Written by Peter Hinssen

On the eve of the nexxworks initiative Disruptive Innovation Day (Brussels, November 18) our cofounder Peter Hinssen sat down with its international keynote speakers - Eddie Obeng and Simon Mainwaring - to chat about innovation, the future of digital and how existing companies can survive the era of disruption. This here is Peter’s ‘fireside conversation’ with Eddie Obeng.

A collaborative approach to business education

Peter: A lot of decision makers still see technology as an enabler, as something that will give them a competitive edge. They do not seem to realize how digital has completely transformed our environment. They seem blind to the fact that they ought to adapt their structures, management, hiring processes, innovation approaches,… in order to stay relevant.

Eddie: That is exactly why I ask my audience questions like “How would your life be different if mankind had invented the internet BEFORE the internal combustion engine?” or “How would your life be different if mankind had invented the smartphones BEFORE the wheel?”. I want them to realize that they are underestimating the impact of digital. That adopting a “little bit of tech, here and there” will not suffice when an entire market has flipped.

Peter: How do you see companies using the power of digital in order to comply with this complete paradigm shift? To survive in an environment that has taken over all the characteristics of a network: a flat – not a hierarchical – structure, transparency, open forms of collaboration, permanent sharing of information and an increased speed of transactions. One that is still completely alien to most traditional companies?

Eddie: They need to look beyond the ‘opportunities’ that digital presents towards the ‘possibilities’ it offers. There’s a big difference between the two. The first is about using channels like Twitter to communicate with your 10.000 customers. Which is good, of course. But that’s just about cleverly adopting digital tools and everybody is doing that. What organizations ought to do is look beyond the obvious, to where the opportunities are still unclear. That is how you should innovate for this era of disruption.

Peter: You believe something similar when it comes to ‘learning’, I believe? That corporate education should not so much be about gathering more and more existing information and mastering what others already know and do. But that it ought to be about the new, about the paths that were not yet taken.

Eddie: Yes. Learning should not be about keeping up with others. More information is not always better. We are already drowning in information. Organizations should learn to do new things instead, things that they have no clue how to do. And they will know what exactly, by looking for patterns in behavior. Instead of just teaching employees to repeat what others have done before them, they ought to ask questions Like “These days most people have small computers attached to their bodies or carry them constantly. What does that mean for MY organization and how can we take advantage of that?” That is exactly why I am much more partial to a collaborative, interactive and problem-driven approach for business education, rather than using the traditional case method or the one where a renowned professor imparts what HE thinks is important, from his own research.

Peter: We are both fervent believers in flat organizational structures. Social networks are pure meritocracies. Us playing, working, living in them, has resulted in the flattening of our environment. Networks are ‘allergic’ to titles: only accomplishments and the sharing of valuable insights count. One of the biggest downsides of a hierarchy is that it slows processes immensely down. Not really an option in the fast moving market environment we are dealing with. How do you try to explain to old school companies that this kind of levelled structured is in fact the only way to manage the workforce?

Eddie:  I just try to show them the absurdity of a pyramidal company structure. Because it is really illogical how juniors cannot learn, act and innovate without the consent of a senior person. The only reason that we do this is because we assume that seniors always know the best answers. That might have worked in the Renaissance, when the only “computers” we had were our brains and it was still possible to know and store most of the then existing knowledge in your head! The longer we lived the more we knew and because new knowledge replaced old knowledge at a slow pace, it stayed relevant. So yes, older people would probably have had the best answers then. But now with innovation, the knowledge we have and need today, might no longer be useful tomorrow. So often these days a junior uses a word or  asks a question to a senior colleague who has no clue as to what he is talking about, and probably even does not dare to admit this.

To avoid these kinds of nonsensical situations, I firmly believe that ownership should always remain in the hands of the person doing the job or coming up with the new idea. I do realize that such a flat company culture is a major step for a lot of companies. They still do not realize that “being in control” and “having control” are two very different things. Cherishing a controlling company culture will not allow you to control the future of your company.  On the contrary, like you said:  controlling  slows everything down, including innovation and that is something you really want to avoid in today’s fast moving environment.

Peter: So how should organizations of today innovate according to you? So many of them have trouble in reinventing themselves, their products and their services to match their environment. A lot of them often get side-tracked by sustainable innovation. They stick to the same offering and only make it better and thus more expensive. They seem obsessed with their margins - “we are losing clients to the competition so let’s make our margins bigger” - which is frankly dangerous in a market increasingly dominated by the sharing economy. In the economy of “fast, cheap, always different and good enough”, you do not survive with the expensive “recycling” of your brand.

Eddie: I always tell my clients and audiences to look beyond their average customers.  A lot of them make the following mistake in reasoning: “I get the most money out of my average customer, so he is the one I should listen to, and since people do not like change, I will keep giving him the same, … but better”. What they should be doing is keep a close eye on the outliers: those customers that tend to annoy us, because they keep demanding things from us that we do not yet offer. They are the ones that should be the real drivers of our innovation, not the ‘loyal’ customers. Of course, we shouldn’t kid ourselves: companies need to reward, dialogue with and listen to the average customers as well, but those are completely different processes. They are not the ‘fuel’ a company needs for radical innovation, the kind you need to survive this era of disruption.

A second important driver is “smart failure”. You need to reward smart failure if you want innovation to happen. This will sound like madness to a lot of companies, but there is no other way. You cannot expect people to experiment and come up with radical changes when you punish them each time they make a mistake. Those bold pioneers that keep coming up with new approaches, services, products, business models… will obviously fail often. You need to give them an environment in which they feel safe to take a stab at something different. For me, failure is smart when you have done everything in your power to maximize success: by collaborating, sharing information, experimenting, removing risks, failing early and moving on,… If you don’t do it like this, and if you keep marching on the same “safe” track, then you have “dumb” failure.

Peter: Thank you so much for the riveting conversation. I really look forward to your keynote on Disruptive Innovation Day. As a conclusion, what is the one advice that you would give to corporates of today?

Eddie: I would tell them to stop acting rationally in response to a world they recognize and understand but which no longer exists.

Register now for Disruptive Innovation Day on www.di-day.eu to be inspired by the keynotes of Peter and Eddie! Seats are limited and only a few are left! 

About Eddie Obeng - @eddieobeng

Described as ‘The remarkable Eddie Obeng’ by TED Global and ‘The Rockstar of Business Education’ by Duke Corporate Education, Eddie is a world class speaker and business educator. For over twenty years, Professor Obeng has passionately researched and explained the emerging complexity and ambiguity in our world and invented pragmatic solutions. The Financial Times described him as an ‘agent provocateur’ whose constant refrain is ‘Making it happen’.

He founded the world’s first virtual business school, Pentacle (1996) and developed and has and established QUBE, the world’s best collaborative-learning environment for executives and managers.

Obeng is the author of ten books which offer insights into the most effective ways to develop business strategy, adapt for change, lead, innovate and organise in a complex, fast-changing world, including “All Change!” a Financial Times best seller and New Rules for the New World. His work on delivering disruptive change is award winning.

Watch Eddie speak at TEDGlobal here.

More information on Disruptive innovation day, Eddie Obeng and his keynote “Evolve, Dominate or Die” can be found on www.di-day.eu.