Why businesses must rethink their playbook

Why did Google just push the alarm button?

Basically, there are three types of innovation: efficiency, sustaining, and disruptive. Efficiency innovations often involve cost reduction, ideally maintaining the same level of quality.

Sustaining innovations are all the [normal practice] improvements a business makes to stay current, just to be able to stay in the game, to compete.

Disruptive innovation is the game changer that can transform a business or an industry. Examples would be, for instance, M-Pesa and platform business models.

Artificial intelligence, AI, is today’s great disruptor. Heaven knows what it will be next year. Economics of AI search are starting to shake the foundations of the web with Google hitting the panic button.

“For years, Google’s dominance rested on a simple formula: organise the internet, capture intent, and monetise attention at scale. But generative AI is beginning to disrupt that model from multiple directions at once. Users are changing how they search. Startups are reshaping expectations. And the old ad-driven pathways that powered the modern web no longer look as untouchable as they once did. That is what makes Google’s recent moves so important. They do not look like the actions of a company casually extending its lead. They look more like the actions of an incumbent reacting to a market that is shifting faster than expected,” writes Somya Golchhain.

One route to value creation, winning in business, is innovation, which often comes from outsiders. Not those hyper specialists who can’t see the forest for the trees.

“Big innovation most often happens when an outsider who may be far away from the surface of the problem reframes the problem in a way that unlocks the solution,” advises Karim Lakhani, from Harvard’s Laboratory for Innovation Science.

Reframe to ‘test and learn’

One way to innovate is to reframe the way one works. Reframe how one thinks about business problems.

Somehow managers have this addiction to [longer term] planning—when in a world of [Strait of Hormuz] complex systems - that no one really understands – the plans made months ago, look quite foolish today.

Helps to be able to put on various thinking hats. One way of thinking, one rigid direction in thought, leads straight to the corporate trash bin.

For just a moment, put on the thinking hat that suggests —don’t commit to anything in the future, but just look at the options available now, and choose those that will give you the most promising range of options.

Might be wise to shift from the ‘plan-and-implement’ model — the idea that we should first make a long-term plan and execute without deviation, as opposed to the ‘test-and-learn’ model —proposed by organisational behaviour thinker Herminia Ibarra. Going into the ‘test-and-learn’ mode will put you in the good company of depictions of geniuses.

“Popular lore holds that the sculptor Michelangelo would see a full figure in a block of marble before he ever touched it, and simply chip away the excess stone to free the figure inside. It is an exquisitely beautiful image. It just isn’t true. Art historian William Wallace showed that Michelangelo was actually a ‘test-and-learn’ all-star. He constantly changed his mind and altered his sculptural plans as he worked. He left three-fifths of his sculptures unfinished, each time moving on to something more promising,” writes David Epstein.

You are what you do, not what you say you do - on your LinkedIn.

“Like anyone eager to raise their match quality prospects, Michelangelo learned who he was—and whom he was carving—in practice, not in theory. He started with an idea, tested it, changed it, and readily abandoned it for a better project fit.

Michelangelo might have fit well in Silicon Valley; he was a relentless iterator. He worked according to Ibarra’s new aphorism: “I know who I am when I see what I do,” pens Epstein.

Rather than have a grand plan, find experiments that can be undertaken quickly. Solve business problems by quick simple tests today, not making up some jargon filled explanation, or by creating a fancy slide deck designed to impress the boss tomorrow. Switch to ‘test-and-learn’ not “plan-and-implement’

Focused frogs and visionary birds

Business needs both the worker bees and the queen bees. Physicist and mathematician Freeman Dyson said we need both focused frogs and visionary birds. “Birds fly high in the air and survey broad vistas of mathematics out to the far horizon,” Dyson wrote in 2009.

“They delight in concepts that unify our thinking and bring together diverse problems from different parts of the landscape. Frogs live in the mud below and see only the flowers that grow nearby. They delight in the details of particular objects, and they solve problems one at a time.”

As a mathematician, Dyson labeled himself a frog, but contended, “It is stupid to claim that birds are better than frogs because they see farther, or that frogs are better than birds because they see deeper.”

The world, he wrote, is both broad and deep. “We need birds and frogs working together to explore it.” Dyson’s concern was that science is increasingly overflowing with frogs, trained only in a narrow specialty, unable to change as science itself does.

Not what, but how you think

There has long been a mismatch between the skills, knowledge and mindset that Kenyan employers require – and what is taught in universities and in higher education.

Ability to ‘regurgitate facts on call’ has always been bordering on useless, and even more so in an age of AI – with free intelligence on tap.

You don’t have to go back to ancient Greece to realise that purpose of education is critical thinking, being able to work together with others, in solving a problem. It’s not what you know, it’s how you think. Best thing young graduates can do is put on a ‘harvest problems’ hat, looking out there for the problems that ‘customers’ have, then have the knowledge to pitch the solution to the potential employer.

David J. Abbott is a director at aCatalyst Consulting. [email protected]