The Innovator's Secret

Our idea of the classic entrepreneur or product visionary is someone who must surely be the ultimate optimist. I think this is a fatal misunderstanding.

Our idea of the classic entrepreneur or product visionary is someone who must surely be the ultimate optimist. I think this is a fatal misunderstanding. Hope is not a strategy, and unfettered optimism is the enemy of anyone who wants to deliver significant change. It is unfashionable to be anything other than an optimist, but we can state boldly that the big secret of the most successful innovators is they are, in fact, secret pessimists.

Hope is not a strategy

I’ve been leading HomeServe Labs for over three years now, and my team has been seen increasingly as a shining example of how to successfully do that devilishly hard thing - to create real breakthrough innovation from within a big, established company. People ask us “how have we done it?”  The answer? Right here is the HomeServe Labs guide to what we call the Mind-set of the Courageous Pessimist.

Alain de Botton’s Book of Life defines pessimism as the idea that “everyone, however outwardly normal, is severely flawed: short-term, blinkered, vengeful, sentimental and prone to reckless anger, fear, delusion and passion. We’re mad monkeys, with a few extra neurones”.

The path towards Courageous Pessimism starts with a number of epiphanies:

Pessimistic Epiphany 1: You are a Mad Monkey

To be a successful entrepreneurial leader the first pessimistic epiphany is that you yourself are a mad monkey. You are sometimes prone to thinking your own ideas are marvellous, you are guilty of not listening to feedback, and are at constant risk of searching for data that supports your preordained conclusions. The optimist is fatally blind to these problems, and will suffer from a whole host of cognitive biases that will one day cause a nasty collision with reality.  

The good news is that these biases are well understood by psychologists and behavioural economists. The pessimist is not only aware of these problems but also knows that they are incredibly hard to escape from, so one has to be constantly on their guard, challenging their own assumptions and listening without ego to the signals from outside. The pessimist knows their own self. 

“Knowing yourself is the beginning of all wisdom” - Aristotle


Pessimistic Epiphany 2: Your team mates are also nuts

The pessimist knows they don’t have all the answers, they know they cannot change the world on their own. They need a team. The second pessimistic epiphany is that whoever you hire, they will also be a bit bonkers too. And this makes collaboration rather difficult. An optimist will assume they can hire a team of highly effective individuals, well balanced to each others skills, who will work together unaided in blissful productivity. However, the pessimist knows that, regardless of how hard you try, you will always hire people just as nuts as you. You just don't realise in which specific way each of them are nuts until you work with them for a while. The pessimist leader of a creative team knows their job is psychologist, coach, referee and amateur therapist to keep the team fighting with each other in the most constructive ways you can encourage.

Regardless how hard one tries, you will always hire nutters.

Pessimistic Epiphany 3: Big organisations are a basket case

The third pessimistic epiphany is that your entire parent organisation is a monstrous bureaucracy, full of clashing interests, power struggles, legacy technology and short-term thinking. The IT department does not care about your stupid new ideas. You are nothing other than a pain to the Compliance Department. To the mother-ship, your new innovation project is somewhere between an annoyance and an irrelevance. 

The optimistic leader of innovation will run into this head first and get killed. They will sign up too early to unrealistic goals and milestones, and try and adhere to impossible processes not designed for fragile new ventures. The pessimist, however, knows that they need to very work hard to combat all of these problems. They know they need political cover from the very top. They need to agree different rules apply to the new venture. A clear-headed pessimistic diagnosis of the problem calls for well thought-through and hard-won solutions.

Pessimistic Epiphany 4: Your ideas are flawed

The fourth pessimistic epiphany is that all of your innovation projects are flawed, but you have no idea in what particular way they are flawed when you start out. 

The pessimist will suspect that her new product idea creates no value for the buyer, the costs will be too high, the channels to market ineffective, the technology will be out of reach, the competitors too tough, the skill of the team lacking. The pessimist will leave no stone unturned, and will have worried about, analysed and debated everything that could possibly trip up the new venture. These issues are then prioritised and systematically and quickly tested. The pessimist knows that their idea is flawed in many ways, and they know that this is perfectly normal. The real work is to find out where exactly the flaws are and whether they can be overcome.

Here's to the crazy ones 

In the face of such adversity why would a pessimist actually try and change anything? This, in our opinion, is why they are true heroes. The courageous pessimists, despite their bleak assessment of the facts of the situation, still want to have a go.

It is a huge battle to remain a courageous pessimist for long. Our own human weaknesses are likely to pull us, without realising, toward blind optimism. The more emotionally invested we are in our initiative the more likely cognitive biases will seduce our thinking without us realising. We will fail to see the writing on the wall.

Likewise, taking too many punches can also wear us down and slowly sap our desire to try and make a difference. Maybe its all just too hard. 

Thats why change-makers are true heroes. They summon the courage, despite the brutal facts of the situation, to fight for change. Like the crew of Rogue One, they understand the chances of success are slim, but they have a go anyway. Because it matters.

When we started HomeServe Labs we were, in a sense, incredibly pessimistic about what it would achieve. The CEO positioned the investment as something the HomeServe Group could afford to lose, so we could therefore happily not expect any return. We never baked any numbers into any 5 years plans. We never banked any up-sides, and we didn't try to second guess where the work would take us. We certainly never intended to invent a new-to-the-world internet of things product.

“Act without expectation” - Lao Tzu 

In life as in business

Three months ago I found out my wife has terminal cancer. We have three little kids. Half the people with her diagnosis are dead within nine months. It's a tragic situation. 

In this situation it is easy to collapse into denial as a defence mechanism, and rely on blind optimism that somehow a cure will be found, or a miracle will ensue. On the flip side, it is also easy to be fatalistic, to accept the diagnosis, accept the doctors’ recommendation and assume there is nothing much more that can be done. 

But even in the darkness of this situation it is possible to try to emulate the courageous pessimists. It is possible to stare the brutal facts of a situation in the face, to really feel the pain. And you can still, if you try, find a move to create a different outcome. Find a better doctor, find a better treatment plan, do everything you possibly can to increase the odds of a better future. As Ben Horowitz (one of my favourite courageous pessimists) says in The Hard Thing About Things - "There is always a move".

“There is always a move” - Ben Horowitz

Pessimism is out of fashion in our modern day business culture, but we are calling for a good dose more pessimism in our organisations. We need more courageous pessimists, as there are a lot of problems to fix - there is a lot of work to do.

Craig Foster is Managing Director of HomeServe Labs, the Insurtech startup that invented the award-winning IoT smart leak detection technology LeakBot

Follow Craig on Twitter @foster_ideas

Craig has been nominated for the Insurance Times Tech Champion of the Year, if you would like to vote for him please click the link here.