as business models will continue to be disrupted and access to technology will increase, along with the ability to develop, launch, and scale new products and services in an ever-shorter time span.
From the cotton spun by the British in the 1760s to the digitization of the twenty-first century, continuous innovation has been necessary for the unicorns of their day to emerge, spearhead change, and prosper. As human societies move forward, so do their businesses. Change always creates opportunities. There’s no telling exactly where this hyper speed of exponential change will lead us, but if we don’t act now, we’ll miss out on the greatest opportunities of our lifetime.
Innovation is urgent, time sensitive, and always present. It’s how we’ve adapted to change and succeeded over the past two and a half centuries, and long before. As with every era behind us, there are new business, social, and economic issues that must be tackled in the Fourth Industrial Revolution, and just as the challenges and opportunities of the past had to be met, so do those of today. If you want your organization to survive, remain competitive, and prosper, then you can’t wait to start taking action. Otherwise, you’ll be forgotten, passed up by the next in line, or blindsided by disruption, because today’s unicorns could be gone tomorrow. In short, innovation never sleeps, and we can’t sleep on it.
Still, despite the obvious need, many organizations lack a clear focus when it comes to innovation or fail to align their efforts with market realities. They “kind of” know that they “must innovate,” yet they are not sure “where” and “why.” Sadly, leadership is missing the big picture as well; most executives don’t even know where their innovation priorities should lie, and by some accounts only 14 percent of executives feel “highly confident” that their organizations are prepared for the changes taking place in the Fourth Industrial Revolution.4 Many of us simply don’t know what to do.
So where do we begin?
Don’t Join the Dying Breeds
You’re probably thinking that, as a rule, “don’t join the dying breeds” is pretty much self-evident. Who would want to be a casualty of the Fourth Industrial Revolution, and wouldn’t most leaders do all they could to avoid such a fate? It’s a good point, but the truth is it doesn’t always play out that way in reality, no matter our best intentions. Let me give you a simple example: We all know that exercise is key to living longer—no one would deny that. Yet the US weight-loss industry is currently valued at $72 billion and growing.5 If we actually followed the advice of our doctors and exercised diligently, we wouldn’t be spending so much on meal replacement programs, pills, and the latest, greatest diets. The US is one of the most educated nations on earth,6 but this hasn’t protected it from an obesity epidemic.7 Despite knowledge about the benefits of exercise, and an overall desire to live longer, nearly 40 percent of Americans are obese.8 Even though we know better, we can’t seem to help ourselves; many companies that have receded into oblivion are no different. Maybe they made the effort, maybe they didn’t, but one thing is for sure—they have gone extinct, some along with their entire industries, even when they, too, “knew better.”
The ever-growing list of recent former industry pioneers that have quickly disappeared in this new era is well-known and well-trodden: AOL, BlackBerry, Kodak, Myspace, Motorola, Nokia, Polaroid, Sears, Toys “R” Us, Xerox, Blockbuster—it continues on and on. You can still visit the last remaining Blockbuster in the world, in Bend, Oregon, which has become a popular tourist attraction, but that’s it for what was once the world’s largest video rental chain.9 This fate could have been avoided had the company’s focus been on innovation, allowing leaders to see what was happening right in front of them and what was to come. In 2008, Jim Keyes, the CEO of Blockbuster at the time, told the Motley Fool, “Neither RedBox nor Netflix are even on the radar screen in terms of competition.”10 Of course, Keyes is not alone.
Many years ago, a recruiter asked me to consider interviewing for a small Palo Alto startup called Facebook. I laughed it off. The concept of social media already existed, and Myspace—a popular social media network at the time that once surpassed Google as the most visited website in the United States—seemed to be doing incredibly well and meeting all its customers’ needs. Friggin’ Myspace! When the platform ended up losing most, if not all, of the music that its users uploaded in the twelve years between 2003 and 2015 (which amounted to 53 million songs from 14.2 million artists), it was almost like nothing happened.11 That was because by 2015, Myspace had fallen so far into obscurity, no one seemed to notice the loss of so much un-backed-up data—this was the company that I thought would make startups like Facebook completely hopeless.
Shortsightedness stifles our ability to stay relevant and contributes to a mindset that lulls us into believing that as long as everything is generally fine now, it’ll be fine in the near, or distant, future as well. When it comes to the business environment, today almost always gets in front of tomorrow. Part of human nature is that as we grow older, we may be wiser (though maybe not always), but we also become self-centered and pay less attention to the changes happening around us. The same idea applies to most leaders: even when change is on the horizon, they resist it or brush it off, as if they will find shelter in this “proven” strategy that has failed so many companies before. We often don’t take the time to ask “Is change coming?” let alone to answer this question. Instead, when a major shift takes place, we tend to respond in one of three ways.
The Three (Worst) Responses to Change
The first response is to ignore it, the good ol’ “stick your head in the sand and hope for the best.” Perhaps no better example illustrates this tactic than the lack of timely response from brick-and-mortar retailers to online commerce. As online sales took off, the days of “hanging out” at the mall, casually shopping from store to store with a quick bite at the food court, started to fade quite quickly. Mall and department store shopping, once seen as quintessentially American pastimes, became two of the earliest casualties of the Fourth Industrial Revolution. Some stores that still inhabit these cavernous pieces of antiquity have diversified with online sales, but many retailers don’t have a long-term transformation plan outside of this move, which may already be too little, too late. The retail apocalypse is only beginning: a 2019 report from the investment bank UBS found that with each 1 percent increase in online retail, up to 8,500 physical stores will need to close, leading to 75,000 stores being shuttered by 2026.12 Sadly, instead of investing in new business models and capabilities, many retailers are just praying they aren’t one of those 75,000.
The second response to change is another classic: shame it. Instead of actually doing something when change is afoot, many of us invest our efforts in resisting it by saying “it’s only temporary,” “it will never work,” or that any unproven initiative, idea, or endeavor will be as dead as a doornail in no time. We poke fun or call its validity into question. We even ridicule it or try to laugh it off. In fact, if it’s innovative, expect people to put it down.
For generations, groundbreaking innovations in music that challenge the norms have been targets of this negative, shortsighted response. Take jazz, for example. Known as “devil’s music” when it first started to gain popularity and notoriety in the 1920s, its critics included Henry Ford, the New York Times, and Thomas Edison, who said the music sounded better when played backward.13 As the ’20s came to a close, sixty communities throughout the US had laws in place barring jazz from being played at public dances.14 Of course, jazz’s popularity only increased over time and it is now respected as one of America’s most cherished art forms.
Still, a hundred years after Edison scorned the genre, even its fans and performers put down innovations within the scene itself. Take the music industry’s response to one of my favorite performers, Kenny G, the innovative multiplatinum-selling musician who has been ridiculed mercilessly
