Author Archives: Greg Satell

About Greg Satell

Greg Satell is a popular speaker and consultant. His latest book, Cascades: How to Create a Movement That Drives Transformational Change, is available now. Follow his blog at Digital Tonto or on Twitter @Digital Tonto.

We Must Rethink the Myth of Xerox PARC and the Macintosh

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We Must Rethink the Myth of Xerox PARC and the Macintosh

GUEST POST from Greg Satell

When people like to tell stories of historic corporate missteps, the story of Xerox and the Macintosh is near the top of the list. As the tale goes, the corporate giant spent a fortune to create all the technology that the famous computer was based on, but failed to market it and let Steve Jobs steal it out from under them.

But that version leaves out important context. Yes, Xerox did create the technology. It was also true that Steve Jobs, while touring the company’s research facility, understood that he could use it to make a revolutionary consumer product. But it wasn’t a blunder. Steve Jobs was there because Xerox had invested in Apple at bargain prices, not because they were tricked in some way.

The story has deeper implications, because the myth of Xerox’s blunder influences how firms invest in technology. The truth is that Xerox’s research strategy was visionary and incredibly successful. In fact, it likely saved the company. So rather than looking at the story of Xerox and the Macintosh as a cautionary tale, we should see it as a model to replicate.

The Xerox PARC Strategy

When Peter McColough took the helm of Xerox in 1968, it was at the top of American industry. An incredibly profitable business, it had a culture devoted to technical excellence and produced the world’s best performing copiers. Over the years it also developed a great sales and service organization that built strong relationships with its customers.

But it was becoming clear that trouble was looming. Japanese competitors like Canon and Ricoh started selling simpler, cheaper copiers, based on 20-year-old technology, that were easier to use and needed less maintenance. Rather than staffing a “copy room,” companies could place these smaller, less expensive units on every floor.

Xerox was getting disrupted. It continued to innovate, but most of those efforts were going toward making its copiers better and better at things people cared less and less about. McColough saw the nascent computer industry as an opportunity and sought to control the “architecture of information.

“It was a great phrase,” someone would later say, “because no one knew exactly what it meant.” To that end, he created the Palo Alto Research Center (PARC) and located it 3000 miles from Xerox’s headquarters. He hired Bob Taylor, already considered a visionary for his work on ARPANET and told him to staff it with the best minds in the emerging field of computer science.

The Incredible Success Of The Laser Printer

It was around this time that the company hired a young engineer named Gary Starkweather. He was a guy with big ideas, but soon found he didn’t fit in well at Xerox. Part of the problem probably had to do with his background. Copiers were largely based on chemistry and Gary’s interest was optics. In particular, he was excited about lasers.

But it was more than that. Gary wanted to build something outside the copier business and the higher-ups just didn’t see how it fit in with their business. In fact, his boss actually threatened to fire anyone who worked with Starkweather on the project.

Eventually, he had enough. He marched into the Vice President’s office and asked, “Do you want me to do this for you or for someone else?” In the business culture at the time, this was considered unheard of behavior, clearly a firing offense. Yet fate intervened and destiny had something very different in store for Gary Starkweather.

As luck would have it,news of Gary’s work made it across the country to PARC, the fledgling computer lab that Xerox had recently established in California. The researchers there had developed a graphical technology called bitmapping, but had no way to print the images out until he showed up. His development of the laser printer was not only a breakthrough in its own right, but with the decline of Xerox’s copier business, it actually saved the company.

Leveraging PARC Technology

No one disputes that the number of groundbreaking technologies created at PARC was astounding. The graphical user interface, networked computing, object oriented programing, the list goes on. Virtually everything that we came to know as “personal computing” had its roots in the work done at PARC in the 1970s.

Yet Xerox never became successful in the computer industry, which is why so many question the strategy. That’s the wrong way to look at the investment, however. You wouldn’t evaluate a stock portfolio against all the companies you could have bought, but on how the portfolio performed and by that measure PARC was a magnificent investment.

Clearly, the development of the laser printer paid for the investment of PARC many times over. It also mildly profited on its shares in Apple (although not nearly as much as it could have if it held on to them longer). Xerox PARC technology also led to a number of spinoffs, including 3Com, Adobe and Synoptics, just to name a few. Xerox had shares in many of them.

Many look at these companies and see lost opportunities for Xerox, but that’s a red herring. There is no way that any company could have pursued all of those opportunities. As Henry Chesbrough put it in Open Innovation, “The success of some of these departing spinoffs was largely unforeseen—and unforeseeable. When they left, these spin-offs were more like ugly ducklings than elegant swans.

When you add it all up, even the supposed “failures” of PARC provided enormous value for Xerox.

If You Don’t Explore, You Won’t Invent And You Will Be Disrupted

In the late 1960s, Xerox faced a problem without a clear solution. With many of its key patents expiring, it was losing its chokehold on the industry it had created. That’s what led its visionary CEO, Peter McColough, to create PARC, which invented breakthrough technologies, incredible profits and saved the company.

Yet many see it as a cautionary tale because of all the possibilities it wasn’t able to pursue. Steve Jobs once said that “Xerox could have owned the entire computer industry, could have been the IBM of the nineties, could have been the Microsoft of the nineties.”

Maybe it could have. But you don’t judge a strategy on what could have been, but on whether it solved the problem it was designed to solve. Xerox was facing irrelevance and extinction. Its copier business was dying and it desperately needed technologies that would provide new sources of revenue for a company that was quickly becoming irrelevant. In that context, Xerox PARC succeeded enormously.

In researching my book, Mapping Innovation, I found that the most important thing that great innovators do differently is that they are actively seeking out new problems. In other words, they not only continue to hone their existing processes and practices, they go actively look for areas where they can make an impact.

The truth is that innovation needs exploration and that’s never efficient nor can it be optimized, but it can be done cheaply enough to be sustainable. For large enterprises that usually means investing in labs, but even small business can access world class research by connecting to larger institutions, such as government labs and universities.

It’s a fairly simple equation. If you don’t explore, you won’t discover. If you don’t discover you won’t invent. And if you don’t invent, you will be disrupted.

— Article courtesy of the Digital Tonto blog
— Image credit: 1 of 1,550+ FREE quote slides available at http://misterinnovation.com

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4 Things to Learn About Change From the Orange Revolution

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4 Things to Learn About Change From the Orange Revolution

GUEST POST from Greg Satell

In 2004, I joined a KP Media, the leading news organization in Ukraine, where I would become Co-CEO. In the runup to the presidential election that year, the opposition candidate for president, a technocratic reformer named Viktor Yushchenko, was poisoned by pro-Russian agents. He survived, but his face was permanently disfigured.

In that moment, the once mild-mannered banker was transformed into an inspirational leader. His opponent, an almost cartoonish thug named Viktor Yanukovych, tried to falsify the election. Hundreds of thousands of Ukrainians poured into the streets to protest in what came to be known as the Orange Revolution.

It was very much an awakening. That was the moment when Ukraine, although not yet ready to turn away from Russia, began to insist on its independence and freedom, something that Vladimir Putin wasn’t willing to respect. It was also a turning point for me. It would permanently change how I saw the world and how it works. Here are four things I learned.

1. Power Doesn’t Work Like We Typically Think It Does

One of the first things I noticed about the Orange Revolution was that nobody with any conventional form of power had any ability to shape events at all. In fact, nobody seemed to understand what was going on or what would happen next—not the journalists I would speak to in the newsroom everyday, not the other business leaders and certainly not the political leaders.

We all grow up amidst power structures. We have parents who make the rules at home, teachers and administrators who do so at school. When we enter adulthood and begin to work for a living, we have managers and customers to attend to. Political leaders call the shots in public life. Everywhere we go, there is some authority guiding us.

But in the Orange Revolution nobody seemed to be directing the action. There was just a mysterious force, which nobody could describe but nobody could deny, that was moving things along. It almost felt like we were all characters in a play, there to play a part but without any real agency over events.

In Martin Heidegger’s essay, The Question Concerning Technology, he described technology as akin to art, in that it reveals truths about the nature of the world, brings them forth and puts them to some specific use. I learned that power is something akin to that, a force that we can shape and direct, but not anything we can actually possess.

2. The Power Of Cascades

One of the first things I discovered on my journey to understand the events during the Orange Revolution of 2004 is that scientists had known for centuries about the mysterious force I encountered on the streets of Kyiv and even had a name for it. It’s called a network cascade or a viral cascade.

Imagine thousands of protesters rushing to flood the streets of Kyiv, or Cairo — or Washington D.C. Countless fireflies blinking on and off in nearly perfect unison. Sports fans doing the “wave” at a stadium. These are all examples of information cascading through a network and they have the power to create rapid, transformational change.

When ideas are held by individuals or small groups, they are negligible. However, when groups connect and synchronize their collective behavior, they can become immensely powerful. An industry is remade, a country overthrown, entire societies evolve and change, the preceding order is transcended and the world is transformed.

The key to understanding cascades is that they are driven by small groups, loosely connected, but united by a shared purpose. This is true for any network, whether the nodes are people, proteins or computers. To drive transformation, change leaders need to help those groups to connect and inspire them with purpose.

3. You Have To Prepare To Survive Victory From The Start

I still remember the feeling in the winter of 2005. We were triumphant. We had taken to the streets and, seemingly against all odds, we won—or at least we thought we did. But those who opposed our cause, they didn’t just melt away and go home. No, they redoubled their efforts to undermine us and were able to reverse what we had achieved.

Our mistake was that we failed to understand that you can never bet your transformation on any particular person, policy, program or technology. It always needs to be rooted in shared values. That was what we got wrong. The Orange Revolution got its name because orange was the campaign color of the opposition candidate, Viktor Yushchenko. Its purpose was to propel him into office.

Yet once we won and Yushchenko rose to the presidency, we lost our purpose and everyone went home. And it turned out that Yushchenko wasn’t a magician or a god who could make the country’s deep problems disappear. He was just a man, who was fallible, made mistakes and couldn’t achieve all that we wanted. That’s why we failed to survive victory.

When the global financial crisis hit, Ukraine once again descended into crisis and whatever support Yushchenko still had quickly dissipated. Yanukovych, the thuggish candidate backed by Russia, had his image rehabilitated by American campaign consultant Paul Manafort, who ran a polished campaign predicated on re-establishing order. He won in an election international observers deemed to be legitimate.

He was even worse than we had feared and in 2013, the new protests broke out. But this time they got it right. These protests were called Euromaidan because they were about values, specifically European values and as things progressed the events became known as the Revolution of Dignity, because they were fighting for their basic identity and sovereign status.

4. There Is A Limit To How Much Impropriety People Will Accept

When I first arrived in Ukraine it was a cynical place. After 80 years of communism and then 10 more under kleptocratic rule, few thought change was possible. So why worry or complain about things that you couldn’t do anything about anyway? It seemed better to focus on things close to you; your family, your work, your friends.

The Orange Revolution in 2004 changed that. It turned out that there was a limit to what people could accept. It wasn’t so much about policy, capitalism or even democracy, it was about dignity, the most basic yearning for people to be treated as ends in themselves, not means to the ends of a corrupt elite.

The original intention of the Ukrainian people was not to pull away from Russia, which many, if not most, considered a “brother” country, but to pursue a so-called “Finnish model” that would maintain good relations with both Russia and the west. Yet Putin could not bring himself to recognize the Ukrainians’ desire for a separate and distinct identity.

That’s an important lesson for anyone seeking to bring about transformation. When leaders set out to pursue change we must do it in ways that allow others to adopt in ways that reinforce, rather than undermine, their identity. That’s why the second Ukrainian revolution continues even now, because it was about dignity.

Lasting change is always built on common ground.

— Article courtesy of the Digital Tonto blog
— Image credit: Dall-E

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Why the Truth Matters

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Why the Truth Matters

GUEST POST from Greg Satell

In 2012, when Marco Rubio was gearing up for a run at the Presidency, he sat for an in-depth interview with the magazine GQ to bolster his image. “I think the age of the universe has zero to do with how our economy is going to grow,” he proudly declared. “I’m not a scientist. I don’t think I’m qualified to answer a question like that.”

The attitude belies dangerous ignorance. The big bang is not just a theory, but a set of theories, including general relativity and quantum mechanics that underlie modern technologies such as computers, GPS satellites, lasers and solar cells, just to name a few. Our economy literally could not function without them.

As Vannevar Bush famously wrote, “There must be a stream of new scientific knowledge to turn the wheels of private and public enterprise.” Yet today we get “alternative truths” and book bans. Make no mistake: truth matters. History shows when we abandon the quest for discovery and design narratives to suit our preferences, the consequences tend to be severe.

Jewish Physics

In 1905, an unknown physicist working at the Swiss patent office named Albert Einstein unleashed four papers, written in his spare time, that would change the world so completely that it would come to be known as his miracle year. He would later follow up with his theory of general relativity and solidify his place as one of the greatest minds to ever live.

These breakthrough theories would change how scientists thought about the universe. We learned that time and space were not static, but relative, that light travels through discrete packets called “quanta” and that mass could be converted into energy. His discoveries would, within a few decades, be translated into revolutionary new technologies.

You would think he would be a hero in his home country of Germany, but just the opposite happened. As the Nazis gained power and Jews became scapegoated, Einstein’s theories became to be known as Jewish physics and the science of quantum theory and relativity was banned from schools. Philipp Lenard and Johannes Stark, both backed the shift and promoted anti-relativity Deutsche Physik.

The United States went a different way. It welcomed not only Einstein, but an entire generation of leading scientists. Over just a few short decades, America was transformed from a scientific backwater, where promising students would need to go abroad to receive advanced education, to a technological superpower.

In 1939, Leo Szilard, another refugee from fascist Europe, who had helped develop the idea of a nuclear chain reaction, went to see Einstein. Szilard alerted him that uranium could be used to make a bomb of unimaginable power. Together with emigres Eugene Wigner and Edward Teller, they drafted a letter to President Roosevelt which initiated the Manhattan project that led to the Allies ultimate victory in World War II.

Lysenko’s Biology

In the 1930s the Soviet Union was plagued by famines brought on by failed collectivization. The most famous of which, Holodomor in Ukraine, killed as many as seven million people. Clearly, something had to change and Stalin called on his favorite scientist, Trofim Lysenko, to figure out a way to increase agricultural production.

The problem was that Lysenko was both a fool and a fraud. He rejected the new science of genetics in favor of a wacky set of theories which collectively became known as Lysenkoism. At the heart of his thinking was that an organism’s environment can affect the germ line, so rather than selectively breeding for desired traits, he would try to “educate” crops by, for example, soaking crops in freezing water to help them grow in the winter.

It was all nonsense, of course. But ideology held sway over the scientific method and real scientists who questioned Lysenkoism faced serious consequences. Thousands of legitimate researchers were dismissed from their jobs and sent to the Gulag. Many were killed for nothing more than speaking the truth.

Stalin’s dedication to Lysenko and his pseudoscience worsened the famines and deepened the suffering of the Soviet people. Later, his ideas would be adopted by Mao Zedong and lead to the Great Chinese Famine. Tens of millions more would die needlessly. All of this happened for no other reason than the desire to defy what the Soviets called “Bourgeois pseudoscience.”

Identity—and the need to signal it—is a powerful thing.

Darwin And The Age Of The Earth

In 2012, Paul Broun, a US Congressman on the Science, Space and Technology Committee, asserted that evolution, embryology and big bang theory are “lies straight from the pit of hell.” A recent Gallup survey suggests that 40% of Americans still agree with him. Darwin’s theory remains controversial in many quarters.

Just recently, the Texas state Board of Education recently voted to teach creationism along with evolution. West Virginia and Florida also passed laws promoting the teaching of “Intelligent Design,” a pseudoscientific theory that is designed to undermine the theory of natural selection in schools and promote a religious alternative.

These moves have consequences. Darwin’s theory is no abstraction, but a working model that scientists use every day. It is used, for example, to help understand the spread of pandemics and how to fight cancer. Genetic algorithms based on natural selection are used for a variety of complex optimization functions, such as organizing logistics.

Science And Pseudoscience

Today, the truth can seem like nothing more than a preference. We pick a side, form a group identity and set out to prove our worth by supporting the party line. In our quest for status, we try to top those around us, leading to a purity spiral in which everyone competes to see who can be the most true to the cause.

Yet truth is more than opinion. Facts are falsifiable. We can test them. Einstein’s relativity is a wacky theory, but unless we use it to calibrate GPS satellites, they won’t be accurate. Darwin’s theory may conflict with other beliefs, but it can help us cure terrible diseases like COVID and Cancer. These aren’t just ideas, but tools we use to create the modern world.

What we need to be careful about is those who assign identity to specific ideas. Once an idea becomes associated with a particular team, it can be used to manipulate our sense of self. The same basic urges that nearly robbed us of the ideas of Copernicus and Galilieo are no less pervasive today then they were centuries ago.

The telltale sign is leveraging identity to manipulate us, the use of an “us” and “them” to push us in a particular direction of what to believe. For those that are looking to con us, there can never be a “we together,” because that will undermine their narrative of an ideological battle, rather than a search for truth in the service for a greater good.

The need for truth is especially dire today when we have so many pressing problems to solve. We simply can’t afford anything less than an honest search to discover and ascertain facts.

— Article courtesy of the Digital Tonto blog
— Image credit: Dall-E

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Change is Coming from Everywhere

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Change is Coming From Everywhere

GUEST POST from Greg Satell

In the small town of Alamogordo, New Mexico in 2002, a plan was hatched to pass a no smoking ordinance. The wife of a City Council member, a strong no-smoking advocate, orchestrated the campaign. She recruited activists from the next town over, twisted arms and, in a show of force, pushed for a quick vote. It failed.

Compare that to a similar effort in El Paso, Texas around the same time. The central advocate in this case was not anybody with great clout, but a student on an internship assigned to do research on the issue. As he quietly gathered facts, he became a local authority, spreading what he learned. The ordinance passed by a vote of 7-1.

People often say that change has to start at the top, but that’s not really true. Change isn’t top-down, nor is it bottom up. It emanates from the center of networks. Ironically, the way you get to the center is by connecting out to small groups, loosely connected and uniting them with a shared purpose. To really drive change, you can’t overpower, you need to attract.

Change Always Comes From The Outside

Whenever we see a successful transformation we look to the actions of leaders. We see a CEO who gave a speech, a marketer who came up with a big product idea or an engineer who took a project in a new direction. These events are real, but they rarely, if ever, appear out of nowhere. They are products of webs of influence.

When we look more closely, we inevitably find that the CEO was inspired to give the pivotal speech from a conversation he had with his daughter. The marketer got the initial idea for the campaign from a junior team member, who saw it somewhere else. Or the engineer changed the direction of the project after a fateful encounter on vacation.

One of the things we know from the earliest studies of how innovations spread is that change always comes from the outside. For example, the first Iowa farmers to adopt hybrid corn were the ones who visited Des Moines most frequently and the early adopters of tetracycline were doctors that most often attended out of town conferences.

So change doesn’t have to start at the top. What is true is that culture starts at the top. Leaders determine what gets rewarded and what gets punished. If people feel free to experiment with new things, more innovations will be adopted. If, on the other hand, there is an atmosphere of strict regimentation, then little will ever change.

The truth is though, most organizations are somewhere in between. There is a certain amount of freedom within agreed upon guardrails. What was striking about the two no-smoking ordinance examples is that the successful effort worked within the culture, while the unsuccessful effort tried to break established norms. Successful change efforts don’t overpower, they attract.

Working At Every Level

Once you realize that change doesn’t have to start at the top, it becomes clear that every level of the organization has a role to play. Leaders tend to be enthusiastic about change, because they want to be seen as dynamic and leading somewhere rather than standing still. People at the bottom are often open to change because they aren’t invested in the status quo.

It’s the so-called “muddy middle” where you tend to get the most resistance. They are high enough in the organization to have some attachment to the current state of affairs, while at the same time they, unlike senior leadership, will actually have to do the work to implement changes. For overworked executives, that can be a tough sell.

Yet it is precisely those middle level executives that are absolutely essential to any change effort. They usually have enough authority and resources to get an initial Keystone Change started and can help recruit others. They also usually have been around long enough to have some political savvy and know where the pitfalls and tripwires in the organization lie.

So the truth is that every level of the organization can be helpful. The most junior people are the easiest to recruit. Senior people have clout and are usually predisposed to want to see change (if, for no other reason than they can take credit if it is successful). The middle-level executives can actually help you get stuff done.

Identifying Your Apostles

What’s first striking about the two no-smoking ordinance efforts is the power differential. In Alamogordo, the wife of the City Council member had significant power and relationships in another town, where the student with the internship had none. It almost seems like having power can be a disadvantage.

As counterintuitive as that may seem, it is often the case. Decades of research show that change follows an S-curve, meaning that it starts out slowly, hits an inflection point and then begins to accelerate exponentially. The same research shows that the inflection point is usually hit when the participation rate is between 10%-20%.

If you try to overpower, you will begin to draw resistance before you’ve hit the inflection point and your effort will likely be sabotaged before it ever gets off the ground. But if you quietly gain support, without doing a lot to draw attention from detractors, you’re less likely to incur resistance early on and will have a much better chance of reaching the inflection point.

When we begin to work with an organization on a transformational initiative, one of the first things we work on is building a recruiting strategy for the initial group. Often, they know exactly who to approach. Other times it’s not as obvious. One tactic that’s often effective is to create an introductory workshop and then wait to see who comes up afterward.

What’s most important is that you identify people who are enthusiastic about the change you want to see. They will be the ones who will help you get to that 10%-20% tipping point that unlocks a cascade.

Going To Where The Energy Is

Discussions about change tend to gravitate to one of two poles: Either change has to come from the top or it has to be grass roots. As I explain in Cascades, transformation isn’t top-down or bottom-up, but happens from side-to-side. You can find the entire spectrum—from active support to active resistance—at every level.

The answer doesn’t lie in any specific strategy or initiative, but in how people are able to internalize the need for change and transfer ideas through social bonds. The truth is that it is small groups, loosely connected, but united by a common purpose that drives transformation. Effective change leaders help those groups to connect and unite them with a sense of shared values and shared purpose.

What’s important is that you go to where the energy is, not try to create or maintain it by yourself. Go out and find those who are enthusiastic about change, who want it to work and will not only work to bring it about, but bring in others who can bring in others still. You need to recognize that the urge to persuade is a red flag. It usually means you have the wrong people or the wrong change.

Change never happens all at once and can’t simply be willed into existence. The best way to do that is to empower those who already believe in change to bring in those around them. That’s what’s key to successful transformations. A leader’s role is not to plan and direct action, but to inspire and empower belief.

— Article courtesy of the Digital Tonto blog
— Image credit: 1 of 1,450+ FREE quote posters available at http://misterinnovation.com

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Never Trust a Guru

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Never Trust a Guru

GUEST POST from Greg Satell

In 2005 W. Chan Kim and Renée published Blue Ocean Strategy, which found that “blue ocean” launches, those in new categories without competition, far outperformed the shark-infested “red ocean” line extensions that are the norm in the corporate world. It was an immediate hit, selling over 3.5 million copies.

Bain consultants Chris Zook and James Allen’ published, Profit from the Core, around the same time. They found that firms that focused on their ”core” far outperformed those who strayed. For example, they warned that Amazon was putting itself from peril for expanding its business beyond books and predicted dire results.

Clearly, none of this makes sense. How can you both “focus on your core” and seek out “blue oceans?” It betrays logic that both strategies could outperform one another. Today, Amazon makes most of its money outside of books. Yes, new markets lack competitors, but they also lack customers. The truth is that most business research is surprisingly shoddy.

Cargo Cult Science

When Richard Feynman took the podium to give the commencement speech at CalTech in 1974, he told the strange story of cargo cults. In certain islands in the South Pacific, he explained, tribal societies had seen troops build airfields during World War and were impressed with the valuable cargo that arrived at the bases.

After the troops left, the island societies built their own airfields, complete with mock radios, aircraft and mimicked military drills in the hopes of attracting cargo themselves. It seems more than a little silly, and of course, no cargo ever came. Yet these tribal societies persisted in their strange behaviors.

Feynman’s point was that we can’t merely mimic behaviors and expect to get results. To illustrate what he meant, he told a story about going to a new-age resort where people were learning reflexology. A man was sitting in a hot tub rubbing a woman’s big toe and asking the instructor, “Is this the pituitary?” Unable to contain himself, the great physicist blurted out, “You’re a hell of a long way from the pituitary, man.”

What makes science real is not fancy sounding words or slick charts with numbers on them. Business gurus often boast of their “research” that consists of hundreds of case study interviews and large databases containing data on thousands of firms, but without the proper methods and controls, those things are meaningless.

The Problem With Case Studies

Organizations are often inscrutable and hard to research. That’s why the preferred mode of analysis is case studies in which insiders are interviewed and a particular situation is interpreted by investigators. These can be helpful, but they also have severe limitations.

First, with shareholders and customers to please, managers are rarely eager to talk about failures. So we usually only hear about successes. Those, of course, are important but also subject to survivorship bias. For example, if a risky strategy results in 1% of the firms being wildly successful and 99% going out of business, then we’ll tend to hear glowing accounts of that lucky 1% and we’ll miss the vast majority that flamed out.

Another issue with the case study method is that it is necessarily limited. When researchers did a case study on a company I used to run, to take just one example, they interviewed insiders (including me) and did their best to interpret what they heard and what they could glean from background information regarding the market.

While I don’t think anything was inaccurate, it wasn’t exactly the truth either. Only a handful of people were interviewed, almost all of them were concentrated in a single part of the business and none of them, besides me, were involved in making decisions. The issues presented in the case study simply weren’t the ones we were actually wrestling with.

The problem with case studies is that they offer little to no documentation. In more rigorous fields like, say, sociology or psychology, researchers are expected to share their data so that others can interpret it. Unfortunately, that’s rarely true in business research.

Working Around The Glitches In Our Brains’ Machinery

We tend to imagine that our minds are some sort of machines, recording what we see and hear, then storing those experiences away to be retrieved at a later time, but that’s not how our brains work at all. Humans have a need to build narratives. We like things to fit into neat patterns and fill in the gaps in our knowledge so that everything makes sense.

Psychologists often point to a halo effect, the tendency for an impression created in one area to influence opinion in another. For example, when someone is physically attractive, we tend to infer other good qualities and when a company is successful, we tend to think other good things about it.

The truth is that our thinking is riddled with subtle yet predictable biases. We are apt to be influenced not by the most rigorous information, but what we can most readily access. We make confounding errors that confuse correlation with causality and then look for information that confirms our judgments while discounting evidence to the contrary.

Unfortunately, so many of the popular management ideas today come from people who never actually operated a business, such as business school professors and consultants. These are often people who’ve never failed. They’ve been told that they’re smart all their lives and expect others to be impressed by their ideas, not to examine them thoroughly.

That’s why it’s so important to not to believe everything you think, there are simply too many ways to get things wrong and so few ways to get things right.

It’s More Important To Be Careful Than Smart

When I lived in Poland, a common aphorism advised that “life is cruel, and full of traps.” From an American perspective, the aphorism can be a bit of a culture shock. We tend to believe in the power of positivity, the American dream and the can-do spirit. Negativity can be seen as something worse than a weakness, both an indulgence and a privation at the same time.

Over the years, however, I came to respect the Poles’ innate suspicion. The truth is that we are far too easily fooled and taken in by those prey on the glitches in our cognitive machinery. Often business gurus have fooled themselves. They believe they have special powers of insight and get taken in by the glitches we all have in our mental machinery.

We get taken in because we want their claims to be true. We’d like to think that there is a secret we’re missing, that there’s a black magic that we’re not privy to and, if we prove our worth and obtain access to a few simple truths, we’ll capture the success that eludes us. Things can seem simple in a PowerPoint deck, but the truth is that the world is a messy place.

That’s why we need to train ourselves to ask the tough questions. What are we not seeing? What data is missing? What are alternative interpretations for the evidence being presented? It’s more important to be careful than smart. We can only make decisions on higher or lower levels of confidence. In the real world, there are no “sure things.”

— Article courtesy of the Digital Tonto blog
— Image credit: Pexels

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Time to Finally Kill the Idea of Leaderless Organizations

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Time to Finally Kill the Idea of Leaderless Organizations

GUEST POST from Greg Satell

About a decade ago, the management guru Gary Hamel wrote a highly cited article in Harvard Business Review entitled ‘First, Let’s Fire All the Managers’. He analyzed the success of Morningstar, a leading manufacturer of tomato products that operates with a flat management structure and called for other corporations to follow its lead.

“A hierarchy of managers exacts a hefty tax on any organization,” he wrote. “This levy comes in several forms. First, managers add overhead and, as an organization grows, the costs of management rise in both absolute and relative terms.” The article created a lot of buzz and helped bolster other flat models, such as Holacracy.

Yet the “flat organization” idea hasn’t caught on. “Since 1983, the size of the bureaucratic class — the number of managers and administrators in the US workforce — has more than doubled, while employment in other categories has grown by only 40%,” Hamil recently wrote. The truth is that we need managers and trying to eliminate them is a waste of time.

Planning A Spontaneous Revolution

In the early 2000s, a series of color revolutions spread across Eastern Europe sweeping away the authoritarian remnants of post-communist governments in Serbia, the Georgian Republic and Ukraine. These would prove to other revolutionary waves such as the Arab Spring. Old-style hierarchies suddenly seemed out of date.

I experienced some of these events first-hand. I was living in Ukraine during the Orange Revolution and managing the leading news organization in the country. I also spent some time in the Georgian Republic and got to see many of the reforms take place. When Hamel’s article came out, I had already begun the research that would lead to my book Cascades and I found his ideas about flat organizations not only persuasive, but inspiring.

I shouldn’t have. Even at the time, it had become clear that the revolutions weren’t as successful and many of us had hoped. In Ukraine, Viktor Yanukovych had already come to power and it would take another revolution to dislodge him. In other countries, such as Egypt, new authoritarians would soon take the place of those who had been overthrown.

Yet even more importantly, I would later get to know one of the chief architects of the color revolutions, my friend Srdja Popović, and would learn that the revolutions weren’t leaderless at all. In fact, much of what I had experienced as spontaneous and organic was actually very much planned, engineered and organized.

As I continued to research supposedly “leaderless” organizations this would be a recurring theme. Either their success was either not genuine or ephemeral, or that there was a less obvious, informal hierarchy at work.

The Truth About The Orpheus Orchestra

One of the most cited examples of successful leaderless organizations is the Orpheus Chamber Orchestra in New York, which has been operating without a conductor since 1972. They not only regularly play at top venues like Carnegie Hall and Lincoln Center, but have won multiple Grammy awards.

An orchestra concert is a highly coordinated event, with many different musicians needing to coordinate their efforts to play music according to a specific vision. If everyone applies their own interpretation, what should be a symphony would end up as a cacophony. So how does Orpheus manage to not only survive, but thrive?

The truth is that Orpheus is not really a purely leaderless organization. It would be more accurate to say that the members trade off leadership, with one member leading one particular collection and then a different member leading another. So while it is true that the Orchestra as a whole is leaderless, each concert is leaderful.

That’s quite a big difference. If you would believe that an entire orchestra could conduct itself, you might go and try to run your organization with no direction at all, which would be a disaster. However, if you would follow the direction of the Orpheus Chamber Orchestra, you would appoint a particular team member to run each project, which would be so utterly conventional that it wouldn’t even seem worth mentioning.

The Open Source Pecking Order

Another favorite that advocates of “leaderless” organizations like to point to are open-source software communities. Yet once again, when you take a closer look, these communities are not some free-for-all, with everybody chiming in and making changes at will. In fact, in successful communities take governance very seriously.

Some projects, like Android and WordPress, are tightly controlled by the companies that originated them, Google and Automattic, respectively. They manage the community fairly tightly, accepting patches, revisions and improvements as they see fit and providing a vision for where they think the technology should go.

Open source foundations, like Linux and Apache provide more intricate governance structures. They don’t have much in the way of formal leadership, but in practice each project has informal leaders who drive the direction of the technology. In fact, competition for clout within those communities can be very stiff.

There’s a reason why some of the world’s most valuable companies pay people well to contribute to open-source software communities and it’s not altruism. They want to shape how crucial technologies will develop to benefit their business. To do that, talented people need to spend time building the trust and reputation that will enable them to lead.

Let’s Not Fire All The Managers

For a while now, management gurus such as Gary Hamel have been advocating for flatter organizations, yet there is little evidence that eliminating leaders is a viable model. In fact, when Wharton Professor Ronnie Lee took a close look at game software developers, he actually found that the number of levels of bureaucracy increased significantly, not decreased, over the last 50 years.

There are several reasons that this is true. The first is that, while having a flatter structure leads to more innovation and creativity, you need good leadership and governance to execute well. As an industry matures and becomes more complex, more levels of hierarchy are needed to manage it effectively.

Another important factor to consider is that even without a formal hierarchy, leaders will tend to emerge. Which is why when you take a closer look at often cited examples of “leaderless organizations,” there is much more hierarchy that it would at first seem. Just because there isn’t an organization chart doesn’t mean there isn’t a pecking order.

We need to stop thinking in terms of how many levels of bureaucracy there are and start working to network our organizations. We don’t need to eliminate managers — or anyone else for that matter — but to widen and deepen connections within and without our enterprise. We need to lead and to do it more effectively.

The role of leadership in organizations has changed. It is no longer merely to plan and direct work, but to inspire meaning and empower belief. As I wrote in Cascades, the key to transformational change is small groups, loosely connected by united by a shared purpose. The job of leaders today is to help those groups connect and forge a common purpose.

— Article courtesy of the Digital Tonto blog
— Image credit: Pexels

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Three Facts That Business Leaders Refuse to Accept

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Three Facts That Business Leaders Refuse to Accept

GUEST POST from Greg Satell

In the late 90s Fortune magazine named Enron the most innovative company for six consecutive years, right up until the company collapsed in scandal. GE’s strategy of stack ranking was seen as a model to be emulated by other firms, even though there was no evidence it worked. McKinsey advised companies to fight a war for talent.

Today, we know better. It’s obvious that Enron was incredibly dysfunctional, that stack ranking undermines a high-performance culture and that talent is something that you build through upskilling, not something you “win” in a metaphorical war. It’s mind boggling to think of all the damage that was done before those ideas were exposed.

Yet if we accept all that we need to ask ourselves which ideas are widely accepted today that don’t hold water. Every era has its own fictions, things that are accepted because they are repeated, but lack any serious foundation. They become memes replicating themselves throughout the zeitgeist, rarely being questioned. Here are three truths that will surprise you.

1. Bigger Organizations Are More Innovative

We tend to think of innovation as something startups do. Big organizations, with their bloated bureaucracies and cumbersome decision making, are less nimble. Yet a recent book, Corporate Explorer, by Stanford professor Charles O’Reilly, Harvard Professor Paul Lawrence and consultant Andrew Binns finds that larger firms have more resources, talent and ideas.

This may seem surprising, but there is ample evidence supporting the principle that larger enterprises innovate more effectively. A 1969 study of local health departments found that the larger ones serving larger communities were more innovative. A 1986 analysis of footwear manufacturers found that the bigger ones had more technical specialists and adopted more radical innovation. Same thing when researchers looked at German banks’ adoption of telecommunication services.

Clearly startups have advantages. They tend to be less bureaucratic and can make decisions faster. They are also less invested in incumbent systems and technologies, which makes change easier. Yet innovation isn’t just about speed, it’s also about commitment to solving important problems and larger enterprises have more resources and scope to do that.

That’s why when you look at the most cutting edge technologies, like quantum computing, artificial intelligence, materials science, synthetic biology and others, you tend to find large organizations at the core. Don’t get me wrong, not every big company can innovate, but the ones that can come up with new ideas and execute them consistently, year after year and decade after decade, are enterprises with scale.

2. Levels Of Bureaucracy And Hierarchy Are Increasing, Not Decreasing

About a decade ago, the management guru Gary Hamel wrote a highly cited article in Harvard Business Review entitled First, Let’s Fire All the Managers. He analyzed the success of Morningstar, a leading manufacturer of tomato products that operates with a flat management structure and called for other corporations to follow its lead.

“A hierarchy of managers exacts a hefty tax on any organization,” he wrote. “This levy comes in several forms. First, managers add overhead, and as an organization grows, the costs of management rise in both absolute and relative terms.” The article was very influential and helped bolster other flat models, such as Holacracy.

For a while now, management gurus have been advocating for flatter organizations, yet there is little evidence that eliminating managers is a viable model. In fact, when Wharton Professor Ronnie Lee took a close look at game software developers, he found that the number of levels of bureaucracy increased significantly, not decreased, over the last 50 years.

Certainly, the “flat organization” idea hasn’t caught on. “Since 1983, the size of the bureaucratic class—the number of managers and administrators in the US workforce—has more than doubled, while employment in other categories has grown by only 40%,” Hamil recently wrote.

The inescapable conclusion is that we’ve failed to do away with bureaucracies and hierarchies because they serve a useful purpose. While flatter structures can inspire creativity, we need hierarchies to execute complex operations well. That might not play well when your trying to sell consulting projects or on the keynote stage, but it’s the truth.

3. Markets Are Becoming Less Competitive, not More (At least in the US)

Today it’s become an article of faith that everything moves faster. Business pundits tell us that we’re living in a VUCA world (Volatile, Uncertain, Complex and Ambiguous). These are taken as basic truths that are beyond questioning or reproach. Yet are things actually moving any faster than in earlier eras? The evidence is surprisingly scarce.

The data, however, tell a very different story. A report from the OECD found that markets, especially in the United States, have become more concentrated and less competitive, with less churn among industry leaders. The number of young firms have decreased markedly as well, falling from roughly half of the total number of companies in 1982 to one third in 2013.

A comprehensive 2019 study from the National Bureau of Economic Research found two correlated, but countervailing trends: the rise of “superstar” firms and the fall of labor’s share of GDP. Essentially, the typical industry has fewer, but larger players. Their increased bargaining power leads to more profits, but lower wages.

The truth is that we don’t really disrupt industries anymore. We disrupt people. Economic data shows that for most Americans, real wages have hardly budged since 1964. Income and wealth inequality remain at historic highs. Anxiety and depression, already at epidemic levels, worsened during the Covid-19 pandemic.

What You See Is How You’ll Act

When ideas are repeated often enough, we begin to take them as self-evident and don’t even question them. People take it for granted that small organizations are more innovative than larger ones, that flatter organizations outperform those with high levels of bureaucracy and that business is more competitive today than in earlier eras.

If you believe all that, then you would avoid getting involved with a large organization if you want to innovate, you would try to eliminate levels of hierarchy and create a high sense of urgency about everything you do. Yet when you examine the evidence it becomes clear that none of these things are factual.

The truth is that size has little to do with innovation. As we saw during Covid, the most pathbreaking advances came from collaborations between organizations, public and private, large and small. The levels of hierarchy in an organization aren’t nearly as important as its networks. Pushing too many initiatives is more likely to result in a high level of change fatigue and diminished mental health than lead to genuine results.

When we look back at earlier eras, it’s easy to see the errors in the zeitgeist. It seems obvious that the robber barons undermined society, that excessive tariffs during the depression would impoverished society and that Enron was a fraud. Yet we need to look with the same skeptical eye at prevalent beliefs today.

As Richard Dawkins has explained, memes are selfish. They propagate themselves for their own benefit, not necessarily for ours. We need to learn to be fiercer advocates for our fates.

— Article courtesy of the Digital Tonto blog
— Image credit: Pexels

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You Need a Strategy Not a Slogan to Overcome Resistance to Change

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You Need a Strategy Not a Slogan to Overcome Resistance to Change

GUEST POST from Greg Satell

When we’re passionate about an idea, we want others to see it the same way we do, with all its beautiful complexity and nuance. We want to believe that if others can just understand it, they will embrace it. That’s why most change management practices focus on persuasion, explaining the need for change and creating a sense of urgency.

But consider recent research that finds that we can’t even agree on simple concepts such as what a penguin is and it becomes clear that for any given initiative, people are bound to see it differently. The simple truth is that change doesn’t fail on its own, it fails because people resist it. If we are to bring about genuine change, our first job is to overcome that resistance.

We need to internalize that humans form attachments to people, ideas and other things and, when those attachments are threatened, we act in ways that don’t reflect our best selves. Every change strategy has to begin with that. Clever gimmicks or snappy slogans won’t bring about true transformation. We have to build a strategy to overcome resistance from the start.

First, Follow The Energy

There’s something about human nature that, when we’re really excited about an idea, makes us want to go convince the skeptics. That’s almost always a bad idea. A much better strategy is to start with people who are enthusiastic about your change, who want it to succeed. They can help you strengthen it and spread it to others, who can spread it further still.

For example, in his efforts to reform the Pentagon, Colonel John Boyd began every initiative by briefing a group of collaborators he called the “Acolytes,” who would help hone and sharpen the ideas. He then moved on to congressional staffers, elected officials and the media. By the time general officers were aware of what he was doing, he had built up too much support to ignore.

In a similar vein, a massive effort to implement lean manufacturing methods at Wyeth Pharmaceuticals began with a single team at one factory, but grew to encompass 17,000 employees across 25 sites worldwide and cut manufacturing costs by 25%. The campaign that overthrew Serbian dictator Slobodan Milošević started with just 5 kids in a coffee shop.

One advantage to starting small is that you can identify your apostles informally, even through casual conversations. In skills-based transformations, effective change leaders often start with workshops and see who seems enthusiastic or comes up after the session. Your apostles don’t need to have senior positions or special skills, they just have to be passionate.

“You have to go where the energy is,” John Gadsby, who built a movement for process improvement inside Procter & Gamble that has grown to encompass 60,000 employees, told me. “We’ll choose energy and excitement and enthusiasm over the right position, or the person at the right leadership level, or the person whose job it is supposed to be to do that.”

Identify Shared Values

Humans naturally form tribes. In a study of adults that were randomly assigned to “leopards” and “tigers,” fMRI studies noted hostility to out-group members. Similar results were found in a study involving five year-old children and even in infants. Evolutionary psychologists attribute this tendency to kin selection, which explains how groups favor those who share their attributes in the hopes that those attributes will be propagated.

So it’s natural that when we feel passionately about an idea, we want to focus on how it’s different, to create our own tribe. For example, the Agile Manifesto has inspired fierce devotion and helped build a vibrant community around Agile product development. So it shouldn’t be surprising that when evangelists try to attract others to the movement, it’s the Agile Manifesto that they want to emphasize.

Yet for those outside the Agile development community, its principles can seem strange and impractical. It emphasizes adaptability over planning which can appear to be chaotic for those who are used to a more traditional approach. If you want to bring in new people, it’s better to focus on shared values, such as the ability to produce better quality projects faster and cheaper.

One of the biggest challenges in driving transformation is that while differentiating values make people excited about an idea, it is shared values that help build genuine and widespread support. That doesn’t mean you abandon or water down your beliefs. It just means that you need to meet people where they are, not where you wish them to be.

Design A Dilemma Action

Unfortunately, building a shared purpose isn’t always possible. Whenever we set out to make a significant impact you are bound to get pushback, not for any rational logic, necessarily but because, for whatever reason, but because for whatever reason, it offends some people’s dignity, their identity, their sense of self. A simple truth is that we all form irrational attachments and when those are threatened, we tend to act out in ways that don’t reflect our best selves.

When that happens — and it always does eventually — we can get sucked into a conflict, which will likely take us off course and discredit what we’re trying to achieve. Yet, here too, developing empathy skills to identify shared values can be extremely helpful. They can help us to design a dilemma action, which puts the opponents into an impossible position.

Dilemma actions have only recently become an active area of research, but have been used by practitioners for at least a century — famous examples include Gandhi’s Salt March, King’s Birmingham Campaign and Alice Paul’s Silent Sentinels. They are just as effective in an organizational context, using an opponent’s resistance against them.

One of the great things about dilemma actions is that you approach them exactly the same way you approach building allies — by identifying a shared purpose. Once you do that, you can design a constructive act rooted in that shared purpose that advances your agenda. Your opponent then has a choice: they can disrupt the act and violate the shared value or they can let it go forward and let change progress.

For example, I was once leading a transformation project that was being impeded by a sales director hogging accounts. Although it was agreed that she would distribute her clients, she never got around to it, so I set up a meeting with a key account and one of our salespeople. When she tried to disrupt the meeting, she violated the shared value we had established, was dismissed from her position and everything fell into place after that.

Planning To Survive Victory

Many change leaders assume that once they win an initial victory that everything will get easier after that. They work for months — and sometimes years — to get a project off the ground. Yet just when they think they’re turning the corner, when they’ve won executive sponsorship, signed up key partners and procured enough financing to have a realistic budget, all the sudden things seem to get mired down.

That’s no accident. Just because you’ve won a few early battles doesn’t mean opposition to your idea melts away. On the contrary, faced with the fact that change may actually succeed, those who oppose it have probably just begun to redouble their efforts to undermine it. These efforts are often not overt, but they are there and can easily derail an initiative.

As Saul Alinsky once put it, every revolution inspires its own counterrevolution. That’s why every change effort must plan from the beginning to survive victory. You need to anticipate resistance, think about where you’re vulnerable and how you’ll mitigate those attacks by leveraging shared values.

The truth is that change is always a journey, never a particular destination, which is why lasting change is always built on the common ground of shared values. The answer doesn’t lie in any specific strategy or initiative, but in how people are able to internalize the need for change and transfer ideas through social bonds. A leader’s role is not necessarily to plan and direct action, but to inspire and empower belief.

— Article courtesy of the Digital Tonto blog
— Image credit: Pixabay

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Why Are What We Know and What We Do Often So Different?

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Why Are What We Know and What We Do Often So Different?

GUEST POST from Greg Satell

In 1988, a young management student named John Krafcik published an article in MIT’s Sloan Management Review entitled, Triumph of the Lean Production System. Based on his study of 90 manufacturing plants in 20 countries, it argued that manufacturing could be made vastly more productive, while improving quality at the same time.

These methods would grow into the lean manufacturing movement and their effectiveness has been well documented. Krafcik himself went on to have a successful career in the auto industry, taking over Google’s self-driving division, Waymo, in 2016. There is an amazingly strong case for manufacturers to adopt lean methods.

Yet surprisingly few do. In fact, a recent survey found that less than 15% of manufacturers have adopted lean methods. This dilemma is much more common than you’d think. We’ve been conditioned to believe that a good idea, once proven out, will prevail in the marketplace, but that’s not really true. There is often a large gap between what we know and what we do.

A New World Of Work

Clearly the world of work has changed. When I began professional life in the mid-90s, laptops were still new and few people had access to the Internet. Work was something you did in your office. We largely communicated by phone and memos typed up by secretaries. Data analysis was something you did with a pencil, paper and a desk calculator.

Today, on the other hand, work is largely something we do with each other. We are increasingly collaborating in teams and our work has become more social and less cognitive. For example, the journal Nature noted that the average scientific paper today has four times as many authors as one did in 1950 and the work they are doing is far more interdisciplinary.

The truth is that we spend most of our time in meetings, collaborating with colleagues to solve problems, rather than working alone in our offices to execute tasks. Perhaps not surprisingly, there has been no shortage of concepts developed, such as psychological safety, agile development and diversity & inclusion policies, designed to help us succeed and prosper in this new world of work.

Yet much like with lean manufacturing, the reality of most workplaces rarely reflects the pundits’ rhetoric. The reason for this is simple. The status quo has inertia on its side and that is an incredibly powerful force. Change takes effort and is often disruptive. The costs are clear and present while the benefits can seem distant and remote.

The New, New Economy

In 1982, when Steve Jobs was trying to lure John Sculley from Pepsi to Apple, he asked him, “Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?” The ploy worked and Sculley became the first CEO of a major conventional company to join a Silicon Valley startup.

Yet since then, besides for a relatively short period between 1996 and 2004, labor productivity has remained depressed, except during recessions when businesses cut workers. At the same time, income inequality has increased and business has become less dynamic, with fewer startups and less churn among market leaders. I don’t think those are the changes Jobs was talking about.

It seems amazing that given all of the technological progress, including mobile and cloud computing, artificial intelligence and Industry 4.0 manufacturing technologies, that so little has been accomplished, but in their recent book, Power and Progress, economists Daron Acemoglu and Simon Johnson argue that market and technological forces, if left to their own devices, tend to favor elites rather than society as a whole.

We can’t simply leave our fates to the impersonal whims of market and technological forces. The historical record shows that innovations that displace workers do not necessarily make us better off. In fact, we have strong reasons to suspect that many of these technologies impoverish our society and corrode our culture.

Technology and markets were created by humans to serve people. That is their purpose and should be, by any reasonable analysis, the measure of their value. We need to take a hard look at the last 30 years and ask how we’re better off, how we’re worse off, what we need to do differently and how we can forge a better path.

The End Of History?

In 1989, just before the fall of the Berlin Wall, Francis Fukuyama published an essay in the journal The National Interest titled The End of History, which led to a bestselling book. Many took his argument to mean that, with the defeat of communism, US-style liberal democracy had emerged as the only viable way of organizing a society.

He was misunderstood. His actual argument was far more nuanced and insightful. After explaining the arguments of philosophers like Hegel and Kojeve, Fukuyama pointed out that even if we had reached an endpoint in the debate about ideologies, there would still be conflict because of people’s need to express their identity.

Humans tend to build stories that support our notions of who we think we are. If you work hard at your job, new ideas about lean manufacturing or agile development can seem like an affront. In much the same way, entrepreneurs like to think that their businesses have social value and the denizens of the tech universe like to think that their code changes the world.

If you believe that the forces of history are on your side, pursuing your path seems like a calling and an obligation. The benefits you receive are just more proof that you are headed in the right direction and whatever costs that are incurred by others may seem like mere table stakes to be paid for the price of progress.

That’s why tech billionaires write silly manifestos and politicians are able to fleece them for outrageous amounts of money. It is not enough to earn a good living and live in comfort. People have a need to be recognized and they will cling to the the identity they have built for themselves. Asking them to change can often seem more than a simple shift in behavior, but an affront to who they are.

Dismantling the Cult of Inevitability

We’d like to think that if something is a good idea, can be proven to work, improve performance and make people’s lives better, that market and technological forces will somehow make it inevitable. Unfortunately, the history of the last half century makes it clear that’s not true. Most people in developed countries are worse off than a generation ago.

Yes it’s true that our TV’s have gotten better and we have infinitely more channels. We carry supercomputers around in our pockets that give us unprecedented access to information and emerging services like ChatGPT give us almost superhuman powers to process it. Yet the cost of basics, such as housing, healthcare and education have impoverished us.

This wasn’t inevitable. Consider that in the US per capita GDP has nearly doubled since 1985 but median household income has risen only 27% and you begin to see the problem. In my work with organizational transformation it is clear that similar forces are at work in the corporate world. For all the talk about disruption and change, the status quo usually prevails.

We need to be more cognizant of the stories we tell ourselves. We have a primal need to be the heroes in our own narratives, to tell ourselves that we are on the right path while others are just fooling themselves, to look for information that confirms our choices and neglect evidence to the contrary. It is not a character flaw, but a reality of human nature.

Ironically, it is through awareness of our failings that can help us overcome them. Decades of research show that shifts in knowledge and attitudes don’t necessarily result in changes in behavior. Once we know that we can be more vigilant and hold ourselves to a higher standard. What we know and what we do are two different things, but with effort we can narrow the gap.

— Article courtesy of the Digital Tonto blog
— Image credit: Unsplash

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Don’t Underestimate the Power of Identity

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Don't Underestimate the Power of Identity

GUEST POST from Greg Satell

In the 1990s, western-style liberal democracy was triumphant. The Berlin Wall had fallen and the Cold War had been won. Teams of diplomats and consultants rushed to spread the Washington Consensus, an agreed upon set of reforms that poor countries were pressured to undertake by their richer brethren.

Francis Fukuyama noted at the time that we had reached an endpoint in history, when one model had achieved dominance over all others. Yet even as he laid out the rational case, he invoked the ancient Greek concept of thymos, or “spiritedness,” to warn that even at the end of history, there would be some who would insist on going their own way, no matter the consequences.

That’s why any change, even if provably good, noble and just, will inevitably incur resistance. It’s a simple truth that humans form attachments to people, ideas and other things and, when those attachments are threatened, we see it as an outright attack on our identity and lash out. That’s why identity needs to be at the center of any change strategy, if it is to succeed.

Triggering Resistance

Imagine this scene. You are in a meeting to discuss a proposal. There is an active discussion and, over the course of an hour, the group steadily moves toward a consensus. Then, as you’re moving on to discuss next steps and close the meeting, somebody who hadn’t spoken up during the entire hour suddenly has a hissy fit and melts down in the middle of the conference room.

Let’s think about what happened underneath the surface. When the idea was initially proposed, that person had such a visceral reaction to it that they couldn’t even articulate why they were so against it. Nevertheless, being such a disastrous idea in their eyes, they were sure it would get derailed along the way. When that didn‘t happen, it triggered an explosion.

There’s a couple of things that we can take away from this. The first is that it was the initial success of moving to next steps that triggered them and their inappropriate reaction pretty much assured that the proposal would move forward. So one way of dealing with resistance is to quietly build traction. If you can resist the urge to engage or attack your opposition directly, they will eventually feel the need to lash out and discredit themselves.

Another important point to consider is that people rarely melt down in conference rooms. Usually, they hold their composure and then go quietly sabotaging the idea in the hallways. Your most active opposition are usually not the ones voicing concerns. Most often, they find more surreptitious ways of undermining an initiative.

Shifting Identities

Just because people build attachments doesn’t mean that they need to be permanent aspects of their identity. In Immunity to Change, Harvard’s Robert Kegan and Lisa Lahey, discuss their decades of research into how people build competing commitments based on how they see themselves. Their work shows that greater self awareness can break the spell.

For example, “David” was a senior leader who had taken on greater responsibility and desperately needed to delegate. As much as he saw how important it was for him to hand off projects and give more autonomy to his people, he just couldn’t bring himself to do it. It was almost as if he was actively sabotaging his own objective.

As it turned out, David had a somewhat hardscrabble upbringing and identified himself as a “hands on” manager. It was important for him to do “real work” and not just be “overhead.” So every time he tried to delegate, it felt like he was getting away from his hardworking roots and becoming something he didn’t want to be.

The problem was solved once David saw that the change he needed to undertake involved his own identity. He began to see another role for himself, that of an enabler and a coach, empowering his people. He was able to see their accomplishments as his own. It didn’t happen automatically—it took real work—but it can be done.

Designing A Dilemma

I once had a six-month assignment to restructure the sales and marketing operations of a troubled media company and the sales director was a real stumbling block. She never overtly objected, but would just nod her head and then quietly sabotage progress. For example, she promised to hand over the clients she worked directly with to her staff, but never seemed to get around to it.

It was obvious that she intended to slow-walk everything until the six months were over and then return everything back to the way it was. As a longtime senior employee, she had considerable political capital within the organization and, because she was never directly insubordinate, creating a direct confrontation with her would be risky and unwise.

So rather than create a conflict, I designed a dilemma. I arranged with the CEO of a media buying agency for one of the salespeople to meet with a senior buyer and take over the account. The sales director had two choices. She could either let the meeting go ahead and lose her grip on the department or try to derail the meeting. She chose the latter and was fired for cause. Once she was gone, her mismanagement became obvious and sales shot up.

Dilemma actions have been around for at least a century. One early example was Alice Paul’s Silent Sentinels, who picketed the Woodrow Wilson’s White House with his own quotes in 1917. More recently, the tactic has been the subject of increasing academic interest. What’s becoming clear is that these actions share clear design principles that can be replicated in almost any context.

Key to the success of a dilemma action is that it is seen as a constructive act rooted in a shared value. In the case of the Sales Director, she had agreed to give up her accounts and setting up the meeting was aligned with that agreement. That’s what created the dilemma. She had to choose between violating the shared value or giving up her resistance.

Creating A Larger, Integrated Identity

Our identity and sense of self drives a lot of what we see and do, yet we rarely examine these things because we spend most of our time with people who are a lot like us, who live in similar places and experience similar things. Our innate perceptions and beliefs seem normal and those of outsiders strange, because our social networks shape us that way.

That’s why we often see so much resistance to change. People get invested in the status quo. They work within it, follow its rules and achieve some things. Those achievements become part of their identity and to reject the means in which their present self arose is, in some sense, to reject a part of themselves.

Yet our identities aren’t fixed. They grow and evolve over time. We routinely choose to add facets to our identity, while shedding others, changing jobs, moving neighborhoods, breaking off some associations as we take on others. “Identity can be used to divide, but it can and has also been used to integrate,” Francis Fukuyama wrote in his book on the subject.

It is at this nexus of identity and purpose that creativity and innovation reside, because when we learn to collaborate with others who possess knowledge, skills and perspectives that we don’t, new possibilities emerge to achieve greater things. To make that possible, however, we need to support the identities of those around us, so that we can build the shared purpose upon which we can build a shared future.

— Article courtesy of the Digital Tonto blog
— Image credit: Unsplash

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