Sunday, October 29, 2017

ECHO CHAMBERS: Trouble For Entertainment And Toy Companies



Tablets, electronics, video games, the economy, Millennials, these things are causing big declines in the toy industry! 
NOT TRUE!!

Rotten Tomatoes, Rising Prices, Video Games and SVOD are causing the decline of the movie industry! 
ALSO NOT TRUE!!

Yes these factors are at play but there is a much more profound reason for terrible movie summers and major toy company and retail failures and declines. There have always been changes happening at a rapid pace and we could spend a great deal of time debating how fast those changes are coming and whether the speed of the change is to blame.

The practical truth is that it doesn’t matter how fast the change is happening, HUMAN SYSTEMS ALWAYS HAVE TO ADAPT! Storytelling must keep pace and even lead. Play itself has always evolved and so must the toy companies. Those that can’t, become history.

Some learn to see the changes coming and evolve but truth be told, usually there is a long and painful decline or acquisition in the story creating the impetus to do things differently.

Beyond a certain size and age, companies, and all repetitive human functional constructs, inadvertently put well defended “ECHO CHAMBERS” around themselves.
These echo chambers get created by cultures that form based on past successes that become inflexible expectations making the company incapable of imagining the changes happening let alone reacting to them.

Echo chambers are extremely effective at blinding the organization’s ability to see the changes coming and pro-actively evolve.

As a result, much of the new successful efforts are found and exploited by the mid and small sized companies.


Sure there are some big companies evolving successfully into the future. They are the ones who are at least partly functional at embracing seeing change and activating on new ways of doing things. why is this true?

First we need to understand what an "Echo Chamber" is:

  • An inculcated systematic way of functioning that edits incoming information and internal discussions and actions down to only ways of thinking that are approved.
  • The result is that an echo chamber becomes an extremely effective filter blinding your company from seeing changes, new ideas and evolution that keeps pace with how the world is changing.


Echo chambers serve some very powerful functions:

  • Defense of Power – Suppressing ideas, opinions, projects and discussions that could eclipse, exceed, negatively contrast or lessen an executive’s or group’s political currency.
  • Adaptive Justification – The creation of post-mortem reasoning, conclusions and ultimately rules that internally deflect blame for your actions. (this can be particularly damaging because it’s largely false and even if parts are true, they may not be true tomorrow)
  • Reinforcement of Rinse and Repeat – Efficiency, repeatability and predictability are important elements of profitability. Organizations measure and compensate based on this and often unintentionally put in place powerful incentives to create and defend echo chambers.

What are the effects of an echo chamber?

  • It’s simple. Results become the definition of madness: Repeating the same behaviors over and over yet expecting a different result.
  • Company executives of inflexibly declining companies may direct or accept certain “initiatives” aimed at stemming the decline but those efforts are largely insufficient to the task because the extent of the market and audience change is being denied due to the dogmatic rules the echo chamber has institutionalized.
  • The daily functioning environment has become highly politicized.

What are the symptoms you are in an Echo Chamber?

  • Expressing Rebel thinking is discouraged or Punished (this is very often disguised as “not a team player” feedback)
  • Meetings focus on consensus not alignment (consensus means everyone agrees but alignment means everyone understands. Innovation is about leadership and risk. Companies must be good at identifying the first and willing to embrace the latter.)
  • Those charged with creating ideas, product, strategy or plan edit their ideas down to only what they think would be approved by management. (Out of the box thinking is critical. If the longer you are at a company, the less ingenious your ideas are, you are doing “reductive editing!” Get them to change or move on because it is changing the foundations of how you think.)
  • These same people talk a lot about their “fears” when on personal time. (Echo chambers can be dangerous places for people with ideas that stand out as different)
  • Employees, especially the executives, make little or no effort to regularly meet with others well outside their usual daily business circles. (This is especially critical because top executives can easily get trapped in echo chambers made by other executives skilled at “managing up.”)
  • Employees feel they have no time or support for enrichment activities (no seminars, no in-house guest speakers, no travels to enrich thought)
  • When hard times happen it’s largely the troops let go and not the chiefs. (Echo Chambers result largely from management and leaders.
  • Research has replaced vision. (Echo Chambers especially like research. It removes responsibility for decisions, especially decisions about the next steps for your audience. Research can give you valuable observations but insight can only come from the right talent looking past what has been into what might be. Audience’s cannot tell you what that is. It sounds corny but it’s the Steve Job’s effect: YOU HAVE TO FEEL IT!)

How can your company escape or dismantle its Echo Chambers?

  • Change out the executives who are creating and defending Echo Chambers. Those who rise because they can keep other ideas and efforts from the room are not your hot employees… they are driving them away. no matter how successful these execs may have been, today’s fast changes always bypass those in echo chambers.
  • Enrich!! Aggressively bring in outside thinking, experiences, ideas, etc.
    • Sometimes this is people or companies in your industry
    • Sometimes its outside your industry
    • Consultants can be great if they know how to speak truth to power!
    • Support tangential interests
  • Change your reward structure! If you aren’t rewarding for behaviors that bring in new ideas and take more risk, you won’t keep pace with change.
  • Risk! The future is only yours if you take chances. There are no absolute guarantees. Be smart but do so by letting other ideas into the room. This also means placing bets. When change is happening fast, this is of utmost importance. Don’t keep rounding the corners off to make it fit.
  • Innovate in business plan! Echo chambers effect everything they touch. Most profoundly, they solidify how you do business and the structure of your business plan. How your money moves and what it touches must also evolve or any of the other changes you make will become ineffective and rapidly return to old behaviors.

Net/net, the blame for decline brought about by marketplace and audience changes doesn't belong with those factors. It belongs with the culture within those companies that has created Echo Chambers. Human beings, especially those with talent and vision, are built to sense and see change. It's why we're so successful as a species. When it doesn't work over and over again, it is time to fix the culture.
Cheers, Kevin