Why the Incredible GE Turnaround Could be a Sign of the Times

GUEST POST from Greg Satell

When Jack Welch took the helm at General Electric in 1981, it marked the beginning of a new era. Corporations would no longer coddle workers, but would slash costs, close factories and focus on increasing shareholder value. By 1999 he had increased revenues from $26.8 billion to nearly $130 billion and in 2000 he was named “Manager of the Century” by Fortune magazine.

Yet all the success belied serious problems rumbling underneath the surface. As David Gelles explains in, The Man Who Broke Capitalism, Welch increased profits largely by “financializing” the firm and operations suffered. Under his successor, Jeffrey Immelt, GE collapsed and was removed from the Dow index.

Yet while Welch’s rise marked a new era of shareholder capitalism, the new CEO at GE, Larry Culp has taken a different turn. He invests in workers, distributes authority and has refocused the firm on improving manufacturing productivity. The result has been one of the most dramatic turnarounds in industrial history, perhaps signaling a larger shift.

The Welch Myth

To understand why the Welch era was not what it seemed, let’s look at one common practice that took hold in the 1980s and 90s: Offshoring. From a shareholder value perspective, it has an intuitive logic. You move your factory from high wage countries such as the US to low wage countries such as China and pocket the savings. You lower costs and increase profits, at least in the short-term.

Yet that analysis omits some important factors. First of all, it undermines trust among employees, suppliers and other partners when relationships are treated as purely transactions. Also, a Harvard study found that moving the factory floor thousands of miles away from R&D reduces knowledge transfer and has a negative effect on innovation.

Looking back, it’s easy to see how this played out at GE. The company became more profitable, but less productive. For decades, it failed to innovate. Its last major invention was the CT scanner, which came out in the 1970s, before Jack Welch took the helm. For all of the hype about his management genius, in truth Welch was, in large part, living off the accomplishments of his predecessors.

One helpful way to look at managing an enterprise is to group it into two major activities: capacity building and optimization. Building capacity is a drag on profits in the short term, but builds a foundation for the future. Optimization focuses on efficiency, which drives short-term profits, but doesn’t build anything for the long term.

Welch’s layoffs created profits, but undermined GE’s ability to build capacity. The firm’s increasing reliance on its finance arm to smooth earnings masked real problems and increased risk. The stage was set for a downfall.

The Road To Ruin

In 2001, after a lengthy succession process, Jeffrey Immelt was named Jack Welch’s successor and he began his star-crossed tenure. The 9-11 attacks hit the firm’s aerospace business hard and, while he used many of the same accounting tricks involving GE finance that Welch employed, the share price continued to lag. That’s when Jeffrey Immelt set out on a journey to transform GE into a 124 year old startup.

No longer would GE be a boring old manufacturing company, but would make a “pivot” to the digital age. Although it was one of the largest private organizations in the world, with 300,000 employees, he sought to become agile and nimble enough to compete with high-flying Silicon Valley firms. A key ambition was the development of Predix, an industrial software platform.

He also brought in Lean Startup guru Eric Ries to help instill a more entrepreneurial culture and speed time to market. The initiative caught on and eventually became the FastWorks program, One of the most touted projects was the development of a gas turbine , which reduced development time by a full year while significantly increasing performance. Immelt also acquired the power division of Alstom, essentially doubling down on the same bet.

It didn’t end well. As renewable energy began to take off, demand for gas turbines declined markedly. In 2017, problems in the firm’s power division led to massive layoffs and GE’s removal from the Dow after 110 years.. Immelt was forced to step down as CEO. The company, once famous for its sound management, was now an iconic failure.

The Rebirth

In the aftermath of GE’s collapse, Larry Culp was named as the first outsider CEO in its history and he came with a very different approach. Unlike Jack Welch, he didn’t take pride in layoffs or try to be a management guru. Nor did he fall in love with Silicon Valley and fashion himself as some sort of new age hero, like Jeffrey Immelt.

Instead, he focused on improving operations through lean manufacturing, a methodology focused on continuous improvement that’s been around for over four decades, and shed debt to improve the resiliency of its balance sheet. He also broke the company up into three separate firms, reversing GE’s history of growth through acquisition.

Most of all, he shifted management’s focus from seeing its employees as cost centers to profit centers. Rather than offshoring to cut costs, lean manufacturing puts an emphasis on getting the factory floor involved, using frontline hands-on knowledge to improve productivity and efficiency. GE’s famous culture of stack-ranking and shooting the messenger has been replaced by one in which workers are encouraged to report problems so they can be solved.

The results are hard to argue with. In 2023, GE’s share price leaped by 95.8%, outperforming darlings such as Apple, Google and Microsoft and sending its market cap back over $150 billion. Perhaps most importantly, he’s shown that you can best serve shareholders by serving employees, much as MIT’s Zenep Ton argues in her book, The Case for Good Jobs.

Rethinking American Industry

General Electric has long been symbolic of the US economy. Formed in the 1890s when J.P. Morgan merged Thomas Edison’s electric company with other firms, it was one of the original components of the Dow Jones index and signaled America’s industrial rise. It also became the first major conglomerate, forming the Radio Corporation of America (RCA) in 1919, which became a leading broadcaster.

That all began to change when Jack Welch took over in 1981. He led a new era of “Welchism,” in which CEO’s laid off employees, offshored factories and engaged in “financial engineering,” to goose profits. American industry followed suit, cutting investment in R&D, lobbying hard for cuts in government spending and corporate taxes, hollowing out the US industrial base.

Yet it appears that GE’s new CEO, Larry Culp, might be as emblematic for the new era as Jack Welch was for the old one. Instead of layoffs, he’s investing in lean manufacturing methods that put front-line workers at the center and instead of using acquisitions to fuel growth, he’s broken the company up to help focus on operational excellence.

This reflects a greater shift that began during the Obama Administration with the creation of the Advanced Manufacturing Office and the Manufacturing USA Institutes. It has continued under the Biden Administration with legislation such as the CHIPS Act and the IRA. The results are clear. Manufacturing employment has increased by roughly 1.5 million jobs since 2010, productivity is up and unemployment is at record lows.

The truth is that we’re moving from an era of bits to an era of atoms and that means we can’t just move fast and break things anymore. We can expect the basis of competition to shift away from design sprints, iterating, and pivoting to building meaningful, collaborative relationships in order to solve grand challenges.

Once again, what’s going on at GE might be a sign of the times.

— Article courtesy of the Digital Tonto blog
— Image credit: 1 of 1,550+ FREE quotes for you at http://misterinnovation.com

Sign up here to join 17,000+ leaders getting Human-Centered Change & Innovation Weekly delivered to their inbox every week.

Goal-Setting That Actually Works

Leave a reply

Goal-Setting That Actually Works

GUEST POST from David Burkus

Goal-setting is one of the most powerful tools a leader has. But most leaders don’t wield it nearly as well as they think. And if we’re honest, many treat it as just another item on the management checklist. You draft goals at the beginning of the year, plug them into your HR system, and then forget about them until the next performance review cycle. That’s not leadership. That’s busywork.

And when goals are vague, misaligned, or constantly shifting, they don’t inspire effort—they create confusion. Your team stops trusting the process. Eventually, they stop trusting you. And when that happens, performance drops, motivation tanks, and the team dynamic starts to unravel.

That’s not the kind of team you want to lead. And it’s definitely not the kind of team you want to be on.

The good news is, goal-setting doesn’t have to go wrong. But before we talk about how to fix it, we need to talk about how most leaders get it wrong in the first place.

The Most Common Goal-Setting Mistakes Leaders Make

There are a few ways leaders unintentionally sabotage themselves—and their teams—when setting goals. And one of the most well-documented comes from a study with a surprisingly catchy title: Goals Gone Wild. Researchers at Harvard found that when leaders set too many goals, or overly aggressive ones, it actually hurt performance.

Instead of building focus and momentum, teams start scrambling to hit numbers without understanding the bigger picture. They cut corners. They burn out. And they start working in silos instead of collaborating. I’ve said it before and I’ll keep saying it: metrics aren’t meaning.

And then there’s the issue of stretch goals. They’re great in theory—designed to push the team beyond business-as-usual. But stretch quickly turns into stress when the goals are unrealistic. If your team is standing at the starting line thinking, There’s no way we’ll ever hit that target, the most common reaction isn’t motivation. It’s apathy. Why try if you’re already destined to fail?

Finally, there’s the confusion between learning goals and performance goals. Performance goals are about execution—hitting a number or completing a process. Learning goals are about experimentation—trying new things and embracing occasional failure. Both are valid. But when you try to hit both at the same time, you’re essentially slamming on the gas and the brakes. And teams stall out.

Now that we’ve identified the common traps, let’s talk about how to set goals the right way.

How To Set Goals That Actually Work

Here are four research-backed strategies for goal-setting that will strengthen performance, boost motivation, and build long-term trust with your team.

1. Choose a Clear Focus

Before you start drafting goals, get clear on the kind of work your team is doing right now.

If your team is executing on something known—like running a proven process or scaling an existing strategy—then set performance goals. These should be measurable, time-bound, and tied to operational excellence.

But if your team is exploring something new—developing a prototype, entering a new market, or experimenting with a different process—then it’s time for learning goals. These goals encourage experimentation, reflection, and iteration.

You can shift between learning and performance goals over time. In fact, most innovation cycles require both. But don’t mix them in the same cycle. When everything is both a test and a target, nobody knows what matters most.

Make it clear: are we in learning mode or performance mode?

2. Clarify the Purpose Behind the Goal

Most goals focus on what to do. But few explain why it matters. And that’s a missed opportunity. Because while some people are naturally competitive—motivated by the scoreboard—most people need more than a number to stay engaged. They need meaning.

So instead of saying, “Increase repeat customer business by 15% this quarter,” clarify what that number means. For example: “Increase repeat business by 15% because that shows customers trust us enough to keep coming back—and that we’re delivering value worth repeating.”

It’s not just about the number. It’s about the impact that number represents.

That doesn’t mean you abandon metrics. Specific, measurable goals still matter. But they work best when they’re connected to something deeper. Remember: metrics guide performance. Meaning fuels it.

3. Co-Create Goals and Take Feedback Seriously

Top-down goal-setting kills motivation. If your team has no say in how their goals are defined—or no visibility into how they’re progressing—then those goals won’t inspire action. They’ll be seen as arbitrary mandates. And people disengage.

Great leaders define the “what” but collaborate on the “how.” You can set the targets, milestones, and success metrics. But bring the team in to help design the approach. When people see themselves in the plan, they take ownership. And ownership drives motivation.

That collaboration shouldn’t stop after goals are set. Check in regularly—not to micromanage, but to monitor progress, solve challenges early, and adjust course if needed. Talk about what’s working, what’s not, and what the team is learning. That ongoing feedback loop keeps goals relevant and keeps people engaged.

4. Watch for Signs of Goal Fatigue

Even the best goals can backfire if they come too fast, too often, or without a break. Goal fatigue happens when every project is urgent and every metric is top priority. When your team is always sprinting, it’s only a matter of time before they burn out.

Your job as a leader isn’t just to set goals. It’s to sustain ambition.

That means watching for early signs of fatigue—slipping deadlines, fading creativity, or a drop in team energy. And when you see those signs, don’t push harder. Take a pause.

Ask: “What’s essential right now?” Maybe it’s time to scale back or switch from performance goals to learning goals for a while. Give your team space to recover, reflect, and rebuild their sense of purpose. When motivation returns, performance will follow.

The Real Goal of Goal-Setting

When done right, goal-setting doesn’t just drive results—it builds trust. It clarifies direction, reinforces purpose, and gives people ownership in the outcome. But when done wrong, it becomes just another bureaucratic task. A checkbox. A system no one believes in.

So if your current goal-setting approach isn’t energizing your team, it’s time to change the way you lead it.

Pick a focus. Tie goals to purpose. Build them together. Check in often. And don’t forget to rest.

Because the goal isn’t just to hit a number. The goal is to build a team that’s motivated, focused, and in it for the long haul.

Image credit: Pixabay

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Getting Ready for Annual Planning Season? Start With Foresight, Not a Blank Template

Leave a reply

Getting Ready for Annual Planning Season? Start With Foresight, Not a Blank Template

by Braden Kelley and Art Inteligencia

Somewhere in your organization, right about now, a calendar invite is going out. The subject line says something like “FY27 Strategic Planning Kickoff,” and attached to it is a template. The template has boxes. The boxes are empty. Everyone will spend the next several weeks filling them in.

I have nothing against boxes. I like boxes. But I’d like to make the case that the single most expensive moment in your planning cycle is the one where somebody opens that blank template and starts typing, because whatever goes in first becomes the frame for everything that follows.

The blank template has a gravity problem

Here’s what actually happens. A blank template isn’t blank. It’s been filled in, invisibly, by last year’s plan, last year’s assumptions and last year’s loudest voice in the room. People don’t start from the future. They start from the previous document, change a few numbers, and call it a strategy.

That works fine if the world held still. It didn’t, and it won’t. If the biggest shift in your market is something nobody has put in a box yet, the template can’t ask about it, because the template was designed by people who hadn’t seen it coming either.

So the question I’d ask before the kickoff isn’t “what goes in the boxes?” It’s “what do we know, and not know, about the world these boxes are supposed to describe?”

What “start with foresight” actually means

It doesn’t mean hiring a futurist for the offsite (though I’m certainly not going to talk you out of it). It means doing a small amount of structured looking-outward before anyone does any planning. Think of it as the warm-up lap. Three things, in order:

Gather the signals. Not the trends. The signals. A signal is a small, specific thing you noticed: a competitor’s odd hire, a regulation that moved, a customer behavior that doesn’t fit your model. Trends are what you get when you’ve bundled signals together, and you can’t bundle what you haven’t collected. Ask your leadership team, and a few people from well outside it, to bring the three oddest things they’ve seen this year.
Sort the signals into the trends they suggest. This is where the room starts to disagree, which is the good part. Two people looking at the same pile of signals will see different trends. Better to find that out in October than in March.
Ask what futures those trends could produce. Plural, on purpose. Not the forecast. A handful of genuinely different, plausible futures, so that when the planning boxes finally get filled, they get filled with a plan that can survive more than one of them.

Then, and only then, open the template.

Why timing matters more than people think

Planning season has a quirk I’ve watched for twenty years. The moment a plan has a draft, it starts defending itself. People get attached to their numbers. Challenging the premises feels like challenging the person. So any foresight you want to influence the plan has to arrive before the first draft, not after it, when all it can do is make everyone feel bad.

That’s why I think of the weeks right before kickoff as a window, and a short one. Get the signals gathered now and the template gets filled in by people who’ve actually looked up from their desks. Skip it and you’re back to editing last year’s document with a fresh date on the cover.

A way to try it this week

If you want a low-risk way to feel what step one is like, the free FutureHacking Signal Picker walks you through identifying and prioritizing the signals worth watching, which is the foundation of the whole FutureHacking™ methodology. Run it yourself before the kickoff, then bring the output into the room instead of a blank whiteboard. You’ll be surprised how different the first fifteen minutes feel.

The next step, if you want it

I’m putting the finishing touches on a second tool, the FutureCanvas Picker, which carries you further: from signals, to the trends they suggest, to a set of possible futures, to your most probable future, and then to the path toward the future you’d actually prefer. It’s the closest thing I’ve built to the full FutureHacking™ arc in a single sitting, which makes it a natural fit for exactly this moment in the calendar.

I’m opening early access to a small group first: strategic planners, CSOs and leaders who are running a planning process right now and can tell me honestly what works under a real deadline. If that’s you, reach out and let me know and I’ll follow up personally with the select few who get in first.

Before you hit “accept” on that invite

The organizations that do planning well aren’t the ones with the best templates. They’re the ones who spent a little time, before the template appeared, finding out what the world was actually doing.

So when that kickoff invite lands, go ahead and accept it. Just make sure somebody has done the looking first.

Image Credits: Gemini

Content Authenticity Statement: The topic area, key elements to focus on, etc. were decisions made by Braden Kelley, with a little help from Claude to clean up the article.

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Uncertainty Barometer

Leave a reply

Uncertainty Barometer

GUEST POST from Mike Shipulski

Novelty, or newness, can be a great way to assess the status of things. The level of novelty is a barometer for the level of uncertainty and unpredictability. If you haven’t done it before, it’s novel and you should expect the work to be uncertain and unpredictable. If you’ve done it before, it’s not novel and you should expect the work to go as it did last time. But like the barometer that measures a range of atmospheric pressures and gives an indication of the weather over the next hours, novelty ranges from high to low in small increments and so does the associated weather conditions.

Barometers have a standard scale that measures pressure. When the summer air is clear and there are no clouds, the atmospheric pressure is high and on the rise and you should put on sun screen. When it’s hurricane season and super-low system approaches, the drops to the floor and you should evacuate. The nice thing about barometers is they are objective. On all continents, they can objectively measure the pressure and display it. No judgement, just read the scale. And regardless of the level of pressure and the number of times they measure it, the needle matches the pressure. No Kentucky windage. But novelty isn’t like that.

The only way to predict how things will go based on the level of novelty is to use judgement. There is no universal scale for novelty that works on all projects and all continents. Evaluating the level of novelty and predicting how the projects will go requires good judgement. And the only way to develop good judgment is to use bad judgment until it gets better.

All novelty isn’t created equal. And that’s the trouble. Some novelty has a big impact on the weather and some doesn’t. The trick is to know the difference. And how to tell the difference? If when you make a change in one part of the system (add novelty) and the novelty causes a big change in the function or operation of the system, that novelty is important. The system is telling you to use a light hand on the tiller. If the novelty doesn’t make much difference in system performance, drive on. The trick is to test early and often – simple tests that give thumbs-up or thumbs-down results. And if you try to run a test and you can’t get the test to run at all, there’s a hurricane is on the horizon.

When the work is new, you don’t really know which novelty will bite you. But there’s one rule: all novelty will bite you until proven otherwise. Make a list of the novel elements of the and test them crudely and quickly.

Image credits: Pexels

Sign up here to join 17,000+ leaders getting Human-Centered Change & Innovation Weekly delivered to their inbox every week.

The Secret to Sweetwater’s Billion-Dollar Online Business

Leave a reply

The Secret to Sweetwater's Billion-Dollar Online Business

GUEST POST from Shep Hyken

Sweetwater is an online retailer specializing in selling whatever musicians need, from instruments to audio equipment and lighting. In 1979, Chuck Surack founded the company in Fort Wayne, Indiana. It started as a mobile recording studio and over time, evolved into a retail business selling musical instruments. In 1995, the company launched a website, and just a few years later was selling most of its inventory online. Surack was an early adopter of online retailing, and today, with 2,500 employees, Sweetwater is the largest online retailer of musical instruments and audio equipment in the U.S., serving millions of customers with $1.7 billion in sales.

I had a chance to interview David Fuhr, Sweetwater’s chief sales officer, for an episode of Amazing Business Radio. We discussed the secrets to creating an exceptional customer experience that drives repeat business. It turns out, it’s not a secret at all. It’s a common-sense approach to putting the customer at the center of all decisions. When a company becomes customer-focused—even customer-obsessed—magic happens. Here are six lessons any business can learn from our discussion:

1. Creating Experiences Out of Love for Your Customers Beats Just Chasing Money

This seems like a good place to start. Fuhr shared Sweetwater’s philosophy: “Our team is in it for the love of the game.” Surack started Sweetwater out of love and passion for the business, and success followed. Fuhr started playing clarinet when he was young, eventually decided to teach music, and now he gets to sell music. There are many similar stories from Sweetwater employees. They love what they do!

2. Hire the Right People

Even if you love music, it’s not easy to get hired to be a salesperson at Sweetwater. Keep in mind, Sweetwater is in Fort Wayne—not a major city like Chicago, LA or New York. All employees are expected to work in the Sweetwater office. With a smaller population, one might think Sweetwater would have difficulty hiring enough staff to support its customers. Only 5% of applicants vying for the coveted role of selling and serving customers with a shared passion for music are hired. They choose the best.

3. Training Never Stops

Sweetwater wants to ensure its salespeople have the technical information they need to sell and the soft skills to communicate effectively with customers. It’s all done through training. Once hired, new employees complete 13 weeks of training at Sweetwater University. They are paid to be in a classroom for the first 90 days of their Sweetwater journey, and it doesn’t stop there. Each week, salespeople go through 90 minutes of additional training. This reinforces something I’ve preached to my clients for decades: Training isn’t something you did. It’s something you do.

4. Core Values Create the Foundation for Strong Business

Surack was successful because of his core values-based rules, and his No. 1 core value was simple: Just do the right thing. Fuhr used my salesperson, Blake Strickland, as an example. I recently bought a guitar from Sweetwater, and he not only helped me choose the right guitar, but also took the time to go downstairs to their “store” to compare it with similar models, ensuring I would receive, in his opinion, the best guitar of the lot. This was time spent away from the phone when he could have been talking to other customers. But, as Fuhr points out, Strickland wanted me to have the best experience. In addition, Strickland didn’t want my new guitar to spend a week in various locations and climates in the back of a truck or in a warehouse while en route to my home, so he surprised me by upgrading my purchase to overnight delivery. Fuhr says, “Who are we to stop him? He’s doing the right thing for you. … We empower our employees to do the right thing.”

5. Small Acts of Generosity Surprise Customers

One of the fun things Sweetwater does is include a small bag of candy with every order. Pun intended, it’s a “sweet” gesture that gets people to smile. Fuhr says, “Generosity doesn’t need to cost much. It’s about showing you care.” A small bag of candy, a follow-up email or phone call after a sale to make sure the customer is happy, or a surprise upgrade to overnight shipping are the small acts of generosity that pleasantly surprise customers.

6. Don’t Solve Problems—Solve Customers

I asked Fuhr how Sweetwater handles complaints. He said, “We solve the customer.” His point was that the problem or complaint is not the most important factor. Sure, you must fix what needs to be fixed, but more important is to “solve the customer.” That means the customer walks away with renewed confidence that Sweetwater stands behind its products and takes care of its customers. Once “the customer is solved,” the complaint or issue is escalated to a team to discuss how to mitigate or prevent it from happening again.

Final Words

As a musician, I’m a big fan of Sweetwater. But as someone who studies customer experience for a living, I’m an even bigger fan of how they do business. The company reminds us that a great customer experience isn’t complicated. And as important as anything, they don’t just chase dollars. They chase and build relationships. Their relentless focus on the customer experience is why their customers say, “I’ll be back!”

This article was originally published on Forbes.com.

Image Credits: Shep Hyken

Sign up here to join 17,000+ leaders getting Human-Centered Change & Innovation Weekly delivered to their inbox every week.

Mixed Reality Headsets Meet the Dead Zone

Leave a reply

Mixed Reality Headsets Meet the Dead Zone

GUEST POST from Geoffrey Moore

My colleague and social media maven, Rich Stimbra, forwards me news items that might spark a blog post, like the following a couple of years ago:

Meta has scuttled development of a high-end mixed-reality headset meant to compete with Apple’s Vision Pro starting in 2027, The Information reports, citing anonymous sources. Production cost was a primary factor, since Meta was using the same micro OLED display tech as Apple, but trying to keep the headset under $1,000 in order to attract buyers. Apple’s $3,500 Vision Pro, meanwhile, is “stuck in neutral,” per Business Insider. Falling U.S. sales will be offset somewhat by its international launch in June, but the Vision Pro has no must-have app yet — and a more affordable model is expected next year.

This was clearly a technology adoption problem, and clients often ask members of The Chasm Group how you can tell where a given category is in the Technology Adoption Life Cycle, and how should that impact your commitment to the opportunity?

One tool we use is called the Pain/Gain matrix, as illustrated in the two charts that follow. The first chart tees up a thought experiment exercise. Looking at the disruptive innovation you are seeking to bring to market, ask yourself how much gain does it deliver, and how much pain must the customer go through to get it? In so doing, don’t just consider the end user, also take into account the other constituencies that must support the purchase. This is particularly germane to B2B enterprises, so you have to squint a bit to apply it to consumer markets. That said, here is the framework:

Pain Gain Matrix

The executive sponsor is the one who has to pay for this, the process owner is the one who has to secure the productivity improvement from it, the systems owner is the one who has to install and support it, and the end user is the one who has to actually extract the benefits from it. Each one has their own pain/gain experience, so they need to be placed separately. (In consumer markets, all four roles could condense into one, although in many families they may be distributed across either one or both parents as well younger and older siblings.)

The goal of the thought experiment is for the team to reach a consensus on the most likely square for each of the four stakeholders based on the current offer in the market today. Once you have all four placed in one (and only one) square, then you can turn to the second chart, which serves as a kind of decoder ring in that it predicts where you are likely to be in the adoption life cycle and what you will have to do to be successful at that stage.

Dead Zone Matrix

Following the Technology Adoption Life Cycle around the edges of the diagram

One might expect that the life cycle would proceed from the upper right to the lower left on a diagonal path, a straight line being the shortest distance between two points. It turns out that is not the case.

For the Early Market, a high-pain, high-gain proposition is OK provided the size of the gain is massive. That is, if you can deliver a truly transformative outcome, early adopters are willing to put up with a considerable amount of pain (and expense) to get it. However, if it is anything less than truly transformative, then they won’t play. That is why the winning Early Market operating model is a bespoke project wherein you and they put serious skin in the game, including assigning your best and brightest to the effort and simply refusing to stop until you have got the thing all the way to bright. The key to this stage is to have a visionary executive sponsor who will commit not only to fund the outcome but to continue to support it through its struggles until it gets all the way to the finish.

For the Bowling Alley (including the critical crossing the chasm step) the critical issue is still very much the size of the gain, what we call the compelling reason to buy, but the ability to absorb pain is much less. Here we have a pragmatist process owner who is under direct pressure to fix a broken mission-critical process that they cannot remediate with conventional solutions. They are desperate for a solution to their problem, what we call the whole product, which will be a huge gain for them. However, they do not have the resources to fund a bespoke project, which means they cannot absorb a great deal of pain. As a result, the vendor has to bring the whole product to them, partners included, and keep everyone committed to stay the course until the fix is up and running and proven successful. The process owner is willing to pitch in here, and so can absorb some pain in order to get to their goal, but nowhere near as much as the Early Market visionary executive.

For a Tornado to form, two things must change. The first is the emergence of a killer app that makes everyone and their mother want the new thing—that’s the big gain that has broad appeal. The second is that there has to be a major reduction in pain—a big drop in the friction that has been holding the category back to date. The goal is to sell a stripped-down, friction-free killer app that has a super-short time to value and then expand over time to address adjacent opportunities that may require more development but which can be readily absorbed because the core product is already installed. During the Tornado proper, particularly at its outset, it is the systems owners who are under the gun to procure and deploy the killer app as fast as possible. Their speed is gaited by whatever friction is still present, so the more this can be removed, the faster the tornado can spin up and the further it can spread. The company that does this best typically takes the field, becomes installed as the category gorilla, and generates outsized returns for many years to come.

Finally, when technology adoption comes to Main Street, we are now in the expand part of the land-and-expand playbook, where the gaiting item is how many different use cases it can support in how many different contexts and whether the offer can be converted from a licensable product to a consumable service. Under such conditions, because the amount of pain to adopt has been reduced to a bare minimum, it takes less and less gain to drive additional market growth. The end users are the ones who most benefit, and success rides increasingly on securing distribution channels that get to them as directly as possible and making it as easy as pie for them to try and buy, or at least try and then get their system owner to buy.

The Dead Zone

As you can see, the Life Cycle follows a path from the upper right to the lower left of the diagram by skirting around the edges. What about all the other squares?

Well, the ones that are blacked out are simply non-starters. The pain exceeds the gain to the point that no one other than a technology enthusiast would want to engage. But the four squares in the very center of the diagram are the ones that are the most dangerous. Collectively they make up the Dead Zone, which is another way of seeing the chasm, or what Intel used to call the Valley of Death.

Products in the Dead Zone deliver good (but not amazing) gains, but they do so at the cost of real (although not excruciating) pain. This combination is the kiss of death. It causes prospective customers to express real interest in the offer (“We’d love to take a meeting and see a demo”), but it does not motivate them sufficiently to get them to actually buy. It is hard to imagine a greater waste of go-to-market resources than that. Start-ups, as well as in-house incubations who venture out into such a desert usually die of thirst, meaning they don’t get that life-supporting next round of funding.

It is kind of like a LaBrea Tar Pit that swallows up whole species, as witnessed by the Sharp’s Personal Digital Assistant, RCA’s 8-track tape, and Mazda’s rotary automobile engine, as well as the . . .

Mixed Reality Headset

This sucker has Dead Zone written all over it. And because it is being positioned as a consumer product, it has a much tougher row to hoe. There is simply no chance of it getting traction unless and until someone can bring to market a killer app at a consumer price point, which will require some very deep pockets to get there, not to mention incredible design skills to get it right.

A much slower but more achievable path would target a B2B customer base with Bowling Alley applications that address urgent problems with mission-critical business processes. An obvious example relates to the “aging out of the workforce” problems that industrial manufacturers are facing, both in the factory and in field services. There simply are not enough trained technicians to meet the need, especially now that many of these industries are moving back onshore. Mixed reality headsets can be used to enable just-in-time training for onboarding inexperienced workers better, faster, cheaper, and even more importantly, safer than conventional alternatives.

Is this a killer app? Heck no, but it is a start; it can support a higher price point, and it can create enough volume to warrant investing in lower-cost approaches. What it cannot do is be rushed. The biggest cause of Dead Zone casualties is a management team that thinks a tornado is upon them when in fact it is just a Hype Cycle hitting its peak.

That’s what I think. What do you think?

— Image credit: Pexels, Geoffrey Moore

Sign up here to join 17,000+ leaders getting Human-Centered Change & Innovation Weekly delivered to their inbox every week.

Compliance-Driven Customer Experience

Leave a reply

What Financial Services and Healthcare Teams Need to Know

Compliance-Driven Customer Experience

by Braden Kelley and Art Inteligencia

In most industries, a bad customer experience (CX) costs you a customer. In financial services and healthcare, it can also cost you an exam finding, a complaint to a regulator, or a line item in an audit report that someone on your compliance team now has to explain. That’s a meaningfully different kind of pressure, and it changes what a customer experience audit is actually worth to these two industries specifically — not just as a commercial tool, but as something that can double as genuine regulatory evidence.

A caveat before I go further: I’m not a lawyer or a compliance officer, and nothing here is regulatory advice. What I am is someone who’s watched CX and compliance teams operate as two separate functions inside the same organization, often documenting the same customer touchpoints in two different ways, for two different audiences, without either one fully benefiting from what the other already knows.

The silo that’s costing you twice

Here’s the pattern I see constantly in regulated industries: compliance runs its own fair-treatment reviews, complaint trend analysis, and documentation processes, built specifically to satisfy an examiner or auditor. CX, separately, runs its own journey mapping and improvement work, built to satisfy customers and the business. The two teams are frequently looking at the exact same touchpoints — the same loan application flow, the same patient intake process, the same claims experience — and producing two different, uncoordinated pictures of it, often without either team knowing in detail what the other found.

That duplication isn’t just inefficient. It means your compliance documentation and your actual customer experience improvement work rarely inform each other, and the organization effectively pays twice for insight into the same process it could have gotten once, more thoroughly, if the two efforts were designed together from the start.

What regulators in these industries are actually looking for

Across financial services and healthcare, the regulatory expectation increasingly isn’t just “treat customers fairly” as an outcome — it’s evidence of a systematic, ongoing process for finding and fixing where you aren’t. Fair lending and UDAAP-related reviews in financial services look for documented, proactive self-assessment, not just a clean complaint log. Patient experience standards in healthcare increasingly tie directly to things like CAHPS-style measurement and documented quality improvement processes, not just satisfaction scores reported upward once a year. In both industries, accessibility requirements for digital experiences — online banking, patient portals — are under increasing scrutiny on their own. What all of this adds up to is a consistent theme: proof that you looked, systematically and on a defensible cadence, matters as much as what you found.

Why a well-run CX audit produces exactly this kind of evidence

This is where the overlap gets genuinely useful instead of just theoretically interesting. A properly structured audit — validated personas, real journey mapping, an honest evaluation of existing complaint and service data, firsthand walkthroughs of the actual touchpoints, and benchmarking against what good looks like elsewhere — is, almost incidentally, precisely the kind of systematic, documented, dated process that compliance functions in these industries need to be able to point to. The commercial insight and the compliance evidence aren’t two different projects. They’re two outputs of the same rigorous process, if that process is designed with both audiences’ needs in mind from the outset rather than retrofitted afterward.

Timing matters more here than almost anywhere else

In most industries, a CX audit can happen whenever budget and bandwidth allow. In financial services and healthcare, timing it ahead of a scheduled exam or review changes its character entirely — it becomes proactive evidence of a mature process instead of a reactive scramble after a finding already landed. I’ve seen the difference in posture this creates firsthand: walking into a regulatory conversation with “here’s the systematic process we run and here’s what we found and fixed” is an entirely different position than walking in after a finding, trying to explain what you’re doing about it now that someone else noticed first.

Where to start

If your organization is in financial services or healthcare and hasn’t yet connected your CX and compliance efforts into a single, well-documented process, a Customer Experience Audit designed with both your commercial goals and your documentation needs in mind can serve both functions at once — worth coordinating with your compliance and legal teams on scope from the start. And if you want a sense of what unresolved experience gaps could be costing commercially, separate from the compliance conversation entirely, the CX ROI Calculator is a good place to start putting a number on it.

Download the Customer Experience Audit Checklist as a PDF

Image Credits: ChatGPT

Content Authenticity Statement: The topic area, key elements to focus on, etc. were decisions made by Braden Kelley, with a little help from Claude to clean up the article.

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Is Your pDoom Less Than Zero Yet?

Leave a reply

Is Your pDoom Less Than Zero Yet?

by Braden Kelley and Art Inteligencia

Every statistician who just read that headline winced. Probabilities don’t go below zero, and they’re right. Hold that wince for a moment, because it points at something the whole conversation about superintelligence keeps skipping.

If you haven’t run into the term, pDoom is the probability you personally assign to artificial intelligence ending badly for humanity. People trade their pDoom numbers at dinner parties now, the way people used to trade fantasy football picks. It’s a useful little conversation starter. It’s also a lopsided one, because it only counts one column of the ledger.

Nobody asks for your pDoom of inaction.

Press play first

I built this article around a music video, because some arguments land better with a hook in them. Here it is: Nothing Went Foom! from Bright Mirror.

That title is a wink at one of the great nerd arguments of the last twenty years. “Foom” is the sound an intelligence explosion makes in the fast-takeoff story: the machine gets a little smarter, uses that to get a lot smarter, and before anyone finishes the meeting it has left us standing on the platform. The idea was batted around in the Yudkowsky and Hanson debates back in 2008 and has been living rent-free in our collective imagination ever since.

I love that the title makes the point that nothing went foom. Technology almost never works that way. Electricity took decades to rewire the world. The internet took decades more, and we are still arguing about what it did to us. Transformations arrive in increments, which sounds boring until you realize what increments give you: time to watch, time to measure, time to adjust, and time to build the guardrails while the thing is still being built. Gradual is where safeguards live.

What we’re actually talking about building

I get tired of conversations where superintelligence is only ever the villain, so let me describe the other movie.

We already have a preview. AlphaFold predicted the structures of hundreds of millions of proteins, a job that used to cost a doctoral student years per protein, and its creators shared a Nobel Prize in Chemistry in 2024 for it. That is what narrow, early, imperfect AI did to one corner of biology. Now scale the ambition.

A superintelligence, pointed carefully at our hardest problems, could plausibly help us:

Compress drug discovery from a decade to a few years, and take a serious run at diseases we’ve written off as incurable.
Design new materials for batteries, solar cells and carbon capture that human intuition would never stumble across.
Help tame fusion, where the physics is understood but the control problem is brutal.
Put a patient, personalized tutor in front of every child on earth, including the ones who live hours from the nearest decent school.
Bring specialist-level diagnostics to places that have never had a specialist.
Speed up science itself, which is the part that makes my futurist heart skip. When the engine of discovery accelerates, every other list gets longer.

I’m not promising any of it will happen. I’m saying it could, and that “could” is worth a lot of human lives and a lot of human potential.

The risk we never put on the spreadsheet

Here’s where the less-than-zero joke earns its keep. The standard pDoom calculation asks how likely it is that we build this and it goes wrong. Fair question. But look at what’s missing: the cost of every year we don’t build it, or build it late, or build it only in the places that don’t care about safeguards.

A disease that goes uncured for another decade is a cost. A grid that stays dirty for another decade is a cost. A child who never gets the tutor is a cost. Those costs are quieter than a robot uprising, so they never show up in the headline, but they are real people. If you only count the risks of acting and never the risks of not acting, you haven’t done risk analysis. You’ve done fear analysis.

So here’s my proposal for a better number. Take your pDoom from moving forward, then subtract the doom you are already accepting by standing still. I suspect that for a lot of people the net figure is a lot lower than they thought, and for some of us it’s flirting with the territory of the headline. Statisticians, you may now exhale.

Safeguards, of course

Now let me be extremely clear, because I know how this paragraph gets quoted without its neighbors: I am not arguing for recklessness. Brakes are what let you drive fast, and seatbelts didn’t kill the automobile, they saved the automobile.

Responsible innovation means staged deployment instead of big-bang launches. It means independent testing and red-teaming, transparency about what these systems can and can’t do, real accountability when they fail, and international cooperation, because a safeguard that only half the world adopts is a suggestion. It means keeping humans in the loop for the decisions that matter, and building systems whose values we can inspect rather than hope for.

And I’ll say this plainly: thoughtful, serious people believe the danger is real, and some put meaningful odds on catastrophic outcomes. They might be right. That’s exactly why the safeguards have to be real and not decorative, and why dismissing the worriers is as unhelpful as dismissing the optimists. The goal isn’t to win the argument. It’s to build the thing well.

Ask a better question

The debate usually gets stuck on “should we build superintelligence?” Treat it as a yes-or-no switch and one side has to lose. Ask instead: what would we need to see in place to say yes? What safeguards, what evidence, what governance, what tripwires that tell us to slow down?

That question has answers. It also has owners and deadlines, which a vibe never does.

So, how’s your pDoom?

Mine is not zero, and I would be suspicious of anyone whose is. But when I count both columns, including the diseases, the climate, the classrooms and the discoveries waiting on the other side of responsible progress, I find the biggest risk we face isn’t that we build this thing carefully. It’s that we let fear stop us from building it at all, and hand the future to whoever was less cautious.

Hit play on the video again. Then ask yourself what future you’d rather get to first.

OR, is it all an EVIL PLAN?

Image Credits: m365 CoPilot

Content Authenticity Statement: The topic area, key elements to focus on, etc. were decisions made by Braden Kelley, with a little help from Claude to clean up the article.

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

How True Believers Undermine Change

Leave a reply

How True Believers Undermine Change

GUEST POST from Greg Satell

Journalist and Puck co-founder Tina Nguyen has been doing the rounds to promote her new book, The Maga Diaries, that chronicles her rise through, as well as her retreat from, the right-wing media ecosystem. What she describes is a carefully constructed culture that identifies, indoctrinates and then promotes ultra-conservative media personalities.

Yet these efforts are prone to failure. As MIT economist Daron Acemoglu and his colleagues have shown, in their effort to create homophily, these types of echo chambers undermine critical thought by creating filter bubbles and diminishing access to information, which makes it hard to be relevant to a wider audience.

The truth is that lasting change is always built on shared values. We can’t just preach to the choir. We need to venture out of the church and mix with the heathens. The best way to identify shared values is to listen to those who oppose what you’re trying to achieve. If you only interact with those who agree with you, you are undermining your own efforts.

Humans Are Wired For Tribal Thinking

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.

Marshall McLuhan, in his classic Understanding Media, one of the most influential books of the 20th century, described media as “extensions of man” and argued that technologies like the Gutenberg printing press not only accelerated the spread of information, but also affected human thought itself. In effect, the medium is the message.

Following this same line of thought, he predicted that the new electronic media that were emerging at the time would lead to a global village and people would be able to instantly exchange ideas and experiences across vast chasms of time and space. Communities would no longer be tied to a physical place, but intermingle with others on a world stage.

Yet McLuhan did not see the global village as a peaceful place. In fact, he predicted it would lead to a new form of tribalism and result in a “release of human power and aggressive violence” greater than ever in human history, as long separated—and emotionally charged—cultural norms would now constantly intermingle, clash… and explode.

Building Status Within A Shared Identity

The indoctrination process that Nguyen describes is designed to create a uniformity of thought. The pressure is subtle at first. Young students are invited to dinners with prominent people, told that they have great potential and a big future ahead of them. They learn to take subtle cues about what ideas and beliefs are appreciated and which are not.

Then, as Will Storr explains in his bestselling book, a status game begins. As the players vie to signal identity, group polarization leads to “moral outbidding,” a purity spiral ensues and the most extreme views are proudly displayed, creating strong bonds of group identity and what Wittgenstein calls a private language begins to form.

Those who proudly display tribal signals and speak the tribal language, get access to opportunities others don’t. Nguyen tells about being given a mentor who opened up job opportunities for her in journalism and would advise what stories to report and what angles to take. Slowly, she started to feel that something was wrong.

The problem is that the more we dedicate ourselves to a particular status game, the more difficult we find it is to relate outside of it. Top notch athletes, Special Forces operators, Wall Street traders and members of religious cults often find they have difficulty relating to others who play different status games than they do.

Differentiating Values, Shared Values and The Social Media Business Model

When we feel passionately about an idea, we want to talk about how it’s different, because that’s what made us passionate in the first place. People who go to Trump rallies vie for who can wear the t-shirt with the most extreme slogans. Some who start out with a desire to promote social justice and basic fairness can drift into a belief in a hierarchy of oppression and cheer on cruelty and violence.

Social media business models exacerbate these underlying tendencies by rewarded content that draws strong reactions. For example, when Facebook researchers created a profile of a white woman named “Carol” that was interested in politics, parenting, Christianity, and Fox News, she was immediately subjected to a rabbit hole of hate speech and QAnon.

Within the bubble, this feels good. People become religiously dedicated to the cause, the sense of group identity intensifies and the movement feels powerful. The problem comes when ideas from inside the bubble escape out, such as when somebody shoots up a pizza shop because he gets convinced that a Satanic child sex abuse ring was being run out of its nonexistent basement or a Cornell professor declares that he was exhilarated by the murder of Israelis.

Differentiating values are what make people passionate about an idea, but by definition they can seem strange, or even extreme, to others. That creates an inevitable backlash. It’s a simple truth that every revolution inspires a counterrevolution. To avoid that boomerang, you need to identify shared values that can bring people in without turning others off.

Failing To Survive Victory

In The Righteous Mind, social psychologist Jonathan Haidt makes the point that many of our opinions are a product of our inclusion in a particular team. Because our judgments are so closely intertwined with our identity, contrary views can feel like an attack. So we feel the urge to lash out and silence opposition. That almost guarantees a failure to survive victory.

I first noticed this in the aftermath of the Ukraine’s Orange Revolution in 2004. Having overcome a falsified election, we were so triumphant that we failed to see the gathering storm. Because we felt that the forces of history were on our side, we dismissed signs that the corrupt and thuggish Viktor Yanukovych was staging a comeback and paid a terrible price. DEI leaders are experiencing something similar today.

I see the same pattern in our work helping organizations with transformational initiatives. Change leaders feel so passionately about their idea they want to push it through and silence dissent. But not every transformation is for everybody. Meaningful change can’t be mandated or forced, it can only be empowered.

But in order to do that, you need to focus your energy on winning converts, rather than punishing heretics. One of the most difficult things about leading change is that we need to let people embrace it for their own reasons and in their own way. Some will never embrace it and will take another path, pursue a different journey.

The truth is to bring about lasting change you need to learn to love your haters. They’re the ones who can help alert you to early flaws, which gives you the opportunity to fix them before they can do serious damage. They can also help you to identify shared values that can help you communicate more effectively and also design dilemmas that will send people your way.

The best place to start is with a problem that people actually want solved, that can be pursued with a sense of shared values and shared purpose. Change that lasts is always built on common ground. The secret to bringing about large-scale change is understanding you don’t have to bring in everyone at once, just enough to help you get to the tipping point where you can unlock a cascade.

Change is about collective dynamics, not persuasion, or snappy slogans. In fact, the urge to persuade is a red flag. It usually means you either have the wrong change or the wrong people. That’s why you want to start out with a problem that people want solved, that can be pursued with shared values and shared purpose.

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

Sign up here to join 17,000+ leaders getting Human-Centered Change & Innovation Weekly delivered to their inbox every week.

Changing Minds to Mindsets

Leave a reply

Changing Minds to Mindsets

GUEST POST from Arlen Meyers

Fostering bioimedical and clinical innovation will mean creating entrepreneurial universities with academic entities, like medical schools, that have entrepreneurial faculty that graduate all students with an entrepreneurial mindset.

There are 6 characteristics of the entrepreneurial mindset.

1. Personal growth relates to the size of the challenge, not the size of the kingdom. What motivates real innovators is the more exciting challenge, not the number of people reporting to them. The “size of the difference” they will make is more inspiring than the “size of the business.” They relish getting out of their comfort zone, and into the unknown.

2. The new direction is the challenge, not the destination. The challenge is the transformation vehicle for true innovators, and not a performance goal. They focus on legacy creation, not legacy protection. They ignore failures and are constantly looking at the progress made. They treat innovations reviews like performance reviews.

3. Be an attacker of forces holding people back, not a defender. Real innovators start by questioning the world order rather than conforming to it. They begin by confronting the forces holding everyone back, rather than living with it. The forces include mindset gravity, organization gravity, industry gravity, country gravity, and cultural gravity.

4. New insights come from a quest for questions, not a quest for answers. This discovery mindset searching for new questions drives real innovators away from more of the same. They fundamentally become value seekers; they look for value in every experience, in every conversation. They don’t seek prescriptions, they seek possibilities.

5. Stakeholders must be connected into the new reality, not convinced. True innovators tip stakeholders into adopting and even co-owning the orbit-shifting idea. They go about tipping the heart first, assuming the mind will follow. They seek smart people, who openly express their doubts, and then collaborate to overcome them.

6. Work from the challenge backward, rather than capability forward. Overcoming execution obstacles is combating dilution, not compromising, for these innovators. Their mindset is not “if-then” but “how and how else?” They convert problems to opportunities, and often the original idea grows far bigger than the starting promise

Training minds is easier than changing them. Changing mindsets is even more difficult than changing minds.

– A new survey by the Center for Connected Medicine (CCM) at UPMC reveals that artificial intelligence (AI) continues to be a top priority for senior leaders in the healthcare industry.

– For the second year in a row, executives cited AI as both the most exciting technology and the most improved, highlighting its potential to transform healthcare.

But top of mind is not top of mindset.

Here are some ways to future proof your mindset.

Both students and faculties need to be more proactive than reactive to opportunities and they need administrators and leaders to provide them with the innovation systems and infrastructure they need to thrive.

Too much of academe is about features, not benefits, problem solving, not problem seeking, spoon feeding, not challenging learners to figure out how to feed themselves.

Image Credit: Gemini

Sign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.