David Rowan

Nathalie: David, thank you so much for joining me in conversation today.

David: Hi, Nathalie. Nice to be here.

Nathalie: I’d like to start by asking you the question that I tend to invite all of my guests to speak to, and that’s to ask what you think is happening in the global human psyche at this very strange moment in time?

David: We are living a gigantic controlled-research study. We’re experimenting. People are being forced to challenge their assumptions, and although it’s a bit painful and lots of people are suffering, I actually think there’s some creative and entrepreneurial and economic benefit that’s going to come out of this. If we question norms, if we start to ask ourselves why we’re spending so much of our lives working on projects that maybe haven’t been as fulfilling, we can get people working on things that actually matter.

I’ve been working with a lot of entrepreneurs who have moved over to climate-tech or who are working on health-tech projects who don’t go into an office, who don’t have a boss, but they’re going to make an impact. So, I take an optimistic view that although we’re missing out on a lot of joy, we’re not getting the social benefits of being with people, there is a reset happening and I think it will lead to more considered approaches to what work is and can achieve.

Nathalie: That’s an excited lens through which to view it and actually it relates really well with some of the themes in the book that you wrote called Non-Bullshit Innovation. In which he goes to great lengths, around the world in fact, to meet with business leaders across all industries, to explore the qualities that give rise, in particular to corporate innovation, but across the board – and you define this as fresh approaches that deliver new value to an organization and its customers, which of course is exactly what we need right now. So given the complex challenges that we face with a pandemic and the climate crisis and more, what innovations give you a sense of hope right now?

David: So I wrote the book because I got a bit frustrated that I was doing a lot of keynotes for corporate events where they were having an off-site to show how innovative they were and they had their head of innovation and they had lots of post-it notes. You dig a bit deeper and say, “So you have this innovation budget, you have a little incubator with startups, what has changed in the parent company?” An oil company or a fertilizer company or a bank, and nothing really changes because the incentive systems are to keep things going, whilst quarter by quarter revenues are doing okay.

And of course, it’s politically quite dangerous saying, “Actually, we thought we were in this business, but the future has to be turning us into this business,” and that really bothers some people in power. I started despairing that there was all this jargon of innovation, but not much actually happening, so I went looking for big successful organizations that were making a transformation, that were understanding how digital technologies, how distributed workforces, how new ways to manage people were leading to massive transformation. In the lockdown that we’ve had over the last year and a bit, there have been a few examples of organizations realizing that, okay, so it’s not business as usual in the short-term, but maybe longer term, we need to rethink our processes.

I’ve been quite excited to see the idea of how we work, and what collaborative work is, be challenged. So, it’s obvious things like what an office is, but it’s also how we empower people to work at different paces in different ways to balance their family obligations, their childcare obligations, and their commitment to the company. I’ve also seen, because lots of people were isolated and locked down and couldn’t meet teams, they were finding ways to build teams using digital channels to solve real problems. You may have noticed starting in March 2020, there were a bunch of collaborative projects like hackathons to try and solve some real problems, so there were Facebook groups and Google groups and Slack channels and all sorts of WhatsApp groups where people were organizing hackathons to design open source ventilators, where they were trying to work out how to build and acquire protective equipment to send into hospitals, where they were trying to work out new ways to communicate in remote workforces.

So, one of the positive lessons I think I’ve drawn out of the last year or so has been the crowd is actually rather brilliant if it’s enabled by tools to communicate and to organize and to work on extraordinary projects. There was a time in about May or June when a collaborative computing project called Folding at Home, which normally helps use people’s unused computing capacity to understand protein folding, and they created a project to try and understand the structure of the COVID virus-

Nathalie: Wow.

David: … and so many people volunteered the spare unused processing capacity of their computers at home that it became, for a while, the world’s largest super computer. This is not through a company or a government, this is a collaborative crowd-based project. So, I think we learned in the last year that if you give the crowd tools to collaborate, to work together, to communicate, magic can happen.

Nathalie: Actually in your book, one of the leitmotifs is around culture and its importance in giving rise to creative, disruptive innovations, and in particular, the qualities of autonomy and curiosity, and the opportunity to engage in rewarding and exciting work. While your book touches on specific examples of cutting-edge projects by very successful companies, do you feel that this desire for autonomy and fulfillment is something we’re going to see more of from more people, that they’re going to demand this from their employers?

David: Daniel Pink wrote a book almost a decade ago called Drive, where he looked at the psychology of human motivation and he looked at a lot of studies of what makes people really effective as a workforce. He said, as long as you take out the algorithmic jobs like supermarket checkout or toll money collector, where finance is the reason you’re doing it, and most of us don’t work in those algorithmic jobs, the three things that people are looking for in their work are autonomy, the chance to direct how you work. Mastery, the idea that you’re going to get better at something through your work, you’re going to pick up new skills. And purpose, the idea that today’s job is actually contributing to something bigger in the world, something more important. The conclusion of the book was if you give people autonomy, mastery, and purpose, and they’re less motivated by money because their job is a form of self-expression.

I think that’s proved very true in some of the most effective companies. I went to see a company in Helsinki, Supercell, one of the most powerful games companies in the world, probably Europe’s most successful games company. The boss, Ilkka Paananen, talks about wanting to be the world’s least powerful chief executive, appoint good people, let them decide what they work on, how they work. I went to see some senior people at Supercell who’d spent a year working on a games project and they were testing it on local app stores and it wasn’t getting the engagement they were wanting. There were about 10 of them, expensive high-quality people and they went off, because this is Finland, to have a meeting in a sauna one weekday afternoon. They decided in the meeting, they were actually not that excited about the game and all of them wanted to work on different projects.

So Jonathan Downey, the lead of that group came back to the office, emailed the whole company saying, “Hey, sorry about all this wasted resource, but we’re going to kill this project and work on other things.” They didn’t ask the boss before sending that note because the boss wasn’t in the office, but it’s what the boss would have wanted. I think organizations that are able to accept that the real creative force is the workforce – not necessarily senior people, but people at every level, people who are talking to the customer, people who are spotting day-to-day how demand is changing – if you give power to these people, to have a say in how they work, what the product should be, what the company should be doing, then this can be transformative.

I think we’re in an era where it’s very dangerous to rely on hierarchies with bosses at the top deciding what happened, what should happen. I think it’s much more exciting now seeing companies where they trust the frontline workers to decide where the future lies.

Nathalie: Of course, part of that trust, especially if you’re taking those risks within your team and you’re not the CEO or what have you, is to know that you have a context in which there is psychological safety, where you can speak up, where you can venture out and potentially make mistakes without the fear of humiliation and punishment. What are some of the ways that you feel we can help people to speak up and encourage a more generative relationship with failure so that it does pave the way for the kinds of innovations that you explore?

David: You don’t create fixed norms of what’s acceptable to say, and what’s laughable. So I went to see Google X, the team that works on Moonshots and technology-led projects, doing things that haven’t been done before that can potentially benefit a billion people. They have two solid criteria by which they judge all their projects. First of all is they want cognitive diversity. They want teams that think in different ways, people with different backgrounds, not just the engineer and the designer, but the former concert pianist or the origami expert. Second, they want to create a sense of what they call psychological safety, which is it’s never uncool saying something that may sound ridiculous. In meetings, nobody gets shouted down for challenging the orthodoxy. Nobody is considered stupid for proposing something that may be a bit weird.

I talked to somebody there who used to work on marketing, Kathy Hannon, and she personally was a bit obsessed with carbon neutral forms of energy, and she’d read this paper published by a professor at Xerox PARC that suggested in theory it might be possible to take water from the sea and separate the carbon and hydrogen and recombine them as a carbon neutral fuel. There was no proof that it worked, but she went to the bosses, suggested this might actually be interesting to explore and they didn’t laugh at her. They didn’t talk her out of it. They gave her a tiny bit of resources, one person to work on. Over two years she built up a bigger team, she proved that the science works, created a fuel, an FML-type fuel and found ways to take the cost further and further down.

They have to start at Google X with a kill criteria, a number at which you’ll kill a project if it doesn’t work out, and her kill criterion was it can’t be more expensive than gas at the gas station, like $3 or $4 per American gallon. They started making this fuel at the equivalent of maybe a thousand dollars per gallon and over two years, got it down to a $100, $75, $50, $15, $13. Then she goes to the boss and says, “We’re going to have to kill the project. It’s really working. We’re all very happy, but it’s going to take longer and cost more money to get to a metric of same prices petrol as gas and we’re committed to our protocols, our kill criteria.” The boss was a bit surprised because it was all going well, but gave them all a cash bonus for sticking to the protocol. So, cognitive diversity, psychological safety and agreed protocols that keep you disciplined, I think, is the way to build effectively big, bold new projects.

Nathalie: While there’s a lot of focus on the use of technology to disrupt and recreate failing organizations or to revive organizations before they have the chance to be cannibalized by competitors, in your book, you also touch upon the power of the human factor. You give this charming example of the Heywood Hill bookshop in Mayfair, in London, a business that turns their fortunes around by taking quite a different approach to service and personalization. They end up building a specialist team of booksellers to provide personalized recommendation services for their discerning book subscribers around the world.

So, I’d like to ask with so many people justifiably concerned about the impact of tech and automation on their jobs and on, for instance, their capacity to lead a long professional life because it requires re-skilling, are there certain human qualities that you think we are coming to value more in the face of all of this technological innovation and change?

David: I do a lot of mentoring and advising of startups and a lot of the time it’s trying to help them understand what their story is, what their narrative is, why they exist. Often we go back into deep psychology, what’s their existential purpose, why as an organization and as individuals they’re here on the earth, forget the business model, forget what they’ve been doing, what their core essence is. It’s really quite enlightening when you work out what the real core emotional motivation is, the psychology.

There was a bookshop from the 1930s in one of the most expensive streets in Mayfair and they’d been losing money for a few years because online people have a bigger choice of books, they’re cheaper and they don’t have to pay the rent of a big shop in Mayfair. A new boss took over and he struggled with how he was going to turn this around, were they going to have to close down the bookshop?

He was reading Karl Marx in the bookshop. He took it down from a shelf and he noticed Marx was writing about, I think the phrase was conscious linkages. He started reflecting that maybe our existential purpose is not so much about selling books because that’s been commodified, but it’s hoping make those conscious linkages to books that people will like. Maybe our existential purpose is our passion about books and our ability to recommend books. Then he started doing some experiments. They created a service where you would come to them, tell them a bit about yourself and your taste and they would design a bespoke library for you. The first customer was a wealthy lady who had a Swiss mountain chalet who wanted 3000 books on modernist art and they created the library. I think they charged her about half a million pounds.

Nathalie: Oof.

David: Nicer business model. So, they started doing libraries. Then they thought, why don’t we do a monthly recommendation service? We’ll get to know individual customers. We have very interesting, quite important people, quite wealthy people coming off the street into the bookshop, why don’t we get to know a bit about them? Then we’ve got half a dozen ladies in the basement reading 100 or 200 books every month and they will recommend a book for each customer. We’ll wrap them and send them to them every month and they’ll charge hundreds of pounds per annual subscription.

It took off, they have thousands of people paying for those subscriptions, other bookshops like Waterstones have been copying them, but it differentiates them because it takes them back to their existential purpose and the conscious linkages, which is they know a bit about the person. It’s a human aspect of making that recommendation. It’s not a commodity transaction, like selling a book and it differentiates themselves. So, I think we can reinforce our economic value by going back to our essential purpose and what it is that motivates us. And it might be creative expression. It might be pattern recognition. It might be competing and wanting to do something first. It might be building. I want to build something bigger than has ever been built before. It might be environmental sustainability. Once you’ve identified the existential purpose, then the business model will follow and business models keep changing. If you are a school, suddenly you’re having to be a digital school. If you’re a church, suddenly you’re having to work out how to create Zoom services. So the form factor changes, but why do you go to that church or to that school where attendance is an essential human need to connect with other people, to have spiritual fulfillment, to learn in a collaborative way.

Nathalie: It’s an interesting example, the one of the school that you mentioned, it was one of my favorite ones in the book that you wrote about. Do you want to tell us a bit about that story, about Intercorp and the Innova schools and how they created this extraordinary ecosystem?

David: We need to go into, I think in Paddington Bear terms, we talk about deepest, darkest Peru. Peru’s been a bit messed up. It’s had political corruption. If you’re a president in Peru, typically you either go to jail or take your own life on the way to going to jail. It’s not worked out. 15 education ministers in 15 years, plus terrorism for 30 years. The middle class were not growing and it’s been a really troubled place. I met the head of, I think the biggest conglomerate in Peru called Intercorp, which started with a bank and then added supermarkets and cinemas and hotels and pharmacies. When I wrote the book, it was 4% of the GDP of Peru, 80,000 people, very central company to the economy of Peru. But first of all, they couldn’t grow as they wanted because the middle class wasn’t emerging to spend money and they couldn’t get good people inside the company because the education system was so messed up. So they thought if the government’s not doing it, we’re going to have to create an education system. We’re going to have to create a school system because the schools, even the private schools were very, very low quality.

And CRP, Carlos Rodríguez-Pastor, the boss, the founder, became a bit obsessed with, in the internet age, how you create a new kind of school, online plus offline blended learning. You go to the world’s best educationists to work out how to start from scratch, from age three to 18. But you do it in a way that the lower-middle class could just afford, but it also had to be for-profit, otherwise the company would give up on it. It didn’t want to subsidize it. So they came up with a way of creating a very low cost but highly efficient school system with the scholarships for those who couldn’t afford it, but still it would make them a dollar or two profit every month.

They started teaching. They took over big sites in big cities, not just in Lima, but outside. When I went to see them, I think they had 50 schools. I think now they’ve got about 100 and they’ve been exporting to Panama and Mexico.

Nathalie: Wow.

David: The schools get incredibly high attainment test results, much higher than the private schools. Then they started trying to create the equivalent at university level. There’s no MIT in Peru, so they created a technical university where they were using executives inside the Intercorp companies, teaching based on what the market needs, teaching based on the engineering that the telco part of Intercorp had to understand.

Again, it’s a way of creating a public utility education in a for-profit but accessible way that was doing things that the government wasn’t doing. Because they were doing this, they had a renewed sense of purpose inside the company. They were attracting talent from around the world to come and work there. It was good for the bottom line and they have on their homepage of the website now the mission of the company, which isn’t supermarkets and banks and profit, it’s to make Peru the best place in Latin America to raise a family, which is pretty motivating.

Nathalie: That was very motivating and I think it’s something which emotionally, obviously, speaks to so many people. Another theme that you explore that I’m keen to ask you about in the realm of emerging tech is the use of blockchain and its application in providing transparency to supply chains from food to fashion. Given that more and more consumers are demanding greater information about the provenance of the products they buy, do you think that blockchain is going to become more ubiquitous in the years ahead?

David: I think transparency is going to become more ubiquitous. I think the ability to track supply chains, to know where your pair of jeans came from, the conditions in the factory, to know a bit more about the food you’re eating and how it’s got to you, I think that’s all going to be incredibly important, that that’s going to create differentiated businesses because of their transparency. I don’t think blockchain is a magic word. There’s been a lot of hype and mismanagement around some of the companies claiming to offer blockchain solutions. Don’t fall for the jargon. Go back to the actual purpose, go back to what we’re looking for, which is an understanding of authenticity of how products have moved around the world of accountability.

I talked to Phil Chen, who is part of the family that runs HTC, this big phone company in Taiwan. He’s been experimenting with a new kind of phone called the Exodus, which uses the blockchain to make everybody who has this phone part of the network, a node on the network. So, you can’t simply store your cryptocurrencies by your phone. You can also offer your own phones, sensors, memory storage, unused bandwidth to the network, and maybe somebody else on the network, a company will pay you for it. He’s trying to create a way to put the phone owner into the network in a distributed way where you can contribute to the network. I think that’s really interesting as an experiment. I don’t go mad because it’s got blockchain in it. I think decentralized networks, however we organize them, become very, very powerful in a world where, as I mentioned, I think a lot of organizations are moving away from hierarchies.

Nathalie: Alongside the shifting sands of hierarchy within organizations, you also point out how important core values and the ethos of a business or organization is, to the ways in which they make their change and how the change that happens has to be driven authentically from the top. Given that values are playing an increasingly important role in attracting and retaining talent, if I asked you to envision what a thriving, sustainable resilient business of the future might look like, what characteristics it might have, how might you begin to answer that?

David: It needs to be declarative about what it stands for and what it won’t do. I’m starting to see companies put their ethics statements online. I saw one yesterday, it’s a company called Descript that helps you edit audio like this. They’ve got a way for you to record a few sentences and then it will simulate your voice-

Nathalie: Oh, gosh.

David: … which gets a bit close to the whole deep fake territory. Could you take a politician’s voice and have them saying things that they didn’t actually say, and to their credit, they’ve acknowledged this risk and they put on the site how they’re going to avoid this. I think, I’m telling a lot of the startups I’m investing in that are working on quite sensitive areas involving artificial intelligence, “You do need to say what you will do and what you won’t do.” It’s come to hit a lot of the big tech companies, the Googles, the Amazons, especially the Facebooks, that their staff start to see them as actually not that ethical in some of the pragmatic decisions these companies are making in order to boost shareholder value.

It’s a battle for talent now and really good people in, not just in tech, but in all sorts of industries have a choice of where they work. And if you want them to work for you, you’ve got to give them a mission to believe in that’s honest, that’s authentic, that they can align their personal values with.

Nathalie: Brilliant. You also run a fascinating project called VOYAGERS.io, which is a community of more than 250 people from over 30 countries.

David: It’s about 400 now, it keeps growing.

Nathalie: Is it? Can you just briefly touch on what it is that you do there and some of the most poignant lessons you’ve drawn from that community?

David: I like bringing people together to see what magic sparks, to see how serendipity leads to good things. I used to do it as dinner salons, the architect next to the entrepreneur, next to the investor, next to the human rights activist, and then I started experimenting, not for profit, taking people for weekends, for three days of curated activities. We call them adventures, doing four or five of them a year. We did one which brought together people working in health-tech, just to see what happens if you get people from a dozen countries working on real, important problems, who can learn from each other – the regulator getting to know the investor, getting to know the research scientist and the founders.

We did a trip in Iceland with 50 people in health-tech, about October 2019, and people started new companies. They started pairing up to create projects that were going to change the world. An investor met a founder and invested. People were becoming coaches to each other. I realized that if you can create the conditions where people are encouraged to be givers not takers, where they are primed to contribute something to the whole, to be helpful to each other, extraordinary things can happen. In lockdown, a health-tech group helps give people in the group access to lab space when theirs is closed, help get access to hospitals when they’ve got protective equipment, lots of extraordinary things happen. Then we started a climate-tech group. Again, it’s growing by recommendation. People are bringing into the group people that they respect and trust and people have created some beautiful things out of this. Somebody got an introduction to president Obama during the Black Lives Matter’s debate.

People have been offering their advice for free to founders going through challenging times. For me, it’s all an experiment to see if you can build real community, not Facebook fake community, but authentic community. People might not be in the same country in coronavirus times, they may not actually meet each other for quite a while, but they can be there for each other. And we’ve started doing some interesting experiments. We’ve created peer-support networks of about eight people called Voyagers Cabins that meet in confidence for two hours a month, where people can talk about important things and get feedback from other people on their own experience in dealing with something difficult at work or at home. We’ve created the Voyagers Lazy Book Club, which meets each month online. It’s lazy because you don’t have to read a book, just hear about books that other people are excited about.

We created for the health-tech group, a community-based small investment fund where 72 people in the community put in a bit of money, some of them a bit more than others. We didn’t have a minimum. We’re not taking out fees. We’ve so far invested in seven companies in the community doing amazing things in health-tech. Of course, it’s not just about money, it’s about being inside the community and seeing what help other people in the group can give. We may do the same with climate-tech.

Nathalie: To end on then, and it follows nicely from what you just described, what kind of world you want to build and what one thing can we do to move us in that direction?

David: I am stimulated by people doing surprisingly bold things to solve some of the big problems. So, I want a world where people are actively collaborating and building and focusing their efforts on things that matter. Don’t build a laundry app, do something to solve a real health problem or an aspect of the climate problem, or come up with a better way of creating a food system.

I think what we need are approaches to collaboration that create trust, and Voyagers is an experiment in doing this, but I think there are all sorts of other approaches. But one thing I’ve learned through investing and through journalism and through the Voyagers is the best resource is your network. If you can blend your network with some other people’s networks, that becomes super powerful. If people are open to helping each other in those networks, extraordinary things can be built.