Welcome, Frans. First question – what is the Medici Effect and what has it got to do with innovation?
So, when I wrote my first book, The Medici Effect, it refers to what
happened in Florence about five hundred years ago and it comes back to the Medici family that was able to sponsor creative individuals from lots of different disciplines, sculptors, architects, painters, philosophers, Leonardo da Vinci, Michelangelo, from all over Europe even as far away from China actually, and they brought them to the city of Florence where they were able to break down the boundaries between the different disciplines, between the different cultures and ignite what became one of the most creative eras in Europe’s history, the Renaissance, and so when I look at the Medici Effect what I’m looking at is how were they able to create that effect and what I wrote about was how were they able to create that effect and how can we do the same, and at its essence, what it essentially says is that diversity drives innovation because it was through all these diverse perspectives, all these diverse backgrounds that these people during the Renaissance were able to borrow and build upon each other’s ideas to break new ground. Well, not only can we do that today, it is a fundamental fact of innovation, it’s a fundamental driver of innovation and so the Medici Effect refers to this fundamental driver and that diversity drives innovation.
And when you say diversity, I guess, you’re not talking so much about biographical diversity. Is this more sort of cognitive diversity, the different disciplines and the different ways of looking at the world or are you talking about both?
I’m talking about both. So, what’s interesting about this and this comes up quite a bit, I talk about perspectives from different industries and fields and disciplines but also perspectives from people who are in different cultures and countries, different gender, people with different experiences and it turned out, and this is one of those things that have become increasingly important as my work in this area sort of got deeper and deeper, a tremendous amount, far more than I believe the vast majority of executives themselves have any inkling of really, comes from a demographic diversity. The experiences that we have, wherever they happen, however they came about, drive a tremendous amount of perspective shift, and in the book, I spent quite a bit of time talking about fields. This is one of my favorite examples when I wrote this book and still today many years later is, is an architect that borrowed ideas from termite ecology to design this extremely efficient building in Havana. It uses 90% less energy than any of the buildings around it using these termite design principles and that is a clear case of taking one concept and bringing it into another field. But in a company, an organization, the most powerful intersections come from when different perspectives meet and those perspectives are able to build upon each other and collaborate and find new avenues. So, it’s both.
And subsequent to writing the book, you’ve worked with companies like Nike and Avantis and Disney and a number of companies. What are they doing in order to unleash or nurture the Medici effect? What are the kind of things that leaders do, or HR managers do, or line managers do? Can you give us some examples?
Yeah, it’s a great question because, actually, the instinct is to, even though you might be intellectually aware of that this works, the instinct is to do the opposite. The instinct is to build silos, the instinct is to focus, the instinct is to surround yourself with experts, with people that are like you, so you have this whole thing which gets increasingly reinforced and so the real challenge is, one – first of all, to understand the power of using this diversity of perspective, the diversity of backgrounds to your advantage, but once you figure that out, the organization you are in tends to have erected incredible barriers to actually pull that off and in order to break through those barriers you have to find clever ways to unleash this diversity unless this idea courses through the organization. So, for instance, I’ll give you two examples that you can find from this, Disney and Nike. Disney, they’ve become quite adept at understanding how to take ideas and concepts from one part of their enterprise, one part of their empire and leverage it into something else. They even have a group called the Synergy Group whose real job is to do that. They look across all of their activities essentially looking for ‘Can this play over here? Can we use this, or can we combine this over here?’ and what was fascinating about that is, of course, that their business is highly dependent on IP and their ideas have tremendous power. One piece of successful IP, the movie Frozen for instance, can, if done right, play in lots of different angles, lots of different places, in a park, in a TV show, in products and so on, and so ultimately when they are able to look across and find ways to make these types of combinations they can keep creating new stuff. At Nike, going back to another definition of diversity which is more along the cultural line. We started work with them about ten years ago and actually I share this story in the new edition of the book, and they really wanted to look at a new model of innovation. So, there’s disruptive innovation, you could talk about blue ocean, you could talk about crowdsourcing. There is any number of different approaches to it but how would they be able to use diversity to drive it? And here the focus, the emphasis of that was across demographic lines, countries, cultures, people from different backgrounds, gender and so on, and what that led to was that increasingly managers, leaders started looking, ‘How do I diversify my teams? How do I successfully bring in other perspectives either by the team members that I hire into it or by people that can rotate through it or by partnerships I can create with others in it?’ So, it’s really impacted how they think about their whole talent and everything that follows.
I’d love to come back to that in a minute, that talent question, but just going back to the Disney thing, you know one of the big biases, I guess, you get particularly in high performing companies is the ‘not invented here syndrome’, you know, ‘We can do it better than anyone else’. Any thoughts on how companies like Nike, like Disney, actually overcome that because it is real even though it’s a bit of a cliche as well, right?
Yeah, I do think it is real and in fact, the more successful a company has become, the more this type of thinking tends to spread, and I think people can get confused with this thinking. One piece of the thinking which might be possibly quite sound is really around values and cultural norms, and any organization that is successful, that’s hard-charging and driving, needs to kind of have that. There’s a sense of who we are as an entity, there’s a sense of what is important for us as an entity and what we value, and that’s one thing, and you can sort of see an organization become resistant to innovating those things but then again that isn’t necessarily something you want to be innovating all the time. It is something that should be able to lead you through times good and bad, but then, on the other hand, you have a completely different thing which is ideas, concepts, and I think people can confuse those. Ideas and concepts, being able to create intersections with completely different industries becomes critical and successful organizations do that either by having a healthy way of introducing new people into the mix, so there’s a rotation, they are very eager to revisit people who may have worked with them in the past, they go out, they do something somewhere else and now they come back in again-
The so-called boomerangs, right?
They’re boomerangs, exactly. If fully leveraged boomerangs can be incredibly powerful. I like to say – one of our clients right now has a new Head of Strategy, I just met her I think it was on her fifth day on the job and we were simply talking about the fact that probably some of the most impact that this person could have is going to be over the next six months because this person has not yet bought into everything that is local or within her new organization and she’s looking at it with fresh eyes and it’s just more irreverent. Over time, of course, you become more careful, you understand the game better and so you’re just not naïve even about introducing new ideas. So, organizations should truly capitalize on their new hires. This is when they will have the best shot at introducing new concepts and ideas.
Which is, well, not ironic but you know the classic book about the first ninety days and people talk about the first hundred days which is the honeymoon period but what you’re saying actually is that’s the point at which the individual has these very fresh perspectives and these unique ways of doing things and they should really be brought into service by the company as quickly as possible before they get, I won’t say beaten out of them but certainly aculturalized out of them before they get absorbed into the mother culture if you like?
I think it’s an incredibly impactful time. If capitalized, and it has to be capitalized upon by both parties, in other words, it’s not enough that the incoming person is eager to do it because those ideas may not be received well, this new organization also has to be able to take advantage of it. But certainly, in our company, The Medici Group and the firm that I created, in those first six months, we really tried to get as much insight as possible. That doesn’t mean of course that this person can’t be highly effective afterward. Now the person has been indoctrinated essentially to what a company is doing is now you’re running, now you’re executing but it’s a different type of thing. You’re no longer as mindful of introducing new ideas as you may have been earlier.
So, I’m curious about this. So, what specifically do you do – someone comes in from the outside with background, with the expertise that you recognize is strategically important for your organization but you’ve also got friends, you’ve got a culture, you’ve got processes, you’ve got a way of doing things and you don’t want this person to go in and blow them all up or disrespect them. What do you do as a leader to ensure that you stop that person from being prematurely homogenized or aculturized if you like?
So, this really gets to how do you take an innovative idea and how do you actually execute it within an organization, and so I think it holds true in that situation but also true throughout really the lifecycle of an organization. How do you take something that doesn’t neatly fit in with the organization’s dominant paradigm and how do you make that thing, this new idea, possibly stick? And obviously, there’s been a lot of thinking going on about this throughout the years and so some of this stuff is fundamentally true, which is it is very difficult to know what’s going to work or not work with an idea hence it follows very naturally that you have to test ideas. That means that if an idea and this is particularly true of new ideas, in other words, I don’t think it’s a good approach to say ‘I have a new concept. Now we’re going to run with that’ but ‘I have a new concept. Are there ways that we can test this? Are there ways that we can incorporate this? Are there clients that might be’ – in our case, we ask questions – ‘Are there clients that have been with us for ten years for instance, are they open to trying this tomorrow in a small way?’ I mean, that’s always extremely exciting when that happens. ‘Here’s a new way of looking at it, haven’t really thought about it this way before, where can we put this to the test and let’s not waste any time really doing that piece’, but what I’m hesitant about is, ‘here’s a new idea and now that needs to be going to overhaul how we do this’. Not good, and I don’t think it’s good for several reasons. Not good for culture but it’s also not good because you know don’t know if it’s going to work so it makes no sense to actually go all in on that.
Yeah, yeah, yeah, and it’s fascinating because this is an area that we’re increasingly aware of is – you know, I’m an anthropologist by training and you know, how long does it take before someone who joins a new culture actually starts looking at the world through the same lens of that predominant culture they just joined and it probably is somewhere between three and six months but I guess it varies?
Well, here is actually where – you know, these ideas around innovation which aren’t really – I mean, the way I’m viewing them, this is a new way of thinking of innovation, involving diversity. Now, there’s another term that comes up a lot when people talk about diversity which is inclusion, and actually, the way we think about it, The Medici Group, gets to this question that you’re asking. So, here’s what tends to happen. You will have a person that is different that enters a team. Now in fact, actually, what you often find is this person comes from a different part of the business if the business is large enough, so, actually they may come from a part of the business that came through an acquisition. They’re looking at things a little differently, but be that as it may, this person enters the team and they’re different. Maybe they’re different functionally, maybe they’re different demographically, maybe it’s the only woman on the team, so you have different ways of thinking about what that difference is. OK, so now you’re part of the team. The first thing that the person’s going to do generally speaking is trying to figure out ‘How am I successful on this team?’ which means ‘How can I adopt the norms, behaviors, ideas quickly?’ and the first thing the team does is conveniently ignore everything about what makes this person different in the first place.
If they’re lucky. They might even bully but that’s a different story.
Right! So, the problem is clear. Now the solution also then becomes equally clear. Being able to find a way to have this person remain with a fresh perspective for as long as possible becomes an imperative, and what we have found is the most straightforward way to do so is actually bring in to the degree that it’s possible another person that is different and actually, we talk about a quantum leap type of difference between literally, and I’m talking real numbers, literally having one person different on a new team then two. One person different in a team will lead to assimilation far faster. Two that are different, and they may not have to be different in the same way they’re just different from the dominant idea of that team, they are able to more strongly support each other, defend each other in that difference and the team themselves, the dominant team can’t ignore their difference as easily. [IF1] Much of the work we do is about enabling these different types of intersections to happen and when they do happen also ensure that they’re sustainable.
Yeah, and just building on this, the thing or one of the things that I found fascinating about the book is that when you have a diverse team, actually, the execution happens far more quickly because and I quote ‘you’ve got more pathways.’
Just say a little bit about that because it’s very profound I think because I had never made that connection.
Just put it in context, right? In the past, let’s say five to ten years, there’s been a tremendous amount of work done around the notion of agile, being agile, being lean, pivoting, and what all of these things really get to is that, again, innovation is unpredictable. So, don’t buy into the notion that you’ve got it right the first time. You have to maybe switch course and pathways, so people talk about that but they don’t talk about really as much as how are you going to be agile? How are you going to be able to pivot? And what we’ve found particularly in a corporate context is that diverse teams are faster and they work much faster with even fewer resources and the reason why is that if you have a team, a homogeneous team, let’s say a team of experts that all kind of view the world roughly the same way, when they start discussing ‘How are we going to make this idea happen?’, they will all sort of arrive at the same conclusion which might be that we should talk to ‘Paul’. So, Paul is the main guy for this and then they go to Paul and Paul’s busy, Paul’s really busy and now things are slowing down and anybody just listening to this that works for a corporation recognizes this situation over and over again. And then, ‘OK, well, maybe there’s an opening in three months, there’s a window here’ and so you’re kind of restructuring your timelines. A diverse team may come up with ‘Paul’ but they actually have six, seven, eight other pathways to make this first initial step what we call an SES, a small executable step. So, it’s not just Paul. Actually, you could work with this person over here, that group over here, there are any number other pathways in which one could take this first step to test the validity of the idea and that includes even outside parties. Who should you partner with to try this? And the more diverse the team is, the more possible pathways exist, the more surface area you have, a sort of facing inwards organization and outwards to your community of clients and partners and hence-
Sorry, keep going.
Well, hence diverse teams tend to just be much faster and able to move with fewer resources.
Yeah, yeah. Well, I suppose you actually articulated this idea of the ecosystem which is at the heart of what we’re doing far better than I can. It’s about having the breadth and the depth of the network that you can tap into, the strength and the robustness and the diversity of your ecosystem will be a resource for you moving forwards far more quickly than if you’re in a monoculture where you’ve got a pretty fragile ecosystem that you’re surrounded by.
That’s right, and this is a fractal type of idea so it’s true for organization but it’s also true for division, it’s true for a team, it’s also true for you as an individual. As you, as an individual, think about how you have built your skill sets, your relationships, your networks, what areas do you have to tap into when the path that you chose no longer works? You know, the more diversity you have in that the more possibilities you will have to move in a different direction. So, it works at sort of any level of granularity.
Brilliant, brilliant. So, let’s switch gears, Frans, because we’ve got a couple of other areas I’d love to cover. At the heart of The Medici Effect are these ideas of intersections and you talk about intersection hunting-
Can you maybe just say a little bit about that and then segueing into the four strategies that you propose for breaking down some of these associative barriers or actually strategies for better intersection hunting. Can you just say a bit about that?
Well, so, let me start over because I’m just realizing now that the term intersectionality in the book, we use it in the consulting firm and I’m going to take the more modern term we’ve adopted so let me start over. With intersection hunts, the question is how can you quickly introduce a new fresh perspective? You may not have time to hire a diverse team if you need something today, tomorrow, something like that, and what we encourage people to do is to either look for sources of inspiration that are very different from the ones that you normally look at, and I gave a piece of advice to the CEO of a very large media company when there were large media companies. He’d just heard my keynote and said ‘This is a terrific idea. What can I do now about it?’ and I started talking about some tactical strides. ‘No, no, no. I mean, literally over the next hour?’ ‘OK,’ I said.
You got him, you got him.
Yeah, so I said, ‘What are you doing over the next hour?’ ‘I’m going to the airport.’ ‘All right. When you get to the airport, walk into a newsstand and select a couple of magazines that you would never ever read and then use those magazines as sources of inspiration to create new insight into the challenges that you’re facing.’ And actually, I came back to do another keynote not much long after that and when he was introducing me he was saying he’s reading more wedding magazines than ever-
And the point he was making was that there are all kinds of things in how they are looking at challenges and problems that I can now begin to apply to the ones that I’m facing and they’re fresh. These are not the same things that I would have found looking at my normal sources. So, intersection hunt means to actively look for a field or a discipline or a person or a culture that doesn’t necessarily make immediate sense and then through that make a connection. Try to connect it to the issue, opportunity, challenge that you have at hand and of course, you can do the exact same thing with people particularly, in a company. I have many times seen people who don’t even necessarily know who is across the hallway and even if they know they don’t really interact with them. We have a tool, I guess you can call it, where we say, ‘Look take ten minutes, go to them with an issue that you’re facing and talk to them for ten minutes to get their perspective on it.’ As long as they are different maybe quite different from who you are they’re going to look at it in completely fresh ways and in the best case when I saw this play out were these risk managers for a bank. They said, ‘Look this is great but across the hall, we have marketing and marketing doesn’t really understand any of the stuff that we do’ and I said, ‘Try it.’ And they did, and what was fascinating is, of course, marketers think about risk management they just think about it differently than what the division of risk management does in the back. And so, people just become so stuck in their very definition of risk management, and I mean they stayed there for like half an hour because they were getting a completely different take on how to think about risk.
Yeah. Why is this so difficult?
Because at the heart of it we like to believe that success comes from some sort of rational choices that we make, rational decisions, logical decisions. Illogical decisions are based on our experience. We have a fairly muddled approach to how we think about rationality and logic because it’s based on what we’ve seen work in the past and then we extrapolate and that becomes the stand-in for logic or rationale. But in fact, what this asks us to do is to talk to people, interact with ideas and concepts that don’t necessarily make immediate sense, at least not in the very short term and that’s the piece that holds us back but here’s what’s really amazing about it. Once you start thinking about the world this way, you start constantly, sometimes every day, finding the value of not taking the instant short-term approach, of instantly going to the person that you know knows the answer but maybe trying somebody else. Once you have done this enough, it becomes a part of your overall first approach, then behavior, then being, and the truth is that if you want to be successful in innovation in a large corporation you cannot be thinking short term all the time, you have to actually train yourself to think beyond that and this is a way of getting on that training. If you are not able to take ten minutes to talk to somebody who you’re not sure is going to provide value to you right now, well then how are you supposed to ever be able to look beyond the quarter.
Yeah, yeah. And I just wondered, the CEO who grabbed you after your keynote, presumably that’s the outlier, I mean, what’s the most common challenge that your audience has around your material?
Yeah. So, first, it has to do with accepting the unpredictability of innovation. Everything stems from that. The Medici Effect really stems from this fundamental idea. Every trick that can be used in the book gets used so that executives can try to lock down innovative success. Maybe they analyze things over and over and over again which gives them more numbers but truthfully not more certainty maybe they say well we’re going to put a lot of money behind it as if that is not going to guarantee success but obviously if that was the case, every single venture capital firm would just put a hundred million dollars behind every idea they see and they’d be successful. Clearly, they don’t do that because it’s not a successful approach to innovation. So, they’re looking for ways to lock down predictability. That is really the fundamental challenge. So, they’ve got to overcome that. That’s number one. Number two – they have to overcome their instinct as to who knows what, who is smart, who is valuable, who do I need to talk to? And in my experience the only real way to do so is really through experience so by exposing executives to repeatedly seeing and experiencing the value of these different perspectives, the value of exploring intersections, they themselves begin to develop a new intuition on this and it falls really, through the leadership model that we have and we believe that most leaders rarely when they have to make a call, go back, pull out a book flip to page eighty-six and look at what the framework is there, and work off an intuitive sense of what has worked in the past and what hasn’t, and inject new ideas, so we try to basically increase that level of intuition for leaders and that comes from that type of stuff. And then there are organizational barriers all the time. Incentives are aligned to really have you focus on this one thing so why would you ever then focus on something else? You have a whole structural sort of network of things that becomes really challenging to break through. So, you have the individual level, you have the organizational level, both of which can be very challenging.
Yeah. Now, I think you touched on it but the question that was going through my mind is, so let’s say you get the CEO on board and he’s now reading wedding magazines versus Harvard Business Review and his intuition is being developed and he’s talking to people in different ways, what can you do to actually be sure that this reaches deep down into the organization versus hitting the first buffer and disappearing in a puff of smoke?
Right. So, a CEO thinking this way is one thing, and they may tell some others about it but in order to be successful you have to actually be in an environment that thinks this way. It doesn’t make sense if you are eager to connect with somebody else, but that person doesn’t even understand why you’re doing so, and so in order to be successful, you have to expose this type of thinking through all layers. Even if a CEO tells people to think this way, or a senior level executive, they’ve got to discount that because what people say is ‘Well, did you do that to rise in the ranks to get your position?’ and he has to say ‘No, I did something very different, I just listened to what my boss wanted and I did that’ for instance. It’s a time-honored tradition. And so, the way we’ve been successful at it is that we have created lots of exposure points where people can not only understand the heart of the Medici Effect but also put it practice using all kinds of tools. What happens when you go into a situation and you decide to reverse assumptions about that situation? You’re looking at how the assumptions you make – we just did this last week with a huge medical device company – what are the assumptions you make about this particular sector? And then just get rid of all of those assumptions, what is left? And what happens is that it naturally forces you out of your comfort zone into another one so these are the type of tools, tactics that force you into the intersection and unleash the Medici Effect. So, yeah, those are elements, the intersection hunt is another one, rotating people on your team. So, maybe you can’t actively or instantly introduce new people to a team but can you have somebody join the team for the meeting and then lead? We find great success in being able to do so because you borrow somebody for half an hour or an hour, as long as it leads to contributing their insights you gain this fresh perspective, and yeah.
Wonderful, wonderful. Frans, I mean, we could go on for some time but I know time is short for both of us. So, three questions that we discussed beforehand, forgive me for not sending them in advance but the first question, what have you changed your mind about recently?
So, I think that’s a great question and one that should be asked frequently. Here’s one thing that stood out in my mind is that even when executives inside of corporations truly understand these ideas, truly understand, and I’m talking about the notion of trying something in a small way, quickly, so again insight and then maybe pivot, this particular notion, they can’t execute it in that way because they’re so used to thinking big. Big numbers, projects, so it becomes a massive contradiction to attention. And I used to think the way to overcome that is to have them maybe experience it, so they can be part of a team where they are doing this and indeed it is helpful to cement their understanding of that, but when it comes to successfully introducing this way of thinking in an organization, you still have to do it in a way where they can talk about millions of dollars or hundreds of millions even billions of dollars, numbers that they’re comfortable throwing around. It doesn’t make sense to talk about an idea that is started in a small way and you only put ten thousand dollars in. Nobody’s really impressed by that but if you can talk about an approach to ideas and maybe launching multiple of these and you can do so in the scope of ten million dollars or a hundred million dollars, all of a sudden, people get interested. And I’ve really had to rethink my entire approach to leading this conversation because I’ve been so steeped in this notion of moving fast, small numbers, but it doesn’t get the traction simply because every day they deal with numbers that are far, far larger. So, even if a ten thousand dollar test was extremely successful they still can’t understand what that means into their day to day, and so I have now been able to, and we’ve been looking to, and the way we talk to our clients is ‘All right, now you get the basic principle, let’s get into the world that you live in so you can actually move the needle’ and that world is run by millions and billions.
Interesting. What’s interesting here is we need to be careful, or, I, certainly need to be careful, that different perspectives – I mean, perspectives all have value for the individual and clearly if an executive is used to dealing with billions of dollars then that’s a perspective that serves them well in that organizational context and we can’t impose our perspectives necessarily on their perspectives or we do so at our own peril.
We do, and part of it is empathy.
OK, so, let me walk a bit in your shoes, right? I mean, I think that becomes critical when in particular, you’re coming from a leadership perspective like I do where people are asking me about what to do, yes, but to stop and then put yourself in the other person’s shoes and say ‘How is this received now? How are they able to take these ideas and instead of talking about maybe one idea and pivoting, maybe you should talk about fifty ideas and pivoting?’ and then this all of a sudden, now they can work with that. That’s the level of scale that they’re comfortable with and it took me quite some time to get from that, from the first point to the second.
Great. Second question – where do you go to get fresh perspectives to help you solve problems or make decisions? What’s your equivalent of picking up a wedding magazine at an airport?
So, the true answer is-
And I do want the true answer, Frans.
Yeah, and the truth is, I see literally everywhere, so, instead, the more interesting question for me is ‘How do I choose to spend the next couple of hours of the day to increase the number of unusual perspectives?’ So, for instance, I don’t really have much routine in what I do. I know that a lot of books, a lot of approaches will tell you you need to have routine, you need to have habits. I try to break those. Maybe one day I’ll walk to the subway, I live in New York City, maybe the next I’ll take a car, maybe the next time walking. We have our office on the twenty-sixth floor. I’ll take the elevator to the twenty-third floor and then I’ll walk up three floors. And what this is all doing is exposing me to new perspectives, new insights, I’m running into people that I wouldn’t otherwise have met. I’m allowing myself – last night, I had dinner with a former editor so the comments, we were chatting about something and he was on his way to something else while I was – normally I would have just said ‘Were great and I’ll catch you later’ but actually what happened was, further along, our kids had already gone to sleep at a point and met a whole bunch of other folks. In many ways, one can view this as a social type of interaction. For me, it is actively looking for intersections, actively saying ‘Where can I learn new things?’ and perhaps the biggest place, the one thing to now give you something more specific comes from TV shows and movies. I will look at a movie sometimes over and over again to try to apply a different lens. Why is this happening? Why am I feeling this way? Why did the plot unfold? What could the director have been thinking? What was the actor thinking? What was cinematographer thinking? And then every single time I get an answer there I say, ‘What can I learn from that?’ So, movies have become sort of my wedding magazines specifically.
As you were saying that, Frans, I mean, we all know the story of the Netflix algorithms which are designed to, I suppose, reinforce ‘You like this, therefore, you’re going to like that’ but the connection is based on similarity versus diversity so, you know, we all live in our own little bubbles and I finish one series and Netflix tells me to watch something else which is very, very similar and I guess, this is part of the world were living in where a lot of our recommendations are driven based on similarity versus diversity, I suspect?
I think it’s a regressive type of concept. I’m no longer on Facebook because it became obvious to me that the inputs, the ideas, it just kept on feeding on itself and so despite the fact that Facebook, for instance, to pick, I mean, it’s the same idea sort of with Netflix, it has an incredible opportunity to introduce you to new concepts, new ideas, new things. Of course, the business model suggests that they should do the opposite which is to just keep you kind of clicking, clicking, clicking, doing the same thing over and over again and so I would say to anybody who’s listening to this, be wary of these seemingly virtuous circles because they’re more really like doom loops. That’s at least how I’m thinking about it. They get you into this one narrow point of view of the world. Now, there’s a lot of talk about this from a policy and political standpoint but the same is true for how you view your industry. The same is true for how you view your model of leadership. Over and over again we get it reinforced, strengthened when in reality we should do the exact opposite and the world has never had a more different set of ideas going on than it does now, it’s just we actively shut them out through AI and algorithms.
Yeah. Well, with the active ideas, it’s also easier to connect with all those active ideas than ever before as well but yet the industry is, as you say, making false connections through these algorithms.
That’s right and even what seems like – that’s right. There’s another piece around it as well. What is an idea that goes viral? Have you noticed how today, say over the next two or three days, there’s going to be something hitting across the internet that both you and I will watch and process all at the same time? Which means that now, yeah, we have something to talk about. ‘Oh, did you see this event? Did you see this incident? Did you see this video?’ which is great, it fosters this commonality. But what happens is that you’re again setting yourself up for not being the one with a different perspective. You end up having the same perspective. And so, it’s the AIs that keep us in the same bubble but it’s also the instant spread of a particular concept that can just become dominant, and again now people look at it and go – you can imagine a viral video that a thousand marketers around the world look and go ‘This is what we need to do next!’ and now a thousand marketers are working on it at the same time as a source inspiration for the next thing. You’re not really setting yourself up for success. In fact, in my mind one should be careful using that as a source inspiration simply because it’s been viral, you have to look at other places.
Yeah, yeah. And as you say to reinforce the point, this is not just about people sitting at home on Facebook with a beer in front of them, this is what happens in the business world but it’s just disguised and dressed up in a slightly different way.
That’s right, that’s right.
Yep, wonderful. Final question – what’s been your most significant failure or low, Frans, and what have you learned from it and how have you applied that learning? Anything in there?
Yeah, for somebody that views every failure as learning, views every failure as success, as long as you’re still in the game to keep trying every time, it’s a question that I struggle with simply because of the perspective shift. I don’t think that most failures should really be viewed as failures. That said, I believe that I developed a blind spot a number of years ago where what I was focused on too much was business models, concepts, ideas, as I was building The Medici Group. And the one piece that was kind of left out of that was, for lack of a better term, the human side, was what does it mean to bring someone on that may be having all of these pieces to the puzzle but they may have a different value system, they may have a different perspective on things, on how to even do things. It’s easy to paper over those things because they hear the coming of all this other stuff that is really tremendous but if the value system is off, you really set yourself up for a massive failure and that’s indeed what happened. I had somebody on board that just looked at the world differently and I think it set us back for quite some time and I carry that with me now. It’s really been a much deeper understanding of how important it is to be mindful of that aspect as well. That’s just as important as any business model or any sort of concept.
And I relate to you. I’ve made every mistake in the book on my entrepreneurial journey but one lesson which my co-founder brought on board is, there are only two things ultimately, we should be looking for in a new hire. One is do you rate them, i.e. are they good? Are they world class? And number two is, do we trust them? And often you can find one of those, but very rarely do you find both of those. But I fall into the trap where, yeah, I trust this person even if they’re not very good or this guy’s great but I’m not sure I trust him. Either of those is fatal for a startup, they’re fatal for any organization, of course.
They are, but I love the simplicity of that rule. I think it’s extremely true for any startup, and you know what, we get tempted to abandon them simply because we may need somebody right now and if they can just do the job, yeah, we go for it, but there will be a price to be paid down the road.
Wonderful. Well, very, very, very grateful, Frans, for your time today. I’ve learned a lot, preparing for it and talking to you, and really very, very grateful for your openness and also for your insights because this is a fascinating area and it sounds like you’re having a great impact in a number of organizations. So, very, very grateful for this.
Thank you. I really enjoyed this podcast. One thing to note, we didn’t talk about this, I just realized, but I just realized now that you tend to contextualize an episode, right, before they come on-
Yes, I do.
And this book was re-released by HB Press last year but the original edition of it came out in 2004 and so, HB Press rarely re-releases any books, and so why did they rerelease this one? And the reason why was because they felt it is even more relevant today than it was when it came out, and it’s really taken on sort of a new life because of that. A bunch of more languages and translations, I think it’s twenty, twenty-one languages now that have a translation, and the world that we live in right now is one where everything is converging between various industries and technologies and diversity is more talked about than it’s ever been before, and innovation, of course, is the frame in which everything is played up against, so, you have these ideas and so when you’re contextualizing it, it could be interesting to note that I wrote the book as an evergreen idea of a book but man, if it’s not exceptionally true right now that the Medici Effect is playing out. I think that has been one of those things that we’ve seen full force.
Yep. And it’s interesting, my story, I picked up the book about two and a half years ago and read it on an airplane and enjoyed it and put it away, and there was some really good stuff in there but I wasn’t really – and I began to think, well, I want to get you on the show and I know we’ve been in conversation for some time but I couldn’t find that book, Frans, so I went on to Kindle and bought a new one and it resonated so much more partly because of the work I’ve been doing but also partly because I think the intro chapter really contextualizes it and brings it forward in a way that is, you know, it’s almost a different book even though it clearly isn’t, it was for me anyway, so-
Yeah, that must be the reason, as you say, for those reasons. And I think the other thing that’s fascinating is, I’m a bit of a reader as you might have imagined, but if I look at the Leonardo da Vinci bio which I’m working my way through at the moment, it’s all there in the first chapter about what the Medicis were doing and what Florence was like and why it was such a hotbed of not just economic innovation but also cultural and social-
Yeah, fascinating. As they say, there is nothing as powerful as an idea whose time has come, right?
That’s right, and I wrote another book called The Click Moment which, when you get a chance, you may want to take a look at that. It is a book that didn’t really hit as well as The Medici Effect by any measure, but it did among very senior executives and it still has such a huge impact on that, because it’s a book that I just took a far more provocative point of view on the world. I really go all in on the notion of serendipity, randomness, the unexpected, and certainly the comments I’ve been getting on that has been much more fresher, more practical take on it than say somebody like Nassim Taleb or there are a few others where I’ve obviously been in that space as well, and I’m really sort of saying that ‘Look, most of the ways that things get done is a post-facto story.’ People take these stories and put them together very neatly after the fact. Beforehand though, it doesn’t look as neat, and I think you’d really enjoy it. I think it’s particularly a book for people that have read a lot of business books, it tends to come across as very fresh perspective and so I would recommend you taking a look at that as well and seeing what resonates for you.
Yeah, Lucky or Smart. This is-
Is it Bo [Peabody], who built-
Built an internet company even though he didn’t – or his software developers built one company while he thought they were building something else. He realized-
He was smart enough to realize he was being very lucky and basically the business exploded then he sold it, then he cashed out, did the options the day before the Nasdaq crashed and he invested it in something else that went – you know, it’s a really interesting book because most of us, if we’re lucky enough to have some success we think we’re very smart but as you said earlier on in the interview, luck plays a major role in it.
Oh, my God. I think it has an outsized influence and the people that are actually smart, if you will, are those that expose themselves to more possibilities to get lucky, on the one hand, and second, their ego allows them to recognize when they have been lucky just as you described right now. Like ‘Wow, it didn’t go the way I expected it to but I’m OK with that, I can change what I’m doing. I don’t have to be as wedded to these set of ideas as I have been in the past’ and you can capitalize on it. I want to check this book out. Basically, the whole ‘click moment’ as is built around that, and what I do is I take many of these well-known stories and I completely deconstruct them because I think that many of those stories are really built to prove a particular point for the author-
Retrospectively, as well.
Retrospectively. So, yeah, once you know the outcome you can pick it up, but you know, trying to pick it beforehand it doesn’t make as compelling reading because most of the time when you pick a story beforehand, it doesn’t amount to anything.
I will check it out.