Chasing Digital: Machiavelli on Digital Innovation

Niccolo Machiavelli (1469-1527) is perhaps best known for his novel on political science, The Prince (1513). In Chapter 6, Machiavelli gives some insight into the problems of the innovator. Like most of what Machiavelli had written, it is as real today as it was in 1513.

The innovator makes enemies of all those who prospered under the old order, and only lukewarm support is forthcoming from those who would prosper under the new. Their support is lukewarm partly from fear of their adversaries, who have the existing laws on their side, and partly because men are generally incredulous, never really trusting new things unless they have tested them by experience.

But to discuss this subject thoroughly we must distinguish between innovators who stand alone and those who depend on others, that is between those who to achieve their purposes can force the issue and those who must use persuasion.

It is easy to persuade them of something, but difficult to confirm them in that persuasion. — The Prince, Niccolo Machiavelli

The period in which The Prince was written marks an important lesson in understanding innovation and succeeding or failing to get innovation through. Set in Florence in the 16th century, The Prince depicts different colors of political leadership and country-management styles. Most importantly, the Republic of Florence (then) was the only Italian city to thrive in art, science, and technology.

The home of painters such as Dante Alighieri, Leonardo Da Vinci, Michelangelo and Botticelli, to name a few, Florence was renowned for its beauty and growth compared to other Italian cities. Florence was a danger to Rome, a town that embraced art and intelligence above religion. Rome was also concerned about the way in which intelligence and art were communicated because communication was conveyed in Italian rather than in Latin. Machiavelli himself wrote The Prince in Italian, thus reflecting one of the indications of innovation in the form of written literature.

While the opening quotation defines the development of a fresh principality or state in a political context, the text may be applied to other circumstances. In our case, we're going to discuss the innovator in the company globe.

Dissection of the text:

In the first part of the quotation, Machiavelli draws the attention of innovators to the fact that they will make enemies of those who, prior to the new rule, have succeeded or enjoyed authoritative roles.

We're going to take it piece by piece; first, in the situation of an entrepreneur who creates a fresh concept for a product or service. Using a familiar figure to demonstrate this instance, we're going to use Steve Jobs. Jobs confronted an opponent twice or more than once, but we're going to use the two common ones. When Steve imagined a personal computer in every family, he was mocked and turned away by many investors. The second time that Apple Inc. was formed and Jobs was working on the Lisa Computer, he was fired from his own business.

The following text describes why innovator faces people's adversaries. As Machiavelli put it, individuals are incredulous or skeptical about fresh stuff. Back in Machiavelli's youth, Da Vinci worked on ways to make individuals fly, and his concepts were deemed preposterous, and he was labeled a crazy artist. But surely, centuries later, flying became mainstream. When Jobs argued for personal computers, it turned out instantly, and that's because investors saw it as impossible, very dangerous, and completely absurd, coming from a nineteen-year-old drop-out.

In the second case, when Jobs worked on Lisa, he required more time until the product realized his vision. However, the patience of shareholders is short-lived, and once again Jobs has encountered the same skepticism and mistrust. It may seem ironic, considering that Jobs had already made his first innovation (private computing) but the shareholders had become accustomed to the current manner of doing stuff, and accepting a fresh concept did not seem "secure" to them.

Distinguishing between the innovator who uses force and the one who uses persuasion:

Machiavelli then demonstrates two methods the innovator can use to get his message through. The first is the one who utilizes force, and the second is the one who utilizes persuasion. Machiavelli points out that "persuasion" is a double-edged sword. One may convince another with the concept of an idea, but the latter may still choose to follow his or her way of doing things. The persuader must guarantee that the latter confirms that he is acting on the concept, not simply entertaining it. This involves a lot of skill in knowing the individual (or individuals) you're attempting to persuade.

The use of force can really fire you back. Unlike the art of persuasion, there is no gray region; it is either black or white with power. With force, you would have to master such manipulative abilities, threats, and other unfavorable means to achieve your end outcome. In this situation, you'll create more enemies than friends, and when you start a company, you'd definitely need more friends than enemies!

But there are other methods to use force, and that's indirect. If you have a big network in your sector, and you understand individuals of impact and authority within your sector, then "strengthening" your concept through them can assist you to attain your final outcome. If your dad is well-connected or your uncle or mother is well-connected, then your dad, uncle or mother can speak to colleagues who work in important organizations to speak to their colleagues to get your concept, product or service on the market.

Now, depending on the position you are in and the assistance you have in hand, it is up to you to evaluate the technique you want to use to bring your concept to market.

Back to persuasion, though, we're going to take a look at a situation where persuading the audience and confirming persuasion actually succeeded. Amazon.com's founder, Jeff Bezos has been innovating in the manner individuals have shopped. With an insane concept in one side and an adverse profit/loss declaration, Bezos had only his faith in selling to investors. His unshakeable belief in his vision made it hard for investors to be skeptical. He did not demonstrate them that he cared if they turned their backs on him (though he did care and required their assistance), but he showed that he was prepared to continue until the industry absorbed the concept of online shopping.

He wrote a letter to his significant shareholders, which was then framed and used as a mission statement by Amazon.com:

“We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate directly to higher revenue, higher profitability, great capital velocity, and correspondingly stronger returns on invested capital.

Our decisions have consistently reflected this focus. We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degrees to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as we move to establish an enduring franchise.” — Jeff Bezos, founder of Amazon.com (Quoted from “The Everything Store,” by Brad Stone).

This letter was published back in 1998 when the internet footprint was very small. Amazon.com is an empire today.

Reading Bezo's letter and re-reading it again, you can trace his art of persuasion.

1. He stressed the significance of generating value for its shareholders. This was placed right at the start of the letter. In other words, he showed the shareholders that he saw stuff from their point of view.
2. Next, he referenced "market management" and usually that means — if well sustained— more cash flowing into investors ' pockets. So, to get the shareholders ' attention, he appealed to their concern, i.e. cash.
3. In the end, he showed his unrelenting persistence in investing to develop the company. In other words, whether or not they are with him, he will discover ways to grow the company, and those who follow him will reap benefits. He wasn't going back down; he was going to sail the boat, no matter what was going on.

Bezos had already persuaded investors to accept Amazon.com, but his letter to them was intended to confirm their recognition. Steve Jobs, on the other side, had not been confirmed in his early years. His departure from Apple Inc. acted as a persuasive agent. When he returned to Apple Inc., he used a combination of strength and persuasion to save the business from bankruptcy.

He exercised his authority by appointing himself as CEO (interim) and Chairman of the Board, and only through that power was he able to force his thoughts through and guarantee that they were carried out.

The Innovator in Established Organizations: 

Many well-established organizations place the term "innovation" on their value statements; mission statements and guiding principles. Yet almost all of these organizations are failing when it comes to innovation. Why? Why?

For one thing, innovation is costly. But let's go back two steps: innovation has been misinterpreted. Innovation does not necessarily imply inventing new products or introducing new ones. And by no means does innovation imply the addition of social media as fresh channels of marketing!

Innovation is an enhancement of something that already exists. Innovation is making things better for all stakeholders. Suppose we're in the commercial leasing company. The standard way is to develop a business tower and sell vacant units or towers to customers (companies, people or investors). You've been doing this for years, and you've been happy to receive the return on your investment. Your shareholders are happy with this. Why do you alter stuff?

So, back to the instance in our offices. You realize that running more advertising campaigns or rebranding is expensive and the market is saturated with real estate ads that if you stand out today, your audience's attention won't last too long. If you decide to lower your prices, your margins can be eaten away and your shareholders won't be pleased. Adding more parking space will require an investment and you're in the center of the year.

So, you're going back to your twenty-story construction, and you know you've had one empty floor since the start of the year, and that's costing you. You decide to take the floor, split it into tiny offices, supply it with printers, internet, funky furniture, and rent a tiny area for a well-known coffee brand. You then market tiny offices to entrepreneurs at affordable rates; you only understand they're going to have to use the printer/copier, the internet, the conference room, etc. So you're creating a pricing strategy that includes the price of setting up an entrepreneur's office room plus a tiny profit margin that you want to make.

With these easy measures, you have developed a niche market in a current, well-established market by implementing easy, creative ideas.

How do you sell a concept like this within the organization?

You're so confident of the concept, but you understand you've got to get it through various layers of leadership before you put it on the market. Now you're confronted with the same opponent as an entrepreneur. The Department of Finance will come up with millions of excuses; the Department of Human Resources will not be happy to add an unforeseen manpower plan; Legal will take forever to react to you; Marketing will enjoy the concept, but they are already swamped with job and a tight budget; and the CEO has no time for you!

What can you do?

Become an intra-entrepreneur, i.e. an entrepreneur within an organization. Please use the following measures:

1. You've got to have the same passion and excitement as an entrepreneur when speaking about his / her product.
2. Do the homework. The devil is in the details— go straight to the heart. Find out what the industry requires and where the gap can be filled by your business.
3. Gather followers or lovers or evangelists of ideas within the organization. If you have one person supporting your concept from each department, you have come to understand the way they see it from their own department's point of view. This is going to assist you to convince their managers later.
4. Make sure that you understand the figures very well. Don't over-promise; don't think so. Try to be as precise as you can with the financial result.
5. Make sure you've got a team. You can't operate in a vacuum. By getting a team, you can guarantee the board that this concept will transform into a true project and not just applaud and then shelve.
6. Once you have all the supporting information in place to prepare your case, submit it to the Board to make sure that you take their interest before yours.

And as Machiavelli pointed out, don't just win their attention with a convincing presentation, but confirm that you've won their hearts and that they're 100% on the project with you.

Throughout all ages, innovators have been turned down, dismissed, mocked, because individuals favor stability and security over change. Change is inevitable, but it is not very prevalent to change for the good. That's why individuals are skeptical about innovative projects.

Forcing individuals to acknowledge their thoughts is not always a feasible alternative, so persuasion is better advised. However, you always need to make sure that your audience is 100 percent with you.

The examples I have used above made it through because they shared one thing in common: perseverance. They pushed their way through the rejection, the petty failures, and the skepticism. They proved their ideas could work. They proved they were doing something that would make people’s lives better.

For news and insights find me on Twitter at @naullyn and to see what I do when I’m not working, follow me on Instagram.