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Why Smart Companies Miss Disruption: The 3 Ghosts Blocking Innovation | Scott Anthony

• Mark Blackwell • Episode 41

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What if the best map for tomorrow’s chaos comes from a chef, a nappy, and a medieval wine press? We dive into epic disruptions—the kind that turn what’s complex and costly into something simple and affordable—and trace the repeatable patterns behind them. Scott Anthony, clinical professor at Tuck and longtime collaborator of Clayton Christensen, joins us to unpack the behaviours, structures and stories that help leaders steer into uncertainty instead of spinning out.

We start with an unexpected icon: Julia Child. Long before streaming tutorials, she translated elite French technique into home‑kitchen clarity through curiosity, collaboration and relentless experiments. That same pattern powers P&G’s Pampers, which only succeeded after multiple failed tests in technology, price and marketing. The takeaway is practical: speed to learning beats speed to launch, and patience, persistence and playful testing turn false starts into insight.

Then we connect dots across centuries. The printing press wasn’t a single eureka moment but a recombination of existing parts—presses from a wine region, metalworking, ink and paper—showing how exaptation and intersections fuel breakthroughs. We bring that lens to AI, arguing that wisdom is the real unlock: asking sharper questions, judging outputs and choosing the hard way when it matters. Along the way, we meet the “ghosts” that haunt organisations—past traumas, present patterns and future fears—that quietly block rational change, as seen in the classic mini mill versus integrated steel story.

If you lead in a shifting market, you’ll leave with a compact playbook: define clear hypotheses, set learning objectives, make predictions, execute tightly and reflect with discipline. Create spaces for play to surface anomalies. Name your ghosts so they don’t run the room. If this resonated, follow the show, share it with a colleague who wrestles with change and leave a quick review—what ghost is strongest in your world?

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Scott Anthony:

Any innovation, any idea is going to start its life necessarily imperfect. Nothing springs from an innovator's head fully formed. The trick for the successful innovator is separating what is right and what is wrong. And the way you do that is like a scientist. You say, What is my hypothesis? How do I design an experiment where I've got clear objectives about what I want to learn? How can I make predictions so I can test and measure that? And then how can I execute in a way where I can gather the data and then reflect on the learning?

Mark Blackwell:

This is Mark Blackwell. Welcome to the Arkaro Insights Podcast. This is the show where we help B2B executives navigate their way in a volatile, certainplex, and ambiguous world and thrive with an adaptive approach. Today we've got a guest who's just been voted number five out of 50 worldwide as a leading thinker in business and management, recognized for his pioneering work in innovation, transformation, and navigating these uncertain times. Scott Anthony is a clinical professor of strategy at the Tuck School of Business at Dartmouth College. He's globally recognized as a thought leader on strategy, innovation, and growth. He previously served as a senior advisor with and managing partner Emeritus at Inasight, the growth strategy consultancy founded by his mentor, Clayton Christensen. Scott helps organizations rediscover their entrepreneurial spirit and build sustainable futures. His latest book, and that's the book we're going to spend our time discussing today, Epic Destructions, 11 Innovations That Shaped Our Modern World, is a fascinating look at transformation breakthroughs. From the printing press to the Model T to Julia Child's Art of French Cooking. This book weaves together stories from ordinary people to emperors, revealing the hidden patterns behind world-changing innovations. Scott, welcome to Arkaro Insights.

Scott Anthony:

Mark, it is my pleasure to be here. Looking forward to our conversation.

Mark Blackwell:

Thank you, Scott. I'm very, very happy to hear you. I've read the book. It is a definite read for everyone. Let me grab a coffee just so people know what we're going on about. This is what we're talking about today: epic disruptions.

Scott Anthony:

I've got the big sign of the book behind me, so I say well-versed to try to market the material in the book, but thank you for holding it up and for saying such nice things about it. It was a joy to write, I'll tell you that. Right.

Mark Blackwell:

So, for the benefit of our listeners, two questions merged into one. What is an epic disruption? And using your favorite jobs to be done language, why does the world need a book on epic disruptions right now?

Scott Anthony:

Well, so let me start with definition. So the way that I'd like to explain what an epic disruption is is just to take you on a brief tour through history and involve key highlights involving my family. So my father was born in 1947. In that year, there was one, count them one computer in the world. It weighed 20 tons. There was no way my father would ever see it. Big, complicated, centralized. I was born in 1975. Now there are tens of thousands of computers in the world. They're still pretty big. They're still pretty expensive. I would not see those because they're tucked away inside large organizations. My daughter Holly is born in 2007. Now, of course, there are hundreds of millions of computers in the world on desktops and on laptops. And that's the year Steve Jobson team introduced the first version of the iPhone. Today, there are billions of computers in our pockets, in our pumps. They weigh now 20 ounces as opposed to 20 tons. This is an epic disruption. You take something that once was complicated and expensive, you make it simple and affordable, you change market dynamics, you drive explosive growth. Why do we need to go and interrogate the idea of disruption right now? Well, the world is drowning in disruption. In 1620, Sir Francis Bacon wrote that there had been three things in human history that changed the state and appearance of the entire world: the printing press, gunpowder, and the compass. Those three things span 2,000 years. Today, we could talk about artificial intelligence, augmented reality, additive manufacturing, autonomous vehicles. I've gotten to four and I have not left the letter A. This is the world that we live in. Has can be an indispensable guide to help us make sense of a very confusing moment we're in right now.

Mark Blackwell:

Welcome to the Arkaro Insights Podcast. This is the show where we help B2B executives navigate their way in a volatile, certain, and ambiguous world and thrive with an adaptive approach. Today we've got a guest who's just been voted number five out of 50 worldwide as a leading thinker in business and management, recognized for his pioneering work in innovation, transformation, and navigating these uncertain times. Scott Anthony is a clinical professor of strategy at the Tuck School of Business at Dartmouth College. He's globally recognized as a thought leader on strategy, innovation, and growth. He previously served as a senior advisor with and managing partner Emeritus at INASIT, the growth strategy consultancy founded by his mentor, Clayton Christensen. Scott helps organizations rediscover their entrepreneurial spirit and build sustainable futures. His latest book, and that's the book we're going to spend our time discussing today, Epic Destructions, 11 Innovations That Shaped Our Modern World, is a fascinating look at transformation breakthroughs. From the printing press to the Model T to Julia Child's Art of French Cooking. This book weaves together stories from ordinary people to emperors, revealing the hidden patterns behind world-changing innovations. Scott, welcome to Arkaro Insights.

Scott Anthony:

Mark, it is my pleasure to be here. Looking forward to our conversation.

Mark Blackwell:

Thank you, Scott. I'm very, very happy to hear you. I've read the book. It is a definite read for everyone. Let me grab a coffee, just so people know what we're going on about. This is what we're talking about today: epic disruptions.

Scott Anthony:

I've got the big sign and the book behind me, so I say well-versed to try to market the material in the book, but thank you for holding it up and for saying such nice things about it. It was a joy to write, I'll tell you that.

Mark Blackwell:

Right. So, for the benefit of our listeners, two questions merchant to one. What is an epic disruption? And using your favorite jobs-to-be-done language, why does the world need a book on epic disruptions right now?

Scott Anthony:

Well, so let me start with definition. So, the way that I'd like to explain what an epic disruption is is just to take you on a brief tour through history and involve key highlights involving my family. So my father was born in 1947. In that year, there was one, count them one computer in the world. It weighed 20 tons. There was no way my father would ever see it. Big, complicated, centralized. I was born in 1975. Now there are tens of thousands of computers in the world. They're still pretty big, they're still pretty expensive. I would not see those because they're tucked away inside large organizations. My daughter Holly is born in 2007. Now, of course, there are hundreds of millions of computers in the world on desktops and on laptops. And that's the year Steve Jobson team introduced the first version of the iPhone. Today, there are billions of computers in our pockets, in our pumps. They weigh now 20 ounces as opposed to 20 tons. This is an epic disruption. You take something that once was complicated and expensive, you make it simple and affordable, you change market dynamics, you drive explosive growth. Why do we need to go and interrogate the idea of disruption right now? Well, the world is drowning in disruption. In 1620, Sir Francis Bacon wrote that there had been three things in human history that changed the state and appearance of the entire world: the printing press, gunpowder, and the compass. Those three things span 2,000 years. Today, we could talk about artificial intelligence, augmented reality, additive manufacturing, autonomous vehicles. I've gotten to four and I have not left the letter A. This is the world that we live in. Has could be an indispensable guide to help us make sense of a very confusing moment we're in right now. That's the job to be done, I think.

Mark Blackwell:

Brilliant. Amazing. And it's so fit for the purpose of our podcast of navigating in an ever-changing world. But I have to start with what is rather surprising disruptive innovation, potentially for some. I live in France. I'm married to a wife who, like me, absolutely loves cooking. And one of the reasons we still live in France is we love the French cuisine. Indeed, my wife has a blog which uh promotes French cuisine to an Anglo-Saxon world. So I have to talk about the Julia Child story to begin with, which immediately doesn't seem to be a disruptive innovation, but you beautifully lay out the whole story and point out that arguably she shows many, if not more, elements than any other story in your book. Maybe you could go through the Julia Child story for us.

Scott Anthony:

Of course, I love all 11 chapters in the book, but Julia Child maybe is first among equals just for being a great story and one that really illustrates three important things. Number one, it shows what disruptive innovation is and shows how it's quite a broad concept. People, like you said, they don't see it coming. What did she disrupt? Well, you go back to before Mastering the Art of French cooking came out. If you lived in America and you wanted to enjoy great French cuisine, what did you do? You had to get on a plane or a boat and go to France. That was really your only option through the book and the other books that she wrote and her television show. She took what once was complicated and expensive and made it simple and affordable. It is disruptive innovation. That's number one. Number two, she reminds us that anyone can do this. She wasn't born a great chef. Nobody is. When she moved to France in 1948, the joke that would go around when she visited her husband, Paul Child, was that she couldn't successfully boil water. The first meal she cooked for him was brains simmered in red wine sauce. I don't know why she picked that, but that's what she picked. When she first took the test at Les Court en Bleu in 1951, she failed. So it reminds us that anyone has the capacity to do great things, and it can show up later in life. Number three, what allowed Julia Child to succeed? A set of behaviors that anyone can follow, that anyone can get better at with careful practice. She was intensely curious, always trying to understand things. She was customer obsessed. She put herself in the shoes of the chef at home. She was great at collaborating with co-authors and other chefs. She was really good and creative at experimenting, trying lots of different things, and she was incredibly persistent in the face of setbacks. 51, she met Simone Beck and Louisette Bertold, who were the co-authors of the book Mastering the Art of French Cooking. It took them 10 years to get the book published, two near-death experiences, three different publishers, and that's what it takes to drive disruptive success. The end of the chapter, I call Julia Child the perfect innovator, and I really think she was, because she shows us all the recipe for disruption.

Mark Blackwell:

Fascinating. Now, I think for me, another bit that resonated in our podcasts over the last couple of months, one of the emerging themes, obviously, as we talk about challenges, is AI. And we're learning that AI is an opportunity, it can amplify the best in us, it can amplify the worst in us. And it's also forcing discussions on what it really means to be human, because by thinking about what it means to be human is how we can amplify the best to make AI a success. And so I loved picking up elements of past conversations on collaboration, on curiosity, and on creativity. Do you yourself see any connections between this sort of disruption and how we might succeed in the face of AI?

Scott Anthony:

We could talk for hours about AI and I'll give you just a couple thoughts and we can branch further if we want, or maybe we'll save that for a follow-up podcast. Who knows? You know, of course, AI is a topic that everybody is thinking about. Here's my own story. In July of 2022, I switched careers from a consultant to an academic, and I think, okay, now I get a chance to relax. Consulting is hand-to-hand combat. Every day you're fighting something. And the world of academia, of course, that moves slowly. Not too much happens. Four months later, OpenAI introduces ChatGPT 3.5, and here I am, right in the middle of a big disruptive change. So we as educators have to think about how we teach and assess differently. I jump into the deep end. I design and teach a class called Gen AI and consultative decision making. About half of our graduates go into consulting. So essentially a sandbox to let people play around with the technology. My biggest takeaway, the unlock, if you're going to get the most out of AI, is wisdom. The wisdom to be able to ask the right question to an AI, to prompt in the right way, the wisdom to be able to distinguish something that actually is useful output from what you might colloquially call a hallucination or you might call something else if you want to. Wisdom is the key. How do you develop wisdom? Well, I have my students read an interview that Jerry Seinfeld, the comedian, did with the Harvard Business Review a few years ago. And he was asked, your writer's room was famous for you micromanaging it, for there being lots of burnout. Would it have been better if you had hired someone like McKinsey to help you with it? Seinfeld responds, Who's McKinsey? The interviewer says, they're a consulting company. Seinfeld asks, Are they funny? Having cut my teeth at McKinsey, I can report his answer. The answer of the interviewer is correct. No, they are not. Seinfeld then says, then they couldn't have helped me. This is the key thing. The right way is the hard way. The right way is the hard way. The show was good because I obsessed over every single detail. This is what I tell my students. The right way is the hard way. Those of my students who like to go to the gym to work out, if they wanted to, they could bring a forklift to the gym and they could lift any amount of weight, but that's not the point. The right way is the hard way. That's what develops the wisdom. The wisdom is the unlock to make AI a tool that lets us all go further.

Mark Blackwell:

Absolutely. You sent me a paper and I read it, and this whole idea is coming across of the right prompting, which I think we're beginning to learn now. But totally I'm with you that to learn new skills in the business world, we should play. And if there's more new skills to be learnt because we've got more new challenges faced, then play should be something that we begin to get more comfortable in the workplace. So if you have the time, I would love to have another podcast on that because that's an interesting theme as well. You know, maybe I just switching it. I was very fortunate to spend a lot of my career in DuPont. And DuPont was one of those great companies of its time that made a lot of fabulous innovations in in this world. But unfortunately, over time it fell apart and it wasn't quite the powerhouse that it once was. And we hear a lot of times about how do these giants innovate? And so for me, one of the more inspiring topics in the book was Procter and Gamble, another big American giant, demonstrating that even though the size of that business can create disruptive innovations. There's many case studies being written about it, but you chose the Pampas story, which was like a knick-and-neck race that I loved reading. Maybe you could tell the audience how Pampers came to be a disruptive innovation.

Scott Anthony:

Well, first, I just I can't help but comment on DuPont. Two thoughts went through my head. Number one, I mentioned I cut my teeth at McKinsey. The first consulting project I worked on was for a bank in Wilmington, Delaware. And I stayed in, of course, the DuPont Hotel. So that was one. And then number two, DuPont almost made it into the book, just because in a lot of the case studies, I noticed DuPont kept creeping in. And I just couldn't figure out exactly what to do with it. But it's at the end of the gunpowder story because of course a lot of DuPont's history traces back to explosives, comes again as a key provider for the Model T. It shows up again in the transistor story. I couldn't unlock it, but maybe in Epic Disruptions too. Who knows?

Mark Blackwell:

Please, so we're, I know a few people can help you with some research if you're interested in that, and who would love to be part of writing the story of DuPont. So uh definitely if you're interested, let's talk again. But go back, what happens at PNG?

Scott Anthony:

Yeah, so here's the brief version of the Pamper story. So 1954, PG taps Vic Mills on the shoulder, on the shoulder. Vic Mills at the time is a very decorated scientist. He's 58 years old, and he's asked to lead a new division to go and pioneer, to go into new markets for PG. Two years later, Vic Mills taps Bob Duncan on the shoulder and says, as a new grandfather, I've now seen Vic Mills said this, I've now seen a real pain point in the world. 90% of U.S. households have at least one disposable diaper at the time, but they only make up 1% of diaper changes. Nappy changes depend on what country you're from. The reason why is the product quality was super low. So PG had an idea. Let's come up with something that is a very affordable but high quality solution in the disposable diaper space. This is where the story gets really interesting. Ultimately, of course, they succeed. Pampers becomes the largest brand in PG's history, the first brand to get to $10 billion in revenues per year, but it's not an overnight success, anything but. In 1958, the first test market fails for technological reasons. In hindsight, maybe the idea of two-part diapers where you've got plastic pants that go around the diaper was a bad idea to test market in the state of Texas in August. One researcher said we subjected children to the equivalent of a Turkish bath. In 1960, they fail again. This time they fail because the price point is wrong. The idea was we're going to price at a little bit of a premium to established products. That's not what the consumer wants. They want something that is cheaper than established products. Test Market 3 in 1962 fails because they're not marketing appropriately. Finally, in 1964, they succeed, though it takes them longer than they think. So they still have to fine-tune things, but enough there to say, let's go, let's launch this in the United States, and then ultimately the world. The thing that this teaches me is that one of the key things to succeed with disruption is to be patient, to recognize that there are not overnight successes. We think the world is moving faster than ever before, and there's a lot of truth to that, but still, success takes longer than people think. We were talking about open AI a little bit before. 2022 was the first year of commercial operations and the 66th year of work on artificial intelligence. That work began in 1956 at a conference here at Dartmouth College. We see the tail end and we think it happened in an instant, but that's not the way innovation works. It requires patience, it requires persistence, it requires overcoming false steps, fumbles, and yes, failures on the way to success. And that's what I learned from the Pamper Study. I also appreciate the fact that my editor gave that chapter, I think the best chapter name of all the chapters, Crap, was the title of the chapter. That was a Kevin Evers special. That was not a Scott Anthony joint.

Mark Blackwell:

I just love the stories. It reminded me of Fabriz in terms of the winning value proposition is not what they initially thought it to be. And shall we say sleeping well at night was a great part of the story. But I'll let the readers pick that up when they get to the book.

Scott Anthony:

Just as a side note, Fabriz, you know, one of the people behind Fabriz, Carl Rahn, is a good friend of mine and one of the people who read early versions of this book, he's mentioned in a footnote or two. So he was the head of RD for the fabric and home care division when Fabriz was launched, rebooting PG as a candle company back to its origins. But the stories that Carl would tell about the unanticipated, that was one of his lessons that life repeatedly taught him. The way he described it to me once is when I'm a researcher, what I'm always looking for is the point off the line. When I see a point on a line that continues a trend, that's boring. I didn't need to do the research. It actually hasn't taught me anything. When I see something that doesn't fit, the anomaly, maybe there's a completely different dimension that I hadn't seen. That's an opportunity to reframe, to reimagine, to disrupt. Trying to find the thing that doesn't fit. That's what can lead us in interesting directions.

Mark Blackwell:

That's a really good insight. Thanks for yeah, thanks for sharing that. I think many of our listeners come from a technical background. Typically, most of our listeners are in ad companies or chemical companies or food companies. And one of the things I liked about in your book was that you drew a parallel between the scientific method, which I think many people will be familiar with, and emergent strategy, which helps drive disruptive innovation. Can you talk a little bit more about that?

Scott Anthony:

Yeah, this is something I first wrote about in my 2014 book, The First Mile. And that book is hard-earned lessons from a whole bunch of failures. In 2010, I moved to Singapore, and I wasn't going there to expand our consulting business to Singapore. That's what I ultimately ended up doing. But the first couple of years was focusing on venture investing and new business incubation, a journey that was unsullied with commercial success. And I learned again and again how to create businesses that don't work. The thing that I learned from it, which made it a valuable exercise, commercial failure, but powerful learning, is the trick, is to take what Sir Francis Bacon described so nicely in 1620 and Novan Organum, what we now call the scientific method, and apply it to strategic uncertainty. If you're a believer in lean startup, it's the same basic idea. But the idea is any business is going to, any innovation, any idea is going to start its life necessarily imperfect. Nothing springs from an innovator's head fully formed. The trick for the successful innovator is separating what is right and what is wrong. And the way you do that is like a scientist. You say, What is my hypothesis? How do I design an experiment where I've got clear objectives about what I want to learn? How can I make predictions so I can test and measure that? And then how can I execute in a way where I can gather the data and then reflect on the learning? If you listen really carefully there, I gave you a little acronym. You never know for sure when you're pursuing disruption. So you always should have hope. Hypothesis, objective, prediction, execution plan. You do that with discipline. It's a way to reduce the uncertainty, remove the uncertainty that comes along with any idea. I think the key thing in all of this is to recognize that's part of the game. If you want to do interesting things, you have to go and embrace that uncertainty. If you try to get rid of it or live in a world with no uncertainty, well, then you're doing things the world already knows and understands. That's not that interesting. By way of metaphor, the futurist Amy Webb has this metaphor that I just love. She says, when you're driving on ice and you hit your brakes and you start to skid, what you want to do is turn away from the skid. You want your car to start going straight again. That doesn't work. It leads to you spinning out. Instead, you have to do what? Steer into the skid. That's the way that you get out of it. Same thing with uncertainty. You steer into the skid, you approach it like a scientist, you don't get scared by it. You view it as an opportunity. Going back to something you said a little bit before, maybe even you have some fun and play with it a bit. That's how you progress through it.

Mark Blackwell:

Yeah, absolutely. Having fun's key because I think you've pointed out persistence, long-term focus. So if you don't have fun during this, you're going to struggle. My sort of academic start was more in the natural sciences. So I love seeing overlaps between arguably the best creative force there ever is, evolution, and innovation. What's the evolutionary shortcut to overcome the problem of time? And I understand it to be this phenomenon of exaptation. So what do I mean by that? Well, how did birds fly? Well, they didn't move that directly. Animals decided to live in trees, they got cold, so they developed feathers to keep warm, they fell out of trees, and they repurposed the things that had been used to keep them warm, by chance became the thing that enabled them to fly. That's the idea of acceptation to help accelerate the force of innovation. I've read it a few times from a few authors, but I loved your approach to the whole idea of how the printing press came about. Isn't that a story of a bit of acceptation in practice?

Scott Anthony:

For sure. And you know, I smile as you describe that concept because, you know, I'm I'm here at the Tuck School of Business at Dartmouth College, and right down the hall from me, two doors down, is Vijay Govindarajan, known as VG, who is working on an article with J. Shri Seth from 3M and another co-author on exactly that topic, saying that nature has taught us so much already. If we learn how to smartly borrow and adapt from nature, it can turbocharge the work that we're doing for innovation. So I think that's a critically important topic. Back to the printing press. The printing press story really taught me two things. One thing is I had it completely wrong. I wrote an article maybe 13 years ago called The New Corporate Garage, and I said there basically have been three defined eras of innovation. The first era I called the lone inventor. And I say Gutenberg, Johannes Gutenberg is an example of that. That was just wrong. You go into history, you say, of course, Gutenberg played a part in it, but he had a whole team who he was working with. Conrad Saspatch showed up with a press that was a key component of what he did. He had a financial backer, Johann Fust, who ended up suing him, but whatever. It takes a village to go and do this. There is no thing that is done by an individual. That's the first point. The second point, why was it Gutenberg in Germany? Well, I think history is pretty clear on this. The research persistently shows magic happens at intersections when different mindsets and backgrounds collide, creating the opportunity for exactly the phenomena that you described. The work was done in Strasbourg, Germany. Strasbourg, Germany was a vibrant trade route. Lots of people were coming there. There is a robust bell engraving industry so people can do the work on the molds. The reason why Saspat showed up with his press is because it was a wine-growing region. So there were lots of presses there. So you had all these components there. You had to put them together, you had to look at them in a different way. The printing press actually had very few novel innovations in it. It really was a combination of ink and paper and press and molds that allowed the printing press to have the world-changing impact that it did. I think it's exactly an example of what you talked about.

Mark Blackwell:

No birds flew in it, but uh but a good value. Yeah. Brilliant. Superb. And again, that's another of the many interesting chapters that you've got in the book. But I suppose when people think about disruptive innovation and work of Clayton Christensen, inevitably you think about Minnie Mills and Bethlehem Steele and that story. And I like the way that you tell it and bringing in this concept of ghosts. And why is it that rational people can end up in this situation? You know, we learn a lot in the book about what it is to be a disruptive innovator, but for me as well, there was a lot of insight and learning, especially if you're in a large company in a settled industry, about behaviors that we should try to be cognizant of and aware of to make sure we don't get disruptive. And uh you talk about the ghost story. Can you elaborate on the on the ghosts?

Scott Anthony:

And the uh again, all of them are my favorite chapters, but the Bethlehem Steel one I really like. I I follow the advice of Stephen King when I write his book on writing, the horror author. His book on writing, very good book. It says the first time he's working on a manuscript, he writes with the door closed. So it's just him and the book. Then he opens the door, shares the manuscript, and gets feedback. So first version of the book I wrote on my own, and then I started sharing with friends. One of them is Thomas Weddell Weddelsberg, who just has a name that's fun to say, Thomas Weddle Weddelsberg. He's written a couple of books of his own and he always provides very generous feedback. When he read the chapter that I wrote about steel mini mills, which was Clay's favorite story, so it had to be in there, he said, Scott, I understand what you're trying to do, but this chapter is just deathly boring. There's nothing that interesting in it. He said, What if? What if you flipped it? Instead of telling the story of Nucor and how it disrupted with these electric arc furnaces that had a very different business model, much lower prices, and so on. What about through the eyes of Bethlehem Steele? I said, that's interesting. And when you look at it through the eyes of the company that got disrupted, it's a great way to illustrate this concept you mentioned, this idea of ghosts. I first learned about some of these underlying forces through an academic program I took a few years ago that focused on a field called system psychodynamics, basically business meets psychiatry. And once you see it, you can't unsee it. Every organization, I would argue, is haunted by ghosts. An homage to Charles Dickens, I call them ghosts of past, present, and future. Let me illustrate them through Bethlehem Steel. So the basics of the story, Bethlehem Steel, large integrated steel mill, building an integrated mill. The last one it built was 1962. Billions of dollars creates the best steel in the world. Ducor in the late 1960s introduces the steel mini mill, a lot cheaper to build. It's tens of millions as opposed to billions of dollars, a lot smaller. You can run it more efficiently, but in the early days it can't make steel of the same quality. So classic disruptive innovation, new trade-offs, much lower price points, and so on. So why didn't Bethlehem steel respond? Clay Christensen argued it was rational. You go and invest in your best, not worst opportunities, you go and push margins up and so on. There's a piece of that, but there's an irrationality as well because the ghosts are there, ghosts of the past. These are traumas your organization has not gotten over. That when you're reminded of them, all you want to do is run away. Nucor relied on non unionized labor. You bring up the idea of non unionized labor inside a place that had a series of Strike, some of which turned very violent, some of which almost shut the entire country down. No way. You couldn't even discuss it. Ghosts of the present. Those are invisible patterns that an outsider can see, but an insider is oblivious to. It is hardwired into an organization, often going back to its founding story. There are two key figures in the history of Bethlehem Steel: Charles Schwab, not the financial guy, another Charles Schwab, and Eugene Grace, who basically run the company for 70 years. They had sayings that drew back to Andrew Carnegie and what he did to create the modern steel industry. Pioneering doesn't pay. The dominant view was we are going to seek scale and volume above all else. You try and do something different in that, people say that's not what Bethlehem Steel does. Finally, ghosts of the future. To disrupt requires you to fundamentally change the essence of your organization. That can conceptually be exciting, but it also can be really scary. Individuals have identity that tie to yesterday. Trying to go and create something different means that you are going to invalidate your own identity, and that is a really deep fear. Bethlehem Steel. It is rooted to Bethlehem, Pennsylvania. By all rational accounts, its main mill in Bethlehem should have been shut down in the 60s, but you keep pushing forward because who are you? You are Bethlehem Steel. So the past traumas, the present patterns, the future fears, these are things that haunt every organization. If you are dealing with disruptive change, you got to spot the ghosts, you got to disarm the ghost, or they will swallow you up.

Mark Blackwell:

Fascinating. You're making it even more interesting if I can persuade you to write a book on DuPont by having gone through the uh Bethlehem Steel.

Scott Anthony:

I will tell you, Mark, when people hear it, and when people hear about ghosts, you're like, yep, I have seen those before. And look, I've helped to spawn my own ghosts. You know, back in the days when I was working at the consulting company, I look back and I say, if I knew then what I knew now, there's a couple things I would do really differently. Because if you're not aware of it, there are actions you can take that create things that make it really hard for the organization to change. Once you understand it, it helps you understand some of the challenges in a different light. And of course, then it makes sure that you can overcome or not create them in the future.

Mark Blackwell:

Brilliant. Thank you. This has been a really interesting discussion, Scott. As we wrap up, normally I ask guests to give three takeaways for people to think about. But knowing the style of your book, may I suggest I ask three questions that you would like the listeners to think about? Three questions.

Scott Anthony:

So let me see. So number one, I'm going to do this. I'm going to assume that people who are listening are working inside an established company. So I want to build on what we just talked about. Number one, what's the ghost in your organization or your own life that is inhibiting your ability to innovate? If you look at it from the perspective of an individual, we all have the times in the past where things didn't work, and that's a sting. We have our present patterns to stop us from doing new things. And as humans, we don't like change actually. We have the status quo bias. What is the future fear that you have to fight? So, question one, what are your ghosts? Question two, what is the upside in today's uncertainty? It feels really scary right now to be in a world where everything is changing. It is legitimately scary. It also creates unique possibilities. So, what is the upside in today's uncertainty? And number three, how do you approach all of this with a glint in your eye and a smile on your face? How do you have more fun? Those would be my three questions.

Mark Blackwell:

Brilliant, Scott. Thank you so much. Really enjoyed it. Thank you for your time. And I've got to now persuade you to come on again and talk about play. Thank you so much. Thank you, Martin. It's been a pleasure. Cheers, Scott.

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Mark Blackwell

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Scott Anthony

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