One of my favourite scenes in television history is from Yes Prime Minister. In the scene Humphrey (the lead civil servant) is trying to dissuade Jim Hacker (the Prime Minister) from pursuing a certain policy. Instead of arguing against the policy Humphrey simply describes it as a “very brave decision”. By calling the decision brave he implies that it is something that could lead to bad consequences and this makes Jim nervous enough to back down.
The scene demonstrates our fear of taking risks. A fear that only grows the more you have to lose. It is hardly surprising then that large, successful organisations are risk adverse.
The problem with the tried and tested approach
For most large and successful organisations, avoiding risk means doing what they have always done. It means using tried and tested approaches that have been shown to work in the past. That works in a world of consistency. Unfortunately, the world is not stable and consistent. We are surrounded by change and the web has only accelerated this change.
What was once safe ground is no longer so. Approaches that used to work do not. Unfortunately our mental picture does not keep pace with that change. We still see risk in change even when the status quo is actually more dangerous.
Ignore the changes at your peril
We saw this in the music industry. With the rise of Napster consumer expectations changed. They were no longer willing to go to a record store to buy an entire album, when they could download just the tracks they wanted instantly online.
Instead of accepting that things had changed and adapting accordingly they tried to maintain the status quo by closing down Napster. However, that only delayed the inevitable. This should have given music retailers like HMV and Tower Records time to adapt to the changed landscape. Instead they did nothing, paralysed by the fear of taking a risk. Eventually Apple stepped into the void and these companies found themselves out of business.
We have seen this same model occurring in sector after sector, from newspapers to cable TV and this is just the beginning. Digital will impact every sector and if the big players are unwilling to take the risk of changing, new, smaller companies with less to lose with replace them.
Digital is the best place to take risks
The irony of all of this is that digital is the best place to make mistakes and large organisations are best placed to swallow the costs of making these mistakes.
What makes the web so ideal for experimentation and risk taking is two fold. First the cost of making mistakes is low. Trying different approaches online doesn’t require large print runs or expensive spend on advertising. In most cases it is a relatively trivial matter.
Second, the web offers an unprecedented opportunity to track the success or failure of your experimentation. Through a combination of analytics, social media feedback and user testing, you can see what works and what doesn’t almost instantly.
Why then do large organisations seem so reluctant to adopt a culture of experimentation online?
Barriers to experimentation
In a large part the problem is cultural. Ways of working become engrained into the DNA of an organisation and that is hard to shake.
The other factor is structural. Large organisations tend to be very hierarchical with decision making having to happen at multiple levels of the organisation. Departments and business units further hamper their ability to experiment as most areas of experimentation have to work across multiple areas.
A disrupting digital team
What organisations need is to have their existing structures disrupted. It needs a Digital team with the authority, passion and drive to experiment and innovate. Most of all organisations need a digital leader who has an in-depth knowledge of the field and the strength of will to stir up change. Organisations need innovators and visionaries with the determination to not let organisational structure hold them back.
In short organisations need a digital maverick and they need to empower and support that person even when their disruptive influence is painful.
The alternative is to wait for a competitor who is faster, more agile and less afraid of change to pass you by.
“Uncertainty Green Road Sign Over Storm Clouds” image courtesy of Bigstock.com