Creative Inconvenience

In a recent episode of Showtime’s “Homeland” the teenage son of a potential presidential candidate is driving with his girlfriend, and in trying to impress her attempts to lose their secret service escort. This in turn leads the couple into a fatal hit and run with a pedestrian. The story plays out where the guilt ridden couple ultimately confess the accident to their parents, at which point a moral dilemma ensues.

Do the presidential parents act on what is morally right and report the incident, thus risking the presidential bid, or do they use their power to suppress any investigation? In this fictitious scenario the issue’s morality lost to its ability to restrict personal gain, and as such the event went unreported.

This dramatized example of morality of convenience, where ideals are sacrificed for gain, has roots in reality and takes on different shapes, some that lay outside of black & white moral purity.

For instance we love the entrepreneur - the creative rebel who by the very act of their non-conformity changes social behavior patterns and the standard approach to business. However the inconvenient truth is that most business ventures fail. So even as we admire innovative success and celebrate the ideals behind the success, we also tend to ignore the multitude of failures that surround those successes and gloss over the price of achieving them.

Creative innovation requires taking risks, accepting failure, rejecting convention and exploring unproven methods. Despite the fact that Corporate America has created a cottage industry on promoting the ideas of innovation and creativity, the fact is most are structured to stifle innovation. Like Homeland’s hit and run casualty who fell victim to the morality of convenience, so is corporate innovation the victim of creative inconvenience.

The 4 Dynamics Of Stifled Innovation

1. Cultural Homogeneity:

Organizations typically recruit employees that best fit into their existing culture. This creates a self perpetuating cycle where any deviation from that culture tends to be met with dissatisfaction and thus gets weeded out.

Social experiments have additionally shown that when faced with a majority point of view, individuals tend to adhere to that viewpoint, even if it goes against a believed truth. This behavioral conformity is particularly prevalent where departures from the social norm negatively impact status - such as one’s ability to get promoted.  

The result - homogenized thought with a singular voice in support of the existing order.

2. Innovation Inefficiency

In The Medici Effect Frans Johansson writes that in any given field 10% of the creators are responsible for 50% of the contributions - Picasso created 20,000 pieces of art, Thomas Edison filed a record 1,039 patents  and Richard Branson started 250 companies.

The point is that successful innovation is a numbers game of high output for minimal success with high reward. Unfortunately most companies are structured to minimize costs through operational efficiencies and to deliver consistent returns, not to absorb the loss of excess capacity in search of a home run.

3. Decision Incentives

Directly resulting from the above points, in most corporations it is more dangerous to make a bold, potentially high return decision and fail than it is to make a consensus decision and fail. As a result people tend to model their decisions to satisfy those who will be evaluating them instead of making choices based on their potential to deliver.

4. Risk Aversion Biology

Since the hunter gatherer days when unnecessary risk could be fatal, humans are biologically wired to minimize risk. Social experiments have again proven this whereby giving people a choice between a larger, less certain reward and a smaller more certain one people will generally choose the more certain, lower payout. Innovation requires risk and risk taking is not in our DNA.

Achieving innovation and creativity in the corporate sense are clearly not impossible since they happen often enough. However the next time you attempt to push creative boundaries realize that despite what people say they may not be ready to pay the price for innovation, and your ability to bridge that price gap may ultimately determine the fate of your idea.

Wine Box Economics

Charles Antin is a writer and wine enthusiast who attempted to barter a $43 box wine for a single bottle worth at least ten times the price. The process was designed to tell an interesting story and maybe learn if consumers valued wine differently than the merchants who set the prices. In reality it illuminated a core principle of marketing - the true definition of value.

Swap 1: $43 becomes $109
Box wine is typically perceived to be of inferior quality, which lends itself to a tough trade. Mr. Antin realized to start he needed a good product, which in fact does exist in a box wine. More so, he needed a unique selling point to help a buyer get over this perception of box wine inferiority.

Box wine is equivalent in volume to four standard bottles, however the 3-liter box format has a much smaller carbon footprint. Mr. Antin had a Californian friend for whom he figured this sustainable benefit might appeal. Furthermore, this friend was an avid cook who regularly held large dinner parties for which 3-liters of wine would be useful.

Trade 1 complete - A $43 box wine for $109 in four bottles of off-the-grid, artisanally made wines.

Swap 2: $109 becomes $140
The next challenge was to trade four interesting bottles of artisanally made wine that no one has ever heard of. Again Mr. Antin mused who would place value in a wine’s unique story over its brand name? The answer - the wine world’s equivalent to a hipster - a sommelier.

Sommelier’s at good restaurants have already tried everything, including the world’s best wines, so something new with potential excites them. Plus most sommeliers have their own collection, which usually include some pretty good wines they long ago got bored of - perfect trade bait.

Trade 2 complete - $109 in four obscure, artisanal wines for a $140 premier Burgundy.

Swap 3: $140 becomes $245
Trading a high quality wine from a top producer in one of the world’s most prized wine regions seemed a simple task. However, Mr. Antin quickly realized that his attempts at a bottle-for-bottle swap wouldn’t work. In his own words, “It was like my fifth grade friend who tried to trade me his raisins for my Fruit Roll-Up based on the premise that they are both dried fruit.”

In a bottle-for-bottle swap value becomes more of a 1:1 comparison highly predicated on price. People were at most willing to swap for a bottle of equal cost, but wouldn’t knowingly swap a bottle of greater cost for one of less. The conversation needed to return to value, not price.

To do so Mr. Antin again sought to trade one bottle for multiple bottles. He knew someone with a large quantity of a single wine who found value in trading extra capacity for something different.

Trade 3 complete - A $109 premier Burgundy for $245 in five lesser bottles of Burgundy

Swap 4: $245 becomes $290
For the five lesser Burgundies Mr. Antin leveraged the wines’ sense of exclusivity, since they could only be purchased through a charity auction that the vineyard hosts annually in France.

Mr. Antin looked for someone who had attended the vineyard’s charity auction and catered to their sense of nostalgia and appreciation for the event’s history.

Trade 4 complete - $245 in five bottles of Burgundy for a $290 Burgundy Magnum.

Swap 5: $290 becomes $520
For the next swap Mr. Antin found a Burgundy lover - someone who valued the uniquely delicate style of Burgundy wines over non-Burgundy wines. He then leveraged that style preference to trade for four combined higher priced bottles of full bodied wines.

Trade 5 complete - $290 Burgundy Magnum for $520 in four bottles of Rhone reds.

Final Swap: $520 becomes $600
For his final swap Mr. Antin used data. The four bottles of Rhone had all received scores of 90 or higher from an acclaimed wine reviewer. Mr. Antin took these to a wine merchant friend and offered them for a bottle of extra stock that didn’t appeal to the merchant’s client base.

Mission complete - $520 in four Rhone reds for a $600 Grand Cru White Burgundy

Knowing The Price Of Everything And The Value Of Nothing
How does a $43 box of decent wine become $600 of elite wine from a renowned producer? By focusing on value over price.

In each instance the recipient of Mr. Antin’s swap may not have received an equal dollar value to what they gave, but they were satisfied because what they received served a personal need or desire that existed outside of price.

Mr. Antin conveyed that value by understanding the unique benefits of his products and positioning them in a way that appealed to the emotional sensibilities of his buyers. The one time he strayed from that approach he got nowhere, because when a proposition is based on price value alone people will always look for a deal.

Brands provide value that appeal to both emotional and physical sensibilities. Products only provide physical benefits that can more easily be valued by price. Build brands based on total value, don’t sell products based on price value.

The Origin of Talent

A national radio broadcaster regularly receives music singles from would be musicians who feel they have the talent to become stars and who just need to get discovered. This broadcaster said that he receives more singles than he can listen to on a daily basis which, spanning his entire 26+ years in syndication, is potentially hundreds of thousands of songs.

In over 26 years and hundreds of thousands of songs from aspiring musicians only once did he receive a single that he believed to have star quality. Most of what he received was bad to average at best - some was even good - but only one in one hundred thousand plus songs stood out as being distinctively exceptional.

The broadcaster’s name is Howard Stern and the one in one hundred thousand plus talent independently went on to become the acclaimed musical artist Kid Rock.

The point being that truly exceptional talent is as rare as it is vivid, and when channeled correctly, it is irrepressible.

A Star is Formed
Anders Ericsson is a professor of psychology and a pioneer of the “Expert Performance Movement” who spent years studying the progression of talent in top performers across varied pursuits. Mr. Ericsson offers that regardless of the field, expert performers are almost always made, not born. He even suggests that talent is overrated as a trait.   

Mr. Ericsson theorizes that the reason talent is so rare isn’t because the potential for it is in such limited supply. Rather, exceptional talent is rare because it takes substantial time and practice to realize it. If you aren’t doing something that you are truly passionate about, then you most likely won’t possess the desire to undertake the extreme work required to be exceptional at it.

Mr. Ericsson also believes that, far from being innate, talent is actually something that everyone can acquire through deliberate practice. Deliberate practice, beyond excessive repetition of a task, involves setting specific goals, obtaining immediate feedback on the actions used to achieve those goals and concentrating on the technique that goes into achieving the goal as much as on the goal itself.

That is not to say that all people have equal potential. Instead, deliberate practice can make mediocre talent good, good talent great, and great talent exceptional.

Average to Exceptional
Hitting a baseball is widely considered to be one of the most difficult things to do in all of sports. It takes exceptional eye-hand coordination, a high awareness level, strong intuition and years of practice. Even then a good hitter will only succeed roughly 30% of the time.

There was once an athlete who at 30 years old wanted to chase his lifelong dream of playing baseball professionally. It had been at least 15 years since he stepped onto a baseball diamond as a player. More so, when he had played he played as a pitcher, a position that commonly doesn't hit. Now, attempting to enter baseball as an outfielder, hitting would be essential to his game.

To make up for his 15 year absence from the game this player woke up every morning before sunrise to practice hitting. He was always the first player to arrive and the last to leave. He would take batting practice for hours before “official” team batting practice began, then take it again in the time between team batting practice and the game, and finally one last time for a few hours after the game.

Every single day he practiced in this manner, sometimes until his hands were bleeding.

The player played wound up hitting .202 with 51 RBIs and 114 strikeouts in 127 games. Poor stats by most measures, but when you consider this was done in AA minor league ball against some of baseball’s top prospects after 15 years away from the game, they look less so.

Furthermore, all of his coaches noticed marked improvement from spring training to the end of the season. In the Fall League that follows the minor league season he batted .252 - a decent average for any player. And that against pitching prospects that most considered to be professionally bound.  

Through disciplined hard work and deliberate practice this player, in just 1 year, went from not playing baseball in 15 years to being decent at what many consider to be the most difficult athletic skill of any sport.

The players name was Michael Jordan and anyone who has ever coached or played with him consider him to be the hardest working athlete they have ever seen. Is he a great athlete - sure. But it was his unparalleled work ethic and his use of deliberate practice that made a poor baseball player average, and an exceptional basketball player the greatest that has ever played the game.