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FT editor Roula Khalaf has chosen her favorite stories in this weekly newsletter.
The author is the author of Uncharted: How to Navigate the Future
Years ago, when I was running a technology startup, I met with senior executives from Disney to discuss the streaming technology our business was developing. Their politeness quickly betrayed them. They argued that I needed to understand that their precious creative assets were the work of geniuses whose artistry I would never understand.
They are never going to expose their masterpiece to the snob internet. Like many in the industry, they then spent years trying to catch up.
These wealthy and successful executives were neck-deep in the trap of maintaining the status quo. Everything was going well, so I thought there was no need to change. It’s a common phenomenon.
When Netscape was released in 1995, Microsoft did not have a web browser in development. Google’s only real foray into social networking was Google+ in 2010, a full three years after Facebook launched, but too late for success. Kodak and Intel have since become legendary examples of failure to adapt. Even a cursory survey of today’s business environment suggests widespread learning failures.
I am still appalled by the willful blindness of companies that have no decarbonization strategy, no carbon budget for their employees, and no awareness that they have a carbon footprint.
Similarly, as executives rush to master artificial intelligence, it’s hard to find a single company with a consistent strategy for upskilling its workforce. Instead of debating the number of jobs that could be lost to rapidly evolving technology, if employers knew that otherwise smart people would take the lead, they would be able to hire their best and most loyal employees. It will be possible to develop new competencies for employees. Instead, paralysis is common.
But not everywhere. Companies that are alert to the status quo trap can escape it. 3M has long been known for its ability to innovate quickly. The more mundane reality was that he was constantly experimenting. Many of these attempts at innovation failed. But instead of burying failures, they were analyzed to identify what changes in market conditions make failures thrive. When conditions changed, old flops often became instant successes.
What 3M does with innovation and what SSE does with projects in the energy business is identify important emerging trends and make big bets early. Strategy director Sam Peacock says pursuing a number of potential new technologies provides strategic flexibility.
In 2012, a huge investment was made in Greater Gabbard, making it the largest offshore wind farm in the world for many years. The joint venture with RWE Renewables provided SSE with early expertise. This was expensive in the short term, but helped the company scale quickly when prices started to drop. SSE’s project portfolio currently includes carbon capture and hydrogen.
“When we see a strategic alignment, we are not afraid to pursue it,” Peacock says. Build relationships, expertise, and supply chains so you can act quickly and at the right time. ”
According to him, there is a fine line between being too early (Oersted) and too late (oil majors) in the energy transition. He calls SSE a “1.2 strategy” and emphasizes the human capital it builds. “Once you start moving, people want to work for you to be part of it,” he says. “We attract knowledgeable and ambitious people and build a center of gravity.”
In my experience, trends are rarely detected early by employees wondering why management isn’t taking action. By seeking collective insights, you can identify and motivate change.
When Pixar executives realized that their films were becoming more expensive and longer to produce, threatening the company’s boldness and innovation, they may have turned to traditional cost-cutting measures. . Instead, they actively engaged the entire workforce to identify changes across all of the company’s processes and achieve results that exceeded what management had imagined. And no one had to sell a dime to the person who designed it.
All of this shows that the trap of the status quo is inevitable. So why aren’t more companies emulating something bold rather than passive? Incrementalism may promise a high degree of certainty that some CEOs and investors crave. do not have. But they cannot provide the level of initiative and ambition needed to overcome challenges that will never go away, such as the climate, water, food and inequality crises.
Many so-called leaders spend more energy searching for alibis – timid investors and uncreative workforces – than ideas. Others are bound by entrenched mental models that prevent them from thinking imaginatively. Management often requests complete information before making changes, unaware of the fact that by the time the information arrives, it is already too late.
They should keep in mind the themes of the great Italian novel The Leopard. That is, for things to remain the same, everything must change.
