Stamatakis: Aspiring innovators should follow Steve Jobs’ lead

By Nick Stamatakis

It’s very common to call people irrational when you disagree with their views. Unless you want… It’s very common to call people irrational when you disagree with their views. Unless you want to go there and accuse them of being Hitler, this is the best ad hominem attack you can marshal.

What this insult implies, of course, is that being rational is invariably better. If your opponent reasoned more logically, the world would be a happier place. Everybody just needs a double dose of logic.

With Steve Jobs’ passing, however, analyses of his decision-making style questioned this attitude. Jobs’ great ideas — the iPod, the iPhone, the iPad and the MacBook — didn’t really follow the smart money of the day (although he indisputably had a firm understanding of the markets). It was in no way obvious that people would want flat tablets. No budget projection would have predicted 20 million iPhone sales a quarter. A more reasonable, clear-minded CEO would have probably played it safe and released another incremental improvement to the PC.

That, of course, is exactly what the rational people in charge of Microsoft, HP and Cisco did. Accordingly, it’s unlikely that the CEOs of these companies will be eulogized to the same degree Jobs was, although Bill Gates might come close. And it’s certain that these companies won’t be valued as highly.

Although we all like to invoke reason and logic, slavish followers of this creed don’t make the world move. We need people to stay irrational — or “foolish,” in Jobs’ words.

If you’ll indulge me for a moment, I’m going to suggest that the reason why so much of the world seems broken — the reason unemployment is so high for new college graduates and why median incomes have remained static since the 1970s — is that we have too many rational people.

To understand where I’m coming from, you need to understand how the world improves. Most economists will tell you this happens when our productivity increases. When we can create more goods with the same amount of resources, our quality of life spikes.

The Industrial Revolution is the best example of this phenomenon. When mechanized fabric making was introduced in the late 18th century, all the hours that had been spent sewing pilgrim hats could suddenly be devoted to other things while the population still produced the same amount of hats. The worker or any other person could now occupy his excess time caring for a puppy. Magically, the world became one puppy happier.

Of course, productivity needs to improve faster than the birth rate. Otherwise, all the new, happy puppy owners will have babies and suck up all the extra resources.

Now here comes the part where rational people ruined things. When computing and extremely sophisticated statistical techniques began to drive production in the 1970s, everybody could be more precise with their predictions. Not to romanticize too much, but before this, things really were a lot like that famous scene in “Apollo 13” in which the engineers are given toys and told to figure out how to get the astronauts home safely. There weren’t sophisticated models to predict the profit projections of a new product. Read an engineering paper from the 1950s — the lack of specificity is almost shocking. The best way to move forward at all was to be very risky.

But when rational people began using all the data available with computing, it wasn’t about riskiness anymore. To be successful, you didn’t need to be daring, just logical. As “Innovation Starvation,” Neal Stephenson’s brilliant essay in this month’s World Policy Journal, points out, there is now a “laptop-wielding person in the corner” always checking precedent and past attempts.

With this rational person in the corner, why take risks? An incremental improvement to an existing technology has a guaranteed, albeit small, benefit. Why make a car when we can just slightly improve the horse? Why create new energy sources when we can just slightly improve the existing source? Why completely reform health care when we can just throw a bunch of money on it and tweak the edges?

Without anybody willing to take these risks, big productivity jumps will never happen. You can’t incrementally improve things fast enough to make the world better.

Sadly, Steve Jobs only transformed personal computing which, while revolutionary in its own way, doesn’t create those productivity leaps that make the entire world better. But just imagine if he did. An iSolar Power Plant might now be up and running.