Here are two reasons companies fail: they only do more of the same, or they only do what's new.
Existen dúas razóns polas que as empresas quebran: ou só fan sempre o mesmo ou só fan cousas novas.
To me the real, real solution to quality growth is figuring out the balance between two activities: exploration and exploitation. Both are necessary, but it can be too much of a good thing.
Para min a verdadeira solución para un crecemento de calidade é encontrar o equilibrio entre estas dúas actividades: exploración e aproveitamento. Ambas son necesarias, mais podemos caer na esaxeración.
Consider Facit. I'm actually old enough to remember them. Facit was a fantastic company. They were born deep in the Swedish forest, and they made the best mechanical calculators in the world. Everybody used them. And what did Facit do when the electronic calculator came along? They continued doing exactly the same. In six months, they went from maximum revenue ... and they were gone. Gone.
Pensemos en Facit. Eu son vello abondo para me lembrar. Facit era unha empresa fantástica. Naceu nos profundos bosques suecos, e fabricaba as mellores calculadoras mecánicas do mundo. Todo o mundo as usaba. E que fixo Facit cando apareceron as calculadoras electrónicas? Continuaron a facer exactamente o mesmo. No intervalo de seis meses pasaron dos máximos beneficios... a desapareceren. Fóronse.
To me, the irony about the Facit story is hearing about the Facit engineers, who had bought cheap, small electronic calculators in Japan that they used to double-check their calculators.
Para min, o que me resultou irónico na historia de Facit foi saber que os seus enxeñeiros compraran pequenas e baratas calculadoras electrónicas no Xapón, e usábanas para testar as súas calculadoras.
(Laughter)
(Risos)
Facit did too much exploitation. But exploration can go wild, too.
Facit esaxerou no aproveitamento. Mais a exploración tamén pode ser excesiva.
A few years back, I worked closely alongside a European biotech company. Let's call them OncoSearch. The company was brilliant. They had applications that promised to diagnose, even cure, certain forms of blood cancer. Every day was about creating something new. They were extremely innovative, and the mantra was, "When we only get it right," or even, "We want it perfect." The sad thing is, before they became perfect -- even good enough -- they became obsolete. OncoSearch did too much exploration.
Hai uns anos, traballei cunha empresa europea de biotecnoloxía. Imos chamarlle OncoSearch. A empresa era brillante. Tiña aplicacións que prometían diagnosticar e mesmo curar algúns tipos de cancro do sangue. Todos os días querían crear cousas novas. Eran extremadamente innovadores e o seu lema era: "Até que o conseguirmos" ou, mesmo: "Até que sexa perfecto". O triste é que, antes de se tornaren perfectos, ou, sequera, o suficientemente bos, tornáronse obsoletos. A OncoSearch esaxerou na exploración.
I first heard about exploration and exploitation about 15 years ago, when I worked as a visiting scholar at Stanford University. The founder of the idea is Jim March. And to me the power of the idea is its practicality.
Ouvín falar sobre este tema por primeira vez hai perto de 15 anos, cando estaba como investigador convidado na Universidade de Stanford. O fundador da idea é Jim March. Para min, a vantaxe da idea é que resulta práctica.
Exploration. Exploration is about coming up with what's new. It's about search, it's about discovery, it's about new products, it's about new innovations. It's about changing our frontiers. Our heroes are people who have done exploration: Madame Curie, Picasso, Neil Armstrong, Sir Edmund Hillary, etc. I come from Norway; all our heroes are explorers, and they deserve to be. We all know that exploration is risky. We don't know the answers, we don't know if we're going to find them, and we know that the risks are high.
Exploración. Exploración é chegar a algo novo. É investigar, é descubrir, son novos produtos, é innovar, é mudar as nosas fronteiras. As persoas que admiramos son as que se dedicaron a explorar: Madame Curie, Picasso, Neil Armstrong, Sir Edmund Hillary, etc. Eu son de Noruega. Todas as persoas que alí admiramos son exploradoras e todas o merecen. Todas e todos sabemos que explorar é arriscado. Descoñecemos as respostas, non sabemos se as iremos encontrar, e sabemos que o risco é elevado.
Exploitation is the opposite. Exploitation is taking the knowledge we have and making good, better. Exploitation is about making our trains run on time. It's about making good products faster and cheaper. Exploitation is not risky -- in the short term. But if we only exploit, it's very risky in the long term. And I think we all have memories of the famous pop groups who keep singing the same songs again and again, until they become obsolete or even pathetic. That's the risk of exploitation.
O aproveitamento é o oposto. O aproveitamento consiste en usar o que xa sabemos para tornar o bo en mellor. Aproveitamento é facer que os trens cheguen a tempo. É crear bos produtos, máis axiña e máis barato. O aproveitamento non é arriscado... a curto prazo. Mais se nos dedicamos só ao aproveitamento, é moi arriscado a longo prazo. Imaxino que todas e todos sabemos de bandas de pop famosas que cantan as mesmas cancións constantemente, até convertérense en obsoletas ou mesmo patéticas. Ese é o risco do aproveitamento.
So if we take a long-term perspective, we explore. If we take a short-term perspective, we exploit. Small children, they explore all day. All day it's about exploration. As we grow older, we explore less because we have more knowledge to exploit on. The same goes for companies. Companies become, by nature, less innovative as they become more competent.
Por iso, se adoptamos unha perspectiva de longo prazo, exploramos. Se adoptamos unha perspectiva de curto prazo, aproveitamos. As crianzas están todo o día a explorar. Dedican todo o día a explorar. Conforme imos crecendo exploramos menos, porque temos máis coñecemento que aproveitar. O mesmo acontece coas empresas. As empresas viran, por natureza, menos innovadoras conforme se van facendo máis competentes.
And this is, of course, a big worry to CEOs. And I hear very often questions phrased in different ways. For example, "How can I both effectively run and reinvent my company?" Or, "How can I make sure that our company changes before we become obsolete or are hit by a crisis?" So, doing one well is difficult. Doing both well as the same time is art -- pushing both exploration and exploitation.
Iso, claro, é unha importante preocupación para quen a dirixe. Escoito moitas veces preguntas, formuladas de diferentes formas. Por exemplo: "Como podo xestionar e reinventar eficazmente a miña empresa?", ou: "Como podo ter a certeza de que a nosa empresa muda antes de se tornar obsoleta ou ser afectada por unha crise?". Facer unha cousa ben é difícil. Facer as dúas cousas ben ao tempo, é unha arte (promover tanto a exploración como o aproveitamento).
So one thing we've found is only about two percent of companies are able to effectively explore and exploit at the same time, in parallel. But when they do, the payoffs are huge. So we have lots of great examples. We have Nestlé creating Nespresso, we have Lego going into animated films, Toyota creating the hybrids, Unilever pushing into sustainability -- there are lots of examples, and the benefits are huge.
E algo que descubrimos é que só o 2% das empresas teñen capacidade efectiva para explorar e aproveitar ao mesmo tempo, de forma paralela. Mais cando o fan, os beneficios son enormes. Temos moitos bos exemplos. Temos a Nestlé, que creou o Nespresso, temos a Lego, póndose a facer filmes de animación, a Toyota, que creou os híbridos, a Unilever, que promove a sustentabilidade. Existen moitos exemplos, e os beneficios son enormes.
Why is balancing so difficult? I think it's difficult because there are so many traps that keep us where we are. So I'll talk about two, but there are many.
Por que o equilibrio é tan difícil? Eu penso que é difícil porque existen moitas trampas que nos atrapan onde estamos. Vou falar de dúas, mais existen moitas máis.
So let's talk about the perpetual search trap. We discover something, but we don't have the patience or the persistence to get at it and make it work. So instead of staying with it, we create something new. But the same goes for that, then we're in the vicious circle of actually coming up with ideas but being frustrated. OncoSearch was a good example. A famous example is, of course, Xerox. But we don't only see this in companies. We see this in the public sector as well. We all know that any kind of effective reform of education, research, health care, even defense, takes 10, 15, maybe 20 years to work. But still, we change much more often. We really don't give them the chance.
Falemos, pois, da trampa da busca permanente. Descubrimos algo, mais non temos a paciencia ou a persistencia para traballalo e facer que funcione. E, en vez traballalo, facemos algo novo. E volve acontecer o mesmo e entramos no círculo vicioso de ter moitas ideas que se frustran. OncoSearch era un bo exemplo. Un exemplo famoso é, claro, Xerox. Mais isto non acontece só nas empresas, tamén o vemos no sector público. Todas e todos sabemos que calquera reforma no ensino, na investigación, na saúde ou mesmo na defensa, precisa 10, 15 ou 20 anos para funcionar. Aínda así, nós mudamos con moita máis frecuencia. Non lles damos unha verdadeira oportunidade.
Another trap is the success trap. Facit fell into the success trap. They literally held the future in their hands, but they couldn't see it. They were simply so good at making what they loved doing, that they wouldn't change. We are like that, too. When we know something well, it's difficult to change. Bill Gates has said: "Success is a lousy teacher. It seduces us into thinking we cannot fail." That's the challenge with success.
Outra trampa é a trampa do éxito. Facit caeu na trampa do éxito. Tiñan, literalmente, o futuro nas súas mans, mais non se deron conta. Facían tan ben aquilo que lles gustaba, que optaron por non mudar. Nós tamén somos así. Cando sabemos facer algo ben é difícil mudar. Bill Gates dixo: "O éxito é pésimo profesor. Sedúcenos facéndonos pensar que non podemos errar". Ese é o desafío do éxito.
So I think there are some lessons, and I think they apply to us. And they apply to our companies. The first lesson is: get ahead of the crisis. And any company that's able to innovate is actually able to also buy an insurance in the future. Netflix -- they could so easily have been content with earlier generations of distribution, but they always -- and I think they will always -- keep pushing for the next battle. I see other companies that say, "I'll win the next innovation cycle, whatever it takes."
Penso que aquí hai algunhas leccións que poden servirnos a nós e ás nosas empresas. A primeira lección consiste en adiantarse á crise. Calquera empresa capaz de innovar está, á vez, a contratar un seguro para o futuro. Netflix podía terse contentado, moi facilmente, coas primeiras formas de distribución, mais sempre están (e penso que continuarán) a prepararse para seguinte batalla. Vexo outras empresas que din: "Venceremos no próximo ciclo de innovación custe o que custar".
Second one: think in multiple time scales. I'll share a chart with you, and I think it's a wonderful one. Any company we look at, taking a one-year perspective and looking at the valuation of the company, innovation typically accounts for only about 30 percent. So when we think one year, innovation isn't really that important. Move ahead, take a 10-year perspective on the same company -- suddenly, innovation and ability to renew account for 70 percent. But companies can't choose. They need to fund the journey and lead the long term.
A segunda consiste en pensar en diferentes prazos de tempo. Vou mostrarvos un gráfico. Penso que é unha marabilla. Ollemos para a empresa que ollemos, na perspectiva de un ano, e reparando no valor da empresa, habitualmente a innovación representa apenas arredor do 30%. Por iso, cando pensamos en un ano, a innovación non é moi importante. Pasemos a unha perspectiva de 10 anos na mesma empresa. De repente, innovación e capacidade de renovación representan o 70%. Mais as empresas non poden escoller: precisan financiar o camiño e liderar a longo prazo.
Third: invite talent. I don't think it's possible for any of us to be able to balance exploration and exploitation by ourselves. I think it's a team sport. I think we need to allow challenging. I think the mark of a great company is being open to be challenged, and the mark of a good corporate board is to constructively challenge. I think that's also what good parenting is about.
Terceira: estimular a crítica. Non penso que poidamos, ninguén de nós, equilibrar exploración e aproveitamento pola nosa conta. Penso que se trata dun deporte de equipo. Penso que debemos permitir a crítica. Penso que o caracteriza unha grande empresa é a abertura á crítica, e o que caracteriza unha boa xerencia é a crítica construtiva. Penso que niso consiste tamén ser un bo pai.
Last one: be skeptical of success. Maybe it's useful to think back at the old triumph marches in Rome, when the generals, after a big victory, were given their celebration. Riding into Rome on the carriage, they always had a companion whispering in their ear, "Remember, you're only human."
A última: escepticismo ante o éxito. Quizais sexa útil pensarmos no pasado, nas marchas triunfais de Roma, cando aos xenerais, após unha gran vitoria, se lles ofrecía unha homenaxe. Cando entraban en Roma, nas súas carruaxes, tiñan sempre un compañeiro a murmurarlles ao ouvido: "Lembra que apenas es humano".
So I hope I made the point: balancing exploration and exploitation has a huge payoff. But it's difficult, and we need to be conscious.
Espero que isto quedase claro: alcanzar o equilibrio entre exploración e aproveitamento comporta grandes recompensas. Mais é difícil, e debemos ser conscientes.
I want to just point out two questions that I think are useful. First question is, looking at your own company: In which areas do you see that the company is at the risk of falling into success traps, of just going on autopilot? And what can you do to challenge?
Quero apenas recalcar dúas cuestións que penso que son útiles. Primeiro, reparade na vosa empresa. En que áreas pensades que a empresa está en risco de caer na trampa do éxito, de estar só en piloto automático? E que podedes facer para as estimular?
Second question is: When did I explore something new last, and what kind of effect did it have on me? Is that something I should do more of? In my case, yes.
A segunda cuestión que compre facerse é: "Cando probei algo novo por última vez, e que tipo de consecuencias tivo para min? Será algo que deba facer máis?". No meu caso, si.
So let me leave you with this. Whether you're an explorer by nature or whether you tend to exploit what you already know, don't forget: the beauty is in the balance.
De modo que permitídeme deixarvos con esta idea. Quer sexades persoas exploradoras por natureza, quer teñades a tendencia a aproveitar o que xa sabedes, non esquezades que a beleza está no equilibrio.
Thank you.
Grazas.
(Applause)
(Aplauso)