by Greg Satell
Clearly, what Antioco and Blockbuster needed was a basis for evaluating niche competitors that would allow them to assess and respond to disruptive threats without overreacting and changing strategy every time a marginal competitor appeared. Ironically, the solution to this problem can be found in a very unlikely place: Iowa seed corn.
Hybrid corn in the middle of the twentieth century had some important similarities to Netflix’s business model in 2000. Like Netflix’s no-late-fee policy, there were obvious benefits to hybrid corn seed, namely 20 percent higher crop yields and resistance to drought. In both cases, there were also some important obstacles to adoption. In Netflix’s case, there was the inconvenience involved in ordering videos through the mail versus the ease of just popping by a nearby Blockbuster location after work. In the case of hybrid corn, the higher up-front cost was more immediately apparent than the benefits at harvest time.15
In 1962, a young sociologist named Everett Rogers combined studies of innovations like hybrid corn in a book called The Diffusion of Innovations, which has been the model for thinking about how ideas spread ever since.16 In each case he studied he found the same pattern. It looked like Figure 3.4.
FIGURE 3.4 The Diffusion of Innovations
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What Rogers found was that an innovation is first adopted by a small core group of innovators and then spreads slowly to a slightly larger market of early adopters before it hits the majority of people in the middle and begins a period of explosive growth. When the Blockbuster executives met with Hastings, Netflix was most probably still in the “Innovators” or “Early Adopters” stage and therefore easy to dismiss as “niche.”
Rogers was aware of, and greatly influenced by, Katz and Lazarsfeld’s research on opinion leaders. So, not surprisingly, he attributed special qualities to the innovators and early adopters. However, it should be clear by now that’s not necessarily true. Rogers himself noted that his father “loved electro-mechanical farm innovations; but was resistant to biological-chemical innovations such as the new hybrid corn.”17 In much the same way, I might jump on the chance to try a cheesesteak place in my hometown of Philadelphia, but have kept the same hairstyle for 30 years. Our resistance thresholds to new ideas are highly situational. Early adoptership is a matter of context, not destiny. Once again, it is the connections between vulnerable clusters that drive a cascade, much as we saw in the example of transmission lines failing in the last chapter.
In his highly influential book Crossing the Chasm, Geoffrey Moore notes that most innovations never make the jump from early adopter to early majority and end up fizzling out.18 However, the threshold model of cascades gives us some clues that can help predict which ideas have the potential to cross the chasm and which do not: how the early adopters and early majority are connected.
If Antioco had analyzed Netflix in 2000, he would have most likely seen that the niche it occupied had specific characteristics, most probably film enthusiasts in California, where Netflix was located. These people were happy to trade the convenience of a nearby Blockbuster location for the greater selection and economic benefits of Netflix’s mail order model. The logical question would then be, where is it spreading? If new Netflix customers looked much like the old ones, then it probably wasn’t much to worry about. However, once an idea starts infecting new groups with higher thresholds of resistance, it’s begun to cross over from early adopters to early majority consumers and a change is brewing.
In fact, it appears that is essentially what Antioco and his team did, which is why he was able to recognize the potential of the online video rental business and develop and implement a viable strategy. Remember, it was internal networks that led to Blockbuster’s demise. First shareholders, skeptical about the digital strategy and the unrest it caused with the franchisees, diminished the stock price. The undervalued stock, in turn, attracted corporate raider Carl Icahn to take a major position and take control of the company. That, in turn, led to the compensation dispute, Antioco’s departure, the reinstatement of late fees, and the retrenchment into retail stores. If Antioco had shown the same acumen in aligning internal stakeholders as he did in marketing to customers, it is likely that Blockbuster would still be thriving today.
The same principles applied in the Orange Revolution, which started out in low threshold areas like universities but gained steam when the movement spread to higher threshold groups such as young professionals (like my fiancée). By the time the election was falsified, even high threshold groups, such as the babushkas who brought food to the tent city and helped enforce the no-drinking rule, were out in great numbers as well. As we will see later on in this book, changemakers of all stripes, whether they are corporate executives, entrepreneurs, public servants, or community activists, succeed when they actively court those who have not yet joined their movement and fail when they insist on strict obedience to a rigid ideology.
As Duncan Watts noted in a scientific paper on the dynamics of cascades, “The success or failure of an innovation may depend less on the number and characteristics of the innovators themselves than on the structure of the community of early adopters. Clearly, the more early adopters exist in the network, the more likely it is that an innovation will spread. But, the extent of its growth, and hence the susceptibility of the network as a whole, depends not only on the number of early adopters, but on how connected they are to one another and to the much larger community consisting of the early and late majority, who do not tend to respond to the innovators directly, but who can be influenced directly if exposed to multiple early adopters.”19
I would also add that these connections do not form automatically. You have to be proactive about building them. You can’t seek to overpower by ranting and raving. You have to work to attract others to your cause, particularly those with higher thresholds of resistance.
The threshold model offers a possible explanation for why Occupy failed. While it did indeed spark a cascade, it didn’t “cross the chasm” and never spread beyond early adopters. In fact, many in the mainstream, even those who were concerned about income inequality and sympathized with the activists’ “We are the 99%” slogan, were appalled by the unkempt, often vulgar protestors. So it’s not surprising that they failed to connect with higher threshold groups. In Ukraine, the Maidan was a place where people wanted to be. Families would take their kids to see how change was finally coming to their nation. Nobody was going on family outings to Zuccotti Park.
In fact, at times, the Occupy protestors seemed to actively spurn the notion of reaching outside their milieu. When Congressman John Lewis, a hero of the civil rights movement, asked to speak at a rally in Atlanta, he was rebuffed.20 Many attributed the snub to racism among the privileged white protestors. The activist who led the charge to block him from speaking would later explain in an interview that his objection was not so much against the Congressman himself, but against any “member of the two-party system.”21 A post on the liberal site Daily Kos explained that the problem was that John Lewis simply didn’t understand the complex rules of an Occupy event.22 Whatever explanation you want to accept, the result was that an opportunity to build a connection and spread the movement was lost.
Make no mistake. You create change by bringing people in, not pushing them away. You don’t get points for purity or rigid adherence. To spread an idea, you have to connect. Unlike the Occupy protestors, the Otpor activists didn’t seem to be angry. Instead they strived to be funny, because humor was inviting. In Iraq, General McChrystal was willing to sacrifice some of the efficiency of his commando teams in order to invite greater collaboration among key stakeholders. When employees left tech firms in Silicon Valley, they weren’t considered to be pariahs like they would be in Boston, but allies and assets, and they were encouraged to stay connected. Wherever you see a change effort succeed, you’ll find connection at its core.
Yet it is not connection alone that creates a cascade, it is connection to higher threshold groups. That’s a
challenge, because it means that you cannot only seek out the like-minded, you must also bring in the unconvinced, the skeptical, and the oblivious. If the desire for change remains with the zealots, it won’t go anywhere. It’s only when everybody else joins in that a transformational change can take place, whether that change is in a community, an organization, an industry, or throughout society as a whole.
THE EVOLVING ROLE OF LEADERS
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As I noted in the Introduction, the world used to be ruled by institutions that were set up as hierarchies. Those at the top planned and directed action, which was carried out according to formal lines of authority that ran vertically through an organization. Today, however, the world is increasingly organized into networks, which are informal lines that often run horizontally, and, as we will see in greater depth in Chapter 6, it is a leader’s job to shape them.
It is along these horizontal lines that cascades often take place, so it shouldn’t be surprising that hierarchically oriented leaders often miss them. John Antioco at Blockbuster saw the threat that Netflix posed as merely one of a competing business model. It’s not that he didn’t recognize the importance of the concerns of investors and franchisees; he did and made efforts to quell these concerns. Still, these were secondary to the execution of his strategy through vertical lines. Contrast that with General McChrystal, whose primary focus was to transform his organization into “a network that could defeat a network.”
In much the same way, the Route 128 firms saw the marketplace as a quest for dominance among competing firms. That’s why they strongly discouraged employees jumping from company to company or mixing socially with colleagues from other companies. It’s also why they pushed local governments for tax cuts and other giveaways, because in a stable marketplace, a low cost structure can be a considerable competitive advantage. The Silicon Valley entrepreneurs, on the other hand, recognized that technology was cascading rapidly, and they focused on building an ecosystem that would adapt to changes that hierarchies usually miss until it’s too late.
Even Occupy, in its own way, saw things in terms of hierarchies and missed the value of cascades. In effect, they considered the challenge to be a battle between themselves on one side and the banks and politicians on the other. What they failed to recognize was the importance of everybody else, so they turned away many potential supporters. Otpor, on the other hand, saw the struggle ahead as one of mobilizing their fellow citizens. They sought, through humor, pranks, and meticulous planning, to crash through thresholds of resistance and bring everyone else in. Everything—even arrests—was an opportunity to recruit or, at the very least, to soften objection.
Make no mistake. Cascades are forces of nature. Small groups, loosely connected, but united by a common purpose is a valid principle whether the network is citizens in a revolution, employees in an organization, consumers in a marketplace, or snowy tree crickets in a forest. We cannot control cascades or conjure them into existence through sheer force of will. They happen either when new connections form that we are scarcely aware of or some external event that is outside of our control lowers thresholds and makes the system more susceptible to a trigger.
That’s why cascades, as important as they are, are only the first aspect of transformational change. As we have seen, cascades can be immensely powerful, but once they manifest themselves into concrete action, they can also inspire opposition. As Moisés Naím has put it, “power is now easier to get and harder to use or keep.” Every revolution has the potential to inspire a counterrevolution.
That’s why, as crucial as it is to understand how cascades function, the second aspect of transformational change—organization, planning, and discipline—is just as important, because it’s what allows us to put cascades to productive use. We now turn to that very subject in Part Two of this book: how you organize for action, because it is only through action that we can effect real change.
PART TWO
HOW CHANGE MOVEMENTS SUCCEED—AND FAIL
CHAPTER 4
Identifying a Keystone Change
You must be the change you wish to see in the world.
—MAHATMA GANDHI
At midnight on December 31, 1929, the Indian National Congress adopted a resolution for Purna Swaraj, full independence from Great Britain and the intention of self-rule. A few weeks later, the body issued a formal declaration to that effect.1 Reminiscent of the American Declaration of Independence, it spoke of “the inalienable right of the Indian people, as of any other people, to have freedom and to enjoy the fruits of their toil and have the necessities of life.” Yet unlike the American version, it pledged a commitment to nonviolence, even under provocation. The declaration also promised a massive campaign of civil disobedience to come. The task of organizing this effort fell to Mohandas Gandhi, already renowned as both a political and a spiritual leader.
Gandhi withdrew to his ashram to contemplate the task ahead. It was an enormous responsibility as well as a task full of complexity and nuance. The campaign would have to unite a diverse population of Hindu, Muslim, Sikh, and outcaste Indians, who were often at odds with each other, into a single national effort. At the same time, it would have to somehow avoid getting people so riled that it would devolve into violent outbursts, violate Gandhi’s cherished principles, and cede the moral ground. When his friend, the internationally famous poet Rabindranath Tagore, visited him in January, Gandhi told him, “I am furiously thinking day and night and I do not see any light coming out of the surrounding darkness.”2
This is not uncommon for transformational change efforts. Every movement starts with a sense of grievance. Yet to succeed, you must go beyond grievance to identify an affirmative vision for what you would like to be different and then identify a single, fundamental change that will bring that vision about. That’s no small task. The women’s movement in the nineteenth century, to take just one example, struggled for decades to identify a single, fundamental change that would uplift women everywhere. At the time, women were treated almost like property—they couldn’t own land, get a substantial education, or seek legal protection from an abusive husband. So it wasn’t at all obvious that voting rights would become the focus of the movement. Yet that’s what led to greater equality.
Talia Milgrom-Elcott, who leads 100Kin10, a movement to train 100,000 STEM teachers in 10 years, calls this a “keystone change,” based on the ecological concept that an entire ecosystem is highly dependent on the existence of one or two species. Identifying that keystone change is the first major challenge of any change movement, and until you meet that challenge, your efforts will likely be in vain.
So Gandhi continued to meditate on the problem. January turned into February. February turned into March. And still nothing. Finally, he emerged from his ashram. Then, in a letter to the British Viceroy offering one last invitation to negotiate before the campaign began, Gandhi announced his plan:
He would march for salt.
It seemed like some sort of joke. The Statesman, a prominent English language newspaper, noted at the time, “It is difficult not to laugh, and we imagine that will be the mood of most thinking Indians.”3 The British Viceroy, for his part, wrote, “At present the prospect of a salt campaign does not keep me awake at night.”4 Nobody seemed to take Gandhi’s plan seriously.
But it was no joke. In fact, identifying salt as a keystone change was to be remembered as Gandhi’s greatest stroke of genius and the culmination of two decades of seeking to bring truth to power.
Mohandas Gandhi was born to a middle-class family in Gujarat, on the coast of India, about halfway between Mumbai and Karachi. His father, prime minister to a local autocrat, died when he was 16, putting pressure on the family finances. Still, a family friend suggested that he go to England to get a law degree and assume his father’s former stature. While there was significant resistance in the family to his going abroad, Gandhi refused to be dissuaded.5 Gathering money from relatives, he traveled to London to study and, a
few years later, won admittance to the bar.
When he returned to India, however, he proved to be poorly suited to the legal profession. Due to his inherently shy nature, he had trouble speaking in public and was unable to cross-examine witnesses. He soon found himself reduced to filling out petitions to the court. It was hardly the makings of a fruitful practice. So when he was offered the opportunity to work on a case in South Africa for a prosperous Indian merchant, Gandhi took it eagerly.6
It was in South Africa that the young Gandhi had his first experience with true color prejudice. Having paid for a first-class train ticket, he was asked to move to a third-class compartment. When he refused, he was kicked off the train. On a later train during the same trip, he was forced to ride outside the compartment in the cold. Although a well-educated lawyer, he was nonetheless considered a “coolie,” who was unfit to reside with Europeans or even to share a footpath with them.7 “I saw that South Africa was no country for a self-respecting Indian,” he would later write, “and my mind became more and more occupied with the question of how this state of things might be improved.”8
After his case was finished, Gandhi chose to stay and help with the struggle to gain rights for Indians in South Africa. With newfound confidence, he became more assertive, built a prosperous law practice, and eventually brought his wife and young child to join him. He would spend 21 years in South Africa, fighting for the rights of his fellow Indians.
