‘If you're on the wrong path, find the right one’
INTRODUCTION
You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new.
This was one of Steve Jobs very many quotes, you might have seen it on a funky firms corridor walls or a fridge magnet, but it's a statement that remains as true today as it ever has. As consumers, our expectation levels continue to increase. This is fed by a wealth of new providers, innovators, disruptors entering the market to give us what we want. Sometimes we're not even aware that we wanted it until it was available. Online shopping is a good example, smart phones another. If we take the automotive industry as our example then we can see that Tesla has been, and remains, one of those disruptors.
Not so long ago, you could've looked at the websites of a number of car manufacturers and they pretty much would have been highlighting the very same features and functionality; safety and security, comfort and convenience, performance and efficiency. The only real differential between them was the manufacturers longevity and brand awareness. Ford had been market leaders for almost a century. They had a base of loyal ford customers that had been satisfied with the slow incremental improvements over the decades. Then, in the last decade, Tesla came along to shake up the industry. They had an ‘unconventional’ leader in Elon Musk and a long-term vision of manufacturing autonomous vehicles. This was a quantum leap for the industry, and the industry wasn't ready and unsure how to respond. Fast forward to April 2017 and Tesla's Market Value overtook that of Ford.Footnote 1 Mark Fields, the CEO of Ford at that time confessed that:
…as little as four years ago, our approach was aligned with the thinking of most automakers today, which is taking incremental steps to achieve full autonomy by advancing driver assist technology. This is not how we look at it today. We learned that to achieve full autonomy, we'd have to take a completely different pathway.
One of the big differences between the two companies was that Ford was a longstanding automotive company learning to be a technology company, and Tesla was a start-up technology company learning to be an automotive company. Another difference was the leadership styles and agility to change.
Despite Mr Fields announcement of the change of Fords direction, in May 2017 the Telegraph reported:
Ford's chief executive has been ousted after less than three years in the job by a recent entry to the car industry as the company races to keep pace with the sector's rapidly evolving push into the world of technology.Footnote 2
LEADERSHIP STYLES – BLUE V RED
Why would a brand such as Ford dispense with the services of Mr Fields? In the book ‘The Innovators Method’, Nathan Furr and Jeff Dyer suggest that in the early stages of product development the product maturity and revenues start low as there's a high degree of uncertainty. At this stage ‘Blue Management’ is required. This involves understanding the markets requirements to facilitate lightweight experiments to confirm that the direction or solution is correct. Then its about rigorous testing, trial and error, failing fast, learning, adapting, doing. All this is at speed and this results in great growth as the Blue Leader delivers what the market wants, now.
Revenues and product maturity increase, scaling up occurs and the product will move into a period of Low Uncertainty. The skills of the Blue Leader now become redundant as there's decreased product development, decreased experiments, decreased learning – so here it changes to ‘Red Management’. It's now about rigorous analysis, avoiding failure, keeping the client at arm's length, considering, thinking.
I would respectfully suggest that when you look at how companies and organisations are run, the leaders generally fall into one of these two categories. In the case of Tesla and Ford, which category would you place their leaders. You could say that Elon Musk is the archetypal blue leader that's constantly pushing and innovating, and that Mark Fields could be the safe pair of hands for the business as usual attitude of Ford at the time.
That's not to say that one is right, and one is wrong. You could argue that Tesla could do with the execution skills of a red leader, however, I think it's clear that Ford have suffered because they didn't have the innovation skills or vision of a blue leader. To remain at the top, we must have the ability to switch between red and blue management styles and much of this is due to the speed at which technology has changed our worlds.
THE IMPACT OF TECHNOLOGY IN TODAY'S WORLD
The impact that technology has had on us runs a lot deeper than just with brands and it is empowering and enabling businesses across the globe. If we look at the number of patents applications in the US (see figure 1), we see that there was a negligible increase between the 1960s and the 1980s, but as we approached the late 80's it started to soar. With exception of the two crises, one in the 1990's and then the other global financial crisis here from late 2007, we can see that this increase continued.
Figure 1. Total US Patent Applications. Source: US Patent and Trademark Office “U.S. Patent Statistics Chart, Calendar years 1963–2012.”Footnote 3
Although this graph only takes us to 2011, we can confirm that there has still been a year on year increase, and at the end of 2015 the figure had risen to over 629,000 applications. Also, in 2015 the GEM Global Report stated that 100 million new businesses started up globally. That's a staggering 11,000 new companies every hour. Finally, factor in the 2015 Asymco data regarding adoption rates of technology and you'll see that although it had taken over 40 years for 80% adoption of Air Travel, later technologies such as microwave ovens, MPs players, HDTVs, social media, smart phones and tablets have all achieved vertical adoption rates. Often reaching 80% adoption within two years. So, what does this tell us? Well, Reed Hastings, CEO of Netflix, suggested that we define entire epics of humanity by the technology they use – Bronze age, Stone age and now the technology age. Human kind grows out of these eras and we are therefore witnessing a new epic with new companies, new ideas and innovations, providing products and services that clients are adopting almost immediately.
HOW COULD THIS EFFECT THE LEGAL INDUSTRY?
The professional services industry in general has shifted enormously in recent years. In the Accountancy world, we only have to turn on the TV to see advertisements from the likes of Intuit QuickBooks advise SMEs that they can achieve ‘Accounting on the go’ by using the worlds number 1 online accounting software.Footnote 4 On their UK website they claim to have 3.4million customers globally using QuickBooks, and although I'm not suggesting that all their clients previously used to use Accountants – I bet a high percentage did. This is just one of many accountancy software companies that have hit the market recently, and I'm not for a moment suggesting they're doing anything wrong. Far from it. They're acting like Blue Leaders. They understand their clients and they're giving them what they want, in the way they want it. Look at The WOW CompanyFootnote 5 as a hybrid in this space. They're a new breed of Accountants that use technology to make them smarter and more relevant. Using Xero software makes them more efficient and they need less accountants and this allows them to focus more on the client's best interests rather than just filing their accounts.
That's how technology is evolving the accountancy sector, but Mark Cohen wrote last year in Forbes Magazine that,
The medical profession offers a glimpse into law's future; physician time is now leveraged by machines, process, other professionals and paraprofessionals. Physicians perform only high- value tasks that warrant their differentiated professional expertise, skills, and training – machines and/ or other human resources do the rest.Footnote 6
Is this all doom and gloom? The end of the legal world as we know it? I don't think so. William Treanor wrote that “Technology is creating areas of practice that did not exist 10 years ago”, and that's true. But there will be new entrants, competitors, disruptors to the sector – just as there are in the accountancy sector, and I'd suggest that those least prepared will be most at risk.
HOW COULD DISRUPTION EFFECT YOU AND WHAT CAN YOU DO ABOUT IT?
If you Google ‘Disrupt or be Disrupted’, I'm positive that you'll be garnished with a vast range of valuable insights from people far smarter than I. But in the case of a Law Firm, Boston Consulting Group and Bucerius Law School wrote an interesting paper entitled ‘How Legal Technology will change the business of law; January 2016’. In this paper they proposed that the traditional law firm of today, and indeed, yesterday, was a ‘Pyramid Structure’ (see figure 2) where juniors progressed to seniors who in turn, progressed to partner. I don't think I have to explain how most law firms work within this paper. BCG and Bucerius Law School then went on to propose a new structure for the future law firm, and this was called the ‘Rocket Structure’.
Figure 2. Law firm of today. Source: The Boston Consulting Group & Bucerius Law School; How Legal Technology will change the business of law; January 2016.
As Mark Cohen had suggested, the proposed structure (see figure 3) showed less ‘lawyers’ than the traditional pyramid model, with them flanked by Project Managers and Tech Specialists. This structure was surrounded by partnerships and tech solutions that the law firm could then leverage. This model would ensure that the law firm could benefit from the best of breed when it came to technology and partnerships and would benefit from real business leaders within the business.
Figure 3. The law firm of tomorrow. Source: The Boston Consulting Group & Bucerius Law School; How Legal Technology will change the business of law; January 2016.
On a less controversial note, we don't just have to look at this on a macro level. There are many micro changes we could adopt to best prepare and position ourselves as individuals and for our respective firms, companies, organisations.
Be flexible. I'm not recommending you take up yoga or the like, just try and adopt a growth mindset. Instead of hiding from challenges, embrace them. If you receive criticism, be thankful and accept it as constructive feedback to help you grow. Make yourself open for learning new things. If you find yourself saying ‘but we've always done it this way’ let it set off an internal alarm to wake you up and appreciate the risk and negativity of accepting that belief. Learn faster, open your eyes and recognise your surroundings. Is there anything you can change to help you get to your desired outcome sooner? I'm not a boxing fan but I love the story of Muhammed Alis change of strategy in that famous 1974 ‘rumble in the jungle’ fight against the undefeated world heavyweight champion, George Foreman.
The story goes that Ali was 4–1 underdog, and his team had decided that the only chance he had to beat the champion, in the heat and humidity of Zaire, was to come out hard and attack Foreman from the start. If he couldn't get him down early, he didn't stand a chance. When Ali entered the ring, he realised that the ropes around the ring had absorbed the moisture and were more pliable and at that moment changed his whole strategy. He goaded and baited Foreman to hit him, then leaned back on the ropes and allowed Foreman to pummel him. As he wasn't planted to the ground, the energy from the incessant blows was dissipated through the ropes. Foreman eventually tired himself out and Ali pounced, and knocked Foreman out in the 8th round. Now, I know that very few readers will be boxers, or even boxing fans, but there are lessons here for all of us.
In a similar respect, look for associations and connections. If you're part of a process, can it be replicated elsewhere? Can you replicate other processes from other departments? Can you take a lesson from one part of the business to apply to yours? With the launch of the iPod, Apple had taken its storage to over 2,000 tracks when typically, consumers were used to around 250 tracks. This wouldn't have been a success for Apple if the user didn't have a way to get to their desired track. The competition at the time used a simple up and down button that would move them one track at a time. This wasn't practical if you wanted track number 1734! One of Apples employees solved this issue by considering ‘what else needs to get to a big number quickly and easily’, and he thought of the rotary lock. The Apple iPod Click Wheel was born, and Apple dominated the market.
Technology is changing our personal and work lives, and the sooner we embrace this the better. This doesn't mean we have to learn to code - leave that to the coders. But we can, and should, be aware and open to the opportunities that this new age affords us. There are tech partners out there that can help you become a disruptor without having to change your spots. If we continue to do what we've always done, we could follow the same path as Blockbuster, Toys R Us, Maplin, HMV, Kodak, Polaroid and so on. Each had opportunity to change, to partner, to grow, but they didn't recognise the danger of sticking with what they knew and they certainly ignored the behaviour of their own clients.
WHAT TYPE OF ORGANISATION IS YOURS?
There's a school of thought that there are ultimately three types of business in the world today. Irrelevant, Momentary and Relevant. Irrelevant companies are the likes of Blockbuster and others named above and can be classed as Business as usual. No attention is paid to current or future customers requirements and there's zero listening or observation. Momentary businesses are in a safer zone, but they just compete for the moment. Following trends and reacting to the market. Relevant organisations compete for the future. They're engaged and inspired by people. They're adaptive and proactive to shape meaningful experiences. They generally fall into the disruptor category.
The word disruptor can be frightening but understanding how businesses who are viewed as disruptors have achieved their success is crucial to your own success. As an example, I would argue that whilst Amazon is viewed as a disruptor to the high street, realistically, it is those using Amazon as a market place who are the true disruptors. It's an example of how the technology has enabled and empowered all of us. Bringing goods and services to market has never been so easy.
This is exactly how I view companies like InfoTrack – a disruptor offering a platform for law firms to disrupt the, generally accepted, way of doing business. Their agile approach and ability to switch between red and blue management styles means they can deliver services that enable and empower you to do everything differently. That means you remain relevant and relevant businesses like Apple and Amazon are now $1trillion companies.
IN SUMMARY
We don't all have to be blue leaders, but if we can acknowledge and recognise their traits, it can only help. Just be aware and keep your eyes and mind open. So many opportunities have been missed because the status quo was too comfortable. Nolan Bushnell was Steve Jobs' first boss when he designed games at Atari. Naturally Jobs approached Bushnell for capital when he launched his new business Apple Computers. “(Jobs) asked me if I would put $50,000 in and he would give me a third of the company. I was so smart, I said no. It's kind of fun to think about that, when I'm not crying.” Nolan Bushell, American Electrical Engineer/businessman.
Apple and Amazon are now the first two companies to achieve $1 trillion valuations. What else do they have in common? The have blue leaders and they've both disrupted markets, in fact, the key to their success is that they provided disruptive tools for markets. It didn't happen overnight, but they both followed the same process. They think big, start small and learn fast and there's no reason each one of us can't follow that same philosophy.
