How to Overcome a ‘Big Gulp’ Decision in Transformations

Following from our previous post ‘How many Transformations Fail Due to the Lack of Decision‘, in her post ‘Big Gulp Decisions‘ Charlene Li suggests when it comes to the manner of taking the decision to transform, that the right strategy is to ‘burn the boats’.

“Realize also that in the end you’re not going to have all the answers. You will never be 100% certain. […] Once you decide to make this decision be prepared to what one disruptive company calls “burning the boats”. We have to be willing to say we’re making this decision and we’re moving forward and there is no going back. Because if people think that there is an option to go back to what you normally doing before, they will hedge.”

On that perspective, I am not too convinced that it is the right strategy in all cases, because contrary to the Spaniards landing in America with Cortes, organizations nowadays live in an open world – people can decide with their feet to go somewhere else. Therefore, while it is important to ensure commitment to the transformation, the risk of people fleeing is also real.

My recommendation is to instill the transformation at a reduced scale in a specific part of the organization – maybe a specific subsidiary, or even a newly created business, and then let it spread by example and exchange of personnel to the rest of the organization. This also avoids to ‘bet the house’ on the transformation and maintains revenue from the traditional business. This approach may seem less efficient, but it takes into account that something that works will attract people in an open world.

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How many Transformations Fail Due to the Lack of Decision

Charlene Li is a specialist of digital transformation. In her post ‘Big Gulp Decisions‘ she expands on the issue of taking the decision to move into actual transformation after the phases of analysis and planning. If it is a real disruption, the change will be dramatic and probably irreversible. What does it take to move forward?

“In many ways the reasons why most organizations do not go into the disruptive strategies and really move into that assertively and intentionally is that they come up to this big gulp moment and they haven’t prepared for it. For some reason they think some magic wand will show up and they can wave it and it’ll be an easy obvious decision. It’s never that way“

So, many failures in transformation programs could stem from the fact that when comes the time, the decision is not actually taken.

This decision can’t be a half-hearted decision. The governance body must be prepared to take it. It might be the main responsibility of the directors, in addition to planning for the transformation, and it might be the most difficult decision to make: what are you willing to stop doing? Are you willing to bet the house on the transformation? Will you stick to it whatever happens?

“Preparing for that big gulp moment is something that has to be built into a disruption strategy. What are the preparations, the data you need to make? Also, what are you going to do afterwards to be able to make sure that people are aligned and able to move forward from the big gulp moment?“

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How Arthur C Clarke’s Three Laws Continue to Apply

Arthur C Clarke, famous science-fiction writer, produced three statements about technology development. They are quite applicable and profound, in particular with the perspective on the Fourth Revolution. I find it useful to share them here.

  1. When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong.
  2. The only way of discovering the limits of the possible is to venture a little way past them into the impossible.
  3. Any sufficiently advanced technology is indistinguishable from magic.

The first statement is about the role of the change of generation in our institutions: too often, such a change is needed for our paradigms to evolve officially – experts and professors remain stuck in their worldview.

The next statements are about going beyond what we believe is possible. There are not enough visionaries doing that nowadays: in spite of the start-up trend, too many start-ups remain within the established possible.

I love the mention of magic, because the last statement tells us that irrespective of the progress of technology, there will always be magic: beyond the currently possible, and we will always be amazed. Let’s look for the next magical stuff!

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How Millennials are Poorer Compared to Previous Generations

Following up from our post “How Millennials Would Be Less Interested by Start-Ups“, one of the reasons may be that millennials have less money to start companies. There is an ongoing debate about the wealth of millennials compared to previous generations. Some argue that this generation is substantially poorer than previous ones, in particular in the US due to student debt (see for example ‘Millennials are killing countless industries — but the Fed says it’s mostly just because they’re poor‘), while other argue that they are in fact more educated and potentially more wealthy even if it does not show in numbers at a younger age (see ‘Actually, millennials may be the wealthiest generation‘).

The Fed states that “Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth,” the study said, adding, “Conditional on their age and other factors, millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations.” It seems their average net worth is substantially lower than previous generations at the same age.

The counter argument is that the metrics used traditionally to measure wealth are not applicable. “Millennials are not only more educated, they are also more urbane. The changing structure of the economy rewards living in large, urban areas. In a knowledge economy, big cities are where they find well-paid jobs and valuable social networks. Better opportunities, coupled with falling crime rates, means millennials tend to live in cities more than previous generations. More time in school and city living requires different life choices than boomers and Gen Xers and it shows up in millennials’ asset portfolios.”

The debate is on. What seems clear is that millennials have less net-worth than prevous generations, at least in the US but also probably elsewhere, even if they can hope to earn more in the future. The feeling of becoming poorer may be the engine of social unrest and substantial changes in how our societies are run, in particular for those less educated and not living in cities.

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How Entrepreneurship Would Favor the Wealthy

Following up from our post “How Millennials Would Be Less Interested by Start-Ups“, this interesting post ‘Fewer, Bigger Entrepreneurs Explains Rising Inequality‘ refers to a published economical study that would show that the rise in inequality results from the fact that successful start-ups need to be well funded, and thus that start-up innovation basically favors the already (relatively) wealthy.

This idea is interesting and important. It makes two assumptions: that it is easier to start a new venture when one is already well-to-do (which is probably right, as poorer entrepreneurs will have part of their mind focused in getting enough revenue to live); and that overall, people that start entrepreneurial ventures increase their net-worth. This is probably less easy to prove and only works in average, as most start-ups rather end up losing money and diminishing entrepreneurs’ net-worth; however some are wildly successful, but the notion of average may not be relevant.

Would the rise in entrepreneurship explain the rise in inequality in our societies? It may certainly contribute (a large portion of the super-wealthy have been entrepreneurs), but is certainly not the entire explanation either. There are other factors at work, from tax policies to evolution in compensation policies. Still it is an interesting viewpoint and reminds us that to be able to start a new venture, one must have the peace of mind that comes with sufficient wealth.

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How Millennials Would Be Less Interested by Start-Ups

Working in, or starting a start-up is very trendy. It has taken a significant pace in many countries as the occupation of choice. In France, it is now highly regarded. Nevertheless, it would seem that this is slowing down at least in the US, as mentioned in this interesting Atlantic article ‘Start-Ups Aren’t Cool Anymore‘.

According to the article, “A lack of personal savings, competition from abroad, and the threat of another economic downturn make it harder for Millennials to thrive as entrepreneurs“. In particular, “Research suggests entrepreneurial activity has declined among Millennials. The share of people under 30 who own a business has fallen to almost a quarter-century low“.

Reasons range from lack of funds to the fact that established corporations would become increasingly entrepreneurial and drive innovation (on the latter, I am still convinced that they are too slow compared to start-ups, but they have more means)

It will be interesting to watch if this trend confirms and spreads. It might be that some people get disillusioned about the gamble of a start-up. Still, it has proven to be a driving force of employment and innovation.

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How to Deal With Different Storytelling Approaches

Following up on our post ‘How We Believe The First Explanation We Hear‘ I like this post of Valeria Maltoni ‘We Have two General Models of Storytelling. One is Ancient. One is New. It is Only a Matter of Time Before they Collide‘. Storytelling is how we develop our view of the world. The article is meaningful because it adds a dimension between the subjective, relational storytelling and the new storytelling generated automatically from computer-based knowledge.

There would be two different kind of storytelling:

  • anecdotal storytelling, passed between individuals and based on a low level of information – local and variable,
  • the statistical storytelling, produced by new technology based on global information and data – global and standard.

Quoting from Christopher G. Moore: “We have a generation who are getting their stories from the global library, and the international group of story-tellers are transmitting stories that may conflict or contradict what they learned at home or school. As storytellers compete for the attention of an expanded global audience, the stories essential to sustain local cultures are threatened. Stories that inspire are no longer exclusively based on local elites, celebrities or events. […] The statistical story has disrupted and threatens to displace the anecdote.”

Valeria Maltoni makes a powerful point by contradicting this statement: “we have a hard time shedding the subjective story. Because it feels more real […] The reason why we feel more connected to a subjective story is that it influences our emotions. The statistical story keeps changing based on updates and fixes. We have a hard time connecting to that. But the statistical story can make us more efficient, improve our decisions.“

In any case, the conflict between statistical story and a more subjective, emotional one is I believe an essential conflict for all of us today. Let’s be more conscious of it.

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How We Believe The First Explanation We Hear

I did not realize it so forcefully, and I have been impressed since I became conscious of the effect. Whatever first explanation on some event or phenomenon we hear we tend to believe, until some more persuasive explanation is forced upon us – and we have a tough time to change our beliefs then. There is an incredible power in the first convincing explanation we receive.

Something many believed not so long ago: flat earth

This may explain for example, why it may be difficult to change our mind from explanations provided by our parents or social entourage when we were young, or from explanations provided by our cultural environment. It takes being exposed to obvious observations that the initial explanation is not sufficient or inaccurate to change our mind.

This effect has of course serious impact in our daily life: there is a premium to the first explanation we hear. If it is fake, unscientific or an attempt at manipulation does not matter – if it’s credible, we will take it for granted until a better explanation is imposed upon us. This explains in part the power of fake news and social media, and conversely the importance of subscribing to reliable information sources.

Being better conscious of this ‘first explanation effect’ is also useful to be less reluctant to change our view when we are offered more credible alternative explanations. Be more aware!

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How Simultaneous Invention Shows that Progress is Inevitable

There seem to be an increasing awareness that simultaneous invention is more the rule than the exception. This means that when society reaches a certain stage of technological development, certain inventions become inevitable – and this tends to happen more and more often. This excellent Quartz post ‘Simultaneous invention’ summarizes this awareness, that can be complemented by Malcolm Gladwell’s article in the New Yorker ‘In the Air’.

“The whole history of inventions is one endless chain of parallel instances. There may be those who see in these pulsing events only a meaningless play of capricious fortuitousness; but there will be others to whom they reveal a glimpse of a great and inspiring inevitability which rises as far above the accidents of personality.” It would be the availability of scientific knowledge, and its continuous increase, that would create this inevitability.

We need to accept that invention results from building on others’ ideas and findings, and that as more and more people devote time and effort to invention, more and more inventions will be simultaneous in several places and contexts.

Of course, as the Quartz article remarks, this creates an increasing issue with the concept of Intellectual Property – why give the benefit of temporary monopoly to the first that publishes? Isn’t that rather detrimental to society and not as beneficial as conventional theory exposes (the benefit being the publication of the patent)?

Those questions are at the core of the future of Intellectual Property law and should not be underestimated.

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How Bounding Back is More Important than Failing

I like this quote: “It is not how far you fall, but how high you bounce, that counts“. Attribution is controversial, but it remains quite relevant.

Increasingly I find that the behavior in front of adversity is what counts. It is all too easy to appear to do the right thing when events and luck provide success. And sometimes it is just luck but we still believe it is our skills.

Being able to recover from failure in a constructive way and fight back is what really makes the difference. And sometimes it is better to hire people who have struggled and maybe even failed, because it is far more instructive on ourselves and on how to do things right than just to coast through success.

I am not saying we should intend to fail, but that what’s really makes the difference is how we react in front of adversity.

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How Social Media are Perfect Tools for Autocrats

Following up from the previous post ‘How BUMMER Became a New Acronym for Social Media‘, there is some debate about the social destruction brought about by Facebook and the likes, and whether those applications do not undermine democracy – such as in this article in the New York Review of Books titled ‘The Autocracy App‘.

The article states in summary that:

  1. Facebook as a company has lot control of the consequences of the usage of its services, that are being used by pressure groups and rogue users to create instability, chaos and even ethnic cleansing
  2. There is a growing consensus that the power of such a dominating company needs checking, as the tools proves to be much more useful to autocrats while it undermines democracy. Addiction and closure of the horizon of people around their interests hurts the debate, while data can be used by autocrats against users.
  3. There are several ways to deal with the situation, from an user movement (promoted by Jaron Lanier) to anti-trust regulation. However for the moment the current frameworks seem to have difficulties to be effective.

As any tool that becomes prevalent, Facebook demonstrates shortcomings in parallel to benefits. The fact that there is no real governance of the company with Mark Zuckerberg keeping the control does not help. I really believe that regulation is the only way, and there have been positive effects of european law on social media. This needs to be reinforced, because it is true that the impact of social media changes our world, and that democracy is impacted.

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How BUMMER Became a New Acronym for Social Media

Jaron Lanier – quite an interesting individual – came up with a new acronym for social media: BUMMER, which means ‘Behaviors of Users Modified and Made into Empires for Rent’. The concept is developed in this interesting (and critical) Medium article ‘Jaron Lanier’s Top 10 List for Quitting Social Media‘.

The concept is that social media sites change our behaviors in a way that is of interest to them, and that their interest is straight financial. The two steps of this approach can be analysed.

Social media does change our behavior, that’s clear: most people just can’t stop looking at their mobile phone, and on the social networks on their mobile phones, and everything is engineering to support that behavior (notifications etc.).

Whether the interest of social media moguls is only financial is more open to debate. It might not have been the initial intention. It may only be a means to another objective. What this objective could be, oscillates between scary (manipulation of the masses) or benevolent (connection people).

I do not believe we should leave social media, because used well, like any tool, it can bring many benefits. But we must develop behavior rules so as not to fall prey to it. And the question is still open about what is really the objective of social media companies.

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