Amazon this year announced a partnership with JP Morgan Chase and Berkshire Hathaway to cut healthcare costs, characterizing the initiative as a Herculean effort that would require "talented experts, a beginner's mind, and a long-term orientation."  This is an encouraging departure from typical Valley "bubble think."

As Amazon CEO Jeff Bezos correctly points out, when it comes to playing in industries with ramifications in the broader world, many tech leaders are still beginners.
Healthcare affects every person in our country and can literally mean the difference between life and death. It's a different ballgame than selling goods online -- one that will require a more nuanced, multi-faceted approach.

So far, it sounds like Bezos is wisely embracing the massive responsibility that comes with tackling our country's health.  If he manages stakeholders effectively, including the American public, he might just end up dominating another trillion-dollar industry.

This is why entrepreneurs should strive to lead the way Bezos does, because refusing to acknowledge real-world considerations -- the way we've sometimes seen Facebook, Uber, and even Apple do -- is how companies wind up being led by others, most notably the government.

Tech pioneers will either face up to the responsibilities that come with disrupting the status quo and changing the world, or they won't. That means the result could be intractable frustration, as government and other powerful players intervene to protect people's interests in often heavy-handed ways. Or the result could be the opportunity to create companies of even larger, sustainable value.

Approaching things with a "beginner's mind and long-term orientation" is how technology leaders can arrive at the latter outcome. So, how do company founders learn to lead like Bezos so they don't end up being led by others?

Accept the responsibility that comes with disruption

They call it disruption for a reason: It's disruptive. Always remember that it's real people, real livelihoods, real economic interests, and real political interests that your technology will be disrupting. In positively changing the way industries operate on the one hand, your product or service is also likely displacing people, services, and different, yet no less legitimate, public interests on the other hand. Instead of ignoring these realities--and thumbing your nose at the people who are self-interested in doing things "the old way"--acknowledge the full set of implications of what you're doing.  Do not incentivize powerful stakeholders to undermine you, and do not assume that their particular interests do not also reflect important societal values.

Build stakeholder alliances

As Bezos looks to disrupt healthcare, he is sitting down with policymakers, healthcare administrators, hospital CEOs, doctors and patients. This is a mature approach that reflects both humility and an intelligent understanding that he will need strategic knowledge from more than just Silicon Valley to be effective. My mother used to say, "You catch more bees with honey than you do with vinegar."  Avoid the "attack first, apologize later (if at all)" approach that seems to come natural to tech entrepreneurs.  If you pay close attention, you'll notice that it rarely works.

Pick your battles wisely

Disruption, even when done properly, will shift the balance of power among traditional stakeholders and shift the distribution of financial rewards across industry players.  You just can't make everyone happy at the end of the day. The lower level competitive interests of incumbents -- often manifested in legal and regulatory barriers designed to preserve market share -- are wise to attack and dismantle. But high-level societal interests must always be managed strategically.  In healthcare, these interests would include quality of care, accessibility, and privacy.

To illustrate the danger of ignoring these interests, take Apple's battle with the intelligence community over the San Bernardino shooter's locked iPhone.

Separating political feelings from the role of the government itself, one should remember that the government's most important responsibility is to keep its citizens safe.  If government officials doubt that mobile tech companies and wireless carriers can effectively police communications networks, they will step in and do the job themselves. This is one of the primary reasons the current Administration is considering building and operating the country's 5G communications network, instead of leaving it to the private sector.

Companies like Apple have every right to protect product security and user privacy concerns. But if the company can't balance those concerns with other concerns -- like the physical safety of U.S. citizens -- it is the victim of "bubble think" that's at odds with the real world. The issue is complex and multi-faceted, and an "all or nothing" (in this case, nothing) approach, won't get you very far. In fact, it will get you an antagonized government ready to intervene in your business in aggressive, far-reaching ways. And few startups ever survive this onslaught.

If tech startups can take a page from the book of leaders like Bezos, they may get the opportunity to dominate a trillion-dollar industry, the way Amazon might do. But if they persist with "bubble think," they'll just end up being led by someone else.
 

Published on: May 16, 2018