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0:00Hey, it's Seth, and this is Akimbo.

0:08It's actually excerpts from the upcoming audiobook of This Is Strategy. Today we're hearing another excerpt from the audiobook. If you missed the last excerpt, it might make more sense if you went back and listened to that one first. I have recorded all my own audiobooks since the beginning, more than 20. In the old days, I could record a nine-hour audiobook in maybe 11 hours, one or two days. But time takes its toll, and you can probably hear in my vocal cords that it's not as easy as it used to be. So if effort is any way to value a gift, I hope you will appreciate today's episode of Akimbo, an audiobook that took a long time to make.

1:03Can you see the river? A river is more than water. There's water in a lake, too. The essence of the river is the current. Paddling upstream is more difficult than going downstream. A snapshot shows you the water, but not its motion, not the relentless force as the water moves from here to there. The river flows. If you want to change the course of a river, you can try to build a dam, but those are expensive and can fail. The alternative is to dig a small channel that helps the river go to where it was going anyway. When you make it easier for the current to flow, the current will respond. A small channel quickly becomes a torrent, and then the river itself.

1:5714. The Collective Why do birds fly in formation? What makes a bird join in? It turns out that the lead bird doesn't stay in the lead the entire time. The flock rotates. The Collective evolved to find an efficient system for travel. It works with people, too. Any time that a person can benefit from engaging with a community, a system will evolve. Most of us don't walk to the stream to fetch the day's water. Instead, we're happy to pay a small fee to get water from a pipe, which comes from a treatment plant, which is part of the city's infrastructure. We don't try to persuade every person we meet of our status and knowledge.

2:45Instead, we paid with time and money to engage with an educational institution that awarded us a certificate in exchange. And even if we spend our days working as a soloist, we're not alone. We're part of a collective or an industry, a system to take inputs and outputs and turn them into something of value for all participants. Systems are everywhere humans engage to fill a need. Sometimes they persist longer than we'd like. Sometimes they move in directions we don't appreciate. Often they're cultural, invisible, and hard to notice. But systems define our lives. 15. Successful systems. There are roles and rules, inputs and outputs, and rewards and punishments.

3:41There are feedback loops, power dynamics, and hierarchies. Systems create the status quo, and they defend it. The system can be invisible, but the people involved in the system feel its pull and often understand that it has power. And effective systems create the outputs that define them. There are giant, wealthy systems, like college admissions, the military-industrial complex, or even capitalism. but there are tiny systems like the dynamic in a particular neighborhood or the way the board of a non-profit makes decisions. Every family is a system as well. We can't change capitalism. We can't even put a dent into it, but we can change the incentives of consumers, employees, and investors by creating different cultural boundaries and status roles that operate within the larger system.

4:37Systems can be as small as a nuclear family deciding who gets to say in what's for dinner, and as large as a planet of 8 billion people trying to deal with climate change. Systems within systems. Turtles all the way down. 16. Real life isn't Lego. Part of the appeal of Lego for kids is that the pieces fit or they don't. A building goes together, comes apart, and can be put back together as it was. This is very satisfying. It's also not very realistic. Try taking apart a Hot Wheels car. It will take real skill to put it back together. The act of disassembling will deform its parts. Even with the promise of interchangeable parts, There are million-dollar airplanes that will never fly again because they're missing a computer chip or a widget that's no longer available.

5:38But the real truth of systems is that they're far more complex than even an airplane. Systems are more than built objects. They are the collisions between those objects and the natural world. They are the complex interactions of culture, of humans engaging with one another, of nature and chaos. You can't step in the same river twice because your footprint the first time turned the river into a different river, and it changed you as well. 17. Two myths about systems. One, you have unlimited power. Two, you have no power. We need a strategy because we can't simply order the system to follow our wishes.

6:33Part of our cultural mythos is that each of us has unlimited agency if we're only willing to work hard enough, demand enough, and insist enough. But systems are resilient and systems push back. The power you have lies somewhere between infinity and zero. It's possible that you've accepted whatever arrives, adopting the posture of a cog, or worse, a victim. But we're not powerless. Individuals organizing others with persistence and generosity change the world and do it every day. With the right strategy and resources, we can make an impact. Sometimes. Buckminster Fuller taught us that to fundamentally change something, we must build a new system that makes the existing system obsolete.

7:26Balance this temptation of building a new system with the insight from Carl Sagan that if you wish to make an apple pie from scratch, you must first invent the universe. It's unlikely anything we build is going to be built from scratch. But with time and focus, we can find the leverage to alter systems we care about. 18. Built, natural, and complex systems. An airplane is a built system in which a designer and a contracting company create plans, subassemblies, and manuals, creating something they believe they have control over. However, once a built system gets even a little bit complicated, unanticipated outputs begin to appear.

8:15The Tacoma Narrows Bridge collapsed because the engineers failed to account for harmonic resonances that would cause the entire bridge, which weighed millions of pounds, to sway and disintegrate once the wind was strong enough. A corporate bureaucracy is a built system, but it's also a complex one. It acts in ways that no one, especially those in the HR department, could have predicted. Complex systems create unexpected and unpredictable outputs. They're probabilistic and unstable, not deterministic the way we expect. Decades ago, General Motors didn't set out to design mediocre, poorly built cars, but they did.

9:03Ford Motor Company didn't plan for the Pinto to explode and kill people. There doesn't have to be a plan for there to be outputs. In fact, that's what usually happens. 19. What makes a system? Human-built systems have elements in common. Generally, you'll find Boundaries. They begin and end somewhere. Benefits. People voluntarily engage with the system because they believe in the promises it makes. Bystanders. Often, people who don't want to be in the system are still involved in it. Information flows. A shared language and expectation creates trust and efficiency. Stability. The system offers its participants a reliable picture of the future.

9:58Protocols There are shorthands, processes, and methods of how things are done. Roles Participants in the system seek or gain status and affiliation through their actions. Resilience and feedback loops When something disrupts the system, it works to push back and regain equilibrium. convenience, and efficiency. Even though systems aren't perfect, they offer participants outputs that encourage them to support it. Side effects. Every system also creates outputs that aren't ideal for non-participants or those that are part of it. And so, we find systems like big-time college sports, Starbucks, religious practices, the chocolate industry, your local volunteer fire department, the community orchestra, the dating scene in certain parts of Boise, Idaho.

11:00Decisions may feel as though they're voluntarily made, but the system exerts influence on each participant through each decision. Each decision is the sum total of all the expectations, feedback loops, and invisible and visible rules that we adhere to. 20. The persistence of systems. We've lived with them so long that they have become invisible, but systems are everywhere. Systems shift our perceptions and our actions, and they don't always offer us what we want or need. So why do they stick around? Status quo. When people coordinate into networks and groups, our individual aversion to certain kinds of change is multiplied.

11:50And so the default becomes keeping things as they are. Sunk costs. Once we've invested our effort, money, and emotions into something, it's hard to let it go. even if it might not be what we need. Interoperability. There are practical reasons for things to work in the way they do. Connectors that connect, languages that are understood, and procedures that maximize efficiency. No one wants to buy a phone that doesn't support Bluetooth. Status roles. The hierarchy benefits those that are at the top who have power and they work to maintain it. They also sell everyone else on the idea that the system is the best way for them to achieve status as well.

12:43Affiliation. Culture is people like us do things like this. Humans find solace, satisfaction, and safety in community and our desire for affiliation maintains existing systems. It's a lot to undo. A more resilient and leveraged path is to work with systems instead of fighting them outright. 21. From fine China to underwater headphones. Cultural systems evolve layer by layer. In 1759, Josiah Wedgwood used new production techniques to bring the world a refined, mass-produced set of china and pottery. In 1843, Ada Lovelace did the groundbreaking work that informs computer programming to this day.

13:43John Wanamaker pioneered the price tag in 1861. By 1911, Frederick Taylor had published his ideas on scientific management, dramatically increasing productivity and quality. In 1951, Lillian Vernon Hochberg began her direct mail campaigns. The ubiquitous steel shipping container, first used in 1956, made shipping finished products around the world far more reliable and cheaper as well, enabling companies like Walmart to eventually transform retail. The toll-free number, launched by AT &T in 1967, connected consumers directly to companies, allowing them to use credit cards, launched in 1950, to buy things directly.

14:33Ethical email marketing, created by Yo-Yo Dine in 1992, opened the door to electronic ordering, which was amplified dramatically by the adoption of web browsers a few years later. And then Amazon wove it all together. Which explains how I can buy a pair of Shox underwater MP3 headphones online and get them delivered to my home the next day for the equivalent of$2 in Wedgwood's time. 22. Duncan Hines and Nina Zagat. Duncan Hines was a traveling print salesman operating in the Midwest of the United States a hundred years ago. There were no health inspectors for restaurants, which meant that visiting a strange town and going out for dinner carried real risks.

15:26Food poisoning was common. Duncan liked to eat, and with the automobile becoming more reliable, he traveled a lot as well. Combining his printing expertise with his love for food, Duncan began to publish a traveler's restaurant guide. His focus was on places where a traveler could find a safe place to eat a decent meal. The first year, he sent it out as a Christmas gift to a few hundred people. In the years that followed, demand for the guide grew, and he began to sell it. Soon after that, restaurants inquired about being listed. The traffic and status that came from being listed was extremely valuable to them.

16:08Heinz offered restaurants a chance to be included. If they paid a fee, he'd send an inspector. If the business passed muster, they'd not only be listed, but be given a sign to put up in front of the restaurant. This status ratchet spread, and the food safety of restaurants around the country was transformed. His project transformed the health of millions of people. It made him rich and famous, and ultimately led to the licensing deal that still has Duncan Hines' cake mix in every supermarket. Several generations later, Nina and Tim Zagat, New York lawyers, put together a pocket-sized guide to restaurants in New York.

16:52They had a particular point of view. These were restaurants for people who went out for dinner a few times a week. Tapping friends and friends of friends to contribute reviews, the book listed thousands of restaurants with a unique, quotable style of short insights. And they included three numerical ratings for each restaurant. The result? Restaurants in New York and then around the country changed their businesses to score well in the guide. DNA tests, passports, digital surveillance, rankings, membership lists, and SAT scores are all transformative because they surface data and turn it into information.

17:37Information changes systems. 23. All dogs are mixed breed dogs. The only thing that makes a purebred so valuable is that an association labeled it. The status conferred on breeders and owners of dogs that match the invented profiles of the AKC and other organizations drives them to commit to the system. The end result is a health crisis due to inbreeding, together with a shelter system that often has trouble keeping up with puppies rejected or unsold by breeders. There are almost 100 million dogs in the United States, and every one of them is affected by a simple rulebook of what sort of dog someone said they are.

18:3124. U.S. News Changed College. U.S. News and World Report was a struggling weekly magazine, in third place behind Time and Newsweek. To make ends meet, they put out a special report ranking colleges in the United States. The first edition was fairly informal, based on limited data and some hunches. But because it caught on and made a little money, they decided to reinvest and turn the guide into a business on its own. They pushed back against resistance from college presidents, brought in various research modalities and added countless variables. It's almost impossible to rank something as diverse as educational institutions, but they did it anyway.

19:22As the rankings increased in visibility and acceptance, status was awarded or lost as a result. Universities started assigning staff members to look at the game, to understand the statistics, and to take action to move up the rankings. Some of the side effects include schools dramatically increasing spending on sports facilities. Scandals at schools like Columbia caught cheating on their self-reported statistics. Many schools shifting focus and curriculum and grading approaches in response to low rankings. Other schools creating easy-to-fill-in applications for high-scoring students simply so they could reject them and improve their metrics.

20:12By narrating, labeling, and publishing a hierarchy, an outsider changed a system that had been around since before the country was established. You can find out more about This Is Strategy at seths.blog slash T-I-S, that stands for This Is Strategy, or visit SethGodin.com to see all the books. Coming up, new episodes in which I get on a call with one of you and talk through your strategy, your boundaries, your issues, where you are headed. If you would like to participate, please visit akimbo.link, that's A-K-I-M-B-O dot L-I-N-K, and click the appropriate button. thanks as always for listening we'll see you next time