Seeking Surfboards...riding the next wave of digital innovation

This is my keynote speech from Solstice FWD 2016. The video, slides and text of the speech are below.

Earlier this summer I took my family to Gulf Shores, Alabama to vacation with our extended family. We rented a place on the water and spent most of our time at the beach.  I have four young kids and they were anxious to play in the waves with their cousins.  The surf was relatively high, even for the Gulf, so I went out with them.

The first day we spent our time letting the waves crash into us. It was fun, but exhausting. We played a game to see who could stand up the longest and not fall over.  Over and over the waves pounded into us, until eventually, we all became too tired, fell down, and swam back to shore. The waves won.

The next day we went back out to the beach, but since we were a little beat up, we decided to build a sand castle instead. We bought some buckets and shovels and really went after it.  I mean, our castle was Game of Thrones style, complete with a moat, towers and curtain walls. But, as the tide rose, the waves came in and slowly started eating away at those walls. And in a short amount of time, the castle was gone.

The third day we threw in the towel and went over to the over priced water sports shack and rented some boards. Now admittedly they weren't full surf boards, the waves weren't quite high enough for those, but they were fun none the less. We spent the day paddling out to sea and riding in the waves.

All of a sudden the game we were playing changed.  We no longer were simply trying to stand up, but instead tried to see who could ride the longest.  And when a big wave came at us, we weren't nervous it was going to wipe out our sand castle, we got excited. Because we knew we could ride those big waves even further than the small ones. We had a blast; and spent the rest of the week learning our new craft.

Ladies and Gentlemen, we are all here today because it’s an incredible and vitally important time to be alive.

The pace at which we’re changing as a human race is more rapid today than ever before, and advancements in technology are undeniably the force driving these waves of change.  

These waves come in many different forms.  Waves of new digital channels facilitating new ways to interact with customers and colleagues.  Waves of new expectations around experience and product design. Waves of new business models, brought about by a fully connected world, rich with data and ripe for automation.

These waves represent digital disruption.  As individuals and digital stewards of our businesses, we all have a decision to make. We can stand at the breakline, like I did with my kids that first day, and hope the strength and legacy of our businesses can withstand the waves.  We can try to build something, like a sandcastle. Something that might stem the tide for a bit, all the while knowing it’s not a permanent solution.

Or we can seek surfboards.  We can choose to embrace the magnificent force of these changes and use them as a catalyst for our business. We can choose to Ride the Wave. We can capitalize on new digital channels and capabilities as a way to differentiate our core businesses.  We can elevate our experience design to be one that sets the trends, not follows.  We can combine our company’s strengths with the new capabilities of a fully connected digital world to explore brand new ways of doing business.

Today, My goal? Is to teach you how to surf.

Now every good Illinois born, Lake Michigan dwelling surfer knows there are 4 fundamental rules to surfing.  Let’s go through them together.

Rule #1 First Surfer Up, Closest to the Curl, Has Right of Way 

In surfing, being first gives you the right of way. The same happens when you’re tackling digital disruption. We call this the first mover advantage. Let’s look at a great Chicago company as an example.

10 years ago, JD Power and Associates released their first ever Credit Card Satisfaction Survey. They looked at all areas of the credit card customer's journey and evaluated all of the top players on the market. Not surprisingly, American Express took home the crown.  They were the biggest credit card company with the biggest budgets. And they continued to take home this crown every year, for the next 7 years.

But Discover, who was almost 200% smaller than American express, saw an opening.  As more customers started moving towards the digital channels for self service, they made the decision to use digital to level the playing field.  While holding firm to their promise of treating their customers the way they deserved to be treated, they decided to invest in creating the most amazing self service experiences across not only the contact center and the web (where their customers were) but mobile, where they knew they’d be going. They decided to stop following American Express and instead, started leading the industry with new digital innovations across the web, contact center and emerging mobile channels.

They became the first surfer up, closest to the curl.  In 2014 they tied American Express for first place in that JD Power survey. In 2015 they won the award outright and this year, they won it again.  And in the past three years, their stock price has outperformed American Express by more than 30%.  Discover decided to stop building sandcastles and started seeking surfboards. They knew they could be more nimble than their larger competitor and they used that nimbleness to their advantage.

Today you’ll hear from first surfers up like Ron Zink, from John Deere, Mark Relph from AWS, Mike Houlihan from Pullstring and Randy Cavaiani from BMW.  And today’s topics around IoT and Conversational UX offer a "first surfer up" advantage for the hungriest and most aggressive companies.  

Rule #2 Paddle Out Wide to Avoid Collision

When paddling out to catch a wave, surfers will paddle out wide of other surfers, in order to avoid  competition for the same wave.

In the digital world, we call this "creating a category". Creating a category involves not only creating a great product, but creating a great experience, a great company, and a new category at the same time.

We’ve all experienced effective category creation at work. In the beverage industry for example, Gatorade created a category of sports drinks, Kuerig created a category of K Cups.  5 Hour Energy, understanding the demand for energy drinks but also understanding how awful they tasted, recreated how we think about consuming energy drinks.  

What these companies realized is that the key to creating a category is challenging the status quo of how we think about how the world works.  They defined a new “problem” that needed to be solved.  Then they marketed the problem, as well as the solution.

They paddled wide of the other surfers, to catch their own wave.

Salesforce and their famous campaign of “no more software” is a great example of a category creator.  They marketed the problem of installing bloated ERP software in the enterprise environment. Then they provided the solution to that problem, Software-as-a-Service, thus creating a new category.

Right now, digital is bringing us all a tremendous opportunity to create new categories.  Uber, AirBnB and Amazon are obvious examples, but you don’t have to be a digital startup to create a category.  One of my favorite stories of 2016 is from Bosch.  

Bosch is one of the largest producers of after market auto parts in the world. Similar to their other well known product lines, like appliances and tools, their auto parts are known for solid engineering and phenomenal quality. Bosch also has a network of auto mechanic franchises all over the world.  The problem that still existed, they realized, is that people simply hate going to the auto mechanic. It’s an inconvenient service that robs people of their mobility and lacks transparency. At the same time, much of their product sales were at the whim of the mechanics fixing cars and not the consumers themselves.

Bosch decided to paddle out wide to avoid a collision. Leveraging the power of today’s digitally connected world, they designed an entirely new category for on-demand auto repair, called SweetWorxx.  With SweetWorxx, if you have any car maintenance or repair needs, you simply call up the app, get quoted on the spot, and have someone pick up your car and return it when maintenance is complete.  They even drop off a rental car if the customer needs one. They’ve created a new category on the backs of what they do best, build phenomenal auto parts that customers love.  They recently launched SweetWorxx in California and are seeing tremendous feedback in advance of their nationwide launch.

For category creators, disruption is not the goal, creation is the goal.  Category creators paddle out wide to avoid collision. Category creators create a gravitational pull on the market.  They ride their own wave.

Today you’ll hear from category creators Like Michael Francisco from Amazon’s Alexa, Eric Lemond from GoGo, Kristian Hammond from Narrative Science and WonJin Kim from Samsung. And today’s topics around Virtual and Mixed Reality, Artificial Intelligence and Robotics offer opportunities for new categories to be created across every industry.  

Rule #3 Surfing is a Team Sport

Experienced surfers know that surfing is a team sport.  Surfers are responsible for watching out for one another, which empowers everyone to be more courageous.

This rule is all about culture.  Many large organizations struggle with creating a culture of risk takers and in-trapeneurs.  A test and learn culture that rewards “learnings from failure”, alongside success. To cultivate the courage to ride the wave because you know your peers are behind you, ready to help pick your head up above the water if you fail. These are the fundamentals to building a culture of innovation.  And many organizations struggle greatly with it.

Conservative cultures that are afraid to take risks lead to a lack of Courageous Executives. These are the individuals needed to transform an analog organization into a digital one

A couple weeks ago I was talking to a colleague about a potential digital product initiative they were considering bringing to their board for funding.  He was hesitant. He said, “J, I’ve worked  my whole career to get into the position that I am in. If I risk my reputation on this and it doesn’t work, I know the guys who will have it out for me. Our organization just doesn’t like taking risks.” I asked him if he believed in the concept. He did. I asked if he agreed with the research that had been done thus far to prove it’s merit and he said he did.  And then I told him about the bumble bee.  

You know, according to the laws of aerodynamics, a bumble bee shouldn’t be able to fly. Its wing span is much too small to support its fat body.  In fact physicists have been stumped as to how a bee actually gets off the ground.  Luckily, no one ever told the bumble bee that.  

You see, even in a large bureaucratic organization, it’s amazing what the power of only a few individuals can accomplish.  I asked him, "Why did you get into this industry in the first place? Did you get into it to become the body of the bee, or the bee's wings? To create disruption or be a victim of it?  To play offense or to play defense?"

Ladies and gentlemen I know you’re in a difficult position. I know sometimes it feels like no one else cares. That the chips are stacked against you. But that is no excuse to give up.  In the words of one of our greatest presidents, John F Kennedy:

“We choose to go to the moon not because it easy, but because it is hard. Because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win.”

Taking risks as leaders relies on knowing not only that your organization encourages it, but that your peers have your back. Surfing is a team sport, the courage to ride the wave comes from knowing, you’re not going it alone.

Today you’re going to hear from a panel of courageous executives, as well as some of the industry’s great disruptors.  James McQuivey literally wrote the book on digital disruption. Melissa Stevens has a storied career of being the bees wings for some of the worlds largest global organizations, and she’s just getting started. And Dennis Hall will talk to us about how he has turned a 100+ year old iconic institution into a digital leader in their industry.  

Rule #4 Drop Off Before You Get Dumped

Surfers know when a wave has run out of room. They hop off the wave before they get too close to shore so they can get back out and catch the next one.  This is called pivoting. You have to be clear about what your business’ purpose is, not just its product or service.With digital your products and services will inevitably have to change.  

You’ve got to always be looking for the next wave.

Solstice is not immune to disruption. A little over 7 years ago, we pivoted from developing web-based customer experiences into mobile strategy, design and engineering.  Although mobile only represented 5% of our revenue at the time, we knew mobile represented the future of digital customer experience.

It was a scary time for me. I remember back to some of those meetings we had, and it wasn’t easy.  But we decided to seek surfboards, not sand castles. We knew what wave was coming and we decided to ride it, instead of trying to withstand it. We’ve helped many other companies ride that wave and have been rewarded with tremendous growth in the process.

But the needs of the market have changed, our vision of the future has broadened; and our strategy, design and engineering capabilities have evolved to follow suit.

Our purpose remains the same. We exist to prove what your business is capable of.  But in order to do that in today’s world, we must acknowledge that the definition of mobile, the definition of digital, is different.

As you walk around our Innovation Hall today you'll notice that all of the experiences across displays, kiosks, Facebook Messenger, Hololens, IoT and Robotics are personalized, interactive and contextual; without you ever having to download an app or visit a website. This exemplifies what we call "The Post-Mobile Era". It doesn't mean apps are dead, but that mobile has moved past the glowing rectangle in our hands and into the world around us. Digital is no longer constrained to handsets and tablets, it's about delivering meaningful experiences in context of our user’s environment.  

The point is this, the expectations of the consumer are changing. Your business purpose should remain consistent, but your products and services will have to change. We all have to be willing to Drop Off, Before We Get Dumped.

Guys, it’s time to find the next wave.

Today we are here to forget the stresses of today and look towards the future. At the next break, I want you to come talk to us. Check out all of the experiences in the Innovation Hall. Network with the speakers and with one another. If you ask Siena, she might even have some people she’d like you to meet.

And when you leave here today I want you to seek surfboards, not sandcastles. I want you to become the courageous executive, the bees wings that each one of our businesses need, that your employees want to follow.   I want you to be first to the curl, I want you to paddle wide (and paddle fast) and not just create a product, but create a category.  Find new problems to solve.  Define new ways to move yourself, your business and humanity, FWD.

Thank you.

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