Crisis Innovation: How Technologies Are Currently Shaping Societies With Mike Steep

Technology does have some pros and cons, but innovation has brought light to its goodness. Today, Dr. Diane Hamilton chats with Mike Steep, a prominent keynote speaker and author and the Founder & Executive Director of the Disruptive Technology & Digital Cities Program at Stanford. Mike talks about the goal of their technology program and touches on innovation and how it leads to the success of any company in the world. He also explains how other companies like Apple have innovated and improved revenues while others went down in a spiral. Join Dr. Diane and Mike as they further tackle privacy, globalization, communication, and so much more.

TTL 648 | Crisis Innovation

 

I’m so glad you joined us because we have Mike Steep here. He is the Founder and Executive Director of the Disruptive Technology & Digital Cities Program at Stanford. He is a genius in the area of disruptive technology, digital cities, effective leadership and disruptive innovation. This is going to be a fascinating show. If you have some questions about what’s going to happen in the future, you’ll probably get some answers.

Listen to the podcast here:

Crisis Innovation: How Technologies Are Currently Shaping Societies With Mike Steep

I am here with Mike Steep who is the Founder and Executive Director of the Disruptive Technology & Digital Cities Program at Stanford. He’s a prominent keynote speaker and author. He has a book called the First Light of Day. It’s so exciting to have you here Mike, welcome.

Thank you, Diane. It’s a privilege.

This is an honor for me. You’re such a fascinating guy. I don’t even know where to start with you because you had so many great stories. My research in curiosity was to try and help people become more innovative and everything you’re talking about is innovation and disruption. Can you give a little background of how you got to this level of success? What was your path to this?

It’s 35 years as an operating executive. The last corporate position that I held was senior vice president of Xerox PARC, which is known for all the early stage innovations that were done, including the development of ethernet and also the Mac interface for Apple. It’s a whole range of different inventions. Prior to that was with Microsoft. I had worked with the innovations team that was run by Bill Gates and also Gary Flake, who at that time was CTO. I’ve had a long operating career dealing with large corporations that have been doing innovation, including Airbus and others. I’ve seen the whole process first at the Microsoft, but also an earlier stage at PARC. That’s led me to the belief that there is an ongoing crisis in innovation that’s occurring because a lot of the development of disruptive technology is outside the corporate R&D organization.

In fact, we have some data shared with us. The total R&D spend worldwide for all corporations have roughly $2 trillion. Out of that total of $2 trillion, only $200 billion is being spent on what I would call at-risk new innovation. The rest of it is supply, meaning the existing product line. That number has been diminishing considerably. It’s at 10%. It used to be as high as 25% after World War II. In contrast to that, $300 billion in 2019 on the worldwide venture at risk innovation for disruptive technology. In other words, someone who’s inside the corporation is worried about innovation doesn’t have access to or is not aware of some of this disruptive technology that’s taking place outside the company. That’s the reason why we have a crisis in innovation.

What’s ‘at risk’ for those who aren’t sure what that means?

You know the story about the 50 Fortune group companies from several years ago and most of them have disappeared. The risk is that they get completely disintermediated and they disappeared. What ends up happening is you have new technology coming up from underneath and literally attacking their customer base. A good example of that is when Apple introduced the iPhone back in 2007. Nokia was the King of the cell phone. In fact, they were on the Forbes Magazine cover. Within a space of two years, Nokia went into a nosedive. Their revenue started to diminish to such an extent that it threatened the survival of the company while Apple essentially had the inverse trend of huge revenue growth occurring, a big tick up.

The introduction of that new value proposition of disruptive technology made a huge difference in terms of Nokia and how it was approaching it. What people don’t understand is that innovation came from the outside of Apple when Steve Jobs was working on the board of directors at Disney and also doing work with Pixar. He was outside the company when he came up with the notion that the whole platform should become an entertainment device. That was not something that came from inside of Apple. He brought that into the company and when he returned, he changed the name of the company to Apple from Apple Computer. He completely reformatted the entire strategy around entertainment content and that all was a result of what he had learned when he was walking the desert unemployed.

I had read a book about how the board of directors had come to him to get him to help Apple at that time. He didn’t even want to do it. The only thing he asked for was the private jet and eventually went little bit by little bit back in. The story is an interesting one. What I think is interesting in what you were talking about is how can this happen to Nokia? What happened to cause the fall and what can we learn from that?

There’s a slide that I use in some of the keynote presentations and it’s called tribal culture. On the right side are listed out all of the elements of what it takes to drive consistent revenue growth and earnings. On the left side is what we look at as the disruptive model for Silicon Valley, which is completely and totally opposite in terms of talent, how people do things, what their interests are and what their focus is. The left side is more like a Las Vegas casino where the entrepreneur is making bets on an extremely disruptive technology may win or lose. 90% of the time they lose, but on the 10% under the traditional venture model, of course, they went big time. The right side is all about keeping everything stable, no change, a consistent process without rocking the boat. The culture in many respects is what drives the ability to change or innovate.

That’s one of the reasons why large corporations have a hard time with this because they tend to hire people that are very much like themselves who are also interested in stability and finding ways to drive incremental revenue growth. The same thing happens on the R&D side of it. Whereas in the other model, people don’t have anything to care about in terms of stability because they’re reinventing a new product or a new service from the get-go. It’s their idea that’s looming and they get compensated through tremendous equity opportunity if they’re successful. Whereas on the corporate side you have bonuses, but you don’t have much in a way of upside potential unless you’re at the very top of the management pyramid, the food chain to get stock options. I think it’s a lot simpler than people think and trying to understand why it is that it’s so hard to do innovation. It’s cultural more than anything else.

That’s my interest. We have so many leaders who set the culture and if you’re at the bottom of this chain, nothing’s going to change. How do you get these leaders to recognize that they could be the problem? If they know that there’s an issue and they hire consultants and they go out and they get mentorship and they do things, then they’re on the right path. A lot of these guys, do you think somebody like Steve Jobs is going to go, “My personality is causing a culture problem here and I want to fix that?”

You have to measure it because a CEO of an existing corporation, even if they hire consultants doesn’t mean they’re solving the problem. Because the problem set is relatively complex. Take one example of an expertise level. I was in a keynote in front of the Metals Association and the head of one of the largest Fortune group companies in the world, the head of Metallurgy did not know about some of the technologies that I started to talk about in the presentation that directly impacted his business. The reason is very simple. He doesn’t peruse and doesn’t have connections or a bridge to that world. It’s very difficult for him when he’s focusing on driving incremental revenue to start looking way to the left or way to the right to see where disruptive technology is heading. He doesn’t even have the connection points into that world.

That’s part of the problem we have and that’s one of the reasons why I started the program. The whole goal of the Disruptive Technology Program is to take Stanford’s 400-plus technology labs crossing every conceivable type of technology from advanced materials to persuasive technology. Match it up with 30 corporations, each one in a different industry sector to help them build a bridge so that they can understand what that technology’s potential is and driving a revenue opportunity for the corporation. That’s a completely different model than what typically is done at a university. It’s a model that focuses on trying to get business modeling done, which is a scarce resource inside of large corporations to give them exposure in such a way. Even with that, you still have all the cultural complexity of how to process and systems have been put in place that essentially make it very difficult to be creative or to see how to get the technology into some new product or a service group without disrupting the boat.

Risk is extremely important because it is how companies ascertain what their strategy is going to be. Click To Tweet

What kind of a prerequisite do they need to get into this program? Who is your typical student? How long is the program and what do they go through in that?

Here’s the problem. We have more corporations interested in becoming part of the program than we can accommodate. Part of it is what I alluded to. There’s this crisis innovation. We did this survey of 400 companies and several thousand executives asking them to talk about innovation. Here’s the interesting part of that, Diane. Here are some results. Number one, innovation is absolutely critical to success in my company long-term, 94% agree to that. When you start digging down into it, what you find is that the biggest problem set that they have is they are not able to get the kind of product technology out into the market that’s innovative. Their failure rate is above 90% on new technology projects, which is incredible. Keep in mind, we’re talking about corporate R&D, not venture.

We’ve got corporate R&D. If we are using the survey results as a guidance point with a 90% failure rate on new projects, why is that? Even if you recognize that you’ve got a problem, you may have the wrong expertise inside your company to be able to drive a new innovation approach. Secondly, it’s highly disruptive because people who are like Steve Jobs or who are obsessive are not the kind of people that play well in the sandbox in large corporate environments. The system antibodies rise to try to get rid of those people or at least marginalized. That I’ve seen over and over again and the CEO has enough on their hands trying to figure out how to drive existing revenue and earnings to make the kind of decisions that will arise with new technology.

Let’s take a good example because you pointed this out, Apple. We don’t have a Steve Jobs in combination with the CEO of the company who is an operating executive, Tim Cook. As a result, what have we seen in the last several years in terms of new product introduction? Have we seen a radically new value proposition? No. Have we seen incremental product efforts? Yes. We’ve seen the development of the iPhone. We’ve seen it iterated to version eleven. That’s not the fault of the CEO. The CEO is an operating executive. He’s not a visionary in the sense of what Steve Jobs would be like.

Steve Jobs is so obsessive and that kind of personality that just doesn’t let go. It’s like a Jack Russell terrier going after a squirrel. You don’t have that anymore. A lot of the leadership in terms of their skillset inside of the company is highly linear. It’s toward a specific set of objectives and has a hard time dealing with what I call nonlinear thinking, which is what a typical entrepreneur does in many sense of the work. It’s a tough problem.

Are they on the path to being Microsoft Windows then, another version and nothing new?

Take a look at revenue growth. If we take a look at what’s happened on the financial side of it, it’s been okay, but it’s not been spectacular like it was through an introduction of new technologies like the iPhone for example. The company is just not equipped to do that unless it’s willing to take a real high degree of risk and we thought there was going to be an automotive product coming, but that’s no longer the case. The question is how can you drive the kind of revenue growth that Apple was notorious for without having a visionary in place that can help with that whole process of invention. It’s almost incompatible with the current goals of the company. It’s understandable, I’m not criticizing the current CEO or any of that. I’m saying it’s the nature of the beast.

Are you saying that you need a different leader then or are you saying we have the wrong expertise?

I believe it’s a combination of leadership and expertise, but the kind of leadership required to invent new product technology is highly disruptive in and of itself. Most companies cannot handle that. It’s very difficult. They can either hold it at arm’s length or they could invest in startups. As an example of that, in our program, we have a startup fund. If one of our corporate members finds it a little too risky to get involved in acquiring technology, but they think it’s important, they can do so by having startup invested in or they can license the technology longer term from Stanford. We provide a mechanism, like a Chinese menu for them to have multiple options depending on their risk level. Risk is extremely important and how companies ascertain what their strategy is going to be. It’s the gorilla in the room that people rarely ever talk about.

You’re dealing with more established companies in your training program then. Do you go with startups at all?

Yes, we have one called Cinema, which is a breakthrough approach to entertainment and brand. It’s based out of LA and it’s devising a way to use avatars to know what a real shopper would do with a virtual world where you reconstruct Fifth Avenue in New York, but walk into a store where you can buy things right through the virtual experience and then monitor it through your own eyes what is interesting to you or not. We also have OnePointOne. We have startups, but we also have large corporations to validate markets.

I’m curious of what you think if we’re seeing a lot of the more faking it until they make it. Is that what the mentality’s turning into in? is that good or is that bad? Do we need to fake it a little bit?

There’s an important role to fake it before you make it. There’s an important reason why that’s so. It’s the shiny blue light of the promise that draws the money. Remember that the investors don’t make money just from the fact that it goes public. They can sell shares at different cycle times and still be able to get step-ups. For Silicon Valley to draw venture capital in the way that it does, it’s got to crate this image. Kleiner Perkins in the dot-com era said, “The reason that people don’t get dot-com was growing like nuts is that they don’t understand IT.” That was from a partner at Kleiner Perkins. In other words, they had a superior understanding of why dot-com would work and the entire market crashed the following year. I think that the whole blue light imaging that takes place in Silicon Valley is absolutely necessary in order to be able to attract capital. Otherwise, what rational human being would want to invest?

I don’t know if you read Blitzscaling by Chris and Reid Hoffman. It’s like what they’re talking about.

TTL 648 | Crisis Innovation
Crisis Innovation: Innovation is absolutely critical to the success of any company.

 

It’s very delusional. It’s also how our city governments work in Silicon Valley when we look at affordable housing and all that good stuff. Here’s one stat that I think you might find interesting. You look at the city of San Francisco, when do you think that most of the zoning laws are put in place for that city?

I don’t know when.

A long time ago, right after the post-war boom, 65% of the surface area of the city are single-family homes. Although there’s been rezoning in on the land that literally will sink in the next earthquake or at least have some issues with it, the land is preoccupied with single-family housing. Ask yourself this question. Suppose you rezoned let’s say 20% of it to be multifamily high-rise housing. What would that do in terms of a number of units of affordable housing that would suddenly be available in the city? It would essentially eliminate the problem from the perspective of the numbers, like job growth versus available housing. Who in their right mind on the city council is going to take that kind of step to do the appropriate rezoning of a major segment of the city?

The homeowner’s prices and their houses are always at threat. They want to keep increasing. They don’t want any threat to the housing prices. Some of these problems that we talk about that seem insurmountable are not insurmountable. Our solutions to the problem, but we were not thinking about what the problem is. No one talks about, why is it that we don’t have affordable housing here? How can we make a difference? The answer is because we don’t have any land to build upon. That’s the wrong answer. There’s a lot of issues there where we just don’t think fully about what the real problem is. That’s in a sense the magical thinking of Silicon Valley. We put something up there that is magical in the way that it operates without dealing with the reality of what exists. It’s necessary for us to be able to attract venture capital, in my opinion.

It’s going to be interesting because it’s different when you go to San Francisco and something that’s going to have to happen.

We think so, but we’ve been saying that in Silicon Valley. My daughter bought a house from a 70-year-old junker in Palo Alto for $1.3 million less than a decade ago. She sold it for an all-cash offer, $3.5 million. It’s the same house that was built by Eichler for $15,000 back in the old days when Palo Alto truly was a middle-class neighborhood. There is too much money available and too few opportunities and very little in the way of any intervention on the part of the city government to represent the interests of the vast majority of the population.

All the stuff that you’re talking about is so important when people are looking at what we’re doing in terms of innovation, whether it’s within companies or outside. You said CEOs don’t even realize that a lot of the innovation is outside the company. What’s driving all this new innovation? Is that what you talk about in your book, First Light of Day?

What’s driving it is globalization and communication and the vast investment. I’ll give you one stat. There is $13 trillion of family office money is available for investment. When you have the kind of dollars that are looking for investment opportunities at the low-interest rates, what’s going on here is that the money doesn’t have enough place to go in terms of new investing opportunities. We’ve had a boom on the venture side and at the same time that’s providing a major expansion of innovation across the board in China, not just in Silicon Valley but pretty much everywhere. There’s a curve that I show which measures the amount of activity of innovation over the last several years and it is literally exponential. When you look at people and managing technology, it is linear.

The gap keeps increasing and we have very little in the way of any ability to manage what’s happening. That in part is the reason why we’re having so many issues with privacy, social media, fake news and the whole nine yards. Our society is being shaped by the introduction of technologies that are essentially unregulated. They are unregulated because we haven’t been able to keep up with the explosion of technology that’s occurring all the way across all these different areas. That’s a direct result of having $300 billion of money invested across the board to drive it all. Think about that, $2 trillion in R&D spend, $200 billion in new technology development versus $300 billion on the outside, all at risk. That’s what’s driving a lot of this. Plus, the technology costs of introduction have been dropping significantly.

You can develop new technology very cheaply compared to several years ago. You don’t need as much money to invest in it. As a result, you’re getting a lot more take up with new startups that are attacking it from an algorithm point of view, for example or taking a look at how to put the mass materials into new products like medical devices. That’s what’s going on and it’s fascinating. I love it. For me, it’s like being in the center of this cauldron of opportunity. What I’m trying to do is make that available so that corporations can have a chance to be able to innovate in an effective manner.

You’re talking about unregulated. It brings to mind blockchain. Will we get a company like Facebook or any other one to be the one that is the major player in that market or is it going to have to be a government-regulated thing that they’ll never let go of?

I wouldn’t worry so much about government regulation. The answer to your question is yes, we will have probably ten Facebook over the course of the next ten years. It’s already starting to happen. Do you know about SenseTime?

No.

It’s a Chinese company. It’s one of the most valued startups in the world. What is SenseTime doing? They’re scraping social media to hook it up to cameras so that when you go up on the social media site and you express an opinion or you share photographs or some new experience that then becomes available when you walk on let’s say the streets of China through the camera technology. There are all kinds of explosive technology. Technology is just another tool. It can be used either for good or for bad social. That’s part of what we’re going to have to start dealing with making social decisions about what gets regulated and what does not. I would say in the United States at least, we’ve got a real problem. I call it theater privacy, which is we act as though privacy is important, but we do nothing to protect it for the vast majority of the population.

Our society is being shaped by the introduction of technologies that are essentially unregulated. Click To Tweet

Do you have an Echo device?

No, I have Siri in the household and it’s restricted. My wife got Alexa for a Christmas present. I refused to install it for six months because I didn’t trust it and she finally installed it, which pissed me off. It’s collecting all this data and the grandkids when they come over to play games with Alexa. I’m fearful at some point that this is deteriorating our ability to socially interact. You can say I’m just crazy and that I’m taking a negative view of it, but I’ve been exposed enough to know that data’s being collected everywhere and it’s past the point of return. Pandora’s box has been opened and I don’t believe we’re going to be able to shut it again even with new regulatory plans.

What’s your experience with what they’re going to do with it?

They already are doing things with it. I was surprised and shocked that I got a text message. One of my BMW got into an accident. I hit a car at three miles per hour and I got a text message offering and giving me a quote on the repair. It turns out that was a beta program at BMW that has been run by an executive who wants to play games with me. When I talked to him about it, he said, “We now have a fully integrated system so we can test this and know what’s going on every minute that you’re driving the car and then compare it to others.” I said, “Did I sign for any of that?” He said, “Yes, on page 72 in a roughly three-point font down at the bottom is a closure agreement.” We’re as guilty as anybody at violating our own privacy rules because we want the convenience or we want to be able to have these toys.

That’s the hard thing. You want to have the joy of it and there is a price. It’s interesting the way you are able to analyze what’s going on and what the price is and what we’re getting out of innovation. I want to look at what you wrote about because your book is different because you told me the first part’s fiction and then the next part is non-fiction.

I was thinking myself, how do I try to explain to people what’s going on? I can’t. Maybe the best way to do it is to write a book of fiction with real characters and a real story and show people what their world is like 35 years from now and how technology is playing a role of it. Not quite, but both. I have a character who’s a Russian in London who is at the precipice of a change where quantum computing is being invented and used, which dramatically changes the whole equation of computing power. He has to decide what he’s going to do because if he does what his company wants him to do, he will literally switch on the inability of anyone to go back and have control of their independent life. He goes through a whole series of events through the book with other characters.

While you’re doing that, he is being advised by all his agents, which are essentially Siri equivalents, giving them advice on everything from philosophy to how he should conduct his work and so forth. It uses the technology, extrapolates and expects what it will look like 35 years from now. The characters are using the technology in their day-to-day activities, but they have a hard decision to make. That’s what the novel is about. It’s a way to explain in real terms how this stuff is likely to impact our personal lives. The second part of the book is technologies. Here’s the snapshot that we talked about in the book. If you don’t believe it’s real, there’s website information, research to write up and see it. That way I can at least get a story across on how this works for the average person that’s intriguing. They can either read that or they can go to the back of the book and just look at objective information. It gives them a chance to have some fun with what we’re trying to do here.

What’s your biggest concern? Are we going to have a matrix society? What do you think in your lifetime is going to be your biggest fear?

The biggest problem’s going to be economic because the advances and you’ve heard this before from other people in robotics are far greater than what anyone could believe. As an example of that, there’s a start-up company called Robotech that is in the process of using sensors that are wrapped into the form of robotic skin that allows a robot to feel its way and make its own decisions about what it encounters versus being told.

The advances in getting autonomous decision making for robotics are going at such a rate that when you attach machine intelligence to it, it is not like the advent of a new industrial revolution, it’s a quantum leap beyond that. Unfortunately, I don’t believe we’re going to be able to suddenly have a whole new set of jobs that get created that are going to supplement where are you going to have a transfer. Something’s going to be eliminated. The problem here is going to be one of a highly advanced society with high expertise for a very small percentage of the population where the bulk of the population doesn’t have the kind of work that we used to be able to have in our economy. That’s some of the things that we’re going to have to face. That concerns me more than anything else.

I’ve had people on the show from Andrew Yang to Jurgen Schmidhuber. I’m thinking of how there are different solutions for different reasons, but Juergen was talking about artificial curiosity. I remember talking to him a little bit about that and it almost sounds like you’re touching on that when you’re talking about wrapping themselves and making these decisions. It seems like there are two schools who I talked to, one will say, “Nobody’s going to have to worry about anything for a long time.” The other school is like, “Yes, we’re going to die because they’re going to take over.”

Let’s take one example. There’s a company called OnePointOne and unlike other vertical farming methods, it’s a fully-integrated robotic enabled urban farm where the plants reside on one half of the vertical plane and on the other half are simply roots. Every aspect of the plant from the time that it’s born until the time of its harvesting is monitored by computers, robots and sensors. There are no humans involved in the process except for those who operate the robots. You can get a picture of the life of the food that you are eating from the time that it’s born. They literally image the leaf growth and they control the entire environment. There’s no need to ship produce outside of a city or to receive it. There’s no spoilage. There’s no disease. It can be put in a railroad car.

What does this mean? A 10,000 square foot facility, think of a dumpy little warehouse in San Jose that produces 35 acres of food. It’s a 20% higher nutrition level and the startup is producing food. How long will it take for that to get out there? It uses 1/10 the amount of water and almost no fertilizer compared to the traditional farm. It certainly doesn’t use the land in the same way. You don’t have the pollution going into the Mississippi river down into the Gulf of Mexico with this type of solution and you don’t have the 1,500-mile journeys of food. If you had 10,000 startups crossing all different areas, how long is it going to take for some of this to get out into the market where we are going to be impacted by it?

I don’t think it’s happening, but I also don’t think it’s twenty years from now. It’s coming, it’s a matter of time. We’re going to have to figure out how to adjust to it because we’re moving into a new age where expertise, that knowledge has to be paramount. It’s weird because we’ve got, on the one hand, a lot of faith-based people who, and I’m not talking about religious people, people who don’t use data to make decisions. We have in a small minority of elitists who are highly educated, who are creating all this stuff. It’s not like we have 100 million Americans working in science and engineering that is driving all this stuff. It’s a small percentage and it’s a very elite group of people and it’s not going to be broad-based. If you don’t have that knowledge and expertise, I worry about my grandkids, for example. I don’t know how they’re going to be employable in the future. Plus we also have these ridiculous costs and expenses in the urban centers.

TTL 648 | Crisis Innovation
Crisis Innovation: Globalization and communication are driving innovation.

 

The disagreements out there in general, global warming, not global warming. Why are we getting so much split ideas on these things?

We’re undergoing enormous change. I was tutoring my grandson and we were looking at the advent and what caused the industrial revolution. It started with the invention of technology in the 1700s at the farm level. They became so good at producing food that it drove the population to suddenly explode and then the population moved to the cities and all of a sudden you had labor available for factories. Unfortunately, you had steam engines and a whole series of new inventions. The whole thing took place in less than 200 years. There were rebellions, there were people who said, “We don’t want a disruption in our lives.” When we look at Brexit, for example, that’s a reaction to globalization.

You have these reactions of people trying to deal with the change. I can completely understand that. That’s one of the reasons why the slow adoption rate occurs then these startup companies go literally right underneath it and disintermediate the company and destroy it because they don’t have these problems. You’ve got this divergence in the society and it has happened throughout human history. It’s not something new. The resistance to change is a common human theme because it threatens our own security and our own family circle and how we raise children and the whole nine yards. It’s a social phenomenon. We have with this explosion of technology challenges to all of that traditional thinking. I don’t know if you read Professor Shoshana Zuboff’s book on surveillance capitalism. She wrote a book a long time ago. She’s a professor at Harvard. I took a course with her. She’s great. It’s The Soul Of The Machine. She talks about the impact of technology during the industrial revolution in the world and this phenomenon is very similar in reaction.

There was a populous uprising during the industrial revolution. That brought about the progressive movement because people were tired of being worked to death and children being worked. There had to be social regulation of it all. We go through this, this is part of our human adoption, but ultimately what happens is the economy benefits from all this. Consequently, there’s a huge amount of wealth to be made and there are some people who are simply not going to allow us to bypass this. If you look at Silicon Valley, it is a good snapshot of the craziness of the future. You got super-wealthy 1% and you’ve got virtually no development in housing that didn’t occur many years ago except in the office space area. We’ve got an irrational system. We don’t even have a decent transportation system. Here’s a little story. I invited Japan Rail to come to PARC. They always take the train wherever they go because that’s the nature of their business.

They come to California and I said, “You probably want to take a cab from the airport.” They said, “No, we’re going to use the train system.” They got on the Caltrain and they rattled along down to Palo Alto. The train stopped at several instances because of problems with the rail. It was rattling along at roughly 45 miles an hour and it was called the bullet train. They’re looking at it and they’re expecting the train. They find out that it was designed in 1960 and it’s still basically the same technology. It’s a diesel engine. They could not believe that Silicon Valley had a train like this. The other thing that he could not believe is it took them almost an hour and a half to two hours to get to Stanford and then to PARC because there wasn’t a connection between the two.

They had to take a bus and then it had to go. It was crazy. They went from San Francisco Airport, had to take a bus to get to the local station. The station had them transfer. This didn’t click. I said, “Are you still going to take a train next time you visit?” He said, “No, we’re not going to do that. We’ve learned our lesson and we don’t understand why Silicon Valley with all its technology, you cannot get a cell phone signal and you cannot get a train.” You probably got to talk to the cities and regional planning authorities because those are the people who make those decisions.

It does seem like it is worse there than other cities.

It’s counterintuitive. You would expect something different here in Silicon Valley, but it’s not with PG&E and burning down the forest. With such an old infrastructure, it’s creating major catastrophic fires. Who would believe it?

They said it was going to take them ten years to fix that and I can’t imagine why.

The regulations are not and the high-speed train. Let’s put a high-speed train in the middle of nowhere instead of connecting the dots. Who makes these decisions?

Is it California that’s just different or are you seeing this anywhere else?

No, it’s the same problem. You’ve got multiple legacy models. If you look at the Silicon Valley model of the cities and how they operate, it’s almost like the orchard village mentality before Silicon Valley existed, why decisions are being made. Very little in the way of connecting technology to performance metrics. Even though they call themselves, in many cases, smart cities. In my view, they’re pretty dumb. They haven’t been able to solve any major problem with it. You look at congestion and there’s the avenue in Palo Alto and you’d think they’d time the lights using a 1950s technology or perhaps even digitize them. It’s such a big deal to try to get anything to change, but it just doesn’t happen, so the congestion gets worse when it doesn’t have to. For that matter, putting a toll road to replace the commuter lane on 101, what a brilliant idea. Let’s increase the cost of commuting and eliminate one full lane so only people who want to pay for it are going to use it and we already have congestion on the other three lanes. I look at this and I think it’s God playing with us, I do.

What’s the solution?

The solution is to get some intelligent management and create a regional authority, in my opinion, that would govern the infrastructure and transportation needs in the city. Also, the rezoning of the city and to start figuring out reality here.

Technology can be a very positive solution to a lot of our problems. Click To Tweet

Have you thought of running for office?

No, Diane. I’m better suited right here in an academic institution.

You’re doing some amazing things and it was that and your book. I want to make sure we covered it.

We’ll be out on Amazon, in the retail stores and also on Apple. I’ve gotten some wonderful people who’ve written introductions including Celina Smile from Singularity University, but also the former head of the Central Intelligence Agency and some other people who have endorsed the book. I’m happy about that.

Who would you hope would be the reader of this book?

Somebody who wants to understand what it’s going to be like for their children and grandchildren or what it could be like. Because I’d like to have my grandkids read it and my kids because it’s their generation that’s going to be impacted by all this. Also, technology can be a very positive solution to a lot of our problems. It’s a tool that can be used both ways. The problem with the city government is they don’t use it in a constructive way that would change the quality of life. It’s being used by private corporations in cities to develop their markets. That’s how we’re digitizing cities, not through government. It’s companies like Uber, Microsoft, Apple and so forth. Once we decide to solve the problem differently if we know what the problem is, it’s not that complicated. There’s hope out there if we can find a rational way of providing the leadership to make the changes necessary.

Why call it First Light of Day?

Because part of this whole phenomenon is being able to become self-aware and to take a different view of the world. The main character who’s going to be making a serious decision about things wakes up on in London on the first day of light coming into the window. It changes his perspective on things, but without context. In a sense, it’s a way to think about the technology that could be used in a positive way or it can be used in an entirely different way.

I’m excited about it and I think all your work is super fascinating. I’m sure everybody wants to reach and want to go out and find it. You said it’s on Amazon. Did you want to have any other links or anything or is that the best way to reach you?

I have a publicist through information arts who are going to be active. It doesn’t publish until January 30th. It’ll be ready for preorders. We already have 30 readers who are doing reviews of it. We’re going to prepare the launch. I also work with a company called Leading Authorities. I did twenty keynotes in 2018. I saw about 6,000 executives talk about this whole transformation piece and they are going to be sponsoring some of the discussions around the book in 2020. If you can’t tell, Diane, I’m having a lot of fun.

I’m sure you have so much knowledge that I’m sure a lot of people are scratching their heads trying to keep up with you because I know I am and I know everything that you know is what everybody’s wanting you to talk about. This is going to be a popular book I can tell already. Thank you so much for being on the show, Mike. I appreciate that. I love this because everything that everybody’s wanting to know and you’re answering all everybody’s questions.

Thank you, Diane. I appreciate the opportunity. Take care.

I would like to thank Mike for being a guest on the show. We had so many great guests. If you’ve missed any past episodes, you can catch them at DrDianeHamilton.com. We’re also on every place from iTunes, iHeart and Roku. It’s fascinating to talk to people like Mike. He has this finger on the pulse of where we’re going with innovation. That’s what I was interested in doing when I was studying curiosity, perception and some of the things that he brought up. I think a lot of the times, we don’t know what we don’t know. If we don’t ask questions and don’t explore, we’re just going to keep repeating doing the same things.

We saw the issues that are happening in San Francisco and some of the examples he gave. It’s important to develop a new way of thinking, to get away from that status quo. What always worked in the past, will make it work in the future. The same kind of way of doing things. That’s what I’ve been doing, working with companies to develop their sense of curiosity in their workplace. Because we have so many people who are worried about what’s going to happen with their jobs and they’re maybe not engaged in their job. If we’re going to have people moving as Mike said, we’re going to have some drastic changes eventually. We know we’ve got people that technology can replace some of the jobs that are out there.

TTL 648 | Crisis Innovation
Crisis Innovation: The explosion of technology challenges has impacted our traditional thinking.

 

Wouldn’t it be a great thing to get people trained and interested in doing something new that they like to do, but maybe they don’t know what they like to do? Because nobody’s asked them what interests them or let them explore much at work. A lot of what holds people back from being curious are the four things that I found in my research, which are fear, assumptions, technology and environment. What I do is I work with companies to recognize how all these factors are keeping employees from exploring different things that they could be doing at work to be more engaged, innovative and productive. If you’re interested in learning more about curiosity and what it can do for you, the book is available on Amazon and my site at DrDianeHamilton.com and CuriosityCode.com, but also at both sites, you can become certified to give the Curiosity Code Index.

If you’re an HR professional or a consultant and you’re used to giving DISC or emotional intelligence tests and those types of things and you’re wanting to be more relevant and innovative, we are certifying people to be CCI certified. In the process, you’ll get five hours of SHRM recertification credit, which is wonderful. In addition to that, you have a relevant innovative way of dealing in the workplace. When you go through this training program, you learned so much about how to not only to develop curiosity in the employees but how to take what you learned in the training program and bring it back to leaders and say, “This is what we’re doing to develop in an individual employee basis. What we learned from this training session is this is what we can do for the overall organization as a whole to help us be better with the communication, emotional intelligence, soft skills, critical thinking or whatever the issues are that are plaguing the organization.”

There’s an overall report that the HR professional or consultant would bring back to leaders that put together everything that we learn in the training programs to give an overall action plan. Basically, the employees from the horse’s mouth are giving you the answers you need for how to be more innovative, creative and productive through developing curiosity. It’s an exciting time. I was fortunate to have Steve Forbes, Ken Fisher, Dave Ulrich, Verne Harnish and all the big names that have written nice things about the book. It all ties into the book and the Curiosity Code Index together as a system for organizations to move forward and become more innovative. I do have more information. You could see some of the talks and information on YouTube about a Curiosity Code, but if you go to CuriosityCode.com, everything is in that one location.

If you’re looking for more information just in general for speaking consulting, it’s all DrDianeHamilton.com. My focus is behavioral-based in terms of soft skills, generational conflict and building curiosity, working on perception, all the things that are going to help make people improve in behavioral ways that’ll help them reach their fullest potential. That’s something I’d be happy to talk to anyone about. Please feel free to reach me through the sites. Also through all social media sites, you can find me @DrDianeHamilton. I enjoyed talking to Mike. We get many great technological foresight gurus on the show. It’s so much fun to see what they’re training and big organizations and also in major universities like Stanford. Mike was great to share so much knowledge. I hope that you take some time to check out his book. I hope you enjoyed this episode and I hope you join us for the next episode.

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About Mike Steep

TTL 648 | Crisis InnovationMike Steep is the Founder & Executive Director of the Disruptive Technology & Digital Cities Program at Stanford, a Prominent Keynote Speaker/Author, and has over three decades of operating experience, managing global P&L’s, country and global sales organizations, corporate strategy, business development, innovation leadership, and strategic alliances – Stanford, PARC, Microsoft, Lexmark (IBM), Apple, Xerox, and HP. He is the author of The First Light of Day.

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