The Digital Marketing Podcast – "Digital Darwinism" (April 10, 2018)

Hosts: Daniel Rowles & Ciaran Rogers
Guest: Tom Goodwin (author of Digital Darwinism, Head of Innovation at Zenith)
Theme: Surviving and thriving in a fast-changing digital business environment. Tom Goodwin discusses his book, "Digital Darwinism", exploring how organizations should adapt to technological change, avoid repeating historic mistakes, and why enthusiasm for innovation is rarely matched by real transformation.

Episode Overview

This episode centers on the concept of "Digital Darwinism"—the relentless pace of change in the business world due to digital technology, and how companies must adapt or risk obsolescence. With guest Tom Goodwin, the discussion explores how organizations often misunderstand, resist, or only superficially engage with new technology. Drawing parallels with the past, Tom argues that being large or dominant is no longer enough; relevance hinges on willingness to reinvent, embrace discomfort, and think beyond incremental innovation.

Key Discussion Points & Insights

1. Motivation Behind "Digital Darwinism"

• Tom's Journey:
  • Not a "natural-born author", Tom began writing out of frustration with existing narratives on change and transformation (02:21).
  • "We live in this pretty extraordinary time... but most of the people writing about it are actually not people with jobs that are on the cliff face of action." (02:40, Tom Goodwin)
• Purpose of the Book:
  • A provocative, candid call to action to start meaningful debates around how organizations face change—beyond buzzwords and superficial gestures (03:02).

2. Defining Digital Darwinism: Natural Selection in Business

• Shortened Lifespan, Accelerated Change:
  • The concept links natural selection in biology to survival among companies in the digital age—change is so rapid that typical adaptive mechanisms are no longer sufficient (04:17).
  • "Things are now changing sufficiently fast that the sort of mechanisms we've always had to adapt are... not helpful for this fast-changing environment." (04:19, Tom Goodwin)
• Not Survival of the Biggest:
  • Larger companies are often the least fit, paralyzed by fear of change (04:41).

3. Historical Parallels: Electricity & The Fate of Incumbents

• Learning from the Past:
  • Companies historically misapplied new technology—like early factories using steam engines just to power existing waterwheels, rather than reimagining processes (05:21).
  • "There's a long history of companies having this new technology, applying it to the edge of what they do... It's only when businesses are created for this new environment that we see leap changes in productivity." (05:15, Tom Goodwin)
• Repeating Mistakes Today:
  • Modern businesses replicate this by confining digital initiatives to silos rather than fully integrating them (06:29).

4. Structural & Cultural Resistance to Change

• Bolted-On Innovation:
  • Many organizations create separate digital departments, avoiding the discomfort of true integration—especially notable in the advertising industry (07:07).
  • "Every single new thing... we create a new department, stick younger people in a more funky part of the building, and hope not to work with them that much." (07:32, Tom Goodwin)

5. Boiling Frog Analogy: Incremental Change is Deadly

• Complacency as a Risk:
  • Companies become comfortable with gradual change (boiling frog syndrome). By the time the heat (competition/disruption) intensifies, it’s too late to react (08:30).
  • "If the change seems quite slow... you just become warm and... apathetic. By the time things are too difficult, it's too late to do anything about it." (08:54, Tom Goodwin)
• Call for Positivity:
  • Instead of fear, organizations should embrace and get excited about new tech (09:26).

6. Superficial Innovation: Signal vs. Substance

• Virtue Signaling:
  • Many innovation projects (like chatbots, Alexa skills, ibeacons) are more about perceived modernity than real transformation (09:50).
  • "My main role... seems to be doing things which are gestural, which are about signaling... and actually they're not [real change]." (10:53, Tom Goodwin)
• Need for Existential Rethink:
  • True adaptation would involve asking tough, identity-level questions about the organization’s future role (10:32).

7. Financial Inertia & Incremental Thinking

• Short-Termism:
  • Current accounting and investment frameworks favor incremental improvements over bold, long-term changes (11:36).
  • Metaphor of UK rail upgrades illustrates how “drip” investments produce mediocre outcomes, mirroring business decision-making (12:04–12:46).
  • "It's easier to justify money for maintenance than to improve things. That's how most businesses operate..." (12:52, Tom Goodwin)

8. Leadership’s Misaligned Incentives

• Perpetuating the Status Quo:
  • Executives often have short-term incentives (stocks, retirement horizon), making them risk-averse toward significant, long-term bets (13:17).
  • "We see ... leaderships ... just managing the decline, rather than investing for the future." (13:55, Tom Goodwin)

9. Real-World Examples: Who Gets it Right?

• Netflix as a Standout:
  • Cited as a company that disrupted itself before the need was urgent (14:43).
  • "Netflix is the only company ... that changed before it had to." (14:47)
  • Their move to streaming caused consternation among analysts and investors, yet paid off spectacularly (15:07–16:12).

10. Should Companies Self-Disrupt?

• No One-Size-Fits-All:
  • Not every industry faces existential digital disruption to the same degree (16:40).
  • Industries like breweries may need incremental change, while others require more radical reinvention (16:56).
• Denial is Dangerous:
  • The more a company needs to change, often the more denial it exhibits (17:29).
  • "Maybe the long-term future of some retailers is to go bankrupt. ... At least make an active decision to do that and ... open new companies." (17:59)

11. Acquisition vs. Internal Innovation

• Acquisition as Deferral:
  • Many large organizations prefer buying disruptive startups (e.g., Unilever and Dollar Shave Club) rather than taking risks on internal innovation (18:23–19:30).
  • "It's puzzling... that these ... well-capitalized companies ... assume the only possible way to succeed is to buy a model which someone else has perfected." (19:18, Tom Goodwin)

12. Chartism: Over-Reliance on Data

• Fetishizing Forecasts:
  • Businesses place misplaced confidence in charts and linear data projections, despite their poor predictive track record (19:58).
  • "We did a terrible job predicting ... curved TVs, virtual reality, 3D printing." (20:24)
  • True vision requires empathetic understanding of possible futures, not just data (21:05).

13. Innovation Theatre

• Superficial Innovation Labs:
  • Many companies use flashy experiments (AR, mood-sensing blankets) for PR rather than operational transformation (22:00–22:37).
  • "If you decide to completely re-engineer the entire booking engine... you won't get any press, but would probably see customer loyalty increase massively." (23:04)

Notable Quotes & Memorable Moments

• On digital adaptability:

  • "Change is happening so fast that the old ways of adapting just aren't cutting it anymore." (04:19, Tom Goodwin)

• On real transformation:

  • "We've never once taken all these amazing new skill sets and... really integrated them into our entire offering." (07:51, Tom Goodwin)

• On boiling frog syndrome:

  • "You just become warm and... apathetic. By the time things are too difficult, it's actually too late." (08:54, Tom Goodwin)

• On short-term thinking:

  • "No one wants to make a change which is radical, risky, or will take a long time to pay off." (13:47, Tom Goodwin)

• On chartism:

  • "Most of the data we use to talk about the future is inherently unreliable." (20:17, Tom Goodwin)
  • "We need to get better at having confidence in beliefs which are not necessarily supported by accurate data." (21:12, Tom Goodwin)

• On innovation PR vs. substance:

  • "If you try flying transatlantically with one airline powered by biofuel, you will get some press... If you re-engineer the booking engine so you can change your flight online, you won't get any press." (22:37, Tom Goodwin)

Timestamps for Key Segments

• Tom Goodwin introduces himself and his motive for writing (00:35–03:02)
• Defining Digital Darwinism (03:49–04:41)
• Lessons from electricity, historical analogies (05:12–06:29)
• Siloed innovation & advertising industry critique (07:07–08:11)
• Boiling frog analogy for complacent companies (08:30–09:40)
• Virtue signaling & superficial innovation (09:50–10:58)
• Critique of financial/investment models (11:06–12:52)
• Leadership incentives and risk aversion (13:17–14:07)
• Netflix as a model for proactive change (14:20–16:12)
• Self-disruption debate—industry differences (16:30–17:34)
• Acquisitions vs. internal innovation (18:23–19:30)
• Dangers of 'chartism' and data worship (19:58–21:12)
• Innovation theatre vs. meaningful change (22:00–23:12)
• Closing recommendations & where to connect with Tom (23:51–24:13)

Conclusion/Recommendations

Tom Goodwin’s Digital Darwinism stands as both a warning and a rallying cry: companies must face the realities of change head-on, embrace uncertainty, and think deeper about their role in a world where technology and consumer behaviors shift rapidly. The episode is filled with practical wisdom, memorable metaphors, and challenges to business-as-usual thinking—essential listening for anyone involved in digital transformation or organizational strategy.

For more on Tom Goodwin’s book:

• Website: www.digitaldarwinismbook.com
• LinkedIn: Tom Fgoodwin