How to have the confidence to disrupt

Dear Rethinkers,

One of my favorite principles on?disruption?is “the Shirky Principle. It states:?“Institutions will try to preserve the problem to?which they are the solution.”??Clay Shirky

Such a simple,?yet powerful?observation. You’ll notice examples everywhere, including decades of resistance from traditional newspapers to online news channels, Kodak’s resistance to digital photography, or Blockbuster’s blindness to content streaming. It doesn’t just happen in business; many charities require an ongoing problem – homelessness, illness, deforestation — to justify their existence. I once suggested to employees at a well-known foundation focused on childhood obesity that their end goal was to become?irrelevant. You should have seen their faces!?

Understandably,?no?one wants to make themselves irrelevant. I think it's the buried fear of many leaders that’s not discussed within their organizations. The result is organizations continuing to act in the self-interest of their survival, as opposed to truly fixing a problem.

?Disruption is a persistent theme in business these days, but most organizations still tend to focus on new technologies rather than addressing the deeper problem — mindset. Ironically, the innate fear of making oneself obsolete?makes us resistant or blind to new or different ways of doing things.

This week we’re?rethinking disruption?— and to do so, we’re pulling back the curtain on the critical iTunes deal that completely?transformed?the way we listen to music.?

Why do we get locked into old systems to solve old problems??

Take any problem — from something mundane, like doing your taxes — to listening to music. Solving a problem requires building a system and structure around it; institutions like the Internal Revenue Service get formed. You find yourself needlessly filling out forms each year or paying someone to do it for you. More money is invested into the industry that, over time, becomes more bureaucratic and complex. The IRS is one example of many institutions locked into an old framework, an old system. Similar dynamics can play out in obsolete?“functions” within an organization. Have you ever seen a department fight to preserve its existence?

?Two signs of the Shirky Principle at play are:

?1. The complexity of a system is wasting productivity or attention.

2. A structure, channel, or format created to solve an old problem is now itself the problem.

When a vested interest or an idea used to solve an old problem is in the way of change, it’s a loud signal that it’s time to?disrupt?your department or industry.?

?Take the music industry 20 years ago

Picture this: It’s 2002, and the music industry is in chaos. Napster has been shut down, but there is still no clear copyright ruling in the court case. New subscription services, music devices, and illegal digital downloads are carving up the market.??

CDs, up until this point, had been highly profitable. But the Mp3 players that were starting to be developed were a “look over here” distraction from what was really going on. CDs and Mp3 players were the “shiny things.”

The industry’s?problem was actually behavioral: People wanted a song or two without buying the entire album; they wanted to access their music instantly and often for free. It was a music Armageddon. No wonder the executives in the industry were resistant and blind to solving the problem.?

And then along comes Steve Jobs with the iPod and iTunes.

I’ve always wanted to know what?really?happened between Jobs and the music industry executives back when the music industry was changing forever. So, I reached out to?Paul Vidich?to see if he would have a conversation for an episode of Rethink Moments.

Vidich might just be the most influential person in music you’ve never heard of. He joined Warner Music as their seventh employee in 1987. A decade later, he was charged with solving the problem of digital music (and music piracy) that was growing like wildfire. His story is phenomenal.

In 2001, in his role as Senior Vice President at Warner Music, he entered the Apple offices for a showdown with Jobs.

“He was sitting and rocking back and forth in his chair, and at one point, he leans forward and, in a loud voice, said: ‘You guys in the music industry all have your heads up your asses,’?I leaned forward and looked at Steve and said, ‘Steve, you're right. And that's why we're here,’”?Vidich told me.

In this incredible episode, which you can listen to in full HERE or below, you'll hear Vidich unpack the courage and impartiality that is often required to overcome the deep mindset inertia that gets in the way of disruption.

“The senior executives were trying to figure out how to solve the problem, which was how do you put a new format into the marketplace that gave people what they wanted and for which they would pay — and they'd still have a good experience,”?Vidich said during our conversation.

The American novelist and social reformer Upton Sinclair wrote: “It is difficult to get a man to understand something when his salary depends upon his not understanding of it.” It’s not even a conscious or malicious response. It’s innate.?

Here’s the question Jobs and Vidich kept coming back to that made me rethink disruption: What needs to be sacrificed to make change happen?

Not what needs to be added or gained — what needs to be?simplified or removed to make an entire industry shift and align with what people want or need?

Ostriches, fighters, and pioneers?

I've seen three distinct mindsets in response to disruption: ostriches, fighters, and pioneers.

• The ostriches are the people with their heads in the sand. Or, in some instances, perhaps their heads are somewhere else. They're ignoring the need for change.
• The fighters are determined to take down the competition, sometimes at all costs.
• The pioneers are prepared to show the humility to let go, challenge assumptions, and to do things differently.

Vidich was a pioneer. He proudly displays the framed, signed deal with Jobs, dated December 5, 2002, on his wall. Here is how he described his Rethink Moment:

“It was the recognition that to solve the music industry's problems, the music industry was going to have to disrupt itself and it wasn't something that most of the executives in the industry were going to do.

It required somebody who was going to give up the thing by which the industry measured its success, called profits. In exchange for something that is hard to measure, which is called, you know, consumer satisfaction. And sometimes they're the same and sometimes they're not the same.”

If you’re facing change (or resistance to change), I’d encourage you to listen to this incredible episode?of Rethink Moments on Apple, Spotify, or wherever you get your podcasts.

I hope you're enjoying the new podcast series that we’re making to bring stories and themes around the newsletter to life. All feedback and ideas on what you find helpful, makes you rethink, or what you don’t like is welcome (please tag comments #rethinkmoments so I can respond.)

?Keep rethinking…