Tedxufm - Luke williams - Ideas are the recipes

When I work with companies around the world on innovation strategies, probably the most common thing I hear from them is: "Luke, we don't need any more ideas, we have more ideas than we know what to do with". The trouble is which ideas do we move forward with. You all feel this, you feel, Oh my! I heard it described accurately one day as "paralyzed by possibility." There's so many things we can do. We don't know what to do. Now, when I ask them to see those ideas, they start backpedaling a little bit. Well, we don't have them written down or anything. And that's one of the problems in a nutshell right there. Ideas often don't get articulated in anything other than water-cooler conversations. So, they remain abstract, just discussed and half baked in people's heads. But when I do hear about the ideas, or see them if I'm lucky, another problem emerges, and that is that the ideas, more often than not, almost a hundred percent of the time are incremental ideas. They're ideas that support the current product and services the organization is making. Their current business model. And, you can understand why that happens, right? Everybody in the business is incentivized towards making that business work better. So, the ideas that everybody is coming up with are the ones they're most comfortable with. The ideas we're all most comfortable with are the ones that we've encountered most often; alright, the products, the services, the experiences, we've encountered before. And it makes us feel, kind of happy and relaxed because we know the outcome. Now, I actually don't know who this gentleman is, but he's the happiest guy in the Internet I could find. And for me this conjures up this feeling of it must beintuitively right because we've experienced this before. But companies that only embrace incremental change and only develop incremental ideas are making a big mistake. The reason is that they put you on a path, a path that becomes increasingly narrow; and sooner or later you're going to reach the end of that path. And when you do, your customers have forsaken you for another offering that nobody saw coming, least of all you, because you were developing incremental ideas. Now, if companies, organizations, or people do take disruptive risks with their ideas, it's normally because they've been backed into a corner and being forced to by circumstances: changes in their environment or new competitor. So, they've got no other choice but to come up with groundbreaking disruptive ideas to really try and change their business. But by then it's too late. Now, this is what Clayton Christensen, a professor at Harvard University first described in his book called The Innovator's Dilemma when he was describing this notion of disruptive technology, which is the theme of what we're here to talk about today. And that is that new technologies are often ignored by successful companies, established companies, because, you know, they're at the bottom of the market. Hardly anybody's buying or using those products. So the established companies say there is no market for them. They don't care about that. But, gradually those products, those new technologies, grow and influence until they actually surpass the old systems. And this is what catches companies off-guard. But, there is a misconception when it comes to talking about disruptive technology. And Michael picked up on it this morning. It's not about technology, it's about the way you think. Michael said this morning that you are the disruptive technology, and he's absolutely right. It's not about how to spot and react to new products and technologies coming out in the market and trying decide what to do. The real challenge, this is why I wrote the book, the real challenge is to work out how you can be the disrupted change in your segment, in your category, in your industry even the disrupted change for your country. That's the challenge. Now, when you're aiming to be the disrupted change, you have to give away this notion of comfortable ideas, right?, we're comfortable with these ideas that we think are gonna work. And, you have to embrace a new feeling. You have to embrace being scared. Taking disruptive risk is a scary business because you do not know where it's going to go. You do not know what the answers are. Now, I assume everybody has seen this image before, right?. What's that from? Psycho, right. The shower scene. The stabbing in the shower, you hear the [sound of Bernard Herrmann's soundtrack "The ***"]. Now, can anyone tell me what happened in the film before Janet Leigh's character got stabbed in the shower? Audience's answer: Showering. Luke Williams: Yes. [Laughs] Certainly the most original answer that I've had on this question. Yes, she was in the shower. Before, she was in the shower, does anyone remember where this famous Alfred Hitchcock's film started? She was driving a car, she pulled into a hotel took, the shower but why was she driving a car? Audience's answer: She had stolen a suitcase of money. Luke Williams: That's exactly right. She had stolen a suitcase of money. You went in my class the other day, wouldn't you were. You cheater. Because hardly anyone gets this question right because it's irrelevant. Nobody remembers where the film started because it doesn't matter. It started out she'd stolen a suitcase of money and she was on the run. So, it started out as a caper of film...then all of the sudden she gets stabbed in the shower. And everyone's going why did that happen? They didn't even know that the money was in the car, why have they killed her? So quite the audience is watching the film by surprise and took the film in another direction. And, in Hollywood terms this is called a turning point. It catches you by surprise, sparks your curiosity; you really want to know where this is going, but it changes the direction. And if you're really going to embrace disrupted change that is what you're looking for. You're looking for the turning points that, again, take your business, your segment, your category, your industry, your city, your country, in another direction. One of my favorite examples of somebody in business finding a turning point, we've heard him mentioned this morning already, is Steve Jobs. This is old Steve Jobs, this is back in 1992, where he started working with the company that I used to work for Frog Design. This is back, you can see Steve's signature here in 1992. Now, obviously, I wasn't in the room when this took place, but the founder told me about what happened. So, he was there with Steve Jobs, they kicked off a project on Snow White. This was meant to be an exploration of where Apple could go. It was an exploration of seven new products, hence Snow White and the seven dwarfs. So, the founder of Frog Design was in the room with Steve Jobs, now, normally when you get a brief for a project of any sort, it's lists and lists of requirements, right? You've all written briefs, you've probably responded to them So, you expect to go in there and say... for the client to say you: okay,well, it has to be this cross point? has to be entered in this target segment. If you talk about a technology product, it has to be this fast, it has to have this much memory; lists and lists of requirements. When the founder of Frog Design was in the room with Steve Jobs, Steve Jobs simply said this: The brief for Frog Design and what he wanted for the future of Apple on this products was simply this; he said: "I want Bob Dylan" songs. I mean, what on earth you meant to do with that? I want Bob Dylan songs, and, you know, it's funny, I can imagine it; you probably... it's like instead of expecting a brief coming through email with a document, you get sent an mp3 file. [Plays Times They Are A-changin, Bob Dylan] This is what we want from their computers. It really makes me laugh, I can actually imagine them in the room and Steve probably played the song, and the founder of Frog Design is kind of still asking some questions. Well, Steve, yes, but, you know, what do you really want these computers to be like? What product should I buy? And I can just imagine Steve going [Plays Times They Are A-changin, Bob Dylan]. Now, this is what's known as a disruptive hypothesis, and they can be powerful. Now, in fact, this lead to the development and influence of the first Apple Macintosh SE. It's one of the success that came of project Snow White. Now, disruptive hypothesis is this: it's an intentionally unreasonable statement that gets your thinking flowing in another direction really quickly: intentionally unreasonable. The key to thinking disruptively about anything that you're focused on is that you have to be wrong at the start in order to be right at the end. Because if you are right at the start, it means that somebody else is already doing it and your ideas are already generic. You have to start this process not knowing where it's going to go. It's the difference between prediction and provocation. Prediction is what most businesses spend all their time on. Predicting where the market's going, predicting what the next incremental change in a product should be. There's far too little provocation going on. So, before you can provoke or disrupt a market in any way, what you have to do is provoke your own thinking. It starts with you changing the way you think about your competition and the business you're in. I'll give you a great example of this; it... because, for me this example sums up exactly what you need to do. It's all about looking at what we interact with every day. What is so familiar with us, we almost forget about it. We almost forget why it is the way it is. 'Cause I think about movies, famous movies. They're always the same. Now, this one in particular, who here has seen The Shining? Okey. There're half of you. The Shining is a famous American film; it's a horror film, okey? It's scary, scary stuff. One of the scariest films ever made. As you can see, this woman is not having a good time. Okay? There's knives involved .. it's very scary. Now, I had a competition a few years ago; it was for assistant editors, and I said "let's see what this assistant editors can do." Rules of the competition were simple, they had to take a famous film and create a new trailer for it which would shift your perception of what that film was about. Okey, I said take something very familiar and completely flip it on its head and make it unfamiliar. This is what the winner came up with: Video: Shining new trailer Now, if you haven't seen The Shining, I don't recommend seeing it after that preview. So, they had to keep all the visuals the same but they could change two variables, which were the voiceover and the soundtrack. Okay? So, the soft voiceover that you're very familiar with, with romantic comedies, triggers to another pattern. The Peter Gabriel soundtrack; we've tried this, you can put Peter Gabriel in anything and it will soften it up. Now, you can find examples of this in every category and I'll deliberately show you examples that are non-tech. Because I want you to think about things in everyday life, everyday aspects in your business that aren't necessarily broken, they're not necessarily problems. Think about socks, for instance. You're in the apparel business of fashion. What do we take for granted abouts socks? Our expectation is that we always buy socks in pairs and they match. Now, if you were to disrupt that and come up with the disrupted hypothesis, one way of looking at it would be to say: what if we sold socks in sets of three and none of them match? I mean... how kinda crazy would that be? Somebody, actually, did this and went and started a company called LittleMissMatched, and that's what they do, they sell socks in sets of three and none of them match. And, what they found out was that they're a hit with tween girls. So, eight to twelve-year-old girls loved missmatching socks; it enables self-expression, but the disruptive hypothesis came first. Then, they had to find out who would find value in that, because being disruptive for disruptive's sake is just annoying. It needs to develop... to deliver value; that's what you need at the end. Now, they're into furniture, they're into toys, they're into all sorts of other things that let children do things they're not meant to do. Soda: the soda category. Now, how long have we been drinking soda and it's the same cliche, it's the same expectations. It's inexpensive, tastes good, all the sugar, and it's marketed as aspirational -- anyone in marketing here will know what I'm talking about, okay? Coke and Pepsi wrote the rule book on aspirational marketing. This isn't soda, this is American democracy in a can. Now, somebody came along and said: Let's... I'm sick of these cliches; let's disrupt those cliches, let's reverse turn those on their head. What if instead of soda being inexpensive, it was expensive? What if instead of tasting good, what if we place no importance on taste? And, what if we stop telling people that it's going to change their lives and make them happy, and we just tell them exactly what the product does: it gives them a functional boost when they need it? Any guesses? I didn't hear that one Red Bull, completely. When they launched, actually, the product, it was double the price of Coca Cola, they placed no importance on taste. People say: "Well, I like the taste of Red Bull" now. I can tell you when those early focus group tests, people were spitting it down in the floor. Now, if you ever made a marketing and see somebody spit your product down on the floor... You're not going to look like that happy guy that we saw at the start. But, they went with it, and created this huge market for energy drinks. Rental cars. This is one of my personal favorites because I was so frustrated with the rental cars for so long. And, again a non-technology example. There's no new technology here, it's just thinking about the set of interactions somebody goes through on a regular basis in this business. So, think of about the times you've rented a car. You have to go in there, so they have to see the customer, you have to complete paperwork, and they rent cars by the day. Disruption: somebody came along and said: you know what? What if we didn't have to see the customer, they could skip the paperwork, and we're going to rent cars to them by the hour. Of course, this was a service called Zipcar in the United States. They took the car sharing model from Europe and gave it their own spin. And the great thing about any disruptive strategy is that it leaves competitors scrambling to catch up. Now, we see other big competitors like Hertz and Avis scrambling to come up with their own models of not seeing the customer, they're not filling up paperwork, renting cars by the hour. The Zipcar has the advantage, they've got eighty percent of the the market right now. Because the disruptive strategy gives you a huge lead time over what other people are doing. Television. So, look for these examples everywhere, and even when you're sitting on the couch enjoying some entertainment. In America, in the sitcom industry, you know, those situation comedies like the Cosby Show and Family Matters are all driven by this expectation called the "hugging and learning" rule. You all know what I'm talking about. You know, one of the teenage children, goes off, gets into trouble at school, comes back to the house at the end of the day, there's a lot of tension but at the end of the episode, normally around the kitchen table, they've all worked it out, and they're hugging and learning, and... We've all learned something, the viewers have learned something, everybody's happy. Somebody came along and said: you know what, I'm so sick of this cliche "hugging and learning." New rule, "no hugging and leaning," no matter how much trouble the characters get into, they're not gonna learn anything by their mistakes and they're not gonna develop. So, does this ring a bell? One of the most successful sitcoms of all times: Seinfeld. Just think of George Costanza, for instance. What a breath of fresh air and a extremely stout category just from denying one of the very stale cliches. Now, again it wasn't really a problem. The sitcoms applying the "hugging and learning" rule were extremely successful. Now, an economist at New York University, Paul Romer, is very influential economist, wrote an economic theory called new growth theory. And, in that he said "ideas are the recipes we use to rearrange things to create new value and wealth." I think that's an amazing definition of what ideas are. So, the challenge for every organization, no matter what size, the challenge for everyone in business, whether you are an executive or an entrepreneur, is to develop a constant stream of bold new recipes. Recipes that change the trajectory of a market, recipes that turn consumer expectations upside down, recipes that can take it in hiring history into its next generation. That is the challenge, because the potential for reinvention is all around us. There has never been a better time to make an impact on the world. I truly believe that. It's an extremely exciting time to be thinking about how to structure your business, your community, your country, even your life, in new ways that create value. So, I just leave you with this: What will your recipes be? Thank you, thank you for your attention. I really appreciate it. Thank you.