• 14:25
  competitors that I come up with a phone to a on to Apple, they look at it and
• 14:30
  they go, that's not a. That's not anywhere near as good as our ecosystem, but
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  actually Xmi aren't competing with that.
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  They're competing to be just good enough.
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  And I think I love this where you taught me this and it really stuck
• 14:43
  with me was the idea that, well, that's actually your biggest opportunity.
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  If you can actually go after that marketplace, that's good enough.
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  I think about this, for example, in in Ireland, I don't see 'em quite so
• 14:52
  much here in Boston, but you see a lot of people on those ramped up bikes.
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  You know those scooters with the motor on them.
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  And you often see a lot of immigrants in Ireland who have work because of that.
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  'cause now they can be cleaners.
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  Now they can be au pairs.
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  They can travel places that they couldn't get to, perhaps in public transport, but
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  that is a competitor to a car, even though the automobile industry might not see it.
• 15:14
  But it's a different context once again.
• 15:17
  I'm smiling for a range of reasons.
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  One is you see a lot of those scooters where I teach, uh, up in the great
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  North in Hanover, New Hampshire, because it solves a very important problem.
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  How do I cut a 25 minute walk across campus, which in the middle of winter
• 15:31
  when it can be minus 20 Celsius, you know that that's actually a, a big deal.
• 15:36
  How do you cut that time down to two minutes and it, it solves a problem very
• 15:40
  nicely, except for when there's big snow.
• 15:41
  So I was smiling about it for that reason.
• 15:43
  And also, if you go back to the Innovator's dilemma, the appendix
• 15:47
  of the Innovator's Dilemma talked about electrification and how that
• 15:50
  might take root with a stripped down, simplified vehicle that
• 15:53
  people would use neighborhoods.
• 15:55
  Clay didn't quite get it right because you know, the world
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  works the way the world works.
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  But you certainly see echoes of that story in the way that people
• 16:03
  are using mobile devices today.
• 16:05
  And you did see, I mean, Tata would've read that.
• 16:08
  For example, they tried something like that.
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  I know it didn't quite work out, but we are seeing the echoes of
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  that happen across the industry.
• 16:15
  Well, I, you know, you, we can spend hours talking about automobiles, but you know,
• 16:19
  if you look at what many of the Chinese auto manufacturers are doing, driving
• 16:22
  massive disruptive growth that we are largely blissfully unaware of here in the
• 16:26
  United States, a lot of it is this play.
• 16:29
  How do we come up with something that isn't a car that you're going to
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  take on a hundred mile commutes every day, but something that allows you
• 16:35
  to get around town in different ways?
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  And if we can make it affordable enough, the continent of Africa is, is ours.
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  And that's something that the world I, I think, doesn't fully recognized, but
• 16:46
  will be a huge change in the automobile industry in the next 10 or 20 years.
• 16:50
  One of the examples of that that I read in both your work and across
• 16:54
  clay's is the Honda Super Cub.
• 16:57
  Maybe we'll share that with an audience.
• 16:58
  It's a great example.
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  Uh, a a great example too of the idea that I, I do talk about in
• 17:02
  the book of emergent strategy.
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  So the idea is sometimes you do deliberate strategy where you study, plan and act,
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  but when you're dealing with disruption, you're dealing with nascent markets.
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  It's test, learn, and adjust.
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  And the Honda Super Cub emerge from people in the United States
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  going and using it on weekends.
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  And then this whole idea for you meet the nicest people on a Honda emerges.
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  And it becomes this very powerful growth business.
• 17:27
  Not competing against Harley-Davidson for high-end motorcycles, but as something
• 17:31
  that's fun, enjoyable, that you can use on the side, which was not the plan at all.
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  It emerged almost accidentally because people had nothing
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  else to do over the weekend.
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  And this story that unanticipated things, uncover opportunities to build
• 17:47
  big, disruptive platforms is a really consistent one throughout history.
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  And it's important lens, again, to read your book because.
• 17:56
  You see in the examples that you give, like we're gonna get into
• 17:59
  gunpowder now for example, that the people who were playing with it
• 18:03
  were literally exploring with it.
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  They were trying things out and they might stumble upon a use.
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  But if you're a company locked into your trajectory of exploiting the
• 18:14
  current curve that you have, or o overshooting the curve that you
• 18:18
  have, you miss those opportunities.
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  You're not doing emergent strategy anymore, and that's kind of that
• 18:24
  dismembering of, of the curve you're on.
• 18:28
  Exploiting that one and exploring a current one is broken in a lot of
• 18:31
  companies, so therefore they don't come across things and they may reject it,
• 18:35
  like, we'll find out now with gunpowder.
• 18:37
  So maybe that's just a little introduction for gunpowder.
• 18:40
  I also loved the story of Joan of Arc in this story because the fact that
• 18:46
  she wasn't a seasoned professional in that field, and because of that she
• 18:52
  had a beginner's mindset and she was open to emerging strategy as well.
• 18:55
  And because of that, she then said, how do I use this new technology in the way that
• 19:00
  it should be used versus people who were trained in using horses and swords and
• 19:06
  all the things that characterize warfare.
• 19:08
  Up until then, it's hard to unlearn things.
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  That was true in the 13th century, the 15th, that whatever,
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  and it's even more true today.
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  The beginner's mindset, the willingness to look at things through very
• 19:18
  fresh eyes is really critical.
• 19:20
  I was thinking as you were going through that, one of my good friends,
• 19:23
  Carl Ron, he was a senior leader at Proctor and Gamble, gave birth to
• 19:26
  a number of disruptive businesses.
• 19:29
  He taught me something really important.
• 19:30
  He said, when I was doing market research, the most exciting moments for
• 19:34
  me was when I saw a point off the line.
• 19:36
  I'm like, what's that?
• 19:37
  He's like, well, a point on the line.
• 19:39
  It confirms what we already expected.
• 19:40
  It's another data point that confirms it.
• 19:43
  When I saw that, I'd always get depressed because why'd I run the research?
• 19:46
  I already knew that.
• 19:47
  But if I see a point off the line what Clay would call an anomaly,
• 19:52
  that suggests maybe there's a completely different plane out there,
• 19:55
  completely different possibility.
• 19:57
  And that's what you see in gunpowder.
• 19:59
  Gunpowder 1 42 AD is the first reference to someone mixing together
• 20:04
  sulfur, salt peter and charcoal in the right proportions, and
• 20:07
  creating this explosive concoction.
• 20:10
  But it wasn't warfare where it started, it was alchemists.
• 20:14
  Philosophers who are looking to elongate life.
• 20:17
  Then it goes to magicians who are like, Ooh, smoke hum.
• 20:19
  Is that?
• 20:19
  That's kind of cool.
• 20:21
  Finally, in the 12th century, people say, if you put it into a container and you've
• 20:27
  got a projectile and you do things in the right way, you have what we would now call
• 20:32
  a gun of some form and warfare changes.
• 20:35
  But it requires people like Joan of Arc who will say, I'm gonna look
• 20:38
  at this in a completely new way and I'm gonna rewrite the rules.
• 20:42
  Classic disruptive change.
• 20:43
  So let's bring in there as well, because you're after sparking, cramming, for me
• 20:47
  the term cramming another important term for your previous work, but works here.
• 20:51
  For example, an incumbent stumbles upon an invention like this and then tries to
• 20:57
  use it for the exact mental or business model that they have already at play.
• 21:01
  And you see it, you know, if you look at some of the early things people
• 21:03
  were doing with now, what we now call guns, you try to jam them onto
• 21:07
  knives and you create these hybrids that don't really work because you
• 21:11
  really need the ability to think about it from a blank piece of paper.
• 21:14
  But, you know, cramming the idea is we'll take the disruption and we'll try
• 21:19
  to force fit it into the market that we already know and we already understand.
• 21:23
  And that's not what the disruption wants.
• 21:25
  The disruption wants the space to go and take on the form that it should take on.
• 21:30
  You create these ugly hybrids that don't work very well when you try to force
• 21:34
  fit them in the innovator's dilemma.
• 21:36
  It's the natural tendency for the large organization that keeps looking for ways
• 21:41
  to sustain, whether it's an organization or a general on a battlefield.
• 21:46
  This is our first instinct.
• 21:48
  We need to turn that instinct off and look at the world through fresh
• 21:51
  eyes to go and create the future.
• 21:53
  It's very difficult.
• 21:54
  I was talking to Gary Hamill, he studied.
• 21:57
  The structure of paradigm shifts, but also the history of military strategy
• 22:03
  and with military strategy in that term, the generals fighting the last
• 22:06
  battle that he gave this example of, for example, when there was a shift in
• 22:11
  technology from bow and arrow to muskets, that they still fo followed the same
• 22:16
  formation, which is one behind the other.
• 22:18
  So I'm standing behind you and I'm shooting my arrow in the air, but this
• 22:20
  time I have a musket and it's like, Scott, just turn to the left there a little bit.
• 22:24
  I need to take my shot.
• 22:25
  And they kept the same structures.
• 22:27
  And it wasn't out of people dying on the field for the lack of a
• 22:31
  proper structure that changed it, it was the death of the generals.
• 22:34
  So it was that whole idea of the applying principle that the, the
• 22:37
  former generation dies out before the cramming, uh, disappears.
• 22:41
  So we use that as a way to think about.
• 22:44
  Gun Petter and how the Byzantines di dismissed the opportunity.
• 22:50
  So back to what you said earlier on, the incumbent misses the opportunity.
• 22:53
  They often pass, turn it away, even though they have a huge opportunity with
• 22:57
  it and you see this time and time again.
• 22:59
  So sets us up nice for the Byzantines, the wall and urban.
• 23:03
  It's a great story and it's where I, I begin the chapter.
• 23:06
  So, you know, I set it in 1453 and I've got this army approaching
• 23:09
  Constantinople, and the people inside the city, asay are feeling pretty
• 23:14
  safe because the, the ocean walls had protected them for a thousand years.
• 23:18
  Let's get the walls visualized.
• 23:20
  There's a moat that goes around them, a literal moat and strategy.
• 23:23
  Today we're talking about moats defending our business.
• 23:26
  This was a real moat.
• 23:27
  Two sets of walls each are 15 feet thick, 96 towers, buttress the walls.
• 23:33
  Those walls that stood again for a thousand years, repelling attacker
• 23:36
  after attacker, but that was before.
• 23:39
  As you mentioned, this gunner named Orbin appears the year before, and
• 23:43
  he goes to the Byzantine Empire that's inside the walls and says.
• 23:46
  I can build for you a canon to defend your city.
• 23:50
  They pass on the technology.
• 23:52
  He then goes and brings the very same technology to the Ottomans
• 23:56
  that have been trying for a hundred years to sack the city.
• 23:59
  They say yes.
• 24:01
  So imagine how it feels you're inside this city.
• 24:03
  The walls that stood for a thousand years, you now have a half ton
• 24:07
  cannon ball flung over a distance of a mile crashing into the walls.
• 24:12
  The walls collapse in 47 days, the city falls.
• 24:16
  Disruption changes everything a. That was true in 1453.
• 24:22
  It is still true today.
• 24:23
  The question I then ask audiences when I tell this story is, what's your
• 24:27
  equivalent to the Theod Ocean Walls, the defenses that you built that
• 24:30
  worked brilliantly in the past, but are now no longer effective against the
• 24:36
  disruptive onslaught you are now facing?
• 24:38
  And every organization has a parallel to that.
• 24:41
  I open today with saying how reading your work, and it was the first book I
• 24:46
  really read on disruptive innovation.
• 24:48
  My first understanding, I read it before even the Innovator's Dilemma,
• 24:52
  and what it gave me was a way to actually think about it in a framework.
• 24:56
  And when you think about the Byzantines and urban coming
• 24:59
  up and offering this thing.
• 25:00
  There was no literature to go, wait, let me just check what
• 25:03
  the literature says on this.
• 25:04
  There's no podcast, there's no data in the world.
• 25:07
  And you say, well, you would have somewhat a bit of empathy for them turning it down
• 25:12
  'cause there was no precedent to lean on.
• 25:15
  But if you're a business today, there's precedent after precedent after precedent.
• 25:19
  And we see the disruption happening over and over, over again.
• 25:23
  But yet it's very hard to read the label when you're inside the jar.
• 25:26
  An example you give in the book is Nokia.
• 25:29
  I love the way you set this up with the endorsement on the Jacket of
• 25:33
  the Innovators Solution with Michael Rainer and Clayton Christians, and.
• 25:37
  It's a kind of sad story, right?
• 25:39
  'cause you know, Nokia, I, I try and tell this to my MBA students, they
• 25:43
  have no idea what I'm talking about Now that that's, you know, time marches on.
• 25:47
  But at the time, 2005, 6, 7, 8, they are a titan.
• 25:51
  Everyone's looking at them as this fantastic, innovative company, which is
• 25:55
  why they were one of the endorsers of the innovator solution in 2003, because
• 25:59
  they're a market leader that had pioneered the mobile phone and had dominant market
• 26:04
  share who totally blew it when Apple and Google and others came in and changed the
• 26:09
  paradigm in the mobile phone industry.
• 26:12
  And, you know.
• 26:12
  As, as you said, I, I certainly, lots of empathy for what happens in 1453.
• 26:17
  Who knows?
• 26:18
  But, uh, at this point people should know better.
• 26:20
  And I think Nokia is an interesting story.
• 26:22
  You, I, I know have talked to from Yeah.
• 26:26
  Insead, who was done gone soon, hasn't been aired yet.
• 26:28
  Yeah.
• 26:28
  So I, uh, this is, I won't give it away.
• 26:30
  No, no, it's okay.
• 26:31
  I won't give it away.
• 26:32
  Tear it up, man.
• 26:33
  Tear it up.
• 26:33
  He has done really fantastic work to explain what's going on and what you
• 26:37
  see there as you go deeper into it is culture matters a lot and, and the
• 26:42
  way organizations share information and make decisions based on that
• 26:46
  information is really important.
• 26:48
  When his research Clay and the Innovator's Dilemma said, the enemy is the resource
• 26:52
  allocation process, naturally it allocates to today better, not tomorrow, different.
• 26:58
  People are the ones who drive the resource allocation process.
• 27:01
  And people can be weird, very weird.
• 27:03
  And the things that they do can be unpredictable.
• 27:06
  And Nokia, I think is a, an excellent case study for how
• 27:09
  things can go horribly wrong.
• 27:11
  One of the things I learned through that work with Qui Hui and Anti Fury
• 27:16
  was that there was, there wasn't much diversity in Nokia, so you were
• 27:21
  finished, you were usually a man.
• 27:22
  If you're in a senior position.
• 27:24
  So there was no innovation happens at the intersections neurodiversity
• 27:29
  wise, and that's why I love that pin.
• 27:31
  And you talked about that actually as a, an advantage that you can
• 27:34
  take part, take advantage of if you collaborate with different people from
• 27:38
  different parts of the organization.
• 27:40
  And that was totally absent from Nokia.
• 27:42
  Oh, for sure.
• 27:43
  And, and you had that and you also had a culture where bad news did not spread.
• 27:49
  So bad news was capped.
• 27:50
  So Amy Evanson would talk about psychological safety.
• 27:54
  It does not appear that there was psychological safety at Nokia.
• 27:56
  So the good news in all of this is as we continue to advance, we can
• 28:01
  understand at deeper levels what drives something like the innovator's dilemma.
• 28:06
  You know, I remember back when I was considering getting a doctoral degree,
• 28:09
  which I ultimately decided not to do.
• 28:11
  Clay's advice to me is make sure you go in with a good question.
• 28:14
  You go in with a good question.
• 28:15
  It's very easy to do.
• 28:17
  Clay went in with probably the mother of all questions, which is why is it?
• 28:21
  That smart well run companies fail.
• 28:24
  That's interesting.
• 28:24
  Why Bad poorly run companies fail.
• 28:27
  Uninteresting.
• 28:28
  They fail because they're bad and poorly run.
• 28:30
  But why smart?
• 28:31
  Well run companies fail.
• 28:32
  We're still trying to understand that.
• 28:34
  So Clay gave us part of the answer, but not all of it.
• 28:38
  So we're continuing to unpack it and the great work that you and
• 28:40
  all the people that you bring their ideas to life and help share it.
• 28:44
  We still have work to do to collectively solve the dilemmas of disruption.
• 28:47
  Getting closer but still haven't fully cracked it.
• 28:51
  The thing I find is, like you said here, so I have actually
• 28:55
  what this guy, uh, peka a lot.
• 28:57
  Piela, I'm butchering his name there.
• 28:59
  I
• 29:00
  I, I'm glad you were pronouncing it other than me.
• 29:02
  I wouldn't even try it.
• 29:03
  I'd say that Nokia
• 29:04
  person, you know who you're talking about.
• 29:05
  So this is on the, the jacket.
• 29:07
  So he says here, clay Christensen and Michael Rayner have done a superb job
• 29:11
  of creating a framework for helping to understand industry dynamics and for
• 29:15
  planning your own growth alternatives.
• 29:18
  So that was in 2003 by this guy, the chairman, and he went
• 29:23
  on to be president of Nokia.
• 29:24
  And we see that time and time again.
• 29:28
  There's a, that quote that history doesn't repeat, but it often rhyme
• 29:31
  rhymes or the echoes into the future.
• 29:33
  That these patterns are very, very clear.
• 29:37
  They happen all the time.
• 29:39
  Yet so many listeners of the show, so many people who don't have time to listen or
• 29:44
  read books are the ones who are gonna be leading companies as they get disrupted.
• 29:48
  And that just, I, I, I understand how busy people are, but if when
• 29:54
  there's a shift in your knowledge gap and you can actually use new ways of
• 29:57
  thinking, like I said, that your work to help me with, it's like a new lens.
• 30:01
  And I look through that lens and I see something totally different that's been
• 30:04
  staring me in the face all the time.
• 30:05
  And that work is so powerful
• 30:08
  and it is something that drives one a little bit crazy.
• 30:10
  I remember there was a moment, it's probably 2005 or thereabouts, I was doing
• 30:15
  some work for, back in my old days as a consultant working with the newspaper
• 30:19
  company and we were gonna present the results of, of our project and we're
• 30:22
  in the boardroom and there's a guy who is going to present right after us just
• 30:26
  getting ready and he's clicking through his slides and I, I just stand, watch it.
• 30:30
  And afterwards I say, that's not gonna work.
• 30:33
  And he says, why I. It won't trust me.
• 30:36
  Never has, never will.
• 30:37
  And you can see it.
• 30:38
  It, it's the lenses.
• 30:40
  You can see it, it's so obvious and apparent to you that the way
• 30:42
  he was gonna structure their new growth business was not gonna work
• 30:46
  and it was gonna get destroyed.
• 30:46
  And it did.
• 30:47
  I, I, I was right.
• 30:49
  The challenge is when you can see it and other people
• 30:51
  can't, it becomes really hard.
• 30:52
  This is one of the things Clay would always preach.
• 30:55
  You need a common language to be able to get through things like this.
• 30:59
  You need to be able to give people, models, tools, frameworks, theories,
• 31:02
  so they can have conversations.
• 31:04
  It takes time.
• 31:06
  You know, this person was a very successful executive, but they
• 31:09
  went to business school 30 years before they learned Michael Porter's
• 31:12
  forces of strategy, but they didn't learn what happened when things
• 31:16
  changed in those forces of strategy.
• 31:18
  My hope Aiden, for the future is people now who are starting to
• 31:23
  get into senior positions all have taken a version of Clay's course.
• 31:27
  So we will have a generation that understands it.
• 31:30
  And look, you are seeing some examples of this.
• 31:33
  You know, if you go back 20 years ago, the safe bet would be Microsoft done.
• 31:39
  Facebook is going to miss what happens on the mobile phone and messaging.
• 31:43
  Apple, there's no way it can continue to grow.
• 31:45
  Google search advertising is good, but you know, forget it.
• 31:49
  And in all cases, those organizations.
• 31:52
  Have seemingly fought against pieces of the innovator's dilemma and emerged
• 31:56
  as much stronger organizations.
• 31:58
  So that's interesting.
• 32:00
  That might even be an anomaly to Clay's original research one that's worth
• 32:04
  continuing to unpack and understand.
• 32:06
  Yeah, and shout out to your co-author as well with Eat, sleep,
• 32:09
  innovate, Paul Covin as well.
• 32:10
  And the example of DBS, which is in Singapore as well.
• 32:14
  I'll leave you you to read that or listen back to that episode you mentioned
• 32:18
  about the magicians using the gunpowder or trying to figure out Salt Peter and
• 32:23
  all these basically ingredients for how to actually work with gunpowder
• 32:27
  or to create it in the first place.
• 32:29
  Excrement and everything was in there, not pretty.
• 32:32
  I'll let people read it to find out more about that, but there was,
• 32:35
  there was early books on it as well.
• 32:37
  And the book is a segue for the next epic disruption, which was the printing press.
• 32:42
  Uh, the printing press.
• 32:43
  You know, there's a lot that one could talk about about the printing press, but
• 32:47
  let me tell you a couple things I learned from going into the research around it.
• 32:51
  So one thing I learned that just really changed the way that I think about
• 32:54
  things, I had this article I wrote, uh, probably about, I don't know, 15 years
• 32:58
  ago, the new corporate garage where I said, okay, basically there have been
• 33:02
  three types or three errors in innovation.
• 33:04
  There was era number one, the lone inventor era.
• 33:07
  Number two, big corporate lab era.
• 33:09
  Number three, the venture capital back startup era.
• 33:12
  Number one, the lone inventor.
• 33:14
  I said, yeah, it's just a dude Gutenberg working on his own.
• 33:17
  That not true, never has been true.
• 33:19
  Innovation cannot be done by an individual.
• 33:21
  It's too hard.
• 33:23
  Gutenberg shows up in modern day Strassburg in 1434.
• 33:27
  He forms a team.
• 33:28
  The team is working on a venture, not the printing press.
• 33:31
  They're working on this mirror that will capture the essence of the Holy
• 33:34
  Spirit during a planned pilgrimage.
• 33:36
  The plague breaks out, the pilgrimage is called off, the venture is gone.
• 33:40
  What do they do?
• 33:41
  They pivot.
• 33:42
  They say, what else can we do?
• 33:43
  They find this guy Conrad SAS bot that's working on this new technology, a press.
• 33:49
  They bring that together with a bunch of other things.
• 33:51
  They create the printing press.
• 33:52
  The rest is history.
• 33:54
  It's not one person, it's not a lone inventor.
• 33:57
  There's Nicholas of ssa, who's the early customer.
• 34:00
  There's Johan Fuss who provides the funding, and by the way, sues
• 34:03
  Gutenberg takes the technology over.
• 34:05
  It's a fun story, but it's a whole bunch of people that are coming together.
• 34:09
  That's one thing I learned.
• 34:10
  A second thing is it is a reminder of something that
• 34:13
  runs through epic disruptions.
• 34:15
  There's a lot of positives when disruption happens.
• 34:17
  I believe I preach, I promote.
• 34:20
  I really believe disruption makes the world a better place.
• 34:23
  There's a shadow.
• 34:24
  Disruption casts.
• 34:26
  When you make it easier for people to go and reproduce information,
• 34:30
  you also make it easier for people to spread misinformation.
• 34:34
  There's a downside of that technology.
• 34:36
  The person who helped to sponsor the printing press, the Catholic church
• 34:40
  at first is super happy about it.
• 34:42
  We can standardize religious services.
• 34:44
  A Bible would take three years to hand copy.
• 34:48
  Now we got it.
• 34:49
  Like that problem.
• 34:50
  Martin Luther can also go and print his 95 thesis.
• 34:54
  He can go and print his books and spread his books.
• 34:57
  The Reformation comes, the church splinters.
• 35:00
  The church helps to sponsor an innovation that leads to not, it's just demise.
• 35:05
  Obviously, it's still a strong institution, but leads to a lot
• 35:08
  of trouble in the centuries ahead.
• 35:11
  If I fast forward all the way to today, I wonder if we might in a few years
• 35:15
  say the same thing about consulting companies and artificial intelligence.
• 35:19
  Right now, it's a great time to be a McKinsey, Accenture, whatever,
• 35:24
  because clients are asking and investing a lot in using ai.
• 35:28
  But what happens when they realize, Hey, we're really good at this.
• 35:32
  We might not need the consultants anymore.
• 35:34
  Is it gonna be the parallel of the story?
• 35:35
  I don't know.
• 35:36
  It's worth watching.
• 35:37
  Yeah, I always thought about that.
• 35:38
  You know, with the, the capture that you have to do, the squiggly lines that you
• 35:42
  have to fill out to for security, that in a way you're digging your own grave.
• 35:47
  'cause you're, you're teaching the AI how to do this a hundred percent.
• 35:50
  It's the same echo of at a bigger scale as a consulting company,
• 35:54
  lemme teach you how to use this thing that will possibly replace me.
• 35:57
  But that pattern of, you mentioned, for example, Guten Gutenberg, going
• 36:01
  back to what you said about SWOT and the importance of skill, because this
• 36:06
  thing about early disruptive innovations usually take great skill to use and
• 36:11
  they're dismissed not just by the incumbent, but often by the public
• 36:15
  or the customer in the first place.
• 36:16
  'cause it's like, yeah, it's cool and all that, but like it takes a
• 36:19
  lot of learning to be able to do it.
• 36:20
  Like the fir first car, the Model T for example.
• 36:23
  Or when we talk about, when we talk about, uh, Ford, but the same thing happened
• 36:28
  with the, with the printing press.
• 36:30
  So the diffusion of that as an innovation was quite slow as a result because you
• 36:34
  needed these teams to be able to pull together all these multiple technologies.
• 36:38
  That's another pattern that happens.
• 36:40
  Absolutely.
• 36:41
  So, and in the early days it's very besi.
• 36:44
  In the early days, there is the equivalent of black art where you have
• 36:47
  to figure out exactly how are we gonna create these molds that we're gonna put
• 36:51
  into the movable type printing press.
• 36:53
  And there is a learning curve you have to go down, which of course, no
• 36:56
  one has language for learning curves in those days, but we, we understand
• 37:00
  what that means now and it therefore is really hard, which makes it even
• 37:04
  easier if you're the market leader.
• 37:06
  Going back to our previous conversation to say this is never gonna be a big deal.
• 37:10
  But that which is hard becomes easier.
• 37:13
  Standards begin to emerge.
• 37:16
  People learn what works and what doesn't work, and then you get things really
• 37:19
  begin to take off the printing press.
• 37:21
  I actually was surprised as I went deeper into the research
• 37:25
  that it was faster than I thought.
• 37:27
  So, you know, the printing press itself begins to be commercially available in
• 37:30
  the 1450s and it very quickly spreads in the decades ahead to a bunch of
• 37:35
  places in Italy and France and so on.
• 37:38
  So it's not hundreds of years like gunpowder was.
• 37:41
  Gunpowder 1 42 is the first reference.
• 37:44
  It's almost a thousand years until you get to military uses for the printing press.
• 37:48
  It's really a couple decades and you see big impact now in today's
• 37:52
  terms, a couple decades, is who could possibly wait that long.
• 37:55
  But you know, in the 15th century, that's maybe faster than than
• 37:58
  many people would've thought.
• 38:00
  But still you have to go through that messy, pardon the beginning
• 38:03
  before you can get to the elegant simplicity on the other side.
• 38:06
  For sure.
• 38:07
  And the irony of the brilliant press is it enabled quicker diffusion going forward.
• 38:12
  'cause now you had books as a result of the printing press as
• 38:14
  well, but the echo you used there.
• 38:17
  So in each of the chapters in the book, Scott gives an example of an
• 38:21
  epic disruption and then a company that echoes that in some way.
• 38:24
  He mentioned a guy we had on the show as well, Steve Sasson.
• 38:26
  Who was in Kodak and developed the, the digital camera for Kodak.
• 38:31
  And again, it reminds you of this story of inside the Catholic
• 38:35
  church, you're kind of going, yeah, yeah, we'll fund this disruption.
• 38:38
  That just might be a double add surge sword for us in the future.
• 38:41
  Yeah, for sure.
• 38:42
  And you know, the Kodak story is such an interesting story and you know, Steve
• 38:45
  Sasson, I mean he, he's the protagonist in the early days where he creates the
• 38:49
  first prototype of a digital camera and said management's response, is that cute?
• 38:53
  That's cute.
• 38:54
  Please don't do anything about it.
• 38:56
  But you know, the thing that I think people miss about Kodak is Kodak
• 38:58
  actually did something about it.
• 39:00
  They invested a bunch in the technology and had a pretty
• 39:03
  good line of digital cameras.
• 39:04
  Wave one of digitalization didn't get Kodak Wave two when it disappeared into
• 39:09
  mobile phones through social networking, Facebook and then Instagram and so on.
• 39:13
  That's what got Kodak.
• 39:15
  And the thing that makes that even more interesting is Kodak was there
• 39:18
  2004 years before Facebook exists.
• 39:21
  It buys o photo, a photo sharing site in a multiverse.
• 39:25
  One of the other ones out there, Ko, I figures it out.
• 39:28
  They, they say, what do we do?
• 39:30
  We help people share memories and share life.
• 39:33
  We're going to create what we now would call a social network.
• 39:36
  And I wonder a lot what the world would look like if that happened where you had.
• 39:41
  Adults running social media and had good policies on it.
• 39:46
  I don't know, I, I, you, you can't argue counterfactuals, but I don't see that
• 39:51
  world as being worse in today's world.
• 39:52
  In fact, I'd see it being better, but who knows?
• 39:55
  Another multiverse that hopefully we'll find,
• 39:57
  let's focus on it.
• 39:58
  Maybe, maybe.
• 39:59
  But one of the things that brings up then is again, and why I'm so
• 40:05
  passionate about this work, and again, I've learned so much, is
• 40:08
  when you understand it, you realize.
• 40:10
  It was a lack of a business model or an understanding of what a a possible
• 40:15
  business model could be for the internet.
• 40:18
  That's one thing, but also then the difficulty of, well, if I'm selling
• 40:22
  film, I can never compete with the curve.
• 40:25
  Getting to a point where the camera's essentially free or a
• 40:27
  marketing feature on a phone.
• 40:29
  I can never compete with that.
• 40:30
  So I have to actually look for a total reuse of my assets
• 40:34
  that I have available to me.
• 40:36
  Which, you know, you could argue Fuji is an excellent example of a company
• 40:40
  that started the same position as Kodak, which, you know, you could argue Fuji is
• 40:44
  an excellent example of a company that started the same position as Kodak and
• 40:48
  said, actually my ability to work with chemicals I can use to get into everything
• 40:52
  from other chemicals to pharmaceuticals.
• 40:54
  And has been very successful doing that.
• 40:56
  You know, the the point too, I, I remember I was on a, a panel with the president of
• 41:00
  Eastman Kodak in, I think it was 2008, and he said the fundamental problem we had is
• 41:06
  that our business wouldn't stop growing.
• 41:07
  So we all knew that digital was the future, but 2001, 2, 3, 4 people kept
• 41:14
  buying film, which I find kind of crazy, but whatever people were, so the data
• 41:18
  only became conclusive when it was too late to act on its conclusions.
• 41:23
  Now, a good model or theory would say it's very obvious how this is going
• 41:27
  to end, but in the middle of it.
• 41:30
  Business still feels pretty good until it doesn't.
• 41:32
  Yeah.
• 41:32
  It's the line from the, uh, the sun also rises by Ernest Hemingway.
• 41:36
  How did you go bankrupt?
• 41:37
  Two ways.
• 41:38
  First, slowly.
• 41:39
  Then suddenly, and that's what disruption feels like.
• 41:42
  I wanna double click on that one.
• 41:43
  'cause it, it was a paper you wrote with Clay and I quoted quite often
• 41:48
  where you talked about, well, often with a disruptive innovation when
• 41:52
  there's a crash coming, there's a spike before the crash in revenue and people
• 41:57
  go, great as others exit the market.
• 42:00
  No, and this is a, another thing that makes it hard because the data, the
• 42:04
  signals, I mean, taking an example back to mobile phones, I will play, I,
• 42:08
  I stole this from Rita McGrath 'cause she did it on, on a course that we
• 42:12
  were doing for a company in Singapore.
• 42:14
  There's this great video clip of Jim Balsley, the CO CEO of research in motion
• 42:18
  from April, 2008, which is seven, eight months after the iPhone launches where
• 42:23
  he's smug and dismissive and says, yes, we're a very poorly diversified portfolio.
• 42:28
  Yes, we either go to the moon or we crashed earth, but we're
• 42:30
  going to the moon pretty well.
• 42:32
  So we'll keep doing what we're doing.
• 42:33
  Everyone lasts at it and dismisses him.
• 42:36
  Revenues had tripled in the year, in the fiscal results that were
• 42:39
  just announced in the next three years, revenues would triple again.
• 42:44
  So it was clear how it was gonna end, but until then, revenues kept shooting up.
• 42:49
  'cause there were still a lot of life left in the sustaining curve
• 42:51
  until they fell, fell off a cliff.
• 42:53
  So, you know that that pattern is really persistent and makes it doubly
• 42:57
  difficult because if you're an executive and people on the one hand are saying
• 43:01
  you're getting disrupted, and you say, yeah, but look at the numbers,
• 43:05
  it's, it's hard to square those two.
• 43:07
  Yeah.
• 43:08
  And by the time you get to here, then you gotta make the big investments,
• 43:11
  but too late because you need to make the big investments here, not here.
• 43:16
  And that speaks to then capability building as well.
• 43:19
  It's not just the revenue or the resource allocation, it's actually
• 43:22
  the resource into building new skill sets to carry the next curve.
• 43:25
  That's correct.
• 43:26
  And, and those, that next curve.
• 43:29
  There are.
• 43:29
  If you go back to dual transformation, there are some capabilities that you
• 43:33
  could absolutely use, but most of the capabilities you need, if you're gonna
• 43:37
  do something different, take Kodak.
• 43:39
  If it really were to go into social media, its ability to manufacture at scale.
• 43:45
  Its ability to do retail distribution, wholly irrelevant.
• 43:50
  You have to do completely different things when you're
• 43:53
  working on a new business model.
• 43:55
  And the hard thing for an incumbent is they want to take their old
• 43:59
  capabilities and port them to the new, but not only are they irrelevant, they
• 44:03
  will hold you back in many places.
• 44:05
  So you have to forget a lot.
• 44:06
  My colleague at Tuck b Jacobin would talk about this.
• 44:10
  You have to forget a lot.
• 44:11
  You have to learn a lot of new things and be very selective in what you
• 44:15
  borrow from the current business.
• 44:17
  One.
• 44:17
  You said it.
• 44:18
  I'd love you to share the A, b, C of dual transformation.
• 44:22
  So we're, we're doing, uh, all the greatest hits here, but the,
• 44:25
  it's the greatest hits of Scott.
• 44:27
  Anthony.
• 44:27
  Yeah.
• 44:27
  No, no lyrics.
• 44:28
  No lyrics in this one.
• 44:30
  So the a, b, C of dual transformation, so dual transformation book that I wrote in
• 44:34
  2017 with Clark Gilbert and Mark Johnson.
• 44:38
  And it's the answer to what do I do if I'm a large incumbent and disruption strikes?
• 44:43
  The answer thankfully is in the book's title, transformation, fundamental
• 44:46
  change in form or Substance.
• 44:48
  Dual, not one effort, but two, a transformation.
• 44:52
  A, reinvent today's business to make it more resilient in the face of the change.
• 44:57
  This is Microsoft going on to the cloud, making sure that all of
• 45:00
  its software is available on any place that you could access it.
• 45:04
  Transformation.
• 45:05
  B, getting on the new curve.
• 45:07
  Going to create tomorrow's growth engine.
• 45:08
  This is Microsoft getting into artificial intelligence in lots of new spaces.
• 45:13
  C, the capabilities link transformation B is not.
• 45:17
  Unrelated diversification where the only thing you're
• 45:20
  bringing to the table is cash.
• 45:22
  It is strategically related diversification, where you
• 45:25
  say, Hey, we're Microsoft.
• 45:27
  We understand the customer, we understand the buyer.
• 45:30
  We understand how coding works and so on.
• 45:33
  We've got some unique things that can allow us to incorporate
• 45:36
  something like OpenAI into our solution better than anybody else.
• 45:41
  So you find smart ways to link those capabilities and do things
• 45:44
  that few startups could do.
• 45:46
  So a transformation, a reinvent today transformation.
• 45:49
  B. B create tomorrow.
• 45:51
  C, the capabilities link very thoughtfully sharing selective
• 45:56
  assets between those two.
• 45:57
  Nicely done, man and the sea.
• 45:59
  I've done it a couple times before.
• 46:02
  This is like, play.
• 46:03
  Yeah, play, play, go, play, go.
• 46:05
  One of the, it's the equivalent of even flow, but uh, yes, I
• 46:08
  was wondering what the Pearl Jam equivalent was, but the sea also.
• 46:13
  One of the things I picked up from that book was, it's not just capabilities
• 46:17
  linked between A and B, but it's also communication as a leader.
• 46:21
  Uh, incredibly important.
• 46:22
  I, I, I think one of the things that people will miss in transformations
• 46:26
  that you need to have, and Mark Bertolini premise days, and Aetna,
• 46:29
  I think explained it better than anyone else, you'd have a very clear
• 46:33
  vision of what you're trying to do.
• 46:35
  And you have to be able to convincingly communicate that in
• 46:38
  the right way to all the people you need to communicate that to.
• 46:42
  And it will be different when you're communicating to your shareholders than
• 46:46
  it will be to when you're communicating to your call center employees.
• 46:50
  And the thing that Mark Bertolini would say is, you'll
• 46:52
  get tired of talking about it.
• 46:54
  You'll feel like you're saying the same thing over and over again, but you have
• 46:57
  to, because Clay would say this, people don't learn when you want to teach 'em.
• 47:02
  They learn when they're ready to learn.
• 47:03
  So you have to make sure you meet them in the moment and relentlessly
• 47:07
  repeat something that is simple enough that they can remember, but
• 47:11
  powerful enough that they wanna follow.
• 47:13
  Yeah, and you, you have to not be embarrassed, don't you?
• 47:15
  I think sometimes leaders are embarrassed.
• 47:17
  They're kind of going, oh, I'm saying this ad nauseum.
• 47:18
  You're kind of going, you are maybe to the leadership team, but the rest of
• 47:21
  the organization don't know that story.
• 47:24
  I totally agree and I, you know, I shake my head because, you know, one of the
• 47:27
  things that we were driving around 16, 17 was coming up with a statement of purpose
• 47:32
  for nSight, and we came up with something and I, I thought it was really awesome.
• 47:38
  And then I'm like, okay, we all got it.
• 47:39
  Let's go and do it.
• 47:40
  It did not soak into the culture and power forward thinking organizations to navigate
• 47:45
  disruptive change and own the future because they didn't feel it as much.
• 47:49
  And I, I felt like I said it at the town hall meeting, so
• 47:52
  everybody should understand it.
• 47:54
  That was not enough.
• 47:54
  It needed to be repeated, repeated, repeated again.
• 47:57
  My colleague, Natalie Payne show, who was one of the co-authors as you know
• 48:00
  of, eat, sleep, innovate, did that phenomenal work to go and do what we
• 48:04
  should have done in the first place, which is repeat, repeat, reinforce.
• 48:08
  Then people begin to get it.
• 48:09
  But it took an extra three years.
• 48:11
  Yeah.
• 48:11
  You, you win or you learn and I like that as a, as a motto, one of the last things
• 48:16
  on Gutenberg, which is really interesting, so I loved, I'd say it was great fun
• 48:20
  actually understanding these disruptions going into the historical side.
• 48:25
  So you, you balance really nicely that historical, don't go too deep
• 48:28
  in the historical side, but pull out some threads that are interesting.
• 48:31
  One of the one that was interesting was a pattern that repeats time and
• 48:34
  time again, which is when the founder.
• 48:37
  Either gets shafted by the investor.
• 48:41
  I dunno what a better way to say that is.
• 48:42
  It's, uh, you nailed it.
• 48:44
  But this happened with Fust and with Gutenberg.
• 48:48
  'cause fuss name was on it as the inventor in the early days.
• 48:51
  Yeah.
• 48:51
  I, I, this is, I, I had no idea this, so I discovered in the research,
• 48:54
  so every innovation needs money.
• 48:57
  So these, these things require funding.
• 48:59
  They required funding from the very early days.
• 49:01
  So Gutenberg goes and finds this merchant, Johan fuss and fuss makes
• 49:05
  an investment in the business.
• 49:07
  Gutenberg maybe gets a bit distracted in a couple places, slips a couple deadlines,
• 49:12
  and right as he's about to have the first Bible come off the press, like the big
• 49:16
  moment Fs sues him and, and says, you didn't meet the terms of the contract.
• 49:21
  I should take ownership of this.
• 49:23
  And he wins.
• 49:24
  So he is kind of not that much of a mercenary.
• 49:27
  He lets Gutenberg keep one press so he can produce the Bibles, but then FS is
• 49:32
  the one that scales the technology and for centuries he is the name people
• 49:36
  associate with the printing press.
• 49:38
  It's a couple centuries later that people go way back in
• 49:41
  history and say, wait a second.
• 49:43
  This was the funder, but not actually the creator, which is why today we
• 49:47
  remember and celebrate Gutenberg and not first, but you know, this is something
• 49:52
  that does repeat throughout history.
• 49:54
  You know, if we look at a reasonably controversial figure, Elon Musk.
• 49:58
  He was not the creator of Tesla.
• 50:00
  He came in a little bit late and then rewrites history to a degree where
• 50:04
  people make him the creator of Tesla.
• 50:07
  You know, he, history is written by the victors.
• 50:09
  Always been true.
• 50:10
  Absolutely.
• 50:10
  And one of the nice segue that it, one is for, for Bacon, because a lot
• 50:16
  of Shakespeare plays, we believe were possibly written by Francis Bacon.
• 50:20
  Bacon is one of your next epic disruption elements along with Boyle.
• 50:24
  So this was a, a very different chapter and you know, there was one version of
• 50:28
  the book where I did a couple products and then would do ideas, couple products
• 50:32
  and ideas, couple products and ideas.
• 50:35
  And that ended up getting overweighted.
• 50:37
  So we scrapped that version of the book.
• 50:38
  So we had one chapter in the end that's really not a product,
• 50:41
  not a service, but an idea.
• 50:43
  And that's the scientific revolution.
• 50:45
  And you know, the way I start the chapter, it starts with.
• 50:48
  Probably my favorite historical find for the book.
• 50:51
  I, I'm sure you like this one, the 1548 Proclamation by King Edward.
• 50:55
  I six Couldn't read it though, but yeah, yeah, yeah, yeah.
• 50:57
  It's is illegible.
• 50:58
  Yeah.
• 50:59
  Old English.
• 50:59
  Yeah.
• 51:00
  Yeah, indeed.
• 51:00
  But you know, it's a, a really cool thing.
• 51:02
  15, well, not cool.
• 51:04
  Really interesting.
• 51:05
  1548, king Edward.
• 51:06
  The VI issues of proclamation, and the proclamation is against
• 51:09
  those that do it, innovate.
• 51:11
  And at first it's like, why would the king care about innovation?
• 51:14
  At the time, innovation was not a desirable thing.
• 51:18
  Innovators from day one do one thing.
• 51:21
  They question the status quo.
• 51:23
  And in 1548, if you're questioning the status quo, who are you questioning?
• 51:27
  The king or God above.
• 51:29
  And the proclamation says, God does not like disorder.
• 51:32
  God likes order.
• 51:33
  This is bad, bad, bad.
• 51:35
  So you know, we have what we call the dark ages where people who are advancing
• 51:39
  knowledge are burnt at the stake.
• 51:41
  And now some of that gets overblown.
• 51:43
  And of course universities are being formed.
• 51:45
  And in Islamic countries, amazing things are happening with mathematics.
• 51:49
  So knowledge is advancing.
• 51:51
  But not very fast.
• 51:53
  So Bacon comes along in 1620.
• 51:55
  He writes his big book, Novin Orum, where he says, basically we
• 52:00
  reveal the glory of God when we understand how things really work.
• 52:04
  And the way that we understand how things really work is what we now would call
• 52:07
  the scientific method, which is we will go and form a hypothesis and go and
• 52:12
  run an experiment and we will learn and then do something based on the learning.
• 52:16
  We take all of this for granted today.
• 52:18
  But that thing, the scientific method which Bacon helped to develop, the
• 52:23
  underpinnings of Boyle, helped to demonstrate a few decades later when
• 52:26
  he showed how to run a whole bunch of experiments and learn what happened to
• 52:31
  atmospheric pressure at altitudes through this crazy device he came up with.
• 52:36
  That changed everything that made the pursuit of knowledge a good
• 52:39
  not bad thing that made innovation not a here act, but a hero.
• 52:44
  Act hero.
• 52:46
  Take it.
• 52:47
  We'll, we'll take it, we'll go with it.
• 52:48
  Don't stop.
• 52:49
  Me's on a roll.
• 52:49
  So it made innovation something that really made the world a better place.
• 52:53
  You then have the, all the things that happened afterwards, the Renaissance, the
• 52:57
  industrial Rev revolution and so on, that leads to the modern age and that idea,
• 53:02
  that disruptive idea that we can reframe the way that we think about the search for
• 53:08
  knowledge is the beginning of all of that.
• 53:11
  Beautiful, and I, I really love this because it was the start of emergent
• 53:16
  strategy really, and taking a record of that emergent strategy you talked
• 53:21
  about for Boyle, for example, that it was, it was almost in a religious act.
• 53:25
  He would do it on a Sunday almost to celebrate.
• 53:28
  This is a, a celebration of creativity, which is in service, and I love
• 53:32
  that part, but also that you lead it up to a point to go, well, let's
• 53:37
  bring it to the modern day if.
• 53:40
  Being an innovator was a defiant actor.
• 53:42
  You were a deviant because you were innovating.
• 53:44
  They shall not innovate.
• 53:47
  Is that, you talked about Benoit go down then the Canadian guy who had
• 53:52
  done deep research on the history of anybody who innovated people were burned
• 53:56
  at the stake for being innovators.
• 53:58
  And we wonder why that epigenetic element has been brought into organizations today.
• 54:03
  No, and you know, of course we don't issue proclamations like that in
• 54:06
  organizations, but many organizations act like they're still in force.
• 54:10
  And this is something, you know, we talked about need, sleep, innovate, where the
• 54:13
  big barrier that you have to face in many organizations is the status quo.
• 54:18
  It's that innovation is not actually something that people are seeking.
• 54:21
  You know, you have the, the quote that I have in that book and I've had
• 54:24
  in a couple other books from I can.
• 54:26
  Reveal it now.
• 54:27
  Mark Pritchard from Proctor and Gamble, a generation ago where he
• 54:30
  said, we are organized to deliver predictable, reliable results.
• 54:34
  And that's exactly the, that's who it was.
• 54:35
  I was wondering who it was.
• 54:36
  That's exactly, you know, he said it long ago.
• 54:38
  I don't mind saying it.
• 54:39
  Oh, yeah.
• 54:39
  The NPG has done many great things for innovation.
• 54:41
  So, you know, I, I don't think I get in any trouble doing this, but you know,
• 54:45
  why would that be a problem to organize, to do predictable, reliable results?
• 54:50
  Because the innovation is the anomaly.
• 54:53
  It's the thing you don't expect.
• 54:55
  And if you're trying to have everything be perfectly predictable,
• 54:58
  you never get the point off the line that I was talking about before.
• 55:01
  You never get the unexpected.
• 55:03
  You never get the disruptions.
• 55:05
  So back to dual transformation, you need both.
• 55:08
  You need an organization that is firing on all cylinders, that's delivering
• 55:12
  what it's supposed to deliver.
• 55:14
  And you need an organization that's a little crazy and
• 55:17
  chaotic and does weird things.
• 55:18
  You need to proctor, you need to gamble.
• 55:20
  You need both of those things in your organization.
• 55:23
  You mentioned earlier on Netflix and I was gonna go there earlier and I was,
• 55:27
  wasn't gonna break the chronological order of the book, but I am so I
• 55:31
  mean to go to the end and towards the end you talked about McDonald's.
• 55:35
  And McDonald's really like the way you mentioned Netflix
• 55:38
  was a business model change.
• 55:40
  McDonald's was a business model change and it was perfecting a
• 55:43
  business model and it was iterating what a business model as well.
• 55:46
  And I love the way you told this chapter because it tees you up then to
• 55:49
  actually think about things differently again, like I mentioned from the work
• 55:53
  that I've read from you in the start.
• 55:54
  So whatever way you'd like to tee us up from McDonald's,
• 55:56
  how about we lay out the basics of the McDonald's story and then maybe
• 56:00
  I'll tell you something that I learned after the book came out, which I, I
• 56:03
  think is always a fun thing to do.
• 56:04
  So the basics of the McDonald's story, 19 38, 2 brothers in San Bernardino,
• 56:10
  California open a restaurant.
• 56:11
  Not interesting.
• 56:12
  There's lots of restaurants.
• 56:14
  1948, the story begins to get interesting.
• 56:16
  The brothers are frustrated.
• 56:18
  Dick and Mac McDonald, they're frustrated because their restaurant has service
• 56:22
  where cars would drive in and they'd have people deliver the food to cars.
• 56:26
  Teenagers were absconding with their utensils.
• 56:29
  They were loitering.
• 56:30
  It was taking too long.
• 56:31
  They couldn't keep staff, so they said, let's try something different.
• 56:34
  They shut the restaurant down, they simplified the menu down to nine
• 56:38
  items, hamburger, cheeseburger, french fries, milkshake, and five other
• 56:42
  drinks, and they implemented what they called the speedy service system.
• 56:46
  We're gonna simplify and standardize how we produce food.
• 56:50
  This changed everything.
• 56:52
  They now had something that looks like what we now would call fast food.
• 56:56
  The story's still not that interesting 'cause it's one hamburger stand
• 56:59
  in San Bernardo, California 1954.
• 57:02
  Ray Crock shows up.
• 57:04
  He is a salesperson.
• 57:05
  He's selling milkshake equipment.
• 57:07
  He'd heard the store was booming.
• 57:09
  He had milkshake sales in his eyes.
• 57:10
  He goes in and he sees so much more than that.
• 57:14
  He says, the brothers are sitting on a gold mine.
• 57:17
  He leaves not only with some milkshake equipment sold, but with the deal to
• 57:21
  be the master franchisor for McDonald's store's starting to get interesting.
• 57:25
  Now he does something interesting with his team.
• 57:28
  Before Ray Croc people had approached franchising, which had existed.
• 57:32
  He wasn't the pioneer of that.
• 57:33
  A and w was already at 2,500 stores at this point.
• 57:36
  But people approached franchising as something where the franchisor
• 57:40
  would win, the franchisee would lose.
• 57:43
  So we're gonna take everything we can from them.
• 57:45
  Maybe we'll give them a big geography.
• 57:47
  We'll demand.
• 57:47
  They pay a lot, or we'll lock them into buying food equipment from us and so on.
• 57:52
  So they struggle.
• 57:54
  Crock and team embraced what today we would call mutuality.
• 57:57
  How do we make it something where everyone wins together?
• 58:00
  That was a reframe of franchising.
• 58:02
  Things begin to take off problem.
• 58:04
  By the end of the decade, the 1950s, McDonald's are popping up everywhere.
• 58:08
  The franchise owners are doing well.
• 58:11
  The master franchisor McDonald's corporation is not $159,000 in
• 58:16
  profits for the whole decade.
• 58:18
  They had to figure out how they were gonna capture the value that they were creating.
• 58:23
  It wasn't through hamburgers, it was through real estate.
• 58:26
  Henry Sonneborn, who ultimately became McDonald's, CEO, didn't
• 58:30
  care at all about hamburgers.
• 58:32
  He cared a lot about making money.
• 58:34
  He said, we can get really good at finding the best pots of land in a city,
• 58:40
  leasing them, and then subleasing them to our franchise owners, still in a
• 58:44
  mutual way where we win when they win.
• 58:47
  That was the unlock.
• 58:49
  The real estate model is what allowed the flywheel to begin at McDonald's
• 58:52
  to take over the fast food world.
• 58:55
  The thing that I found so interesting about this is it shows very clearly,
• 58:59
  as you said, what we now would call a business model, creating value through
• 59:04
  the speedy service system, delivering that value through a franchise model
• 59:09
  that embrace mutuality, capturing that value through a real estate model.
• 59:14
  Burger Chef later renamed Burger King might be able to cook a
• 59:17
  hamburger as well as McDonald's.
• 59:19
  You can copy a thing, but that end-to-end business model, that
• 59:23
  end-to-end system is next to impossible to replicate even today.
• 59:28
  That is the special sauce of disruptive innovation.
• 59:32
  It reminded me a little bit of the theories of modularity as well, where
• 59:36
  they'd created a system, and the system meant that you could actually change parts
• 59:42
  of the system, like for example, a burger.
• 59:45
  One of the great ones you mentioned in here was a Friday.
• 59:48
  There wasn't many people eating meat on a Friday.
• 59:50
  So what do you do about that?
• 59:51
  And all of a sudden you're like going, well, fill a fish works nicely here.
• 59:54
  And, and I, and in my head I was like going, oh, I'd say he's gonna use now
• 59:58
  Amazon as the example where Amazon maybe perfect the shipping of a book and then.
• 1:00:04
  Are able to ship other things, but they've built the system behind it.
• 1:00:07
  But you went to Netflix here, but I'd love you to share if you zoomed
• 1:00:11
  out and you went, how is that applicable to me and my business?
• 1:00:15
  How would you, how would you tell an audience that?
• 1:00:17
  Yeah, so two things I would say.
• 1:00:19
  So the first thing I would say is.
• 1:00:21
  As you're thinking about your business, if you're an entrepreneur, think about
• 1:00:25
  how you're going to not just have a whizzbang technology, but how you're
• 1:00:29
  gonna really come up with a way to create, capture, and deliver value.
• 1:00:32
  How will you really come up with a business model?
• 1:00:34
  If you're an incumbent company, what is your business model?
• 1:00:38
  My former psych colleague, Mark Johnson, and his book, reinventing
• 1:00:41
  Your Business Model, gave very good language for how to describe it.
• 1:00:45
  Alex Osterwalder has the business model canvas.
• 1:00:47
  Those things exist now, but most organizations still cannot
• 1:00:51
  explain exactly how they create, deliver, and capture value.
• 1:00:55
  You need to understand it because your business model
• 1:00:58
  can be a source of strength.
• 1:01:00
  It can also be a source of weakness because it's the thing
• 1:01:03
  that can make it hard to change.
• 1:01:05
  A technology, a piece, a component, you can change.
• 1:01:08
  A business model is very resistant to change.
• 1:01:11
  That's the first thing I would say.
• 1:01:12
  The second thing I would say, and this is the thing I learned
• 1:01:14
  since the the book came out.
• 1:01:17
  Just pause at that moment in 1954 when Ray Croc showed up.
• 1:01:22
  So the thing that was hiding in plain sight in the book, I, I
• 1:01:24
  was talking to my publicist about doing an article for A A RP.
• 1:01:29
  I don't know if you know a A RP, I don't know if it's come to Ireland,
• 1:01:33
  but this is formally known as the American Association of Retired People.
• 1:01:37
  That now is a society for anyone who is 50 or over.
• 1:01:40
  And a lot of people in A A RP buy books.
• 1:01:43
  So my publicist is like, you should do an article.
• 1:01:45
  Do you have any protagonists in your book that are older than 50?
• 1:01:49
  I'm like.
• 1:01:49
  I don't know.
• 1:01:50
  I hadn't thought about that.
• 1:01:51
  Probably Julia Child.
• 1:01:52
  So it turns out she was 50 when she did her first television show.
• 1:01:56
  And then as I look deeper, almost every chapter has someone who was older than 50.
• 1:02:02
  Gutenberg was 54 when the first by, this is in the 15th century.
• 1:02:07
  Whoa.
• 1:02:07
  Ray Crock, 1954.
• 1:02:09
  52 years old.
• 1:02:11
  A theory, I don't know if this is right or not, but a theory, there is a pattern
• 1:02:15
  here that you can explain by talking about the two types of intelligence that exist.
• 1:02:19
  Fluid intelligence, your ability to quickly process and learn new things
• 1:02:23
  that peaks very young and declines pretty quickly in your twenties or
• 1:02:27
  thirties is when you're at peak fluid intelligence, crystallized intelligence
• 1:02:32
  where you're relying on wisdom that accumulates that can keep going
• 1:02:36
  up until you're in your seventies.
• 1:02:38
  The fact that Ray Crock had been around the block, that he knew
• 1:02:42
  how businesses were allowed him to see what others might not see, and
• 1:02:47
  that's a lot of what disruption is.
• 1:02:49
  So my theory is that disruption begins at 50 now.
• 1:02:53
  I turned 50 this year, so this is incredibly self-serving,
• 1:02:57
  but I think there's at least some data to suggest it's true.
• 1:02:59
  Steve Jobs, of course, illustrates what most people believe.
• 1:03:02
  He founded Apple when, along with Steve Wozniak when he's young,
• 1:03:06
  and also shows this pattern.
• 1:03:08
  He was 52 when the Apple iPhone came out.
• 1:03:11
  It wasn't just the technology, we know this.
• 1:03:13
  It's the whole ecosystem he built and maybe he needed the extra
• 1:03:17
  couple decades of experience to be able to really do that.
• 1:03:21
  Disruption begins at 50
• 1:03:22
  and also you have the compounding of the information or the knowledge that happens,
• 1:03:26
  and I think this term we inter innovation happens at the intersections is important
• 1:03:31
  that sometimes these diverse experiences or different groups of people to come
• 1:03:35
  together, that's actually the magic sauce.
• 1:03:37
  Or even you take the chapter on the transistor.
• 1:03:40
  So you know, you've got three researchers who are working in Bell Labs, pertain
• 1:03:43
  Bardeen and Shockley, and they're making progress on the transistor.
• 1:03:46
  World War II breaks out, they have to stop working on the transistor.
• 1:03:51
  They go to work in other areas.
• 1:03:52
  One lens says it's a distraction because they're not working on the transistor.
• 1:03:57
  Another lens says it's an enabler because the work notably that Shockly did on radar
• 1:04:01
  systems and so on, gives a different frame to help to solve a really tough problem.
• 1:04:06
  So the takeaway I have from it is if you're a leader and you're trying to
• 1:04:10
  build the capacity in your organization to cope with never ending change, don't
• 1:04:14
  have a war breakout, but find ways to give people diversifying experiences where
• 1:04:19
  they've got different lenses to draw on.
• 1:04:21
  Maybe it's new functions, new geographies.
• 1:04:24
  Have people not get promoted to bigger opportunities, but smaller ones where
• 1:04:28
  they can be entrepreneurial because it gives them the lens to be able
• 1:04:32
  to reframe and reimagine things.
• 1:04:34
  I'm gonna come finally to Ford and.
• 1:04:38
  I, I think it's a nice segue to Ford.
• 1:04:39
  You mentioned that one of the things that changed for McDonald's
• 1:04:42
  was now people had cars.
• 1:04:43
  So they had to, they had to use those cars somewhere and this was the
• 1:04:46
  opportunity to drive through restaurant, but the car had to come and the car
• 1:04:50
  goes back to what you talked about Swat earlier on, about the skill.
• 1:04:53
  It took great skill at the start to be able to drive a car.
• 1:04:56
  You talk, for example, about the Oldsmobile guy driving his automobile
• 1:05:01
  up to New York or wherever he was going, and everybody kind of
• 1:05:04
  going, Hey, get outta the way, Dr.
• 1:05:05
  Get a horse.
• 1:05:07
  Yeah.
• 1:05:07
  You know, the, the Henry Ford story, the Model T story, there's so many avenues
• 1:05:11
  to explore in it, but you know, a good one to start with is a very persistent
• 1:05:15
  pattern in the book is disruption, rewards, patience, and perseverance.
• 1:05:18
  And Henry Ford really shows that.
• 1:05:20
  So he had a vision, I'm gonna create a car for the great multitudes.
• 1:05:24
  It required three companies.
• 1:05:26
  So the first company he formed, he was fired from the second
• 1:05:29
  company he formed, he quit the Ford Motor Company's number three.
• 1:05:33
  His breakthrough car was the model.
• 1:05:35
  T. He liked his letters, so there was an A, B, C, D, et cetera, et cetera.
• 1:05:41
  Before there was a Model T, so it wasn't like this idea emerged
• 1:05:45
  fully sprung from his head.
• 1:05:46
  Emergent strategy, as we've talked about, it took a lot of trial
• 1:05:49
  and error before you get there.
• 1:05:50
  The Model T came out in 1908.
• 1:05:53
  It is a technological marvel.
• 1:05:55
  It's a lot simpler than anything that exists.
• 1:05:57
  It uses this amazing steel one problem.
• 1:06:00
  The car for the multitudes at the time cost 30,000 US dollars.
• 1:06:05
  In today's terms, it was priced out of the market.
• 1:06:08
  It required all the things that we know.
• 1:06:11
  The assembly line in 1913, Henry Ford dramatically increasing
• 1:06:14
  wages to decrease turnover at his factories in 1914 before prices get
• 1:06:20
  brought down to the level of $5,000.
• 1:06:22
  In today's terms, at the beginning of the twenties.
• 1:06:24
  So this reminds us that it doesn't happen like this.
• 1:06:27
  It's a theme of everything we've talked about.
• 1:06:29
  There's the persistence, there's the patience.
• 1:06:31
  We've gotta try a bunch of things.
• 1:06:33
  It's gonna be ugly before it's beautiful, and that's just to get to the price point.
• 1:06:37
  Then you need adoption, and there's a whole nother thing we could talk
• 1:06:40
  about about what happened in the twenties and how you really get to the
• 1:06:43
  mass marketization of the automobile.
• 1:06:45
  It's a great story.
• 1:06:47
  There's a couple of things in here as well, because this Ford is celebrated
• 1:06:50
  as a great innovator, which he was, but he also fell into the traps of the
• 1:06:54
  innovator's dilemma in ways where, for example, he'd vertical integration.
• 1:06:58
  He grew the wood that came into the Model T. He was trying to drive the price down.
• 1:07:03
  We had Peter Campo on the show talking about emerging strategy, but he said
• 1:07:06
  there was like this overall arching strategy, which was, you can have it
• 1:07:10
  in any color as long as it's black, as this kind of mental model to everybody
• 1:07:14
  to go, I don't want your crazy ideas.
• 1:07:16
  Tell me about different colors or different styles, et cetera.
• 1:07:19
  We're doing this car, we're driving the price.
• 1:07:20
  Then as much.
• 1:07:21
  So you think about that and you kind of go in many ways, going back
• 1:07:24
  to Clay's point about why do good companies and good leaders fail.
• 1:07:29
  He was doing everything right to perfect and absolutely create this
• 1:07:33
  perfect system for this automobile.
• 1:07:35
  But in doing so, allows somebody else into the market, and in this case it
• 1:07:39
  was General Motors, and later on Toyota.
• 1:07:41
  Uh, exactly right.
• 1:07:42
  And, and the thing that this reminds us of success of fleeting, I, if
• 1:07:47
  we stick to one model forever.
• 1:07:49
  Yeah.
• 1:07:49
  There are exceptions to this.
• 1:07:51
  You know, you've got sake companies that have been having the same
• 1:07:53
  formula of sake for a thousand years.
• 1:07:55
  That's not what most businesses are, most businesses require that we throw
• 1:08:00
  away the old I, I think a modern example of this is the software company.
• 1:08:04
  Intuit.
• 1:08:05
  Scott Cook is the co-founder of it, very active board member
• 1:08:08
  for long periods of time.
• 1:08:10
  Quicken is its claim to fame product.
• 1:08:12
  A few years ago, Intuit sold off Quicken while Scott Cook was still on the board.
• 1:08:16
  Imagine emotionally.
• 1:08:17
  What's that like?
• 1:08:18
  That's your baby, and you're saying no more.
• 1:08:21
  But that's the right thing to do.
• 1:08:23
  If you're trying to create an organization that will sustain from
• 1:08:26
  generation to generation, you gotta be willing to say goodbye to the past.
• 1:08:30
  You gotta be willing to say, you know what, it was right for a period of time.
• 1:08:35
  To have the car only be black.
• 1:08:36
  But that was yesterday and today is a new day.
• 1:08:39
  Emotionally, that's incredibly hard.
• 1:08:41
  In the chapter on Bethlehem Steel, I talk about how organizations
• 1:08:45
  are haunted by ghosts.
• 1:08:47
  Those ghosts of the present, the patterns that you follow in your
• 1:08:50
  organization that you're not aware of, make it really hard for you to do this.
• 1:08:54
  That goes to the future where you worry that change will invalidate your identity.
• 1:09:00
  We are the company that created the industry by focusing in simplification.
• 1:09:05
  If we do something different.
• 1:09:06
  Is that who we really are.
• 1:09:08
  Those are really hard things to overcome.
• 1:09:11
  So I have lots of sympathy, empathy, other ths for, for the people who
• 1:09:15
  have to deal with it because it's a really, really hard problem.
• 1:09:18
  But if you want to create a thriving enterprise through disruptive
• 1:09:22
  change, you gotta be willing to tackle those things head on.
• 1:09:25
  And you do such a great job in this book of doing that because the book
• 1:09:29
  brings you on lots of journeys.
• 1:09:31
  You start to, what you do brilliantly is you give the kind of pattern and then you
• 1:09:35
  see the pattern and you go, well, this is just like what happens in this company.
• 1:09:38
  So it has each, each element has an echo in today's modern world as well.
• 1:09:42
  For people who want to find out more about you and the book, where's the best place?
• 1:09:46
  So social media wise, I live on LinkedIn, so you can find me on LinkedIn.
• 1:09:50
  There is a companion website to the book, epic disruptions, plural,
• 1:09:53
  with an s.com, that has all sorts of information about the book and
• 1:09:57
  where to find it and all that.
• 1:09:59
  And of course they could find me on your show since I think this is the,
• 1:10:02
  how many times have I done this there?
• 1:10:03
  I think it's, we're five.
• 1:10:04
  Yeah, number five.
• 1:10:05
  So we're doing
• 1:10:05
  a whole, we're gonna do a series at some stage.
• 1:10:08
  We'll go and we'll do them chronologically at some stage.
• 1:10:10
  And we'll be very fluent.
• 1:10:11
  Probably actually be able to do it in one show.
• 1:10:13
  I think we should have some of this for that show.
• 1:10:15
  I think that will help a lot.
• 1:10:16
  But, uh, Aiden, it is a true pleasure.
• 1:10:18
  I always enjoy our conversations.
• 1:10:20
  It's a, it is a pleasure for me and I wanna thank the team here, HBS publishing.
• 1:10:25
  So we have Ellie, we have Dave, and we have Simona down in the back as well.
• 1:10:29
  Thank you guys for your efforts.
• 1:10:30
  Ndl, our sponsor.
• 1:10:31
  Thanks for all your efforts for the show as well.
• 1:10:33
  And to our guest, the great Scott De Anthony, author of Epic Disruptions.
• 1:10:38
  Thank you for joining us.
• 1:10:39
  Thank you very much.