Hello, and welcome to another episode of the Working Conversations podcast, where we talk all things leadership, business, communication, and the future of work. I'm your host, Dr. Janel Anderson.

Back in 2007, Netflix, our beloved video company, made a quiet but revolutionary move. It started streaming a small selection of movies directly to your computer. No red envelope, no trip to the mailbox. Just click and watch.

At the time, most of us still had DVDs stacked up next to our TVs, and buffering was a frequent and frustrating part of online life. But that one move of starting streaming services cracked open a door. And on the other side, a completely new way of consuming content. One that reshaped not just how we watch TV, but how content gets made, marketed, and monetized. In today's episode, we're diving into that pivotal shift and exploring what Netflix's leap into streaming reveals about the adjacent possible. The idea that change doesn't always come from giant leaps, but from the next small step that suddenly makes whole new futures possible. Now, if this idea of the adjacent possible sounds familiar to you, it is because I did an episode on it just, oh, six or seven episodes ago. Episode 216 How to Anticipate and Create the Future.

And we'll link that episode up in the show notes, and you can find those show notes @janelanderson.com/222 for this episode 222. And that episode 216, How to Anticipate and Create the Future. It created one of the most talked about episodes of this podcast. I think I got more email from listeners than just about any other episode has garnered. So I want to just share with you a little bit about what that email was about and why it led to this next episode. So people were insatiably curious about this idea of the adjacent possible. And if you recall, if you did happen to catch that episode 216, I talked about some historical things and people wanted to know, but, like, give me a current contemporary example. So, you know, I talked about how the printing press paved the way for things like literacy.

Okay, these are really big ideas that fundamentally changed our society. But I was asked for, you know, give me some more tangible examples and then give me some more practical advice about how I could tap into the adjacent possible in my work life. So that's what we're doing in this episode. We're going to explore the adjacent possible a little bit in greater detail. I'm going to give you the example of Netflix and how Netflix truly created adjacent possible. And so, yeah, that's where we're going with this episode now, if you remember and if you haven't caught episode 216 again, I highly encourage you to catch that because it's going to give you some foundational pieces. But I just want to do a quick recap of a couple of key ideas. So the idea of the adjacent possible came to us from a theoretical biologist.

His last name is Kaufman. And Kaufman was studying really, really complicated things around evolution and small microorganisms and what made it possible for a small organism to evolve to its next level into its next thing. So he came up with this, the very mathematical formula about how biology works and how biological evolution unfolds. And so his key insight is that whatever happens next to a particular cell is completely dependent upon what happened. And the change that then manifests can lead to any number of different things which can, you know, which we can't necessarily predict. And so you can kind of think of it like once early life form depended on a primitive ability to do something like, you know, process oxygen. Like, again, we're talking on like a cellular amoebic kind of level. And those animals or microorganisms didn't just get better at breathing because they could process oxygen.

They turned into entirely new, different types of organisms. So that's the idea here. Like what, what amazing new thing might be on the other side of some change, not just like an incremental improvement, but just like really blowing things up. So Stuart Kaufman was the one who originally created this idea of, and named the idea the adjacent possible. Now, Steven Johnson, who writes for the Popular Press, he wrote a book called Where Good Ideas Come from, in which he describes the adjacent possible. Okay, so that's where I first heard it. I always like to cite my sources because, you know, PhD organizational hazard of having a PhD is I know a bunch of stuff, but I also want to make sure that I am appropriately citing my sources. Okay, so this idea of the adjacent possible, again, I talked about it in greater detail in episode 216.

But, you know, as I mentioned in that episode, it's not just a concept, the adjacent possible. It's not just a concept for scientists or historians. It really is a practical tool that we can apply to our own life for, for enhanced creativity, for more innovation. And in the fast changing world of work that we live in right now, we really have to be able to see the future coming and capitalize on what might happen next. Now, we're not always going to get it right, but we have to be Ready? And as I'm fond of saying, the future belongs to those who can see it coming. So I'm going to dive into a very contemporary example of Netflix. Okay, so again, as I teed up at the beginning of the episode. Well, first of all, if you don't know that much about the history of Netflix, the origin story of Netflix is that Reed Hastings, who's one of the founders of Netflix, is driving around in his car, and on the back seat of his car, he's got videos that need to be returned to the retail store Blockbuster, which I believe there still is one of somewhere in Pennsylvania, I think.

But he needs to return these videos to Blockbuster because the late fees are accruing, and he's frustrated with himself for not having turned them in. He's frustrated with the whole business model of late fees. And as he's driving, he notices the dang videos in the back of his car, and he thinks to himself, why couldn't video rental be more like a gym membership where you play, you pay a fee, flat monthly fee, whether you use it or not. It doesn't matter how much you use it. You could use it 0. You could use it constantly, but you pay the same flat fee. So that subscription model was core to Netflix and still is. I mean, those of us who subscribe to Netflix pay our monthly subscription fee every month.

Now, as you probably know, they have gone away from DVDs. They phased out DVDs in their entirety last year, and they have gone fully streaming. But before I get ahead of myself and talk about streaming, let's just go back and look at that core business model. So movies like a Blockbuster video rental, so atoms, so pieces of thing, you know, actual movies, whether they in for Netflix's sake, it was always on dvd. It was never. They were never mailing VHS tapes through the mail, but so always DVDs. And so. But it was taking two ideas, say, blockbuster on one hand, the video rental business and subscription model, revenue on the other, and mashing them up.

It was two things that already existed. They mashed them up and created something new. Now, that in itself is absolutely innovative and cool and, you know, attracted the attention of many of us, many of us who are still customers to this day. But that's not really as exciting as the adjacent possible. That came along in 2007. So in 2007, Netflix ads streaming videos. Streaming movies. Now, the collection was very limited.

There was a very, very small number of titles available for streaming, and you couldn't stream directly to your tv. That technology didn't exist yet. You could only stream directly to a computer. Now, it was clunky. It absolutely was clunky. If you remember, for those of you who were around in 2007, video download, downloading anything, or certainly streaming or downloading anything took forever. There was the constant buffering and just bandwidth couldn't handle it back then. But it was novel and it was exciting and it paved the way for some really, really interesting innovation that couldn't have happened had it not happened first. So that's where we can invoke this idea of the adjacent possible. And we can look at Netflix's evolution through the lens of the adjacent possible. So hang with me here. There's two really big ideas that I want to cover in terms of the adjacent possible as it relates to Netflix. So the first is that this makes possible not only traditional content from the regular production companies, Paramount and the like, but it also gave rise to original content coming directly from first of all, Netflix and then other high tech companies. Amazon prime, for example, makes its own original content.

All the services now do Hulu, Apple, Apple tv. So all of these services came on the heels of this first opportunity to deliver streaming video to customers. And again, it's an adjacent possible because once that happened, like all these other things were available. So let's just dive a little bit deeper into this idea of content being made by the company who's delivering it. So Netflix has original series left, right and center. Now that didn't exist before. There was the production company who made the entertainment, and then there was the distribution company who distributed. And it was, you know, by and large, they were two different entities.

Now sometimes they were the same entity and sometimes that caused problems for them as well for having monopolies on different parts of the marketplace. But when Netflix starts to stream content and then it starts making its own original content again, that gives rise to an entirely different set of ways that content gets created and produced and of course, distributed. Now we went from in 2007, Netflix having this feeble streaming service to now there are more than 200 different streaming services worldwide, many of them with their own original content. So it's changed not only how entertainment gets delivered, but it changed how it got created, how it continues to get created with original content coming from the streaming services directly. So that's very cool. Now there's a whole different angle that we could look at with it too. And that has to do with the analytics. So when the services started streaming, when Netflix started streaming its content to us, it's coming to us not only as content over our computer, but we are users of that content.

And so Netflix is gathering all these analytics about how many people, which people are they watching it to the end is there, you know, what's happening in terms of fall off rate and so on. And so the analytics make data driven decisions, like totally revolutionizes data driven decisions that streaming companies can make, so they can make data driven content decisions because they're watching to see who's watching, how long are they watching. If it's a relatively new series, especially if it's their own content, then they might not renew that series. If it's a series that is getting a lot of play and people are watching all the way to the end, then definitely that series might get renewed sooner than later. Because if you remember, you know, television in like the 70s and 80s, when I was growing up, there was a season, and that season started in the fall and There were usually 26 episodes and it tracked from the fall to the spring, and then there were reruns on during the summer. Now with production companies being the technology companies and creating their own content, I mean, it's just literally a matter of how quickly can they get those same actors together back on set to create the next season.

If it's a highly popular program, it completely changes. They can watch the analytics and find out what's popular, what's not, and make choices accordingly. There's also another angle to the analytics, and that is consumer behavior. So when a production company like Netflix technology, slash production company, drops an entire series at once, what does a fan do? Well, a fan's gonna binge watch. Now, if you're not familiar with. Well, I'm sure everybody's familiar with binge watching, but it technically means three episodes in a row. So watching three episodes, like on the same day or in the same scene, if you will, and maybe not necessarily quite back to back, we do need to get up and use the restroom and get a snack and all that good stuff. But essentially, you know, three episodes in a day is considered binge watching.

Now, when episodes were dripped out once a week on network television, binge watching wasn't possible. I mean, the closest thing you could do to binge watching would be to go to your local blockbuster and get that show on VHS tape or on dvd and bring it home and watch multiple episodes in a row. So if you were a big fan of I Love Lucy and you hadn't seen the original episodes, maybe you would go, again, get those VHS tapes or get those DVDs, bring them home, and then you could sit and watch all the I Love Lucy episodes you want. So you could have binged before, but not necessarily right at the click of a button, right on your screen, in the same way that we can today. So it creates a different type of consumer behavior in terms of how we consume content. So you start to see, like, and those are just a handful of ways in which Netflix and Starting to Stream really opens up the adjacent possible.

Okay, so let's go back to this idea of the adjacent possible. The idea is that one single change has different possibilities on the other side of it. And we don't necessarily know exactly what those possibilities are, but when you start to think and innovate and be creative from the space of the adjacent possible, and it just makes. So it makes you so much more competitive. It gives you so much more strategic edge. Now, again, as you've heard me say, we can never, with any 100% degree of certainty exactly. Predict the future. We just can't.

But what we can do is we can get ready for it. And that's how the adjacent possible can be incredibly strategically valuable to you. So let's say something changes in the marketplace. And again, if you've heard me talk about this in a keynote, you hear me talk about bringing in divergent data sources and divergent points of view. So you might be looking in newspapers or magazines or other types of media, social media streams or news channels that you don't usually watch for what's coming next. What are some of the patterns that I wouldn't necessarily see in the places that I usually look? So we want to cast that wide, divergent net. So we have lots and lots of ideas coming in. And then you might start to notice patterns and you might start to notice things kind of bubbling and coalescing towards.

Oh, I mean, imagine if you were paying close attention back in 2007, 2008, when streaming started and you started watching and you were wondering, well, where else is something like this happening or what could happen as a result of this? And you started spinning out these possibilities. I mean, absolutely fascinating. So here's the idea is when something changes, even if it's like a small, clunky change, like, again, I think there were a lot of people who thought like, oh, we don't you know, buffering is too much of a pain in the butt to watch anything on streaming. And so Maybe back in 2007, 2008, there were a bunch of people who were doubters and he didn't think that this was going to turn into anything. Well, sometimes it doesn't. But if we're not paying attention, if we're not looking, there's no way we can capitalize on it.

So we have to be casting that wide net, looking for what might be a change that really makes a difference. And again, we can't always know. But when we start to see patterns emerging, when we start to see going from that divergent data to things starting to converge around a single idea or a platform or a core technology, that's when we can start to say, ooh, what's possible now? Or what would be possible if this really takes off? And then you can start to truly brainstorm and get some divergent ideas going from that. And again, you don't necessarily know exactly which one of those is going to be the match or going to hit, but at least you're getting ready for what might be coming next and you're prepared for it. Now, if you really want to take this one step further, you go and move on to actually prototyping out what some of those solutions might look like or what some of those, like, next products or next leaps in innovation might be. And you can, you know, you don't have to, like, build the prototype. You can wireframe it, you can draw it, you can imagine what it would look like. You can, you know, it doesn't have to be something you actually build, but something that you tease out and play around with.

Now when we start to think like this, it really opens up a whole new way and a whole new set of strategic possibilities open up. Now, what I want people to get in their emails, like, give me a tool, give me something. You know, I love practical tools. You know that. And the people who listen to this podcast love the practical tools as well. So let me give you a practical tool. So the practical tool I want to give you is this. So I've talked about a little bit about divergent thinking.

And so you might be wondering, like, well, what is she talking about when she talks about divergent thinking? What exactly does she mean? Okay, so let me give you a divergent thinking exercise. So the divergent thinking exercise is this. Take something, I'll just reach over here and grab like a Pen. Okay. And to do a divergent thinking exercise, sort of like brainstorming, but not really quite like brainstorming. What you want to do to create a divergent thinking exercise is I would ask you this question. I'm going to put 60 seconds on the clock. In those 60 seconds, I want you to come up with as many alternate uses for this pen.

Obviously, it is a writing implement. So, I mean, that one can go on your list. You can count it as a writing implement, but then I want you to come up with as many different things that you could do with this pen. What could you use it for? Maybe you could use it as a screwdriver. Maybe you could floss your teeth with it. Maybe. So you just get, really creative. There are no wrong answers.

And this just really gets your brain primed and ready. This is a great exercise to do before brainstorming because it gets your brain, like, all juiced up and ready to go after the zany, wacky ideas and really gets you into that place where you're not filtering. Because if we're like, let's say we were brainstorming about actual product innovation in our company, there's still a certain layer of judgment. Again, depending on your team, the culture of each team is going to vary dramatically. But some teams are going to be like, I'm going to have to play this safe because if I put my really out, you know, my really far out there idea out on the table, it might get shot down. They might think I'm stupid. They might think I don't have any good business sense. So there is a certain sense of filtering that we often do when we are brainstorming.

But if you do a divergent thinking exercise before brainstorming again, it's gonna get those juices flowing in your brain such that you will be able to come up with more better creative ideas in the actual brainstorming. Now, if you are going to do this, I would strongly encourage you to tee this up with your team so that they know exactly why we're coming up with as many uses for the pen as possible. It is not about the pen. Let me repeat. It is not about the pen. It is just about, like, doing the warm-up activity before you go do the heavy lifting. That's a great metaphor for it.

If you were gonna go into the gym and, like, lift some heavy weights, you need to lift some of the lighter weights and do a little cardio. Get the systems, you know, get the blood flow going. Okay. And that's what you're trying to do if you use something, and it obviously doesn't have to be a pen. I just have a pen in my, you know, laying here on my desk. It could be anything, any. Could be an unusual object. It could be a familiar object.

But again, it's a great precursor for a brainstorming session because people really get that bubbly energy, unfiltered energy going. So, again, just make sure you tee it up correctly so that your team knows why you're doing it and they're not left going, like, why did we come up with 75 uses for a ballpoint pen? Okay, now, so back to the adjacent possible. Of course, we cannot predict the future. None of us have an accurate crystal ball that we can look into. But when we start to notice changes happening, patterns, weak ties between things, we start to notice those things again from divergent points of view, and they start to converge and some change starts to happen. That's the point at which it's time to explore the adjacent possible. So I hope this idea has given some contextualization to the adjacent possible.

And, you know, a specific, more contemporary example that the printing press is in terms of discussing Netflix and how Netflix, and specifically when it launched streaming, adjacent possible just exploded on the other side of that. So the adjacent possible isn't some abstract theory. It's right here unfolding in our business decisions, in our technological advancements, and in cultural shifts that reshape our world. So Netflix didn't set out to kill cable or reinvent television. It just saw a sliver of possibility. What might be possible now that wasn't possible before, and they took a bold step toward it. And that bold step unleashed a floodgate. So the next time you're facing change, or better yet, sensing it on the horizon before it's actually materialized, ask yourself what's newly possible right now? Or maybe if it's a change that's just on the cusp, you might ask yourself, if this change occurs, what's possible that wasn't possible before? Because just beyond the edge of what's familiar might just be the very future that you are meant to build.

All right, my friends, if you found this episode helpful, please share it with someone who might benefit from hearing it. And you will find the show notes and other goodies over @janelanderson.com/222 for episode 222. And if you think that's auspicious, which I kind of do, then definitely, please share it with somebody. Okay. As always, stay curious, stay informed, and stay ahead of the curve. Tune in next Monday for another insightful episode of the trends that are shaping our professional world. Until then, my friends, be well.