Humans organize. We create rules. Those rules are inevitably broken, and then we create rules for dealing with the broken rules. At its most formal, it’s called the legal system.
People deal with chaos, randomness, and emotions by creating procedures, systems, and laws. We have a deep desire to create order. In many instances, we ignore reason and fairness - the very things we seek - to maintain a sense of order. Think of the complexity of the American school-to-prison pipeline. Authorities double down on punishment for disadvantaged children who need the most help escaping a cycle of poverty and violence… which perpetuates a broken system and creates more social strife. We sacrifice reason and fairness for a sense of order.
In business, we deal with the same chaos, randomness, and emotions by creating procedures, systems, and laws. We have rules around everything: contracts, payments, employee rights, holidays, hiring and firing, etc. We develop operating procedures for every imaginable scenario, including planning for an unknowable future.
And that’s where we go wrong.
While systems work for knowable and predictable inputs, business is not a science of those inputs. To be sure, some operations like compliance are based on running the machine by following the rules. But business is largely about breaking the rules.
Take the examples of Airbnb and Uber. At their core, those businesses were created by breaking rules: they avoided the infrastructure of hotels and automobile fleets by using people’s private homes and vehicles. They capitalized on the emotions of travelers who wanted new experiences. And, in almost every market they entered, they broke local laws regulating lodging and transportation. Criminal behavior funded by Silicon Valley venture capitalists is called “disruption.”
Airbnb and Uber might be outliers in the extremity of their behavior, but they prove a point about the marketplace: someone is actively trying to eliminate your business model. Every sector is vulnerable to challengers, especially — and this is important — from outside the sector itself. The digital revolution did more than digitize; it neutralized the defenses that organizations had developed over hundreds of years.
The modern organization is challenged to read changes in its environment and make changes that keep it alive and prosperous. This function is more complicated and complex than it was before because the challengers are coming from outside industries. Education is being contested by non-education companies. Transportation is being disrupted by non-transportation companies. Governments? By non-governments.
I suggest a solution to dealing with the chaos… and it’s not a system. To create a more adaptable organization, you need more contributions from outside the organization. You need to engage more outsiders.
In the past, organizations could maintain advantages by keeping secrets. The old strategy of becoming valuable or irreplaceable through expertise was extinguished when Google [and the rest of the web] replaced the experts. Humans have dumped as much information as possible into the system, and we can all access it. The education system is churning out smarter 22 year-olds every year. TED talks provide short updates on the advances of any industry. The value of what you know is diminished. Advantages now come from your ability to identify changes in the environment, combine ideas, and modify your behavior. In short, your adaptability.
Outside experts provide valuable information because their viewpoint is different. [This is diversity in action.] If we can agree that change comes from outside your industry as well as within, then we can agree that out-of-field perspective is vital to planning for the future.
Michael Capellas, former CEO of Compaq, MCI, and First Data Corporation, said, “When you really solve a big problem, something breaks.” I argue that this breakage should come from within your company, not from the marketplace. Find people who can make you consider new approaches, different ideas, and innovative behavior. Invite them in to strengthen your planning and deployment. Break the rule that your experts come from inside your organization or your industry. Embracing the chaos might help.
Do you remember the feeling of an idea that completely changed the way you saw the world? That brilliant spark that lit up your mind? I’ve had many of those experiences and have leveraged those ideas to create meaningful change for organizations.
As humans, we have an attraction to - and fear of - change. We want the benefits yet are reluctant to take steps toward a better future. This is where I help.
I guide work teams to resolve their most critical, future-oriented problems with a multidisciplinary, ethics-minded approach. I have demonstrated success in change initiatives, trend analysis, and emerging market identification with corporations, humanitarian organizations, NGOs, universities, and governments.
How do I work? Organizations rely on me as an out-of-field expert; that is, people value my novel approaches and innovative ideas to create advantages. I bring concepts from the fringes to the center.
I have collaborated with or spoken to United Nations, The Nature Conservancy, Broadway Across America, TED and TEDActive, Substance Abuse Training Initiative, Association of Fundraising Professionals, Association of Information Technology Professionals [AITP], and Independent Kidney Foundations.
Results? I’ve led 89-100% year-over-year multi-million dollar sales increases, mobilized people to save historic buildings from demolition, and launched three companies. An active member of the global TED community, I have produced 10 TEDx events, trained over 100 speakers in the US, Canada, and Uganda, and mentored new licensees.
I introduce people to the ideas that change their lives.
In 2017, I founded Common Good Media, a publishing company dedicated to conversations about improving the human condition. I am currently developing a podcast series to highlight people who are changing the world for the better.
Brian Smith | This website built using artificial intelligence.
I’ve made up a new law called The Rule of Splintering. If psychologists and economists can do it, anyone else has the same power. Ready?
The Rule of Splintering: every idea fractures into variations, and each variation has a trajectory and lifespan independent of the original idea.
Is its earliest form, human mobility meant human powered-movement. Walking, running, being carried by another human. Then, mobility progressed to include animal carriage, human-powered vehicles, animal-powered vehicles, wind-powered vehicles, electric-, gasoline-, alcohol-powered vehicles. You get it.
But, advances in technology have not eliminated the earlier forms of mobility. We still use all of the forms of transportation that I mentioned. We walk, ride horses and camels, pedal bicycles, and even drive alcohol-powered cars. There are many forms of mobility that survive, independent of the original form.
The Rule of Splintering can apply to anything: architecture, economics, marketing, agriculture, whatever. Our advances create an “and scenario.” We can build the Burj Khalifa and tin-roofed sheds in favelas. We can barter, pay cash, and use digital currencies. We can plant a lettuce seed in our personal garden or a hydroponic greenhouse. We experience it all.
The present is made up of ideas that have come into favor, been pressed upon us, transformed, persisted, crumbled, and resurfaced. When we read history in a rear-facing format, it unfolds to explain what happened to get us to our modern point. It’s presented as an explanation or unfolding of events. Often, it misses the mess. Today’s politics are a mess. Politics in 1715 were a mess, too. But those ideas still live on today… as splinters.
You have used good, old fashioned SWOT analysis. It is a cornerstone planning tool when considering a new project, venture, businesses unit, product, you name it. Your team gathers around a conference table to call out Strengths, Weaknesses, Opportunities, and Threats. It’s an easy 2x2 matrix designed to identify the parameters of engagement.
And, like other easy things, it has major flaws. The biggest problem with SWOT analysis is this: it only includes what you know. You list Strengths, Weaknesses, Opportunities, and Threats as you understand them. In reality, your SWOT looks like this:
Do you feel comfortable with that diagram? This is not a planning strategy I’d want to show my clients. Or your board. Still, organizations use this model as a planning tool and move forward with half of the information they need to assess their risks and advantages.
Here is my SWOT model:
Call it Blind Spot SWOT. This matrix forces you to consider known and unknown information. “How can I know the unknown,” you [hopefully] ask. This is when your organization benefits from outside perspective… if you reach far enough outside. Hiring a consultant from inside your industry will give you information you probably already know. Instead, hire a consultant like this:
The goal is to get new ideas. You can only get new ideas from someone with different knowledge. If SWOT analysis gives you known Strengths, Weaknesses, Opportunities, and Threats to consider, an outsider can contribute new information from a different perspective.
People with outside perspectives can contribute to your Unknown SWOT data, especially in the Unknown External category. Consider embedding some outsiders to identify Unknown Internal information, too. Your organization has latent talent, ideas, and energy, plus cultural characteristics that go unrecognized by the culture itself. Outsiders can recognize those situations quickly because they have a different basis for comparison.
The economy has proven that organizations are at the mercy of rapid shifts in marketplace and customer expectations. Like it or not, the word “disruptive” is here for a reason: the groups who do things differently are changing the environment for everyone. Your biggest threats come from outside your industry. Competition has changed, and your planning strategies need to change, too.
When I spoke to a national collegiate conference in 2015, I titled my talk “Expect Chaos: IT Career Paths - The Next 50 Years.” I made it clear to university students that they had been told a story about education and career that would probably not come true for them. It's the same story that we tell to all of our young people:
Graduate high school - get into a good college - declare a major - graduate - get a job in your field - advance in your profession
Graduate high school - get into a good college - declare a major - graduate - get a job in your field - advance in your profession - retire
This pathway does not reflect the reality of our careers, the value of education, or the expectations of the marketplace. US Census data shows that only 32.5% of adults hold a bachelor's degree or higher. Of those people, only 28% of them work in their field of study. Do the math, and you end up with roughly 9% of the adult population. After you consider people who need a degree to practice - physicians, architects, engineers - who is left? The minority of the workforce has a degree, and the minority of degree holders are active in their field. If university education is the key to a good career, how do we explain the disconnect between degree and career?
In context of these numbers, consider the hiring process. Job descriptions for professional positions often include: "bachelor's degree required, master's preferred." Ignoring the fact that only 12% of adults have an advanced degree, the bachelor's requirement shuts out 70% of the workforce. Since most Human Resource departments use software to qualify candidates based on educational attainment and keywords, there is little hope that a job seeker without a degree will be considered. Their resume goes directly into the NO pile, regardless of practical experience or performance capability.
Why does that matter? Go back to the IT students that I addressed. Statistically, 59% of them will graduate within six years. So, 41% will fall into the no-degree pile. There are more complicated reasons for leaving university than lack of aptitude, including high cost, perceived lack of value, and pressure to work. A 2011 Pew Research paper showed that people understand the connection between a degree and lifetime earnings, but short-term financial obligations win. To hiring managers, people with some college experience are the same as those with no college experience, regardless of capability or practical experience.
For many people, the very reason to complete a degree program is to qualify for work opportunities, which is why they take on student loan debt. There's the promise of a payoff. And, in the US, it's a real threat. In the Fast Company article How The Master's Degree Became The New Bachelor's In The Hiring World, Lydia Dishman showed that US employers are raising educational requirements due to correlated work quality. Requiring a master's degree means that playing field is narrowed from 30% to 12% of the total workforce. Dishman contrasted that situation with two UK firms who have delisted educational attainment as a requirement because it didn't correlate with performance or because the practice unfairly barred people from economically disadvantaged backgrounds.
But let's get back to the title of my conference talk, "Expect Chaos." In the marketplace, change is fast, relentless, and constant. People who are retiring now at age 68 graduated university in 1970. That year, there were 2,388 bachelor's degrees awarded in computer and information sciences. In the entire country. Programming meant punch cards. Now, anyone can build an app with another app, host a server for a favorite online gaming community, and access artificial intelligence through consumer-grade services like The Grid and x.ai. The market will shift dramatically in the next five years, let alone 50, and the pace of change requires the ability to acquire new skills in the workplace in real time, independent of degree status. The Bureau of Labor Statistics has never studied career change, so there are no official statistics, but I suspect that most students will end up in a different place than they started.
I believe that Human Resources is using educational attainment as an outdated measuring device - a heuristic. It is a mental shortcut that gives organizations the illusion that they are selecting employees who have demonstrated certain capabilities. Using minimum educational attainment appears to be a safe way to determine that a worker is qualified for a professional position. From an organizational perspective, limiting the talent pool means that the organization misses out on talented employees who are otherwise qualified. It's dangerous to organizational capacity, diversity and inclusion, and general competitiveness.
For transparency, I am among the 41% of US college dropouts, the 67.5% without a bachelor's degree. I am also a committed adult learner who has produced TEDx events, contributed to a United Nations initiative, and helped homeschool my children. When I was a 20 year-old student enrolled in General Studies, I found my university experience uninteresting and pointless. I had no specific career trajectory, and my parents had four other children to educate. I felt like I was wasting resources and time, so I chose to leave.
My personal experience obviously guides my perspective on this issue, but I'm not alone. If money were no object, many people would continue, restart, or begin their university education. Detroit and Boston now provide two years of free community college to their high school graduates because they know that an associate's degree makes people more attractive to Human Resources and gets students closer to a bachelor's degree. Higher educational attainment also correlates with a reduction in poverty, criminal activity, unplanned pregnancy, and other social problems.
In practical terms, our workforce needs more capable, skilled workers to keep up with global market demands. If you believe that those workers come from universities, make the education free and accessible to all people. If you agree that skilled workers exist but aren't given a fair chance to contribute, make a bachelor's degree "nice to have" but not a requirement for employment consideration.
Artificial intelligence has been on the horizon for decades, fueled by science fiction writers and futurists. From 2001: A Space Odyssey’s HAL 9000 to Ray Kurzweil’s Singularity concept, AI has been presented as something we will experience… someday.
But there are consumer-level AI services available in the marketplace now. I’ve lived with two AI services for the last year - The Grid and x.ai - and they provide the opportunity to plug in and test out AI in familiar business functions.
The Grid builds websites. I’ve worked for marketing and web agencies, so I have dealt with anxious clients who don’t know how to explain what they want or don’t really care about design. For my own websites, I’ve bounced between Squarespace, WordPress, the late Jux, Tumblr, Wix, Weebly, and other DIY web builders. The Grid promises to step in and design everything for you at just $96/year.
I pre-paid in October 2014 [Founding Member #5326] and waited for 13 months until my beta access was granted. I had tempered my expectations - this was a brand-new AI service - and it’s a good thing I did. Building websites is complicated business, and The Grid has to improve before it becomes a viable option.
The initial interface was difficult to understand, and I had ongoing problems with simple content management functions like copy/paste. The design process - The Grid’s main selling point - has undergone several iterations. One option pulled website colors from a photograph of your choice. At one point, users could influence the desktop layout to make blog posts appear full-width or tiled. Currently, it displays a series of design options that the user ranks from one to five stars and uses the feedback to make changes. It’s not easy to directly influence modifications.
After 12 months of playing with The Grid, I still am not comfortable moving my main website to the platform. They are still adding basic features like topline navigation and multiple contributors. Ecommerce is promised for 2017. But I have never been happy with the layouts, the color tools, or the font selectors. Maybe it’s my hangup about being in control of design options… which is ironically what drove me to try The Grid in the first place. I wanted to give design responsibility to the machine.
Here's a look at my site: h̶t̶t̶p̶s̶:̶/̶/̶t̶h̶e̶g̶r̶i̶d̶.̶a̶i̶/̶b̶s̶/̶ Update: you’re looking at it. [Like machine learning should, it’s improved in the year since I wrote this post.]
The Grid hasn’t been great for me, but I’m giving it time to mature. In the last year, it’s been obvious their dev team has been hustling to deploy new elements and updates to the interface. It’s better now that it was at the beginning. I’m not giving up on it.
x.ai, on the other hand, takes a simpler task and makes it work beautifully. As a virtual assistant, it schedules meetings on your behalf. That’s it. Before using x.ai, I would call people directly to coordinate calendars. I hated the seven back-and-forth emails to hash out dates, times, and locations. Now, when someone suggests a meeting, I send an email and copy “Amy.” [Or you can use “Andrew.” I prefer to hire women to combat AI gender bias.]
The setup is easy. You set preferences for overall schedule, locations, and day parts. If you like a certain tea shop in the afternoons on Monday and Thursday, Amy/Andrew will use that information to coordinate with your meeting partner. It allows you to add buffers for drive time, duration of phone calls or meeting types [coffee, lunch, after-work drinks], and other preferences.
It’s simple. After that point, Amy/Andrew sends all the emails and just adds the final meeting to your calendar. Using x.ai lifts my workload in a reliable manner, and Amy has fooled a lot of people into thinking she’s a real person. At $39/mo, it’s cheaper than anyone you could hire. [Limited free account also available.]
Both of these AI services address functions that the average businessperson would need. For $100 a year, you can get a simple website - with no obtrusive advertising banners - that designs itself. At $468 per year, your AI assistant can handle meeting requests with a single email. Here’s the real value: neither of these services require you to know anything about code or design. They are browser-based applications that shift and learn based on your feedback and interact with other people on your behalf. Even if you’re not able to play with IBM’s Watson, you can still use the power of AI.
A corporation has a strange life. It is founded in the spirit of change, with key people leading a messy, tenuous advance toward new adventures. If lucky, the corporation achieves some success in the forms of profit, market share, and notoriety. Then, it starts to shift its attitude. It wants to replicate its successes, so it starts to move toward replication and defense. The corporation changes from upstart to adult, eventually resulting in old grey men in old grey suits.
Of course, not all corporations experience this pattern of ossification. [The ones you can name right away are the outliers.] But if you asked the youngest employees of the Fortune 500, they would probably candidly tell you about the inflexible internal processes, the difficulty of testing out new ideas, and the layers of approval needed to make a seemingly simple change. A friend who negotiated the ability to work from home occasionally was told to keep it under wraps because “the whole sixth floor” would want the same opportunity if word got out. The machine resists change.
And that’s a pity. Organizations that were started in the spirit of change can easily grow into entities that defend against change. Why does it happen? A corporation becomes systematized. If x happens, do y. Stimulus, response. Systems thinking recognizes that if a change is made to one part of the system, that change has a ripple effect that impacts other parts of the system. In small doses, it annoys the accounting department. Taken to the extreme, change is chaotic for an organization.
One of my favorite thinkers on this topic is Michael Capellas, former CEO of Compaq, WorldCom/MCI, First Data Corporation, and other large corporations. At a conference in 2014, he said one thing that I memorized immediately:
“When you really solve a big problem, something breaks.”
That is the ultimate fear of the ossified organization: breakage. This unwillingness to change means that upstarts — new corporations — get the advantage of throwing themselves at big problems. They don’t have to play by the same old rules, either. Corporate giants have major infrastructure concerns that small organizations actively avoid. Corporate giants have systems in place that prevent a much-loved startup advantage, the pivot. Corporate giants influence the law, while small organizations operate in the margins. Example: Uber owns no cars [infrastructure], changed the delivery system [from “black car service” to contract driver model], and broke transportation laws in every market they entered.
Clearly, a large legacy corporation has greater theoretical capacity to affect the marketplace. They have recognition, relationships, and resources to spare. An organization like Ford, with $53B in market capitalization,* has the potential to make bigger waves than Tesla Motors, with $28B in cap. But can they execute? Consider that Tesla developed 52% of Ford’s market capitalization in just 13 years. Uber, whose cap is $62.5B, has already surpassed Ford handily. Change — or breakage — is the language of Tesla Motors and Uber. They are solving big problems in transportation, just like Ford did a century earlier. Ford got stuck in a different operating model, making incremental change instead of leaps forward.
Like it or not, the word “disruptive” is here for a reason: the groups who do things differently are changing the environment for everyone. They actively fight the continuation of the status quo, and they create chaos in the system. The mindset of Michael Capellas is important. If an organization can say, “When you really solve a big problem, something breaks,” it can assume the mindset of their challengers. The mindset of the company’s founders. The mindset of the people who started something new to create a messy, tenuous advance toward new adventures.
Every business environment is constantly shifting. The great challenge each company faces is to risk, rinse, repeat.
*Public figures available via Google Finance at time of writing