F From the time we wrote our very first resumes, we've been taught that experience is one of our greatest assets. After all, it’s through experience that people gain depth of knowledge in the work they do and the industries they serve. Ultimately, experience is tantamount to assets on the balance sheet, in that the more there is, the greater the value.
But is this still true? Do years of real-world experience make you more valuable? Does it make your team and your company better equipped to manage and take advantage of the rapidly changing world around it? Or has the speed of technology and innovation changed our reality so much that the deeper our experience, the deeper the hole we dig?
The Vertical Integration of Self
Vertical integration has been a popular business strategy for nearly a century. From the time industrialists started purchasing companies that produced the raw materials needed to manufacture their products, to the current investments by companies like Apple in their own retail environments, deep integration throughout the value chain and sales channel has its benefits. But it also has its weaknesses, and primary among them is reaction to change.
While a standalone retailer can quickly switch out the products they sell to meet the ever-changing demands of the consumer, a vertically integrated retailer has to continue to sell the products the rest of their company is producing. This "handcuffed" state only worsens when entire technologies change, especially in today's world where change can manifest so quickly.
Imagine being a vertically integrated retailer of typewriters facing the technology shift to word processors and personal computers. To survive, you couldn't just start selling computers. You'd have to change over every link in your chain — there's a reason why nearly all are out of business today!
Personal business experience is very similar to vertical integration, especially when confined to an industry.
Instead of purchasing or building assets throughout the value chain and sales channel, we are building knowledge. A seasoned clothing retailer will know a lot about the raw materials, manufacturing and wholesaling aspects of their industry. A supplier of beef will similarly know a good deal about farming products, animal health and possibly even food trends.
But what happens when we face significant change, like the typewriter retailer?
Most of us would rely on the assets we own (i.e. our industry knowledge and skills) to determine a way forward. But how much did deep knowledge and experience of typewriters help industry leaders adapt to personal computing? Not much. In fact, many of these individuals fought the change simply because everything they knew kept them in the typewriter mindset. Essentially, it was their own personal experience that confined their thinking and spelled out their eminent demise. In times of significant change, deep knowledge and experience may cause us to rely on antiquated thinking to solve new-reality problems — and that doesn’t serve us at all.
A great example of this experience-driven fixed mindset can be seen in new learnings from Kodak's painful demise. As a new article from the Harvard Business Review surmises, it wasn't that Kodak was blind to the digital camera trend, nor was it that they didn't take it seriously enough to invest in. They actually created the first digital camera in 1975, and spent billions developing a line of them. They were even progressive enough to understand that photos would be shared online, acquiring a photo sharing site called Ofoto in 2001 to simplify photo printing.
Instead, Kodak’s true downfall was their inability to look past their years of printed-photo experience and realize that online photo sharing was the new end-game, not just a way to expand their enormous printing business.
So how do deeply experienced business leaders overcome this trap?
While recognizing the potential pitfalls of your industry experience is a critical first step, it doesn't change the essence of how we think. As such, it's important that we embrace new practices to proverbially "shake things up." Here are a few you can try:
- Embrace Outsiders - From a personnel standpoint, our natural inclination is to recruit the best and brightest minds our industries have to offer. While there’s no doubt that it makes the onboarding process easier, it may only serve to compound our thinking. Instead, learn to embrace talent from other industries. And once they're part of the team, fight the urge to assimilate them into your worldview — rather, allow them to challenge you.
- Step Out - Learn to seek out tangential learning opportunities. Instead of attending your industry's annual "can't miss" conference or event, find another industry that has recently experienced or is currently experiencing significant change, and see what trends, challenges and opportunities are headlining their "must see" events. Immersing ourselves in another reality can be a great way to shift our focus and start thinking differently.
- Seek Controversy - When studying, researching and interacting with our end customers, be wary of confirmation bias. As data can be interpreted in many ways, it is easy to elevate findings that mesh with our own thinking. Instead, learn to focus on the outliers, the input that doesn't "fit" with the rest. This encompasses not only the negative, but the sometimes "out there" feedback that can so quickly be discarded as statistically irrelevant or simply just too odd. Imagine a taxi company getting feedback from a customer saying they'd rather get a ride with a total stranger because it's a more pleasant experience. I'm not sure if that ever happened, but if it did, it would have been quickly dismissed.
Our final recommendation: start fresh. Sometimes we need to take radically different actions to catalyze radically different thinking; otherwise, we risk falling back into complacency. We advise you to make the intentional decision to change, then ask those around you to hold you accountable to making that change.