Transcript for:
Disruption vs. Transformation: Key Concepts in Business Strategy

[Music] hi Shannon Waller here and welcome to the inside strategic coach podcast with Dan Sullivan Dan you said something today which I found very interesting and provocative and you said that disruption is a bad thought which I find a very cool way of saying something so what do you mean by disruption and why is it a bad thought well I was reminded of this because of the Facebook blow up which occurred just a very short time ago in mark Berg ended up having to wear a suit and and be in front of Congress in the United States to explain what he was doing with people's personal information and you know what kind of safeguards they had I did a little bit of digging and I went back to the original mission statement of Facebook their internal mission statement which is to move quickly and break things and my feeling is that if you have that as a mission statement at a certain point you have to buy a suit and actually appear in front of Congress because I believe the dominant law which has governed the business Marketplace for the last certainly the last 30 years is mores law which is the speed with which Information Technology evolves you know that it doubles every two years or so in speed and the price drops by half that's one law and I'll talk about that a little bit so what I've really noticed is this sort of narrative that has gone along with the technological age that we live in which is that every industry in the world is going to be disrupted people are going to be thrown out of work companies are going to be going bankrupt and my feeling is to have that as a goal that you're going to disrupt other people's lives is a negative goal uh contrast that to another mission statement which is Apples which came out of Steve Jobs what's the mission statement of Apple it's to create beautiful technology that people love using and if you contrast move quickly and break things with we create beautiful technology that people love using there's a 180 degree difference between what that does internally for what you think you're doing as a company and it also has to do with your image in the marketplace are you a negative gradually and I think in a very short period of time I think within about a year the whole image of Facebook has gone completely negative they're now seen as a major problem that causes disruption not just in Industries but that it's disrupting individuals personal lives in their day-to-day existence it's almost like an addictive thing that people are caught up and the damage that can be done with Facebook in the hands of negative people is really people are starting to see that and I've never heard that about Apple you know Apple you get to do all sorts of neat things with technology and I think it has to do with what's in the mind of the founder and what's in the mind of the people making the technology or any other product or service in the marketplace so I think if you have a negative mission statement that consists of destroying things that eventually it'll turn around on you and you'll get destroyed by your own mission statements so I never use the word disruption as regarding strategic coach I use the word transformation and what transformation means is to create a bigger better form that does far more good and you actually improve people's lives with whatever you're offering in the market Marketplace and that you simplify things you make things more enjoyable in people's lives so I've become just totally resistant to all the claims that this is going to disrupt this and this is going to disrupt that and instead put all the emphasis on transformation that this will transform this this will transform that and the other thing is I don't associate it with solving problems I put more emphasis on creating Solutions I don't want anything that I do in strategic coach to be negative and destructive I want everything in strategic coach to be empowering and I want it to be transformative so that's my thought about this so all this talk about you know when we introduce this device in the marketplace it's going to destroy these companies and it's going to throw this many people out of work I think you're setting yourself up for bad comeback so there's a law Moors law which everybody knows but I'm a great believer in uh Newton's third law so this is Isaac Newton and Isaac Newton you know essentially created the basic rules of how the physical Universe performs but one of them is for every action there's an opposite equal reaction so if you do a negative action out here what's going to come back at you is an opposite and equal negative action coming from the other direction so if you create good well you won't get an opposite action you'll just get gratitude and you'll get appreciation but if you create negative disruptions what you're going to get is that you will get disrupted to the degree that you're a disruptor this is such an interesting conversation to me so some of my thoughts about this is disruption is sometimes a byproduct of things changing or transforming but in my experience it's also often very temporary you know people are resourceful companies are resourceful Industries are resourceful and when you focus on the disruptive conversation you actually miss the incredible number of byproducts that are emerging out of the the good that people are striving to do like apple for example and I have a teenager we have two but one of them is going into the marketplace and I am very clear that jobs that she could be preparing for right now will not exist in the four or five years when she's in the marketplace and there'll be a whole plethora of of roles and opportunity that don't yet exist that will come online so being super stressed about disruption is actually just a very narrow minded approach to this whole conversation and it's very polarizing when you think about disruption and the whole transformation thought is wonderful because it means that you are almost reusing or repurposing things and making them better and as you said more empowering and simpler for people and that's always a good thing our goal as humans a lot of times is to transform our circumstances into something better so that to me is a much more interesting and positive approach to this whole process that we see a lot with technology it can happen with a lot of things well I think it psychologically it's I'm just taking it down the road that there's a whole culture that has formed around this Narrative of disruptive technology and that the whole society is going to be divided into winners and losers and the winners don't care about the losers you know this eventually gets translated into politics so if you've conveyed an image a certain sector of society that doesn't care what happens to the other side of society then the real disruption will be that those people probably have more votes at the polling Booth we saw that I think that's shown up over the last couple of years in Britain and the United States where what you've told us very clearly is that you don't care we're experiencing your disruption and you don't care that we're accepting your disruption so guess what at the polling Booth we're going to set it up so that your power gets taken away from you and the last thing you really want to do where there's a possibility for really growing economics and you know the creation of all sorts of solutions is for government to become the main player okay and that's what happens if the people who are really smart really inventive convey to the rest of society that they don't care what happens as a result of their Innovations well that power is going to be taken away from you politically and that's my Newton Law you know for every action there's an opposite and equal reaction so my feeling is that I get an image a lot of the Hightech field that they're like gains of really really mean spirited adolescents who are out breaking things you know I get a picture of that they're doing graffiti on walls and they're breaking windows and they're kicking over you know garbage cans and everything like that egging houses but there's no value creation proposition instead of putting the emphasis on the good that their technology is doing they're putting the emphasis on who we undermining who we destroying who were you know making their lives miserable and I there's a concept you know out of Hinduism of Karma and my feeling is you got to be very very careful what you put out into the world because if it's negative it'll come back to you as negative and and I want to see the Technology field start talking about transformation rather than disruption you know transformation involves everybody's input okay and transformation has to be a very participatory activity because people have to agree to go along with a new possibility of a bigger better future so my feeling is that you know I've been around technology I've been studying it for 45 years and after 45 years this mindset that our Purpose with this technology is to disrupt other people's lives I think it's bad karma it's certainly not a healthy purpose it reminds me of our concept Dan of freedom from and freedom to freedom from is a rebellion you know it's acceptance of the status quo and saying wanting to smash it down so it's a very reactive standpoint and freedom to is very very creative and as you said inclusive and participatory it's harder it takes more work it takes more Independence you have to be really clear on your unique ability and what you want for someone but it's that same kind of dynamic between focusing on what's already there and destroying it as is the the disruptive Focus versus creating something that's even better and new and different and creates more possibilities for people which is what the transformational mindset does so your coaching is to focus on the transformation go past that minor disruption and really focus how does new value get created awesome and if the new value is really going to be transformative it has to include everybody you know and we have to give thought to that it's like people are saying there's going to be self-driving vehicles and these self-driving vehicles are going to put 13 million truck drivers out of work and it's almost said with a sense of pleasure you know isn't that great and I said why don't you create another technology where you can actually show people an easy fast way to develop new skills and capabilities in the marketplace and make this widely available to other people and I think what the disruptiveness of a lot of technology is is that the present state of most educational institutions is actually geared to producing people who are disruptors and not producing people who are Transformers that's really interesting talk more about that yeah well you know you look at the elite universities it's to produce Wall Street bankers and produce high-tech innovators and these individuals can introduce something brand new which they can basically from a financial standpoint they can clean up really quickly and they can go and they can live in Walled communities and they don't have to pay any attention to what their work does and I don't think they'll be remembered well besides it's doing real damage so my sense is that if you have this Narrative of where's the transformation for as many people as possible that's different from how do we create a disruption where a small group of people can get a big payday and everybody else is thrown off balance or made uncomfortable I see this coming I think we're getting past a particular stage where there's this sense of almost contempt for the people who can't adjust to my disruption and I said you're going to get repaid for that your name is going to be blackened for this and eventually you won't feel any sense of satisfaction or enjoyment from what you've created you may get unbelievably wealthy but the wealth is not going to give you any pleasure so this is it it's a kind of a adolescent there's kind of an adolescence that I noticed to the culture that is being represented by Silicon Valley especially right now you know that who cares what happens to other people you know we're out to feel Superior to other people and we're smarter and who cares if they can't accept the change that we're unleashing on the world and I just think it's bad karma I think that's a great Point you're observing of History really is that will come back to bite you and the world actually has quite a powerful voice and so taking into account sooner rather than later is by far the better strategy yeah and the other thing is that gradually people are going to reject what you think is the promise of your technology and it's kind of like I remember Amazon was saying that they're going to start delivering packages by drone well the FAA in the United States the drones cannot go higher than 500 ft so the communities across the United States you know there's lots of communities like we live in the beaches the beaches can put in a rule in Toronto in Toronto that the drones cannot come below 400 ft okay and there will just be legislation which will prevent this technology for bothering us same thing happened with airliners right now if you use the existing Tech technology airliners could go 3,000 M an hour but vast majority of companies said not Overland you can't and the reason is because of the breaking of the sound barrier breaks glass and it's very uncomfortable having that so the fastest airliners today are no faster than the fastest airliners 50 years ago and the reason is we won't put up with this disruption of boom boom you know the airliners going over in this down goinging so there's a way that we stop things and my feeling is don't have the I'm not sure the airliners you know they were out to disrupt people's lives but it tells you that the people will rebound and there will be this reaction and we won't allow it we just won't allow it so if you show no concern for what your creation is doing in the world except to pay off a certain number of people then you'll get bitten by your own creativity great Point Dan thank you so thank you for sharing what the bad thought is and also what the good thought is yeah be a Transformer don't be a disruptor done I love that thank you Dan great conversation