Malcolm Gladwell and Steven Levitt are two of the world’s most pre-eminent business thinkers. Highly acclaimed authors, their widely published work includes Outliers, Blink, The Tipping Point, David and Goliath, Underdogs, Misfits and the Art of Battling Giants (Malcolm Gladwell) and Freakonomics, SuperFreakonomics, Think Like a Freak and When to Rob a Bank (Steven Levitt).
Gladwell and Levitt were invited to Melbourne by the Growth Faculty in December 2017 to address how to cope with the nature of disruption currently being experienced in the world and to enlighten their audience on how organisations should tackle these challenges.
Their key observations have wide application across many businesses, including those in the hotel industry:
Key message 1: Changing world and market dynamics now mean businesses now play a game of soccer, not basketball!
- Using a sporting analogy, Gladwell compared and contrasted what he referred to as “weak link”(soccer) and “strong link” (basketball) games.
- He referenced that strong link environments are those where the 2-3 best ‘players’ make a material difference on outcomes achieved (for example, in a game of basketball, in a stock trading environment, or as surgeons in a hospital).
- In these environments, he contended there were a small number of very powerful people.
- As world dynamics change, there is a paradigm shift where many organisations are not now judged by their strongest links (shining stars), but by their weakest.
- For example, satisfaction levels in hospitals aren’t judged relative to the skill of the surgeon (particularly given patients are unconscious when operations are performed), but by the attention received, response times to calls for assistance, and quality of food and general amenities on offer within the hospital.
- He cautioned businesses not to be caught playing the wrong game – for example, having a disproportionate focus on the performance of ‘strong links’ within an organisation, at the expense of retraining, up-skilling or divesting their weakest links.
Key message 2: In an age of ready access to information, businesses now need to be more adept at solving ‘mysteries’, rather than ‘puzzles’.
- When Al-Qaeda planned and committed terrorist attacks on September 11, 2001 at New York’s World Trade Centre, relevant authorities had information, in advance of the attacks, that alerted them to what types of activity were likely.
- Essentially, they needed to make sense of existing data (40,000 terrorist related leads), not gather more.
- Authorities were contending with a “mystery,” not a “puzzle,” where they had a lot of information that they were trying to make sense of (hence, a “mystery”), rather than trying to find missing pieces of information (as is the case with a “puzzle”.)
- Gladwell used this example to demonstrate that, in the digital age, where information is readily available, businesses are now often trying to make sense of ‘mysteries,’ rather than ‘puzzles.’
- He contends this necessitates a transition from “puzzle solving” to “problem solving”.
- An excess of information requires different skills from decision makers.
- Puzzles aren’t effectively addressed by gathering additional information to solve them – given you already have plenty!
- Gladwell asserts that the nature of problems has changed.
- The availability of ‘big data’ hasn’t made decisions easier, it has actually them harder.
- A key ‘take-away’ is that we no longer live in a ‘puzzle universe’ and businesses need to be mindful of not embedding themselves in the wrong paradigm.
Key message 1: Challenging embedded assumptions
- Levitt posed the question as to why certain things have always been done in particular ways.
- For example, entrance exams for lawyers are always timed. This rewards ‘hares,’ but a key trait of lawyers, in many settings, is the need to be methodical with high levels of attention to detail. This takes time.
- This deeply engrained process should also consider environments in which ‘tortoises’ operate effectively, given their skills are highly valued in the legal profession too.
- He contends strong assumptions and processes are hard to shift, but must be challenged, particularly as the disruptive, technology charged world in which we now live makes decision making more “cognitively challenging”.
- Effective communication should consider the intended audience and be mindful of “how much they need to know” versus “how much you have the capacity to tell them”
- Levitt challenged his audience to make the distinction between sharing “useful rather than universal observations,” particularly given universal observations will be useful in some instances and not others.
- Levitt also contended that the need for individuals to create space to reflect and be “alone with their thoughts” is critical and seldom exists in the fast paced world in which we now live.
- Levitt asserted that data isn’t a substitute for ideas and that businesses should not get “blurred by data”.
- Instead, data should support ideas.
- Businesses need to know how to harness the right information and staff need to know how to ask the right questions.
- In doing so, they should ask “What is the path of least regret?”
The Growth Faculty offers a program called ‘Future Thinkers’ that curates key messages from publications of some of the world’s best business thinkers in easily-digestible, 30 minute live video vignettes, direct from the authors.
For more information, on Future Thinkers resources, click here