16 / 06 / 2020

Innovation Versus the Status Quo (Or Only in Oz Does a Guild Make You Feel Welcome)

When Dorothy and company finally met the Wizard, they discovered he was neither great nor powerful. Maybe what he needed was a guild to guard his reputation. Guilds and other professional organizations exist solely to defend the status quo against change, and, though they can impede innovation, they can never stop it.

Carey Smith | Founding Contrarian

When I was a boy, The Wizard of Oz used to be shown on television once a year around the holidays. Because my family was a late adopter of any technology that cost more, Kansas and Oz never looked dramatically different on our black-and-white TV, but I watched because it was the thing to do, especially when there were only four other channels offering even less intellectual content.

Back then, one of the film’s more unsettling scenes was Dorothy’s welcome as a conquering hero by the members of the Lollipop Guild. At the time, I may have put it down to the trio’s tough-guy delivery in their little-boy suits. But years later I realized the real problem with that scene: Since when has any guild ever greeted an outsider with a song and dance? They’re far more likely to slam the door and wedge a chair under the knob.

What got me thinking about guilds was a recent story in The New York Times about attempts by SmileDirectClub, a direct-to-consumer teeth straightening appliance company, to quash negative reviews by making unhappy clients sign non-disclosure agreements before receiving refunds. While the company clearly went overboard in its attempt to muffle criticism, the mistake likely grew out of a bigger problem the company has, one that was almost entirely overlooked by the Times:  dealing with criticism spewed by defenders of the dental status quo. SmileDirectClub represents a major threat to traditional orthodontists, so you can be sure that the guilds that protect their interests — the American Dental Association and the American Association of Orthodontists — are going to do whatever they can to keep newcomers from crashing their party.

Orthodontists regularly appear close to the top in annual lists of best-paid professions, so it’s natural they would want to keep the field to themselves. How else are they going to prevent the public from recognizing that they are, in essence, the mechanics of the dental profession whose major skill is in twisting and fastening wire, causing discomfort and smile-hiding embarrassment to thousands of tinsel-toothed teenagers. They don’t design or manufacture anything. For all their schooling, they’ve acquired no magic skills.

Just like the wizard in Oz, they don’t want anyone to pull the curtain back and see that there’s no magic involved in what they do. And so the ADA guards the curtain and tries to stand in the way of innovation, because that’s what guilds do best.

The status quo never goes down without a struggle. I experienced it at Big Ass Fans, and we’ve seen it happen time and again in recent years, as rideshares drove donuts on taxi drivers’ turf, Airbnbs moved into hoteliers’ neighborhoods, and streaming services upended the entertainment industry. Whenever you reinvent markets, the current players will fight back. In the ADA’s case, I’m sure they’re fighting back tooth and nail.

SmileDirectClub made a huge mistake in closing down its customer feedback loop, which is the only way to improve a product. But to me, the more interesting piece of the story is what the reporter left out, and that’s the way that innovation rattles and shakes the foundations of those who make their living protecting the status quo. Ultimately, though, the cracks it makes become too big to seal, and another guild hall crumbles. And when it does, you can bet I’ll be on the sidelines cheering.