5 things I learned from visiting top innovators
Once every year, the nexxworks team organizes and joins its own innovation program: to reflect upon our own Day After Tomorrow, reconnect with colleagues on a human level and, of course, to visit some top change makers. This year we visited lovely Lisbon, and these were some of the key insights I had, following our visits and some other experiences:
- Always be aware of your default settings: How you think is influenced by your context. Cognition can vary depending on your (company) culture. Know that you can always learn from different perspectives out there, that may be just as valid (if not more) as yours.
- In a highly saturated market, finding in a niche – and expanding to other niches from there – could be an interesting strategy.
- Experiment at the edges (not the core): a safe (and fun) way to experiment with different approaches or technologies is to try them out at the edges.
- Ethics are definitely on the rise: how we treat customers, employees, partners, citizens and the environment is an increasingly essential part of organizational success stories.
- Negative learning is learning too: you sometimes can learn just as much from an absence – of success, innovation or information – as you can from present, visible and highly inspirational information.
Be aware of your default settings
One of my favorite parables (Ok, it’s actually one of the few I know. I’m not really a parable-type of person) comes from the brilliant commencement speech of David Foster Wallace “This is Water” (I highly recommend listening to it, if you don’t know it).
“There are these two young fish swimming along, and they happen to meet an older fish swimming the other way, who nods at them and says, “Morning, boys, how's the water?” And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, “What the hell is water?”
The immediate point of the fish story is that the most obvious, ubiquitous, important realities are often the ones that are the hardest to see and talk about.”
The lesson to be taken from that is that we often don’t understand or even see our own ‘normal’, let alone how it differs from other cultural ‘normals’, which may be just as valuable as ours. I immediately had to think about this when our monochronic-oriented team became irritated with the polychronic time-experience of the Portuguese culture, where meetings and events did not always happened as planned.
Monochronic Western cultures like ours (also including some parts of East Asia, such as Japan) tend to measure their time by the clock. According to their understanding, each activity should have a precise beginning and end. They are methodical planners, do one thing at the time, stick to facts and plans and are highly future-oriented. On the other hand, measuring time in polychronic Eastern or some Southern cultures is event or personality-related. They don’t let time interfere with their judgment. They will gladly prolong the meeting or reschedule it for the next day if participants have family-related obligations. Each activity or event should have a natural beginning and end.
What we can learn from that is that we are products of our culture in ways that we often don’t realize. Just like the fish don’t “see” the water, we don’t “see” our cultural programming. Yet, this might interfere with our interactions with suppliers or customers from other cultures on the one hand. And on the other, this blindness might also stop us from learning from different cultures, perceiving their otherness as irritating OS flaws rather than useful alternatives. Polychronic cultures, for instance, tend to be less rigid and more agile. They focus on relationships and let those decide about the planning, rather than stick to the latter for no other reason than its sole existence. We stand to learn quite a bit from this perspective.
Be aware of your default setting, know that there are alternatives that are just as valid and be open for the lessons you can learn from them.Now, it's very difficult to recognize your own cultural “default-setting, hard-wired into our boards at birth” (David Foster Wallace). One way to become more aware of them is by looking for content that explains these differences. Some useful examples might be:
- How the World Thinks: A Global History of Philosophy, by Julian Baggini
- The Web of Meaning: Integrating Science and Traditional Wisdom to Find Our Place in the Universe, by JeremyLent
- Can We Trust China?: A Different View on a Country in Transition, by Pascal Coppens
Find your niche
Sometimes it’s easier to enter a saturated market than to find or even create a blue ocean market with very little competition (the latter is obviously a very valid business model, but just harder to pull off). And one of the most common approached to successfully enter a red ocean market is to find and focus on an underserved niche and become really good at it. That’s exactly what Unbabel did, the artificial intelligence-powered human translation platform that our team visited in Lisbon.
Their translation platform focuses on customer service, which is probably one of the company segments that stands to benefit the most from fast translations. It’s a clever solution: working with translation agencies is expensive and slow when you’re interacting with customers, while hiring in-company translators is even more expensive and often inefficient because of the seasonality of customer interactions (e.g. peaks with Summer sales, Christmas or Black Friday). An automated translation platform on the other hand, like Unbabel, that is able to evolve so fast just because it is so specialized while continuously measured and adjusted by human translators, is an interesting alternative.
If you want to expand that niche, once you have found success, diving into adjacent markets might be an interesting way to go. Unbabel, for instance, is now looking into translating marketing content, which allows it to recycle some features (like the interface) and is pretty complementary to their sales business. It’s a tactic that is often used in niche market expansions. Alan, for instance, started out as an easy-to-use and frictionless health insurance app and then expanded to include other health-related services. Lemonade Insurance did something similar, but in a different direction: they expanded into different types of insurance. Both found a way to further develop a niche through adjacent services or industries.
In an oversaturated market, finding a niche and excelling at it could be a great answer to finding your spot. And if it works, looking at adjacent products/services/niches might allow you to expand in clever ways.
Experiment at the edges (not the core)
It’s easy to dismiss Teleperformance’s “Global Esports Arena and Metaverse Center of Excellence” – which we had the honor to visit in Lisbon too – as a mere branding project or even just a clever (though expensive) gimmick.
But this metaverse-oriented eSports arena is a lot more strategic than may seem at first glance. Yes, for the moment, it may not immediately mean something for Teleperformance’s core business – which is customer acquisition management, customer care, technical support, debt collection, social media services, and other services – but it will have a significant impact at the edges:
- The studio will help familiarize their employees with the new VR, AR and gaming technologies that form the basis of the metaverse. This is learning by playing in its most strategic form and will allow them to recognize the possibilities in pleasant and non-threatening ways.
- It sends the message to their customers that Teleperformance is continuously innovating and pushing itself to the next level so that it, in turn, can help its customers access that level too.
- It’s a great way to expand its metaverse network: from talent acquisition through employer branding to collaborations with metaverse influencers like Ukrainian Counter-Strike professional Oleksandr "s1mple" Kostyliev.
Sometimes it’s smart to dip your toes in a new trend at the edges, away from your core, so that you can familiarize yourself with it before you make big business-model or other decisions.
The rise of ethics
Ethics is not a fluid concept. It is not as complex as some companies will have us believe. The latter is often just an excuse to keep doing what they were, which very sadly more often arises from a place of habit or laziness than from a lack of morals.
Never adapt a narrative that does not reflect your actions. Yuval Noah Harari taught us that humans are story-telling animals which think about their lives, society or business in terms of stories (not numbers). Big stories like Christianity, communism, Daoism, have shaped our cultures and then us. But this won’t happen if there is a disconnect between the story and reality. The best marketing agency in the world will not be able to sell a bad or truly unethical product in the long run. And customers will just become mad and frustrated if you greenwash your offering.
Practice what you preach. Or preach what you practice.
But don’t change the narrative without changing your culture, practices, dealings with customers etc. in parallel. Unfortunately, we still see too many companies that are changing the (communication) channel towards more ethics, without adapting their actions.
Ethics will become huge in the coming months and years for several reasons:
- The war on talent: if you have a toxic employee culture with questionable morals, talent will turn to other companies.
- The war on customers: if you have a toxic customer culture with questionable morals, they will turn to other companies.
- New business models: many companies – like Orsted - are successfully building more ethical versions of their own business models or creating ethical versions of those of competitors (Patagonia, Tony’s Chocolonely, Everytable…). It’s a great way to innovate, and a possible disruption if you don’t pay attention.
- Web3: one of the biggest promises of Web3 is that customers will own their own data. Unethical dealings with their personal information will simply no longer be possible should this really happen. And only ethically sound, trustworthy and transparent companies (for instance those that use data to cure cancer) will be granted access to this data.
- The metaverse: while toxic online behavior in Web2 can be harsh, just imagine how much more disturbing it will become in an almost lifelike and immersive environment.
Ethics will be one of the key drivers in business in the coming months. Pay attention. But don’t change your narrative if you are not prepared to change your behaviour and output in the same manner. Ethics may be a long game or a Day After Tomorrow segment, but bad decisions will eventually boomerang back. Just look at how McKinsey & Company was forced to pay nearly $600 million to settle investigations into its role in helping “turbocharge” opioid sales.
Negative learning is learning too
In WWII, the army tried to determine how they could make their planes stronger so that they could minimize the casualties. They decided to armor the planes, but as this would make them heavier, this would also make them less agile and use more fuel. So they decided something which seems quite logical at first, based on the data they received. When American aircrafts came back from Europe, they were covered in bullet holes, that were concentrated in these places:
So, understandably, the army leader’s intuition was to armor the places with the most holes to protect the planes. Statistician Abraham Wald disagreed, though. He thought they should better armor the nose area, engines, and the mid-body. The reason why is that they were analyzing the survivors, the planes that made it back. This meant that the planes that did not come back, had been hit in different places, and it was these places that they needed to protect with armor.
The psychology behind this is called survivorship bias or survival bias: the logical error of concentrating on the people or things that made it past some selection process and overlooking those that did not, typically because of their lack of visibility. This can lead to false conclusions. So, when you’re trying to understand how to run a company, don’t fall for the survival bias trap. Analyze your failures too, and that of other companies.
Just like that, once in a while, we will program a speaker in a program that seems disappointing, uninspired or even irrelevant. We experienced that too in Lisbon. But these ‘failed’ experiences offer lessons too. Obviously, we’ll always aim to program the most engaging, eye-opening, disruptive speakers for our customers. But never dismiss the other group. Ask yourself: why are they boring? Why is there a disconnect? Could we have avoided this? And what can we learn from the gaps and disconnects in this story? What can we learn from what they are not saying or doing?
Negative learnings are just as important as positive ones. Survivorship bias is real. For instance, only about 80% of startups survive their first year. If you base all of your learnings on the 20% that make it (some of which might also fail later on), it’s clear that you lack the data to make objective decisions here. Keep your eyes and ears open for what is not said or shown.