ABOUT THIS EPISODE
"Moving fast in the wrong direction can only get you into trouble exponentially faster."
"Innovation is really about risk taking, and a lot of companies don’t like to take risk."
"Opposites work better."
"If it can be done, it will be done. If you don’t do it, someone else will."
"If you continue to play the old game and think you know what it is you’re going to undershoot."
"Whatever problem you’ve got, that’s not it."
Listen to Learn
00:24 Introduction about the guest speaker (Daniel Burrus)
00:46 Daniels new book and what it is about?
02:06 Daniel talks about his article, as well as insights about innovation
04:12 What does being proactive means? The idea of being preactive - hard trends and soft trends.
07:38 The science of "cycles"
09:00 Three categories of hard trends (Demographics, Regulations, Technology)
15:40 The idea of "Opposites work better"
18:17 What are some hard trends in ecommerce?
Michael: Hello everyone and welcome to another episode of Ecommerce QA. This is the show where directors of ecommerce, ecommerce founders, strategists, anybody that’s very close to the growth of any ecommerce company come here and we talk about what we are learning. We are very privilege today to have Daniel Burrus. Daniel is a world leading futurist and expert in innovation. He has written many books. Daniel, it’s wonderful to have you.
Daniel: Thank for having me on. I appreciate it.
Michael: Absolutely, so you just finished a new book and it’s called The Anticipatory Organization with a sub line “Turn Disruption and Change into Opportunity and Advantage” Tell me about it.
Daniel: Well, technology driven change is accelerating at an exponential rate. But moving fast in the wrong direction can only get you into trouble exponentially faster. So it’s not just about speed, it’s also about how do we determine some kind of direction. Then secondly, reacting to problems and digital disruptions no matter how agile your organization are just isn’t good enough because of the speed of change. So instead of just focusing on agility which is the current big focus, we got agile innovation, agile this, agile that. But remember agility is reacting fast to something fast that’s already happened. What I’m talking about is the other side of the coin, and that is how to anticipate disruptions before they disrupt. How to anticipate problems before you have them, and how to anticipate game changing opportunities before others see them so that’s the idea of the book The Anticipatory Organization. It’s a proven model that’s working great and now it’s in book form.
Michael: That’s wonderful. I want to dig into your model. But I have a question an article that you wrote in Huffington Post. It’s this article titled Is it Time to Innovate? What Netflix Got Right (And WebTV Didn’t). This is a little bit funny to me because I’m a member of WebTV. Whenever we hear this new technologies or innovations spaces opening up, you wonder which one is going to win, right? And then, of course, there is the in the looses, sometimes we don’t easily know which one is going to come out on top. I find the title of this article very intriguing, is it time to innovate? I mean, I think people like me we think it’s always time to innovate. Talk to me about that.
Daniel: Well, you know, it’s very interesting because I work with small, mid-size as well as the largest of companies. No matter what their size is a lot of companies will say, “We have a culture of innovation.” But if you really dig in into it, they haven’t innovated in 10 years. They haven’t innovated in 5 years or even longer. They innovated long ago and have been milking the cashcow they created and they lost the culture of innovation. Secondly, innovation is really about risk taking, and a lot of companies don’t like to take risk. But what I have done is through this methodology which I know we’re going to talk about. What you can do is do innovation with low risk and high reward which is really a flip. It’s kind of an opposite. It is truly accelerated innovation and really transformed results for organizations. And by the way, I know this system works because I came out with leadership learning system, a video learning system about two years ago. I call it The Anticipatory Organization, and corporation of all sizes around the world have been using it. It got a product of the year award in its first year. It’s been used by the Pentagon even for leadership training and it’s been working so well I decided to put that out in book form. So the book is not something that’s been not tried. Actually it’s been working extremely well and now again it’s in a book.
Michael: I want to talk about the framework and some of the specifics of what you’re alluding to here, but I have one more high level question which is when we think about being reactive which is what we as managers know we should never do, right? We should be proactive and so on and so forth. Do you see that the trend towards enterprises especially in the tech space and particularly with software thinking in terms of agile. Do you feel like this is a new phenomenon, probably speaking like in the last 5, 10, 15, 20 years or do you feel that the need to bring things back to a proactive basis has just been around forever?
Daniel: Well, that’s a great question. Thank you. First of all what I’m doing is redefining what proactive means. Proactive means taking positive action now. And what I would say is let’s call it being preactive to future known events. So when you have the methodology of, in this case I start to get into it that methodology has to answer your question. One of the keys to it is separating what I call hard
trends from soft trends. Hard trends are based on future facts. They will happen guaranteed and you cannot stop them, but you can see them before they happen. And that allows you to turn disruption and change into indeed an opportunity and advantage. The other type of trend is a soft trend, and that is not based on the future fact. That’s actually based on an assumption. But unfortunately a lot of companies of any size have treated a lot of things as facts, in reality they are assumptions. Before I go any further on this let me just say I like both hard trends and soft trends because hard trends let me see the disruptions and the changes before they happen giving me a choice. Now I can be the disruptor or I can just choose to be disrupted. I have a choice. Soft trends, if I don’t like them, I can change them. Let me give you a really good example and that is I was just speaking to CEOs. It’s about 500 of them of a big healthcare conference. And they were CEOs from hospitals of different sizes as well as suppliers to the healthcare industry. One of the things that they were all assuming to be true is that healthcare cost will continue to rise. And they all saw that as unstoppable. They saw that as a future fact but in reality it is a total soft trend. We could change that. Let’s see if we don’t think you can change it you don’t even try. And by the way here’s how you could change that. Healthcare reform basically has really health payment reform. Otherwise, how are going to pay for that mess out there. Instead of using innovative new technologies, transformational technologies to, for example, transform how hospitals purchase, supply chain, logistics as well as using the technologies like Blockchain to bring transparency to consumers. I mean let’s face it, you would be paying $300 for an aspirin if you really knew how much it cost when you’re in that hospital. So we could actually lower the cost of healthcare if we use these transformational technologies and realized, you know what you could, or we can just continue to let it go.
Michael: Daniel, what’s an example of a hard fact? Something that we know in the future?
Daniel: Yes, that we know this will happen. Well, first of all, there’s already a well known science to it and that is cycles. Like right now we know after spring is summer, followed by fall, and by the way there are over 300 known cycles. Business cycles, weather cycles, biological cycles, there are even sales cycles. By the way, if there is a sale cycle, I like to have the sale completed before the cycle begins obviously to my advantage. An economist used cyclical as a way to predict the future, but as everyone listening to this knows, the economists have been increasingly wrong. And the reason is there is another kind of change and I’m addressing that very powerful in the book. And that is I would call that linear in that it’s one way/exponential meaning that it’s going almost vertically. It’s getting faster every year. Once you get a smartphone that’s not a cycle. You are not going back to dumb phone. You’re going one way. Once people in China park their bicycle and get a car, it’s not a cycle, you’re not going back to the car. And once people in India get refrigeration in their home they are not going to say we don’t need refrigeration. So these are linear changes driven by exponential technologies that give us predictable opportunities as well as predictable challenges. And to further answer your question to really add some real value here for our listeners, really it’s not that hard. There are only three categories of hard trends or future facts. And that is one, demographics. Example, simple example, there are 78 million baby boomers in the United States and hard trend, they are going to get older. They are not going to get younger. They are going to get older, guaranteed, and that gives us some opportunities. For example, if your company, you’ve got a lot of people predictably that are going to be retiring that have a lot of knowledge and wisdom. You got a database, do you have a wisdom base, you have a knowledge base? Have you actually pulled the knowledge and the wisdom from them before they leave? Or another quick example, a lot of people love to go boating and fishing. Trouble is as you get older it’s hard to launch the boat, so why don’t you and I create the easy launch trailer for seniors. Would we have a fully definable growing market every year? The answer is yes. Would we know which countries to export to and which countries not to export to. Anyway, know the ones with young populations and aging populations. You see, it’s amazing. So demographics is one opportunity, it’s a hard trend. Another one, this will surprise
everyone, regulations – government regulations. People are saying, “Oh, I didn’t think you would say that.” But indeed it is. Let me give you an example of how to get an opportunity from it. You see, when a regulation comes into place we all look at the stuff we don’t like. But one of the principles in the book is opposites work better. Do the opposite. Look at what you do like, look at where the money is. For example, in California in January there were 1,000 new laws that went into place in January. Of those thousand laws, one of them said within three years in the State of California all Kindergarteners and 1st Graders in the state, half of their reading has to be non-fiction. You got three years to do that. By the way, right now, all of their reading is fiction. A little engine that could is fiction. So most of us would hear that and say, “Well, what are these guys? Crazy? Shouldn’t they be doing something important?” Instead, a 26-yr. old teacher in San Diego did the opposite. She made three phone calls. She called the San Diego School District, the Los Angeles School District, the San Francisco School District and said, “Hey, it’s a new law. You got three years to get half the books non-fiction. If I supply those books would be interested?” And to make the long story short, they not only said, “Yes”, but they underwrote her business and became a guaranteed customer and she didn’t have to go in shark tank. See, there’s an opportunity out there. The third one is technology. And of course, that one is especially in the bull’s eye of most of us but we don’t realize how amazingly predictable technology is. Again, this is book #7 from [term unclear – 11:47] It’s pretty easy to do that. For example, after 3G and 4G we start to read about 5G equals that’s it? No. I’m going to have 6G, followed by 7G. We can even tell how powerful they will be and when they will come out because of some predicting graphs that I can show you in the book. Are we putting more in the cloud or is the cloud getting full? Is where we’re going to continue to not only virtualize our products and virtualize our hardware as well as our software. Could we also virtualize all of our services? And the answer is, oh yeah! As a matter of fact there is a strategy I teach, if it can be done, it will be done. If you don’t do it, someone else will. So with hard trends and soft trends you can start to see what can be done before so it happens giving you an edge.
Michael: Wow, a way to seeing into the future folks. So now, let’s dig in into this a little bit more. Now we can anticipate future facts. We can infer what some soft trends will be. What are the problems? Most of the time what a lot of us do is dealing with problems. There probably a model that addresses problem solving.
Daniel: Yeah, it’s amazing. Michael, you know, I just completed a study over the last year of thousand companies all around the world and just about every different industry. I’m about to publish this but I’ll give you the results the now. This is talking to the CEO and saying, “What is your company’s biggest problem?” Then after they tell me what it is, what I do is I ask them, “Now, did that come out of the blue? No way to see it ahead of time? Or could you have seen it a year ago and done something about it?” 93% of the thousand have said, “Oh, you know what we could have seen that a year or two ago. We just didn’t have the methodology for doing it.” And that is another reason I wrote this book. You know, most of us who listen to this have said, “I knew that was going to happen.” But what did you do? You just kept going. You didn’t do anything about it. So what this does is it allows you to do everyday innovation by empowering your people to learn to predict problems. They are about to having their function and their role and presolve them so they don’t have them in the first place. We’ve invented solutions. We actually showed people how to do that in the book. And then the type of innovation is exponential innovation. How to take big leaps ahead with low risk because, again, if you don’t do it, someone else will.
Michael: I’m intrigue by this because I’m used to taking big leaps ahead with lots of risk.
Daniel: Yes, so let me give you an actual real strategy right now for all of your listeners. So even if you don’t get this book let me give you some value right now. And that is why didn’t a cab driver think of Uber? Why didn’t Marriott think of Airbnb? And I know the reason. They were all really busy executing strategy. Let’s face it, execution being lean and being agile. Hey, Blackberry was quite good at that, and so is Dell, and so is Sony and so is HP. Let’s face it we need a new competency that why I wrote this book. A matter of fact, you know what, that’s why I’m giving
everyone of your listeners this book. You know what, let me just do that right now. I believe in this book so much I’m going to put my money where my mouth is. I’m going to give you the hardcover copy of this book. Because right now it’s available, you can buy it on Amazon. You know what, go to theaobook.com and I’ll give it to you for free. And I’m doing that because I think you’re going to love it so much you’re going to tell whole bunch of friends. That’s how much I think you’re going to find value it because I’m losing money in everyone of these. No I’m not. You’re helping me spread the word because I know you’ll like it that much.
Michael: Wow, well that’s amazing. Ok folks, theaobook.com. We’ll include that in the show notes as well as a lot of these other points. Wow! I forgot what my next question was going to be. You kind of took me on that. Daniel: Well, that’s another thing. Opposites work better. See, I’ve got 25 principles that will allow you to transform how you innovate to elevate your innovation and transform your results. Opposites work better. Let me give you a quick example about opposite. Back in about 2002 or 2003 a lot of people were putting out this free E-zines, right, electronic magazines. These free E-zines, and I thought why not do the opposite so I decided to make a really expensive electronic magazine monthly. By the way, how expensive? It’s really expensive. I charge $120,000 a year for it and it worked. Now here’s the point when you say to yourself I’m going to make a monthly E-zine that’s going to cost $120,000 a year to subscribe. You have to ask yourself what kind of value would it have to have to get somebody paying that much? Well, if you’ve never asked that question, you’ve never got that answer. Well, I decided to be bold enough to ask that question and by the way it totally changes how you market. Let me give you a quick example. The first client was a C-suite marketing expert at Walmart. Probably no one else at Walmart is going to subscribe that newsletter. I don’t care. All I need is one per company. The next one was American Express. Probably no one else in American Express is going to get it. I don’t care. I just need one per company. You see, it changes the whole game. And the reason I’m sharing that with you is because we’re in a time where you can change the game, or you can continue the play the game the way you’ve always done it. But the old saying was, “If you do it what you’ve always done, you’ll get what you always have”, it’s no longer valuable. If you do it what you’ve always done, you’re going to get less of what you’ve always had because you know what the world is changing around you super fast. The world’s fastest computer two years ago was disassembled four months ago because it was already obsolete. It used to be the big to small now the fast to slow. But moving fast in the wrong direction, again, can get you into trouble. That’s why hard trends separating them from the soft trends give you direction, and it gives you certainty. And I’ll tell you something, when you’ve got certainty you have the confidence to make bold moves. And as a leader when you have certainty and you talk in future facts rather just giving your opinion, what happens is your people are empowered to make bold moves because they also have the confidence to move forward to a new more powerful direction.
Michael: Now, let’s take this home Daniel. What are some hard trends that you are aware of in ecommerce space or the retail space more broadly that you feel that company is today need to think about more critically?
Daniel: Well, I’m going to give you some really good ones. For example, on my computer right now I have a prototype of a 3D web browser. By the way, all of your web browsers right now, you know what there, your computer screen, your website looks like a flat piece paper with an embedded video, and a hyperlink and some text, and a picture. But when it starts having 3D and you don’t need glasses to wear it because it’s only one viewer unlike movies, when you go to the movies you all need glasses because there are so many people viewing it. But with a handheld device or with a computer you don’t need the glasses. And you add interspatial dimensionality, you can go into buildings, you would go into stores. You’re going to have things pop out at you. Hey, I’ve already got that in my laptop. It is game changing if I’m already using that prototype. And I can’t tell you the name of the company because of the non-disclosure that I signed. But if I’m already using it can I predict you’re going to get it? Yeah. And can I predict that that’s going to change how we do our websites. Oh god, it’s going to be game changing. And that’s just one. There’s far more than that as we start looking at how do the data and analytics in Watson and AI play into this, and how do we
use that to supplement in the ecommerce world - the human and the physical part of what we do. You know, there is a reason why Amazon is getting into and bought cold foods and is opening up over a hundred book stores around the country. They are looking at the future of brick and mortar differently than the CEO of Sears who is closing 175 stores. Both of them are seeing a different future in ecommerce and not only ecommerce but also in brick and mortar commerce. But the reason Amazon is getting into that being an ecommerce king is because they realized you are going into a new revolutionary pace of ecommerce. And it is amazing blend of the physical and the virtual in a way it goes far beyond just having your website look just like the other things that you offer. In other words, you see what I mean? We’re at a base of a mountain of this whole thing we’re calling ecommerce. And I want everyone listening to this to get really excited right now because we’re in a game changing time. If you continue to play the old game and think you know what it is you’re going to undershoot.
Michael: Fabulous. Yeah, that’s a recurring theme on the show is stop treating your website like a Sears catalog. Not to pick on Sears but there’s the picture, there’s the text, there’s the button.
Daniel: Exactly, exactly. And again the tools are there. Are you reading the same things you’ve always read? Are you doing the same things that you’ve always done? Maybe you need to start getting some new information. Maybe you need to start connecting. A matter of fact on my website burrus.com, I write a lot of articles those are free. If you’re on LinkedIn just two weeks ago I think I past the one million follower mark on LinkedIn. I’m one of the highest in the world. The reason is I’m giving a lot of really good stuff for free. I’m not even selling you stuff. Why won’t you go connect with me and see why I got a million people following me? There’s ways of getting information out there. And Michael, thank you for helping me get this message out to all of our ecommerce people out there because it’s not just an evolution anymore, it’s a revolution. And they need you sharing all of these, not just for me, but for the other people you are interviewing to try to help them to redefine and reinvent what ecommerce is.
Michael: Well, that’s great place to leave off. And Daniel, I really appreciate your time. There’s one more topic that I would love to have people dig in to which is your model that you’ve been sharing with us. In your book you talked about how to take your biggest problems not only solve them but skip them. This book again you want to go to theaobook.com, and you want to go find Daniel on LinkedIn. Let’s learn how to innovate. Daniel, final thought.
Daniel: Yes, well, taking your biggest problem and skipping in there are several dimensions I teach on that. But one of them is whatever problem you’ve got, that’s not it. See you’re trying to work something wrong. What? That’s why you’re stuck. Get unstuck and I will show you how to peel the onion back. In other words in the book I’ll show you how to get down to what the real problem is which is completely solvable. I mean, I’m an adviser to the [term unclear – 23:13] I worked with IBM and their Watson team and so on. I’ve never found a problem they couldn’t solve when they defined it correctly. Let’s get unstuck.
Michael: That sounds great. Alright everyone. Daniel Burrus, absolute pleasure to have you on today. ecommerceqa.com for the show notes and that’s it.