Don’t most people notice the weather?  Yes, but they don’t respond to it.  In my home state of Michigan, there were signs as far back as the 1970s that the auto manufacturing jobs on which so many relied were leaving the country.  By 1994, Michael Moore had made his movie “Roger and Me,” about the horrific effects of outsourcing on his hometown of Flint.  Word was out.  I personally had two friends who took it upon themselves to get new training before their manufacturing jobs disappeared.  They started to ask themselves and their friends: is there any reason to think the number of auto factory jobs is going to go back up again?  Is the work I do so special that it will be necessary no matter what happens to the auto industry?

When they thought about these questions, they realized the answers were no and no.  So then they looked around for industries where the weather was better.  Online sales were growing every year, and one of my friends had always liked and been good with computers.  The population of elderly people in Michigan was growing, and my other friend – a big, burly guy, the last person you would have guessed – had always had a feeling for caring for the elderly.  In the end, one became a website designer and the other a nurse.  Yet most people with jobs in the auto industry kept going to work as if they didn’t see the storm clouds or feel the first drops of rain.  Either they felt the sensations and didn’t think about them or they had no way to apply their creativity to what they observed all around.

How can you shift from passive notice of the weather to active response?  To begin, make time to reflect on the larger changes going on around you.  Instead of using all your time to check items off the to-do list or kick back and relax, give yourself a half a day a month, or two hours here and there, to watch the weather.  Put it on your calendar.  Treat it as one of your most important meetings.  When the time comes, learn about changes going on in your area and your industry.  How could you start?

  • Read a news magazine or industry publication that you normally skip
  • Replace an hour of “entertainment” television each week in favor of a news or documentary program about an issue you are concerned about
  • Browse an online news aggregator such as HuffingtonPost or Google News, that gives a wide range of experts and observers a place to comment on the trends they observe
  •  Make use of the expertise and experience of the people all around you.  Make a point to talk to different folks at community gatherings – at a party, after religious services, at a school event – and ask them what’s new in their business or their neighborhood.  Where do they see opportunities?  Or what has them concerned?
  • When you travel, talk to the people traveling alongside you.  The person next to you on the bus or plane, or in the seat nearby when you stop for a bite to eat.  The driver of the airport shuttle or the taxi.  Are things changing around here?  What’s on their minds?
  • Join a group on Facebook or another social networking site that provides neutral information on big-picture issues that concern you – health, education, finance, etc.  Remember that the goal here is to choose a group that will expose you to new points of view, not just reinforces the views you expect to be true.
  • If you have children in your life, discuss issues of the day that get raised at your child’s school.  Work to help them develop a big picture perspective.  As you help them to think for themselves, you may find that they are learning things or encountering situations that are new to you as well.  

In any of these ways, you can begin to become aware of the changes on the horizon.  But don’t just sit alone to wonder and worry – find others who are interested in watching the weather and discussing the longer-term possibilities.   “I saw on Huffington Post that X and Y.  Do you think that will happen here?”  “I read in the newspaper that …” Start an ongoing conversation, with others and with yourself.  Conduct thought experiments: When you look up at the sky, what do you see coming?  What might that mean?  Is that something that’s going to matter for you?

The most important thing is to remember that you are starting a learning process that will take time.  If you spend one afternoon learning and talking, chances are you won’t end the day with any answers at all.  That’s exactly where you should be.  For now, your goal is to establish the innovator’s habit of looking up and identifying some clouds you need to keep an eye on, some areas down the road that are expecting sunshine.  


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A few years before the Great Recession, I was an advisor to the Federal Reserve Bank. I provided some limited advice on how to stimulate growth through innovation. It was too little, too late. Many financial experts far more capable than myself tried to help prevent the imminent collapse. But the politicians were sure they knew more about our economic system than the experts. Hindsight proves they knew very little and it was the everyday American who suffered from their ignorance and arrogance.

So here we are again. Less than a decade away from our brush with economic Armageddon, we are deregulating the financial industry. We don’t need the Dodd-Frank Wall Street Reform and Consumer Protection Act because the same financial institutions that were too big to fail (but required trillions of dollars to bail out) will apparently regulate and police themselves. It’s like returning to the honor system when half of the class was caught cheating and still failed the exam.

On top of that, the big investment banks have now invented something called spread networks. Author Michael Lewis brought these to light via his bestseller, Flash Boys. Basically, these networks give big banks an advantage by executing trades faster than everyone else, allowing them to buy lower and sell higher than the average Joe. While these spread networks game the system that the banks themselves created, the bigger problem is that they trip trading algorithms in other financial institutions. Forget irrational exuberance – this is artificial exuberance. These systems are not responding to market dynamics. They are creating them.

Ironically, investment banking itself was created from the outside-in. In the eighteenth century, inherited property was the only pathway to wealth. Mayer Amschel Rothschild, a Jew from Frankfurt, helped create many of the financial innovations we still recognize today: global banking, bond markets, foreign exchange and arbitrage. Rothschild, who endured pogroms and daily doses of anti-Semitism, developed imaginative ways to infiltrate a system designed to keep people like him out. Today, the biggest innovations in finance are largely happening outside of the financial community, as well. Digital cryptocurrencies, like Bitcoin, are emerging as viable financial alternatives. They’re basically managed via a continuously growing distributed database called a block chain. All users have a record of all transactions all the time, which means no hidden fees, accounting errors or hacked accounts. In other words: No bank needed.

Innovations like Bitcoin can disrupt more than just financial institutions. They can move independently of borders and the laws that govern nations. They can be used for illicit purposes without detection. Most importantly, since the government has no line of sight, collecting tax on these transactions is almost impossible.

Increasingly, digital innovations are being used to bypass ATM fees, deflect overage charges, and switch credit card debt to lower cost alternatives. They provide lending networks that are an affordable substitute to predatory payday loans, as well as algorithms that predict the credit worthiness of people with no credit history. And these are just the beginning. In the near future, artificial intelligence software, along with open and pervasive internet access, will make it easier to disintermediate the big banks. The ability to connect lenders with borrowers, manage complex corporate transactions like mergers, and invest capital productively will no longer be the monopoly of the banks.

While our largest financial institutions are lobbying to recover the freedoms they enjoyed before they destroyed the economy a decade ago, entrepreneurs are innovating their way around them, creating a financial future that will make banks more and more irrelevant. Which makes one wonder if someday, we’ll hear the phrase “Too Slow to Fail.”

Jeff DeGraff is the Dean of Innovation: professor, author, speaker and advisor to hundreds of the top organizations in the world. Connect with Jeff on Twitter @JeffDeGraff.

This article was originally published on The Next Idea

A recent headline in the Financial Times read, “Vancouver seizes chance to lure Silicon Valley tech talent.” The mayor of Vancouver confirms that inquiries from U.S. tech companies have risen sharply in recent months.

It’s no secret that Cisco Systems, Samsung and SAP have recently established a presence north of the border, but now it appears that Apple, Microsoft, Google and Facebook are all also considering their options. If this tire-kicking becomes a trend, it will compromise America’s ability to remain a global leader in technology.

According to a study in a recent California Management Review, the re-urbanization of America and other parts of the world is leading the collaborative innovation revolution. The demographics of these cities are very different than those of their surrounding areas. Austin, Madison, Raleigh Durham and Ann Arbor come to mind. These cities are also job-creating juggernauts that build a strong tax base and attract service businesses and more start-ups. They are innovation ecosystems that are vital to sustaining a high standard of living in a competitive world. What do these cities have in common? They are highly diverse.

Diversity is an essential element of an innovation ecosystem, because it brings a wide range of mindsets and talents into close proximity. The constructive conflict produces solutions to intractable challenges and creates irresistible opportunities. These people are deviating from the norm on purpose. The greater the variance, the greater the potential value.

In Eric Weiner’s bestseller, The Geography of Genius, he makes the case that most of what we would now call intellectual property has historically come from a relatively small group of people who are in the same right place at the same right time – think Athens in the Classical period, the Florentine Renaissance, Detroit in 1900 or Silicon Valley in 2000. In most cases, these places were anomalies that were eventually forced to conform to the norms of the larger homogenous area. Predictably, the loss of these communities was also a portent of the rapid decline of civilizations that traded their future for the past.

Today’s innovation ecosystems can be anywhere on the planet. But it’s interesting to note that over half of all the high quality patents have come from innovators born outside of the U.S. or from first generation Americans. Some survey data even suggests that immigrants are five times as likely as native-born U.S. citizens to produce a patentable innovation. We see similar trends for start-up businesses. This human capital brings innovation into our country from all corners of the world.  But it can just as easily go somewhere else, and the rift between the current administration and Silicon Valley makes that more and more likely.

In fact, it’s already happening. Research universities, the innovation engines for the U.S. economy, are facing increasing visa hurdles for students, postdoctoral fellows, and researchers. This is particularly ominous because these people are our next generation innovators.

There are innovation ecosystems in cities all around the world: Bangalore, Cambridge, Santiago and Tel Aviv – and let’s not forget Toronto, Montreal and Vancouver. Maybe we should consider building a wall between the U.S. and Canada to keep our best and brightest at home. Then again, such a wall would just likely be a colossal waste of money because these bright folks would just find a new way under, around and through it.

Jeff DeGraff is the Dean of Innovation: professor, author, speaker and advisor to hundreds of the top organizations in the world. Connect with Jeff on Twitter @JeffDeGraff.

This article was originally published on The Next Idea