The statistician George Box pointed out that “all models are wrong, but some are useful.” He meant that we create models as simplified representations of reality. They are merely tools and should never be mistaken for reality itself. Unfortunately, that’s much easier to say than it is to practice.
All too often, models take on the illusion of reality. We are trained, first at school and then on the job, to use models to make decisions. Most of the time the models are close enough to reality that we don’t really notice the discrepancy. …
I was working on Wall Street in 1995 when the Netscape IPO hit like a bombshell. It was the first big Internet stock and, although originally priced at $14 per share, it opened at double that amount and quickly zoomed to $75. By the end of the day, it had settled back at $58.25 and, just like that, a tiny company with no profits was worth $2.9 billion.
It seemed crazy, but economists soon explained that certain conditions, like negligible marginal costs and network effects, would lead to “winner take all markets” and increasing returns to investment. …
When Steve Jobs returned to Apple in 1997, one of the first things he did was develop a marketing campaign to rebrand the ailing enterprise. Leveraging IBM’s long running “Think” campaign, Apple urged its customers to “Think Different.” The TV spots began, “Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes…”
Yet Jobs actual product strategy did exactly the opposite. While other technology companies jammed as many features into their products as they could to impress the techies and the digerati, Jobs focused on making his products so ridiculously easy to…
In 1929, just before the stock market crash, Louis Bamberger and his sister, Caroline Bamberger Fuld, sold their department store in Newark to R.H. Macy and Company for $25 million ($343 million in 2015 dollars). Grateful to the people of Newark for their support, they planned to endow a medical college in that city.
Things didn’t turn out that way. They were convinced by Abraham Flexner to create the Institute for Advanced Study instead, and to build it in Princeton. …
In 2014, when Silicon Valley was still largely seen as purely a force for good, George Packer wrote in The New Yorker how tech entrepreneurs tended to see politics through the lens of an engineering mindset. Their first instinct was to treat every problem as if it could be reduced down to discrete variables and solved like an equation.
Despite its romantic illusions, the digital zeitgeist merely echoed more than a century of failed attempts to generalize engineering approaches, such as scientific management, financial engineering, six sigma and shareholder value. …
In 1891, Dr. William Coley had an unusual idea. Inspired by an obscure case, in which a man who had contracted a severe infection was cured of cancer, the young doctor purposely infected a tumor on his patient’s neck with a heavy dose of bacteria. Miraculously, the tumor vanished and the patient remained cancer free even five years later.
You would think that such an accomplishment would be hailed as a breakthrough, but much like Ignaz Semmelweis a half century before, Coley’s work was met with skepticism. …
Some years ago, I wrote an article in Harvard Business Review about stock buybacks, which were being pilloried at the time. Many people thought that companies were spending too much money to gin up their stock price when they could be investing those funds into innovation, making better products and creating new markets.
Change isn’t what it used to be. Where earlier generations had leaders like Gandhi, King and Mandela, today’s change efforts seem rudderless. Movements like #Occupy, Black Lives Matter and #MeToo hold marches replete with strident calls for change, but they never seem to get anywhere. Lots of sound and fury, signifying nothing.
Many believe that if only these movements had more charismatic leaders or more inspiring oratory they would be able to gain more traction. Others say that society has become too corrupt and our politics too coarse to make change happen. …
One of the most often repeated stories about innovation is that of Alexander Fleming who, returning from his summer holiday in 1928, found that his bacterial cultures were contaminated by a strange mold. Yet instead of throwing away his work, he decided to study the mold instead and discovered penicillin.
What’s often left out is that it wasn’t Fleming who developed penicillin into a miracle drug. …
It’s been clear to me for some time that 2020 would be a pivotal year. Globalization and digitalization, the two major forces of the last generation, have disappointed. The corporate mantra of shareholder value has proven to be bankrupt. The end of the Cold War has led not to a democratic utopia, but a rise in populist authoritarianism.
Much of what we believed turned out to not be true. At the same time, there is great cause for optimism. We are undergoing profound shifts in technology, resources, migration and demographics that will give us the opportunity to drive enormous transformation…
Greg Satell
Bestselling Author of Cascades and Mapping Innovation, @HBR Contributor, - Learn more at www.GregSatell.com — note: I use Amazon Affiliate links for books.
