In the Windmill Theory within the Sunday Time best-selling book, Powered By Change, Productive Paranoia is one of the sub-blades of the People blade. The goal of the People blade is to ensure the people within organisations are in the best shape possible to enable success. That is, there is a willingness and desire to learn and grow, push boundaries and move the company forward. It is about management, mindset and moulding of team members together around the company’s elevated purpose (which has been discussed in a previous article on elevation).
Essentially paranoia is a thought process that is typically heavily influenced by fear and a perceived threat. There is also an element of blame or unwillingness to accept accountability. This is a type of paralytic paranoia that can culminate in a level of irrationality or even delusion and prevents one from looking at things objectively. In relation to companies, this manifests in thought processes such as the belief that a specific threat or disruptor, that could fundamentally disrupt a company; are discounted as low or non-existent. This happens commonly in large companies where the general consensus is that they are too big to fail. That attitude perpetuates the myth that past success is an indicator of future success. This simply isn’t true and the history books are littered with multiple examples where there has been a reluctance to accept that change is a reality and the consequence has been spectacular failure. This is due to being unwilling to take such threats seriously and implement back-up plans in the event those threats eventuate. A classic case in point is Blockbuster. Ultimately, their downfall came from their unwillingness to accept change was coming, in the form of rivals such as Netflix, and refuse to change their business model and product offerings.
This type of paranoia and fear is the antithesis of Productive Paranoia which is about proactively looking at what is on the horizon that could potentially impact your company, or disrupt your company, as well as hypothesizing about threats that are not yet visible. Then, utilising this understanding in a productive way. By actively and consistently practising Productive Paranoia, a company can start to unlock the opportunities that are presented by the winds of change that are fuelling such potential threats and disruptors and start to generate strategies to hedge their bets in the event that any of those changes materialise. It is essentially about being willing and courageous enough to accept that change is the only constant, there will be a need to constantly reinvent to ensure ongoing success and proactively planning to ensure this can occur. That is, it provides company’s an opportunity to develop Plan A, Plan B, Plan C, etc. Essentially building the well before you need the water.
Given current world events, particularly in relation to COVID-19 and the huge impact the health crisis has had on business and employment and subsequent economic crises that are now unfolding, Productive Paranoia highlights the absolute necessity for companies (and indeed individuals) to start thinking about what could fundamentally disrupt them and proactively begin putting in place back-up plans so it is possible to change course quickly. Really it’s about being prepared. Having multiple plans and hedging bets, especially to deal with times of uncertainty and change, is a really smart approach. It could be the difference between surviving and thriving or not. Productive Paranoia is about how you can do this to ensure long-term success.
In order to effectively engage in Productive Paranoia, some processes to support this need to be in place, to do this regularly. There are essentially 3 steps involved:
- Investigate what you’re currently discounting as a low or non-existent threat.
- Identify what things would disrupt your business, not just in terms of competition but also in terms of change in context, i.e. a shift from bricks and mortar to e-commerce.
- Integrate the above findings into your strategy moving forward at the very least in terms of how things are monitored but ideally in terms of how innovation is directed and developed.
If Blockbuster were open to accept change was coming and engaged in Productive Paranoia they could have adapted and thrived. Likewise, in the early 2000’s the tobacco companies dismissed the e-cigarette concept as a novelty and held the belief they would not be affected. Fast forward to today and they are paying millions of dollars in royalties to use e-cigarette patents. These are examples of the commercial impact of failing to be Productively Paranoid. Conversely, an example of a company that was hugely successful at doing this is FujiFilm. At a time when smartphones were ascending rather than taking the approach that Kodak did, Fuji Film reconsidered its elevated purpose, which was how light damages material or membrane, and created alternate strategic plans that enabled the company to pivot as needed and launch the hugely successful skincare range, Astalift, that was designed to improve wrinkles which can be caused by damage to the skin. By being Productively Paranoid, the company was able to survive and thrive whilst others of their peers feel by the wayside.
Productive Paranoia in its essence is about asking “what could fundamentally disrupt us?” or “what is our e-cigarette?” A couple of examples that are relevant today are professional speakers and banking. Given the changes COVID-19 has led to, with professional speakers the answer to that question is “not being able to speak on stage and therefore having no revenue”. If they’d been productively paranoid and asked that question they could have taken steps to mitigate the impact. Such as by productising or digitising the information and knowledge they impart, to ensure that should such a circumstance arise where they can’t speak on stage, they may still have revenue streams. Another example is banking. There is a common belief the biggest threat and disruptors are neo-banks, digital banks and FinTechs. However, the reality is this is not the case. The answer is big technology companies like Amazon, Alibaba, Google, Apple and others such as Uber. All of these companies are making headway into financial services and banking in different ways. They all have sticky customer bases who are loyal, but I’m not aware of any financial services companies that are really treating them as a significant threat or disruptor.
Therefore, there are huge strategic, commercial and competitive outcomes or advantages of engaging in Productive Paranoia. However, it is important to note that simply engaging in Productive Paranoia as a one-off activity is not sufficient. There is a need to have the underlying processes in place that enable a rapid change in response and direction. There is a need to have in place innovation processes that can support new product ideas and initiatives. There is a need for new product ideas to enable real-world messes or problems to be solved. There is a need for a company to have the right people in place who have a desire and willingness to learn, test and improve. Finally, there is a need to ensure that all of this relates back to, and supports the company’s elevated purpose. In short, all four blades of the Windmill Theory need to be working effectively together.
The benefit of the Powered By Change solution is it provides a blueprint to effectively ensure this is the case and to help you design your business for ongoing success. There is always opportunity in adversity and change, we just have to be courageous and open enough to look. Even in times of cataclysmic change, as is happening now, there is time to identify how you can deal with these changes and start making plans to ensure you survive and thrive long-term by being Productively Paranoid.
- Engaging in Productive Paranoia has significant strategic, commercial and competitive benefits, and could be the difference between success and failure.
- Build the well before you need the water. It is a smart business practice to proactively and regularly understand ‘what your company’s e-cigarette could be’ so you can develop strategies that enable the company to pivot as things change and hedge your bets.
- Simply being Productively Paranoid is not enough. There needs to be alignment and synergy between all four blades of the Windmill Theory to ensure your company is set-up for perpetual success and to effectively utilise change as a driving force rather than something to fear.