Welcome back to part three of Leading the Revolution with our guest, Gary Hamel. You're very, very welcome back. Thank you. Thank you, Aiden. Nice to continue the conversation. It sure is. There's two chapters I'd love to get through today. . I was telling Gary, I've been collecting quotes that I'm gonna share to our audience as well from the books. I could actually write a book of quotes from all the books we've covered so far.
But I'm gonna just tee us up here for this idea of being your own seer. And really the principle of this chapter is don't rely on other people. You have to do it yourself because it has to be in your own context. And I loved how you started off here. You said, I. There are too many individuals who cannot yet escape the dead hand of precedent. Too many who are not fully vested in the future. Too many who cannot distinguish between their heritage and their destiny is this.
You want to do something about it. More and more innovation comes not from the triumph of big science, but from the triumph of contrarianism. It is the idiot NT who asks a fresh question, who then answers it using parts that already exist, who is also often the author of the new that's because industry revolution is conceptual innovation. It comes from the mind and soul of a malcontent, a dreamer, a smart ass, and not from some bespeckled boffin or besuited planner.
I absolutely love that, and it speaks to this idea of. Psychological safety to speak up, creating the conditions where people can come forward and talk about things. And what you ultimately say here is companies fail to create the future. Not because they fail to predict it, but because they fail to imagine it. It is curiosity and creativity. They lack, not prospect.
It is vitally important that you understand the distinction between the future and the unimagined between knowing what's next and imagining what's possible. Yeah, boy, it's been a long time since I heard those words. They, they're pretty good actually, you know. I'll, I'll claim that. You forgot, man. You forgot there's so many. Look behind me here. There's so many you've written in the meantime that that's why.
Yeah. Well, you know, I do think there, there is a need for every individual and for every company to develop foresight. And as, as I say, foresight is not primarily about prediction. It is much more about imagination. I got very interested in this question when I was a young faculty member. One of the questions that really intrigued me is, well, where do all these new game changing innovations come from? Like, once you see it, you go like, well, that's cool, that makes a hundred percent sense.
But like, where where did it come from? And when you go back, and I spent a lot of time talking to a lot of entrepreneurs, you know, many, many years ago it was a different kind of population we have today. But what, what do you discover is they weren't smarter than the rest of us. They didn't have any , communication with the almighty. But they had a different way of seeing , and what became clear to me is that, foresight is as much. imagination as it is prediction.
And, but it's not imagination without context. It's not like you, you have a fever dream and it's all informed by experiences these people had and the context they were in and frustrations they saw among users and technologies they could see that were becoming, that were being commercialized and putting those things together. And it was often born outta serendipity, right? You just happened to be in a particular face and go like, wow, that doesn't make any sense. Can I change that?
And so a lot of what I've tried to do is understand, okay, what are those perceptual habits? How do you develop them in yourself so you're able to imagine what could be and then how do you build an organization where. You can never program innovation. You know, in the same way you can, you know, program a piece of software, but you can create the conditions. So how do you build a lightning rod so that, like maybe lightning strikes at least more often than it would otherwise.
But the starting point is to really have a theory and an understanding of where do these ideas come from and how do I develop this capacity to see around corners, to see over the horizon, to reimagine what could be. And the exciting thing for me in my career is I learned you can teach that and you can build that.
I think often, particularly in, in Silicon Valley where I spent a lot of my time, they like to tell themselves that this innovation is just like this incredible, brilliant mind and they're not many of them about, and you'll probably never be able to do it, right. Well, after you've trained a hundred thousand people to, think in this way. And you've seen new businesses and billions of dollars of market value going on. No, no, no. Guys, this is not that complicated.
Weirdly, almost nobody actually does it seriously, but this is not, this is not neuroscience. It's much more straightforward. I. Love what you said you shared throughout the book, other books you've read, but also quotes that you loved and one of your favorites you mentioned at the time was Alan Kay, who wrote Perspective is Worth 80 IQ Points. And you say, Alan knows that a fresh way of seeing is often more valuable than sheer brain power.
And then you go on to say, impressionism, cubism, surrealism, postmodernism. Each revolution in art was based on a reconception of reality. It wasn't the canvas pigments or brushes that changed, but how the artists perceived the world. In the same sense, it's not the tools that distinguished industry revolutionaries from rum incumbents not the information technology They harness, not the processes they use, not their faculties.
Instead, it is their ability to escape the stranglehold of the familiar. And here you go on to share ways we can school ourselves in the art of seeing past the familiar or to the truly novel. Maybe you'll share some of these, so I'll, jog your memory as well because you give loads here and this is probably work you were doing with companies at the time you went, look, let's just lay it out there. So I highly recommend people get the book. There's loads of stuff in there if you're.
Struggling with your imagination. Gary gives a list of things you can do. One of them you say is what you call discontinuities, and you said change. Revolutionaries are looking for things where the rate of change is changing. For inflection points that foreshadow significant discontinuities. Those who fail to notice these nascent discontinuities will be rudely awakened by those who were paying attention.
And this is to your point that you've said throughout this whole series, most companies know they see the change happening. You worked with Nokia at both points when they created the phone, when they created the industry, and then they failed to take notice when there was an inflection point or discontinuity again. Yeah, I think you have a dilemma in many organizations where. The people kind of control strategy and are supposed to set vision.
They have a very kind of narrow set of interactions, right? Most of them internal for sure. And they show up at Davos and they talk to their senior team and so on, but they do not actually invest in getting out at the fringes where change happens, right? Change does not start in the mainstream, whether it's fashion, whether it's music, whether it's architecture, whether it's technology. It starts out in the fringes and if you're not out there learning from that, and it takes an investment.
But I do think, you wanna ask yourself whether it's politics, whether it is technology, science, lifestyles, what is accelerating, what's changing that most people are in my industry are still ignoring. Because by the time, you have Accenture, McKinsey telling you how important is things, you're probably too late. I mean, you're still gonna have to do it, right?
You're still gonna have to understand AI or whatever the, you know, technology du jour, but most of the economic value probably already been captured by somebody else. So, you do have to be your own seer. You cannot, you know, rely on somebody else to come and package this all up and tell you what the implications are. You have to make that investment. And, most companies are very insular. Most of the senior leadership time is spent inside the four walls.
And , you're just gonna be surprised if that's your your M.O.. I mean, one of the things that, , when I wrote, the book we're talking about now, Leading The Revolution, that was around 2000. I had moved to Silicon Valley , in 1993 from London back , to the us And you know, I just had a ringside seat to what was going on. And every day I'm rubbing shoulders with people who are inventing the future and working out on the bleeding edge of technology and so on.
It's not that I was any better at anybody else in particular in the future. I was just immersed in it all the time. And so, so I say like, well that's interesting. Where might that lead? I think the other really critical thing when you see something that's accelerating or something catches your eye is to really have the discipline to work through the second or third order consequences. Like, therefore, what happens? And , you see the smartphone, and photographs.
You go like, well, we're gonna have interesting privacy concerns outta that. That's gonna be a whole industry, probably, or a whole set of issues that are gonna, , come around that, or you see early Napster and you go like, wow, okay, there's a way of immediate sharing now. So how do I think about where that goes in my industry, peer to peer, user generated content. How, how might that be monetized? How do I, you know, so it's not simply noticing a trend.
But it's having the discipline to work through the implications. If then, if, then, if then, and like, okay, where does that lead and how might I harness it? It's obviously very important to put these trends together because when you look at innovation, it's almost never one insight. It's a combination of insights about users, about technology, about industry incumbents, about where they're blind. And somebody goes like, okay, I can put this all together.
And so that's why one of the things that I've long believed is that you cannot really innovate and you can't create an innovation strategy unless you first of all, built a foundation of new insights, right? you have to know things. And I, say know, not in the sense that it's just a hunch, but you have to see things, know things are changing, know what's happening, and you have to have a set of insights that you are not gonna find in your competitors. Right.
That you didn't get off of some chat GPT list of , what's changing in the world, what's important, or whatever. but that you've seen for yourself because, , you can't build a differentiated strategy or a differentiated product or business model unless you have differentiated insights to start with. So yeah, and that's a piece, that often gets missed.
So, when I've worked with organizations before, asking 'em like, well , what are the new products and new businesses and so on, we start by saying, let's build a deep population of new insights of things that we know, we've seen, that they're grounded in reality. It's not a fantasy, but we also know that probably very few of our competitors are paying attention to these. Very few have thought deeply about 'em.
And, and I'll say the other thing here, that's super important, Aidan, those insights need to be shared because, , you can have two or three different people who will see the same thing and draw completely different conclusions out of it. So when you start to share these insights, and so in the work we do, we'll create hundreds of these sorts of insights. They're all up online. We put 'em where everybody across the company can see, okay, here's what we saw.
Here's actually like the data behind it. Here's some of the implications. We, and we let people comment on that and build that. Oh yeah, I saw that too. Or I saw something over here. And so when you have multiple minds all mulling on the same population of insights, you get a huge explosion of ideas rather than hoping like it's just one person who has some kind of brain fart , and sees it. So you have to have differentiated insights.
They have to be shared across the organization because people are gonna see different things out of that. I love that man. I was telling you, I was quoting your loads and I have this reinvention summit starting in April, and I was sharing a quote because one of the things we're trying to do with that is get people into an environment where they'll rub shoulders with, I. Different people and have conversations and have enough time.
And , you say in this book you recognize then, this was before the onslaught of information we have now, you said how ironic in a world populated by knowledge workers, there is virtually no time to think. You may be able to manage the present in tiny splinters of time, but you certainly can't innovate if your attention has been smashed into minute sized shards. I thought that was so prophetic, but also that was the experience people were having then and now it's way worse.
I think that one of the greatest personal advantages one can have in, in your career is just the discipline to reflect and to take time and to think, and what works against that is not just like, only the inbox and all the things that are coming at you every day. What works against it is also the fact that all of our media now is so addictive, is all built around 30 second one minute clips and so on.
And , it's like going off a crack or alcohol or something else to sit back and saying, no, no, no, I'm gonna clear my mind. I wanna think through it. So yeah, in a world of fragmented attention, concentration is a competitive advantage. , but it, it takes, it takes work to do that. Absolutely, and, and you don't get rewarded for it is the other problem , you think about someone like Zhang Rumin, who you work with, the CEO and founder of Haier.
What I was struck by is he got all your books translated into Mandarin and loads of other thought leaders as well, and he actually read them and then he sought you out. And that intellectual humility is one of the reasons why higher such, probably the one of the most valuables and will become one of the most valuable companies in the world. I think that's a really important point because we have this bias for action instead of a bias for thinking, plus a bias for action.
Yeah, I think, I think that's true. And and, and, and also I think what, what distinguishes Zhang Rumin and not, not many other leaders I can think of, they understood that management is maybe humankind's most important social technology. Like how we bring people together, how we motivate them, how we coordinate across units, how we set goals, how we plan. And so he wanted to deeply understand what was the state of the art was there.
But he also understood like, if I wanna build an amazing company, the state of the art is not good enough, right? I gotta push the boundaries farther. And I think so many leaders, they just take that all for granted. And in other words, and we'll come to this later, but, when you talk about innovation, we tend to think products and services, but by far the most important innovation is in innovation and how we lead, manage, control and so on.
And that gets almost no attention at all in organizations. But, but yeah, I think now, what I wrote all those years ago is, it's still relevant, I think. So. But of course now, you have things like Y Combinator, all of these incubators where they will help you probably understand the future, see opportunities and so on. But I think even there, they mostly, they take people who already have an insight, who already have had an epiphany, and now how do we help you build a business?
And I think in an organization, the starting point has to be, Hey, how do I build that foundation of interesting, unconventional insights that will, that will be the building blocks for genuine innovation. And it's just something that I think. , I think it's gets dismissed.
I know a very few, in many organizations you'll have a unit, for example, a company like Proctor and Gamble have people go out and live in customer's homes and try to get, insights on people's lives and their frustrations with their products and how they're cleaning their houses and so on. But my questions, okay. How broadly do those insights get shared across the company, right? Is that like just some people in product development or everybody across the company has a chance?
Number two is, okay, do you take those insights and do you also have literally in the same space where people see the insights about where tech, what tech technology is doing and new material science and so on. And do you have insights at the same place about what your competitors are doing and what their value proposition is and how their position? We cut all these insights up and they're spread across different parts of the organization.
So, the average individual just does not have the grist for the mill. They just don't have, enough in front of them because they're like, wow, okay. That could really, there's a chance to do something very interesting there.
I was telling you, I was just speaking to Eric Von Hippel, and I mentioned you in that episode, but I was telling him, I read this amazing study by Robert Sapolsky and Robert Sapolsky in his book, why Zebras Don't Get Ulcers, it's about stress, but he was talking about the discovery of Type A personalities and there was. A guy called Meyer and another cardiologist called Meyer and another one called Rosenman, and they discovered Type A personalities.
But what happened was an upholsterer came into their office, so they'd noticed that their seats were getting destroyed and they just assumed this was the rate of change , of these seats that people were destroying them. But the upholster comes in and goes, man, what the hell are you doing to your patients in here?
'cause they were all scratched and worn and they discovered that it was their type A personalities who were so eager to get in and out of the clinics that they were scratching the seats 'cause they were so nervous. And SSapolsky had this brilliant line I thought of when I was reading this chapter. He said that if you want to know if the elephant in the zoo is sick, don't ask the vet, ask the cage cleaner.
And I was thinking about how it's the same as asking a consultant versus asking the people out in the field. And it, it segues beautifully to what you said, you, you have to search out underappreciated trends. You said there is no propriety data about the future. Whatever you can know about what's changing in the world. So can anyone else. So you've got to look where others are not looking. But the good news is that people in an industry are blind in the same way.
They all paying attention to the same things and not paying attention to the same things. And I thought that was really interesting that almost having. Some charges to go looking for these trends versus going to a conference once and not doing anything about it or listen to a TED Talk or reading The Economist and how to bring that into the culture.
You know, the early work I did, and we've done this, you know, multiple times, through the years, but, we'll in a large company, we'll put teams together with maybe 20 or 30 people on a team. And first of all, we need these people for maybe two or three months. And it's interesting. I was, I was working with one of the very large automakers, which everybody would know and they were in our kind of stuck and they said, Hey Gary, we really have to get in front of the future.
We have to like, innovate. And I said, okay. You have like about 250,000 employees. I'm gonna need about 120 of them for four or five months. You thought I'd ask them like, I don't know what like. But they said it's impossible I said, you guys have so much waste and so much slack, and you're telling me, and so that this is by one of the places where the rubber meets the road. Like, yeah, we need to have a point of view about the future.
We need to get in front, but like, we can't spare any cycles, any intellectual time, anybody. Well, alright then let's just go back to turning the crank. But in any case, often we'll take 25, 30 people times four teams. So a hundred or more a hundred people. And we'll have one team spend a month trying to understand what are the nascent changes, what's accelerating, what are the implications? Who's driving it? Has anybody exploited it?
We'll have another team spend a month digging into all of the competitors and saying, where are they all blind? Where are they all, have overlapping assumptions and business models and so on. And what part of that might we be able to, we'll have another group. Reconceiving their own organization and thinking about it not as a portfolio of products and services, but what are the deep skills and technologies that we have?
I mean, , I think right now about Apple, I, apple probably has a wider range of technologies than almost any company in the world. And yet they, all of it is focused on this little thing called , the iPhone, right? Or maybe a Mac. And you're going like, guys, let's step back and think about what you know and where else can you exploit that, right?
But you have this, and you know what's very interesting, Steve Jobs changed Apple's name from Apple computer to Apple, because he said, I don't think we're like, we're broader, but I think now they've gotten stuck. It's essentially the iPhone company, right? So this is a super critical thing to do, is. To challenge the prevailing conception of who we are as a company, which is almost always defined in product terms and say, no, no, no. Like what are the deep things we know how to do?
What are the skills, what are the competencies? We'll have a team kind of digging and drilling down through that, and how much of those things are really unique in world class. And then we'll have another team that is interacting with customers and out of the field and understanding what are the frustrations, the anxieties, the unspoken needs. And each of those teams is gonna bring back hundreds of insights. And then we share those.
And I'll go deep in the process if people are interested, but, but I, I do think that is just a critically missed step. And every time we've done it, there are whole new businesses that get created and a lot of market value gets created. But we talked about taking the time as an individual, but setting aside the time as an organization to explore those fringes and to bring those insights together. You know Haier is very good at this. Now they use a lot of technology to do that.
All of those things are shared internally and externally. 'cause they want their potential partners to look at, Hey, here's what we're learning. Do you see an opportunity here? We're missing. They're not proprietary about that. And then come help us build it. But yeah, it's, the investment in, the foundations of innovation it just doesn't happen in most organizations, or it's very sporadic or very fragmented. Most innovation is actually innovation theater. It's not real to that point.
went, right back to Joe Bower, who was Clay Christensen's thesis advisor. I'm doing a series with him. Gary, after, when we're, we're finished our, good. Say hello to him. For me. yeah. He's, he is awesome. influential in my own work, Oh wow. I. Yeah, yeah, yeah. Yeah. Brilliant. Brilliant. Well, I'll, I'll let him know and maybe we'll have you on that series as well, because he is, he is a load of guests on that series. It's kinda like this is your life, one of those episodes.
But the, resource allocation process that he talks about. To your point, people won't, allocate the human resource to that because it's seen as putting a, a pause on the company or we're not measured for that yet. Or what, what will Wall Street think instead of actually going, okay, well let's have maybe lower managers will give them, will give them a responsibility now to run the company now that it's running and we'll focus on the future. And, and how do, how do you bring that into companies?
How do you bring in that real step change to go, we're running this thing differently from now on? I. Well, I think in my experience, there's a couple things that has have to happen. Number one, the company has to, be pretty dissatisfied with where they are. You know, they have to understand like, Hey, we've missed some big opportunities. We're not growing. If the top line doesn't look very good our margins under our pressure. So you have to have, a business of imperative to do this.
I think the other thing that it just requires a lot of humility. When we did some of this work for a big sportswear company, , the CEO kind of put out a blog, put out a video blog and said, Hey guys, we're not growing as fast. We're all dissatisfied the report, we at the top cannot tell you what to do. We don't know what to do. We don't, , if we had the answer, we would've figured it out by now. So you have to have also that kind of. Humility to say, Hey, we need to learn from everybody.
This is not a few people at the top. We're gonna figure this thing out. And then of course, as we were just talking, you have to create some slack in the organization for it to happen. And in, in many cases, all three of those things are missing, right? Rather than being like super honest about kind of mediocrity and flatlining, it's like, ah, it's this problem, it's that problem. There's a lot of excuse making.
There's a sense that if I ask the whole organization to help in this, in a very open, transparent way, I lose control. I cannot predict the answer. I cannot see the end from the beginning. And that, that makes me like super nervous because like, what if they come back with ideas that like, we don't wanna do? And then thirdly, yeah, just, cutting through all the busyness and say, Hey, we're gonna invest here.
Yeah, those conditions are often missing and so companies stumble and at some point activist investors force you to do things you know, you didn't wanna do anyway, and it's too late. , and I think part of the problem, Aidan, is so many leaders really see their role as running something rather than reimagining or building or changing it, right?
If I'm a top leader and I'm spending 80 to 90% of my time on basically running the business and fighting outside fires, regulators, other things as it happens, like I'm not doing my job. But that's the reality. some of this stuff is quite simple. Like if you're a reader of a paper, a newspaper, or website, whatever it might be, or a journal, you say, find the big story. And I thought this was really interesting.
Now, I was saying to you, I bet you loads of companies were reading your book and going, I'm gonna do that. I don't have any ideas, but I'm gonna do what Hamel says here. 'cause you said search for transcendent themes. So these overarching themes, and you said one of the reasons many people fail to fully appreciate what's changing is because they're down at ground level. Lost in the thicket of confusing, conflicting data.
You have to make time to step back and ask yourself, what's the big story that cuts across all these little facts? And the example you gave in the book was to consider trends. So several trends, but they're everywhere. And one of them was, in most developed countries, people are getting married later in life. No longer do people expect to find a mate while still at school. They have more time at work, they're not getting out as much, they're not drinking as much.
Hence, what about a dating site? And so reminding people, this was the naughties, that this was 2000. You wrote this book and therefore you saw a rise in match.com and all these kind of companies that, or co companies like that. But I just wanted to remind you of that. And they go, what's the one at the moment that you're seeing like, so some of these big stories that you're seeing and you're going, why is nobody doing this? I have a list of those things that I think are interesting.
One of them that I think is pretty current is I. And we cannot, we kind, I think we see it now, but I think most people, certainly business people and government people still don't wanna face up to it. It's just this incredible divide we have between the elite and everybody else. And the fact that a huge number of people in societies across Europe, north America, elsewhere, just feel completely disenfranchised.
, I started looking at this data some while ago, and people just don't, yeah, a lot of this, I think Aiden is people, there's, we just have a pain avoidance. You look at something that looks uncomfortable and you don't wanna think about, what's really going on here and what are we going to do about it? You know? But you look at data where a, a significant majority, like two thirds of kids in Great Britain think they, that they would be better off living in a socialist system.
Now they can't tell you where a socialist system has worked, but that gives you a sense. Vast majority of people across the developed world thinks that government, media and business works for the few rather than the many. Right now. Now this has become unavoidable and you see Trump and whatever, as as, but, but you could have seen this a decade ago.
All of, if you're looking at the data, if you're looking at the frustrations that people have, if you're looking at the declining middle class, if you're looking at where wealth is going in society, where 90 some percent of it is going to the top 1%, you know this is going to become an issue. And it was very interesting dur when, during the, and I tend to be as apolitical as I can be, but you know, in Trump's first victory, people literally were shocked. What the hell is going on?
How could this happen? I'm going like, you people certainly have not been paying attention. You're in your own fricking bubble , and you didn't really even need to go to talk to people, all you need to do look, is all the surveys that are being done and see this like deep well of frustration that's there. So I think that's, I think that's certainly one thing that, you could've seen a long way off and most didn't. And most politicians are still surprised.
And many, and probably 90% of the people at Davos are still in denial about this. Like, guys, if, , and on the back foot, right? So, yeah, I think again, getting the bigger picture means having a lot of different sources of data trying every day to read things and consume things that are not in your usual diet. So if you have like, here's the three things I read every day. No, you gotta diversify that. You gotta look much farther a field.
But I'll also say spending some time, you know, understanding history, understanding philosophy, understanding theology also helps you like. See what's the deeper things that are often going on, right? That, that are kind of fundamental changes in how, in, in self-perception or how people see their role in society or what they think the role of government is, or businesses.
And, and that's very hard to see, if you're not getting data from multiple sources and multiple perspectives rather than being inside of your little tribe. And number two, if, if you don't have the historical or the broader context to make sense of that I'm gonna bring it back to something you had talked about, which was the orders of Impact.
And you said that the world is a system and we really saw that during covid, the whole idea of vuca, the complexity, something changes here and it will affect something over here, water bed effect. And you mentioned Paul Saffo and this idea of orders of I impact, and you mentioned a brilliant analogy in the book that I'd love you to riff on. You said the speed of the Internet's takeoff surprised most people, but that it should have happened.
It was no surprise because the interstate highway system provided an almost perfect historical analogy. Bear with me as I tell you this quickly. Automobile had existed for 50 years before the interstate highway system began to connect communities across America. Within a decade of the interstate's, introduction, suburbs started springing up. City centers were withering. Corporations were building office towers, and what had been corn fields and commuters were commuting.
It wasn't the car per se, but the ability to connect communities that changed the distribution of work and commerce. Likewise, computers had existed for 50 years before the internet took off. Before the net computers had been islands of computational power once connected, that began to transform society in ways even more dramatic than the interstate highway, but also in ways that are entirely consistent with timeless aspects of human nature. I thought that was brilliant because.
When you grasp that and you see things in the rear view mirror, you can start looking outside the windscreen and going, well, where are things going now?
And I wondered, what was your version of that now I mean, one of the things that, again, this is the value of sometimes, like understanding the deeper things, any technology that connects people together, whether that was , a path, 300 years ago or, or whether it was smoke signals from, from Native Americans, or whether it is a telegraph or phone and so on. Anything that connects people is going to have enormous impact.
And, and , , you take that connectivity and it's exploded in, in terms of mobile data and communication density and so on. Social media was in inevitable. You could tell, I mean, you go back to the earliest things where people were starting to be on online forums and you could rate each other's comments. You know, this was happening by the time I wrote that book.
It wasn't hard to see, , that's gonna be like an enormous business of peer-to-peer in whatever way that, you know, turns out you sharing content and so on. So, if you ask me what are some of the things I think are likely looking forward? I think, I think many, many customers today are deeply, deeply frustrated because I think companies, in many ways have used technology to degrade the customer experience. It's harder to talk to a human being.
You're forced through, , apps that are often very poorly designed, not easy to use. So I think, if I'm a business, I'm saying there's a deep in every industry, there's a deep, deep well of customer frustration that we're not even paying attention to. And because we're all focused on like, we can save a little bit here and there.
So that's one thing that's like, I think, , somebody could thinks about because, one of the, one of the other really broad themes that I think has been true for now 20 years at least in terms of the newcomers, is basically reinventing every industry from the customer backwards, right? And thinking, okay, like, what's the core function we're trying to do? How do we deliver this in a much more seamless, interesting way?
Uber would be an example that Airbnb would be an example of that, Kindle , and Amazon would be an example. Like, but there are many industries where that still really hasn't happened. So I think that's, you know, deep, deep well of frustration as technology has been used often to push customers away rather than to bring them closer. So I think that's like kind of an enormous opportunity.
I think another thing I see happening is just the way we build knowledge and consume knowledge is gonna change fundamentally. Partly thanks to ChatGPT, but partly because, universities have fundamentally failed young people. They're not teaching 'em what they need to do. They're have become kind of indoctrination centers and , nice retreats to spend a few years. And kids are desperate to know what are the skills I need. To make a difference. How do I build my portfolio of interesting projects?
I think there's an enormous opportunity for entirely new educational models to emerge. It's not just gonna be, take an online course, but things that are much more thoughtful than that, that are really focused on building skills, that are measurable, that are quantifiable, where you leave, not with kind of a degree, but you leave with a set of, certificates that you've mastered these things.
And so that, if you just look at the, sorry, state of education, you look at kids who are desperate to make an impact. The fact that two thirds of kids who come outta university don't work in the field of their degree. Like there has to be just like a freaking huge opportunity in there somewhere, right? So yeah, you look at any of these things and, you, and that's the beauty once, once you teach yourself, I. To Walk through the world saying, okay, what does everybody believe here?
This kind of nonsense. Where's the deep wells of frustration that nobody's addressing, that everybody's ignoring? What are the technologies that we're using to do this, but could actually be used to do this? Like, the world is just filled with opportunities. There's a dozen different companies I would've liked to start here. I'll give one idea away for free. Maybe somebody's done this by now.
You go to a restaurant and they give you this long wine menu and all the prices are super inflated, but also you have no idea what are the good wines are, where are the bad wines? So you can sit there with your phone and maybe go to wine.com. I just want to snap a photo with my phone. Use character recognition. Then I wanted to go to a database, find the VINs, take the prices and tell me what are the best, where, what's the best ratio of quality of wine to price?
Like somebody could just do that tomorrow, right? It's not hard. And That, that, let's let's a 15-year-old idea at least. So maybe somebody's done around way, but yeah. I think, and by the way, you just become a lot more optimistic when you have, when you've developed those kind of thinking skills because like, there's just like amazing cool things we can do everywhere. There was one you mentioned in the book with the hotel hangers. Do you remember that one? Oh, well, yeah.
I mean that's the other point is that, you know, these industry orthodoxies come in all different sizes, which is why, you know, I need people on the front lines thinking about this, not just, yeah. But that little example used there was, you know, obviously you can challenge the big orthodoxy that, hospitality means I own a physical building with rooms that are all alike and whatever, versus Airbnb or something else.
But then you think about the customer experience where, you go in even to like a, a, maybe a four star hotel and the hangers are all like secured in the closet, like they're locked down. And you go like, man, , so they really don't trust me. Do they like for, , they have my credit card information, but they don't trust me with a hanger that's worth four pounds or $4 or something. So, you know, put a side behind the door, say hanger's $5 and like do an inventory the same way.
Do a minibar and make it a profit center. Right? I mean, again, those things are just like everywhere. But , we all start to get blind and we mistake, the edge of the rut for the horizon. But when you train people like, okay, what are we doing every day? That just doesn't make sense. That frustrates comp customers, it doesn't create economic value. Those things will very quickly come to the surface.
And, you know, the one I thought is like sometimes you as a customer, like I'm one of those people who will say it to the people I go, you know what would be really useful? And you can see their eyes glaze over and they're just going, when will this guy be outta my face? And you just go, why would I bother? But if you had somewhere to capture, that would be so good. Well, it's, there's a whole business there, Aidan, because you're absolutely right.
You have people like you, like me, like everybody listening, who every day, you know, you have a customer experience that like, Hey, there's a simple fix here. You could do this like better. And there's literally no place to go. Your choices. You talk to an employee in that moment who has no way of sharing that, who has, is completely disempowered, can't change it, it's just helpless feels bad for you, but can't do crap about it.
Or you go to some online complaint thing or whatever that disappears, whatever, of course. Which is why people today who are really pissed off, you put it on social media and then maybe somebody's gonna like pay attention. If you have a few thousand followers, you might get a response. But you start to, I mean there was a us, I dunno if they still do this. There was a US consumer electronics retailer called Best Buy that had something called.
Voice of the customer through the employee VCE Best Buy. And it was really simple, you know on the terminals, the screens in the store at the point of sale. If a customer says something, there's just a little place you could click and say, this is what we just were asked about this. And , I talk about this in one of my books. They were mining tens of thousands of these comments every year. So just imagine something that is that simple.
I know at one point British Airways when they were serious about service, I'm not sure they still are now, but they had video kiosks and when you came off the airplane and you wanted to say, you just like walked up, pushed a button and said, Hey guys, here's something else you could do. Right. And I honestly, I think a lot of companies, so so what do we have instead? I. What we have instead is at the end of every damn interaction, they want you to like rate somebody.
Like if you hang on, we're gonna survey, okay, fine. You wanna know whether this person did a good job or not, but like you're really not interested in whether I have an idea for how to make this thing better. You always share great cartoons, illustrations , with your books and on LinkedIn and stuff like that. I think you share. Air wood once where it was a suggestion box and it was zoomed out and the person was putting in a suggestion box and underneath there was a shredder.
So it was like my idea. That's where, that's how it feels sometimes is like, why bother then? But there's a exercise you give here, which is great. You surface the dogmas, you called it. And you say, so how do you cultivate contrarian tendencies and surface the dogmas in your companies? One simple device is to ask yourself and your colleagues, what are the 10 things you would never hear or customers say about our company or our industry?
For example, no customer's ever gonna say the airline treats its customers with dignity and respect. Few customers would ever say it's easy to shop for a better rate or on electricity or fewer, even still would say, banking is fun, or hotels are have always got great food. And once you've identified what customers would not say, ask yourself why they would not say those things. I thought that was just such a simple exercise for people to do.
Yeah. Well, again, I hope that in that book, I think there are a lot of like fairly simple things because these do have to become habits, they have to be routines. And without it, they're not gonna have, any impact. But it is, it is interesting to me how an industry can get it wrong for so long. You know, recently some of the airline industries have started tying their loyalty programs to how much you actually spend. Well, of course you should.
It's not how many miles you fly that makes you a valuable customer. It's how profitable you are, right? And so you go like, wow, took you guys a long time to like figure that. And of course now all those super frequent flyers who weren't making the airline any money are pissed off about that. So fine. You better figure out a way of dealing with that, but yeah.
I mean, there is, I think in every business, in every industry, there's literally an infinite number of ways you can make that thing better. And the only question is like, okay, do your employees feel empowered to think in new ways? Is there a place for them to go with their ideas? Better yet, can they experiment with that locally without having to get like a lot of permission? If an idea is good, how quickly gonna get it tested? How does it then propagate across the system?
How long does that take? And you just start to, these are very, very simple ideas. How many ideas of what quality, how quickly are they tested? how efficiently are they tested? How quickly do they get shared across the system? And those things together absolutely drive the rate at which any business can get better. And yet, if you take every one of those elements, our employees actually listing every day, do they have a place to go with those ideas?
, do we actually then turn those into experiments? It's like, no, no, no, no. You good? So, yeah, sometimes it's been frustrating, Aiden, because But man, I, I tell you, it's it's why I'm so happy to share the book because n not, not much has changed. And you know, that Mark Twain quote, history doesn't repeat what, it rhymes that the names have changed of the companies, the industries, et cetera. But the challenges just creep back in and it's almost like a cycle of.
The companies that listened at the start were either entrepreneurial or they were entrepreneurs who read your book, listened to it, took action, but then they get to the top of their S-curve and they stop doing it 'cause they're so busy.
And then the other guys come in and it's, it's, I really wanna stop that cycle and I want to, those companies who were at the top of the curve to realize and to wake up and see, it's not, it's not that you're broken, you're human, biased, you get blinded, you get in, stuck in the exploit phase and stop exploring. And there's, there's a formula to fix this if you really want to. Yeah, and I think, yeah, the really want to is certainly part of it.
But you know what I had to recognize, and we've talked about, this took me a long time, too long I. Is there was a reason so often these things were falling on deaf ears. Right? It wasn't that the CEOs didn't care about this, it wasn't that they were willingly blind or whatever, but all of these employees are caught in a system where these things are just not rewarded.
I came across this wonderful, funny blog, bitter and funny and so on by some, young employee saying that their whole life now is spent navigating between a bunch of bullshit tools like Zoom and Trula and notion and whatever. None of them are connected together and we spend all of our days like entering data and filling these things out. And, we're in a system that now a hundred percent mistakes activity for achievement.
I. You know, and we're all just feeding these various, like, you know, data, data hungry systems that are mostly designed so people above us can tell, like, and you know, we just fall into these traps and organizations that. everybody there goes like, this is stupid, right? Like, or, or maybe not. Maybe a lot of 'em are just done thinking and they're just in the system.
. So it's a system level problem that has to be solved right there are organizations where, as I say, activity is mistaken for accomplishment where you look at most of your customers as people inside the organization, not outside the organization where there's very little upside for new ideas and for taking the risk to pioneer them. There's very little downside to killing an idea because nobody's ever gonna come back and say like, why the hell did you kill that? That was like a promising idea.
There's no accountability there. You know, most people have no idea what a P&L is. And so they're managing to bullshit KPIs and other things that are only tangentially related to actually having a good business outcome. You know, most frontline employees don't have not been given business skills. I mean. So this is a system, right? And that's why my book's changed and the focus has changed, is like, alright guys, we gotta step back and change the system.
Having said that, if you make the investment in yourself and you make the investment in seeing into the future, and if you teach yourself how to be a contrarian and so on, you will still have a way bigger impact than you would otherwise. I mean, you may not be able to change the whole system, but, despite everything I said, CEOs leaders are still hungry for new ideas.
They want people who will take the risk of doing something I talked about in that book of, how do you become an internal rebel and even, despite those things all around you not letting those dissuade you or put you off or wait for the system to change. 'cause that's, that's a pretty hopeless situation to be in too. I think what we'll do, Gary, is we'll keep that for the next day. If you're cool with that, we'll do the corporate rebels.
Give a couple of those examples and the idea of to change the business model, you need to change the mental model, but also the political model behind it. We'll do a coverage of that. So I have some diagrams, a couple of last ones maybe to wrap this chapter. I thought we'd get through more, but I love the fact that you've built on these ideas and that also you're willing to share some of the experiences you've had in the field from working with clients. I think that's the unique thing.
You're not only writing this, but you're an academic, you're a practitioner, you're a consultant, but you're out there with really successful companies, which really makes it interesting. But one of the things that you talked about in the early books. Competence based competition for example, was the idea that your capabilities or competencies can actually be the competitive advantage. But you say in this book, you can distinguish form from function.
And I think this is a really key term to share with our audiences. Any company can't distinguish between form and function will get what inside. An obsolete form factor. And you say one way of distinguishing function from form is to substitute a verb for a noun. Rich je and butcher in his name there, but chief he at the time he was CEO of Wells Fargo, provides an example. Banking is essential, but banks are not. Banks are things, bricks and mortar banking is a function.
And maybe you'd share an idea on that because that's a really great one for people to start thinking about their own business. I think, I think Clay Christensen had a different way of talking about this. I think he, he talked about jobs to be done. Maybe it was a language he used. I. But I do think, yeah, we, you end up caught inside of a particular business model, a particular way of delivering a customer benefit, and you lose sight of, well, what's the real benefit?
And are there other ways to do that? You know, you look at now, you know, banks have basically become an app, right? I mean as many things have, right? So the function is still there. Newspapers have become an app, right? I mean, you still consume the news, but in a completely different way. You know, music, same kind of thing. And we were talking a few minutes ago about education, right? Well, like, I think. It's, I wanna be careful about saying universities are gonna disappear.
They're may, maybe the, the, almost the longest lived human institutions we have, right? Oxford, Cambridge, and these places go back, having said that. And so they'll still exist in some form, but I think if you look at how education is delivered more generally, yeah, the university is just, it's just a particular form, a way of delivering knowledge human expertise, capability, even research. And if you're wedded to that, you lose, right?
Your commitment has to be not to a particular business model or structure. The commitment has to be, we're trying to make a difference in people's lives. We're trying to do something like amazing, and we're gonna find the best, most efficient, most amazing tools to do that. the moment you lose sight of that and you become hostage to a particular, form factor or delivery channel or whatever, you've opened the door for somebody else to take the future. Brilliant man.
I've one last quote and I'd love you to riff on this one. This was. Kinda like what you said about Steve Jobs changing from Apple computer to Apple, the power of language and the power of labeling something, and how we get stuck in that. You said that in most companies there is no distinction between a conversation about radical new possibilities and a conversation about how to eke out another percentage point of gross margin.
The same standards of analytical rigor are applied to both, whether the subject is the return on a new piece of production machinery, or the chance to create an entirely new market. Strategy conversations at GE Capital at the time were labeled Dreaming Sessions. Questions about internal rate of return on EVA are disallowed. No one mistakes them then for budgeting meetings, I thought that was a really important point.
Yeah, well, un unfortunately, GE Capital I think imploded with a financial crisis. So may again, the examples are sometimes better at the time than they are, but that's, you know, you can't write a book without taking that risk. Um, But though, Gary? I I mean, I think that's a really important point and, and something that somebody could be critical and go, Hey, that didn't work, but that, that's the point No, no. The point. Yeah. And, and, and the, and, and, and GE co much got caught.
GE Capital got caught much more on the operational side and just this endless quest to do deals and expand for the sake of expanding and getting bigger. So they may have, they had those sessions. I don't, I'd be surprised if anything came out of them having said that. Absolutely. Right. And I think, you know, there's, one of the things we're fighting behind all of this, Aidan,, is not only kind of systems and structures, but we're fighting kind of a managerialist mindset.
And if you look at the kinds of people who move up in our organizations, their analysts program managers, administrators, finance people, and so on. And for them, pragmatism always has the veto on any idea. And so the quickest way you can kill, and, and particularly as we were saying there, when you can't distinguish between a highly operational thing where you, where you should expect to have a lot of data, you should expect a high degree of certainty. Your right to demand it.
If you walk into every conversation with that mindset, like I am here to pull your idea apart, to pressure, test it, define the weak point and so on, you'll never do anything that's truly new. Because the things that are new by definition cannot be evaluated using those criteria, there's not enough evidence, there's not enough data, there's not enough history, there's too much that's unknown. And I've seen this happen again and again.
As I've watched young teams that get excited, we help them to get excited about some new idea. They've done a lot of work and thought it through, and they come to present and then you have some like gravelly voiced old timer say well of course we have to be realistic. And like, you destroy the idea, you destroy the spirit of those kids and like whatever. And you know, when, when you're thinking about the future, being realistic is a very different thing.
Being realistic means are we seeing the world in the right way? Like we could be very clear, do we have the right assumptions? Are people really frustrated? Is this technology really evolving at the rate we think it is? So it's not that you're fact free and that you're just riffing it. You can start, , you can say what do we believe here? Is it credible to believe it? But you can ask how much money is this gonna make?
I'm trying to think of the company and I think it was W.L. Gore, they've pioneered the long-term innovator material science, but they had a simple model called real win worth. It's probably in one of my books. And so if you have a new idea, I'll give you a really practical little case study. gore, they make Goretex right, which is an amazing performance fabric. It's in all kinds of things, and they get paid a lot of money for that. Somebody at Gore said, could we put this in shoes?
'cause a lot of people are running outside in inclement weather and it had never been done before. And it actually, there are a lot of technical challenges in making gore, that fabric flexible enough to stand up and not lose its properties as you're flexing in a shoe. They spent years doing this and it wasn't a big team, but nobody said stop because the first question they'd asked the gore is there a real opportunity?
You go like, okay, there are a lot of people live in inclement areas and they wanna exercise. Okay, yeah, that's big. Okay. Like, keep going. Right? That's like, that wasn't so hard to figure out. Right? But it wasn't that it was a fantasy. Like here's the data, here's the number of people, here's how much it rains in Ireland, wherever. Yeah. Let's, let's do this. So that's the first question. Is it real? And you can go for a long time just with that alone. At some point somebody's gonna ask.
Can we win? Which means, okay, it's real, but do we have any right to play here? Do we have any competencies, any capabilities that you know, or is this somehow in our wheelhouse? But that's the secondary question. And of course for Gore, the answer was yes. And then finally somebody's gonna say, worth, okay, can we monetize this? Is it is, is there enough value here that people will pay us? We can cover our costs, we can make a margin. Is it really important?
So often I think in companies, when new ideas come up, all three of those questions get asked at the same time, real win worth. And the last one is the killer. Because if you can't say like right now, like, yeah, it's gonna be worth X. Yeah, yeah, yeah. We can, you know, and so that's why I think companies so often miss the future because the, in fact, it's, it's very interesting. We've done this a lot in our research, in our consulting.
Very interesting question to ask in a, in organization companies. What are the opportunities that we missed where we could have played, where we had enough capability, expertise we could have played, but we're not there. And then you wanna go back and do some real diagnosis and say, did we never see it? And often people did see it. Alright. Did we under resource it? Yeah. Did we kill it prematurely? Yeah. Did the team behind it get frustrated and leave or get reassigned?
Yeah. So you cannot take that highly pragmatic, hardcore data driven mentality and apply it to every question or every opportunity. and yet that is the managerialist mindset and the inclination to do that. And by the way, you get a little buzz of feeling superior and feeling good when you pull somebody else's idea down. That's often the unfortunate truth as well. And like, you know, I told you it was like dumb idea. The audience experience that all the time.
But those of you who are CEOs take heed of that. And we all tend to do it. We see things to our own perspective. To Gary's point, you'll see the same thing. You'll see a totally different, let the organization see it. Gary, it's always a great pleasure. I thought we'd get two chapters done today. I'm glad we didn't. 'cause I really want to go into the next chapter, which is Corporate Rebels there's some great heroes, corporate rebels in that chapter.
But more I want to talk about , the kind of structures of navigating political hierarchies, because that's a huge challenge when it comes to status and to the point you just said there about trying to get around those people who will condemn your idea early. For people who want to find you, Gary, where's the best place for them to reach out? Gary hamel.com. Email Gary at gary hamel dot com. Prof, Hamel on X and you'll find me on LinkedIn as well. Brilliant.
And don't forget all those books are available that adorn the shelves behind me. There we were covering Leading the Revolution, author of Leading Revolution. Gary Hamel, thank you for joining us. Thank you very much. Thank you, Aiden.