Luke Williams, a leading educator and consultant on innovation strategy, delivered the keynote speech at ISPA EXPO 2014’s Industry Breakfast.
Williams, the author of Disrupt: Think the Unthinkable to Spark Transformation in Your Business and a professor of innovation at NYU Stern School of Business, shared his thoughts with bedding industry members on the idea of disruptive thinking and fostering a culture of game-changing leadership.
Williams focuses on the idea of disruptive thinking, which he said fosters real innovation, rather than sustaining innovation, which makes incremental improvements. This often requires a complete reevaluation of a how business is run.
“You need to worry less about your success rate and worry more about your experimental rate,” he said.
Williams discussed the idea of the “self-similarity principle,” wherein people are drawn to like people. But, he said, spending time with others in the same departments as you means they will have similar ideas, and this will never increase the pace of innovation. Ideas—new ideas—are what drive true innovation.
“All theories of economic growth are rooted in the scarcity of diminishing returns,” said Williams. “Ideas are subject to increasing returns.”
Williams said that ideas need to meet, mix, mate and mutate—with the key words being mate and mutate. So one person’s ideas mixing with another’s can often create an entirely new—and innovative—idea.
“Ideas aren’t self-replicating organisms,” said Williams.
Williams gave many real-world examples of the changing tide of ideas, from the rise and fall of the Blackberry phone to Blockbuster missing the idea that the world of video rentals was changing.
“Industry is changing faster than ever before, and we’ve all got to keep up by bringing new ideas into play,” said Williams.
But he also said that it’s difficult to support truly new ideas.
“You’re going to bet on the ideas that you think are intuitively right, and that’s the ideas that you’re most familiar with,” he explained.
Williams cautioned that this “incremental change” breeds a level of complacency that won’t work for companies that want to be on the cutting edge of the next big thing.
“Any organization that’s only embracing incremental change is in a dangerous position,” said Williams. “That path is getting narrower and narrower, until at the end, the customer has forsaken you for someone else that you didn’t even see coming.”
Williams acknowledged that it’s difficult to make big changes in the middle of running a business, and pointed out that the former CEO of Kodak knew he had to change in the face of digital photography, but still found it an impossible task.
“If you’re a car mechanic, under no circumstances do you want to stick your hand in an engine that’s running in order to change the fan belt,” he said.
But with the pace of the world today, organizations need to think more creatively about change.
“The only times an organization changes are when they’re forced to—when they’re backed into a corner,” said Williams.
But in today’s fast-changing world, that old model just won’t cut it.
“If you’ve only got a spot-and-react model to address change, you’re probably making the problem worse,” he said.
Williams said that for industry leaders, the key challenge is “learning in every sense of the word to be the disruptive change.”
“The prospect is terrifying,” he acknowledged. “By the very definition, you do not know what the answers are going to be.”
Williams discussed how Hitchcock was one of the pioneers in using turning-points to change the trajectory of films. Those turning-points exist in business as well, he said—turning-points that change the trajectory of an industry.
“It’s the difference between being good at prediction and being good at provocation,” explained Williams. “Everyone in this room is good at prediction. But there’s far too much emphasis on prediction, and too little on deliberate provocation. You need to ask the questions that no one is asking.”
Williams offered these five steps to get started:
1. Craft a disruptive hypothesis—an unreasonable provocation such as ‘why does a remote need batteries at all?’
2. Deliver a disruptive opportunity.
3. Generate several disruptive ideas.
4. Shape a disruptive solution.
5. Make a disruptive pitch.
Disruptive thinking, said Williams, “is a skill that can be learned and practiced.”
But Williams said disruptive thinking is not for everyone; a company needs to really be on board to make some radical changes.
“People don’t like change, so disruption for disruption’s sake is just annoying for everyone involved,” he explained.
To practice disruptive thinking means throwing out some of the old methods of doing things. Williams cautioned that in the world of big data, people think that if they can get more analysis, the idea is more likely to succeed.
“The analysis data is important, but it will only ever get you 50% of the way there,” said Williams. “The other 50% is human imagination.”
To get there, Williams suggested asking entirely different questions in order to break down the clichés of the industry.
“If you’re not asking a different question,” he said, “the rest of the process is useless.”
Williams talked about clichés as “the widespread beliefs that govern the way people think about and do business in a particular space—also called best practices.”
To think disruptively and break those clichés, Williams suggested looking at three filters:
1. What are the interaction clichés—the most obvious assumptions that you’re almost embarrassed to write down?
2. What are the product clichés?
3. What are the price clichés involved?
Williams suggested looking outside of problem areas.
“The problem with problems is that they’re looking for attention,” said Williams. “You need to look at areas in which nothing appears to be wrong.”
He gave several examples of companies that have successfully used this method.
Little Miss Matched questioned why socks came in sets of two and why it was necessary for them to match, and found themselves with an incredibly successful line of socks for tween girls that are sold in sets of three non-matching patterns. The company also has a full portfolio of licensed products. Zipcar changed the face of car rental by letting people rent by the hour or day, skip the long airport counter lines, and including gas and insurance—all by asking “why” to the most basic of assumptions about the car-rental business.
“Most clichés are around for no other reason than the industry has always done it this way,” said Williams.
Williams said that changes in consumer behavior are going to be radical in the coming years, especially as a new generation, raised on technology, comes of age.
“How many of the decisions you’re operating on were made in a different age?” he asked.
Every industry has unthinkables, said Williams, and to think disruptively, you need to challenge those unthinkables and put aside common sense for a bit.
“Nothing kills a new idea faster than common sense,” he said.
Sometimes you have to “cannibalize” your most profitable product, said Williams, in order to make room for the next innovation.
“Deliberately make yourself wrong at the start so you put yourself in the position to see the right answer at the end,” he said.
Williams suggested asking the following questions:
- What can you invert? Take the assumptions about what a product is and turn them on their head.
- What can you deny? Things don’t always have to be done the way they’ve always been done.
- What can you scale? Turn free into expensive; turn abundant into scarce.
“You need to have an instinct for change,” said Williams. Look at where the competition is complacent, where the potential for turning points exists, or the potential for reinvention.
“They’re all around you right now,” he said. “Enjoy the possibilities.”
