This past week, writer and social influencer Julian Shapiro took to twitter with an intriguing observation.
Airbnb is today roughly a $100 billion start-up, Shapiro noted, as he wondered why many investors and entrepreneurs did not see the opportunity before yet the ingredients required for such a business model to take off and scale - like growing Internet access, high demand for budget travel as well as regulatory ability - had existed for years.
The answer, he ventured, was what he described as ‘precedent bias’, a tendency by people to dismiss something with no previous example. As I mulled over this assertion, I came to the conclusion that there could be another even more commonplace reason why novel ideas are often dismissed offhand. I call it the power of orthodoxies.
Over time, societies, people and organisations develop a common understanding of how things should work. Orthodoxy can be described as a deeply held belief, a traditional practice or a conventional way of thinking that is assumed to be true or correct.
The term was first used to denote conformity to the creeds of the early church - the core beliefs and agreed upon understandings of the doctrine that were shared across religious communities. Today businesses also develop orthodoxies that determine the way they create, deliver and appropriate value.
Orthodoxies may come in the form of industry best practices, standard operating procedures, operating manuals or general rules of the game. Often, they enable a firm develop a shared body of knowledge about how to conduct its activities. To this extent, orthodoxies are crucial for smooth and efficient operations. The issue though is that if left unchallenged, orthodoxies can and do blind organisations to new ways of doing things.
“Orthodoxies create the proverbial box within which people come to think, operate and make decisions on a daily basis and it becomes difficult for them to see outside of it,” says innovation expert Rowan Gibson.
The Airbnb model and opportunity could not be seen and captured by many beforehand because it simply didn’t conform to the dominant logic of the hospitality industry at the time.
Across many industries and sectors, successful disruptors do so by challenging the accepted way of doing things. Let’s look at a few examples.
For a long time it was assumed that to make French fries it required actual frying as well as a lot of oil. That was until French multinational Groupe SEB in 2006 challenged these two assumptions and developed Actifry, which requires no frying and uses only a table spoon of oil to make about 1kg of fries.
When Michael Dell built what was to become one of the largest personal computer and technology corporations in the world, he began by challenging the prevailing assumptions of the computer industry at the time. “Why does an assembled computer cost fives times as much as the parts that went into it? Why do computer manufacturers need indirect retail channels to sell their products?
Steve Jobs asked, “Why can’t we put 10,000 songs in your pocket by making a portable music player out of a small storage digital device?”
Ikea, the world’s largest furniture retailer, challenged the assumption that home furnishings had to be fully assembled before being sold and delivered. Why not design modular units that customers could pick and easily assemble at home?
Veteran Ikea creative director Michael Hay recalls a typical production brief: “Can you produce a well designed, durable table that can be made and sold profitably for five euros.”
How often does your company challenge deep-seated dogma it has about how to do business? Are those assumptions still relevant or even valid?
