The future of industry leadership.

Embracing the outsider imperative

In 1931, Harry Beck was a 29-year-old draughtsman, working as a temp in London Transport’s engineering department. The electrical circuit diagrams that he was working on gave him an interesting idea, so he decided to show one to the publicity department, suggesting that it might make underground maps easier to read if they straightened the lines and spaced the stations more evenly apart, like in a circuit diagram. He was laughed out of the office.

Two years later, a persistent Beck persuaded the PR team to trial a print run of 1,000 copies. They sold out in an hour. Within six months there were a million in circulation and almost every tube system in the world now uses Beck’s style of map. Beck had never worked in PR or customer communications, and had no experience of cartography, which is probably why he came up with such a bizarrely brilliant idea.

Fast-forward over sixty years to Reid Hastings and Marc Randolph. Neither of them had ever worked in the film industry, and neither of them had ever run a retail store. But that didn’t stop them founding Netflix and putting Blockbuster, and a thousand smaller video chains out of business. As with Beck, their biggest strength was their outsider perspective. Unburdened by experience, they were uniquely placed to think outside of the prevailing conventions and imagine a completely different way to dramatically improve what was on offer.

One of my most successful clients started their business 25 years ago, by taking processes they’d seen working in the automotive industry and using them to introduce an entirely new service model in a completely different market. They now own over 25% of that market and they’re still growing. Another client recently explained to me how they took their inspiration from Apple stores, where customers are far more likely to want to touch, feel and play with the product, than to simply walk in and buy it off the shelf. They’re in a completely different market to Apple, but they recognised how powerful that interactive experience was, completely redesigned their own business, and they’re now reaping the benefits.

The common theme across all those examples, is that in each one, the innovation didn’t come from within the business, or from competitors, it came from much further afield, from way outside the regular radar. Which is why it makes me wonder why so many businesses still spend so much of their time obsessing about their competition.

Taking ideas from others in the same industry is inherently self-limiting. It’s impossible to get ahead of the pack if all your points of reference, your sources of inspiration, are within that same pack. None of the successful businesses I mentioned were remotely concerned with chasing the competition. They were all looking much further afield; outside their sector, their industry, sometimes outside of commerce entirely. Their aim was not to compete but to lead; to leap out in front of everyone else, and to run so fast that their competitors could never catch up.

It’s hard to break such an entrenched habit. But it’s also hard to run fast while looking behind you. There’s a reason Usain Bolt didn’t wear wing mirrors.

It’s one thing to encourage head office teams to get out to the front line, to walk in the customer’s shoes and spend time shopping the competition. It’s another thing entirely to get them looking outside of that radar, exploring innovations in entirely unrelated fields, on the off-chance that they could find a way to break completely away from the norm, to fundamentally reinvent the industry. But that’s precisely what business leaders need to start encouraging.

In the 1950s, the average time a US company spent in the S&P 500 was 50 years. By 2012 it was less than 20 years. Businesses are no longer steadily trading share with competitors, they’re being increasingly disrupted by outsiders. For an industry leader now, the biggest threats and best sources of inspiration are not the established competition, those traditional sources of worry, they’re the outsiders: the ones that surprise you, delight you, blindside you on a random Wednesday afternoon.

How are you going to spot them?