Digital Darwinism Read online

  PRAISE FOR DIGITAL DARWINISM

  ‘A fascinating dip into a disruptive future.’ Dylan Jones, Editor, GQ

  ‘This finally answered many questions about innovation which have long haunted me – not least why most large companies are typically so bad at it. It’s one of those rare books that is worth reading twice.’ Rory Sutherland, Vice Chairman, Ogilvy & Mather Group, and TED speaker

  ‘In a cacophony of voices calling for an immediate digital revolution, how reassuring to hear one advocating a more nuanced and balanced path forward for your business. How refreshing to have an author parting the weeds of digital transformation, offering homespun, achievable suggestions and solutions for your company.

  The digital world is littered with a baffling array of jargon and acronyms. Goodwin cuts through the gobbledygook to offer down-to-earth, practical advice for transforming your business. Digital Darwinism reassures you that futurizing your company doesn’t mean you need to be the next Uber or Amazon of anything. Among the multiple platinum nuggets in this book, the most valuable takeaway is that change must be at the core of your business, not at the edges. Digitally transform your business? First change the way you think about change.’ Adam Najberg, Head of Digital Media, Alibaba; formerly Digital Editor, The Wall Street Journal Asia

  ‘In Digital Darwinism, Goodwin presents a thoughtful canvas of digital wisdom, covering the past, present and future with smart illustrative examples. It’s a great map of the entire digital landscape, sprinkled with invaluable insights to act upon.’ Stefan Olander, former Vice President, Global Digital Innovation, Nike

  ‘The future does not fit in the containers or mindsets of the past. This book persuades, provokes and points to ways to rethink your business. Society, business and life are being disrupted by a revolutionary stage of evolution: Digital Darwinism. This book provides ways to thrive in the new environment.’ Rishad Tobaccowala, transformation expert, speaker and writer, and Chief Growth Officer and member of the Management Committee, Publicis Groupe

  ‘Goodwin delivers what he promises in his preface: the book is wildly irritating and inspiring at the same time. It is a passionate cry for more common sense in corporate decision making. The examples he provides demonstrate how little companies have embraced the digital age. Goodwin rightly questions the attempts from corporations to overcome disruption and ambiguity in the digital age either by “better planning” or by minor adjustments to business models and strategies that were developed in a bygone era of stability, linearity and predictability. He reminds us that a flexible response is the only answer to massively changing corporate environments and that entrepreneurship means maximizing opportunities and overcoming obstacles instead of minimizing risks. An overdue book.’ Uwe Ellinghaus, former Global Chief Marketing Officer, Cadillac

  ‘Digital Darwinism is a must-read for both legacy brands and ambitious start-ups, arming business leaders with clear strategies to navigate disruption, unlock growth and prepare for the future. A bold and provocative thinker, Tom Goodwin brings a fresh approach and a much-needed reminder that you have to think differently in order to win in today’s global digital economy.’ Stefan Larsson, former CEO, Ralph Lauren

  ‘Tom Goodwin sees organizations facing a Darwinian battle for survival, given the pace of technical change. That’s familiar ground. What’s so refreshing is his notion that empathy will be crucial in that battle – that businesses that put people first are most likely to stay the right side of the chaos.’ Mark Jones, Commissioning Editor, the World Economic Forum Agenda; formerly Global Editor, Networked Journalism, and Global Communities Editor, Reuters News

  ‘Tom Goodwin shows how Darwinian success depends not on ruthlessness but on learning how to play well with others.’ Douglas Rushkoff, author, Throwing Rocks at the Google Bus

  ‘Goodwin is the right kind of futurist: he’s a history geek at heart, and recognizes that innovation doesn’t happen in a vacuum. Context is king, and there’s plenty of that in this intelligently constructed book.’ Paul Kemp-Robertson, Co-founder, Contagious

  ‘If you ever wondered if and how you and your organization could survive and grow in today’s disruptive environment this is the book for you. This beautifully written book offers an informative and insightful description of the age of disruption, the need for a paradigm shift in our thinking and practical guidelines for survival and growth. Enjoy, learn and apply.’ Jerry Wind, The Lauder Professor Emeritus of Marketing, The Wharton School, University of Pennsylvania

  ‘Today the words “disruption” and “innovation” are plastered everywhere. We’ve become numb to them, lost in a sea of information. The future is here yet it is understood unequally. With Digital Darwinism, Tom Goodwin uses his unique combination of passion, empathy and audacity to give us all an equal understanding of the future as it bowls over us.’ John Winsor, thinker, advisor and entrepreneur building platforms in the marketing, media and innovation industries, and Founder and CEO, Open Assembly

  DIGITAL DARWINISM

  Survival of the fittest in the age of business disruption

  TOM GOODWIN

  Publisher’s note

  Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publisher and author cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or the author.

  First published in Great Britain and the United States in 2018 by Kogan Page Limited

  Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses:

  2nd Floor, 45 Gee Street

  London EC1V 3RS

  United Kingdom

  c/o Martin P Hill Consulting

  122 W 27th St, 10th Floor

  New York NY 10001

  USA

  4737/23 Ansari Road

  Daryaganj

  New Delhi 110002

  India

  www.koganpage.com

  © Tom Goodwin, 2018

  The right of Tom Goodwin to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.

  ISBN 978 0 7494 8228 2

  E-ISBN 978 0 7494 8229 9

  Typeset by Integra Software Services Pvt. Ltd., Pondicherry

  Print production managed by Jellyfish

  Printed and bound by CPI Group (UK) Ltd, Croydon, CR0 4YY

  CONTENTS

  Cover

  Title Page

  Copyright

  Contents

  List of Figures

  Preface

  Thank you

  01 Business in the age of disruption ‘I wouldn’t start from here’

  The world has changed

  It’s time to ask the hard questions

  Remember what is not changing

  Change is a threat at a core level

  Self-disruption

  We’re in the age of innovation as distraction

  The depth of change is underestimated

  The only certainty now is uncertainty

  It’s time to focus on people

  Key topics to inspire

  It’s time for action
<
br />   References

  PART ONE Change in context 02 The electrical revolution that never was The hard sell of electricity

  Electrification of factories

  The line drive system

  The electrical shift

  Enter the group drive

  Thinking driven by economists

  The real change: re-imagining factories around electricity

  What can we learn from all this?

  References

  03 The three eras of technology The three phases

  The pre-electricity age

  The mid-electricity age

  The post-electricity age

  The pre-computer age

  The mid-computer age

  The post-computer age

  The shortening cycles

  The pre-digital age

  The mid-digital age

  The post-digital age

  How can businesses leverage the power of the post-digital age?

  Reference

  04 Unleashing the power of the paradigm shift A new theory for disruption

  The power of the paradigm shift

  Design as evolutionary funnels

  Avoiding the local maximum

  The paradigm leap in action

  Leaps in design paradigms surround us

  The lesson from the paradigm shift: we have to break rules

  Don’t let expertise or success kill you

  Being different is scary

  Don’t apply old thinking to new eras

  Don’t apply old models to new eras

  Ignore most future models

  References

  PART TWO Unleashing the power of now 05 Digital transformation An era of bolted-on change

  Onions

  The communications layer: the outermost layer

  The marketing layer: supporting communications

  The product layer: what you make

  The process layer: the how

  Mission

  A prioritization framework for innovation

  It’s pretty easy to innovate at the edge

  Innovation at the marketing level

  Applying new thinking at the process layer: the how

  Deeper transformation: companies built with new thinking at the core

  Digitization vs digital transformation

  Create new value propositions

  Reference

  06 Starting your disruption What is your risk level?

  How vital is this change?

  Establishing a role

  Establishing a time to change

  Four ways to change

  References

  07 Today’s business dynamics So why don’t big companies innovate?

  Buying innovation is the fashion

  Accounting and outsourcing risk

  Establishing a leadership for change

  Short-termism is killing ambition

  Success takes time

  Charismatic leadership

  An intolerance of bureaucracy

  Celebrate failure

  Maximize outcomes, don’t minimize risk

  A sensible view on data

  Create a process to change

  References

  PART THREE Anticipating the future 08 A changing canvas Digital disappointment

  What can companies do about digital disappointment?

  Time limited, stuff abundant

  Pervasive internet

  Intimate screens and data

  One-on-one communications with instant messaging

  What does this mean for business?

  Bifurcation of retail

  Young older people

  References

  09 Preparing for the new world Looking further forward is more important than ever

  It’s about empathy not technology

  Second-order and adjacent technologies

  Anticipatory computing and seamlessness

  The predictive web: the Th’Internet

  Privacy trading

  Smartness in the cloud

  Demographic shifts

  References

  10 Tooling ourselves for the future Unprecedented levels of unpredictability

  Rethinking education

  The comfort of properness and expense

  Audacity

  References

  And in closing 11 A final focus on people It’s not about technology: it’s about empathy

  A focus on empathy and design thinking

  Final steps for success

  References

  Index

  Backcover

  List of Figures

  Figure 2.1 A cotton mill in Lancashire, 1914

  Figure 3.1 US productivity per worker in real GDP: quarterly from Q1 1947 to Q2 2016

  Figure 3.2 Frequency of the term ‘electrification’ in the English language corpus, 1800–2000

  Figure 3.3 Capital investment from companies in software and hardware

  Figure 3.4 Frequency of the term ‘computerization’ in the English language corpus, 1800–2000

  Figure 4.1 A brief to the optimal solution

  Figure 4.2 A brief to the new optimal solution

  Figure 4.3 The leap between the locally optimized and the optimal design

  Figure 5.1 The conceptual layers of a company

  Figure 5.2 Problems and opportunities matrix

  Figure 5.3 The world’s most valuable public companies, November 2017

  Figure 5.4 The smartphone era: market-value rankings of companies since the first iPhone launched

  Figure 6.1 Match Group mobile dating apps: US market share by session, January 2013 to November 2014

  PREFACE

  Welcome to my first book.

  This is a sentence I never expected to write; I am an unlikely writer of anything. It was never my dream to be a thought leader of any sort, or to speak at events. The words flow from my fingers – not as part of some romantic mission, lofty goal or stubbornly unticked item on a bucket list – but because I care. This book is reluctant; it’s driven by a huge need to get some ideas out there, to prompt a debate, to explore a new way to connect ideas and a new way to see change in the world.

  Despite having published 250 articles in the last two years, writing this book has been the hardest thing I’ve ever done. I’ve rarely demanded more than 30 minutes of someone’s attention so the pressure I feel to keep you interested for the hours it takes to read this book is huge. I’d guess that the best authors are empathetic enough to be riddled with self-doubt. Do I have enough to say? Is this new and profound? Is this both interesting and valuable? Do I have the right balance of naivety and confidence, knowledge and freshness to question things from an un-entrenched view? As my passions run deep I’m constantly wondering if I care too much or not enough, if I’m being objectively critical or just plain miserable. This book is not here to be cathartic, but enlightening.

  Above all else I wondered if this book should consist of entirely new thoughts or if I should just take some of the most provocative, interesting and well-received pieces from before and weave a strand of new thinking to join them up. In the end this book is a mixture. I started with a blank sheet of what I wanted to say, a holistic narrative to best aid companies in uncertain times, but embellished with some extracts of some of my best-performing work. This book is a new journey, occasionally touching upon some familiar territory on the way. I hope this feels reassuring, rather than repetitive.

  To be sure that you can follow this journey, I’ve done my best to structure it very clearly. There are three themes to this book, covering the past, present and the future. Each has three chapters covering different lessons, ideas, theories or viewpoints. In addition to these nine chapters there is a chapter to introduce the ideas I’ve explored and to provide a platform for understanding, as well as a final chapter to focus what has been discussed and to send you on your way.

  A fast-changing world

  I’m sure that those living through the Agr
arian Revolution must have waxed lyrical about ‘these fast-moving times’ and those visiting the first thrusting skyscrapers in early 1900s New York would without doubt have felt an incredible sense of excitement and acceleration of life. But it is this current moment that feels like the greatest time ever to be alive. We are in an age where existential changes are sweeping through many aspects of the world around us. Where incredible things we once could barely dream about are quickly becoming possible. Where the lifespan, health and wealth of the population of the world improves far more quickly than we ever expected. Where the cost of batteries and solar power and other foundational elements that will propel mankind into a new era are plummeting faster than even the most optimistic projections ever thought. These are times where optimism should be rife and where excitement should be palpable. We should in every industry wake up fresh and energized and inspired by this – but it rarely feels that way.

  We see the rise of fake news, striking workers threatened by Uber or robots or zero-hours contracts. We see companies declaring bankruptcy at an alarming rate or mergers of the hopeful with the hopeless. Countless columns spread the fear of what artificial intelligence (AI) will bring to us, people talk about taxation on robots and the idea of the universal basic income. We explore challenges that seem different to those before them, more pervasive, more substantial, more existential. AI is threatening to take the jobs of ‘people like us’. From the rise of wealth inequality to increasing political intolerance or religious extremism, we can feel the world creaking under change.

  It feels like a planet on a threshold. The proximity of abundance and health abruptly rubs against despair. While the developed world seems to look confidently into the future, much of the West seems uncomfortably drawn to nostalgia and the comfort of the past. The tensions between optimism and sheer panic are everywhere. The internet should be killing ignorance, spreading tolerance and empathy, and yet feels weaponized to foster extremist views that feel normalized. Is globalization a good thing; is migration helping diversity; is freedom growing; is the power of Google, Apple, Facebook, Amazon (GAFA) becoming too great, too fast, and are they beyond the reach of government now?