Change Agent - Issue 32

"Walt Disney, Steve Jobs, my mom -- and now you -- have shared the secret of rifting."

After the death of Walt Disney the man, something happened to Walt Disney the company. You see, Walt Disney was a three-time rifter. He was one of the few people who have successfully managed to find a rift in the continuum of life, to bet everything on it, and to make a profit by doing so. And he did it three times.

What's a rift? It's a big tear in the fabric of the rules that we live by. It's a fundamental change in the game, one that creates a bunch of new losers -- and a handful of new winners.

Most people who build important businesses build them on a rift, usually one that they find by accident, and usually only once. Sometimes, after they've succeeded once, they fool themselves into thinking that they're so gifted that everywhere they look, they can see a rift. But Disney was different: He really was rift gifted. After all, he did it three times.

First, he noticed early on that movies would change the world of entertainment. Realizing that there would soon be a huge demand for family entertainment, he pioneered the development of the animated movie, perfecting the form with "Snow White and the Seven Dwarfs" (1937). The film was the beginning of a huge organization that would grow to dominate this new marketplace.

Unlike most folks who are lucky enough to catch a rift at the right moment, Disney didn't just declare himself a genius, collect his stock options, and relax. Nope. He looked for another rift -- another change in the rules that he could turn into an opportunity.

That second rift came in the form of the automobile. Disney realized that the car was going to change the way that the American family got its entertainment. He believed that a strategically located, extravagantly designed theme park could reinvent family travel. And he was right. So, beginning with California's Disneyland in 1955, he built another huge organization around this rift -- and it has dominated the theme-park industry ever since.

Once Disney was into this rift thing, he saw a third opportunity: television. Although many people regarded television simply as in-home movies, or as radio with a screen, Disney saw in it an entirely different medium. So, with properties like the Mickey Mouse Club, he set out to build a third organization, one that would produce a never-ending stream of content for this market.

A three-time winner: Someone who saw rifts and who mobilized an entire organization to take advantage of them. Someone who combined clarity of vision with tenacity of purpose. Unfortunately, since Disney's demise, his company hasn't really displayed that same rift-hungry attitude. The motto of most rifters ought to be WWWD: What Would Walt Do? I often wonder what Walt would have done with the Internet. Or with cable TV. Or with home shopping, home video, and DVD.

Another of my favorite rifters is Steve Jobs. Jobs is already much celebrated, but several of his successful rift moments are still worth a look. Here are three.

First, he realized that personal computers could serve as a tool in the home as well as in business, and he was smart enough to find the right people to build the Apple I and II. At the time, there were no headlines about how brilliant Jobs was, but he paved the way for every single desktop computer in existence today.

Jobs's second rift was actually more difficult to seize, because it wasn't an obvious rift. Realizing that the graphical user interface that was developed for the Xerox Star could permanently change the way that computers worked, Jobs took a huge risk and came up with the Mac. Most entrepreneurs and virtually every large company would have laughed at the sheer hubris of it: to get lucky once and then to risk it all on a rift as narrow as this! Of course, we know what happened with the graphical user interface.

Jobs's third rift was, in fact, reminiscent of one that Disney would have jumped on. Jobs saw that computers would forever change the way that animated movies are made. And Pixar, the production company behind "Toy Story" and "A Bug's Life," was his bet on that rift. Having just taken my family to see "Toy Story 2," I can tell you that Jobs is on his way to a payoff of Disney-like proportions.

The surprising thing is that just about anyone could have seized any of those rifts and built hugely successful companies out of them. Jobs didn't know anyone in Hollywood -- and he didn't need to. His success wasn't about connections or reputation or access to capital. In fact, being part of the company that sold the Apple II actually hindered his ability to launch the Mac, because his shareholders and employees fought the idea for years. No, Jobs succeeded because, like all rifters, when he saw an opportunity, he was single-minded in his focus and in his desire to take advantage of it.

My mom was also a rifter, though you've probably never heard of her. She saw and took advantage of two rifts that were probably bigger in scope than even Disney's rifts, albeit more prosaic in execution. First, a few decades ago, she saw that society was not only permitting women to go back to work -- but it was also encouraging this behavior. Some women were going back to work because they needed the money; others were doing so because they wanted mental stimulation and social interaction.

Taking advantage of an opportunity that this rift created, my mom started hiring paid and volunteer workers for her nonprofit gift shop at the Albright-Knox Art Gallery, in Buffalo, New York. Her overeducated, underpaid, super-dedicated workforce had extremely low turnover, was responsible for essentially no "shrinkage" (internal shoplifting), and displayed astonishing customer-service skills.

She was at the forefront of reinventing the way that museums and other institutions staffed and ran their stores. Not content to have a little shop that sold a few postcards each day, owners of such shops turned their businesses into full-fledged, cash-flow-positive enterprises.

My mom then foresaw a rift that would change the business of retail forever: People were no longer buying things only when they needed them. Instead, they were now shopping for fun. The experiential retail environment -- stores that were destinations for people who were bored with TV -- became an incredibly profitable phenomenon for almost every nonprofit museum store in the country. By watching for such rifts and then taking advantage of them, my mom was able to change fundamentally the marketing equation for her industry.

Was my mom the first person to notice these two rifts? Not at all! But she was a pioneer in executing against each one. And she did it with confidence and without hesitation.

So why doesn't everyone do this? If Disney and Jobs and my mom can become successful rifters, why can't you and your colleagues do the same? What stops existing companies from grabbing hold of rifts? Why didn't an established coffee company like Maxwell House foresee a rift in the way that adults would spend time and money? (If you don't drink alcohol, where do you go to hang out?) Why did it take a startup called Starbucks to see that rift? Industry by industry, we're seeing more and more startups catching up to -- and then destroying -- the old-guard market leaders.

Why do companies have to be destroyed before the way that we serve markets can evolve? Why don't the existing players see a rift when it's right in front of their eyes -- and then jump into it? One reason why companies and individuals hesitate is because they don't know how to zoom. Big, successful companies aren't organized around the concept of change, and they don't reward people who want to change the way that they do business. To them, change is bad, change is evil, change is to be feared. They have enough trouble coping with shift -- but rift? Forget about it! You can't just cope with rift. Coping is out of the question. Rift appears out of nowhere and waits for a rifter to find it, grab it, and exploit it. And companies that resist zooming and insist on merely coping will always be last to see and to profit from a rift.

But there's also an underlying architectural problem. Market leaders will always be willing to make incremental changes that please customers, employees, and shareholders. (At the very least, they want to have the support of two out of the three constituencies.) Installing air bags in cars was a smart move on the part of car companies, but it had nothing to do with a rift. Putting Federal Express tracking information on the Net was great for you, me, and the beleaguered operators at FedEx, but it didn't fundamentally change the shipping business.

The problem for established companies is that when faced with a rift, they have to make a choice. They can't please all three constituencies. And, faced with that choice, most companies just say maybe. They wait. They hope that the rift will go away, quietly. They confidently project that the startups that are jumping into the rift are overvalued, overhyped, and sure to fail.

Sometimes the old guard is right: Sometimes a rift isn't a rift at all. But, as Disney and Jobs and my mom have demonstrated, if you take advantage of all potential opportunities (and that's exactly what the venture-capital community has done with the Internet), you might find a rift -- and nail it before someone else does.

Take a look at my three-step guide to rifting for entrepreneurs, employees, and CEOs.

1. Make sure that it's really a rift -- and not just a hiccup. A rift is characterized by a fundamental change in one of the basic rules of the game. You can usually expand the first rip in the fabric by discussing it in hypothetical terms: "What if the transaction cost of auctions became zero?" or "What if everyone had a television?"

2. Answer every objection with a "why?" And repeat that "why?" until you get to the core of your hesitation. Then you'll know what's really causing the discomfort, and you'll be able to deal with it.

3. Maybe-proof your organization when it comes to rifts. Require someone, anyone, in the company to sign a piece of paper that says, "I heard about this rift from so-and-so, but we're not going to do anything about it, and here's why." Allow people not to sign the paper, but require those people to give the unsigned sheet to their boss, thereby passing the buck -- all the way to the president of the company, if necessary. It will take only about a week for the president to become acutely aware of the opportunities that the company is not taking advantage of.

Walt Disney, Steve Jobs, my mom -- and now you -- have shared the secret of rifting. My mom taught me how to rift, and now I'm passing on the secret -- no, the responsibility -- to you. Go rift!

Seth Godin (sgodin@fastcompany.com) is permission-marketing yahoo! at Yahoo!

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1 Comments

  • Leonard Brooks

    Rifting, seizing an opportunity that is there, is so easy to talk about. Rifts are so exciting tho, aren't they?