Eddie Obeng: Smart failure for a fast-changing world

Over the past six months, I've spent my time traveling. I think I've done 60,000 miles, but without leaving my desk. And the reason I can do that is because I'm actually two people. I look like one person but I'm two people. I'm Eddie who is here, and at the same time, my alter ego is a big green boxy avatar nicknamed Cyber Frank.

So that's what I spend my time doing. I'd like to start, if it's possible, with a test, because I do business stuff, so it's important that we focus on outcomes. And then I struggled, because I was thinking to myself, "What should I talk? What should I do? It's a TED audience. It's got to be stretching. How am I going to make — ?" So I just hope I've got the level of difficulty right. So let's just walk our way through this. Please could you work this through with me? You can shout out the answer if you like. The question is, which of these horizontal lines is longer? The answer is? Audience: The same. Eddie Obeng: The same. No, they're not the same. (Laughter) They're not the same. The top one is 10 percent longer than the bottom one. So why did you tell me they were the same? Do you remember when we were kids at school, about that big, they played the same trick on us? It was to teach us parallax. Do you remember? And you got, you said, "It's the same!" And you got it wrong. You remember? And you learned the answer, and you've carried this answer in your head for 10, 20, 30, 40 years: The answer is the same. The answer is the same. So when you're asked what the lengths are, you say they're the same, but they're not the same, because I've changed it.

And this is what I'm trying to explain has happened to us in the 21st century. Somebody or something has changed the rules about how our world works. When I'm joking, I try and explain it happened at midnight, you see, while we were asleep, but it was midnight 15 years ago. Okay? You didn't notice it? But basically, what they do is, they switched all the rules round, so that the way to successfully run a business, an organization, or even a country, has been deleted, flipped, and it's a completely new — you think I'm joking, don't you — there's a completely new set of rules in operation. (Laughter) Did you notice that? I mean, you missed this one. You probably — No, you didn't. Okay. (Laughter)

My simple idea is that what's happened is, the real 21st century around us isn't so obvious to us, so instead we spend our time responding rationally to a world which we understand and recognize, but which no longer exists. You don't believe me, do you? Okay. (Applause)

So let me take you on a little journey of many of the things I don't understand. If you search Amazon for the word "creativity," you'll discover something like 90,000 books. If you go on Google and you look for "innovation + creativity," you get 30 million hits. If you add the word "consultants," it doubles to 60 million. (Laughter) Are you with me? And yet, statistically, what you discover is that about one in 100,000 ideas is found making money or delivering benefits two years after its inception. It makes no sense. Companies make their expensive executives spend ages carefully preparing forecasts and budgets which are obsolete or need changing before they can be published.

How is that possible? If you look at the visions we have, the visions of how we're going to change the world, the key thing is implementation. We have the vision. We've got to make it happen. We've spent decades professionalizing implementation. People are supposed to be good at making stuff happen. However, if I use as an example a family of five going on holiday, if you can imagine this, all the way from London all the way across to Hong Kong, what I want you to think about is their budget is only 3,000 pounds of expenses. What actually happens is, if I compare this to the average real project, average real successful project, the family actually end up in Makassar, South Sulawesi, at a cost of 4,000 pounds, whilst leaving two of the children behind. (Laughter) What I'm trying to explain to you is, there are things which don't make sense to us.

It gets even worse than that. Let me just walk you through this one. This is a quote, and I'll just pick words out of it. It says -- I'll put on the voice -- "In summary, your Majesty, the failure to foresee the timing, extent and severity of the crisis was due to the lack of creativity and the number of bright minds," or something like that. This was a group of eminent economists apologizing to the Queen of England when she asked the question, "Why did no one tell us that the crisis was coming?" (Laughter) I'll never get my knighthood. I'll never get my knighthood. (Laughter) That's not the important point. The thing you have to remember is, these are eminent economists, some of the smartest people on the planet. Do you see the challenge? (Laughter)

It's scary. My friend and mentor, Tim Brown of IDEO, he explains that design must get big, and he's right. He wisely explains this to us. He says design thinking must tackle big systems for the challenges we have. He's absolutely right. And then I ask myself, "Why was it ever small?" Isn't it weird? You know, if collaboration is so cool, is cross-functional working is so amazing, why did we build these huge hierarchies? What's going on? You see, I think what's happened, perhaps, is that we've not noticed that change I described earlier.

What we do know is that the world has accelerated. Cyberspace moves everything at the speed of light. Technology accelerates things exponentially. So if this is now, and that's the past, and we start thinking about change, you know, all governments are seeking change, you're here seeking change, everybody's after change, it's really cool. (Laughter) So what happens is, we get this wonderful whooshing acceleration and change. The speed is accelerating. That's not the only thing. At the same time, as we've done that, we've done something really weird. We've doubled the population in 40 years, put half of them in cities, then connected them all up so they can interact. The density of the interaction of human beings is amazing. There are charts which show all these movements of information. That density of information is amazing. And then we've done a third thing. you know, for those of you who have as an office a little desk underneath the stairs, and you say, well this is my little desk under the stairs, no! You are sitting at the headquarters of a global corporation if you're connected to the Internet. What's happened is, we've changed the scale. Size and scale are no longer the same. And then add to that, every time you tweet, over a third of your followers follow from a country which is not your own.

Global is the new scale. We know that. And so people say things like, "The world is now a turbulent place." Have you heard them saying things like that? And they use it as a metaphor. Have you come across this?

And they think it's a metaphor, but this is not a metaphor. It's reality. As a young engineering student, I remember going to a demonstration where they basically, the demonstrator did something quite intriguing. What he did was, he got a transparent pipe — have you seen this demonstration before? — he attached it to a tap. So effectively what you had was, you had a situation where — I'll try and draw the tap and the pipe, actually I'll skip the tap. The taps are hard. Okay? So I'll write the word "tap." Is that okay? It's a tap. (Laughter) Okay, so he attaches it to a transparent pipe, and he turns the water on. And he says, do you notice anything? And the water is whooshing down this pipe. I mean, this is not exciting stuff. Are you with me? So the water goes up. He turns it back down. Great. And he says, "Anything you notice?" No. Then he sticks a needle into the pipe, and he connects this to a container, and he fills the container up with green ink. You with me? So guess what happens? A thin green line comes out as it flows down the pipe. It's not that interesting. And then he turns the water up a bit, so it starts coming back in. And nothing changes. So he's changing the flow of the water, but it's just a boring green line. He adds some more. He adds some more. And then something weird happens. There's this little flicker, and then as he turns it ever so slightly more, the whole of that green line disappears, and instead there are these little sort of inky dust devils close to the needle. They're called eddies. Not me. And they're violently dispersing the ink so that it actually gets diluted out, and the color's gone.

What's happened in this world of pipe is somebody has flipped it. They've changed the rules from laminar to turbulent. All the rules are gone. In that environment, instantly, all the possibilities which turbulence brings are available, and it's not the same as laminar. And if we didn't have that green ink, you'd never notice.

And I think this is our challenge, because somebody has actually increased — and it's probably you guys with all your tech and stuff — the speed, the scale and the density of interaction.

Now how do we cope and deal with that? Well, we could just call it turbulence, or we could try and learn. Yes, learn, but I know you guys grew up in the days when there were actually these things called correct answers, because of the answer you gave me to the horizontal line puzzle, and you believe it will last forever. So I'll put a little line up here which represents learning, and that's how we used to do it. We could see things, understand them, take the time to put them into practice. Out here is the world. Now, what's happened to our pace of learning as the world has accelerated? Well, if you work for a corporation, you'll discover it's quite difficult to work on stuff which your boss doesn't approve of, isn't in the strategy, and anyway, you've got to go through your monthly meetings. If you work in an institution, one day you will get them to make that decision. And if you work in a market where people believe in cycles, it's even funnier, because you have to wait all the way for the cycle to fail before you go, "There's something wrong." You with me? So it's likely that the line, in terms of learning, is pretty flat. You with me? This point over here, the point at which the lines cross over, the pace of change overtakes the pace of learning, and for me, that is what I was describing when I was telling you about midnight.

So what does it do to us? Well, it completely transforms what we have to do, many mistakes we make. We solve last year's problems without thinking about the future. If you try and think about it, the things you're solving now, what problems are they going to bring in the future? If you haven't understood the world you're living in, it's almost impossible to be absolutely certain that what you're going to deliver fits.

I'll give you an example, a quick one. Creativity and ideas, I mentioned that earlier. All the CEOs around me, my clients, they want innovation, so they seek innovation. They say to people, "Take risks and be creative!" But unfortunately the words get transformed as they travel through the air. Entering their ears, what they hear is, "Do crazy things and then I'll fire you." Why? (Laughter) Because — Why? Because in the old world, okay, in the old world, over here, getting stuff wrong was unacceptable. If you got something wrong, you'd failed. How should you be treated? Well, harshly, because you could have asked somebody who had experience. So we learned the answer and we carried this in our heads for 20, 30 years, are you with me? The answer is, don't do things which are different. And then suddenly we tell them to and it doesn't work. You see, in reality, there are two ways you can fail in our new world. One, you're doing something that you should follow a procedure to, and it's a very difficult thing, you're sloppy, you get it wrong. How should you be treated? You should probably be fired. On the other hand, you're doing something new, no one's ever done before, you get it completely wrong. How should you be treated? Well, free pizzas! You should be treated better than the people who succeed. It's called smart failure. Why? Because you can't put it on your C.V.

So what I want to leave you, then, is with the explanation of why I actually traveled 60,000 miles from my desk. When I realized the power of this new world, I quit my safe teaching job, and set up a virtual business school, the first in the world, in order to teach people how to make this happen, and I used some of my learnings about some of the rules which I'd learned on myself. If you're interested, worldaftermidnight.com, you'll find out more, but I've applied them to myself for over a decade, and I'm still here, and I still have my house, and the most important thing is, I hope I've done enough to inject a little green ink into your lives, so that when you go away and you're making your next absolutely sensible and rational decision, you'll take some time to think, "Hmm, I wonder whether this also makes sense in our new world after midnight." Thank you very much. (Applause) Thank you, thank you. (Applause)