What Would Jes–, I Mean Elon, Do?
An outcome-oriented approach to Futurism.
There is a tension or paradox in futurism; it isn’t very good at predicting the future.
Considering that I regard myself as a futures practitioner, the above opening statement sounds like I am foolishly trying to write myself out of the job.
What I imply is that there is a misunderstanding and misappropriation of Futurism as a profession. Allow me to explain.
The business of prediction is fatally flawed. Take for example the last 4 political earthquakes to shake the UK-US centric world: the 2015 General Election, followed by Brexit, then Trump, and rounded off by the 2017 General Election. As explored in David Runciman’s excellent Talking Politics podcast, each one was predicted wrongly by all 5 associated interests: politicians, pollsters, political scientists, pundits and prediction markets. If such events — that are mostly binary, highly watched, and highly invested-in in its outcome — can be so spectacularly misunderstood, then how so for the rest of the messy world we live in? In short: prediction is a mug’s game.
Instead of predicting — as outlined in a previous Andthen article which I shall be building upon — we should be anticipating the future. To summarise that article which I implore you to read (go on, read it, I will still be here): anticipating the future means employing creative thought and analytical rigour to uncover the unexpected “as a tool that empowers us to change things now.” This is hopefully recognisable. We have seen this for decades in the profession of economists, who don’t make predictions, but present scenarios.
If companies and organisations hire Futures practitioners to anticipate the future (rather than predict it with the certainty that the finance department and shareholders love) then what is its purpose and outcome?
To this question there are three options that can be taken: a passive, reactive, or proactive approach. Let’s delve into each.
Passive approach to futures
The first option, a passive approach to futures, could be referred to as the ‘wait-and-see’ approach. This involves defining what the signs are that help us foresee whether a number of generated alternative futures of dubious probability are becoming more probable of coming true. We might call these signs Portents. They are indicators of how quick the trajectories of change that compose a future are accelerating or maturing into the present day.
Reactive approach to futures
Alternatively, one can take a reactive approach to futures. Here, we are using alternative futures to spot opportunities and/or threats that are of high impact. Doing nothing is simply not an option. An organisation should position itself in a ready stance, like a tennis player poised to return a serve, to capture the inevitable windfall of an unfolding future. A downside of this is that the more probable a future is, the more likely that it will be widely known and competed for.
Proactive approach to futures
Finally, the third option is taking a proactive approach to futures. This approach admits that there are shamelessly optimistic visions of the future which are beneficial to people and place. Yet, they might be improbable due to the current trajectory of change. Rather than waiting around for them to happen, or dismissing them entirely, the proactive approach is to use the prophecy as a self-fulfilling one. This means creating the conditions for the prophecy to fulfil itself, which can be defined as Reflexivity.
All three approaches are acceptable options for organisations and companies to implement, depending on the specific situation at hand. However, in this article, I am going to focus on the third, since it is the most overlooked (and powerful) in my opinion.
Before exploring my definition of the term that forms the centre point of the third option, Reflexivity, I shall briefly touch on the original usage to add colour and context. Pardon me for a moment as I get a bit theoretical and meta on you, then we can return to the fun.
Reflexivity originates in social theory as an epistemological term (knowledge about knowledge). It is similar to the observers effect, whereupon observing a situation alters the phenomenon being observed — however for the act of theorising which influences that which is being theorised about. (I warned you it would get meta.) From there, it found its way into wider usage as the underpinnings of George Soros’ theory of market dynamics. Everyday examples of this might be treating drug addicts as criminals creates criminal behaviour; or a lack of faith in government’s dealing of the economy creates a dip in the stock market and consumer spending. Whilst Soros’ focus here is quite negative, this cuts both ways. Positive interpretations of some phenomena can influence it to positive ends.
Leaving the land of theory and returning to the subject you came here to read about, Reflexivity in the context of Futures. How might we identify purposeful visions of the future that are practical in their application, and proactively create a path from Now to Then? There are three principles for leveraging Reflexivity that I shall explore over the rest of this article:
01 Understand The System
02 Approach At An Oblique Angle
03 Change Should Be Emergent.
To bring these three principles to life, I thought it useful to use the case study for each principle of a renowned futurist who represents the most practical and least pontification-with-no-action persona I could think of: Elon Musk. Some might question my label of Musk as a futurist. However, in my opinion, Musk is arguably more of a futures oriented change-maker than he is a business man (but no less than an excellent business man). Looking at his ventures since the acquisition of PayPal, each seeks to completely reinvent an industry towards an overarching goal of reducing the “risk of human extinction”:
When listed in context of their purpose, it becomes apparent that what is common across these ventures is that Musk sees and uses businesses as a means of leveraging change. In particular, I will use Musks surprisingly successful entry into the Automotive market as a case study for these three principles of reflexivity.
1. Understand the system
To be able to influence that which you are a part of is an acknowledgement that you are part of a system. A structure that is systemic in nature is one in which the whole can not be reduced into individual elements, as they are interconnected. The inability to isolate the individual elements from the overall system makes it challenging to analyse through conventional thinking. This is because over the past few hundred years we have diversified and siloed specialisms of knowledge into in disciplines, departments and professions. We are dependent on ever more complex systems, yet our knowledge is becoming ever more specialised, reducing our understanding of them.
This interconnected relationship between the elements of a system also results in unpredictable and unexpected outcomes. These can be caused by feedback loops, which can create exponential outcomes — such as the melting of snow which creates a feedback loop of reflecting less light which absorbs more heat which melts the snow more quickly.
The unpredictability and difficulty in casually observing a system highlights the importance to take the time to cut across disciplines to understand the wider system that surrounds an issue or problem at hand. Doing so uncovers the unspoken rules of the game, revealing the power dynamics and motivations at play which can make or break the success of releasing an idea, product or business into the world.
The risk of not taking the time to understand the underlying mechanics of a system means that a well-intentioned idea can be rejected. This is eloquently explained by Conway, Masters and Throrold in the excellent RSA paper, From Design Thinking to Systems Change, through an analogous system familiar to us all, the human immune system:
“This immune response sees the promising innovation rejected in the same way that the body would resist a pathogen. The current system releases antibodies (barriers to change) to neutralise the pathogen (the innovation). To proactively counter this immune response, innovators should not just focus on user needs (although this is key to developing effective solutions), they must also comprehensively map the system which they hope to change, employing a range of techniques to appreciate the complex dynamics at play.”
What Would Elon Do?
Back in pre-2006, before Musk founded Tesla, deciding to enter the automotive market was a crazy idea. It was an industry dominated by a small number of heavyweight global players that were defensible from entry to the market by new players through the capital required to benefit from the economies of scale, which incumbent car manufacturers enjoy. To justify entering such an impenetrable industry, Musk must have been able to understand the systemic dynamics at play. There were two key dynamics that was holding back the industry from actively innovating forwards — despite the ecological urgency to do so.
The first dynamic is the incentives at play in the elaborate supply chain that forms the hidden bulk of the iceberg that goes into the manufacture of a car. The supply chain of a car is a 3 tier pyramid structure that culminates with the OEM (Original Equipment Manufacturer) — such as Toyota, Ford, BMW, etc — at the top. The competitive nature of this structure means that innovation is highly incremental, each individual parts manufacturer aiming to optimise the efficiency, performance, safety and design, to beat competing parts manufacturers. This intense focus on competing in a bloody red ocean means that you end up not seeing the bigger, transcendent technological leaps.
Second is the incentives of the dealership. The business model of the dealership is highly dependent on post-purchase ancillary services. Using Penske Automotive Group as a proxy for the dealership industry, according to an analysis by Forbes auto industry writer Jim Henry, “service and parts represented 13 percent of annual revenues, but 44 percent of the gross profits”. Since electric vehicles have significantly lower maintenance cost due to the reduced number of parts (from 2000 for an combustion engine to 20 for an EV), it is not in the dealerships interest to welcome the development of the EV with open arms.
Musk surely understood both these dynamics (as you would expect of one making investments of $7.5m, $13m, and $40m into the company in 2004, 2005, and 2007 respectively), and so knew that despite the foundational technology of EVs — batteries, electrification and digitisation — being on the cusp of feasibility, no car manufacturers were even close to developing an electric vehicle, for fear of cannibalising parts of their own value chain. This justifies heavily investing in a company that he would then actively lead, to enter a market that conventional wisdom for 40 years had been viewed as untouchable.
2. Approach from an oblique angle
Having taken time to understand the dynamics of the system, the way in which one must intervene to bring around the intended future needs some thought. As demonstrated in taking a system view of a problem, not considering the dynamics at play in the environment into which an idea is supposed to live sets oneself up for failure. Therefore, the most obvious way of intervening is likely to trigger feedback loops that attempt to self stabilise since the intervention is anticipated. Everyday examples of this are trying too hard to impress the opposite gender, or Bic’s “for her” ballpoint pen debacle — both result in failure of the intended goal.
A counter-approach is Obliquity, a term coined by economics professor, John Kay to describe when “complex goals are best achieved when you are not trying to achieve them directly.” Simply put, sometimes the obvious answer is not the correct answer.
When interventions fail, it is often attributed to what feels like a higher-order force that overrides any attempts to intervene. Systems theorist and environmental scientist, Donella Meadows, writer of the seminal book ‘Limits to Growth’, posits that there is a hierarchy of influence within a system. This can serve as divergent food for thought to uncover oblique approaches to a challenge. Indeed, she points to “twelve leverage points to intervene in a system” that puts the mindset, goals, rules and information flows of a system as among the most influential, as opposed to the basic parameters of it (parameters being the core units that compose a system). A good example Meadows gives is when “Mikhail Gorbachev came to power in the USSR and opened information flows (glasnost) and changed the economic rules (perestroika), and look what happened [the collapse of the soviet union].” The leverage points at the top of the list are sometimes harder to see than the basic building blocks that they influence. This is why the more powerful approach to a problem can be perceived as coming from an oblique angle since it is less tangible to foresee. The effort to uncover and confidence to embrace due to its counterintuitive nature might be greater, but the payoff makes it worth it.
What Would Elon Do?
Having determined that there was an opportunity to enter the auto market to shake it up and bring around a transition to electric vehicles, then next question is how. The direct approach would be to create a low cost, mass-market electric vehicle. From a market dynamic perspective, this makes sense, however, culturally it doesn’t.
Electric vehicles had two major hurdles to get over: a shift in mindset towards one’s vehicle and the cultural perceptions towards EVs.
First, was the barrier of range. Internal combustion cars have a range of roughly 300–400miles before needing refuelled — a process which can take around 5 mins. Whereas, early models of mass-market EVs had a range of around 70–100 miles, with that figure quickly increasing with each new model. Despite the fact that the average commuter drives little more than 30 miles per day to and from work, creating the possibility of charging the vehicle at home. While it is possible to wait for technology to improve to make a move into the market, this would lose any headstart of entry.
This range anxiety could be overcome, would it not be for the second hurdle: car culture. A half century of incremental innovation has created a car culture of petrolheads that celebrate technological specifications such as performance that are measured in number of cylinders, or drive handling. These cultural insiders are a form of gatekeeper in the car market, setting the bar of what is and is not acceptable. Unable to take a step back to take a step forward, these gatekeepers have been unreasonably bullish towards EVs — perhaps by the threat of irrelevance from an entire new way of thinking about cars. They branded EVs as being restricting, slow and just downright unmanly.
These two reasons were likely driving factors in the poor consumer reaction to General Motors’ EV1 in the late 90s.
Similarly, it is for these reasons that Musk enters the market with the Roadster. As mentioned already, rather than launch with a mass market car, the Roadster was positioned to make a point to the petrolheads: EVs can be convenient, fast and cool as hell. Using the cultural yardstick of the car world, it could hit 0–60 in under 4 seconds, beating many other typically fast cars at their own game. This strategy was fundamental in winning over the car enthusiasts essential to keeping the brand afloat on the road to mass market.
3. Change should be emergent
As we have established in the previous two principles: systems are complex and resistant to change. Therefore, it is necessary to think about how to approach change. There are two approaches: top-down, and bottom-up.
Top-down change happens under direction from a central power from above. An example of this is when a new law in enforced in society, such as the 2006 smoking ban in public places in Scotland (followed by the rest of the UK in 2007). This kind of change has the benefits of being relatively fast to implement. To oversimplify, all it took was over half of MPs to vote for smoking in public places to be made illegal. However, the dictatorial nature of this makes it similarly hard to enforce should it go against the grain of the system — in this case, society — which can therefore decide to resist it. If the government had tried to implement a top-down ban on smoking in the 70s when most people were for or ambivalent to smoking for example, it would likely have failed.
In truth, the smoking ban was the result of a long game of encouraging bottom-up change. Since the link between smoking and lung cancer were brought to attention in the 1950s, there has been a myriad of activities to shift public opinion through highlighting health issues, positive campaigning, and restricting the power of advertising and product marketing. Picture the difference of the 1950s and today, where smoking was a rite of passage to being ‘cool’, reinforced by films stars such as James Dean and Audrey Hepburn rarely seen without one hanging from their lips. It was the culmination of the shift of opinion caused by these interventions that actually motivated the top-down shift in the first place — those MPs would never choose to enact a wildly unpopular piece of legislation, despite their labelling of themselves as the people’s ‘leaders’.
The bottom-up approach asks how to use the natural behaviour of the system to encourage change. Instead of asking for ingrained behaviours to be changed, it creates the conditions to allow preferred ideas, interactions and behaviours to flourish. This is called emergence. It is much slower to enact than the top-down approach, however it is much more powerful and hard to resist once it builds enough momentum. This is an incredibly powerful thought in futures for two reasons: often there are conflicting actors within a system that would seek to resist a future preferred to some; and not everyone has the resources or power to enforce top-down change. Working with the dynamics of the system to facilitate change is like the act of using an opponents body weight against them in a bout of jujutsu.
What Would Elon Do?
In June 2014, Musk proclaimed in a blog post, ‘All Our Patent Are Belong To You’ (the weird grammar referencing a retro-gamer meme), which declared 200 Tesla patents open to the public. In doing so, he enabled anyone — including his competitors — free use of Tesla’s technologies, such as vehicle components, battery charging and energy storage.
This enabled the emergence of emergent EV companies to fill out the markets niches and geographies, as seen in the massive jump in the number of new EV startups of around 40 per year in 2014 (the year of the patent release) and before, to 95, 119 and 212 in the years 2015, 2016, and 2017 respectively. What it also encouraged was independent EV infrastructure companies to adopt the Tesla standard, encouraging adoption of Tesla whilst enabling other companies bring about an accelerated future of vehicles no longer dependent on oil.
Musk’s joint Tesla and SpaceX team orchestrated a similar sharing of patents for the Hyperloop concept. This turned an engineering challenge that might have taken a single team a long time to overcome into a competition between a number of big name and well funded companies. The first full scale tests of the hyperloop have been successfully carried out in July 2017, with progress being swiftly made.
The proclamation that Musk is driven by those futures-oriented end goals listed earlier, as opposed to making sheer profit from his businesses, becomes especially apparent from his actions relating to this principle of emergence.
Painting Vivid Futures
You don’t have to be a child prodigy, polymath maniac to succeed in changing the world (although I guess it helps). What does matter is realising that the future is more malleable than you might think, and just because it might seem improbable, it doesn’t mean that it is impossible.
The world needs visionaries who aren’t fatalistic about the world (and there is plenty to be fatalistic about!) or complacent techno-utopians who think tech will just solve it all. By believing that a positive future is possible, we are spurned into action, as concluded by Margaret Atwood, in an interview with Slate Future Tense:
“If you tell people it’s all doom and gloom, they’re going to say, “Well, in that case I’m just going to party.” But if you say there is something practical that you can do, nine out of 10 people will do it.”
This is exactly what Musk is so good at. He creates these positive and vivid visions of the future that motivates others to coalesce around him. Vivid futures are not just visual, but emotionally captivating through language and aspirations that create ideas for people to latch onto. This certainly accounts for the tremendous fandom that cheers him on and embraces his product releases — creating a halo effect of confidence that has inflated the market cap valuation of Tesla Inc. as pretty much equal to 110 year old General Motors, despite the fact that Tesla has produced around 100,000 cars last year versus nearly 10 million from GM (at the time of writing). The stock market pundits believe in the future dream that Musk is putting forth.
So rather than trying to predict the future, let’s take a systems and reflexive approach to imagine those positive alternatives, painting vivid futures to galvanise others and make them happen.
Illustrations by Lizzie Abernethy.