January 29, 2015 by Speakers' Spotlight
Q&A with Frans Johansson: How “Luck” Can Be Used to Enhance Success
Frans Johansson has electrified and inspired audiences worldwide with his thought leadership on innovation, diversity and success. The bestselling author and thought leader shows organizations how to innovate, grow, and create a self-sustaining culture that can withstand even the most volatile conditions. His approach redefines unpredictability as opportunity, diversity as profit, and execution as strategy. Wired magazine interviewed Frans and asked him, among other questions, whether we should give up trying to predict what’s going to happen and gamble our money away, why Malcolm Gladwell is wrong and what businesses can learn from the dating scene:
In Malcolm Gladwell’s bestseller Outliers, he argued that the key to success in any field is a matter of practicing a specific task for 10,000 hours. Frans Johansson, author of The Medici Effect, disagrees. In his latest piece of non-fiction — The Click Moment — he obliterates the idea that success comes from analysis or planning or strategy, and suggests that it has much more to do with serendipity or randomness than we’d like to believe. In order to thrive in an unpredictable world, we must increase the serendipity in our lives and careers and learn how to seize opportunities. We need to turn our attention to those times when luck and skill collide — something he refers to as a “click moment”.
To what extent to you agree with Malcolm Gladwell’s thesis that you can become successful in any field with 10,000 hours practice?
The 10,000 hours practice rule only works in a field like tennis where the rules don’t change. However, take a company like Nokia — if the mobile phone sector worked like tennis, it would have owned that field and been on top for a long time because of its expertise and economies of scale. It thought the mobile phone world was about cool colours, cool shapes and cool ringtones. In one fell-swoop that all changed — no one cared about colours or shape, they are all flat and rectangular, and no one cared about ringtones, it was all about apps. Nokia wasn’t stupid, it just thought it knew the answer, but in an unpredictable world it didn’t.
So are you saying that success is never down to planning?
As companies become more structured, they think these serendipitous things are the exception to the rule. I make the point that it is the rule. Companies end up engineering out their ability to embrace randomness; it becomes all about predictability. But unlike tennis, the rules change the whole time. We even do it ourselves. If I asked you “how do you become a successful journalist?”, you would say “well you need to this, and that and this and that”. But if I asked you how you specifically became successful, you’d say, “well I was starting out doing this, and then I moved to London because I had a relationship, which led to another conversation and something else happened…”. This happens over and over again. We think that we are the exception, but we aren’t. Every company and every career has a story like that.
Can you give an example of a “click moment”?
Youtube started as a dating site [a video version of Hot or Not]. It was awful as a dating site. People had to upload their videos and have people vote on them. Who wants to do that? Then two of the founders [Chad Hurley and Steve Chen] go out to dinner — they filmed the dinner but had nowhere to upload it. Then the third founder founder [Jawed Karim] tries to find a video of a Janet Jackson wardrobe malfunction and can’t find it, and so when they meet up they think “wait a minute, you want to upload a video, I want to find a video, our platform can do that. Eighteen months later they sold it for $1.65bn to Google.
Can’t serendipity lead just as easily lead to disastrous outcomes as it does good ones?
People say luck is blind. And so, in some ways, yes. What I’m arguing for will lead to more “disasters”. But you need to play purposeful bets and take statistical advantage of randomness. Think about Angry Birds. Rovio made that game and people said “whoa, it’s an overnight success”. Well no. Actually they’d been around for eight years and it was their 52nd game. No one has heard of the other 51 but if you or anyone else tried something 52 times, you would have a pretty good shot at doing something remarkable.
How do you mitigate the risk of these bets?
You need to mitigate risk by making sure the bets are small. I had a conversation with the CEO of a conglomerate. He said that he had given a manager $3m (£1.86m) to do something and nothing came out of it. I asked, “are you going to give this person another $3m?” and he said, “no. There was failure there”. That’s where he was going wrong. He should have given her $3m (£1.86m) and told her to place six separate bets at $500,000 (£310,000) each to try different things.
But you still have to choose where to make those bets…
Absolutely. But in order to do that you first of all need to avoid relying on something like return on investment (ROI) calculations, which are absolutely flawed. The founders of Google started the business and ran it for nine months before choosing to try and sell it to Yahoo so they could go and continue their PhD studies. They approached Yahoo with a price of $1m (£620,000) and Yahoo ran an ROI on it and said it was not worth it. Before we say it was stupid, the founders were stupid too. Neither the founders of Google nor the largest search company in the world were able to run an accurate ROI on Google. The same happened with News Corp buying MySpace.
What sort of people do you need for this kind of approach?
You need a passionate team that has the wherewithal to stick with it through the inevitable mistakes they’ll make. This requires companies to reward output instead of punishing failure. Action matters more than sitting and running numbers. If you decrease the cost of failure you will see that people’s risk tolerance will go up.
Who has got this technique right?
Richard Branson. He focuses on what he is passionate about and he is unapologetic about that, which means he’ll keep on trying until he gets it right. If he doesn’t he’ll drop it and move on. He has tried his hand at lots of different industries, trying to get something to work. He’s the classic case of how the 10,000 hours rule is obviously flawed. He started Virgin Music and then starts an airline with how many hours of experience? None.
What’s your most significant click moment?
Meeting my wife. Something I find fascinating is that people feel that the proper way to ensure success is to think things through carefully and analyse them. That’s in all areas except for one, which has to be the single most important decision they make in their lives: the person they want to spend the rest of their lives with. All of a sudden serendipity is a good thing — a whole movie industry is built around it. We want to be surprised when we go on a date. We want something to tell our friends about (“oh my god I just ran into this person”). Randomness is something we seek and want. This is the single most important decision we can make. Everything else we somehow think we need to plan it as if we can somehow do that in an uncertain world.
Are there any sectors where it’s particularly hard to rely on randomness?
Education. I’m amazed by the notion that you are supposed to know a certain amount of maths when you are 16, 17 or 18 but no one cares when you are 23 or 24 whether you know maths. That doesn’t matter any more. “Oh I’m 35 and I know this level of math” — if someone said that, it would be weird. But when you are younger it is critical. Everything centres around whether you are behind or ahead. Education is a good thing, but we can’t plan our success from following a certain path.
So I take it you aren’t a big believe in big data?
Obviously it’s very useful, but the data itself means nothing. What means something is what you do with it. If what you do with it is the same as everyone else is doing, it will not set you apart. You need something unexpected.