Howard W. Buffett, policy adviser with the Domestic Policy Council at the White House and grandson of the legendary investor, Warren Buffett, was the keynote speaker at the April 2010 Nebraska Press Association convention in Kearney. His remarks about social innovation and the future of the media are excerpted here.
I am going to discuss innovation and the way that your industry, our government and the American people can confront some of the challenges that lie ahead.
A decade ago, a prescient question arose — driven, in part, by an explosion of technological advances that began to impact our lives in significant ways: People wondered whether the structural assumptions of the 20th century would hold true in the 21st, whether our traditional social constructs — our habits, relationships and work — would be able to withstand the surging tide of the technological revolution.
A decade later, with the advent of Internet search engines, social media, mobile devices and user-generated content, we have arrived at a definitive answer to that question: The world will never be as it was. We have been thrust upon a journey that will test our ability to reassess the fundamental ways in which we engage our world.
Your industry — the media broadly and the printed press in particular — is the first major sector to feel the effects of this revolution. Printed newspapers have experienced cataclysmic changes in their markets as technology has allowed large conglomerates to localize their content and compete for your audiences. You are, in some ways, the first potential victims of the storm, but you won’t be the last. And because you are called upon to serve as first responders to this enormous challenge, you are also presented with an opportunity to develop new models that will serve as examples for those who face similar challenges in the future.
‘Change’ has become a theme
During the last presidential campaign, the theme of change became dominant in our national conversation. We were experiencing difficult times — two wars, intense global competition and an economic crisis of historic proportions. The change we sought was a response to those circumstances. We wanted to fix broken systems and get back to a semblance of “normal.”
That’s what happens when we’re in trouble. We look for ways to remedy the situation by identifying the ways our systems broke down and by working to fix them. And that is entirely appropriate because, in most cases, our current systems — had they been completely functional — would have been capable of helping us avoid some of the challenges we’re facing.
But the case for change is not always the one we should make because some challenges require more than simple adaptation. In a cause and effect world, change exists as an effect. It comes in response to the challenges we’re confronted with and attempts to improve upon what we’ve known before. In short, it helps us adapt to an evolving world.
Unfortunately, riding behind the curve of progress is often not enough. That is certainly the case with the challenge you’re currently facing. After all, there is no content that will make the printed newspaper more efficient than the electronic one. There is no fuel that will make the delivery truck faster than the Internet.
Look to the causes
In these cases, we must look at the causal side of the equation, and we must try to determine how we can effect changes that preempt the demands of the future. Which takes me to the most important point I want to discuss with you tonight: The difference between being driven by change and driving change; between surrendering to circumstance and rising to the occasion.
This is where we need to make the case for innovation.
Unlike adaptive change, which comes about in response to a fluid environment with emerging problems and opportunities, innovation is the self-determined creation of change to address future trends before they arrive. It allows us to define the scope and direction of that change and limits our exposure to intangible outcomes.
Leadership is at heart of innovation
At the heart of innovation is the difference between management and leadership. While managers attempt to fix systems that are broken, leaders show the courage to scrap the antiquated systems and begin again.
But it goes much deeper for us as Americans because innovation is also intrinsically connected to our national identity. We have built a culture that promotes an undying faith in our ability to meet emerging challenges. In many ways, we have come to depend on that belief as much as we depend on our natural resources.
In the past, our nation has had a constant supply of innovation. But part of the effect of the technological revolution is that it has stripped away many of the conditions that fueled that supply. We once had big factories that led us to think big — and to build things that prior generations could never have imagined. We funded research to pursue solutions to our military challenges and undertook an audacious space program, leading to investments that would ultimately breed the microchip and automate our world.
But we did those things in a vacuum — the Cold War largely shielded us from foreign competition — and we became innovators who could work without fear of being overtaken.
The modern environment is different. It is no longer the case that our supply of innovation is guaranteed. A globalized marketplace has opened up the possibility of innovation to every nation on Earth, and many have become better than we at directing and centralizing their efforts. Technology has also taken many of the tools required for innovation and made them available to anyone with a computer and an Internet connection.
Every institution susceptible to a single individual
In this world, all institutions — large and small — are susceptible to the invisible threat posed by a single person in a garage with a better idea.
Let me say that again because it is truly important: Every institution on this planet is now susceptible to the threat posed by a single individual with a revolutionary idea.
We saw a great example of this in Iraq where the fate of the entire war effort was radically altered by a set of simple ideas developed by officers in the field. These were pragmatic soldiers seeking only to complete their mission and protect their troops, and yet — once their innovations were distributed across the entire force — they revolutionized our approach to two wars and fundamentally altered our methods for engaging in counterinsurgency warfare.
Some refer to this as the butterfly effect — the idea that all of our actions are interconnected — and it has never been more evident in our society than it is today. Through modern tracking tools, we can trace how simple ideas gain traction and quickly overtake the marketplace. But we really only do that after the fact. The key to harnessing change and effecting innovation is to establish a new framework of thought that allows us to visualize the marketplace clearly and to make changes that anticipate our future challenges.
While evolutionary forces will continue to inform our actions, the traditional evolutionary model — survival of the fittest — is itself being challenged by technology, and the very definition of “fittest” is constantly shifting. We are caught in a situation where the complexity of our communal problems is overwhelming and where the only way to overcome those challenges is through coordination that aims to harness the creative potential of many individuals working separately towards similar goals.
Those soldiers in Iraq proved that ideas no longer exist in isolation, that technology has made it possible for us to implement change on a massive scale in very short time frames. The fact that simple ideas re-engineered the most powerful military in the history of our planet means that it is also possible for the media to adapt to the challenges it is currently confronting. After all, every sector of our society will face similar transformations, and we will all need to shoulder our share of that burden.
Office of Social Innovation looking for solutions that make an impact
President Obama carried that idea with him into the White House, and it led to the establishment of the Office of Social Innovation. The office was tasked with “finding and elevating innovative, bottom-up solutions that are having an impact.” The president understood that the White House had to lead the way in this area for three important reasons:
First, the government needs to be able to function, and — as we saw with the financial crisis — it has become much more difficult to remain ahead of the curve in terms of setting standards for behavior in this rapidly evolving world.
Secondly, if properly implemented, these new solutions could help bring people closer to their government and thus enhance the president’s capacity to interact with his constituents.
Finally, the benefits of open sharing of innovative solutions — exhibited in the Iraqi example — are very clear, and having a central hub to coordinate the dissemination of that information is in the best interests of our nation.
It has been my privilege over the past year-and-a-half to help make this a reality. What I’ve noticed is that these new constructs will undoubtedly challenge the autonomy of our institutions. In government, we will face continued pressure to keep up with private enterprise, and ultimately, the change experienced by the military will reflect more broadly: We will gravitate towards smaller, more efficient and more adaptable institutions — institutions capable of learning and of making tremendous adaptive shifts in very short spans of time.
But this should not only happen in government, the military and other large organizations. It needs to become your model as well.
I was lucky to have been born into a family that developed some good ideas on how to make long-term investments in an evolving world. My grandfather’s foresight was in identifying variables that would successfully adapt to the ebbs and flows of market forces and to a changing social dynamic pushed into hyper-drive by both technology and globalization.
Invest in solutions that preserve our values but keep us competitive
We can all learn from this example. We must work to identify fundamental value points that are either immune to change or that run alongside it. Then we need to invest our time and resources in solutions that hold fast to those values while remaining competitive in the everyday marketplace.
We need to constantly retest our premises and reimagine our business models. To move from simple capital allocation to the intelligent allocation of human capital across our organizations. To reassess and adjust our basic value propositions, especially at times when no threat is imminent and when we are most likely to grow lazy or complacent.
This concept is important because it is structural to a deeper exploration that has to take place in our nation, an exploration that will ultimately determine whether we will define our future or whether others will define it for us. The question of whether we can become a society that is willing to constantly reinvent itself in response to innovation is the fundamental question of the 21st century.
I therefore encourage all of you to ask yourselves the following: What service do we provide? Why is it valuable? Will its value remain intact in a broadening marketplace? Will it survive not just competition — meaning the emergence of similar services in the same market — but also consumption — meaning the entry of national entities into local markets? If you find your answers to these questions unsatisfactory, ask yourself how you would do it if you could begin again with a blank slate.
By doing so, you will empower yourselves to challenge traditional assumptions, and you will become the people in the garage experimenting with new ideas. Only then will you be more likely to succeed in a more competitive marketplace, because now — more than ever — a breakthrough for one is a breakthrough for all.
But you cannot work towards becoming the fittest until you’ve made some predictions about what it will mean to be fit. It is the only way to determine how best to take control of the change and drive that change towards a positive outcome.
For you, those value points most likely lie in your proximity to your readers and in your capacity to spend more time looking at how the big picture will affect their lives. After all, we all know that we need to get a lot smarter about how something happening over there affects us over here. The local press will be most valuable when it can map the effects of global forces on local communities. That synthesis is something that no one can do better than you.
I know that all of you understand your value to our democracy. Your talent, knowledge and wisdom — coupled with the journalistic standards you uphold — represent a structural part of the backbone of our nation. Neither the Founders nor present or future generations would accept an America without a strong and independent press. You are a crucial component of our collective future, and the burden of guaranteeing your success is a burden we all share.
You must become the front line of the information gathering effort that will drive Nebraska’s information economy. If you do so, you will not only guarantee your place in the market, but you will also help Nebraska become the state that understands its place in this evolving world better than any other.
But it won’t stop there, because your innovation here will embolden our nation to act accordingly and help us establish a stronger position in the global marketplace well into the future.
Which brings me to my final thought. If we do that — if we rise to this historic occasion and reclaim control over our collective destiny — we will have once again reaffirmed our most fundamental belief about our nation: that the vision of America as a nation of ideas is connected to the vision of America as a nation of ideals. That we have always been aspirational, endowing ourselves with an idealism that has helped guide and protect our innovative spirit. It is in that nexus of ideas and ideals — in that innovation — that the American identity is forged: We are people that do, and when we do, we do for the benefit of all.
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