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.

Stop Doubling Down on Bad Ideas

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Stop Doubling Down On Bad Ideas

GUEST POST from Greg Satell

Over the course of my career, I’ve had the opportunity to lead a number of organizations and each one involved a series of steep learning curves. Even the most successful operations do some things poorly, so managing an enterprise involves constant improvement. You always want to figure out where you can do things better.

One way to do that is to identify other organizations that do something well and adopt best practices. Copying what others do won’t make you world class, but it will get you started on the right road. Over time, you can learn which practices are a good fit for your organization and which are not. As you progress, you can begin to develop your own capabilities.

What you don’t want to do is to take bad ideas that have failed try and force them through, yet it happens all the time. Business pundits and consultants don’t stop selling zombie ideas just because they don’t work and people don’t stop getting taken in by slick sales jobs. We need to be much more discerning about the ideas we adopt. Here are some to watch out for.

The War On Talent

When some McKinsey consultants came up with the idea of a war for talent in 1998, it made a lot of sense. In a knowledge economy, your people are your greatest resource. Creating a culture of excellence, rewarding top employees and pruning out the laggards just seemed like such an obvious formula for success that few questioned it.

However, even early on some began to see flaws. Just a few years after McKinsey launched the concept, Stanford’s Jeffrey Pfeffer explained how study after study refuted the “War for Talent” hypothesis. He found that firms who followed the “talent war mind set” ended up actually undermining their people and overemphasizing recruiting from outside.

Even worse, McKinsey’s approach often creates a corrosive culture. By valuing individual accomplishment over teamwork, leaders set up a competitive dynamic that discourages collaboration while sabotaging the knowledge transfer that promotes learning new skills and improves performance. In a New Yorker article, Malcolm Gladwell explained how that kind of competitive dynamic contributed to Enron’s downfall.

The truth is that you don’t need the best people, you need the best teams and that requires a very different approach. Fostering collaboration requires an environment of psychological safety, not a series of performance review cage matches. Talent isn’t something you attract and bid for, it is something you build.

The Cult Of Disruption

It’s become fashionable to say that we live in a VUCA world (Volatile, Uncertain, Complex and Ambiguous). The term first arose in the aftermath of the Cold War, when a relatively stable conflict between two global superpowers fragmented into a multipolar multiethnic clash of civilizations. Today, however, it has become so firmly entrenched in the business lexicon that nobody even thinks to question it. Change has become gospel.

If you see the world in turmoil, the only sensible strategy is to constantly change and adapt. Perhaps just as importantly, in a corporate setting you need to be seen as changing and adapting. In this environment, managers have significant incentives to launch multiple initiatives aimed at transforming every aspect of the enterprise.

Yet do businesses really face a VUCA environment? The evidence seems to point in the opposite direction. A Brookings report showed that business has become less dynamic, with less churn among industry leaders and fewer new entrants. Research from the National Bureau of Economic Research found decreased competitive environments. A report from the IMF also suggests that these trends have worsened during the pandemic.

Make no mistake, all of the happy talk about change has a real cost. A study undertaken by PwC found that 65% of executives surveyed complained about change fatigue, and only about half felt their organization could deliver change successfully. 44% said that they don’t understand the change they’re being asked to make, and 38% say they don’t agree with it.

Perhaps not surprisingly, it found that most people have come to view new transformation initiatives suspiciously, taking a “wait and see” attitude undermining the momentum and leading to a”boomerang effect” in which early progress is reversed when leadership moves on to focus other priorities. In other words, we’re basically talking change to death.

Marching On Washington

The March on Washington remains one of the most iconic moments in American history. Martin Luther King Jr.’s “I Have A Dream” speech continues to inspire people around the world. The events of that day surely contributed to the successful passage of the Civil Rights Act of 1965 and made the world a better place.

So it’s no wonder that it seems like every time someone has an idea for change they plan a march. Yet the most salient aspect of over 100 years of marches on Washington is that none, except that one in 1963, have really accomplished much. In fact the very first one, in support of women’s suffrage in 1913, was a full blown disaster.

It’s not just social revolutionaries that make this mistake. Corporate change advocates have their own version of marching on Washington. They set up a big kickoff event to “create a sense of urgency” around change and use stark language like “innovate or die” and “burning platform” to make change seem inevitable.

The problem is that if a change is important and has real potential to impact what people believe and what they do, there will always be those who will hate it and they will work to undermine it in ways that are dishonest, underhanded and deceptive. Creating a lot of noise at the beginning of an initiative, before any real progress has been made, just gives your opposition a head start in their efforts to kill it off.

Closing The Knowing-Doing Gap

Business today moves fast. So we like simple statements that speak to larger truths. It always seems that if we can find a simple rule of thumb—or maybe 3 to 5 bullet points for the really big picture stuff—managing a business would be much easier. Whenever a decision needs to be made, we could simply refer to the rule and go on with our day.

Unfortunately, that often leads to cartoonish slogans rather than genuine managerial wisdom. Catchy ideas like “the war for talent,” “a VUCA world” and “creating a sense of urgency around change” end up taking the place of thorough analysis and good sense. When that happens, we’re in big trouble.

The problem is, as Ludwig Wittgenstein pointed out, “no course of action can be determined by a rule, because any course of action can be made out to accord with the rule.” Rules often appear to make sense on the surface, but when we try to apply them in the real world we run into trouble. We live in a complex universe and oversimplifying it leads us astray.

We need to stop worshiping the cult of ideas and start focusing on the problems we need to solve. The truth is that the real world is a confusing place. We have little choice but to walk the earth, pick things up along the way and make the best judgments we can. The decisions we make are highly situational and defy hard and fast rules. There is no algorithm for life. You have to actually live it, see what happens and learn from your mistakes.

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

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The Changemaker Mindset

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The Changemaker Mindset

GUEST POST from Greg Satell

Every time I speak to a group of executives, they complain that their organizations desperately need to change, but that the bosses are hostile to it. And every time I speak to a group of leaders, they say that change is their highest priority, but can’t seem to align the rank-and-file behind transformational initiatives.

The truth is that everybody loves their own brand of change, it’s other people’s ideas and initiatives that they don’t like. We all have things that we want to be different. But the status quo has inertia on its side and never yields its power gracefully. To want change is one thing, but to change ourselves, well… that’s another story.

What I’ve found in both my research and my practice is that people who bring about transformational, even historic, change start out no differently than anyone else. In fact, early versions of them are often decidedly unimpressive. The difference between them and everyone else is that somewhere along the way they learn to adopt a changemaker mindset.

A Problem They Couldn’t Look Away From

As a young man, Mohandis Gandhi wasn’t the type of person anyone would notice. Impulsive and undisciplined, he was also so shy as a young lawyer that he could hardly bring himself to speak in open court. With his law career failing, he accepted an offer to represent the cousin of a wealthy muslim merchant in South Africa.

Upon his arrival, Gandhi was subjected to humiliation on a train and it changed him. His sense of dignity offended, he decided to fight back. He found his voice, built the almost superhuman discipline he became famous for and successfully campaigned for the rights of Indians in South Africa. He returned to India 21 years later as the “Mahatma,” or “holy man.”

The truth is that revolutions don’t begin with a slogan, they begin with a cause. Martin Luther King Jr., as eloquent as he was, didn’t start with words. It was his personal experiences with racism that helped him find his words. It was his devotion to the cause that gave those words meaning, not the other way around.

Steve Jobs didn’t look for ideas, he looked for products that sucked. Computers sucked. Music players sucked. Mobile phones sucked. His passion was to make them “insanely great.” Every breakthrough product or invention, a laser printer, a quantum computer or even a life-saving cure like cancer immunotherapy, always starts out with a problem someone couldn’t look away from.

Identifying A Keystone Change

Every change effort, if it is to be successful, needs to identify a Keystone Change to bridge the gap between the initial grievance about the world as it is and the vision for how the world could be. You can’t get there in a single step. This is a lesson that even a legendary changemaker like Gandhi had to learn the hard way.

In 1919, five years after his return to India, Gandhi called for a nationwide series of strikes and boycotts in response to the Rowlatt Acts, which restricted Indian rights. These protests were successful at first, but soon spun wildly out of control and eventually led to the massacre at Amritsar, in which British soldiers left hundreds dead and more than a thousand wounded.

A decade later, when the Indian National Congress asked Gandhi to design a campaign of civil disobedience in support of independence, he proceeded more cautiously. Rather than rashly calling for national action, he set out with 70 or 80 of his closest disciples to protest unjust salt laws. Their nonviolent discipline inspired the nation and the world.

Today, the Salt March is known as Gandhi’s greatest triumph. It was the first time that the British was forced to negotiate with the Indians and, because it demonstrated that the Raj could be defied, helped lead to Indian independence in 1947. Yet without that earlier failure, which Gandhi would call his Himalayan miscalculation, it would not have been possible.

Gandhi is, of course, a legendary historical figure. But other, more pedestrian, changemakers learned the same thing. A lean manufacturing transformation at Wyeth Pharmaceutical started with a single change with a single team, but quickly spread to 17,000 employees. A healthcare revolution began with just six quality practices. When the CIO of Experian set out to move his organization to the cloud, he began with internal API’s and just a few teams.

To make change real, you need to get out of the business of selling an idea and into the business of selling a success. You do that with a Keystone Change.

Empowering A Movement

We revere legendary change leaders like Gandhi, Martin Luther King Jr, Nelson Mandela and others not just for their ideas, but because of how they empowered others to take ownership of their cause. Those who followed them did so not in their names, but for themselves. The struggle was collective, not one of subservience.

That’s what makes building a movement different from traditional change models they often teach in business schools. A snazzy internal communication program and a training regimen may help an organization adopt new software or gear up to support a new product line, but it won’t change how people fundamentally think or act.

Movement leaders focus on empowerment, not persuasion. Gandhi didn’t need to convince his countrymen about the daily humiliations and injustices suffered under the British Raj. King did not have to explain to black Americans that racism was wrong. Mandela did not have to persuade black South Africans about the evils of Apartheid. They empowered them to make a difference. That’s what makes movements so compelling and effective.

Changemakers of all kinds can do the same. At Experian, the CIO set up an “API Center of Excellence” to help product managers who wanted to build out cloud-based features. To power the quality movement in healthcare, activists created “change kits” to guide hospital staff who were on board and wanted to bring their colleagues along. Change can only succeed if you equip those who believe in it to drive it forward.

Building Empathy, Even For Your Enemies

People who believe in change want to believe that if everyone understood it, they’d want it to happen. That’s why “change management” gurus focus on communication and persuasion. They think that if you explain your idea for change in just the right way, others will see the light. For many change consultants, transformation is primarily a messaging problem.

Yet anyone who has ever been married or had kids knows how hard it can be to convince even a single person of something. Persuading hundreds, if not thousands—or even an entire society—that they should drop what they’re thinking and doing to adopt your idea and help drive it forward is a tall order. The simple truth is that no one is really that charming.

Make no mistake. If your idea is important, if it has real potential to affect how people think and how they act, there will always be those who will hate it and they will work to undermine it in ways that are dishonest, underhanded and deceptive. That’s just a simple fact of life that every potential changemaker needs to learn to internalize and accept.

Yet adopting a changemaker mindset means that you understand that change is always built on common ground and that you need to build empathy, even for your most ardent adversaries, because that is how you identify shared values and move things forward. It is by listening to your opposition and internalizing its logic that you can learn how to discredit it, or even better, inspire those hostile to change to discredit themselves.

That is the changemaker mindset: To understand that change is hard, even unlikely, but to remain clear-eyed, hard-nosed and opportunity focused. To know that through shared values and shared purpose, radical, transformational change is not only possible, but ultimately inevitable.

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

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A Tumultuous Decade of Generational Strife

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A Tumultuous Decade of Generational Strife

GUEST POST from Greg Satell

The physicist Max Planck made many historic breakthroughs, including a discovery that led to quantum theory. Still, he lamented that “A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it.”

Clearly, that’s not only true for scientific truths. Every generation rejects some notions of their elders, explores things on their own and adopts new ideas. Some of those ideas will survive, but others will ultimately be rejected, which always causes some acrimony. Even Aristotle complained about the “exalted notions” of the youth.

Yet this time is different. Because the Boomer generation was so large, and Generation X so small, those who came of age in the 1960s essentially ruled for two epochs. The rising Millennial generation, which is now the largest, holds starkly different values than Boomers. Over the next decade, as Millennials come to predominate, we can expect tensions to rise.

Revamping The Workplace

I still remember one incident early in my career. I had taken a job in national radio sales and the first few months were devoted to an intensive training course. One day that featured particularly nice weather, my fellow trainees and I decided that, instead of bringing our lunch back to the office, we would eat it in the park.

Our Boomer bosses were irate and insulted. The problem wasn’t that we took too much time for lunch, but rather that we took too much pleasure in it which, in their eyes at least, violated the social contract. As trainees, we were supposed to “pay our dues,” not to enjoy ourselves and our brief respite from the daily grind was seen as something akin to insubordination.

Millennials won’t stand for that kind of treatment. As this article in Harvard Business Review explains, they require a better work-life balance, more flexible schedules and constructive feedback. They demand to be respected and chafe at hierarchy. The younger generations of today don’t expect to “pay dues,” they seek a greater purpose.

Businesses that do not heed the Millennial’s demands are finding it difficult to compete. Millions of Boomers retired early during the pandemic, which led to severe labor shortage and the Great Resignation. Over the next few decades, as the younger generations take charge, we can expect a very different workplace.

Rethinking Economics

In 1970, the economist Milton Friedman proposed a radical idea. He argued that corporate CEOs should not take into account the interests of the communities they serve, but that their only social responsibility was to increase shareholder value. While ridiculed by many at the time, by the 1980s Friedman’s idea became accepted doctrine.

It wasn’t just Friedman, either. As the Boomer counterculture of the 60s and 70s gave way to the Yuppie culture of the 80s a new engineering mindset took hold. Much like the success of business was boiled down to its stock price, the success of a society was boiled down to GDP. “You manage what you measure” became an article of faith.

It has become clear that approach has failed. In fact, since Friedman’s essay the American economy has become markedly less productive. Our economy has become less competitive and less dynamic. Purchasing power for most people has stagnated. By just about every metric you can think of, our well-being has declined since the 1970s.

Perhaps not surprisingly, the younger generations have rebelled. While the Boomers remember the Reagan years of the 1980s fondly, Millennials and Zoomers only see a record of failure. From the Great Recession to the Great Resignation, they see a dire need to change course and will not be assuaged by rosy economic statistics. They want a better quality of life.

Reshaping Society

When the Boomers came of age in the 60s it was an era of rising prosperity. Perhaps not surprisingly, many prioritized self-actualization and sought to “find themselves.” The scandals of the 1970s made them suspicious of the establishment and the Reagan years, along with the fall of the Soviet Union, reinforced their faith in individual agency.

Millennials have seen this ideology fail. Besides the lack of productivity growth and stagnation in wages, they have seen 9/11 traumatize the nation and pave the path for an ill-considered war on terror that cost trillions and devastated America’s standing in the world. Many carry significant educational debt and had their careers derailed by the Great Recession.

Research from Pew finds other important differences. While the Millennial generation is the most educated in history, with almost 40% holding a 4-year degree, they are worse off financially than their predecessors. Many continued to live with their parents as adults and delayed getting married and starting families. They are also far more multicultural than previous generations.

Perhaps not surprisingly, Millennials have rejected the 1980s “greed is good” ethos of the Boomers and tend to focus on experiences rather than materialistic signaling. Also, while the younger generation’s passion for inclusivity is often overstated, they have grown up in a world far more accustomed to seeing marginalized groups in powerful positions.

Brace Yourself for a Tumultuous Decade

The almost seismic shift in values that the transition from Boomer to Millennial dominance represents would be enough to set the stage for conflict. What will make this decade even more difficult is that the demographic impact is hitting at the same time as other important shifts in technology, resources and migration patterns. The last time society has endured this much of a pressure cooker was the 1920s, and that ended badly.

We are already feeling the effects. The mismanaged “War of Terror,” the Great Recession and then the Covid pandemic undermined faith in institutions and paved the way for the rise of popular authoritarianism and the decline of democratic institutions. The battle for the liberal world order is being fought in, of all places, Ukraine, as I write this.

What I think should be most salient about our situation at this point in history is that we are here because of choices that were made. Yes, there were cultural and economic forces at play, but the Boomer generation chose to value the individual over the community, shareholders over other stakeholders and to embrace GDP as a proxy for the overall health of society.

We can, as Ukraine has been doing for the past twenty years, make different choices. We can choose our communities over ourselves, resilience over optimization, and to nurture rather than to dominate. Most of all, we need to invest to increase the productive, environmental and human potentials of our society so that we can better face the challenges ahead.

Make no mistake. This will be a struggle, as all worthy things are.

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

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What Separates Truly Revolutionary Leaders from Everyone Else

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What Separates Truly Revolutionary Leaders From Everyone Else

GUEST POST from Greg Satell

In 1919, Mahatma Gandhi, who had long established himself as a revolutionary leader of uncommon strategic acumen, called for a general strike throughout India to protest unjust laws levied on his people by the British. It was, at least at first, an enormous success. In Mumbai, for example, 80% of shops closed their doors.

Yet things soon got out of hand. What began as peaceful protests against oppression turned violent. Riots broke out. The moral high ground that Gandhi so coveted—and relied on to accomplish his objectives—would crumble under his feat. Things ended with a horrible massacre at Amritsar. Gandhi would later call it his Himalayan miscalculation.

Yet that wasn’t the end of the story. Not by a long shot. He not only admitted his mistake, he vowed to learn from it. Ten years later, when the opportunity presented itself, he took a very different tack, which led to the Salt March and became his greatest triumph. It is often the ability to learn from mistakes that makes the difference between success and failure.

A Flash Of Insight That Would Overthrow A Dictator

One day in 1998, a group of five friends met in a cafe in Belgrade. Although still in their 20s, they were already experienced activists and most of what they experienced was failure. In 1992, they had taken part in student protests to protest the war in Bosnia. Yet much like the #Occupy protests that would later spread across the world, they never amounted to much.

In 1996, they took to the streets to support Zajedno, a coalition of opposition parties aligned against Slobodan Milošević. Although the ruling party clearly lost at the polls, the Serbian dictator annulled the election. Massive protests broke out, but unfortunately, the opposition coalition was unable to maintain unity and it was all for basically naught.

It was these defeats that they began to examine in 1998. They took a hard look at what had worked and what didn’t. They knew that they could get people to the polls and they knew that if people went to the polls they could win the Presidential election coming up in 2000. They also knew, from bitter experience, that if Milošević lost the election he would try to steal it.

So that’s what they planned for. They created a movement called Otpor that was steeped in patriotic imagery from the World War II resistance. It grew slowly at first, amounting to only a few hundred members after a year. But by the time the elections came around in 2000, Otpor’s ranks swelled to 70,000 and had grown into a potent political force.

When the Serbian strongman tried to falsify the election results massive protests, now known as the Bulldozer Revolution broke out. This time Otpor was able to enforce unity among the opposition parties, having lost the confidence of the military and police forces, Milošević was forced to give in. He would later be extradited to The Hague and die in his prison cell.

The Epiphany That Would Lead To The Lean Startup

In 1999, the day before his eighth startup went public, Steve Blank decided to retire at the age of 45. With time to reflect, he sat in a ski lodge and began to write a memoir with a “lessons learned” section at the end of each chapter. “In hindsight, it was a catharsis of moving from one part of my life to another,” he told me.

What he realized was that the idea a business started with was always wrong. Sometimes it was off by a little, sometimes it was off by a lot, but it was always wrong. The key to success was not a better idea, necessarily, but identifying and fixing its flaws before you ran out of money. To do that you needed to go and talk to customers.

“I was 80 pages in when I realized there was a pattern. When I sat inside the building things didn’t go very well, but when I got outside the building things turned around and got much better,” he remembers. Pursuing customer development even before product development was the essential insight behind the Lean Startup movement.

Today, lean startup methods have gone beyond startups been proven useful for large corporations, scientific institutions and even government agencies. The essential epiphany that made it possible came not from divine enlightenment, but rather through hard examination of two decades of mistakes and the will to change tack.

The Unmasking Of The Most Deadly Disease

In 1891, Dr. William Coley had an unusual idea. Inspired by an obscure case, in which a man who had contracted a severe infection was cured of cancer, the young doctor purposely infected a tumor on his patient’s neck with a heavy dose of bacteria. Miraculously, the tumor vanished and the patient remained cancer free even five years later.

Looking to repeat his success, he created a special brew of toxins designed to jump-start the immune system. Unfortunately, he was never able to replicate his initial results consistently. His idea was met with skepticism by the medical community and, when radiation therapy was developed in the early 20th century, Coley’s research was largely forgotten.

Yet his daughter, Helen Coley Nauts, kept the dream alive. With a $2000 grant from Nelson Rockefeller she founded the Cancer Research Institute in 1953 to study immunological approaches to cancer. While mostly dismissed by the medical community, it did inspire a small cadre of devotees to keep looking, albeit mostly in vain.

A breakthrough came in 1996, when a researcher named Jim Allison published a landmark paper that added a new twist to the mystery. Allison had a hunch that Coley’s initial insight that our immune system can fight cancer was correct. However, he had discovered a “switch” that would shut off the immune response and believed that he could switch it back on.

As it turned out, Allison got it right and would win the Nobel Prize for his discovery of cancer immunotherapy. Coley’s initial idea wasn’t wrong, exactly, just incomplete. He had a piece of the puzzle, but not all of it. What he failed to see was the diabolical nature of the disease itself, some forms of which, “learned” to outwit our immune system by switching it off.

Unfortunately, we can be proved “right” in the end, and still fail. Every idea is flawed in some way, it’s just that sometimes those flaws are more disabling than others.

To Change The World, You Must First Conquer Yourself

There’s nothing quite like the rapture of an epiphany, that initial flash of insight which is still pure and innocent, before the harsh realities of the world muck it up with a bunch of inconvenient facts, corollaries and exceptions. That’s when we can give ourselves to it wholeheartedly, without equivocation or bearing the burden of creeping doubt.

Yet our ideas never turn out like we think they will. To succeed, they must grow and adapt to the world around them. Gandhi, fresh off stunning victories gaining rights for Indians in South Africa, didn’t realize how his methods could go so horribly awry. The Otpor activists, Steve Blank, William Coley and so many others had similar blind spots.

What I’ve found in my research of revolutionary changemakers is that what makes the difference between success or failure isn’t necessarily the brilliance of the initial idea or even the passion and diligence of those who work to bring it about, but their ability to learn things along the way. They didn’t merely stay the course, they corrected it as many times as they had to until they won.

Unfortunately, most never learn that simple lesson. They would rather make a point than make a difference and wear their failures like a badge of honor. After all, who but the most righteous could inspire such opposition? And who but the most pure could continue to persevere in the face of such constant defeat?

That’s the really tough thing about change. To truly bring it about, we first must change ourselves.

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

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Four Deadly Business Myths

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Four Deadly Business Myths

GUEST POST from Greg Satell

The unicorn is perhaps unique among myths in that the creature doesn’t appear in the mythology of any culture. The ancient Greeks, for all of their centaurs, hydras and medusae, never had any stories of unicorns, they simply thought that some existed somewhere. Of course, nobody had ever seen one, but they believed others had.

Beliefs are amazing things. We don’t need any evidence or rational basis to believe something to be true. In fact, research has shown that, when confronted with scientific evidence which conflicts with preexisting views, people tend to question the objectivity of the research rather than revisit their beliefs. Also, as Sam Arbesman has explained, our notions of the facts themselves change over time.

George Soros and others have noted that information has a reflexive quality. We can’t possibly verify every proposition, so we tend to take cues from those around us, especially when they are reinforced by authority figures, like consultants and media personalities. Over time, the zeitgeist diverges further from reality and myths evolve into established doctrine.

Myth #1: We Live In A VUCA Business Environment

Today it seems that every business pundit is talking about how we operate in a VUCA (Volatile, Uncertain, Complex and Ambiguous) world. It’s not hard to see the attraction. Conjuring almost apocalyptic images of continuous industrial disruption creates demand for consulting and advisory services. It’s easier to sell aspirin than vitamins.

The data, however, tell a different story. In fact, 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.

Today, in part because of lax antitrust enforcement over the past few decades, businesses have become less disruptive, less competitive and less dynamic, while our economy has become less innovative and less productive. The fact that the reality is in such stark contrast to the rhetoric, is more than worrying, it should be a flashing red light.

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.

The recent great resignation, when people began leaving their jobs in droves, helps tell this story. Should anyone be surprised? We’ve been working longer hours, constantly tethered to the office even as we work remotely, under increasing levels of stress. Yes, things change. They always have and always will. We need to adapt, but all of the VUCA talk is killing us.

Myth #2: Empathy Is Absolution

Another favorite buzzword today is empathy. It is often paired with compassion in the context of creating a more beneficial workplace. That is, of course, a reasonable and worthy objective. As noted above, there’s far too much talk about disruption and uncertainty and not nearly enough about stability and well-being.

Still, the one-dimensional use of empathy is misleading. When seen only through the lens of making others more comfortable, it seems like a “nice to have,” rather than a valuable competency and an important source of competitive advantage. It’s much easier to see the advantage of imposing your will, rather than internalizing the perspectives of others.

One thing I learned living overseas for 15 years is that it is incredibly important to understand how people around you think, especially if you don’t agree with them and, as is sometimes the case, find their point of view morally reprehensible. In fact, learning more about how others think can make you a more effective leader, negotiator and manager.

Empathy is not absolution. You can internalize the ideas of others and still vehemently disagree. There is a reason that Special Forces are trained to understand the cultures in which they will operate and it isn’t because it makes them nicer people. It’s because it makes them more lethal operators.

Learning that not everyone thinks alike is one of life’s most valuable lessons. Yes, coercion is often a viable strategy in the short-term. But to build something that lasts, it’s much better if people do things for their own reasons, even if those reasons are different than yours. To achieve that, you have to understand their motivations.

Myth #3: Diversity Equity And Inclusion Is About Enforcing Rules

In recent years corporate America has pushed to implement policies for diversity, equity and inclusion. The Society for Human Resource Management even offers a diversity toolkit on its website firms can adopt, complete with guidelines, best practices and even form letters.

Many organizations have incorporated diversity awareness training for employees to learn about things like unconscious bias, microaggressions and cultural awareness. There are often strict codes of conduct with serious repercussions for violations. Those who step out of line can be terminated and see their careers derailed.

Unfortunately, these efforts can backfire, especially if diversity efforts rely to heavily on a disciplinary regime. As the philosopher Ludwig Wittgenstein pointed out long ago, strict rules-based approaches are problematic because they inevitably lead to logical contradictions. What starts out as a well-meaning effort can quickly become a capricious workplace dominated by fear.

Cultural competency is much better understood as a set of skills than a set of rules. While the prospect of getting fired for saying the wrong thing can be chilling, who wouldn’t want to be a more effective communicator, able to collaborate more effectively with colleagues who have different viewpoints, skills and perspectives?

To bring about real transformation, you need to attract. You can’t bully or overpower. Promoting inclusion should be about understanding, not intimidation.

Myth #4: People Are Best Motivated Through Carrots And Sticks

One of the things we’ve noticed when we advise organizations on transformation initiatives is that executives tend to default towards incentive structures. They quickly conjure up a Rube Goldberg-like system of bonuses and penalties designed to incentivize people to exhibit the desired behaviors. This is almost always a mistake.

If you feel the need to bribe and bully people to get what you want, you are signaling from the outset that there is something undesirable about what you’re asking for. In fact, we’ve known for decades that financial incentives often prove to be problematic.

Instead of trying to get people to do what you want, you’re much better off identifying people who want what you want and empowering them to succeed. As they prosper, they can bring others in who can attract others still. That’s how you build a movement that people feel a sense of ownership of, rather than mandate that they feel subjugated by.

The trick is that you always want to start with a majority, even if it’s three people in a room of five. The biggest influence on what we do and think is what the people around us do and think. That’s why it’s always easy to expand a majority out, but as soon as you are in the minority, you will feel immediate pushback.

We need to stop trying to engineer behavior, as if humans are assemblages of buttons and levers that we push and pull to get the results we want. Effective leaders are more like gardeners, nurturing, growing and shaping the ecosystems in which they operate, uniting others with a sense of shared identity and shared purpose.

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

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The Breakthrough Lifecycle

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The Breakthrough Lifecycle

GUEST POST from Greg Satell

Many experts suspect that the COVID crisis is receding into the background. It is, of course, hard to know for sure. There will continue to be debate and we will still need to have some mitigating measures in place. Still, for the most part, people are back at work, kids are in school, and relatively normal routines have returned.

Generations from now, historians will most likely still question what lessons are to be gleaned from the past few years. Should we strengthen our multilateral institutions or have they become so sclerotic that they need to be dismantled? Is the rise of populist nationalism a harbinger for the future or a flash in the pan?

One thing I don’t expect to be hotly debated, in fact seems perfectly clear even now, is that science saved us. Untold thousands, working mostly anonymously in labs around the world, created a vaccine of astonishing efficacy in record time. It is these types of breakthroughs that change the course of history and, if we can embrace their power, lead us to a better future.

A Seemingly Useless Idea

The MRNA technology that led to the Moderna and Pfizer-BioNTech vaccines have the potential to revolutionize medical science. It can rapidly reprogram the machinery in our cells to manufacture things that can potentially cure or prevent a wide range of diseases, from cancer to malaria, vastly more efficiently than anything we’ve ever seen before.

Yet while revolutionary, it is not at all a new idea. In fact Katalin Karikó, who pioneered the approach, published her first paper on mRNA-based therapy way back in 1990. Unfortunately, she wasn’t able to win grants to fund her work and, by 1995, things came to a head. She was told that she could either direct her energies in a different way, or be demoted.

This type of thing is not unusual. Jim Allison, who won the Nobel Prize for his work on cancer immunotherapy, had a very similar experience when he had his breakthrough, despite having already become a prominent leader in the field. “It was depressing,” he told me. “I knew this discovery could make a difference, but nobody wanted to invest in it.”

The truth is that the next big thing always starts out looking like nothing at all. Things that really change the world always arrive out of context for the simple reason that the world hasn’t changed yet.

Overcoming Resistance

Humans tend to see things in a linear fashion. It is easier for us to imagine a clear line of cause and effect, like a row of dominoes falling into each other, rather than a series of complex interactions and feedback loops. So it shouldn’t be surprising that, in hindsight, breakthrough ideas seem so obvious that only the most dim-witted would deny their utility.

When we think of something like, say, electricity, we often just assume that it was immediately adopted and the world simply changed overnight. After all, who could deny the superiority of an efficient electric motor over a big, noisy steam engine? Yet as the economist Paul David explained in a famous paper, it took 40 years for it to really take hold.

There are a few reasons why this is the case. The first is switching costs. A new technology almost always has to replace something that already does the job. Another problem involves establishing a learning curve. People need to figure out how to unlock the potential of the new technology. To bring about any significant change you first have to overcome resistance.

With electricity, the transition happened slowly. It wouldn’t have made sense to immediately tear down steam-powered factories and replace them. At first, only new plants used the electricity. Yet it wasn’t so much the technology itself, but how people learned to use it to re-imagine how factories functioned that unlocked a revolution in productivity gains.

In the case of mRNA technology, no one had seen a mRNA vaccine work, so many favored more traditional methods. Johnson & Johnson and AstraZeneca, for example, used a more traditional DNA-based approach using adenoviruses that was much better understood, rather than take a chance on a newer, unproven approach.

We seem to be at a similar point now with mRNA and other technologies, such as CRISPR. They’ve been proven to be viable, but we really don’t understand them well enough yet to unlock their full potential.

Building Out The Ecosystem

When we look back through history, we see a series of inventions. It seems obvious to us that things like the internal combustion engine and electricity would change the world. Still, as late as 1920, roughly 40 years after they were invented, most American’s lives remained unchanged. For practical purposes, the impact of those two breakthroughs were negligible.

What made the difference wasn’t so much the inventions themselves, but the ecosystems that form around them. For internal combustion engines it took a separate networks to supply oil, to build roads, manufacture cars and ships and so on. For electricity, entire industries based on secondary inventions, such as household appliances and radios, needed to form to fully realize the potential of the underlying technology.

Much of what came after could scarcely have been dreamed of. Who could have seen how transportation would transform retail? Or how communications technologies would revolutionize warfare? Do you really think anybody looked at an IBM mainframe in the 1960s and said, “Gee, this will be a real problem for newspapers some day?”

We can expect something similar to happen with mRNA technology. Once penicillin hit the market in 1946, a “golden age” of antibiotics ensued, resulting in revolutionary new drugs being introduced every year between 1950 and 1970. We’ve seen a similar bonanza in cancer immunotherapies since Jim Allison’s breakthrough.

In marked contrast to Katalin Karikó’s earlier difficulty in winning grants for her work, the floodgates have now opened as pharma companies are now racing to develop mRNA approaches for a myriad of diseases and maladies.

The Paradox Of New Paradigms

The global activist Srdja Popović once told me that when a revolution is successful, it’s difficult to explain the previous order, because it comes to be seen as unbelievable. Just as it’s hard to imagine a world without electricity, internal combustion or antibiotics today, it will be difficult to explain our lives today to future generations.

In much the same way, we cannot understand the future through linear extrapolation. We can, of course, look at today’s breakthroughs in things like artificial intelligence, synthetic biology and quantum computing, but what we don’t see is the second or third order effects, how they will shape societies and how societies will choose to shape them.

Looking at Edison’s lightbulb would tell you nothing about radios, rock music and the counterculture of the 60s, much like taking a ride in Ford’s “Model T” would offer little insight into the suburbs and shopping malls his machine would make possible. Ecosystems are, by definition, chaotic and non-linear.

What is important is that we allow for the unexpected. It was not obvious to anyone that Katalin Karikó could ever get her idea to work, but she shouldn’t have had to risk her career to make a go of it. We’re enormously lucky that she didn’t, as so many others would have, taken an easier path. It is, in the final analysis, that one brave decision that we have to thank for what promises to be brighter days ahead.

All who wander are not lost.

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

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Moments and Movements Are Not the Same Thing

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GUEST POST from Greg Satell

On September 17th, 2011, protesters began to flood into Zuccotti Park in lower Manhattan. Declaring “We are the 99%” they planned to #Occupy Wall Street for as long as it took to make their voice heard. Similar protests soon spread like wildfire across 951 cities in 82 countries. It seemed to be a massive global movement of historic proportions.

But it wasn’t a movement. It was merely a moment. Within a few months, the streets and parks were cleared. The protesters went home and nothing much changed. #Occupy was, to paraphrase Shakespeare, full of sound and fury, signifying nothing. Certainly, no tangible aim was accomplished.

Failure has costs. Thousands of people for hours a day across several months adds up to billions of dollars worth of man-hours that could have been put to some useful purpose. Make no mistake. Creating positive change in the world takes far more than mobilization. You need a vision and a strategy, guided by values, designed to accomplish clear objectives.

Getting Beyond Grievance

Every change effort starts with a grievance. There’s something that people don’t like and they want it to be different. In a social or political movement that may be a corrupt leader or a glaring injustice. In an organizational context, the problem is usually something like falling sales, unhappy customers, low employee morale or technological disruption.

Whatever the case may be, the first step toward bringing change about is to understand that getting mired in grievance won’t get you anywhere. You can’t just complain about things you don’t like. You need to come up with an affirmative vision for how you would want things to be different and better.

The best place to start is by asking yourself, “if I had the power to change anything, what would it look like?” Martin Luther King Jr.’s vision for the civil rights movement was for a Beloved Community. Bill Gates’s vision for Microsoft was for a “computer on every desk and in every home.” A good vision should be aspirational. It should inspire.

One of the things I found in my research is that successful change leaders don’t try to move from grievance to vision in one step, but rather identify a Keystone Change, which focuses on a clear and tangible goal, includes multiple stakeholders and paves the way for future change, to bridge the gap.

For King, the Keystone Change was voting rights. For Gates it was an easy-to-use operating system. For your vision, it will undoubtedly be something different. The salient point here is that every successful transformation I have come across started out with a Keystone Change, so that’s where you will want to start as well.

Building In Constraints Through A Genome Of Values

Creating a clear vision for change is absolutely essential, but it’s only a first step. You also need to be clear and explicit about your values. While a vision for the future represents possibility, values represent constraints. Values make clear that we not only want things, but we’re also willing to incur certain costs to attain them.

For example, throughout his life, Nelson Mandela was accused of being a Communist, an anarchist, an extremist and worse. Yet when confronted with these accusations, he would always say that no one had to guess what he believed or what he was fighting for, because it was all written down in 1955 in a document called the Freedom Charter.

Importantly, the Freedom Charter imposed constraints on Mandela and his movement. When he rose to power, he couldn’t oppress white Afrikaners, because that would betray all that he’d been fighting for. That gave the movement credibility and power. Occupy, of course, was never clear or explicit about its values and never sought to constrain itself in any way. It’s activists were often seen as undisciplined and vulgar

In a similar vein, when Lou Gerstner set out to transform IBM in the 90s, he vowed that he would shift the company’s values from the “stack of its own proprietary technologies” to its “customers’ stack of business processes.” Yet it was his willingness to forego revenue on every sale to make good on this value is what made people believe in it. If not for that, it’s doubtful IBM would still be in business today.

Make no mistake. Values always cost something. If you are unwilling to bear costs and constraints, it isn’t a value. It’s a platitude. Change is always built on a foundation of shared values and common purpose. If you aren’t able to communicate clearly about what you believe and what you value, you can’t expect others to join you.

Mobilizing People To Influence Institutions

In October 2011, at the height of the #Occupy protests, the civil rights legend and Congressman John Lewis showed up at an #Occupy rally in Atlanta and asked to speak. He was refused. Some attributed the snub to racism among the privileged white protestors. Others faulted Lewis himself, who didn’t understand the complex rules of the rally.

The protester who led the charge to block Lewis, however, described a different motivation. For him, Lewis’s great crime was that he was part of the “two-party system” and therefore unworthy of trust. “Any organization that upholds the legitimacy of the two-party system simply buttresses interests opposed to those of everyday people,” the man said.

This is, of course, total nonsense. Every regime or status quo depends on institutions to support them. That’s why a key part of any transformation strategy is to mobilize people to influence the institutions that can bring change about. One major reason that #Occupy failed was that it mobilized people to do no more than sleep in parks and snarl out epithets.

Now consider Martin Luther King Jr., who was able to bring considerable influence to bear on the US political system, just as Thurgood Marshall and Charles Hamilton Houston did with the US legal system and Nelson Mandela did with international institutions. These men had at least as much reason to be skeptical as any #Occupy protester, but understood that it is institutions that have the power to make change real.

In our corporate work, we find the same principle applies. Would-be changemakers tend to construe institutions too narrowly. If it is an internal initiative, they overlook customers, industry associations, community leaders and other external stakeholders. If it is an externally facing initiative, they often overlook important internal stakeholders that can help.

Preparing For Your Moment

It’s easy to confuse a moment with a movement. A movement involves linking together small, but often disparate groups in the context of shared purpose and shared values. A moment occurs when an event triggers a temporary decrease in resistance to an action or idea that opens up a window of opportunity. Movements require preparation. Moments require little more than luck.

That’s why we see protesters suddenly fill the streets and then, almost as suddenly, dissipate with little or no impact. It’s why some startups catch investors’ imagination and race to billion-dollar unicorn status, only to crash and burn just as fast. Politicians’ fortunes rise and fall, social media stars have their moment in the sun before disappearing into obscurity.

Building a movement requires work. You need to get beyond mere grievances and articulate an affirmative vision. You need to identify and speak to shared values and build on common ground. You need to invite people to join your cause for their own reasons, which may be different from your own. And then you need to focus your efforts on influencing the institutions that can actually make a difference.

So we should never mistake a moment for a movement. However, we can build a movement in anticipation for a moment that we expect will come. Gandhi trained his disciples for ten years before the opportunity for the Salt March came along. King’s efforts failed in Albany, but triumphed in Birmingham under better circumstances. Polish protesters were ill-prepared in 1970, but learned from the mistakes and later brought down an empire.

The crucial point to remember is that moments of opportunity are rare. We need to prepare for them. So that when they happen and fortune smiles on us we are ready. We have everything in place. That’s how radical, transformational change comes about.

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

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Profiting From Fear and Mistrust

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Profiting From Fear and Mistrust

GUEST POST from Greg Satell

When I lived and worked in Ukraine, it was commonplace to see men in camouflage fatigues and Uzi’s in the waiting rooms of offices around town. They weren’t there as security, or to rob the place, but to help transfer money between businesses. It was cumbersome and inefficient, but in an atmosphere of mistrust, it was a necessity.

In most countries, we’re still a long way from armed couriers as a daily routine, but according to Edelman’s recent Trust Barometer, we’re headed in that direction. Entitled “Innovation in Peril,” it details an overall collapse of confidence, finding that roughly two thirds believe that journalists, government leaders, and business executives, are “purposely trying to mislead.”

That’s a problem for all of us. Mistrust is corrosive to the norms that help our society run efficiently and the costs are very real. Our lack of trust in government prevents us from making needed investments. Suspicions about law enforcement undermine public safety. Mistrust in the workplace undermines performance. We desperately need to rebuild trust.

The Value Of Trust

Trust isn’t our natural state. Economists have developed a number of models to show how fragile it can be. For example, in a prisoner’s dilemma, two suspects are brought in for questioning. If they both stay true to each other, they get the best collective outcome, but if each follows his or her own self-interest, both will confess and get the worst overall outcome.

Related concepts are the tragedy of the commons, in which everybody has access to a common field to graze their livestock, depleting the resource so that everybody’s herd suffers, and the free rider problem which often occurs with respect to public goods. These situations are known as Nash equilibriums because nobody can change their preference without making themselves worse off.

When you take a moment to think, it’s kind of amazing that we operate with as much trust as we do. Local businesses faithfully serve communities for years, even decades. Corporations spend billions to build brands and governments work to earn legitimacy. That is what allows us to easily transact business throughout the day. When trust collapses, we get Uzis in waiting rooms.

Yet it doesn’t have to be that dramatic. Research by Accenture found that “trust events” cost businesses billions of dollars every year. For example, a consumer-focused company that had a sustainability-oriented publicity event backfire lost an estimated $400 million in future revenues. Another company that was named in a money laundering scandal lost $1 billion.

Profiting From Our Mistrust

Our brains are geared for mistrust in a number of ways. The first is a bias for loss aversion. We will do more to avoid a loss than we will for an equivalent gain. That makes trust hard to build and easy to lose, which is why the “trust events,” like those cited in the Accenture study, are so costly.

Another contributing factor is availability bias, our tendency to overweight easily accessible examples, such as a specific trust event, and ignore vague concepts, like years of good service. Once we accept a belief, our confirmation bias will lead us to seek out information that supports our prior beliefs and reject contrary evidence.

These effects are multiplied by tribal tendencies. We form group identities easily, and groups tend to develop into echo chambers, which amplify common beliefs and minimize contrary information. We also tend to share more actively with people who agree with us and, with little fear of rebuke, we are less likely to check that information for accuracy.

That, essentially, is the economics of disinformation. Fear breeds mistrust, which makes us feel insecure and leads us to seek out people we identify with to reinforce our beliefs. Research suggests media companies, especially social media companies, profit from the passions that the most polarizing information unleash in the form of greater engagement with their platforms.

Facts, Identity and Fear

We tend to think of truth as a simple matter of knowledge and understanding. We see the world as a set number of facts and believe that any disagreements arise from a lack of clarity about what the true facts are. In this view, mistrust can be corrected by better access to good information. Once people are informed, how could there be any disagreement?

Unfortunately, the world doesn’t work that way. In fact, a study at Ohio State found that, when confronted with scientific evidence that conflicted with their views, people would question the objectivity of the science. Another thing to consider is that, as Sam Arbesman explained in The Half-Life of Facts, our ideas about what’s true changes over time.

We can’t rigorously test every proposition, which is why we adopt the views of those around us, a phenomenon that psychologists call social proof. What makes the effect even more insidious, is that the relationship is reciprocal. We internalize the ideas of the tribes we join and then propagate those same ideas to others, intensifying the echo chamber.

Our beliefs are far more than mere acceptance of sets of facts, but become inherently part of our identity. Wars are not fought over ideologies because people disagree about empirical evidence, but because they see their sense of selves under attack. If truth is a force for good, then those who refuse to accept our version of it are, in the most basic sense of the word, evil.

From Victimization To Empowerment Through Purpose

Our ability to trust others is, to a great extent, a function of how we see ourselves and our situation. If we see ourselves as secure and in tune with our environment, it’s relatively easy for us to build bonds of trust. If we feel those around us share our values, it’s easier to feel a shared sense of identity and purpose.

However, if we see our surroundings as hostile, we will take steps to protect ourselves and that, to a great extent, is where we are at today. First the Internet, and then social media have tended to promote and juxtapose the most extreme elements, creating an atmosphere of heightened conflict among tribes, which further undermines our sense of security and trust.

This is what Marshall McLuhan meant when he wrote that the global village would result in a “release of human power and aggressive violence” greater than ever in human history. When we are confronted with ideas and values that are different from our own, it can feel more more like an assault and an affront than a refreshing interaction with the variety of life.

Here Ukraine offers a lesson. Over the past decade it has built a new identity and found a new purpose. Today most Ukrainians, especially the younger generations, feel a stronger affinity for European values than for their post-Soviet past. In fact, they have so internalized their European ambitions that they are willing to risk a war to maintain them.

We have a similar challenge before us. If a common identity is forged from shared values and shared purpose, on what foundation will we build our future? To what common project can we devote our energies? What are our ambitions and how best might we fulfill them? These are the questions that we need to answer if we are ever to rebuild the bonds of trust.

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

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3 Strategies All Changemakers Should Know

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3 Strategies All Changemakers Should Know

GUEST POST from Greg Satell

All too often, we see change as a communication exercise. We think that if people really understood our idea, they would embrace it. In this view, bringing about change is really just a matter of messaging. Find the right slogan and deliver it in the right way, and you will ignite the passions required to drive transformation.

Nothing can be further from the truth. If a change is important and has real potential for impact, there will always be some people who won’t like it and they will work to undermine it in ways that are dishonest, underhanded, and deceptive. Change rarely fails because people don’t understand it. Most often it is actively sabotaged.

A more elegant slogan won’t save you. What you need is a sound strategy to overcome resistance to change. Fortunately, we know from social and political movements that radical, transformational change is possible and, as I explained in Cascades, their principles can be highly effective in organizations. Here are three strategies that you should know.

1. Start With A Majority

Change starts with a belief. If people believe that a change is good, they will be likely to adopt it. If they believe it’s bad, it’s going to be tough to convince them otherwise especially, as is often the case, their beliefs are rooted in their identity and sense of self. In fact, research has shown when we are presented with facts contrary to our beliefs, we tend to question the evidence rather than our own preconceived notions.

This raises an important question: How do we come by our beliefs? As it turns out, the best indicator of not only our beliefs, but our actions, habits and even some aspects of our health, is the people around us and studies suggest that the effect extends out to even third degree relationships. So not only our friends, but the friends of our friend’s friends influence us.

The truth is that majorities don’t just rule, they also influence. That’s why when we seek to bring about change, it’s important to start with a majority. The secret is that you get to choose where you start. It might be a small, local majority of, say, three people in a room of five. As long as supporters outnumber detractors, change can move forward.

You can always expand a majority out, but as soon as you are in the minority, you will feel immediate pushback. When that happens, you can lose momentum and send the entire initiative off the rails. In many cases, you will never get the momentum back and your hopes for change will end before they really start.

There’s an unfortunate aspect of human nature that drives us to want to convince skeptics. Resist it and focus on empowering your supporters.

2. Prepare For A Trigger

It’s easy to confuse a moment with a movement. A movement links together small, but often disparate, groups in the context of shared purpose and shared values. A moment occurs when an event triggers a temporary decrease in resistance and opens up a window of opportunity. Movements require preparation. Moments often emerge on their own.

What’s crucial for changemakers to grasp is that a trigger eventually emerges that creates a moment. It’s rare that we can predict exactly when it’s going to happen, but it’s not too hard to see that one will come eventually and prepare for it. Political revolutions have leveraged this for decades, focusing on particular stress points in which a trigger is likely to emerge.

For example, the color revolutions in Eastern Europe targeted elections that they knew were likely to be falsified. After Martin Luther King Jr.’s failed Albany campaign, he moved on to Birmingham, because he knew that Bull Connor, the Commissioner of Public Safety, was a hothead and likely to employ the type of brutal tactics that would trigger a moment.

In much the same way, the Covid pandemic triggered digital transformation in many organizations. Economic downturns trigger efficiency measures. When a competitor comes out with a hit product, it tends to trigger enthusiasm for innovation. We don’t know when these things are going to happen, but we know that they are likely to happen eventually.

One reason why so many change efforts have failed in recent years is that the movements were built in response to a moment. Once the moment comes, it’s too late. You build your movement to prepare for a trigger, so that once it comes you can make the most of it.

3. Leverage Your Opposition

Change thrives on passion. The status quo always has inertia on its side and never yields its power gracefully. That’s why so many would-be changemakers start out by attacking their opposition, seeking to meet them head on, expose their misconceptions and show the value of doing things differently.

This is almost always a mistake. Directly engaging with staunch opposition is unlikely to achieve anything other than exhausting and frustrating you. However, while you shouldn’t directly engage your fiercest critics, you obviously can’t act like they don’t exist. On the contrary, you need to learn to love your haters.

In fact by listening to people who hate your idea you can identify early flaws, which gives you the opportunity to fix them before they can be used against you in any serious way. They can also help you to identify shared values. For example, the LGBTQ movement prevailed by emphasizing their commitment to stable marriages and happy families, exactly the ideas that were used against them for decades.

Perhaps most importantly, you can leverage your opposition to your advantage. If left to their own devices, they will often overreach and send people your way. Bull Connor’s brutality, which he was all too eager to display for the TV cameras, furthered the cause of civil rights. In the color revolutions, the activist group Otpor found a way to even use arrests to weaken the regime and empower the revolution..

The truth is that to bring about real change you need to attract, rather than overpower. Being seen fighting the opposition may fire up your most active supporters, but it won’t bring anyone to your side. However, if the enemies of change see you gaining traction, invariably they will lash out, overreach and send people your way.

Applying Strength To Weakness

In the final analysis, the reason that most would-be revolutionaries fail is that they assume the righteousness of their cause will save them. It will not. Injustice, inequity and ineffectiveness can thrive for decades and even centuries, far surpassing a human lifespan. If you think that your idea will prevail simply because you believe in it you will be sorely disappointed.

Tough, important battles can only be won with good strategy and tactics, which is why successful change agents learn how to adopt the principle of Schwerpunkt. The idea is that instead of trying to defeat your enemy with overwhelming force generally, you want to deliver overwhelming force and win a decisive victory at a particular point of attack.

Yet Schwerpunkt is a dynamic, not a static concept. You have to constantly innovate your approach as your opposition adapts to whatever success you may achieve. For example, the civil rights movement had its first successes with boycotts, but moved on to sit-ins, “Freedom Rides,” community actions and eventually, mass marches.

Starting with a majority, preparing for a trigger and leveraging your opposition are only three ways you can apply strength to weakness. The key to success isn’t any particular tactic, leader or slogan but strategic flexibility. Unfortunately, that’s exactly what most change efforts lack. All too often they get caught up in a strategy and double down, because it feels good to believe in something, even if it’s failure.

Change, like many things, largely boils down to strategy and execution. It’s not a simple matter of belief or passion. You need to learn how to operate effectively, by studying those who succeeded and those who failed, building on your successes, dusting yourself off after the inevitable setbacks, correcting mistakes and returning to fight with renewed vigor.

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

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Purpose Matters Because …

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GUEST POST from Greg Satell

When the Business Roundtable issued a statement in 2019 that discarded the old notion that the sole purpose of a business is to provide value to shareholders, many were dismayed. Some thought it was just another example of misguided altruism by “elites.” Others saw it as a cynical and disingenuous ploy.

Yet the primacy of shareholder value is hardly a well-established economic principle. The concept does not appear even once in Adam Smith’s seminal treatise, The Wealth of Nations. In fact, it is a relatively recent idea and when the economist Milton Friedman first proposed it in 1970, it was considered radical, even subversive, certainly not to be taken as gospel.

It has also been tremendously unsuccessful. Since Friedman’s essay we have become less productive, not more. One reason for the poor results is that Friedman and others like him failed to recognize that our economy is made up of people, not inanimate pieces of data that make up economic charts, and these people search for meaning and purpose in their lives.

Failed Cartesians

Often regarded as the father of modern philosophy, Rene Descartes was obsessed with human fallibility. Cursed with imperfect senses and emotions that can warp logic, he sought to build a new intellectual foundation based on cool, rational thought. “I think, therefore I am,” he wrote, proving that at least one thing could be known without referring to the use of the senses.

Descartes’ ideas led to the Rationalist school of philosophy as others tried to build on his work. The idea that, through pure reason, we could see truths with greater clarity held enormous attraction for intellectual giants such as Gottfried Leibniz and Baruch Spinoza. Unfortunately, other than in the field of mathematics, little was achieved.

That didn’t stop others from trying though. In the early 20th century, the Vienna Circle arose in response to the work of Ludwig Wittgenstein and others in order to create a logical system to guide human affairs. Wittgenstein himself would later disown it and Gödel’s incompleteness theorems would eventually expose the whole exercise as a failure.

Undeterred by centuries of failure, business consultants have tried to sell the same idea to executives. Yet despite fancy names like scientific management, financial engineering and six sigma, these didn’t fare any better. One study found that of 58 large companies that announced Six Sigma programs, 91 percent trailed the S&P 500 in stock performance.

Still, many remain undeterred. The idea of an infallible technocracy is just too tempting for many to resist.

The End Of History And The Washington Consensus

In 1992, Francis Fukuyama published The End of History to great acclaim. The Cold War had ended and capitalism was triumphant. Communism was shown to be a corrupt system bereft of any real legitimacy. It seemed that, as many philosophers had predicted, we had reached an end point in which human sociocultural evolution was complete.

A new ideology took hold, often referred to as the “Washington Consensus,” that preached fiscal discipline, free trade, privatization and deregulation. The world was going to be remade in capitalism’s image. Countries that hit hard times would be offered aid from multilateral institutions like the IMF and the World Bank in return for favored policy reforms.

Many pointed out that international bureaucrats were mandating policies for developing nations that citizens in their own countries would never accept. Strict austerity programs led to human costs that were both significant and real. In a sense, the Soviet error was being repeated. Ideology was being put before people.

Yet Fukuyama’s message had been misunderstood. His book was not meant as a prophecy, but as a warning. He pointed to the ancient Greek concept of thymos, a spirited blend of dignity and pride, to caution against rationalist explanations for human behavior. Given a choice between a well trod path and one less certain, he predicted that many will “set their eyes on a new and more distant journey.”

The Silicon Valley Myth

I was working on Wall Street in 1995 when the Netscape IPO hit like a bombshell. It was the first big Internet stock and, although originally priced at $14 per share, it opened at double that amount and quickly zoomed to $75. By the end of the day, it had settled back at $58.25 and, just like that, a tiny company with no profits was worth $2.9 billion.

It seemed crazy, but economists soon explained that certain conditions, such as negligible marginal costs and network effects, would lead to “winner take all markets” and increasing returns to investment. Venture capitalists who bet on this logic would, in many cases, become rich beyond their wildest dreams.

The conditions for increasing returns, however, only apply to a narrow swath of businesses, mostly limited to software and electronic gadgets. Nevertheless, entrepreneurs and their investors became convinced that they could apply the Silicon Valley model anywhere, leading to high profile failures like WeWork and Theranos.

That’s the Silicon Valley myth, that the rational logic of code can be applied to any problem. It’s the same fantasy that has been repeated throughout history, handed from Cartesians to logical positivists to “scientific” managers and now to the software engineers, puffed up with stock options who can’t seem to understand why everyone else doesn’t “get it.”

The costs have been substantial. Evidence suggests that the billions wantonly plowed into massive failures are crowding out real businesses. Productivity has been depressed for half a century. The Facebook papers revealed a culture that has lost its way, so single-mindedly focused on optimizing engagement it lost sight of the humanity it was supposed to engage.

Identity, Dignity And Purpose

If you believe in a rational Cartesian universe, a business is little more than a set of transactions. The nature of the firm, in this view, is simply to minimize transaction costs and skilled managers should focus on maximizing bargaining power among stakeholders in order to build a sustainable competitive advantage. Yet the world doesn’t actually work that way.

Consider the ultimatum game. One player is given a dollar and needs to propose how to split it with another player. If it is accepted, both players get the agreed upon shares. If it is not accepted, neither player gets anything. If the world was completely rational, the second player would accept even a single penny. After all, a penny is better than nothing.

Yet decades of experiments across different cultures show that most people do not accept a penny. In fact, offers of less than 30 cents are routinely rejected as unfair. It offends people’s dignity and sense of self. For many of the same reasons, there is increasing evidence that financial targets don’t motivate employees. No one wants to be a cog in someone else’s wheel.

That is the value of purpose. It bolsters, rather than undermines, our identity. When people feel that they are part of a common project, they feel a sense of ownership, that they are ends in themselves rather than means to an end. It uplifts, rather than demeans, us. It fortifies, rather than undermines, our spirit.

What separates great leaders from mediocre managers is that the leaders do more than calculate, they provide meaning to an endeavor that makes it more than merely a common enterprise. It becomes a collective mission.

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

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