Monday, March 24, 2014

Two Plus Two Before


The human mind is endlessly fascinating. It is the most complex thing in the known universe. And yet we know very little about the brain. Every day we use our minds to live. But there's much each of us doesn't understand about the very organ we are constantly using. For example, are you aware that great discoveries are often made in pairs? Meaning that two people, working completely independent of each other, often discover the same thing at roughly the same time.

It is a fact that is wild and perplexing. It has lead to various theories such as the idea that every brain is connected to every other brain through some sort of cosmic tapestry. Kind of weird, and out there, don't you think? I know. So, I won't get too much into it. Instead I will just give you one example.

Have you ever heard of Gottfried Liebniz? If you haven't, you're not alone. Not a lot of people known the name Liebniz. However, you most certainly know the name of his co-founder. Liebniz made a very important discovery at the same time as a man named Isaac Newton. So, what was the discovery? Liebniz and Newton, working independently at about the same time, each discovered a branch of mathematics known as calculus.

The only thing I will say, about the specifics of calculus, is that it the mathematical study of change. Those of you who have ever studied calculus know it contains two main branches: differentiation and integration. And this is where I can start to make this post apply to real life. The words “differentiate” and “integrate” are certainly words we're familiar with. They are essentially opposites. And yet they can apply to the same thing. So, in that way, what we are dealing with is something of a paradox.

Being different is important, especially in business. The world's leading expert on business strategy is a professor at the Harvard Business School. His name is Michael Porter. And what the professor says is that differentiation is the essence of strategy.

I think most of us already know this. If what you're selling is the same as everyone else, then the only place you can compete is on price. And that's not a good strategy. Competing on price is a recipe for getting clobbered. There is zero customer loyalty and you have to practically shoot yourself in the foot to survive.

It is much more wise to identify, and work on, your points of differentiation. That is to say, what makes you, your product, or your service different from everything else on the market? A very simple yet very complicated question.

Here's where it gets paradoxical (as if "simple yet complicated" wasn't paradoxical enough.) In order to integrate, you need to differentiate. On a personal level, to integrate means to have integrity. And, if you don't have integrity, you aren't going to last very long in the real world. So, as an individual, you do want to integrate. However, compared to everyone else in the market, you want to differentiate. Pretty straightforward, right?

Now it's time to ratchet up the difficulty. You need to integrate your offering with the market, while simultaneously, differentiating your offering from the market. Kind of a contradiction, isn't it? But, really, it's not.

In last week's post I said, “The future belongs to the gestalts.” And it's totally true. The definition of gestalt is, “A structure, configuration, or pattern of physical, biological, or psychological phenomena so integrated as to constitute a functional unit with properties not derivable by summation of its parts.” You get the parts through differentiation, and you get the gestalt through integration.

Since the time of Adam Smith we have hear of the concept of “Division of Labor.” The Industrial Revolution brought us factories and Taylor's Scientific Management. So, breaking things down, into their constituent components, is something people are pretty good at.

In fact, in high school I remember taking a car engine apart and having no idea how to put it back together. And I remember the teacher being very unhappy with me. Now, it was going to be his job to put the thing back together. Making cars is more about integration than it is about differentiation. Henry Ford divided his labor, along the assembly line, to more efficiently integrate an automobile. We must differentiate while simultaneously integrating.

As it turns, differentiation is the easier part. When studying calculus you learn differentiation first and integration second. There's a reason for that. Integration is harder. Picture Las Vegas. It took Steve Wynn a couple years to build his Wynn Hotel. But it only took a couple seconds to implode the Desert Inn, which had been standing on the same site. Building a skyscraper is integration. Imploding a building is differentiation. Both have value, but integration has more value. We know Wynn built the hotel. Any idea who tore down the Desert Inn? Of course not.

Differentiation is kind of like tearing things down. It's what the critic does. And I once heard it said, “They never built a statue for a critic.” Think about it, it's so true. Nobody remembers the critics. The real value is in building things up. The real value is in integration. So I encourage you, I suggest to you, work on your integration skills. Work on your gestalts. It's one of the things I'm doing with this blog. I'm not saying I'm good at it, but I am getting better. And I know I have critics out there who role their eyes at what I'm doing. But I just ignore them. I ignore them because I understand this simple lesson on calculus :)