May 22, 2016 at 11:25 am #1215JeffAltmanCoachKeymaster
By Joshua Cooper Ramo
One morning in the fall of 1995 I received an unexpected phone call from a man I’d never met or heard of. He explained to me that he was a venture capitalist in Silicon Valley and had a job he thought might be of interest to me. At the time, I was winding down an Internet company I had founded and was on the verge of starting another job. The nice man on the phone offered to fly me out to San Francisco to meet with him and the company. I was 26. It seemed like a fine way to spend a day or two.
When I arrived, I headed immediately to a large, mostly empty warehouse where I met the young entrepreneurs who had started the company and their first two employees, who explained to me the business they had in mind. I liked them, and it was great to see the energy of Silicon Valley, but the company seemed a bit risky. I thought they might have some success, but I flew back to New York and called the investor who’d phoned me to regretfully decline the opportunity to be employee number five at the scrappy little company called Yahoo!. This was, more or less, an $800 million dollar mistake.
This was one of my earliest, and most memorable, lessons in what it meant not to have a feeling for the transformative power of connected systems, an instinct I’ve come to call The Seventh Sense, which is also the title of my new book. Missing that opportunity at Yahoo! was less about financial calculation and more about not yet seeing the way in which connected systems of all kinds produce value. The things I had seen at Yahoo!—the warehouse, the four employees, the uncertain business model—were not signs of weakness, but strength.
What I’ve come to understand is that mastering just how connected systems work is going to mark success and failure in the future. It already is. You and I look at an empty car seat and think: Car seat. Travis Kalanick looks at it and thinks: Uber. Or: Analysts look at Donald Trump and think “No chance.” They don’t see his 5 million Twitter followers. To look at anything and see the latent power of connection—this is a skill that can absolutely be learned. But it also means knowing that you have to ask and answer one question in any situation: What connections are at play here?
Life turned out great for me after that trip to Silicon Valley. I leapt into the job I had taken instead—as a senior editor at TIME—and devoured life as a journalist for half a decade. Then I left journalism and moved to China, joined Kissinger Associates–where I am now co-CEO—wrote books, joined corporate boards at places like Starbucks and FedEx, and have loved every minute on the road I did follow. But I’d still say that not taking the job at Yahoo!, along with a later risk I did pursue—to move to China in 2002—taught me a lesson. It began a process of asking questions to help understand our age.
In recent years I’ve wondered: Why is it that our politicians, economists, and CEOs can’t fix the problems we can all see, and often make things worse by trying to solve them? Why has the most expensive war on terrorism in human history seemed to produce more terrorists? How has economic policy designed to save the middle class ended up up gutting it? Why is our politics becoming more extreme? What I’ve come to see is that all these problems are really the same problem: Networks are changing power, just as they’ve changed how we work, entertain ourselves and learn. So a new way of seeing connected systems isn’t just important for business. It matters for the most fundamental puzzles we now face. In my book I show how all these problems are caused by the same underlying dynamics.
When I say “networks”, I don’t just mean the Internet, but any collection of linked nodes: People, shares of stock, currencies, data. “Citizens of New York” is a network in this sense, as is “Companies that use bitcoin” or “People who speak Chinese.” What we’re coming to understand is that networks like these, particularly when they are connected at very high speed—and joined with new technologies such as artificial intelligence—have different dynamics from unconnected systems. They produce constant surprise. They are increasingly complex. They hunger for more and more speed—think of how nearly everything today is faster than a decade ago.
It’s by digging deep and understanding these changes that we can get a feel for the future, and develop this new “Seventh Sense.” (The term comes from the once-common idea that the Industrial Revolution was so profound that it demanded a “Sixth Sense,” or a feeling for history. We still need that! But we also need a feeling for what it means to be constantly linked and how that affects the world and our lives, a “Seventh Sense,” as it were.)
We Are What We Are Connected To
Take my misunderstanding of Yahoo! The company was one of the original unicorns. It appeared, it seemed to the bankers and economists and businessmen on the East Coast, out of nowhere and the kind of economics it once represented were a harbinger of companies still to come. The firm also was—and is—a brutal reminder of the merciless competitive dynamics of the Internet and technology world: Miss one product turn in an age of fast change, and you or your company could be out of business.
Here was my mistake: I looked at Yahoo! and saw four dudes in a warehouse and that looked extremely risky to me. What I didn’t fully appreciate was what they were connected to: The fastest growing network in human history, the Internet. Wise investors. Energetic technologists. So this is maybe the fundamental insight of life in a network age: You are what you are connected to. You might think that, faced with a fast-changing, risky environment, the right business or career strategy would be to take less risk. But in a connected age, it turns out that the more risk you take, the faster you can change and learn and draw on resources you didn’t even know existed. Think of it like learning a new language or moving to a new city: Taking that risks connects you to new people and ideas and places. What’s risky is not expanding the range of your connections, and the new discipline of network science tells us this is as true for the cells inside your brain stem as it is for a financial market.
Here’s the one question you have to ask in any situation or about any business or person or idea: What is it connected to? Try it on yourself. What people, ideas, experiences, and connections shape who you are? Are the ties that define the company where you work the right ones?
In the industrial age, when we were far less connected, you were what your resume said you were. But now what matters is: What can you pull on? What ways do you have to spread an idea, a business insight, a product? What you’re connected to decides how strong you are. It marks your vulnerabilities as well: Connect to a company or a market that is fragile, insecure or backwards and you inherit all their vulnerabilities. Once you make a leap to seeing the world this way, nothing looks the same.
When historians look back at our age from 100 years from now, they’ll see a very clear line marking success and failure that’s marked by those who have this new sensibility and those who don’t. I’ve been very struck, as I’ve travelled through the power centers of this new age, that people as different as the head of Israeli Military Intelligence or the designers of cutting edge artificial intelligence systems have a shared obsession. They constantly ask: “What connections are at play here?”
Every institution around us, every line of business, every political or military strategy, is going to have to be remade for this new age of connection. This can be hard to accept, that the cherished structures that have defined our lives may soon be replaced, as our newspapers and human-driven cars will be. There’s a lot to worry about in that shift. But once we can understand how that change occurs, once we can sense where power is now, it becomes much less terrifying. It becomes exciting. But each of us has to update our understanding of the world. The good news? This new way of thinking can absolutely be learned.
As I look back on it, that call in 1995 was a blessing. The real importance wasn’t about Yahoo! It was a sign that I needed to develop a new way of seeing the world.
In my book I talk about how that one simple question—What connections are at play here?—has helped me grow my business, solve impossible looking problems and have a lot more fun confronting challenges. I whiffed on Yahoo! It wasn’t a mistake I wanted to make again. Here on LinkedIn I hope we can start a conversation. I wonder: What mistakes have you made? What victories have you won by seeing connections others didn’t? How are you teaching your children the Seventh Sense? Our schools, our companies, our careers—how should they be remade? And, if you’re already a master of seeing how connection changes life, I wonder: Are you optimistic about the future?
Joshua Cooper Ramo is the author of the international best-seller “The Age of the Unthinkable”. He is co-chief executive officer and vice chairman of Kissinger Associates and a member of the board of Starbucks and FedEx. You can buy his new book “The Seventh Sense” here.
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