Fearless Innovation. Alex Goryachev
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The first response is to ignore it, the good ol’ “stick your head in the sand and hope for the best.” Perhaps no better example illustrates this tactic than the lack of timely response from brick-and-mortar retailers to online commerce. As online sales took off, the days of “hanging out” at the mall, casually shopping from store to store with a quick bite at the food court, started to fade quite quickly. Mall and department store shopping, once seen as quintessentially American pastimes, became two of the earliest casualties of the Fourth Industrial Revolution. Some stores that still inhabit these cavernous pieces of antiquity have diversified with online sales, but many retailers don’t have a long-term transformation plan outside of this move, which may already be too little, too late. The retail apocalypse is only beginning: a 2019 report from the investment bank UBS found that with each 1 percent increase in online retail, up to 8,500 physical stores will need to close, leading to 75,000 stores being shuttered by 2026.12 Sadly, instead of investing in new business models and capabilities, many retailers are just praying they aren’t one of those 75,000.
The second response to change is another classic: shame it. Instead of actually doing something when change is afoot, many of us invest our efforts in resisting it by saying “it’s only temporary,” “it will never work,” or that any unproven initiative, idea, or endeavor will be as dead as a doornail in no time. We poke fun or call its validity into question. We even ridicule it or try to laugh it off. In fact, if it’s innovative, expect people to put it down.
For generations, groundbreaking innovations in music that challenge the norms have been targets of this negative, shortsighted response. Take jazz, for example. Known as “devil’s music” when it first started to gain popularity and notoriety in the 1920s, its critics included Henry Ford, the New York Times, and Thomas Edison, who said the music sounded better when played backward.13 As the ’20s came to a close, sixty communities throughout the US had laws in place barring jazz from being played at public dances.14 Of course, jazz’s popularity only increased over time and it is now respected as one of America’s most cherished art forms.
Still, a hundred years after Edison scorned the genre, even its fans and performers put down innovations within the scene itself. Take the music industry’s response to one of my favorite performers, Kenny G, the innovative multiplatinum-selling musician who has been ridiculed mercilessly for his curly locks, commercialism, and “soft jazz” stylings. Kenny G is regularly looked down upon by purist jazz aficionados and acolytes alike, which is particularly funny, as “pure” jazz has stayed somewhat stagnant in recent decades. Do you think any of those detractors bother him at all? Of course not—Kenny G has sold over 75 million records.15
When he first found commercial success in the 1980s, Kenny G was interviewed by the LA Times, and he explained that even back then, he wasn’t trying to relive the jazz of the past. “It’s been done,” he explained. “I’m into new ideas and experimentation, so it doesn’t bother me if the purists don’t like my music.”16 These new ideas and experimentation have led him to become the highest-selling instrumental musician in modern times. He’s happy to be considered “commercial” and likes creating music similar to some of his favorite sax players of all time, including David Sanborn and Grover Washington Jr. Of the musicians, Kenny G said, “I like them because they’re always innovative. You can’t criticize people for having different and new ideas.”17 Disparage him as much as you want, and jazz dogmatists be damned, but innovation is at the center of Kenny G’s approach to writing and playing music, and he is great at it.
The third common (and also incorrect) response to change is to try to protect the status quo through regulation, something I’ve experienced firsthand. While working for Napster, I witnessed the company become so disruptive that it threatened the entire recording industry—an industry, by the way, that refused to believe in the concept of digital music when it first came onto the scene (see the first response, “ignore it”). Once the Record Industry Association of America (RIAA) noticed the impact, it took legal action. In its attempts to fight the inevitable digital disruption onslaught, the RIAA did not stop at Napster; it also went after the consumers themselves, suing them for illegal downloading and file sharing. Yet these attempts proved feeble in stemming consumers from welcoming and adopting digital music. Yes, Napster never survived the litigation, but ironically, the music industry did not survive Napster either and had to adapt—the digital music revolution was unstoppable, no matter the amount of regulation.18
All three of these responses—ignoring, shaming, and regulating—are dangerous to the future of any organization, because they distract us from understanding and embracing change. To stay relevant, we must meet challenges, trends, and new realities head on, no matter how uncomfortable they might make us or how skeptical of or shocked by them we are. Who would have guessed, for example, that “online sports” (what is that anyway?) would be competing with traditional sports for people’s attention? According to SB Nation, the sports blogging network owned by Vox Media (another unicorn company), in 2018, during the Overwatch League’s opening weekend, their games had an average of 280,000 viewers per minute, beating out the NFL’s Thursday Night Football’s average viewers on streaming services.19
SB Nation further reported, “At its peak, the Overwatch League had 437,000 concurrent viewers, averaging 408,000 on its opening day, according to Overwatch creators Blizzard Entertainment. In comparison the NFL had an average of 372,000 viewers on Amazon in 2017 and 243,000 on Twitter.”20 Research from 2019 actually found that come 2021, US esports will beat out every other professional sports league, aside from the NFL, in regard to viewership.21 (A number of companies are wisely catching on, and have begun marketing in the area, including Cox Communications, Coca-Cola, and KitKat.22)
And did you know that the highest-earning channel on YouTube in 2018 was essentially run by a seven-year-old child? (Talk about shock and surprise!) With clever orchestration from his parents, Ryan, of Ryan ToysReview, makes millions of dollars reviewing toys in online videos. That year he jumped from number 8 to number 1 on Forbes’s list of the highest-paid YouTube stars, earning $22 million, thanks to his 17 million followers.23 When Steve Chen, co-founder of YouTube, sold the company to Google in 2005, he didn’t see a long-term strategy for the video streaming service, stating, “There’s just not that many videos I want to watch.”24 He could have never predicted Ryan, or 1.8 billion monthly users.25
Sports and toys—surely these aren’t the great examples that embody the Fourth Industrial Revolution, right? Not so fast. Within these two areas alone, we’re talking significant technological innovation, new business models, and a relentless desire to do things differently, not to mention rapid growth. Note that even though the NFL was founded in 1920 and the Overwatch League was founded almost one hundred years later in 2016, within a few years the two were already competing over viewers. Change happens in all sorts of unlikely places, whether or not we want it to or expect it to. We must avoid tunnel vision and pay attention to more than just our immediate surroundings, so we can understand and determine how to adjust to change in the most thoughtful and pragmatic manner. To do so, however, we must first get to know the factors driving change today and the new opportunities and challenges in front of us.
Work with Change, Not Against It
The rate of acceleration in the Fourth Industrial Revolution cannot be stressed enough. Customer expectations are rapidly changing; businesses and organizations are suddenly evolving; new products and services are conquering industries practically overnight; and real-time hyper-collaboration across time zones, countries, and industries has become the norm. If we don’t accept and understand these influences, we’ll never be able to work with them, so it’s important to identify the key drivers that are enabling the world around us. These are, of course, subject to change at nearly any time, but there are a few mainstays that have proven their longevity and look to be integral going forward into the future as well.
First, the world is becoming truly digital. According to Cisco’s Visual Networking