For this week’s letter, I want to share with you an article that I just co-published with my good friend and intellectual maestro, Massimo Portincaso. Massimo is a partner at my old stomping grounds, The Boston Consulting Group, and these days, he runs BCG’s global marketing and communications. So, he does lots of intellectual outreach to alumni like moi. He also posts his own thought-pieces on blockchain, AI and other stuff.
Our article has got a business focus, but I think everyone can draw wisdom from it. You’ll find many of the broad themes I touch on familiar…
In an Age of Discovery, Executives Must Become Map-Makers
The world always makes sense. But it doesn’t always make sense to us. What we see depends on how we look at it. Surprise, a constant theme nowadays in the C-suite, is a sign that whatever perspective we’ve been using to see the world no longer shows us things as they really are.
It is when the world stops making sense to us that we need a new map of the world, a new narrative that better represents reality. But coming up with one, and making it stick, is not easy. Consider this: In the early 1500s, Copernicus taught us that the Earth revolves around the sun — not the other way around. We’ve lived with this insight for 500 years. Why, then, do we still gather at, say, the Valentino Pier in Brooklyn to watch the “sunset”?
The reality — as any picture of the same moment from space would make clear — is “earthspin.” We, not the sun, are traveling across the sky to turn day into night. But that simple, centuries-old truth hasn’t yet penetrated our language. It hasn’t yet penetrated our thinking. Every “sunrise” and “sunset” should be a powerful reminder that our everyday narratives can warp and distort our ability to see things as they really are.
Our “maps” of the world exist mainly in the language, or narratives, we use to frame concepts and issues. Words are just the shared mental maps we use to navigate through the world. Executives steeped in classic business strategy may be skeptical of the power of mental maps, or narratives, to shape our understanding of industries, problems, or priorities. But consider how the multiplication of information has diminished leaders’ capacity to articulate the world to themselves, often forcing them to become consumers of other people’s narratives. For example, we may talk about “disruption” in our own industries because that is the narrative being passed around — but what we mean when we use it remains fuzzy to ourselves and others. So, too, are the actions that follow.
Map-making (or map-remaking) is an essential activity when steering an organization during times of rapid change. In such periods, executives must regularly interrogate and update the narratives by which the organization navigates. If they do not, the maps that once guided the organization instead trap it in outdated worldviews. They conceal and distort, rather than reveal, the paths ahead.
If, however, executives do curate the corporate narrative and update their mental maps, their organizations will be better equipped to evolve along with the fast-changing world around them. Such corporate map-making aligns employees’ judgment and intuitions more closely with external reality in ways that generate better questions and decision making; it helps identify deeply buried mismatches between the organization and its environment; and it can powerfully transform employees’ shared behaviors.
Renaissance Wisdom on Mapping New Worlds
In other periods of rapid change, the ability to create new maps (that is, new narratives) separated those who adapted successfully to — and shaped — events from those who were paralyzed by the pace of change.
Take the Renaissance, an analogous moment of transformation driven by “globalization” (the voyages of discovery) and “digitization” (Gutenberg’s printing press). How people saw the present — their narrative — drove their adaptations and led their transformations. Let’s look at three revised narratives that helped define that time of discovery and change.
From Flat Maps to Globes. The first successful Atlantic empire-builders, Spain and Portugal, switched from modeling the world as flat to modeling it as spherical not because they suddenly discovered that the world was round (Europe had known that since the time of Ancient Greece), but to better visualize crucial business questions. The oceans to Europe’s east and west had both been proven navigable, and in 1494 the Treaty of Tordesillas drew a single vertical line (through what is now Brazil) to divide the lands beyond Europe between the two countries. All that lay to the east of the line was Portugal’s; the lands to the west were Spain’s. But in whose territory did the economically significant Spice Islands (present-day Indonesia, on the other side of the globe) lie? And which way, east or west, was the shortest route to getting there? Visualizing the Earth as a sphere helped clarify — and answer — those strategic questions.
From Sacred to Inspired Art. Medieval art was flat and formulaic. Its main purpose was religious — to tell a sacred story. Plagiarism was common practice; innovation was irreverent. The invention of linear perspective (showing depth on a flat canvas by drawing far-away objects smaller), plus new knowledge in anatomy and natural science, were absent from European art until Brunelleschi, Michelangelo, da Vinci, and others validated them within a new narrative: the artist’s job was to capture a fragment of God’s creation as he saw it. These artists became famous for works that presented increasingly lifelike, original, and secular visions of the world.
From Luxury to Mass Market. Johannes Gutenberg, who invented the printing press in the 1450s, ended life bankrupt. Why? Because books were a luxury — useful to few, owned by even fewer — and the economics of Gutenberg’s printing press made sense only in large-volume runs. Gutenberg struggled to find books that demanded mass production. But over time, the new printing technology helped change people’s ideas about books and the purpose they could serve. By the 1520s, when Martin Luther directed all laypeople to read the Bible as a way to care for their own souls, books were becoming the new medium in which ideas reached mass audiences. Indeed, the Bible has since been printed 5 billion to 6 billion times, and counting.
It’s Time to Update Our Narratives
In order to keep pace with a rapidly changing world, Europeans during the Renaissance completely remade many of their mental maps. Today, many of ours need remaking, too. Here are three examples of outdated narratives/maps in wide use today whose revision could accelerate organizations’ ability to adapt and unleash creativity.
From Infrastructure to Interstructure. What is infrastructure? Literally, it is the structure that lies below. The word “infrastructure” in English dates back to the 1880s, to the second industrial revolution (that is, the advent of mass manufacturing). The way the term has long been used envisages an industry that is stable, permanent, and fixed — something that underlies the busy social and economic activity that all takes place atop it. That was an accurate narrative, once. The idea was that the builders/operators/producers of mass enablers (like electricity grids) were separated from the users.
But that is the opposite of the future being articulated today — by executives in electricity, water, transport, and other industries — of business models that increasingly operate within and between all manner of transaction. Increasingly, infrastructure is being re-conceived as a platform, which — like platforms in the digital economy — blurs the division between producers and users, and enables uses that may be completely unanticipated by the network builders. If all that elected officials, consumers, or employees know of a given industry is that it involves “infrastructure,” then they lack the awareness to be a good partner in these transformations.
“Inter-structure” more closely captures the models that are emerging in these industries. Smart electrical grids enable businesses and individuals to create, trade, and arbitrage electricity with their own generation and storage assets attached to the network. Owners of rights-of-way, from water utilities to railway companies, may enable flows of autonomous vehicles and drones along private transportation routes that do not conflict with public traffic. Owners of physical facilities of all kinds, from parking lots to warehouses to attics, will enable autonomous material flows by supplying staging sites and recharging sites.
From Mechanical to Biological Thinking. As Danny Hillis brilliantly describes in the Journal of Design and Science, “The Enlightenment is dead, long live the Entanglement.” The Age of Enlightenment was characterized by linearity and predictability. It was a world where causal relationships were apparent, Moore’s law had not yet accelerated the pace of change, and economic and social systems were not yet intricately intertwined. But now, as a result of technological and scientific advances and the rise of globalization, the world consists of several big and small complex adaptive systems, which are highly entangled. Whereas we used to be able to use a narrative of linearity and mechanics to explain the world, we now need a narrative inspired by biological and other natural systems. Biological thinking is not linear. Instead, as Martin Reeves has written, it is messy. It focuses on experimentation rather than managing a process to produce a certain effect.
From Automation to Augmentation. Most corporate and policy research regarding artificial intelligence and the “future of work” is centered on automation — the replacement of human labor and cognition with machines. Multiple studies report some variation of the same narrative: about half of all jobs in advanced economies may be automated away by 2050, if not earlier.
This stark human-versus-machine dichotomy gives rise to a number of blind spots and neglects important dimensions, such as the spread of complex adaptive systems and the network effects caused by their entanglement. Most important, it skips the most promising opportunity space for business and for every sector of society: the human-machine interface.
A narrative of augmentation, instead of automation, invites business leaders, policy makers, researchers, and the labor force to pay much more attention to this middle space. Companies and society need to create a narrative that focuses on the potential of AI to switch the scale of reference for several tasks, often by several orders of magnitude. A good example is personalization. Brands that leverage AI and proprietary data can move from tens or hundreds to hundreds of thousands of customer segments and see revenue increase by 6% to 10%, two to three times faster than those that don’t harness this potential.
Amazon is a good example of AI as a source of augmentation rather than just automation. The company, one of the heaviest users of AI and of robots (in its fulfillment centers, the number of robots grew from 1,400 in 2014 to 45,000 in 2016), more than doubled its workforce in the past three years and expects to hire another 100,000 workers in the coming year (many of them in fulfillment centers).
The point is that we need a narrative that encourages us to generate more with available (human) resources by leveraging AI and technology, not one that looks at a finite game of optimizing away labor costs wherever they exist.
The augmentation narrative is not limited to products and processes; it also affects professions and management. Just as what it means to be a doctor is going to be reshaped by access to millions of records and machine learning, what it means to be a manager and run an organization will change significantly. The current trend to decentralize decisions will be fundamentally redefined and accelerated as decisions are increasingly supported by AI and data, “augmenting” decision makers and allowing for new management tools and new organizational structures.
Cartography as Competitive Imperative
Much has already been written about the overwhelming amount of data and information now available to executives. What is often missing in this discussion is that the main challenge does not lie in having too much information (our brains are always flooded with more information than we can process), but in the information overflow that occurs when we lack an apt framework to make the flood meaningful.
Map-making is an essential, but mostly overlooked, part of adapting to rapid change. As the example with New York at sunset shows us, narrative and language can indeed trap us in outdated views of the world. We must gain awareness of our mental maps, and redraw those that need redrawing, if we want the world to make sense to us again. It’s a corporate leadership imperative, and a societal one.
With 73% of CEOs seeing rapid technological change as one of their key issues (up from 64% last year), it’s also a competitive imperative. Conscious map-making helps us to adapt to change, but it also drives it. Five hundred years after the Renaissance, we remember Columbus, Michelangelo, Brunelleschi, da Vinci, and others because their maps defined the terrain in which their age explored. Today’s voyages of discovery are likewise unveiling a new world to us. New maps, new narratives, will emerge and will define how we understand it. If we are not writing them, someone else is…
Three links to help navigate the now:
- Read about the next flu pandemic in The Daily Mail. Can we see the next shock…before it hits? The Daily Mail interviewed me for this feature piece. A bit of scare-mongering (it is the Daily Mail, after all), but my point is—like with my Brexit and Trump predictions last year—that we need to start taking these risks seriously. They’re more likely than we’ve been lulled into believing.
- Read about Our New Robot Overlords in The New Yorker. This is a long piece about robots taking jobs away. Instead of statistics, it tells the stories. Beautifully done.
- Read “How do we solve a problem like the future?”, an essay by prominent Aussie tech journalist, Sandy Plunkett. Over 25 years in Silicon Valley, Sandy befriended every generation of tech leaders, from Bill Gates to Mark Zuckerberg. Now back in her native Australia, she’s helping Aussies craft their role in the 21st century.