Why the C-Suite is the Innovation Buster

They don’t get up in the morning, rubbing their hands and getting ready for another day of dashing dreams and hopes, and squandering their organization’s future. But they often are the enemy of innovation.

Yes, there was Steve Jobs and the other handful rebel CEO’s who changed the rules or went alone to realize their vision. But next to Jobs are 100 others who failed miserably. And nobody talks about them. And there are tens of thousands of other executives who barely survive day by day and don’t even bother trying.

The curse of the schedule

Days of executives are long, fragmented and often disrupted by emergencies. An endless string of 30-minute meetings, the most important meeting of the day for the other side, just another meeting for the executive. Never enough time to dive deep into an issue, made worse by increasing digital disruptions and the hunger for dopamine. Just like that, another day in the book.

We heard the advice many times before: Carve out at least 2 hours a day to just think. To reflect. To do real work. To see things before things are falling apart. But the corporate 16-hour machine doesn’t allow you to do it. Emergencies are calling, decisions have to be made and reality always supersedes innovation. It’s not their fault. It’s not a failure. It’s the system sucking all the life and energy out of them in order to keep the machine going.

It has always been like that. The problem is that 20 years ago, major changes in their competitive environment took 10 years. Now they take a month, a few days. If they are lucky.

It’s the corporate structure, stupid

The whole corporate structure rewards this behavior, ensures the best executives filling that need are hired. Part of their job is to talk a lot about innovation. They have their vision slides, they have the future talk. Because they know change is needed. Desperately needed. The company has to change. And so, they talk about it. A lot. Because that’s what their employees and clients want to hear. And it makes for good PR. They do startup events, get some innovation speakers talking about the changes that are needed, go to conferences and hearing more about necessary changes.

They play the game, but they don’t internalize it. Not because they are not willing, not motivated or lazy. After the speakers are gone, after the events are over, they need to continue feeding the corporate machine. No time. No mind space. All this innovation stuff is good but why not wait for a bit, why not take our time to get it right? Let’s focus all of our attention to the urgent, the important will have to come later.

Empower your people

Here’s the bad news, C-Suiter. You won’t do the innovation. You need to continue feeding the corporate machine until the hard innovation work has been done. Your job is to find one person/a team to do the transformation for you. Give that person/team budget, governance, infrastructure, trust and, most importantly, a feeling of safety and value. Empower them. Let them do their innovation work.

And see how they change the world for you.

Facebook's big payments move

Recode is correct: Facebook’s future is private messaging. In other words: Facebook wants to become WeChat, an “everything app” that can be leveraged to serve users multiple kinds of services. Businesses, governments, direct lines of contact, gaming and payments.

What are the implications?

The News Feed will fade away over time. It will still be around but not continuing to be the central Facebook experience. And the main money maker for Facebook. Besides Google AdWords, the News Feed is the most profitable digital advertising product. Wall Street will demand Facebook to replace decreasing News Feed revenues with new revenue streams.

 This new revenue stream will likely be commerce. Instagram is already working on a standalone shopping app, Facebook is developing a cryptocurrency and Zuckerberg was very explicit in his blog post, outlining his focus on “businesses, payments, commerce, and ultimately a platform for many other kinds of private services.”

Payments are becoming an integral part of social network feature sets. It makes sense for Facebook to try to become WeChat, simplify international payments, unify their offerings, bank the unbanked and continue to grow.

Will it work?

In short: no. Europe will use the sledgehammer and not allow Facebook to unify with Whatsapp and Instagram. They shouldn’t even bother launching payments in Europe. The US might deliver some revenue streams, but Facebook has been such a privacy and societal disaster, it is hard to believe that they will gain back the trust of their users to become the one app that rules them all.

It might work in some countries, where Facebook can bank the unbanked and where Facebook is basically the Internet. But those countries don’t generate enough revenue for the gas of the bankers Maserati’s.

 Never underestimate the desire for convenience when it comes to digital customers, but I don’t see this working on a scale that can help Facebook grow their user base and profit. It will make the payments world more complex, it will lead to a major push to break up Facebook and it looks like the beginning of a continued decline of the platform.

How to make a mark

We feel immediately feel when Sadie has a day off in the coffee shop. You can sense it when you walk in. The smile is missing. Her spirit. The napkins are a bit messy. The music sounds sadder. The coffee is not as energizing.

Corporate conversations tend to revolve around big things: AI, Digital Transformation, Trust, KPIs - fill in the blanks. We think we need to move mountains to get noticed. That’s wrong.

We change the world and the perceptions of our customers by doing the little things that anybody can do. It’s a choice each company has. But most companies gloss over the incremental things. It’s a choice Sadie made every day. And that is sorely missed when she is gone.

Digital Enlightenment

The second phase of digitization is upon us. After hysterical exaggerations and bitter disappointments, it’s now time to adopt digital into human culture.

A ghost runs rampant across the planet. The ghost is present in every digital conference, each business talk, each segment on CNBC and in every newspaper. The belief in the transformational power of Digital is the final belief system of our time. Digital Transformation will solve everything: Growth Problems, Death, Lack of Intelligence, Human Weaknesses and Weaknesses of our Democracy. Well, let’s skip the last one.

While solving all of our problems, Digital Transformation threatens also everything: Whole Verticals are under threat, Democracy, Freedom, maybe even reason. 20–70% of all jobs will disappear. AI will take over our jobs. We assign, full of excitement, apocalypse capabilities to Digitization, just like we used to do for Nuclear Power and Alien Invasions. Humans might need these mega-demons once in a while to feel alive.

All this talk about Digitization is challenging for us because we are dealing with two Internets and we can’t align them in our head and our lives. The one Internet is amazing. It’s still a wonderful experience to call a car with a friendly driver to a dark corner of an unknown, rainy part of town. Or to compare all prices of hotels in Fresno. And, then there is the dark room of human desires and trivial narcissism — the thing we once called Social Media.

Jaron Lanier, one of the digital pioneers, called the myth of social networks “Digital Maosim”. Maoism as an allegory for the cross-fading of complex realities into fanatical, social imperatives. “The Internet empowers the powerless” can be compared to Mao’s “Political Power grows out of the barrel of a gun”. Both slogans lead to terrible disillusions. The social Web empowers definitely world savers, neighbors, running groups, friends that otherwise would never hear from each other again. But it also empowers trolls, stalkers, idiots, Russian saboteurs, terrorists. It transports people in our living rooms we can’t see. And we definitely don’t want to see.

The addiction to the Social Web can be explained with our human nature of a connection-being. From the moment we are born, we are hungering for connections and being seen. Being accepted. Being in relationships. Those synapses are being used by the Social Web, tapping into our relationship neediness. People upload the weirdest thing to their social pages, sharing things they would never share in real life. The pseudonymity of the Web drives people literally crazy.

In the jungle of unresolved emotions, Digital promises something it can’t keep: The right partner. Endless choices. The best friends. Even better friends somewhere out there. The Internet amplifies the Nervousness of our social lives on all levels — privately, socially, politically, economically. The result: Our current reality of constant shitstorms, outrage, conspiracy theories, populism and overall pessimism. The Web can do a lot of things, but it can’t hug you, it can’t heal you, it can’t connect on a human level — unless we are already connected in the analog world.

The Analog Revenge

One of my favorite places in Amsterdam is the Nordermarkt, a Farmers Market that is open every Saturday. I get my cheese, fruits, vegetables, bread, pastry, mangoes, fish, flowers, potatoes from this place. It’s a 2-hour experience every weekend. I chat with the potato guy about his trip to Ibiza, taste the newest bread, buy olive oil from a vintage harvest in Spain. It feels like a place filled with passion and competence. One would think these markets should be extinct by now. Walking distance from my house are at least 4 cheese stores, 4 supermarkets, 5 bakeries. And I’m pretty sure I pay much more on the market than I would pay at the local supermarket. But I still head home each Saturday filled with joy and satisfied that I got a good deal. Supermarkets never make me feel that happy.

What are the merchants selling at the Nordermarkt? Products? Quality? Sure. But the secret is not the product. They trade with relationships. That’s what people are looking for, in the analog and digital space. In the analog world, the foundation of relationships — trust — can be developed rather easily. We look into each other’s eyes when we exchange value.

And that’s the reason why the majority of digitization predictions were wrong. Why are eBook sales stalling and people continue to buy print books and magazines? Why are Moleskins and fancy fountain pens more popular than ever? Why do people put Post-Its on screens and print out important emails? Why do people continue to use cash? The digital gurus sneered about those Digital Neanderthals and proclaimed once those fools were being washed away by the Digital Tsunami, the REAL Digital Revolution would take place. A biological solution…

Maybe sticking to analogue is not the problem. It might just be part of the solution.

David Sax, a Canadian writer, explains in his book “Revenge of the Analog” how the Digital doesn’t conquer the physical, it just reinvents it:

· Revenge of Print: The more feverish and disruptive our information world becomes, the more messages interrupt us, the more people are looking for the quiet presence of paper. Paper is hip. Print is more than alive, the motto of Monocle’s last media conference.

· Revenge of work: We were all supposed to work as cyber nomads in coffeeshops and planes. Instead, work has become more social and physical. The best coders work in lavish office environments, eat organic food before they head to Pilates. And, there are more jobs out there than people who can fill them.

· Revenge of Retail: Yes, Retail is dying. The terrible Retail of Toys“R”Us, Sears and Mega Malls. In the meantime, new shopping concepts are popping up everywhere, there’s more innovation in Retail than ever and digital is fully integrated. But it’s only one channel, not THE channel.

· Revenge of Learning: Let’s be frank: MOOCS (Massive Open Online Courses) have turned out to be duds. Sure, there are some courses that flourish and work well. But during our digital fever we learned that learning is always the results of human, empathetic interaction. Computer are not bad for learning, bad teachers are. Computer don’t solve the secret of knowledge and learning. As Piaget said: “The goal of education is not to increase the amount of knowledge but to create the possibilities for a child to invent and discover, to create men who are capable of doing new things.”

At the end of his book, Sax proposes a new way to deal with the digital revolution: Digitization doesn’t mean a reduction of the world into 0’s and 1’s. Instead, we should focus on a co-evolution of the digital and physical world.Just like one can only understand their native language when one learns a second, the real potential of Digitization can only be explored through its counterpart: the analog world

Digital Enlightenment

A healthy future relies on healthy relationships that allow for transformations. A family works when a deep feeling of security transforms into the drive to be free. Globalization is successful when different cultures can exchange freely and creatively to create win-win situations. A company prospers when it’s aligned with societal needs. When employees, leadership, capital, work, innovation and marketing are in full alignment. It’s important to differentiate digital strategies into Technology and Human solutions:

Technology Digitization:

Replaces relationships with digital tools. The goal is to put a digital distance between the customer and/or employee. The boom of digital assistants like Siri and Alexa is based on the hope to replace real market relationships. Between customer and products/service the illusion of a human voice. It’s cynical and manipulative.

Human Digitization:

Creates new relationships, connecting customers, product and environment. When organic Jeans are being offered as a lease subscription, new markets are being developed. When people share their car rides and preferences on BlaBlaCar, new digital relationships are being developed to benefit everyone. Good Digitization combines real-haptic with the information-communicative to develop new relationships and availabilities.

Technology Digitization:

It’s often about efficiencies and cutting jobs. When a company develops a Digital Transformation Strategy without envisioning new relationships and not mapping out the Relationship Strategy, they basically admit they ran out of innovation. They want to squeeze the last penny of profit out of the firm. Customers are moved to web sites and chat bots. The bank moves people into the virtual world, the advisor can’t be reached. At the end, everybody is frustrated. And unemployed.

Human Digitization:

Uses Digital as a power to enhance the relationships between people, organizations and products/services, generating benefits for everyone. It moves control operation to the digital side to allow for human freedom and relationships. It empowers each stakeholder — customers and employees.

Will Ethics win?

It’s not that easy. Cold Technology condenses on the warm surface of human needs, and a lot of heat is generated. Just like the evolution, the digital evolution is a blind selection process. Uber will disappear if it doesn’t overcome its cynical and sexist corporate culture. And Facebook will crumble unless it develops human regulatory systems. Or it will be the trash bin of Humanity, a smoking trash fire of desperate emotions that people will flee to become analog again.

A wave of human-digital alignment processes is coming. Just like the Evolution where new species have to find their stable niches, digital strategies have to explore their adaptabilities to the human environment. That has nothing to do with ethics, many bad players will continue to exploit the Social Web. But we will separate the good from the bad, the digital that makes sense from the nonsense. Factories will use the Internet of Things because it makes sense that machines communicate to improve efficiencies. At home, connecting my coffee machine with the fridge is nonsense and the search of a solution to find a problem.

The Human-Digital Evolution has just begun

When you spend too much time in Silicon Valley and with Digital Gurus, the future is pre-programmed: AI will take over everything, many of us will settle down on Mars and Death is dead.

But there’s a fundamental misunderstanding behind the AI Religion: Computer are better at Chess does not mean they are smarter than humans, they are just better when it comes to algorithms and board games. AI can only beat human intelligence where complexity doesn’t require the intuition and creativity of the physical human being. Watson might be better at diagnosing diseases but many of our sicknesses are not precise, they are very diffuse. Watson will get stuck in the complexity of the human and health care system. Siri and Alexa will remain toys for some, annoyances for most. Robots will not take over the care of elderly.

The future vision of the Internet giants are the clothes of the new digital emperors. They are filled with panic of the new monopolists, aggregating so much power that it even scares them. Facebook, Apple, Google and Co. wanted to change the world, they were the rebels and now they transformed into Darth Vader. Luring people to click on ads is in the end not a very sexy business model. Their escapism of AI and Robots, Mars and Singularity are just camouflaging the obvious: they have no clue how to escape the click-based model and they have no idea what the next business cycle will bring. The same escapism infected an American airline when they accepted reservations to fly to the moon (the bankrupt PanAm).

Euphoria, Bankruptcy, Decline, Selection: In the next few years we will experience major turbulences in the world of the digital empires. Google, Amazon, Twitter and their ilk disrupted the world, now it’s their turn to be disrupted. The evolutionary carving out continues and will lead to a “New Human Story” as Yuvel Noah Harai describes it in his book “Homo Deus”. The human-digital evolution has just begun. And it’s our job to shape it.