What We Can Learn From The Oldest Companies in The World

Shigemitsu Kongo, a Japanese Buddhist temple builder, formed his construction company Kongo Gumi in in 578 AD. His company built relationships with their customers that lasted for 1,400 years, surviving through many wars and natural disasters,  just like their temples.

It wasn’t technology that nearly killed the company, but cashflow. The oldest company in the world became a subsidiary of Takamatsu Construction in 2006.

There’s a very good chance you will outlive the company you work for. Whilst our life expectancy is increasing, the lifespan of organisations appears to be in decline.

The average age of a company listed on the S&P 500 has fallen from almost 60 years in the 1950s to less than 20 years today. Only 30 of the original companies still exist in 2019, the 35th anniversary of the FTSE 100.

Disruptive technology is killing off older established companies at a much faster rate than ever before.

This is why when you go to conferences you’ll see presentations selling the virtues of Uber, Amazon, Netflix and Google.

Be like them the wisdom goes. Be agile. Only by doing as they do may you survive.

This is only half the story though.

Rarely , if ever, do we look at the companies that are bucking this trend. The companies who have been around forever and are still doing business.

A look at the oldest companies operating today is fascinating.

Worldwide there are over 5,500 companies that are over 200 years old. However the distribution of these is heavily weighted to just a few. Japan dominates the list (3,146), followed by Germany (837), then the Netherlands (222), and France (196).

I started this week staying in Düsseldorf, Germany, in a district known as “Little Tokyo on the Rhine” — one of Europe’s largest Japanese communities. I was there to talk to European students about the opportunities of smart cities , but I concentrated more on the possibilities of building upon the wisdom of communities that have existed for generations.

It’s deeply unfashionable to talk about , let alone revere, older things today. It’s almost like innovation started with the iPhone and disruptive companies began with Uber.

My week ended with a visit by the Disruptive Innovators Network to Bromford, who at 56 years old is barely out its pre-school stage in Japanese or German terms. It was interesting to hear in the talks by Helena Moore and John Wade how there was almost an apology for referring to things we had learned more than five years ago, as if we were becoming embarrassed by the weight of our own history.

We shouldn’t be though. The right culture for innovation is one where there is:

  • Just enough friction – with teams having regular, intense debates
  • The practice of high standards, with a steady supply of high performing people who are committed
  • Permission to be different – a culture where it’s allowable, even encouraged, to push back. 
  • The ability to think and act experimentally with a tolerance for failure through practical experiments

However it’s also a culture that creates a feeling of belonging and a feeling of purpose.

Why have so many Japanese and German businesses lasted so long?

A study by the Bank of Korea found that such companies thrived over the years because they created new demand while sticking to a corporate culture that promoted tradition, attention to detail, and frugal innovation.

Instead of going after short-term results, they pursued longstanding trust with customers and partners. They also pursued growth within their means, rarely borrowing to expand.

In his book The Living Company, Arie De Geus attributed the success of older businesses to four factors:

1. Long-lived companies were sensitive to their environment and remained in harmony with the world around them.

2. Long-lived companies were cohesive, with a strong sense of identity. No matter how widely diversified they were, their employees felt they were all part of one entity.

3. Long-lived companies were tolerant and generally avoided exercising any centralised control over attempts to diversify the company.

4. Long-lived companies were conservative in financing. Frugal even.

However his strongest point is contained in one sentence “Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations’ true nature is that of a community of humans.”

It’s time to stop worshipping the new and the shiny. We need to strike a delicate balance between continuation and innovation, being reliable and disruptive at the same time.

Creating a culture where these two competing sets of values can coexist is difficult – and not always a comfortable place to be.

Clearly though , the innovation potential of us older lumbering giants is vastly under appreciated – and the disruptive power of the younger and hungrier is often overstated.

How The 9-5 Saps Our Creativity and Harms Our Productivity

From ten to eleven, have breakfast for seven; From eleven to noon, think you’ve come too soon; From twelve to one, think what’s to be done; From one to two, find nothing to do; From two to three, think it will be; A very great bore to stay till four.

A Day At The Office – Thomas Love Peacock, published in 1852

Nearly 10 years ago, Professor Gloria Mark of the University of California conducted a study into workplace interruptions.

Observers literally followed people around all day and timed every event that happened in the office.

What they found is that the average amount of time that people spent on any single event before being interrupted – was just three minutes. And it took on average 23 minutes for the person to regain their focus.

More importantly, after only 20 minutes of interrupted performance people reported significantly higher stress, frustration, workload, effort, and pressure.
A decade later – how many companies have considered this and what it means for design?
How many of us truly consider how environments and work practices are conducive to productivity and fulfilment?

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The office is the biggest inefficiency tax that organisations layer over themselves.

They cost huge amounts to procure and maintain, they become an all too convenient base for meetings (the next biggest inefficiency tax), and they set a precedent for the expected hours that people are meant to work.

Offices promote lengthy commuting which has consequences for both the environment and our own mental health. A recent study found that just a 20-minute increase in commute time is equivalent to getting a 19% pay cut for job satisfaction.

Most importantly – and this is the focus of my piece – they presume that there is a unique formula for productivity or creativity.

There isn’t.

One of the reasons is that we all sleep differently – and our internal clock shapes our energy levels, ability to focus, and creativity throughout the day.

This is known as our circadian rhythm and it has a profound effect on our creativity. It doesn’t work how you’d expect – for instance many morning people have more insights in the evening with night owls having their breakthroughs in the morning.

Each day on average we take a few hours to reach peak performance – at around 10:30am. Soon after lunch those levels start to decline before hitting a low point around 3pm. The “very great bore to stay still until four” that Peacock wrote about – over 150 years ago – has gone largely unaddressed.

Our second performance peak, at around 6pm, is reached after most offices have closed.

As a result, very few of us spend time in a state of flow. Flow, a state of consciousness where we feel our best and perform our best, is the most desirable work state on earth, but it’s also the most elusive.  According to Steven Kotler , the average person spends less than 5% of their day in flow. If you could increase that to 15%, overall workplace productivity would double.

That’s why at Bromford we have no specific start or finishing time. As Philippa Jones writes , we need a radical review of the purpose of offices and that means having to think very differently about what it means to “go to work”.

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Nintendo and Google Home – My office space last week

Acceptance of the need to reimagine the world of work isn’t everywhere though.

Last week I badly needed to focus to hit a deadline. Focus comes to me not from sitting in silence but from short 30-minute periods of concentration accompanied by music, and punctuated every half an hour by rapid pacing, a quick video game or Twitter catch up.

Interestingly – it was commented on, fairly negatively, by a colleague, even though it was having no impact at all on their work.

That’s an entirely normal response for people – because it doesn’t look like the world  they are used to.

  • Sitting at a desk doing emails looks like work.
  • Playing Mario and shouting song requests at a virtual assistant – doesn’t.

It’s incredibly difficult for most people to imagine a different future, which is why getting people to agree on what workspaces should look like results in the average of everyone.

New buildings need to be designed for networks – and organised to maximise a meeting of minds.

At Pixar for example, Steve Jobs created environmental conditions that promoted novelty, unpredictability, and complexity in the environment. As a result of this flow, creativity and productivity increased.

Traditional office buildings were built to isolate people, so forcing people to meet each other leads to different operating systems.

The challenge is that this won’t work for everyone. Most of us don’t work at Pixar and have to balance the needs of colleagues with very different working styles.

A good place to start would be better understanding our people.

Your next conversation with your team could be about how much sleep they are getting, when they feel they are most creative, and what the optimal conditions are to get their full concentration.

A world of work that’s in tune with your own circadian rhythms sounds like a more productive, more creative and infinitely happier place.

Don’t Let Busyness Kill Your Creativity


Last week I was getting a drink when a colleague asked me “So, you busy as usual?”

I took a second to avoid my kneejerk affirmative response and went for it:

“No – we’ve decided to slow down. Give ourselves some time to really think about things”.

They looked at me like I’d lost my mind.

In the world of work, more and more of us have bought about the prominence of an unusual status symbol: seeming busy.

But we are busier than we used to be, right?

No – we are not. In fact we are working less than we did 20 years ago – whatever it might feel like to you or I.

We are undoubtedly working in a new reality, one where we now have the distractions of machines to add to those of people. Being busy as a status symbol though is a modern phenomenon.

Thorstein Veblen suggested in 1899 that living a leisurely life and not working (the “conspicuous abstention from labour”) was the most powerful way to signal your status.

However a study earlier this year challenges whether that represents our modern reality. It explored cultural differences, finding that busyness at work is associated with high status among Americans, with the effect being reversed for Italians, who still view a leisurely life as representative of high status.

I recommend listening to the Oliver Burkeman shows that explore the way we fetishise being busy. You’ll recognise the stories of people complaining about the size of their inbox and all the meetings they have to go to.

It’s easy to say you’re too busy. Even when you’re the one to blame for it.

As example I’ve kept up a pretty good blogging schedule this year — usually every week or so. I’ve had a gap for the past two weeks —  and I could blame being been too busy.

But just like eating the right food, reading more books and exercising – busyness is often just an excuse for lack of discipline. 

I like not being busy and I’m proud of it.

I resist being busy at every opportunity.

Busyness for me — and telling people I’m busy — is a sign I’m being undisciplined and unproductive.

Worse still — busyness makes you lose self-awareness. Telling other people how busy and important you are means you start to believe it yourself.

Here’s what makes me busy:

Trying to multi-task (there’s no evidence that our brains work well with too many tabs open)

Attending standing meetings (they just create actions rather than focus on being reductive)

Letting people schedule back to back appointments (which kills any time for you to breathe and think)

Sending lots of emails (you just get more mails back)

Letting people “pick your brain for 5 minutes” (It’s never ever five minutes)

Although we don’t like to admit it – we have a lot of control over our own busyness and the busyness of others.

Someone recently told me that they checked their colleagues diaries to “see how busy they were”.

The implication was clear — busyness was being directly equated with productivity.

The colleagues whose diaries were full , a sign that they say yes to everything, were lauded.

Those engaged in purposeful contemplation or those just getting stuff done were not.

In the space of 50 years the workplace has become overwhelmed with management theories on how to run a better organisation.  It can’t be a coincidence that the growth of busyness has come at a time during which there has been a growth in management.

Not for nothing does the world’s most valuable brand eschew management fads and concentrate on getting the basics right. All staff at Google have to learn how to run meetings, have conversations, and set goals.

Great companies only obsess over productivity – never busyness.

Know Your Customers, Just Never Ask Them What They Want

We do not really know what our potential users will really respond to, what they will understand or what they’ll hate until we really see them using it –Jonathan Courtney

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If you are working on any new service change or product there’s one question I guarantee will be asked of you at some point:

“What do your customers think of this?”

The thing we never say – but we need to be brave enough to is this:

“We haven’t asked them – it would be a complete waste of time”.

Despite no evidence of any real impact, each year millions of pounds are spent across the social sector on market research, focus groups, and ‘coproduction’.

At best it’s well intentioned paternalism , at worst a cynical tick box exercise.

95% of products launched this year will fail – and it won’t be for lack of customer involvement. Many of these will have asked people to articulate what they want whilst failing to actually get to the core of what they need.

It is difficult for us as users , of any service , to think in abstractions or envision a new concept.

There is little evidence that we can even predict our own behaviour. We don’t necessarily know why we make decisions.

When anyone proposes a change – even humdrum day to day changes (think self-serve check outs in supermarkets , or charging people for plastic bags) – we don’t react rationally.

Our status quo bias, the tendency for us to lean towards doing nothing or maintaining our current or previous decision – is a strong reason for never asking customers what they want. Unless you want your business to stand still.

Customers often don’t know what’s good for them.

If you ever go to an airport here’s a quick experiment. Look at the queue of people checking in manually versus the queue for people who’ve checked in online and are using bag drop.

Despite all the benefits (huge time saving, plus the airline can’t close the flight and move on without you) people are disposed to stick to what they know.

These are probably the same strange group who applaud the pilot and crew when the plane touches down, simply for doing their job and not killing you.

Asking them to design your next service would be catastrophic. They’d request a lot of features that they would never use.

As Jason Fried has said – a great question to ask ourselves is  what are people going to stop doing once they start using our products or services?

That’s how Amazon and Google have conquered the world – not by surveying us to death – but by understanding our problems and taking them away one day at a time.

The challenge is understanding the problem better than your competitors and then road testing solutions. As Jonathan Courtney writes, the useful data comes not from research, not from surveys – but from the first user tests.

Every pound we put into asking customers what they want is basically wasted.  My aspiration at Bromford is for us to the become the best organisation at understanding the problem, before deploying rapid experiments to prove or disprove any solution.

Our customers have big problems to solve, the social sector faces unprecedented challenges – and we simply don’t have the time anymore.

 

Have you really got the time to be distracted by what customers think they want?

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It’s a great line but there’s no evidence that Henry Ford ever said this. It never appeared anywhere until about 1970.

A better quote , and one he did say in his 1922 book, is this:

“I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God’s great open spaces.”

Ford understood his customers aspirations before they did.

Knowing our customers is about a deep understanding of the day to day problems they face and the opportunities they haven’t even begun to realise.

You won’t get that from your next customer workshop.

Why We Solve The Wrong Problems

untitled-presentation-2Everywhere I look I see organisations and people investing heavily in new initiatives, transformation, and change programmes.  And in almost every case the goals will never be met.

One of the most crucial causes of the failure? The right questions were never asked at the outset.

We default to ideas and plans. Too many of which fail to get exposed to the tough love of effective questioning.  We get wrapped up in solutions.

It’s no surprise: we are conditioned to find solutions rather than define problems from an early age.

  • We start off being very good at it. Kids ask about LOTS. Annoyingly so. We tell them to stop asking so many questions.
  • In school we start to be assessed and graded on the quality of our answers, not the problems we are contemplating.
  • As we enter the workplace we get rewarded for the solutions that we propose, not the questions that we have asked.

Indeed, great performance at work is usually defined as creating and implementing solutions rather than finding the best problems to tackle.

So we become very good at solving problems – even if they happen to be the wrong ones.

Here’s a few things to watch out for when considering if your organisation is leaning towards solution rather than problem. And some questions you could ask.

Management is becoming excited by transformation as an end in itself.

Question: What exactly are we being transformed into and who asked for it in the first place?

People start talking a lot about what Apple would do. Or Netflix. Or Uber.

Question: We aren’t Apple, Netflix, or Uber. How are the problems our customers face similar to theirs and if they are, are we the best people to solve them?

Getting excited about building a new app or website

Question: What’s the unique benefit of your solution compared to what’s already available on the market?

Fancy PowerPoint business case pitches at corporate away days and Board meetings

Question: Before you tell us what Google did  can you explain what the impact of your last project was, what failed, and what you’ll do differently this time?

You see – ideas people are regarded as sexy. They are positive, optimistic and the people you want to be around.

The person who keeps asking the difficult questions is often regarded as an obsessive – a detail person -a procrastinator. A complete pain in the arse.

This is the very problem we face – and why we see so much innovation theatre rather than genuine impact.

  • Initiatives and projects come with an over simplification of the problem statement. If indeed such a statement exists at all.
  • There’s a lack of penetration into the root causes of problems. We don’t understand our world half as well as we think we do.
  • Most of our organisations have a cultural bias for execution over thorough problem definition. We simply want to get the product on the street. Even if it’s the wrong product (or the wrong street).

Not so long back Tom Hartland , our Lab Designer, was sitting evaluating a new concept. A senior leader walked past and asked him what he was working on. Tom told them there was a problem with the data, the impact was inconclusive and it needed lots more work.

The response came back – “Well, don’t spend too much time on it – we’ll probably do it anyway.”

I share that anecdote not to embarrass anyone but to illustrate the point.

We are hardwired to doing things rather than purposeful contemplation and questioning.

Innovation , as Philippa Jones said, is all about getting better at being wrong. However it must be founded in a deep understanding of the problem we are seeking to solve.

To have the most impact, it’s simple. Just ask the right questions.


 

Hey – we have a great job going as Design Lead in the Lab. You need to ask a LOT of questions before you go near designing though. Take a look here or message me if you want a chat. paul.taylor@bromford.co.uk or DM me on Twitter @paulbromford

 

Adapt or Die: 3 Challenges To Going Digital

Yesterday was a significant day. The sector in which I work put on a huge show of newly found digital awareness. My Twitter timeline nearly melted.

As Shirley Ayres correctly observed:

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This , just one year after the 2012 Northern Housing Consortium Social Media event – which was the first mainstream housing conference to promote digital.

So , with such success behind us, why am I still talking about business needing to change?

Because we can never stand still. Brian Solis describes our present as a “time when technology and society are evolving faster than the ability of many organisations to adapt.”

Despite the huge strides we have made over the past year – our pace of change is still not fast enough.

Let us use Google as an example.

Earlier in the year I was travelling abroad – which involved needing to arrange transport via ferry between a couple of islands. As I was sitting on the beach I got my new camera out. And it’s a Smart camera.

It has Google Now on it, an intelligent personal assistant for the Android operating system.

And the home screen , which I’ve never used before, is all about me. It tells me the time back in the UK. The best places to visit locally. The exchange rate. It tells me the next fixture of the football team I support. And , most significantly, it tells me the timetable of the ferry I need to catch. Even though I never searched for it.

Never used before. But it’s predicting my behaviour and offering me a solution to my problem.

Housing Associations, the Police, Social Care providers and the NHS – to name just a few – hold incredible amounts of data about people. Imagine if they used it like Google Now to solve peoples problems?

These are 3 immediate challenges I think we have to face up to in order that our organisations become “digitally social” :

1: Leadership and Skills

We still have some managers in positions of influence who don’t acknowledge digital as important. I still hear daily examples of organisations who block access to social media or don’t believe in making sure their employees have the necessary tools to do the job.

With the current pace of technological change this is about the single most destructive position you can take as a leader. Not promoting a digital work-style for your employees is to severely curtail their personal development and to put your organisation at risk of extinction.

I love the quote that Vala Afshar used to explain why his companies latest position is to be offered exclusively by social media “(We are) a social company looking to hire candidates that are customer focused and passionately engaged. (We are) looking for builders – relationship builders.”

If your company isn’t looking for those. Why not?

2: Innovation and Collaboration

The role for many public service organisations is to actively mainstream the innovation that is already out there. There are loads of innovators and entrepreneurs who just need a route to market. Some of them may already be employed by you.

This requires mind shift on behalf of organisations who think inside out. The best stuff could be going on outside your organisation not inside it – we need to get out and grab it. This has significant implications for the way Information Technology is supported and developed. IT has done a very good job for years of keeping people from accessing data – it now needs to let people in.

For housing this means delivering services around the person. Tyze is a great example of an innovative person centred community network that links neighbours, friends and professionals.

We haven’t cracked digital just because we have a Facebook page.

3: A new Customer Relationship

The biggest challenge I think we face is to reimagine the relationship with the public in the context of digital and social technology. It isn’t about just moving our services from offline to online. It’s about using the digital platform to think how the relationship could be enhanced. Thinking customers are going to flock online to pay their rent and view repairs is starting from the completely wrong position.

That’s why at Bromford – we are focussing on a completely new deal for customers, supported by digital innovations from a specialist team, partner developers and innovators.

We need to add value. Solve problems for customers – not ourselves.

Look at Google. They are trying to solve everything.

We could too.

[The content of this post was originally presented at the Chartered Institute Of Housing South East Conference 7th March 2013]