IP14: Thinking like a disrupter. Learning from George Stephenson and Jim Clark...
Thanks so much for all of the comments on IP13 about why “every company is now a tech company and every company needs an AI strategy.” I know that it touched on an issue that several organisations have started thinking about. At Artemon, we’re running some immersive workshops to help organisations adequately prepare for the AI revolution. Please drop me a line david@artemonstrategy.com if you want to hear more.
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The Disruptive Mindset
Not everyone is going to be a disrupter, but understanding the disruptive mindset is essential to every organisation in an age of renewed turbulence.
To help piece together what a disruptive mindset might look like, we’re drawing on the inspiration of two pioneers almost two hundred years apart. George Stephenson, who had a vision of the railways that exponentially multiplied the impact of the Industrial Revolution and Jim Clark, who had a vision of the web that exponentially multiplied the impact of the Internet Revolution.
George Stephenson - The Industrial Disrupter
The North of England during the Industrial Revolution was one of the most transformative places and periods in human history. The stories of visionaries who saw how things could be done differently. Possibly the most important of all these visionaries was George Stephenson. He was born in beautiful Wylam in Northumberland and sent down the pit at the age of ten with no formal education, but ended up changing the world forever. Stephenson understood the potential of technology to transform the way in which goods and people were transported and was able to see the railways as much more than providing a faster horse.
In 1814, he designed “The Blucher” to haul coal at Killingworth Colliery, rapidly speeding up operations at the pit. He went on to build the Stockton to Darlington railway and, most famously, designed the Rocket - the first practical steam locomotive. You can still see The Rocket at the Science Museum in London.
Stephenson understood the economic, cultural and social changes that could flow from the development of the railways. His push for the development of the first ever passenger railway, between Liverpool and Manchester was almost as transformational as his development of the Rocket.
Today we’d call Stephenson a disrupter. He wasn’t happy to just see the future as a slightly improved version of the present. Instead, he saw in technology the ability and the tools to transform everything. Like so many of his peers in Britain of the Industrial Revolution, he had a restless desire to invent and to innovate and wasn’t held back by the boundaries of what was previously thought of as “the possible”. He didn’t stop at one invention. Instead he was constantly looking for “the new, new thing”.
The massive explosion of wealth, productivity and industry in 19th Century Britain (and eventually Europe) would not have been possible without the restless mind of George Stephenson and those like him and the transformation of possibilities that the railways brought.
Jim Clark - peak internet disrupter?
Fast forward almost two hundred years and this brings us to Silicon Valley in the 1990s. It particularly brings us to the story of Jim Clark - the apotheosis of the internet disruptor.
The massive explosion of wealth, productivity and industry in late 20th Century California (and eventually most of the world) would not have been possible without the restless mind of Jim Clark and those like him and the transformation of possibilities that the internet brought.
A snapshot of Clark’s life was memorably chronicled by Michael Lewis in his excellent “The New, New Thing”. Like Stephenson, Clark couldn’t see a problem without considering an extraordinary and transformative solutions. As Lewis said of Clark, “his life was dedicated to the fine art of tearing down and building anew.”
Clark was able to found three billion dollar companies. I can testify that starting your own business is particularly all-consuming, so anyone able to found three disruptive billion dollar companies clearly has a remarkable mix of drive, vision and genius.
Clark first founded Silicon Graphics in Mountain View in the 1980s. This went on to transform the graphics capabilities of computers and also special effects in Hollywood. He then went on to found Netscape, alongside Marc Andreessen (who had developed the Mosaic software).
Netscape launched the internet browser that would make the consumer internet a reality. The Netscape IPO was one of the most famous in Silicon Valley history - possibly the defining moment that started it all. “Clark had invented the technology, bet his career on it, and been right.” The Netscape stock post IPO is in the chart below:
Forever looking for “the New, New Thing”, Clark went on to found Healtheon, with the goal of “stripping away… the inefficiencies and inequities” in American healthcare. He aimed to shift from “horizontal” disruption with the browser, to “vertical” disruption of an individual service. The share price increased 400% on the first day of trading.
Both Clark and Stephenson are examples of restless innovators, with the good fortune of being in an environment where the innovative and disruptive mindset could break down boundaries. The England of the Industrial Revolution and the Silicon Valley of the internet revolution were both examples of places where there was no real limit on human imagination and risk taking and invention was actively encouraged. For Michael Lewis:
"What happened to Clark in Silicon Valley was far more interesting than luck. It was the interplay of a character who had a deep feel for technology and a taste for anarchy, with an environment that rewarded both traits."
In a new age of disruption, this time driven by AI, quantum and big geopolitical shifts, what can we learn from these examples of previous periods of disruption?
Thinking like Jim and George. Adopting the disruptive mindset.
Not everybody is going to have the disruptive mentality of Jim Clark or George Stephenson. If they did, the business world would be utter chaos. Indeed, Clark’s relationship with what Michael Lewis called the “Serious American Executive” was famously spiky (note his gradual estrangement from Silicon Graphics). As Lewis said, the man who always went after “the new, new thing was in many ways ill suited for mainstream business”. Not everyone can found three multi billion dollar businesses or create the infrastructure for industrial transformation. Not everyone can have the appetite for risk or placing the big bets at the right time when the time is right.
But understanding how a disruptor thinks is essential to being able to thrive in an age of disruption. As we noted in IP 13, Artificial Intelligence will cause disruption to every industry. Quantum will cause further disruption, as will geopolitical uncertainty. If you don’t think like a “disrupter” and see where disruption might come from, then you risk being disrupted yourself.
We run a Maximum Disruption workshop to help people think like disruptors in an immersive way (get in touch if you’re interested). And there are several lessons that can be learned from the likes of Clark and Stephenson:
1. Avoid seeing the future merely as a continuation of the present.
In the day-to-day of business, it’s easy to give a sense of permanence to something that is actually quite fragile. I’ll regularly ask people to stand back and articulate how they can imagine their organisation in ten years time. All too often their response is to describe the status quo, with perhaps a few tech additions or to project the problems of today forward by ten years. But the reality of disruption is that the status quo is almost entirely upended. This is the reason that corporate longevity is shortening and the average amount of time spent in the Fortune 500 has halved in fifty years.
Saying something is done because “it’s always been that way” is no longer enough. It’s definitely not the way that people prepared to “think the unthinkable” like Jim Clark or George Stephenson would think. Think of all the industries that were disrupted by the internet, including publishing, city mobility, DVD rental, music and photography. In all cases, the shift was from a long-held status quo to near total transformation. There’s no reason to think that the transformation that AI and other emerging technologies will cause will be any less total. In such an environment. Broadening the mindset beyond the status quo has to be a first-step towards thinking like a disrupter.
2. Take a blank sheet of paper approach. Think goals not process.
A disrupter in the style of Stephenson or Clark would often have the mindset to build ideas starting with a blank sheet of paper and a vivid imagination. A blank sheet of paper approach can be an important way of thinking in a disruptive manner. It’s worth considering a few questions as part of this process:
How would you design a successful company in your industry if you were starting afresh?
If there were no resource restrictions and present structures and existing processes weren’t in place how would they be designed?
How could emerging technology be used to redesign an industry?
What would the goals be of a business starting afresh and how would they set about achieving those goals?
By thinking afresh about how to approach an industry you might be one step ahead of potential disruption.
3. Imagine assumptions have been shattered.
Often people in the day-to-day of business can be constrained by existing assumptions in the way that pioneers might not be. Even in the mid 1990s, there were still plenty of brilliant people who couldn’t see how the internet would transform assumptions. In 1993, Jack Clark said that “the internet is the future of all data communications and all communications are data communications.” Plenty of people from the previous tech era wouldn’t agree with that for many years to come. But Clark’s quote showed his instinctive understanding of how the internet would challenge and shatter so many existing assumptions.
Alan Iny and his colleagues at BCG suggest making a list of the top five assumptions that underpin your business and then imagine that each of these has been shattered. After this, step backwards from the assumption shattering and consider what might have caused such a change to happen and what are the factors that caused disruption. You can then consider how you would react to such a removal of assumptions. When Southwest airlines did this kind of exercise, they imagined a future with, amongst other changes, no travel agents and only one type of plane. This resulted in the launch of a low cost airline. By isolating various assumptions, you’re then able to consider where a disruption might occur and address this at an early stage - in either a defensive or expansionist way.
After this, it’s also worth considering what “Maximum Disruption” might look like. What would happen if all five assumptions are shattered at once?
4. Think from a user’s perspective. Identify points of friction that could spark disruption.
One of Google’s “ten things we know to be true” was to “focus on the user and all else will follow”. That’s as true now as it was then. Plenty of disruption has occurred simply because the disrupter has focused on what the user experience should be like and what the areas of friction are that are preventing that user experience from being maximised.
Sources of unnecessary bureaucracy, delay and hindrance are identified and removed or minimised. Of course, sometimes these areas of friction mightn’t necessarily be impacting the user, citizen or consumer - they might merely be obstacles in the way of meeting goals. And technology can often be a powerful way of overcoming these obstacles.
George Stephenson understood that traditional means of transportation represented a blockage to making the most of the innovation that was emerging in the Industrial Revolution. And Jim Clark saw the barriers to the potential of the internet by the lack of a means for consumer usage, as well as identifying the bureaucracy and inefficiency that he regarded as impacting US healthcare.
An exercise that considers where blockages or friction exists from a user perspective can be a powerful exercise in itself, particularly when emerging technology can be a means of eliminating friction. This can allow companies to consider how to use technology to remove this friction and also to identify how a disrupter would go about disrupting.
5. Think about new markets that might be created.
When George Stephenson was the father of the railways he didn’t merely think about replacing the horse drawn goods delivery, he thought about the new markets that could be opened up by his invention. The same applies to Jim Clark and other Silicon Valley disrupters. Technological disruption doesn’t just disrupt existing industries, it creates new ones. And that will be the case for Artificial Intelligence and quantum. Considering what these new markets or even new industries (cloud computing was made possible by the internet) might be created by emerging technology can be an essential way of staying ahead of disruption.
6. Use scenario planning intelligently.
One of the many advantages of scenario planning (and I realise that I’ve spent a great deal of time writing about these advantages in this newsletter) is the ability to consider multiple alternative futures and to consider “out there” or “wildcard” scenarios. Scenarios can paint a plausible picture of alternative futures and consider how technological changes and other major shifts (such as a total decoupling) might have on firms and economies. Scenario planning done well can consider the various factors and driving forces at play and build high impact scenarios that might not otherwise have been considered.