• Nick

Uber, the horseless carriage and the revolution

A couple of weeks back it was tough to get around quite a few big cities because the cab drivers were protesting – at an app.

The app makes it easier for customers and cabs to find each other – thereby reducing poor utilisation, and (here’s the anxiety) massively reducing the barriers to entry for becoming an effective cabbie.

This is existential stuff for the incumbent taxi industry. A medallion for a taxi in NYC costs around $1m – so fighting off new types of competition is a kind of survival instinct. They’ve had a bit of success – chipping away at use of GPS, electronic hailing etc. But change is coming.

A hundred and thirty years or more ago there was a similar backlash against motorised, horseless carriages. “Road locomotives” were swiftly regulated, as they were a menace to pedestrians, and speed restricted to 4mph in the country and 2mph in towns. To help everyone understand just how dangerous they were each had to be preceded by a walking man waving a red flag.

Danger – here comes the future

Reinvention – just too slow

I’ve spent much of my working life trying to help big old corporates negotiate and navigate change. Business – especially transnational business – has immense power. Power that Governments or NGOs don’t have. Business can do good stuff – if it has the intent, it almost always has the resources and reach. In the right hands, with the right focus, big business can achieve astonishing positive impact: socially, economically, environmentally.

Not as some kind of philanthropic, CSR gesture but as a result of the core operation. It is possible to design positive impact into the operating system of the business so that good stuff happens in a sustainable way – not as the result of some kind of corporate beneficence. The power that – say –  GSK has to address disease, or PwC has to create sustainable economic systems, or Microsoft has to transform education – is unrivalled.

I have always felt that it’s not just an opportunity for these businesses – it’s an obligation. If we’re going to get to a world that is sustainable in every sense it is business that will be the primary driver.

That’s my theory.

But in practice it’s not easy to make happen. And the more I think about it the more I think I’ve been tilting at the wrong windmill.

Let me explain. I’ve had a few hilarious job titles in my life, none more so than “reinventor”. The techniques have morphed over the years – and thankfully the lexicon too – but essentially the aim is the same. Get inside the corporate and change from within – some innovation here, a bit of leadership there, a new unit, a funky new sub brand. And also some new measures – stuff like “triple bottom line” – because for some reason we still believe that ‘what gets measured gets done’.

For years then I’ve seen impact measured as a hoped for outcome – something that happens if the stars, the leadership, the purpose, and the organisation align – then maybe, just maybe, some good stuff happens.

But – let’s be honest – not for long. No matter how good Antony Jenkins might be, or how smart (and beloved) Andrew Witty is (and they are both super good) they are both battling to change from within the system. And sooner or later the system resets, the default mode reestablishes itself.

Don’t waste time fighting the existing reality, don’t bother “reinventing”

Buckminster Fuller – he of the geodesic domes – sums it up:

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete”

It’s only now I really get what this means – what the world needs, what business needs to do can’t be achieved by popping some new propositions or innovations into the existing model. If you want to make change, real lasting change that is fast, you have to start from scratch.

That means new business model and new business system. Design the outcome into the system from the start. Don’t just append a meaningless measure and hope that the organisation delivers it. If we don’t design multiple stakeholder value creation into the model from the start, if we don’t align the incentives thorough the system, if we don’t tackle governance – what we’re trying to achieve will fail, will reset back into the old system.

Every industrial revolution has ushered in a new corporate form. The resource revolution we are now looking at (read this – it’s great) is no different.

Invention not reinvention

Automotive/mobility is a space that needs new thinking and new forms. The environment’s suffering, the economics of car production and ownership are absurd, and customers want mobility more than they want to own cars. There’s a big need for new, more resource efficient, forms of mobility.

And I suspect that the only way that will happen is through new entities – Google, Zipcar, Uber, Localmotors, others – rather than by popping new tech into the old model. Tesla’s great but it’s not a whole system redesign. Electric vehicles like the Leaf are great but they are new tech in the old system. Two cheers but not nearly enough.

The Nissan Leaf – by far the world’s most successful electric car but a microscopic fraction of Nissan’s business

In every category that’s ripe for “reinvention” it’s the new, nimble players that are making the running. And the reason is simple – they can do things the incumbents can’t. They don’t have the legacy investment in the old that makes it so tough for incumbents to innovate.

Elephants can’t dance.

But start ups can. They’ve got the most powerful change tool in the world. A blank sheet of paper. And specifically, those start-ups that are applying the principles of new tech companies to the old industrial models are the ones that are going to change the world.

Which is why – after 20 years of tilting at corporate windmills – I’ve come to the conclusion that anyone with a keen interest in making the world a better place should be focused on those early stage start ups that have a clear purpose. The old corporates may have the intent but they just can’t bust out of the existing model.

Because start-ups with purpose have discovered the magic formula. Purpose + blank sheet of paper = new product + business model + corporate form = sustainable impact and sustainable business.

It drives focused innovation across the whole system – with real design intent – to achieve something that benefits us all. It’s faster. And it works.

And for people like me, veterans of fighting the existing reality, it’s exhilarating.

Vive la revolution.

#uber #stefanheck #Tesla #Zipcar #localmotors #riversimple #resourcerevolution #innovation #nickkeppelpalmer #mattrogers

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