Tuesday, May 11, 2021

It's past time to think the unthinkable

 I've been noodling lately about what new way of thinking or new perspective or approach we can bring to companies and organizations that may help break what I think is a current innovation gridlock.

Today, a LOT of companies are talking about innovation (and digital transformation) and some are practicing what I'd like to call innovation theater - that is, doing some window dressing around innovation without actually committing to a real innovation program or deep change.  We can argue about the reasons for more talk and less real action - risk, time, money, COVID, etc - but that's not really the point.

The point - at least for this post - is to get businesses and people to think about what we really need:  new ways of thinking, new business models, new profit centers, new ways to go to market, new products and services and so forth.  I think people are tired of talking about innovation because it is a capability that needs an outcome.  Let's focus on the outcome, rather than the process or tool.

It's also time to start thinking about the unthinkable.  Generally, most change happens on the margins.  We start "changing" from a position of strength, in the core and work our way to the edge or margin of a business or industry.  From there we may stretch to adjacent industries or markets, but that's about it.  This is the least risky way to change and it aligns with our experience and business models.  But what if those older experiences and business models don't work in an emerging new reality?  This is the time when thinking about things that may have once been unthinkable becomes a reality.

Example: Doing away with the filibuster in the US Senate

For example, let's look at the political brouhaha around eliminating the filibuster in the Senate.  Both sides - the Democrats and the Republicans - are hypocritical when it comes to this rule.  Twelve months ago, if the Republicans had attempted to eliminate the filibuster, the Democrats would have raised Cain because the Republicans would have used the new rules to their advantage.  Now that the Democrats are in charge, they are happy to consider eliminating the filibuster because the Republicans may use it to block new legislation.

What they are both missing is the question - should we have a 60 vote requirement for EVERY piece of legislation?  Wouldn't we be far more likely to get consensus bills if the process required that the bill have 60 votes to pass?  Then, there would be no way for one party to force a measure through to passage.  Both sides would actually have to work together to pass legislation.

Perhaps we should be thinking the unthinkable in our politics - require more engagement and more votes to pass every bill, rather than trying to get the bare minimum to pass any bill.  Rather than eliminate the filibuster, make 60 votes the rule for every bill.

My recent shopping trip

One of the things I noticed while out on a shopping trip recently (to visit the strange new world of Aldi) was that the strip mall I was in contained almost no retailers, other than Aldi.  A strip mall that once had a clothing store, an auto parts store and so on is now almost entirely populated by restaurants or services organizations.  In fact the strip mall I visited was full of storefronts for guitar lessons, dance lessons, fitness camps, smoking cessation, insurance companies and so on.

Our economy is shifting rapidly from a "go get stuff at the store" to a "go get knowledge or learning".  We were a manufacturing economy, then we were a consumer driven economy.  Now we are a consumer economy that gets delivery of physical stuff, but strangely we still go out to get knowledge and experiences.  Part of the reason for the shift is home delivery, part of it is exhaustion at being online and part of it is a desire to experience and learn new things.  We are rapidly becoming a learning economy, with services delivered away from the home.

What happens if all of the physical stuff we need - groceries, paper goods, clothing, PCs, and so on - are simply shipped from large distribution centers, that is, we never physically shop for these things - and what we "go out" for are learning and experiences?  What does that do to existing shopping centers, busy highway intersections and so forth?  

Moreover, how does this shift our economy?  Today, most states get revenue from sales tax and income tax.  If sales tax on physical goods stays the same or falls, we will need to make up the difference on taxes on services, experiences or learning.  My home state of North Carolina has already begun taxing some services, and I think we'll see this grow and continue.

It may be time to think the unthinkable about how we live and work, and how state and local governments fund themselves.  

We don't want stuff to encumber us

Recently, a good friend offered us a valuable and beautiful dining room table and chairs.  This would fit very nicely into a dining room where we have a nice Persian rug we bought years ago.  However, both my wife and I decided almost instantly - no, we don't want the furniture.  Not because the furniture isn't nice, not because it was the wrong design or color.  We decided we don't want it because, similar to many other people I think, we don't want more stuff.  In fact, if anything COVID taught us we don't need a lot of stuff.

So, what happens to an economy where the basics get more expensive, but people want more experiences and less stuff?  If you are a producer of large capital goods for the home, or furniture, or nick nacks, or garden equipment, you might want to rethink your business model or product portfolio.  If I can get the product as a service, or simply just acquire a service, I think that's what many people will do.  Our economy and the product and service mix is going to change.  There are some products (groceries) that we cannot forego, but there are many products for sale that we can easily do without, or get the jobs to be done through a service.  When I walked through a Dollar Store recently my senses were almost assaulted by all the stuff available in the store.  I wondered to myself - who really needs all this stuff?

What happens to businesses and the economy in general if we become less consumption oriented? What if we don't buy cars but use Uber?   

Our economy may be on the cusp of a big transition, from an acquisitive, consumerist economy that can never have enough stuff, to a more discerning and less acquisitive economy that values experiences. 

Thinking the unthinkable

What this all could mean - every business, organization and government should start thinking about what could happen if the system flips a switch.  What happens if all we hold dear and felt were immutable conditions suddenly shifts?  It's happened before.  Look at the class system in the UK after the World Wars.  Think about the shift from candles and oil lamps to electricity.  Think about the founder of DEC saying that no one would need a computer in their home, or Gates saying no one would ever need more than 64K of RAM.  

Very few people or businesses think the unthinkable about themselves until they are left with no other options.  Given the pace of change and volatility in the marketplace, it may make a lot of sense to gather people within your organization, and a few people who aren't in your organization and who may not even want or need your product and think about whatever it is that is unthinkable in your company or your industry.  Because I think that the unthinkable is probably more likely to happen than you believe, and in some cases (my example would be the filibuster) the unthinkable may be a better option.

The way we work or operate today is what is right for conditions and expectations today.  Almost none of these conditions are physical laws (like gravity) that cannot be changed.  Companies, organizations and governments that fail to think about and plan for changes in existing conditions and constraints are bound to be disappointed in the next few years.

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posted by Jeffrey Phillips at 8:13 AM


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