The Innovation Show

There is a great anecdote that goes as follows…

A big corporation had hired several cannibals. “You are all part of our team now,” said the HR director during the welcome briefing. “You get all the usual benefits and you can go to the cafeteria for something to eat, but please don’t eat any of the other employees.” The cannibals promised they would not.

A few weeks later the cannibals’ boss remarked, “You’re all working very hard, and I’m extremely satisfied with you. However, one of our secretaries has disappeared.” Through suspecting eyes he probed, “Do any of you know what happened to her?” The cannibals all shook their heads, “No!” they exclaimed in unison.

After the boss left, the leader of the cannibals gradually turned towards the others and asked angrily, “Right, which one of you idiots ate the secretary!?!”

A hand rose hesitantly in admission. “You fool!”, said the leader. “For weeks we’ve been eating middle managers and no one noticed a thing, but nooo, you had to go and eat someone important!, didn’t you!”

3 Trillion (Too many Chiefs, not enough Indians)

We can all agree that many big corporates are no longer fit for the current business environment. Of the Fortune 500 firms ranging from 1955 to 2015 only 12% remained in 2015. We are going to see a lot more big corporates sink in the coming years, some through bankruptcy and many through irrelevance leading to bankruptcy.

Parking true leadership and strategy as the main causes of wastage, many corporates have people who helped get them to where they are yesterday, but these people will not necessarily bring them where they need to be today, never mind tomorrow.

According to a recent Harvard Business Review paper by Michele Zanini and Gary Hamel excess management is costing the U.S. $3 trillion per year. That is in the U.S. alone! Imagine the wastage in many other bureaucratic-heavy countries, imagine the combined wastage worldwide. Zanini and Hamel imagine cutting middle management costs including 35 OECD countries could save $5.4 trillion!

2 Pizza Rule

Amazon’s visionary founder Jeff Bezos runs a lean ship. One of the guidelines he insists on is what he calls the 2 pizza rule. This rule is that no team in the company should have more members than could be fed by 2 pizzas. In some big corporates that would mean a crumb each!

Amazon is organised in autonomous units with less than ten employees per unit. Bezos insists on a decentralised company where small groups can develop lean innovative ideas rather than wasting time getting “buy in” with people who actually wouldn’t know a good idea if it was couriered directly to them. The bigger the team the bigger the threat of groupthink and the less time for actual work, for actual progress.

Agility is the huge advantage of small groups, decisions get made quickly and if there is clear company North Star or direction then decisions are made even more quickly again. In Amazon decisions are made with hard data, the teams use behavioural data to make decisions and need to have a huge amount of work done before they even suggest an idea. When an employee has an idea, they have to write a six-page paper explaining their idea, which all the meeting participants, including Bezos when he attends, have to read in complete silence. Imagine that in a bureaucratic behemoth? No, I couldn’t either!

Older corporates and organisations are built for an old world, a world of discipline, of hierarchy, of bosses and subordinates. Old companies needed people to do what they were told and centralisations and hierarchy enabled that. (Hence, why the education system needs to adapt in unison with seismic shifts in the world’s values, more on that in a future Thursday Thought and Innovation Show).

Teams, like those envisioned by Bezos, operate differently, teams share common purpose. Through experiencing real work and real achievement (not partaking in bureaucratic B.S. meetings all day) deepens bonds and engrains trust. Teams of teams will beat big corporates any day of the week hands down (except big corporate employees will look for overtime after 5:30 and on weekends:).

A Team of Teams is the only way forward. (For more on this a must read is General Stanley McChrystal’s ‘Team of Teams: New Rules of Engagement for a Complex World’.

The Wake up Call

Now, let’s look at where the world has gone. I say has gone, as opposed to is heading, because in most of these companies don’t even see it, nor want to see it. The things holding them back include politics, jostling for power, psychological inertia and groupthink.

For a large majority, employees of such companies do not really care about the viability or profitability of the company at all, they only care about their own role within the company. The general mindset is one of entitlement as opposed to enablement. Showing up for work is working for some people.

For fear of losing power or internal face, they block innovation, agree by consensus and eventually die.

Innovation blockers include, lack of desire to change the status quo, loss of power, nearing retirement and many more.

There is a perfect storm brewing in the world, which will affect us all (I am going to cover this in depth in a few weeks). Let’s consider briefly some of the catalysts of this storm.

• There are more people in the world than ever before
• Globalisation means more competition for jobs than ever before
• Artificial Intelligence means humans are being replaced by machines
• Rote tasks are no longer required, AI can do that now
• Jobs such as taxi driving is being replaced by AI (the main blocker will be regulation)
• A whole new range of skills (hard and soft) are now needed
• Many, many companies will die in the coming years, some will seem rather abrupt, but they are nothing more than ghost ships floating rudderless today

So what do you do if you are stuck in such a company?

I spoke to the great Seth Godin about this a few months back. The world needs more heretics, more naysayers, more challengers. People need to engage in new hobbies, new interests, more thinking and more imagination. There is no excuse to upskilling, anything worth remembering is easily googled, so focus on questions and not answers. Leadership needs to embrace these people, these people will save your ship. Leaders need to be brave. Leaders need to embrace those who may have the answers. Leaders need to embrace a new mindset (a Disruptive Mindset) and re-imagine their business. Leaders need to make brave calls on their people. Many roles are now defunct and the employees in those roles must feel like work zombies. Everyone needs a purpose and everyone needs a reason to go to work every day, everyone needs a North Star.

One final thought, if you are reading this and still don’t see the world as it is today, consider this, consider the big corporates or civil service companies you know. Consider how many unnecessary staff members there are. Now consider the (August 2015) table below courtesy of Liyan Chen via Forbes.

AI hasn’t even kicked in to many of these companies, just imagine when it does…

On this week’s innovation show we talk blockers to Data, Data Dictators and Data Silos with Idiro CEO and founder Aidan Connolly.

We talk HR Lockers and setting up in Lahinch with CEO Adam Coleman.

We talk disruption and innovation immersion with Atrovate CEO Neill Gernon.