 All right, everybody's got their seats. You're back. Yeah, your supervisors must be so relieved. I'm joking. You know who you are. OK, welcome back to day two of LetEx. I'm not sure we're going to give you even more energy today and more insights than yesterday, if that's even possible. It is. I'm telling you. On that note, I do want to say, if someone has seen this event grow over the years, I have to say thank you to all of you for the time and attention that you're giving to us and to all the speakers. I didn't know some of you have traveled far. And that's not lost to me. And I want to say thank you for making the time out of your schedules and making your travel arrangements to be here and to join us. And speaking of making it worth your while, we'd love your feedback. And if you look on the back of your programs, not only will you see the hashtag, you also see a QR code. And when you scan that, it will take you right to the feedback form. No need to comment on the MC. We've got that taken care of. So let's get back to the business of learning. Today's first speaker, Dr. Jeff DeGraft. He is the Professor of Management and Organization at the Ross School of Business at the University of Michigan. His mission is to democratization of innovation. He brings innovation to everyone, bless you, every day and everywhere through his books, his public television program, his columns and his radio program. His articles and thought leadership on contemporary business matters have been covered by Business Week, US News and World Report, in the Wall Street Journal, just to name a couple. He's an advisor to Fortune 500 companies, a top innovation speaker, a business professor at the Ross School of Business, and a best-selling author. He's also a managing partner at Innovatrium, an innovation center and consulting practice that specializes in teaching companies how to grow and become more innovative. He's worked all over the world with significant experience in Europe and Asia and in most industry and market segments. Ladies and gentlemen, someone who makes me want to work on my bio, welcome to the stage, Mr. Jeff DeGraft. Thanks, Mo. Thank you. Good morning. I want to start with a question. What if Adam Smith was wrong? You know, the whole pin factory, the farmer's market, that we compete with each other and everybody gets better and those people who can't really compete are the ones that kind of fall away. What if he was wrong? Now, I want to give you a real contemporary example of this. So I think the bravest leader in General Motors in the past 100 years, since Sloan, is probably Mary Barra. And if you live anywhere where there's a large plant, you're probably figuring out right now that she's closing that plant. And what she's doing is she's raising money to make electric cars. Now, you'd say that makes a lot of sense. Tesla's doing pretty well this past year. They've sold 365,000 cars. Interestingly enough, there are 80 million passenger cars sold in a year. So 365,000 cars is rounding error. And Tesla incidentally hit its target finally in 2019, but it hit its target for 2015. And they only lost $700 million at the end of the year. And yes, it's a great story, but there's a problem. And the problem is the passenger car market has lost 5% in sales for the past three years. Ironically, during the same period of time, ride-sharing globally has increased by 15% a year. This is what we call a diffusion curve. It means something is going up and something is going down. So what's interesting is Mary Barra is investing in the very kinds of technology that are getting scarcer and scarcer and scarcer. Now, where is the innovation in Tesla? It's easy to see. It's the technology, right? We love tech. I have a PhD in technology. Where is the innovation in Uber? The innovation, think about it. Think about the app. It's terrible. Think about the way the companies run. They're being sued by everyone. Their IPO was awful. It looks like an over-the-road trucking company. The innovation in Uber is that people will get in a car with strangers. It's a social form of innovation. It's not a technical form of innovation. And yet, what we're doing is we're pursuing the devil we know because it's always better than the devil we don't. Now, don't believe that interestingly enough. These are the 50 top car companies in the world. They're worth about not quite $2 trillion collectively. These five digital companies called the Fang companies are worth almost $4 trillion. We are now living in a world where the value of digital data is infinitely more valuable than any hard lumpy objects we can create. Who's gathering more data? Tesla or Uber? Uber knows where you're going. Uber knows where you've been. Uber knows everything about you. Does everybody see where this is going? You're looking the wrong way. Mind the gap or you're going to come road pizza. Every man takes the limits of his own field of vision for the limits of the world. How many have a troll on their social media page? Somebody went to high school with, oh, it's Phil. Phil's a great guy. Then all of a sudden Phil starts going on about GMOs. It's all about GMOs. And what happens when you try and correct Phil? Does Phil take the data? Does Phil go, oh yeah, that's really good information. No, what's Phil do? He goes radical on you. Then all of a sudden, if he does it enough times, you hide Phil, don't you? And then after a while, you say, well, we went apple picking in Washington state with the kids. And Phil does what? Oh, GMOs, apples are the worst. The world's owned by Cargill. And on a dark night, on a dark road, you unfriend Phil. The Spanish Inquisition couldn't have thought of it. All the good people are the people who believe all the same crap you believe. And the bad people are the other people. And you wonder why we can't change our mindset or grow. Well, I want to tell you about a story I read. There was a story in Forbes magazine around Christmas. And it basically said the Chinese company Alibaba is to Amazon what Amazon was to Sears. Now, this makes a lot of sense. This is a kind of a one-to-one correlation. And the article was basically saying on November 11, Friends Day, Alibaba sold $25 billion worth of merchandise. During Black Friday, Amazon sold about a quarter of that. So the point they were saying is Alibaba's the new model and Amazon was the new model to Sears. But I want to say, you know what? How you tell a story really matters because the moral of the story is very different. I want to take umbrage with that and say, Sears actually got to the future way before anybody else did. Does anybody remember when email started? It was a company called CompuServe, right? Sears. Anybody remember where industrial investing started? In a consumer way, it was called Dean Witter. Incidentally, their child was called Morgan Stanley, right? Anybody remember what happened with commercial real estate when it became available to UNI? It was called Caldwell Banker. What's the first card that had benefits and cash back? It was Discover Card. What's Before Geico? What was the first insurance company to bundle? It was Allstate. Before eBay, what was the first trading portal on the web? It was called Prodigy. Some of the older guys were going, yeah, that's right. The moral of the story isn't that Sears didn't get there first. Sears got there first. What they did was they didn't know how to think about it differently. Let me tell you what we learned from Sears. First of all, lack of focus. See if you can relate, Airman. Too many things, too many people, too many moving parts, too unrealistic timelines. We're gonna have innovation now. Instant innovation. Doesn't work that way, does it? Surrendering to external pressures. There's always a hater. There's always somebody on you. Always, that's the nature of the world. Failure to integrate and synchronize. I want you to think about all the innovation assets you have at the Air Force. How do they go together? How do you actually use them in war fighting? The old guard waiting out the new. The way it worked in Sears is you ran a store. And if you ran a store, the whole notion was that was the way to the top. So all the new people, while you young people out there, what they did was they waited you out. Oh, he'll rotate out in two years. That'll be the end of that. Yeah, a little early, sorry. Finally, pursuing the past. Yes, you have a glorious history. That's why I'm here. I love you. You have a wonderful history. But it's not about your history. The worst of all strategies is an increasing share of a decreasing market. The Worthington Saddle Company of Hartford, Connecticut made two million saddles in 1900. They're the best saddle maker in America. They made 10,000 saddles last year. You can't pursue the past. The trouble with the world is not that people know too little. It's that they know so many things that just aren't so. And that's what we're gonna talk about today. We're gonna talk about how our dominant logic, our way of thinking gets in the way of our ability to innovate. Now I wanna start with a personal story. In the early 1980s, I got a call from Steve Jobs. Nice person to get a call from. And he said, I'm gonna do a project where I'm trying to teach people how to read, people who are illiterate, by using computer technology. And this is when the disks were big and the computers were big as well. And so we did a project and it was a lot of places around the United States and included Los Angeles and Detroit and a whole bunch of other places. And when we got done with the first iteration, because we thought the problem was these people did not have access to technology, what we noticed in terms of their illiteracy rates is they didn't go down, they actually went up. We spent all the money in technology and we didn't solve illiteracy. So about 1990, when I first became a professor at Michigan, got a call from Life Magazine. And this was at Life Magazine when they were about to go out of business. So they were doing an issue on the 100th, 100th most important people of the 20th century. And the woman called me and she said, I wanna talk to you about innovation. I felt pretty good about it. She said, I wanna talk to you about Robert Fair to graph. And I said, you're kidding me, I'm a to graph. And she said, yeah, I wanna talk to you about your great uncle. Now truth be told, my father didn't belong to his father. I didn't know anything about the side of the family, nothing. So I had no idea that somebody on this side of the family actually did something. Well, it turns out he was the man that invented paperback books. He created a company called Pocket Books. Interestingly enough, when he passed away, somebody in the family sent me a biography that had been written about him called Tubic Culture. And in the biography, what he talks about is he spent his whole life creating this whole idea to make books accessible to every one of you at train stations for two bits, for 25 cents. And his thought was it would correct what? Illiteracy. He thought he'd get over illiteracy with a technology just like I did. Interestingly enough, about 10 years after that, I was talking to a friend. I was on vacation in Florida. And a friend said, I'm doing this amazing thing in Kalamazoo, my hometown. We've got a family that's got a billion dollars that are gonna raise a sinking fund so that everybody who graduates from high school in Kalamazoo, and this is a fact, it's a fact of this day, will go to college for free. It's the way us Dutch people do things. It's very sort of Dutch view of the world. Interestingly enough, the Kalamazoo promise went on for 10 years, a billion dollars sending everybody to college. And the object was it was going to shrink the achievement gap, the difference between the people or the top people and the people who were struggling on the bottom. Guess what we learned from the study when we were done the first 10 years? The achievement gap go down? No, it got bigger. Here's the point. You believe technology and strategy and process will solve everything. It won't. You have to think differently. If you don't think differently, the money is ill spent. Now what I wanna talk about is a very important thing to every airman here. I wanna tell you that the future has come and gone and you missed it. Yeah, I wanna talk about what kind of mindset we're gonna have to have a creative mindset in this new world of work. So many things that you think are gonna happen someday, what I'm gonna point out is a bunch of facts. And I'm gonna point out in these facts that these things aren't going to happen. Actually, they've happened. You're looking in the rear view mirror. So I love what the famous philosopher Kierkegaard said. He said, life can only be understood backwards, but it must be lived forwards. Or as my dad says, youth is wasted on the young. That's what he means. Now, there is no data on the future. You know what the number one form of resistance to the future is? Excessive data collection. You get stuck in the planning cycle. Who's been to the meeting about the meeting? Who's been to the report about the report? You know what I'm talking about. You're not making movement. You're not running the experiment. Seeing the future first, what I do for a living is hard. It's hard because there's no data on the future. Seeing what happens after that is way harder, right? And finally, seeing your own blind spots is the hardest. Your own dominant logic, your own blinders. The art of progress is to preserve order amid change and to preserve change amid order. This sounds like fashion talk. This year's fashion is tall but short, round but square, it's off but hard. Now, what Whitehead is talking about is saying what every adult who's been successful knows about their life. Part of my life is incredibly scripted. Every minute of my life, there's a page. I'm supposed to be here. I'm supposed to be there. This is what I'm supposed to do. And it reduces variation in everything is standardized. And I've got all kinds of cost discipline in my life and it's very vertical. I've worked very hard. I have all my chevrons. People have to kiss my ring and salute and all the normal stuff, just like you, right? And I go, yeah, I earned it. I won a few bar fights. But there's another part of me, isn't there? And that part is I wanna grow. That part is I wanna be relevant in the future. So I increase variation. I increase diversity. Remember, innovation is a form of deviance. Positive deviance, but deviance. I want to be agile. And in order to do this, I have to be horizontal, meaning I'm gonna have to do things in a different way. Not in the hierarchical way that I've always done them. I'm gonna have to find a new way of doing this. Now, for most of you, this is a conundrum. For most of you, this is something you really don't want in life. And what I'm gonna tell you is this tension, this conflict is the actual lifeblood of creativity and innovation. It is from this tension. You heard Safi talk about it yesterday. I've been writing about this since the early 80s. This tension produces hybrids. It produces better ways of thinking. And when we look at Wall Street companies and the fastest growing companies in the world, the top 8% of the companies for the past 30 years have this tension. It's not bad. You have to learn to live with it. Now, most of you have seen this model. I'm one of the authors of this model. I'm not gonna spend any time on this. But it basically, it's called the competing values framework. And it's called the competing values framework because it means everything costs something. If someone says, oh, there's no downside to this and everything's free, they're trying to sell you something or sleep with you, one or the other. Everything in this world costs something. Get used to it. Now, in my last book, and a lot of you have read this book, I talk about the creative power of constructive conflict. The same thing Safi talked about yesterday. The notion is when these things come together, we grow. But in order to do that, we're gonna have to encounter people who don't think like we do. We're gonna have to encounter people who are the loyal opposition. So let's operationalize this model for the future. Let's look at the create position as creativity. And let's look at things that are going on in our world like creativity clusters. Do you know that 21 places in the United States produce almost all the intellectual property? I happen to live in one. I live in Ann Arbor, Michigan. Only has 116,000 people. It has over $2 billion in venture capital. It has more venture capital per person than any place in the United States. It's a flat place. It's really cold. There's nothing special about it. The notion is what makes it unique is that other people who are innovating are staying there. Silicon Valley, the research triangle. Austin, you pick your poison, right? It can happen anywhere. Madison, Wisconsin. Next, the opposite of that, let's look at technology. Let's look at things like smart devices, pervasive communication. Let's look at what's going on with AI. Let's look at the money point of view, which is the compete quadrant. Let's look at what's going on with blockchain and fintech, which is a huge industry. And finally, let's look at yellow. Let's look at the whole social piece of this, right? Is anybody noticing? But for the first time, we're seeing presidential candidates who are using words like socialism and they're being widely accepted. Something has changed here. Something has changed. Pay attention. You can like it or not like it, but you better pay attention to it because it's coming to a theater near you. Now, in order to know what's gonna happen next, I want you to start thinking, I want you to start thinking in terms of probability and impact. How probable is it that this is going to happen and what is the impact? So when somebody says, you know, someday a meteor might careen towards the earth and hit the earth and kill everybody, the probability is probably not that high because it hasn't happened in a couple million years, but the impact would be very high. On the other hand, if somebody said there might be a pandemic, right? Where people go get sick because human beings carry diseases that mutate, the probability would probably be very high and we would be trying to gauge today the impact. Somebody following this, probability and impact. If you don't follow this, here's a simple thing, go watch the movie Moneyball about three times. That's what we're doing. We're trying to figure it out as we go along. We're trying to accelerate the failure cycle. That's the way we're gonna see the future first. So let's start with the creative point of view, that green point of view. Let's start with some provocations. So I'm here to provoke you. Some things to know. Do you know starting in 2016, the Boston Consultant Group looked at how many STEM graduates, technological graduates the Chinese produced against America. Do you know it was eight times as many? Do you know that this year it's 10 times as many? So when I hear Americans say, well, you know, we're way more innovative than anybody. 10 to one, really? You're gonna get out of bar, 10 to one? You think you're that much of a badass? Right? Yeah, good luck to you. The second thing is look at technology spending, what's called late stage R&D spending. The Chinese in 2018 outspent the United States by 100%. So we are now in a world where they are 10 to one and they're doubling what we've got. Somebody following this, this is not going to happen. It happened and you missed it. It turns out in 2018, the US fell from the top 10 most innovative countries when we look at patents applied for. It turns out that we're having a dwindling number of scientific people that create these technologies, mathematicians, technology, et cetera. Do you know that over half of all patents awarded in Silicon Valley to tech workers in 2018 were people who were either first generation Americans or weren't born here? Do you understand where innovation's coming from? And incidentally it always did. Ask yourself where Cyrus McCormick or Isaac Singer or Tesla were from. They weren't from here. They came here to apply their trade. Immigrants are much more likely to hold a doctorate in these areas. And the result of standardized testing apparently shows us that our children not only are becoming dumber but less creative. That is the current reality where we find ourselves, right? How many want to compete with this group? So what are some observations? Innovation creates wealth and security. Declining innovation abilities and stature put us at risk. And finally, STEM is morphing into steam meaning that we're adding creativity via the addition of design and education. A couple other highlights about this, the story of immigration is the story of innovation in the United States. And finally, our school system basically hasn't worked and what's happened to us as Americans is we've created a class society. So the professional class or the creative class are the best people in the world. And then there's a huge gap that used to be the middle and then there's all the bottom. Are we gonna be able to compete with this? Here we are at a university, right? We're gonna need more than that. So let's look at technology. Let's look at the other side of this. Let's provoke ourselves in technology. What's going on with technology? Well, the adaption rate of technology has greatly accelerated. So it took about 50 years for us to get electricity into the farms, if you will. But it only took four years for smartphones. How long do you think it's gonna take for the internet of things, smartware? How long do you think it's gonna take to get a augmented reality and artificial intelligence into the field I come from? How long do you think that's gonna take? It's shrinking, it's shrinking, it's shrinking. These are called Schumpeter's Gale or innovation cycles. And what we're noticing is they're getting shorter and shorter and shorter because not only you are innovating but machines are now having babies. Machines are creating machines. That's the world we're living in. So a few sample points. It turns out that in 2016, there was about half of a billion wearable devices. We know now that there's a 20-fold increase of that. So what that means is you know that phone that you hold in your hand? In about 10 years, you won't have it anymore. You'll have something else, right? This is hard for people to imagine. You went from the computer to the phone. Now you're just gonna have pervasive technology everywhere. You're gonna talk to your clothes. The technology sector is about 25% of everything in the S&P 500, which means the entire economy, which used to be on cars and heavy material and banking is now on these kinds of digital things. What Safi was talking about, things that are not tangible, things that exist in the ether. It turns out that the fastest supercomputer right now in the world, I worked on one in the 1980s, is now in China. I don't know if you know that. And it turns out that the former CEO of Google, a former Michigan student I might add, says that he believes that China will pass the U.S. and artificial intelligence in 2025. And finally, if you start looking at what's going on at Baidu in Tencent, and what's going on at Alibaba in China, where we have pervasive technologies that are all talking to each other, it turns out that they're using AI. Now they're not using AI, maybe in the constructive, helpful, democratic way that we are, but they're here. So what are we gonna take from this? We have to take the technology, not only is happening, it's rapidly accelerating to the point where the technologies that we have now, the shelf life of them is very, very short. And likely to get shorter. It turns out that hard lumpy objects are probably not what the future is about. It's probably about this ephemeral stuff, what's coming, what's going, supply chain issues, issues about what are the other guy thinking, issues where computers are actually able to do what are called juristics, recipes for thinking, algorithms for the brain. And finally, the technology will exist where? It will exist everywhere. And why is this an issue to you? Because the issues of state and national boundaries are being blurred. Your next great competitor isn't gonna be a nation state, it's gonna be non-state actors. It's gonna be people who are using technology to blur the lines of what we think, what we think our nation states and our world looks like right now. And you're seeing that more and more, even domestically. Provocations about money. Yeah, now we're gonna talk about real stuff like money. It turns out when we look at the S&P 500 and we look at the top companies in 1998, we're going back here, it's a couple years old here. We're going back about 20 years. It turns out that most of those companies were all kind of companies. Pharmaceutical companies, people who made stuff. You know, people who made tangible things, people who got oil out of the ground. In 2018, what were the most valuable companies? None of those companies made the list, none. So the whole world about what's valuable has completely shifted. It's not going to shift, it's shifted. And it shifted about 20 years ago. So what I'm asking you to think about is why is it taking us so long to get this, right? We haven't been attacked with military, we haven't been attacked directly. Have we been attacked digitally? Yes, over and over and over again. Those are the new table stakes. So what are our few sample data points about this? Well, it turns out that America always said it was the largest economy. This is according to the World Bank. These all come from studies, incidentally. The World Bank says that what's called purchasing power doesn't mean what the actual number is because we float our currency, the Chinese don't float the yuan. They don't peg it. It turns out that the Chinese became the largest economy in the world in 2014. Meaning what they have and what they can buy is bigger than we are, right? Anybody who's my age, did you see this coming? We didn't see this coming. When I was a kid, we used to collect money for pagan babies. You know, the whole notion was that it was never going to happen. Well, the dragon woke up. 45% of all US commerce and 55% of all growth comes from Amazon. Does everybody know that? The whole world has turned to Amazon. Amazon, not only is 50% of what happened last Christmas, is 50% of all the growth that's happening on the web. And if you think when the government says, well, we're gonna put the clamps on Amazon, how much of the web runs on AWS? 89%, good luck with that, right? There's no way you're gonna do that. That's just a bunch of talk. Talk's cheap, it takes money to buy whiskey. Now there's one other thing you ought to be concerned about. You hear about the 1%, the 1%, the 1%, well, it turns out over the past 20 years, over half of all the companies that were publicly traded on exchanges are no longer on the exchange. There was about 12,000 companies, it's close to 4,000 now. Why? Because of private equity, right? The Michigan Mafia, the Black Rock guys, the State Street guys, the Chicago boys, the Harvard boys. And what they're doing is they're taking money and they're buying all these companies back in portfolio. Now you might think that doesn't affect you. You might think, well, the five people that we have contracts with, the Pentagon to build, are all airplanes, they've got subcontractors and those subcontractors have duplication. Except the tier two companies belong to what? They belong to these portfolio players. So they might have 10 of these in their portfolio, right? They've got leverage over you. You don't have leverage over them. Pay attention to what's going on. 1% of the economy now owns almost half of all the wealth in the family. Last year, last year 1% received 82%, two years ago, 1% received 82% of the global wealth created. The rich got richer. We are now in a period of high efficiency capitalism. Now you're laughing and going, well, that's true. I feel that. Well, what does that mean to you? What happens when you have a society that has disparate gap in wealth creation? Are they likely to sit on their hands? What are they gonna do? They're gonna start by voting. If voting doesn't work, what are they gonna do? They're gonna start by passive aggressive. We're not gonna ride the bus. What happens after passive aggressive? Now you have an agitated society. So the first time in my lifetime since the mid 1960s, I'm seeing a society that's agitated. Anybody else seeing it? It's agitated. The notion is this has everything to do with what's already happened. So when you start looking at this, you have to look at the shift in how wealth is created. You have to look at where the wealth has gone. You have to look at what the wealth and ownership does to your supply chain, your ability to build things in this economy, what it does with your peer adversary. The future has come and gone and you've missed it. Finally, probably the most important people. The whole world now is about talent and the provocation about people. Let's look at a couple of things about America that are interesting. Not total numbers, but does anybody know what the fastest growing group in America is? It's actually Asians. It's actually our Chinese, our Indians, our East Asians, right? Our Southeast Asians. And the second fastest group are multiracial people. I'm married to an Asian woman. I have multiracial children, right? This is the world we live in. So there's a whole lot of kids now who don't look like me. They look like a mashup. So the whole even categorization of who people are and what their culture is is kind of becoming blurry, isn't it? And incidentally, what's the fastest growing group? The fastest growing immigration group in the United States legally is no longer Mexicans or Latin Americans. It's actually the Chinese. Starting in the year 2000. So it's not going to happen. It happened. It already happened. So what we're doing right now is we're scrambling, we're scrambling for H1B visas in the tech sector. So the government tells us we have an immigration problem and you know what we do. We don't have enough of them. Our problem now is that Amazon has moved its tech center north of the border to Vancouver. Why? Was it an issue of real estate? No, Vancouver real estate's very expensive. It moved to Vancouver because they couldn't get enough visas to get the kind of foreign people they need to come in and do their technical work. That's an immigration problem in reverse, right? If you start looking at the fastest growing cities in the United States, they're not New York. They're Boston, Austin, Austin, Boulder, Durham, Madison, Ann Arbor, Champaign, Urvana, Charlottesville, Lawrence, whatever it is in your community. They're college towns. Highly diverse, highly skilled. The new class, the creative class. Millennials don't want to work for big companies. Do they want to work for, they want to go to the Air Force? Look at your advertising. Oh, look at, I'm fighting in a jet fighter. I'm jumping out of a plane and shooting people. That's not what this generation wants. They want to have impact. They're socially aware. They're good people. Millennials, don't let us boomers walk on you. You're good people. But you want different things. You think differently. We need you. You're the future for us. We love you, right? We have to change. We can change. Millennials now number boomers, but not at the ballot box. This is infuriating you youngsters. Yeah, we're old people that actually vote. We were taught to vote. You didn't vote last time. And boy, are you pissed. Yeah, I got it. Maybe next time you'll vote. Because you've opted out of society. You don't marry. Over half of all births to women under the age of 30 are outside of marriage. And when adjusted for education level, the more educated the woman, the less likely she is to marry. There's no financial reason to marry. I've been married forever, right? What's the number one fastest growing religion to people under the age of 30? No religion. I'm a practicing Roman Catholic, right? And finally, what do young people want to do? They're what we call post-capitalist society. That's why you actually embrace a term like socialism, which to a person like me is a real bad term. I'm a capitalist pig from way back. But the notion is it's a different world. That's the new world of work and more and more and more. You're feeling this in the rhetoric of politics, in the rhetoric of religion, in the rhetoric of all of those things that we hold dear. And remember what I said about conflict. Conflict when it's constructive is the lifeblood of our country because we are the most heterogeneous country on the planet. That is our advantage. We have a diversity advantage. So you have to know that social trends, like getting in a car with strangers, is changing everything. And you have to know that those changes are bigger than technological changes. They're changes in how we think. You have to know that the future is all about skills. People develop your skills. This is a huge opportunity. Air University is a gold mine. Come here and develop your skills. What did Herodotus say? War and outrageous fortune takes everything else. All you're left with in life is your family relations and your skills. That's all you have. And finally, you're gonna work differently in the next generation of the Air Force. Are you prepared for it? And I don't mean this just for young people. I mean people my age. Are you ready for this? This is gonna be very different. And if you don't change, you're gonna have problems. Now if you believe that there are simple solutions to complex problems, it's a safe bet that the only thing that's simple is you. The world is complicated. It requires serious people who are able to think creatively about complicated problems. It's not, oh, have you noticed lately everyone's an expert on virology? Have you got that Facebook friend? Oh yeah, you know how we're gonna stop the virus. Oh really? When do you go to school at Hopkins and work with the CDC for five years, you dumbass? Last week they were an expert in military strategy and monetary policy and everything else. Now, know who knows. If it sounds simple, it is simple. For simpletons, that's what it's for. Steve Jobs had it right. Think different. The future of the Air Force includes technology. I'm not hating on technology. I'm a technologist. But it means we think radically different about what we're doing. And that's what's required here. What's required is are we capable of keeping these constructive conflicts, this positive tension in our mind? Are we capable of operating in an environment where we have to have a spree decor and we have to have command and control, but we also have to grow this thing? Are we capable of taking advantage of our huge strategic advantage as Americans in being the most diverse community on the planet and using that diversity to our advantage because if we try and compete in a monological way in a straight up way, we have a competitor who's 10 times as big as we are. That's a guy with a Budweiser jacket who weighs 300 pounds in the bar who wants to fight with you, right? It's always that guy, right? And the little guy with crazy eyes has to do what? He's got to throw the first punch. He's got to be a little more creative. Otherwise he's going to be on the floor. So what is it you can do? Number one, you can stop believing that you can see the future. You can't see it and neither can I, right? I'm just giving you some data on the past. Make smaller and wider bets. Accelerate the failure cycle. Don't go big, go small and go wide. Choosing big over fast. Oh, one of the things I loved about the 08 recession, I was advisor to the Federal Reserve. I loved all those arrogant people who said, go big or go home. They all went home. Goodbye. Goodbye to you, right? Pick up your pace. Get out of the planning cycle. Start running. Mistaking your managers for change agents. The person who probably got your budget in order and figured out how to create efficiency in your supply chain is probably not the same person that's going to take you to the future. Encourage some deviance. When's the last time you worked with a weirdo? I live in Ann Arbor. I work with weirdos all the time. It's a city of weirdos, right? The notion is, are you willing to embrace people are different than you are. Having more ambition than capability. This is one of my favorite ones. Yeah, you know, this year our football team is going to run spread offense and be super fast. And you look at the football team and go, but you're all really 300 pounds and big and slow. Yeah, but we're going to run fast. How's that working out for your sports team? Doesn't work out, does it? You got to build on the capability you have. And I have good news for you, Air Force. You are loaded with capability. You have so much capability in this room. I can't even say how much. It's stunning, but we have to build on that. We have to say, what is it that we do that the other guy can't do? And how do we actually double down on that? Starting at the center and moving out. Innovation doesn't move from the inside out. It's not going to move from the generals. It's going to move from you, from the outside in. I call this the 2080 rule. It's easier to change 20% of the Air Force 80% than it is to change 80% of the Air Force 20%. Innovation doesn't happen in the middle of the bell curve. It happens at the edges. It happens when your life sucks. When the risk of trying something radical and the reward of staying where you're at is reversed. That's when innovation happens. When Apple is trading below $5 a share in 1997, what do you do? You take the safety off, don't you? You play with a live round. So the first trillion dollar company in the world was almost bankrupt a decade earlier. Listening to the wrong people. The people who are the incumbents, are they going to be inspiring you to be radical? No, the people who are going to be radical are the people who need to be more radical nor breakthrough, far away from home. The playbook doesn't work anymore. I've got to figure this out. We need you in a position where you can figure it out. Not disrespectful, not going against command. That's not what I'm suggesting. But there comes a moment when you're out of your Latin and you have to exhibit self authorizing behavior. You have to own a solution. You have to figure it out. You have to say, what would mom and dad do? And then you have to do it. And that's key. And finally, failing to connect the dots. You know what I love about let X, Y come down here? What I love with Colonel DeMarco was able to do down here. The biggest learning you're gonna have here isn't from the front of the stage. There's not much I can teach you. I've never served your airmen, you're brilliant in your own way. But there are other airmen here who have your aunt, the answers to your questions. And you need to talk to them. Take them out for a beer, get their number, get them on, chat them up, right? Hang out with them, whatever, marry them. I don't know. Oh, they're young, breeding is part of life. It's what it is, right? The notion is get to know each other, right? Share legally, whatever's morally right here. I don't wanna, I don't wanna get people going. People are like, I'm letting my hair down, none of that. But the notion is that's why you're here. I want you when it comes to looking at the future, I want you to look for anomalies. I want you to look for things that don't actually fit. I want you to look for incongruities. I don't want you to wait until the future is actually the past. What I'd really like you to do is I'd like you to tune in and I'd like you to think about what things don't seem to go together here and I'd like you to try and make sense out of it. It's not simple. I'd like you to sort of keep those things in front of mind. And most importantly, I come to our friend here from Phil Nike. You are the Air Force. The Air Force isn't an organization, it's people. And it's amazing people. That's why I'm here. You're amazing. But you have to make innovation happen. You can't wait around for other people to make innovation happen. So my hope for you is that you develop your creative mindset, you get over your dominant logic, and you make innovation happen. Thanks for making time for me. I think I've got time for a few questions. Anyone? No? Do I have time for some questions? All right. Thank you. Time for questions. Can we get the house lights so we can see some questions here? Can we get the house lights up for about 10 minutes? All right, somebody get a microphone. Questions, come on, push back. You gotta challenge the old man. All right, we got a question here. Somebody, can you stand up? Mic's were on the side. Can you stand, okay, mics are on the side. Sure, just yell it, and I'll repeat it. Okay, so he asked how, he's an ROTC person. He said, what can a future leader do to give themselves a real chance? First of all, I'd like you to find a problem that your unit has that it's unable to solve. I want you to look for problems. And then what I want you to do is I want you to think about how they're trying to solve that problem, right? And what I want you to do is I want you to think up an idea, some really creative ideas that you can actually put into play. So you learn the trade. See one, do one, teach one. You're learning how to do it. Now here's what's important. You know, young people, when you have a great new idea, I have to tell you something that's really hard. Your name, young man? Ponder. Ponder? Ponder. Ponder, oh, that boy, your parents must have been Calvinists or something. Ponder, he's got a ponderous question. Ponder, that's the ponderous question. Every young person needs to hear this. Nobody cares about your new idea. Nobody. They all say they do, but they don't. This is a hard lesson. It's an existential lesson. Nobody cares about your stupid new idea. What they care about is can you solve the problem? And the problem with young people is they have an answer but they don't know what the question is. Start with the question. What problem am I trying to solve? And you know what's funny when we look at studies? We look at studies about business school professors and we look at studies of senior executives. You know what business school professors say the most important skill for creative thinking is that you learn creative methods. You know what senior leaders say? That you know how to find the real problem. There's a difference and I think the senior leaders are right. So the problem that young people have is that they always assume that the senior person is dumb. Oh, they're dumb. They don't get this. I trained McKinsey consultants for 12 years in New York. Really smartest people on the planet. The biggest problem is, oh, you know, they don't get it. No, they get it. You don't get it. What you need to do is to become deeply insightful about their problem. Then what you need to do is come up with a solution to their problem. What happens to resistance when you're solving their problem? It goes down. And the way you learn to be an innovator is the same way you learn to play a guitar or speak a foreign language. It doesn't matter whether you're eight or 80, you go through the failure cycle. And the only way to go through the failure cycle is to go through it. So when you talk to old guys like me, I've been on over half the Fortune 500 at the CEO level. At this point in my career, I'm 61, right? I don't want to talk about my successes. What do I want to talk about? Let me tell you about how it went kaboom. Let me tell you about how it blew it up and how we lived. That's why these old guys are the same way. They'll do the same thing, right? So that's what you do as a young person. Don't chase money, chase opportunity. Don't solve your problems. Solve problems that need to be solved. Okay? Someone else? Yes, sir. Captain Michener from the back, right? Where are you? Back right. Thank you. Thank you. Over here. Captain, what's your name again, sir? Captain Michener from Columbus Air Force Base. Captain. And you're even talking to me. You're from Columbus. Okay, got it. Okay. So you mentioned non-state actors. Yes. Are the new enemy. And the lines are becoming blurry between nation states and non-state actors. I feel like the Air Force has a traditional definition of what we think are non-state actors. I feel like you're talking about something a little different. Can you give some examples on what you're going to get there with the non-state actors? Yeah, I think about it. Did anybody see Joe Biden's acceptance speech on Tuesday? Did anybody see what the protest... What were the protesters protesting? Were they in favor of Elizabeth Warren or Bernie? What was their protest about? Dairy. Dairy. It was about dairy, right? So pick dairy. What happens in the next phase of that group of people? Right? They start doing what? They don't want to steal dairy. So what happens next? They do something to supply chain. They do something to stores. They start acting out. Is that fair? Right? And if they really are true believers in dairy, maybe they shoot cattlemen or something. The point is... No, we're being funny, but we're not being funny. People ideologically get so involved in their dominant logic, whether it's GMOs, politics. Look at what's going on in the political situation in America. And for the first time, the FBI had to list certain American groups on the terrorist list, right? Because they're non-state actors. So what I'm saying is it's not like these easy to identify, you know, ISIS, al-Qaeda, whatever. What's happening is ideologically people are wound up in a certain perspective. They never get any other perspective. And it escalates from... We have what's called identification and valuation. We identify with each other. We value each other. Here's the first way in which we're going to act out. And if that goes farther and farther enough, they act out in extreme ways. And you're starting to see this with things like animal rights people. Are you seeing this where you live? You know, where people who are... You see the big thing in the news this past week? There's a woman in California who's suing her neighborhood. She's a vegan. And she jogs. And she's suing them because she has neighbors who are cooking meat and won't close their windows. Right? Right? Well, no, we're laughing. But if you start taking this out, it's not just vegans. It's the other side, too. So what's happening is the middle that we used to have, the Walter Cronkite, the evening news, that's been replaced by micro-segmenting, not just in the U.S. Look at what's happened in almost every large nation state around the planet. They're going to their first line of defense, which is isolationism. The next line of defense will be what? It'll be aggressive. So that's what I mean by it. Did I answer your question, sir? Yes, sir, you did. Okay. Thank you. We had a question over here. Okay. Gators, go Gators. Cadet Miller from Florida. Okay. His question was, even though they're outnumbered, what's the problem without sourcing to these countries for manufacturing because they're going to have more people? The answer is there's no problem with that. You're looking at the wrong end of the curve. The problem that you want to look at, I don't know what this is going at. What's happening here? Okay, I've got a question. Somebody put something up. All right. They'll shut me up in a minute. The problem is the other end. What's happened in the United States is our ability as universities, the top 25 universities in the world, are either in England or the United States. And what people haven't noticed is there's two Chinese universities that weren't even in the top 105 years ago. They're now in the top 25. One's in Beijing and one is Shanghai. I know this because Michigan's sister university is in Shanghai and it's now a top 25 university. When we started this, we were friends. We were helping each other. When Xi Jinping came to power, it changed. What the Chinese are doing is quite interesting, and that is what's called dark money. It's not about your manufacturing and tier three rasters in Hengshu. The issue is they're in Silicon Valley with two or three hundred million dollars into a technology. They're not stealing the technology the way you think they're stealing it. They're getting a line of sight because they've invested in it upfront. So their inability to do what's called the forward position innovation, the real radical stuff, what they've done is they've done what big companies do with acquisitions. They basically got a line of sight to it. So we have a lot of problems. There are no laws for this. We have these ridiculous ideologies, which is laws are bad. I'm like, no, some laws are good. We need some laws. And some laws have to be, is there transparency in the investment community in the dozen places in this country, including Florida, where we get this? Is this making sense to you? So there's no problem manufacturing it. Don't get me wrong. If you're manufacturing a chip, you might want to see if there's a back door or some kind of software on it, pay attention. But the other side of it is what you really want to pay attention to is who's got a line of sight to the next idea. That's what you want to pay attention to. Did I answer your question, sir? All right, good. I think I got time for one more quickie, one quick one. Anyone want to take a shot at the old man? I've got a question for you, sir. Where are you? Right here. Major Hoggard, ACSE. Major. So a lot of these talks on innovation emphasize the importance of new ideas and make it sound like the only good idea is a new idea. How do we inspire innovation and creativity while preserving the lessons learned from experience? There is a concept called role efficacy major. And what it means is that on a team, everybody has a different position. I'm from up north. We like to play hockey, right? Center and forwards, what are they? They're in attack position. Their job is to be creative, to get to the end of the ice and see what they can do. Defenders, right? Defenders are where? Defenders in the aft position. Defenders are not to be creative. Defenders are to do what? Close it down. And there are strategies. The goal keep, the goal keep is the least creative person. He has one job. Keep the puck out of the net, right? That's his job. The same is true for any company. A company has a forward position and Safi talked about this yesterday. The forward position you hedge, there's a lot of variation. There's a lot of creative ideas. There's a lot of accelerating the failure cycle. The middling positions are where every organization that's large loses it, especially the Air Force. The middling position is where that idea has to become financially viable. You have to get the right people involved. Then it takes three times longer than you thought it would. It costs three times as much money. This is often referred to in my line of work as Death Valley. People have to be amadextrous. They have to be able to understand what the other side is doing because these are antithetical views of the world, right? Think about it. I want to make money today and I want to have a sustainable Air Force. That's your problem. I've got to be cost-conscious. I've got to be ready for the fight. But I've got to have an Air Force that's relevant in 20 years. The aft position is what you're talking about. The aft position is what most of us need to be in. We need to follow orders. We have a spree decor. This is a winning team. Think of it like a great football team that has synchronization in it. Everybody knows their role and it's synchronized, but we occasionally put new plays in the playbook. That's how this needs to be looked at. But in order to do that, you're going to have to think, what is that other person doing? Can I think like that person? And can you sync it up? Where you get killed in innovation isn't at any one of these points of view. It's in the handoffs. I see I'm at time. Airman, thanks for having me out. You're going to make innovation happen. I know you are. My congratulations to you. Have a great rest of your conference. Thank you so much, Mr. Degraf. I really appreciate it. We've actually got quite a bit of time, so if you do want time for one or two more questions, we do have time. Yes. Oh, there's a... Yes. We are? Yeah, you've got about 20 minutes, sir. I was told I was... See, this is why we need what the major said. This is why we need reds telling people like me what we're doing. All right. Am I the communist in this situation? You could be. I didn't want to out you, but... I'm going to go back and shoot a cattleman. I think you have a question right there. All right. So I don't get off that easy. Someone, please. Okay, this is... Your name again, young woman? Cadet Cruz. Cadet Cruz. So Cadet, I take it as not your first name. I take it that you're ranked Cadet. It could be. Military family, maybe your name is Cadet Cruz. Your parents were also Calvinists. I don't know. So Cadet Cruz from Florida State, Seminole's, Go Seminole's, was saying that there's a DeGraph Hall, incidentally. Isn't there? Yeah. She was saying, well, our schools don't really encourage any of this kind of thinking and what do we do about that? Well, first of all, I got in a lot of trouble about 10 years ago. I got to speak at the big... There's a union that the teachers belong to. I got to speak there. My sort of point to the union was anything that's a low-level analytical skill shouldn't be taught anymore because that will all be automated. You need to think logically. You need to have analytical reasoning, but your ability to do the kind of rote learning that I came up with, you don't need to know that anymore. A true story. I worked on one of the first supercomputers in the world at the University of Wisconsin, the one that tells you what the weather is. We did it with a slide rule. So we had to be able to do computations and tensor calculus and stuff and all that stuff, but you don't. There's no need for you to do that. And oh, by the way, those jobs are going away. Anything that's a low-level analytical job. And if you think about all the jobs in the Air Force, ask yourself a simple question. If the Air Force was current in the same way, let's say Google was, how many less airmen would we need? 20% maybe? Something like that? So this is making sense to you? So the notion is those jobs go away. I believe that in order to be a tier one economy, you have to be able to make something better or new. Better or new. This is making sense. So better is improvement, our major back here. We have to improve the system we have. So I'm an old guy. I don't believe we should blow up the system and have nationalized health. I believe we should fix the system we have. I'm an old guy, right? So that's the better. I don't want it to be new. But you might say you're a young person. It needs to be new. The issue is those are complicated things to do. And in order to think through that, we need to give you the skills to do that. So what I'm most alarmed about, we've dropped art, we've dropped music, we've dropped writing. If you're going to be a creative class society, you need those things. We need to be able to create. It's just making sense to you. So how do we actually change this? How do we change this? I can tell you how you don't change it. You don't wait for legislators to change it. They're doing a terrible job. Is that fair to say? Terrible. And you don't wait for the cavalry to come because it's not going to come. What I'm noticing, forget charter schools too, that becomes sort of a game for religious people to teach their children their religion. In my view, I'm an old American. My view is the state and religion are separate. And if you want to do something in religion, you do that in the home, you do that with your community. That's your obligation as a parent. At school, it's supposed to be something different. You're being read into the playbook. That's why when I was little, we said the Pledge of Allegiance every day. We're really emphasizing we're all Americans. But here's the thing. The thing is where I'm seeing this work is what's happening outside of school. I'm seeing communities where parents are bringing kids together and they're drawing. They're, you know, they're doing, they're throwing pots. They're writing poetry. And you know where I really see this happening more than any other place? I see this happening in underserved communities. I see a lot of self-authorizing behavior. Like, think about Detroit. The Brightmore neighborhood's a pretty rough part of town. Right? But these mothers are getting together. They're working with PBS. They're working with the Detroit Institute of Arts. They're working with people who are in the community to develop those very skills that the school system has not developed in their children as left behind. So to me, it's kind of a scary notion, but I think in some ways the institutionality of schools has kind of failed across the board. I think what's really exciting about it is what's happening across the street is filling the gap and eventually what school becomes is not what's happening in the building but what's happening across the street. And it's the same problem that's happening with universities, including yours. What's going on with universities is it used to be you got a degree and that was great and that's how everything works and that's how universities make their money. And then all these little companies like, you know, the Apollo Group, Phoenix, University of Phoenix and all these places started doing online stuff where degree mills are not very good, right? The education wasn't very good. But over the past few years, that's changed, hasn't it? Michigan has Coursera, where their friends at Stanford and Princeton. I think we have some Stanford and Princeton people here. Stanford, there we go. Reprid the tree. Don't fear the tree. I'm fearing the tree. Yeah, the tree. If you're an MIT person, it's edX. So pick your poison. But we're starting to see these things become a lot more powerful and the point, Cadet Cruz, is that what's going to happen next is that it's going to be like Girl Scout badges. It's going to be what are you certified in? What do you actually know how to do and you're going to be recertified a zillion times in your life? And God bless you, you're going to need that. Is this making sense? So the education system, I think as we know it, is kind of going away. It's sad to say, I have a daughter who's an educator, who teaches elementary school, it's sad to say, because I don't think in any way it's working and I think obviously given what I've been talking about here, it's not working sort of at all different levels and I don't think anyone's really listening. Did I answer your question? I wish I was more optimistic, but I'm not. But I'm optimistic about innovation. Other questions? Question in the back, sir. Back here? Right back here, yes sir. I hate to overrule the guy with the hand raised, but I mean wait, so. You are, sir. Technically a millennial, but I'll try to keep my question under 30 seconds. In the book, 21 problems from the 21st century by Noel Uel Harari, he talks about how the U.S. has succeeded in surpassing the Soviet Union and we won because of transfer information that happened more rapidly. You seem to expound to the fact that China is doing that with their visas, getting more technologically advanced people. My question is, in the same book, he talks about three intrinsic principles, an independent judiciary, free and capital markets, and free elections. Those are intrinsic things that we all believe that should be continuing to happen. He also uses the term autocratic, and then he says technocratic is the future which China is doing, which you said, hey, that's a very bad thing. Can you expound on the difference between things that are intrinsic principles that we as Americans should embrace, and then the give and take of, obviously in a technocratic government, we're gonna have to give up some liberties. Can you expound on that idea a little bit? Yeah, I think the pyramids look inverted. Let me try this in our pyramid. The way our pyramid works is at the bottom of our pyramid, we are intractable. We have a constitution. We have laws that are all written around a constitution of the United States, and those laws continually, maybe some of them should morph, but they don't. We continually go back to this foundational piece. So the whole idea that Americans are kind of have this ability to do incredible free things, I think, is a mythology. Anybody who's come here from another country will tell you the biggest thing that surprises them is the freest country in the world, but most people don't act like they're free. So the bottom of the pyramid, there's a lot of intractable things that we believe in. And that's what holds us together, because we're heterogeneous society. We need that. The difference between American and European culture is obvious to the American. If in American culture everything pulls to the middle because we're all from someplace else. You go to Europe and everybody maintains their culture. Well, I'm Belgian, I'm not Dutch, because their culture is all about the nation state and where their tribe is from. It's a very different idea over here. So my kids who are half Chinese, they speak like the same kids across the street who are half African. So the bottom of the pyramid here is foundational. And as you move up the pyramid, it becomes freer and freer and freer, right? So the notion is where we're free is within that box we're free. But don't come under the assumption that you can do anything because you'll go to prison. Remember, with the exception of China, we're the country that has the most people who are incarcerated in the entire world so it makes sense to you. The first thing I want you to understand is our worldview is you can do whatever you want other than these things and if you step outside of these things then you can't do anything. That's our view. The view of the Chinese is quite different. The view of the Chinese is inverted. And what that means is at the top of Chinese culture you see all the rules. Everybody's augmented a facial recognition or who's a public contributor, that's the index, et cetera. And then you ask yourself how the Chinese are able to innovate because under that, at the bottom of their pyramid, are a handful of people who are allowed to create in a way that violates all the rules. It's sort of the Americans look at this and go, you look like the mafia. It's not that you look like the mafia. It's that these two societies are held together differently. American society is held together by goals, right? Common goals. Chinese society is held together by common values, not by hierarchy or process. Go anyplace in the world. They teach at the Helsinki School of Economics. There's a Chinatown in Helsinki. 200 kilometers from the Arctic Circle there's a Chinatown. That's a cultural issue. So to me, getting back to your point, to me I'm going to challenge, I think that there's some other things that you have to have in order for this to work. One, you're exactly right. You have to have available capital. You have to have favorable tax laws. You have to have talent. And the Chinese have all three of these, right? And some countries have way more of it and now Singapore, right? But I think the one thing that you also have to have is a culture for it. And I think one of the challenges that I think the book is mistaking for a structural issue, so this is where I'm pushing back on Safi where I disagree with him. Where your book is saying it's a structural issue, my view would be it's a cultural issue. It's a belief issue. It's an issue about what we believe in the world. So another way of putting it, I'm going to put it in a really crass way and a controversial way, Americans have political democracy, right? We can vote. We can do that. The Chinese have financial democracy, right? Their issue isn't voting. Their issue is that they've bought into a particular social class view of the world. My concern is that we go back to some of the comments that were made in about 2008, 2009 out of the White House that said the Chinese can't innovate because they're too structured because they have too many structures in place and the answer is that's a very dangerous point of view. I think the other side of it is the Chinese are going to innovate in a very different way than we do because the way their system is built. So let me tell you what's different about Chinese innovation than here. The Chinese innovation doesn't really have the same radical front end of the funnel that we have, but the Chinese innovators are far faster than we are. Think about reverse engineering. Think about how long it took to reverse engineer the iPhone. Do you know before the F-35 was even done, the Chinese had reverse engineered it? It was just making sense to you. So the notion is you're dealing with a very different type of animal, but that comes from the cultural heritage. You have a follow-up question. No, I just wanted to say thank you. But it was a great question. Good job. We got one over here. And then we got one over here. So over here. You had two of them. Maybe you could do it together. Okay, your name again, sir. Cadet Higginbothan. Yeah. Let me repeat what he said. We have lives on the line. How do you temper risk with innovation? I got a great metaphor for you. It's like being in medical school. Right? Now, Cadet, if you were in medical school and you were, let's say, a third year, at M3, I might let you come in and set somebody's leg to a broken leg because you'd learn how to do that and there's a procedural way to do that. Does that make sense? Now, if somebody had a communicable disease, we thought they might have coronavirus, I wouldn't let you treat them. But somebody who had been out, let's say four years, now it was a medical degree, but there's a chart of what coronavirus, what kind of symptoms. I probably would let that person treat coronavirus. Would I let a third year medical student operate on you? No. Now, what I'm trying to point out is you'd get the attending, wouldn't you? You get a cutter. You get somebody in who is a specialist. Here's what I'm trying to tell you. When you're learning to do something, you have to learn the alphabet first. You have to learn how to hold your knife. You have to learn the trade. There's tradecraft. Incidentally, this is where I'm going to point my finger at millennials. You don't get this. You don't get what mastery is because you want everything now. You need to develop tradecraft. You can be the smartest person in the world, but it's very funny. Larry Page was one of my students, the founder of Google. You go to Google and you think you understand something. You don't understand it. You didn't have to earn anything. You'll forget it two minutes later. You don't know anything. You haven't developed tradecraft. Part of the reps, is this making sense? As a junior, you got to do that. We all did. Even the master craftsmen, we first learned how to hold our paintbrush, how to grind the paint. We did. But as you advance, then we start allowing and we start encouraging art creativity a different way. When you're laying on the table with a perf lung, there's no correct way to do this. The surgeon who comes in is going to have to look at this and say, we're now out of the playbook. We got to save this young man. Is this making sense to you? This is true in any craft. Remember, you're in an area where there are trade rules that you have to follow that you have to learn. Before you can write crazy books, you have to write academic articles and learn how to do research and all the crappy stuff that I had to go through. Does this make sense to you? But the important part to the older people here is we need to be apprenticing you with your children, no offense to you, not a child but like our kids and say, well, I think I can give them the car tonight. I think they're old enough to date. I think, you know, I'm sending off to college. Does this make sense? Hopefully I've given them enough trade craft that they got the basics, but now they can do better stuff. Did I answer your question? Back here. Over here, this young man. Cadet Daily from Rutgers, the Red Knights. Scarlet Knights. I'm going to start off by saying Red. The Scarlet Knights. Yeah, this is going to, again, this relates to this young Cadet over here, her comment, Cadet Cruz's comment. Same thing. I'm not a big believer that the cavalry is going to come. I wish I could. I wish I could believe that the schools would be fixed. I wish I could believe that Congress will turn around and start valuing education. I wish I could believe that they're going to make money for that. I don't think they will. I think if you're very interested in this issue, then you start with you. And when you become a parent, you start with your children. And I think what you have to ask yourself is what is it that the state cannot provide for me that I have to provide for myself or my children? And you do that. You're talking to somebody who's... I get in a lot of trouble for this. I spend a lot of my life doing self-authorizing things. Because I wasn't going to wait around for somebody to figure out how to solve my problem. I just... So to me, if I felt like I needed to have a better background in art, I would start by going to museum night someplace. That was free. I'd talk to other people. I'd start joining chat groups. I might take up a class on improv comedy. I might do something that I felt I was sharpening my saw on that. And then what I'd really try and do is apply it. I'm really big on trying stuff. Now don't get me wrong. Don't try stuff that puts your peers at risk. Try something that you can do. I like to tell the story. I worked on a project called C2 which you know is Coke Zero. And what was interesting was it stayed in Atlanta and it never got anywhere. And I took it to Tunisia for the World Cup where I wasn't hurting anybody. I could try stuff with it. Put it in different combinations, put different stuff around it. And it worked. I figured a few things out. But what I was really doing was I was off-broadway. Does this make sense? I didn't want all the senior people to be looking down and judging me. And I invented... I worked on it. Not just me. A lot of people worked on it. I'm not Al Gore. I didn't invent the Internet. But then I brought it back. And I think that's a good metaphor for you. I think if you're really the best investment I can tell this to anybody. The best investment anybody can make is your education. And I don't just mean formal. I mean travel. I mean reading. You can invest in yourself. And the wider your base is, which we used to be, I think the better off you're going to be. Someone else? Last question. They pulled me back on. Now they're pulling me off. Oh my God. Sparty. Sparty's here. At least you're not a buck. The bucks are here somewhere. They'll start booing me. They can't speak in complete sentences. But they can grunt. Oh wait. Yeah, you got a lot of football trophies. I'll show you the Nobel Prizes up north. Okay, there we go. Yup. Is the extreme cost of college a roadblock to innovation? Of course. And is it sustainable? Not at all. And one of the things that's it's embarrassing to say this. There are 25 universities in the United States have about 90% of all the research money. Have them teach at one of them. You have some people in the audience here who teach at the other ones. Some are in Europe. It's the exact same thing. So the issue is that's not a sustainable model. It's also not very American, is it? It doesn't seem very right. So what I suspect will happen in the future is that there will be other avenues for enterprising young people to get advanced. Just full disclosure, I'm from the north end of Kalamazoo. I grew up in a hud house. So I get it. I get it. You have to have two things to get out. You have to have avenues to get out. And the second thing is you have to want to get out. And they're the other. It's the Kalamazoo Promise issue. Do you want to get out? And the issue is I think as colleges become more and more expensive, they're trying to shift it. At my university, they're making a big push to create a secondary curriculum that's online with all the certifications of like the University of Phoenix, because I think we see the writing on the wall as well. I think the top schools are struggling because the financial and business model doesn't work, but there's certainly no egalitarianism. It's a not equal society. And I just need you to know we know it. We're working on it, but it's a difficult, complicated problem. It'll probably take us, you know, 10, 15 years to work that out. Here's the thing that's really heartbreaking to say. At the end of the day, the top schools are just like top brands. They're not going to give it away because it's not just about education. It's about what? It's about maintaining your status in the world. I wish it wasn't true. I hope it isn't true. But for now, it is. Great question. Thank you. One more question here. One more question here. No, we have no more questions. I'll tell you what we'll do. Mo has said, who's question? Mo will kill me. Let him have the question. Hey man, this is on you. Hurry up. Thank you, sir. My name is James Umayali from Uganda, Air Command and Staff College. You've stated that technology and innovation has broken the international boundaries. My question is, how can nations project their influence outside their borders? What is the relevance of organizations like the NATO and other regional organizations in this modern era? If they are not relevant, how can they innovate to become relevant? Just a couple things about this very quickly. I teach at the United Nations of the TET Fund for Nigeria. This is the big question the Nigerian country is asking because it's the largest country in Africa, the fastest growing country in the world. The issue is how do we maintain our national influence in this and I think there's an enormous problem and that is in the world there are these kind of two views and they're antithetical. There's the first view that everything should be equal and people should have a voice and if you remember President Clinton signed the WTO, the World Trade Organization, and the problem with that is the country of Jamaica had the exact same voting power as the PRC. Who's going to vote in an environment where somebody who's rounding error has the same vote as you and the answer is nobody? And the reason is it's not fair. It doesn't represent the total numbers. Incidentally that's why people are bad at the Electoral College, right? The notion is it's supposed to be one to one. The other view is what? The other view is that of course the people who have the most power and the most influence should use that power and influence to their advantage. Here's what I suspect is going to happen. I suspect in the same way that we had NATO or have NATO, I suspect we'll start to see just like we see in businesses now new federation deals, new configurations. Think about, I'm going to make a terrible analogy for you so forgive me. Think about how large companies like Home Depot and Lowe's came into towns and they basically got rid of all the small hardware stores because they couldn't compete. And the small hardware stores then got smart and what did they do? They created a federation and they started buying collectively and they knew a lot more about the local market and they had less overhead and so for the first time about five years ago they started doing what? They started driving Home Depot and Lowe's out of towns. It's making sense. So for every offense there's a defense for every defense there's an offense. So in Uganda I imagine there is a new Africa that's emerging. To me it's an Africa I've never seen in my career. I don't know what it looks like because there's a lot of old tribal animosities that go on or border animosities in Africa just like there are in Europe in the United States. But I think what's going to start happening is that you're going to belong to federations and I think those federations are going to have power, economic power, military power and I believe given the size of the continent and given the population of the continent for the first time in my lifetime you're going to hold sway and have an actual voice in what we're doing worldwide. So at least that's my take on it's a complicated problem. I'm sorry I didn't give you a better answer but off the top of my head I think it's the best I can do. Everyone have a good one thank you. Alright you guys thanks for the questions. Another way to ask questions is to go on to the live feed on go on to Twitter or Facebook or probably not MySpace but just have those questions there so you go on Twitter and use the leadx AU or leadx 2020 hashtags or channels but this weirdo needs a break so we're going to take a quick break until 9 30 and then you can go back to Polifka or Wood as a reminder your lab assignments were emailed to you so just check out the programs ask somebody with leadx gear on and if you need to pop into a room if it's full just cram in there if not you are welcome back here or to Wood they've got five steriles on Yelp so if you want to check out Wood and again just keep the conversations going for 12 minutes thank you