A new year. Change is in the air. Soon you’ll be at the gym three times a week. Visit your grandmother more often. Drink two litres of water a day. Quit smoking, play more with the kids and start to learn more. — Doesn’t work? It’s normal. We humans are not made for drastic changes. Changes are utopias, and the currently omnipresent “disruption” is the greatest. Because we feel better when things stay the way they are. Why this is important for you, your company and your brand right now.
In April 2020 the debut album of a once unknown British rock group will celebrate its 40th birthday. The title: Iron Maiden. By, of course: Iron Maiden. It shot straight to number 4 in the charts back then. Since then the band has sold 100 million records, jetted around the world with their own jumbo and has built up a huge fan base across all age groups. Madonna is out, Michael Jackson dead as a doornail but Maiden are still around. The band succeeds in doing all this in an industry that has been completely deconstructed by a disruptive innovation — the loss of the economic basis due to the digitization of physical sound carriers. On the cover of the last album from 2015, number 1 in 24 countries and 32 weeks in the German charts, is the same lettering as 40 years ago and with skeleton head Eddie even the same motif. Like on all albums before. The sound has also changed only slightly over time. Singing guitars, siren-like vocals. British Heavy Metal. The band has refrained from drastic innovations. Contemporary loops, hiphop interludes or electronic elements the listener searches in vain. He gets what he expects.
The same applies to the film character James Bond, which has been rather cautiously modernized in recent decades. New leading actors, different gadgets, different stories and indeed an adapted image of women. But essentially, a chauvinist fights obscure villains in spectacular locations around the world. The pattern of success has been the same since the beginning of the series in the 1960s. Although the world has changed dramatically since then.
Benefiting from the Lindy Effect
Iron Maiden and the creators of James Bond have understood that radical change is detrimental to a thriving business and their brand. They resisted the desire that often arises in life to try something “completely new”. In doing so, they benefit from the Lindy effect described by mathematician Nicolas Nassim Taleb in his book “Antifragility”: Lindy was a “Deli” in New York. Actors who hung around and gossiped about other actors discovered that Broadway shows that lasted a hundred days had a future life expectancy of another hundred days. The shows that lasted two hundred days, two hundred more. The longer a system, principle or product has been in operation, the greater the likelihood that it will continue to exist in the future¹.
People buy and use what they know and have proven themselves. Psychology has known for a long time: From past behavior, future behavior can be predicted very precisely People’s habits do not change even if their goals are completely opposed to their behaviour². The routines are programmed. Which explains the burst New Year’s resolutions³. We humans change our behavior according to experience — if at all — only under two conditions: Existentially and directly perceptible crises that force us to leave well-worn patterns. Then we have no choice. Or we believe in a vision, repeatedly presented by a demagogically gifted leader (manipulation).
Most attempts to push through drastic changes therefore have one thing in common above all: they fail. Like the introduction of New Coke in 1985, probably the best known and initially biggest marketing mistake of all time. The then 99-year-old Coca-Cola company announced that it would abandon its original beverage formula for a newer, sweeter version. In taste tests, consumers had preferred the “new cola” to the original drink. But the company underestimated the loyalty of the buyers to the brand. After a flood of telephone calls, 40,000 letters and enormously bad press, the company pulled the brakes three months later and announced the return of the classic Coca-Cola. Sales for the original increased dramatically as a result. Today Cola is the fifth most valuable brand in the world⁴.
The “New Coke”, however, has no part in this; it disappeared without a trace. So although the product was better received in blind tastings, consumers did not want the novelty.⁵ But that is normal: 80 to 90 percent of all innovations go down the drain. Remember the videophone, the Transrapid, the futuristic car from DeLorean or green ketchup.⁶
The search for disruption is a lottery
Also two thirds of all change processes in companies⁷ and well over half of all company mergers miss their targets completely⁸. The fashion brand GAP failed to introduce its new logo in 2010. When the label published its new logo, criticism was raging on all channels. Customers wanted the old logo back. In fact, the new logo was unadorned and unimaginative — and in the end an expensive mistake that fortunately could be corrected.⁹ The money for new ideas is not always well invested. The consulting firm Oliver Wyman estimates the financial damage caused by failed innovations at 20 to 60 billion euros annually in Germany alone.¹⁰ If we are not even able to renew our rhythm of life in such a way that we regularly go to the gym for our health, how can we motivate thousands of employees and customers to give up their previous convictions as quickly as possible and change their behavior?
Nevertheless, companies are currently desperately seeking “disruptive innovation”, mainly because of the sermons and successful platforms of the Founding Fathers from Silicon Valley. In fact, we can no longer afford to stand still in this country. Companies are under pressure to catch up with the digital gap. German retailers want to become like Amazon or Alibaba. The diesel-driven car manufacturers look enviously at Tesla. Mechanical engineers increasingly see their future in software instead of hardware. So they are chasing teams through design thinking workshops, spending millions and millions on acquisitions, consultants or digital initiatives. Always on the lookout for a new vision beyond day-to-day business. But is that really the solution to the problems? In management circles, the term “disruption” has been wafting around the aura of the future since Clayton M. Christensen’s powerful bestseller “The Innovator’s Dilemma”. The book’s thesis is that small companies can very quickly and initially unnoticed drive the dull top dogs into a corner and create entirely new markets. The automobile has thus replaced carriages, digital photography has replaced 35mm film, digitization has replaced physical sound carriers and so on. With serious consequences for the business models and companies behind them.¹¹
But these successes of disruptive innovations are the exception rather than the rule. Many companies were simply lucky, had a genius like Jeff Bezos, Jack Ma or Steve Jobs at the top or came up with the right idea at the right time. Harvard Professor Christensen himself now has an inkling of what the success of his work over the past two decades has done. He writes: “In our experience, many people who talk about “disruption” have not read a single serious book or significant article on the subject.”¹² And in interviews he states on record: “Established companies should react to disruption when it occurs, but not overreact. Not every disruptive company is successful, and not every success comes from a disruptive company.”¹³ The widespread panic about quickly pumping millions into radically new ideas because otherwise you will go under is exaggerated. Disruption is also not a result, but rather describes a long-term process characterized by trial and error. Working on it often even endangers the very existence of the company, when people within the organization work towards different goals because a new business model is placed parallel to an existing one. And neither employees nor customers are prepared for it.
Probably more established companies struggle with their self-imposed reinvention than with the market itself. With the men’s tailor BOSS, they seriously considered the idea of having to offer women’s fashion as well over a decade ago. The company is still chewing on this disaster today.¹⁴ Instead of just expensive luxury cars, Daimler wanted to break completely new ground with the Smart in 1994. The small car has not brought the company a single cent in profit since then. It is simply not geared to this business model. In the new year 2020, Daimler wants to turn it into a pure electric brand and is probably facing even bigger problems (but at least has a chance of meeting the EU’s CO² targets). Daimler-DNA specializes in luxury cars with internal combustion engines, and customers apparently expect the company to offer quite different products from upbeat small cars.¹⁵
And now: Let everything be as it is?
This does not mean stopping all innovation efforts, not looking for the next big thing, not courageously trying out new things or constantly striving for change. It is rather a plea for prudence. Strong brands check which technological innovations and trends are really acute and relevant. They know what suits them — and what does not. They correct mistakes quickly, like Coca-Cola or GAP. And they know the power of constancy, which in an uncertain world exerts an enormous attraction on people. Iron Maiden prove that. Some brands adapt gradually and almost imperceptibly to the spirit of the times. They remain as attractive as James Bond, without breaking the mould.
The policy of small steps can also achieve great things over time. To get back to the New Year’s resolutions from the beginning: the long-term dietary adjustment is more successful than the short-term radical diet. Switching to a vaporizer is easier and more likely to succeed than completely giving up nicotine addiction, yet there is a positive health effect.¹⁶ At the same time we do not overtax ourselves with unrealistic expectations. Or let’s take the economic prime example of the year 2019: Battery manufacturer Varta has been tinkering with a new generation of micro-batteries for years — and was thus fully engaged in its core competence. In 2019, the company then surprised everyone with the information that its batteries are built into the earphones of the latest smartphones. The Swabians are already world market leaders in hearing aids. The share price goes through the roof, Varta even buys back the household battery business after 17 years¹⁷ and has now moved up to the MDAX.¹⁸ All this without disruption and the big hype of the visionaries from Silicon Valley. In contrast, this year alleged “disruptors” such as the office space rental company WeWork or the mobility mediator Uber were disenchanted. They burned billions of dollars of their investors.
If you or your company still want to look for really radical innovations, then these activities are probably best served by separate brands and separate companies with completely new structures. The existing business needs to be carefully developed while elsewhere you get involved in the lottery game of the future — and allow for a total loss without jeopardizing your main pillar. Ambidextry is the key word.¹⁹ So start from scratch rather than turn the old completely upside down. That way you can play a free game. On a greenfield site there are no obstacles to a new building. Here, the future is still a hopeful promise for employees and customers alike and not a frightening end-time scenario. Ideally, in addition to an attractive vision and a convincing product, you should also have a fascinating history and an attractive brand image — just like Iron Maiden once did. Then develop this appearance very carefully in the following. Always consider where you stand. What you are doing, and above all: what you are not doing. Lower expectations and avoid — despite digitization ¬- panicky actionism. People need security when they get involved in something new. Perhaps the decisive innovation or the next business model will just jump out. Because Voltaire knew that while we hate change, we love progress.
Happy New Year!
 Taleb, Nassim Nicholas: Antifragilität. Anleitung für eine Welt, die wir nicht verstehen. München 2013
 Sutton, Stephen: The past predicts the future: Interpreting behaviour–behaviour relationships in social psychological models of health behaviour. In D. R. Rutter & L. Quine (Eds.), Social psychology and health: European perspectives. Farnham 1994
 Gardner, Benjamin et. al.:.A systematic review and meta-analysis of applications of the Self-Report Habit Index to nutrition and physical activity behaviours. Annals of Behavioral Medicine, 42. Oxford 2011
 Ashkenas, Ron: Was sich ändern muss. In: Harvard Business Manager, Nr. 12/2012
 Schweizer, Lars: How to improve acquisition performance: The role of a dedicated M&A function, M&A learning process, and M&A capability. In: Strategic Management Journal, Vol. 37, №4. Chicago 2016
 Christensen, Clayton M.: When New Technologies Cause Great Firms to Fail. New York 1997
 Abbosh, Omar et. al: Wende in die Zukunft. Pivot to the future. Werte und Wachstum in einer disruptiven Welt. München 2019