Category Archives: Change

We Must Prepare for Future Crises Like We Prepare for War

GUEST POST from Greg Satell

In a 2015 TED talk, Bill Gates warned that “if anything kills ten million people in the next few decades, it’s most likely to be a highly infectious virus rather than a war. Not missiles, but microbes.” He went on to point out that we have invested enormous amounts of money in nuclear deterrents, but relatively little to battle epidemics.

It’s an apt point. In the US, we enthusiastically spend nearly $700 billion on our military, but cut corners on nearly everything else. Major breakthroughs, such as GPS satellites, the Internet and transistors, are merely offshoots of budgets intended to help us fight wars more effectively. At the same time, politicians gleefully propose budget cuts to the NIH.

A crisis, in one sense, is like anything else. It eventually ends and, when it does, we hope to be wiser for it. No one knows how long this epidemic will last or what the impact will be, but one thing is for sure — it will not be our last crisis. We should treat this as a new Sputnik moment and prepare for the next crisis with the same vigor with which we prepare for war.

Getting Artificial Intelligence Under Control

In the Terminator series, an automated defense system called Skynet becomes “self aware” and launches a nuclear attack to end humanity. Machines called “cyborgs” are created to hunt down the survivors that remain. Clearly it is an apocalyptic vision. Not completely out of the realm of possibility, but very unlikely.

The dangers of artificial intelligence, however, are very real, although not nearly so dramatic. Four years ago, in 2016, I published an article in Harvard Business Review outlining the ethical issues we need to address, ranging from long standing thought experiments like the trolley problem to issues surrounding accountability for automated decisions.

Unlike the Terminator scenario, these issues are clear and present. Consider the problem of data bias. Increasingly, algorithms determine what college we attend, if we get hired for a job and even who goes to prison and for how long. Unlike human decisions, these mathematical models are rarely questioned, but affect materially people’s lives.

The truth is that we need our algorithms to be explainable, auditable and transparent. Just because the possibility of our machines turning on us is fairly remote, doesn’t mean we don’t need too address more subtle, but all to real, dangers. We should build our systems to serve humanity, not the other way around.

The Slow-Moving Climate Crisis

Climate change is an issue that seems distant and political. To most people, basic needs like driving to work, heating their homes and doing basic household chores are much more top of mind than the abstract dangers of a warming planet. Yet the perils of climate change are, in fact, very clear and present.

Consider that the National Oceanic and Atmospheric Administration has found that, since 1980, there have been at least 258 weather and climate disasters where overall damages reached or exceeded $1 billion and that the total cost of these events has been more than $1.7 trillion. That’s an enormous amount of money.

Yet it pales in comparison to what we can expect in the future. A 2018 climate assessment published by the US government warned that we can expect climate change to “increasingly affect our trade and economy, including import and export prices and U.S. businesses with overseas operations and supply chains,” and had similar concerns with regard to our health, safety and quality of life.

There have been, of course, some efforts to slow the increase of carbon in our atmosphere that causes climate change such as the Paris Climate Agreement. However, these efforts are merely down payments to stem the crisis and, in any case, few countries are actually meeting their Paris targets. The US pulled out of the accord entirely.

The Debt Time Bomb

The US national debt today stands at about 23.5 trillion dollars or roughly 110% of GDP. That’s a very large, but not catastrophic number. The deficit in 2020 was expected to be roughly $1 trillion, or about four percent of GDP, but with the impact of the Coronavirus, we can expect it to be at least two to three times that now.

Considering that the economy of the United States grows at about two percent a year on average, any deficit above that level is unsustainable. Clearly, we are far beyond that now and, with baby boomers beginning to retire in massive numbers, Medicare spending is set to explode. At some point, these bills will have to be paid.

Yet focusing solely on financial debt misses a big part of the picture. Not only have we been overspending and under-taxing, we’ve also been massively under investing. Consider that the American Society of Civil Engineers has estimated that we need to spend $4.5 trillion to repair our broken infrastructure. Add that infrastructure debt to our financial and environmental debt it likely adds up to $30-$40 trillion, or roughly 150%-200% of GDP.

Much like the dangers of artificial intelligence and the climate crisis, not to mention the other inevitable crises like the new pandemics that are sure to come, we will eventually have to pay our debts. The only question is how long we want to allow the interest to pile up.

The Visceral Abstract

Some years ago, I wrote about a concept I called the visceral abstract. We often fail to realize how obscure concepts affect our daily lives. The strange theories of quantum mechanics, for example, make modern electronics possible. Einstein’s relativity helps calibrate our GPS satellites. Darwin’s natural selection helps us understand diseases like the Coronavirus.

In much the same way, we find it easy to ignore dangers that don’t seem clear and present. Terminator machines hunting us down in the streets is terrifying, but the very real dangers of data bias in our artificial intelligence systems is easy to dismiss. We worry how to pay the mortgage next month, but the other debts mounting fade into the background.

The news isn’t all bad, of course. Clearly, the Internet has made it far easier to cope with social distancing. Technologies such as gene sequencing and supercomputing simulations make it more likely that we will find a cure or a vaccine. We have the capacity for both petty foolishness and extreme brilliance.

The future is not inevitable. It is what we make it. We can choose, as we have in the past, to invest in our ability to withstand crises and mitigate their effects, or we can choose to sit idly by and give ourselves up to the whims of fate. We pay the price either way. How we pay it is up to us.

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

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Top 10 Human-Centered Change & Innovation Articles of November 2022

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Top 10 Human-Centered Change & Innovation Articles of November 2022 Drum roll please…

At the beginning of each month, we will profile the ten articles from the previous month that generated the most traffic to Human-Centered Change & Innovation. Did your favorite make the cut?

But enough delay, here are November’s ten most popular innovation posts:

Human-Centered Design and Innovation — by Braden Kelley

Four Ways to Overcome Resistance to Change — by Greg Satell

What to Do When You Don’t Know What to Do — by Mike Shipulski

5 Simple Steps for Launching Game-Changing New Products — by Teresa Spangler

Why Small Teams Kick Ass — by Mike Shipulski

Crabby Innovation Opportunity — by Braden Kelley

Music Can Make You a More Effective Leader — by Shep Hyken

Lobsters and the Wisdom of Ignoring Your Customers — by Robyn Bolton

Asking the Wrong Questions Gets You the Wrong Answers — by Greg Satell

Brewing a Better Customer Experience — by Braden Kelley

BONUS – Here are five more strong articles published in October that continue to resonate with people:

Three HOW MIGHT WE Alternatives That Actually Spark Creative Ideas — by Robyn Bolton

Bridging the Gap Between Strategy and Reality — by Braden Kelley

Ice Cream Dreams — by John Bessant

Have the Courage to be Wrong — by Mike Shipulski

What’s Next – Through the Looking Glass — by Braden Kelley

If you’re not familiar with Human-Centered Change & Innovation, we publish 4-7 new articles every week built around innovation and transformation insights from our roster of contributing authors and ad hoc submissions from community members. Get the articles right in your Facebook, Twitter or Linkedin feeds too!

Have something to contribute?

Human-Centered Change & Innovation is open to contributions from any and all innovation and transformation professionals out there (practitioners, professors, researchers, consultants, authors, etc.) who have valuable human-centered change and innovation insights to share with everyone for the greater good. If you’d like to contribute, please contact me.

P.S. Here are our Top 40 Innovation Bloggers lists from the last two years:

Top 40 Innovation Bloggers of 2020

Top 40 Innovation Bloggers of 2021

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Innovate for Good – Breaking Paradoxes

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GUEST POST from Teresa Spangler

At the time of my writing this, the world is in the midst of unprecedented triple crises. The COVID-19 pandemic is wreaking havoc on healthcare and on the personal lives of people globally. The economic impacts of this pandemic are crippling nations, small towns, and people all over the world. And to top it off we are experiencing incredible social unrest – protests for Black Lives Matter are taking shape all around the world, with the goal of peaceful protests for change – but they’ve been hijacked by anarchists of varied profiles… individual crusaders, terrorists acting solo, antagonists of the left and the right wings… so many different factions creating chaos. All of this to say, change is happening at paces unimaginable, and ‘INNOVATION for Good’ – of all types, centered on human, economic, and environmental impacts – is a dire necessity.

The world faces many great challenges. For example, the World Economic Forum reports that “by 2050, global food systems will need to sustainably and nutritiously feed more than 9 billion people while providing economic opportunities in both rural and urban communities. Yet our food systems are falling far short of these goals. A systemic transformation is needed at an unprecedented speed and scale.”

Speed and scale, these days, are the operative words prioritized in innovation investments. When and how are the big questions that investors and stakeholders primarily ask? Of course, these are important questions. Breaking the cycle of ‘profit first’ is not an easy shift for capitalist societies. Social Entrepreneurism, Social Innovation Organizations, and Non-Governmental Organizations are charting courses toward innovating in new and socially impactful ways, but they need the support, collaborative partnership, and help from investors and from the public and private sectors. The world of business has been groomed for years to drive everything fast, faster, and fastest – fail-fast, rapid prototype, accelerated stage gates, hire-slow-fire-fast, rapid returns… and so on. Measured return on investments drives innovation decision-making from new cure-all drugs to the closet full of patents that sit in the coffers of giant industry leaders never making it out into the commercial world, even though these may be game-changing, lifesaving, humanity-improving innovations.

This chapter looks at examples of how to shift from ‘profit first’ to ‘ethics and innovation for good and safety first’. If you build it safely, ethically, and build it to serve humanity, improve the environment, and support socially good causes, the profits will come. But investors and stakeholders need to understand the WHYs – why safety, ethics, and serving are so important. How are we innovators sharing these three critical priorities in the stories we build to gain buy-in on new ideas? So often, safety and ethics are afterthoughts. Responsible Innovation: Ethics and Risks of New Technologies, Joost Groot Kormelink, TU Delft Open, 2019 note:

“If we do not critically and systematically assess our technologies in terms of the values they support and embody, people with perhaps less noble intentions may insert their views on sustainability, safety and security, health and well-being, privacy and accountability.”

Also in the textbook, Responsible Innovation: Ethics and Risks of New Technologies, it sites are case study examples of how conflicting values can open up new opportunities to innovate responsible. As a learning method, the case study opens up our minds to the point of view or moral foundations as an opportunity:“Moral dilemmas can help stimulate creativity and innovation, and innovative design may help us to overcome problems of moral overload.”

In the case study excerpt below: “Smart meters and conflicting values as an opportunity to innovate.” The case study points to an example of smart meter design.

The smart meter 3.0, which is what we are ideally looking for, is designed to accommodate both of the functional requirements in order to make energy use more efficient, while also protecting personal data. It gives us privacy and sustainability. In this respect, innovation in smart metering is exactly this: the reconciliation of a range of values, or moral requirements, in one smart design, some of which were actually in conflict before. Similarly, if we would like to benefit from RFID technology (enabling to automatically identify and track tags attached to objects) in retail, but fear situations in which we might be tracked throughout the shopping mall, it has been suggested we can have it both ways. A so-called ‘clipped chip’ in the form of a price tag with clear indentations would allow customers to tear off a piece of the label, thereby shortening the antenna in the label so as to limit the range in which the label can transmit data.

Clarity of Values-Based Purpose

In the case above, there is clear purpose-driven innovation. Study after study has shown clarity of purpose is key to engaging people in new ideas.

A Kin&Co survey conducted by Populus points out that “Not embedding purpose properly also alienates customers, because in this age of transparency employee problems leak out online, and into the press. Over a third of employees surveyed (34%) said they’d consider writing a negative review online.” One example cited is of “… the Etsy employee who started a petition against the company’s leaders for not living their purpose and values, which was signed by thousands of employees and then went viral.” From: Why purpose matters and four steps companies can take to get it right”, Rosie Warin, 14 February 2018, Ethical Corporation Magazine, Reuters Events – Sustainable Business, the conclusion was thus that …

Having a purpose and not living it will actually hurt your business more than not having one at all! Why Purpose Matters

There is a hunger for more transparency, having our work be meaningful, and knowledge that ethics and privacy are forethoughts, not afterthoughts. It’s good for business, and certainly will drive better profits in the long run.

Breaking the ‘Fast Profit’ Addiction and Adapting Innovation for Social Benefits – Seeking Purpose

Without tradition, art is a flock of sheep without a shepherd. Without innovation, it is a corpse. Winston Churchill

What if we asked the BIG ‘What if?’ What if we were more focused on the benefits of our innovations to humans, the environment, and society – making these priorities over profits first? Can it be proven that if you build it, the profits will come?

The United Nations: Sustainable Development Goals (SDGs)

The chapter Foundations of Moral Innovation (Chapter 3 – page 57) mentioned the ‘triple bottom line’ that socially conscious companies focus on serving – People / Planet / Profit… the social, environmental, and financial aspects of an organization’s impact. In 2015 the United Nations cast a vision (and put actions to their words) to build a better world for all people by 2030. Engaging a world of collaborators is key to the success of these 17 Development Goals (noted below).

“The 17 Sustainable Development Goals (SDGs) are one of the world’s best plan to build a better world for people and our planet by 2030. Adopted by all United Nations Member States in 2015, the SDGs are a call for action by all countries – poor, rich and middle-income – to promote prosperity while protecting the environment. They recognize that ending poverty must go hand-in-hand with strategies that build economic growth and address a range of social needs including education, health, equality, and job opportunities, while tackling climate change and working to preserve our ocean and forests. See Transforming A World: A 2030 Agenda.

The Division for Sustainable Development Goals (DSDG) within the United Nations Department of Economic and Social Affairs (UNDESA) provides substantive support and capacity-building for these SDGs and their related thematic issues.

To say the least, as we read these 17 audaciously massive and impactful goals, the goals feel incredibly lofty; the actions to innovate solutions for three of the goals, much less 17 of them, feels nearly unachievable (in our fast prototyping, rapid release, ROI-focused, capitalistic mind-sets) and CFOs around the world sense that acting on these in any way may weigh heavily on profits. Yet many companies are collaborating to drive solutions to these goals. The United Nations built a values-based and purpose-driven platform to participate in solving these world challenges. They provide guidelines, research, information on other collaborators, tools, data, and so much support to help those that choose to participate. And participating they are! Noted from a press release in July 2019: “28 companies with combined market cap of $1.3 trillion step up to new level of climate ambition. Ahead of the UN Climate Action Summit, companies commit to set 1.5°C climate targets aligned with a net-zero future, challenging Governments to match their ambition”.

Here are a few of the participating companies from this release: AstraZeneca, Banka BioLoo, BT, Dalmia Cement Ltd., Eco-Steel Africa Ltd., Enel, Hewlett Packard Enterprise, Iberdrola, KLP, Levi Strauss & Co., Royal DSM, SAP, Signify, Singtel, Telefonica, Telia, Unilever, Vodafone Group PLC, and Zurich Insurance, amongst others. The release goes on to note that this collectively represents over one million employees from 17 sectors and more than 16 countries.

It seems that the United Nations has created an intensely collaborative framework that offers a moral ground to innovate. It’s just one example, and as complex as these goals are, the framework is simple… build a mission-driven platform, engage thought-leaders around the world, set up metrics and measures for success, provide as much data as possible, offer support when and where needed, and provide as many tools as possible to encourage collaboration amongst them.

ESG – A Moral Compass

Social investors are a group growing in popularity and size. These investors focus their investments and their portfolios on corporations around the world with metric-driven processes to ensure they are building sustainable and responsible companies – a practice known as environmental, social and corporate governance, or ESG.

An example of such an organization is Philips Corporation, which has made a commitment to ESG and thus to ethics over profits. In the article, “Good business: Why placing ethics over profits pays off”, they share “When companies work ethically, they will naturally outpace competition. Why? Simply because customers, as we’ve discovered, will see them as a trusted partner, not only for what they do, but how it is delivered. Commitment from management is a key factor to effectively deal with these situations.”

In Stanford Social Innovation Review, authors Chris Fabian and Robert Fabricant write, “An ethical framework – ‘a way of structuring your deliberation about ethical questions’ – can help to bridge disparate worlds and discourses and help them work well together.” Their article further notes that, “Ethical questions might include: ‘Is this platform / product actually providing a social good?’ or ‘Am I harming / including the user in the creation of this new solution?’ or even ‘Do I have a right to be taking claim of this space at all?’”11 Such a strong ethical framework can help innovators to plan for ‘value-based collaborations’. Establishing such a framework within your innovation practice also provides a process whereby collaborators can monitor the work, and consistently ensure that ethics are intact. Moreover, planning for positive outcomes and managing to an ethical framework gives customers, buyers, stakeholders, users, and investors some comfort that the ‘net new disruptive innovations’ will be safe for all, which will result in strong profits and longevity in due time.

Very importantly, this article also points out that while ethics may involve subjectivity, nevertheless “an ethical framework can bridge the worlds of startup technology companies and international development to strengthen cross-sector innovation in the social sector.”

Fabian and Fabricant outline a 4-model framework in this article:

Innovation is humanistic: solving big problems through human ingenuity, imagination, and entrepreneurialism that can come from anywhere.

Innovation is non-hierarchical: drawing ideas from many different sources and incubating small, agile teams to test and iterate on them with user feedback.

Innovation is participatory: designing with (not for) real people.

Innovation is sustainable: building skills even if most individual endeavors will ultimately fail in their societal goals.

“Critical to the world’s innovation effort is harvesting the Human Imagination!” Patrick Reasonover – writer and producer of They Say It Can’t Be Done

Incorporating any of the above four models provides the basis for forethought and planning. There may be additional considerations accompanying the above framework to drive even better outcomes yet – especially for those with big audacious visions of disruptive innovation. But often there are unexpected barriers. So how can one plan for the unexpected? There is a documentary film that explores some of these barriers, and four companies working to overcome them.

They Say It Can’t Be Done, written and produced by Patrick Reasonover, is an excellent documentary exploring how innovation can solve some of the world’s largest problems. The film tracks four companies on the cutting edge of technological solutions that could promote animal welfare, solve hunger, eliminate organ wait lists, and reduce atmospheric carbon. The film explores often unexpected challenges and barriers that are potentially keeping these companies from realizing success. They each share steps and strategies on how to break through the ‘concrete walls’.

The compelling theme from these companies is innovation for good – innovation with a moral foundation to improve humanity. One of the first questions typically asked by stakeholders is “When will these companies or their new innovations become profitable?” Here’s the BIG ‘What if’ question. What if we changed this question to, “What will it take to make this successful, and how can we help you get there faster?” These are fairly typical questions. But what about roadblocks potentially challenging even the most knowledgeable and experienced teams and proven technologies? I recently spoke with Patrick Reasonover about his mission and the documentary. Reasonover shares, “Faced with similar challenges to the companies in the documentary, I felt if more people understood barriers, the world would see more successful outcomes that could save people, improve human conditions, and the environment.” Reasonover went on to share four themes that would greatly help disruptors in their innovation practices. These four themes are summarized as follows:

One of the most important points he made in our discussion was to engage regulators and government agencies – collaborating with them very early on in the process and all along your path. Help them to understand; listen and take in their input.

Institute what Reasonover calls an ‘Ambassador of Imagination’. We need more imagination in the world and in our own world. It’s too easy to get boxed into an innovation framework and forget to take the blinders off in order to think and create big things!

Optimism is sorely needed in the world and especially for innovators. Getting new things out the door is daunting. Infuse your efforts with doses of optimism grounded in reality.

CELEBRATE… hitting milestones should be celebrated along the way. It’s a long road, and all too often we get push back from doubters, investors wanting faster outcomes, governing approval agencies, and so on. Celebrate and move forward!

These four practices create a culture that encourages and celebrates imagination, innovation, success, and all the collaborators helping you get there. And involving agencies early on in the process helps them to understand that you are taking safety and ethics seriously. Take for example 3D-printed organs for those needing transplants. There is so much at stake. Stepping through the approval process to prove it out on less risky organs – for example, 3D printed ears – helps to chart the course for other organs as the technologies and the discovery of new methods continues to develop.

The article “On The Road To 3-D Printed Organs” in TheScientist reports, “There are a number of companies who are attempting to do things like 3-D print ears, and researchers have already reported transplanting 3-D printed ears onto children who had birth defects that left their ears underdeveloped, notes Robby Bowles, a bioengineer at the University of Utah. The ear transplants are, he says, ‘kind of the first proof of concept of 3-D printing for medicine.”

Ethics First

All in all, there is much evidence pointing to success, longevity, scale, and profits when building a framework that places ethics, safety, values, and purpose as planned practices in any innovation effort.

These practices do not have to slow the process of innovation in the least. On the contrary… they will often speed up the effort, as in the example of engaging regulators as collaborators early on in your efforts. Engaging imagination and optimism are sorely needed, and keeps teams engaged and enthused. And.. leveraging one of Stanford’s four models could save a great deal of pain by monitoring outcomes all along your development stage gates. It all just makes good and safe business sense!

*Article is an excerpt contribution (chapter 6): The Other Side of Growth: Innovator’s Responsibilities in an Emerging World

Image credit: Pixabay

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Leading Your Way Through Crisis

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Leading Your Way Through Crisis

GUEST POST from Greg Satell

There’s a passage in Ernest Hemingway’s 1925 novel, The Sun Also Rises, in which a character is asked how he went bankrupt. “Two ways,” he answers. “Gradually, then suddenly.” The quote has since become emblematic of how a crisis takes shape. First with small signs you hardly notice and then with shocking impact.

That’s certainly how it felt to me in November, 2008, when I was leading a media company in Kyiv. By that time, the financial crisis was going full throttle, although things had been relatively calm in our market. Ukraine had been growing briskly in recent years and, while we expected a slowdown, we didn’t expect a crash.

Those illusions were soon shattered. Ad sales in Ukraine would eventually fall by a catastrophic 85%, while overall GDP would be down 14%. It was, to say the least, the worst business crisis I had ever encountered. In many ways, our business never really recovered, but the lessons I learned while managing through it will last a lifetime.

Build Trust Through Candor and Transparency

Our October revenues had come through fairly strong, so we were reasonably confident in our ability to weather the crisis. That all changed in November though, when ad sales, our primary source of revenue, dropped precipitously. By mid-November it had become clear that we were going to have to take drastic measures.

One of the first things that happens in a crisis is that the rumor mill goes into high gear. As if the real news isn’t bad enough, unimaginably crazy stories start getting passed around. To make matters worse, the facts were moving so fast that I didn’t have a clear picture of what the reality actually was, so couldn’t offer much in the way of consolation.

Yet what I could do was offer clarity and transparency. I called my senior team into an emergency meeting and told them, “This is bad. Really bad. And to be honest I’m not sure where we stand right now. One thing that I can assure you all of though is this: Like everything else, eventually this crisis will end and, when it does, you are going to want to look back at how you acted and you are going to want to be proud.”

A good number of those in the room that day have since told me how much that meeting meant to them. I wasn’t able to offer much in substance, or even any condolence for that matter. What I was able to do was establish a standard of candor and transparency which made trust possible. That became an essential asset moving forward.

Create An Imperfect Plan

Creating an atmosphere of transparency and trust is essential, but you also have to move quickly to action. In our case, that meant restructuring the entire company over the next 36 hours in order to bring our costs somewhat back in line with revenues. We weren’t even close to having a plan for the long-term, this was about survival.

We still, however, wanted to limit the damage. Although we were eliminating some businesses entirely, we recognized that some of our best talent worked in those businesses. So to lay people off indiscriminately would be a mistake. We wanted to keep our top performers and place them where they could have the most impact.

Over the next day and a half, we had a seemingly never-ending and excruciating series of meetings in which we decided who would stay and who would go, where we could increase efficiency by combining functions and leveraging our scale. Our goal was to do more than just survive, but to position ourselves to be more competitive in the future.

The plan we created in that short period of time was by no means perfect. I had to make decisions based on poor information in a very compressed time frame. Certainly mistakes were made. But within 36 hours we had a plan to move forward and a committed team that, in many ways, welcomed the distraction of focusing on the task in front of them.

Look for Dead Sea Markets

In their 2005 book, W. Chan Kim and Renée Mauborgne popularized the notion of a Blue Ocean Strategy, which focuses on new markets, rather than fighting it out in a “red ocean” filled with rabid competition. As MIT Professor David Robertson has described, however, sometimes markets are neither a red or blue ocean, but more like a dead sea, which kills off existing life but provides a new ecosystem in which different organisms can thrive.

He gave the example of LEGO’s Discovery Centers, which has capitalized on the abrupt shift in the economics of mall space. A typical location is set up in an empty department store and features miniature versions of some of the same attractions that can be found at the Toy giant’s amusement parks. The strategy leverages the fact that many mall owners are in dire need to fill the space.

We found something similar during the Ukraine economic collapse of 2009. Because the country was a major outsourcing center for web developers, demand for those with technical talent actually increased. Many of our weaker competitors were unable to retain their staff, which gave us an opportunity to launch several niche digital brands even while we were cutting back in other parts of our business.

Every crisis changes economic relationships and throws pricing out of whack. In some cases that turns cheap commodities, such as Lysol and hand sanitizer amid a Coronavirus pandemic, into highly demanded products. In other cases, however, it makes both assets and market share surprisingly affordable. That can create great opportunities.

Prepare for the Next Crisis

By the fall of 2009, our company was financially stable and things were returning to some form of normalcy. We had a strong management team, a portfolio of leading products and our survival was no longer seriously in question. However, I was exhausted and decided to leave to pursue other opportunities.

The founder, who had started the company almost 15 years before, was as exhausted as me and was ready to sell the company. Given our highly political sensitive portfolio of news brands, I urged him to seek a deal with a multinational firm. However, for various reasons, he decided to go with a local group led by Petro Poroshenko and Boris Lozhkin.

In my book Cascades, I describe what happens next. Due to the hard-hitting coverage of our news journalists, the company came under pressure from the oppressive Yanukovych regime. In 2013, the new owners were forced to sell the company to an ally of the Ukrainian President. A few months later, the Euromaidan protests broke out and Yanukovych was unanimously impeached. Later, Poroshenko was elected President and named Lozhkin as his Chief of Staff.

I still keep in touch with a core group of my former colleagues. Many have started families or new businesses. Quite a few have moved to different countries. Yet we all share the bond of working through the crucible of crisis together, some pride in what we achieved and the satisfaction that, when it was called for, we gave it our honest best.

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

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Shedding Old Habits for New Possibilities

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Unlearning to Learn

Shedding Old Habits for New Possibilities

GUEST POST from Art Inteligencia

In a world characterized by exponential change — where AI capabilities evolve every quarter and market demands shift before the quarterly report is filed — learning is often cited as the key to survival. Yet, leaders consistently overlook the prerequisite for true innovative learning: Unlearning. As a human-centered change and innovation thought leader, I contend that the greatest obstacle to embracing new possibilities isn’t a lack of knowledge or resources; it’s the weight of what we already know. Our past successes, entrenched processes, and deeply held technical expertise act as cognitive anchors, preventing us from navigating uncharted waters.

Unlearning is the deliberate process of discarding obsolete information, mindsets, and behavioral routines that are no longer relevant to the current reality. It is not forgetting, but rather making room for new knowledge by consciously retiring outdated, suboptimal habits. This is a profound human and organizational challenge. We are biologically wired to favor efficiency and certainty, meaning our brains prefer to use existing cognitive pathways. For organizations, this manifests as organizational memory bias, where past triumphs dictate future strategy, causing us to learn a new tool but insist on applying it using the old, linear process. The key is shedding the old process.

The Three Strategic Imperatives of Unlearning

For organizations to transform unlearning from an abstract concept into a strategic advantage, they must focus on three core imperatives:

De-Crystallizing Core Assumptions (The ‘Why’): Challenge the sacred cows—the beliefs about customers, competitors, or processes that have been true for a decade but may be failing now. This includes unlearning technical assumptions, such as the belief that data must remain siloed, which prevents modern AI integration.
Creating Friction for Automation (The ‘How’): Old habits are dangerous when they become automated and unquestioned. We must introduce controlled friction points—such as mandatory cross-functional rotation or requiring new-hire perspectives in legacy project reviews—to force teams to pause, reflect, and consciously choose a new path over the default path. This is a deliberate intervention against autopilot thinking.
Decoupling Identity from Expertise (The ‘Who’): The most senior and successful employees often have the most to unlearn, as their identity is intrinsically linked to their obsolete expertise. Leaders must establish psychological safety where unlearning is framed not as an admission of individual failure, but as a continuous commitment to organizational relevance.

“Your past success is your organization’s greatest vulnerability. Don’t let yesterday’s win anchor you to tomorrow’s failure.” — Braden Kelley

Case Study 1: Netflix – Unlearning the Physical Asset Model

The Challenge:

In the early 2000s, Netflix achieved remarkable success by disrupting video rental with a superior mail-order, DVD-based model. Their core organizational competency was logistics — managing physical inventory, shipping, and returns. This success became a massive cognitive anchor when high-speed internet made streaming possible. Their deeply ingrained knowledge of the physical world actively worked against their digital future.

The Unlearning Solution:

Netflix’s leadership, led by Reed Hastings, made a conscious, painful decision to unlearn their core asset. They had to shed the identity of a logistics company and embrace the identity of a technology and content company. This meant separating the DVD business and the streaming business, forcing the streaming unit to build entirely new competencies and metrics focused on digital delivery and latency, rather than physical inventory and postal service efficiency. They had to unlearn the “perfect” physical delivery process.

The Innovation Impact:

This deliberate act of self-disruption and unlearning allowed Netflix to build the foundation for its streaming dominance. By voluntarily creating friction and letting go of the habits that made them successful, they freed capital, talent, and attention to master the new competencies required for the digital era, ultimately redefining an entire industry.

Case Study 2: Haier – Unlearning the Traditional Management Hierarchy

The Challenge:

Haier, a massive Chinese appliance manufacturer, faced the global challenge of becoming truly customer-centric in a bureaucratic, centrally managed corporate structure. Their organizational muscle was built on command-and-control and mass production efficiency—a model that stifled local innovation and responsiveness.

The Unlearning Solution:

Haier’s CEO, Zhang Ruimin, initiated the RenDanHeYi model, a radical exercise in organizational unlearning. They abolished nearly all traditional middle management and restructured the company into thousands of small, autonomous business units called Microenterprises (MEs). These MEs were forced to become self-governing, find their own customers, and manage their own P&L (profit and loss) against the market. They had to unlearn the security and structure of guaranteed corporate security and centralized decision-making.

The Innovation Impact:

This massive organizational unlearning forced responsiveness at the edge. By shedding the old habits of central planning and top-down control, Haier enabled its MEs to rapidly innovate and localize products (e.g., specialized washing machines for specific niche markets). The shift created an internal entrepreneurial ecosystem, proving that organizational structure itself is an outdated habit that must be unlearned to achieve true agility and customer-centricity.

Conclusion: The L&D Imperative and the Courage to Be Obsolete

Unlearning is the highest-leverage activity in a change-driven environment. It requires leaders to demonstrate courage to be obsolete — to admit that the ways that brought them success yesterday will likely be the source of their failure tomorrow.

The L&D function must pivot its focus from teaching new skills to facilitating the shedding of old, limiting beliefs and processes. This is done by actively building the three strategic imperatives—challenging core assumptions, creating friction for automated habits, and decoupling identity from expertise. Stop asking only, “What must we learn next?” and start by asking the harder, more critical question: “What must we willingly let go of first?” Only by creating empty cognitive and structural space can you truly plant the seeds of new, emerging possibilities.

Extra Extra: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.

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Prototyping the Future

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Experimenting with Emerging Possibilities

Prototyping the Future

GUEST POST from Chateau G Pato

In the high-stakes game of organizational change, inertia is the silent killer. Leaders often talk about innovation, but they are terrified of the risk associated with committing millions to an unproven concept. This fear traps organizations in a cycle of incrementalism. As a human-centered change and innovation thought leader, I argue that the most powerful antidote to this paralysis is prototyping. Prototyping is not merely a step in a design process; it is a mindset — a strategic, disciplined commitment to experimenting with the future in the present. It is the art of making the unknown tangible, allowing us to fail safely, learn quickly, and dramatically increase our Return on Learning (ROL).

We must shift from an obsession with traditional ROI (Return on Investment), which punishes failure, to prioritizing ROL (Return on Learning), which rewards clarity and speed. Prototyping the future requires moving from a culture obsessed with detailed planning to one that values informed iteration. It means creating low-fidelity, high-impact simulations of emerging possibilities — be it a new product, a process, or an entirely new business model. This commitment to creating fast, disposable versions of the future dramatically lowers the psychological cost of failure, fostering the psychological safety necessary for true breakthrough innovation. Whether it’s a cardboard model, a basic wireframe, or an immersive Virtual Reality (VR) simulation, the goal is to maximize the learning extracted per dollar spent.

The Three Imperatives of Strategic Prototyping

To successfully prototype the future, organizations must focus on three core strategic imperatives that accelerate learning and reduce risk:

1. De-Risking the Unknown with Speed: The primary function of a prototype is to identify and test the riskiest assumption in an emerging idea. It must be fast, cheap, and disposable. We aim to fail quickly and often at the conceptual stage, saving significant time and capital that would otherwise be wasted on building a perfect solution for the wrong problem.
2. Generating Empathy Through Tangibility: Abstract ideas are difficult for stakeholders and customers to critique meaningfully. A prototype — whether physical or digital (e.g., an Augmented Reality model) —forces interaction. This human interaction generates deep empathy and reveals hidden needs, emotional reactions, and critical user friction points that no spreadsheet or survey can capture.
3. Creating a Shared Vision: The future is difficult to discuss because everyone imagines it differently. A prototype serves as a Shared Artifact — a concrete, singular point of reference around which a team, and the entire organization, can align their vision, critique constructively, and unify their efforts. This speeds up decision-making and aligns cross-functional silos.

“Don’t fall in love with your first idea. Fall in love with the clarity your first prototype creates.” — Braden Kelley

Case Study 1: The IDEO Shopping Cart – Prototyping the Experience

The Challenge:

The design firm IDEO was challenged by a major grocery chain to redesign the common supermarket shopping cart. The initial, narrow focus was on engineering and durability, which would have resulted in only incremental changes.

The Prototyping Solution:

IDEO’s human-centered approach started not with engineering, but with experiential prototypes. The team quickly built several low-fidelity models using rudimentary materials (duct tape, bins, children’s seats) to test radically different concepts — like a cart with a built-in calculator or one with better maneuverability. They took these rough models into the grocery store for real-time testing, observing customer and employee interaction and failure points.

The Innovation Impact:

By prototyping the user experience rather than the final product, IDEO discovered critical, unarticulated needs—like improved maneuverability and safer child seating—that led to fundamental design shifts. The process proved that fast, visual, and highly interactive prototyping is the most efficient way to unlock breakthrough innovation by placing the human at the center of the learning loop.

Case Study 2: Amazon’s “Working Backwards” – Prototyping the Document

The Challenge:

Amazon, known for its high-velocity innovation, needed a mechanism to ensure that product teams were building things customers actually wanted and that ideas were vetted quickly without expensive software development.

The Prototyping Solution:

Amazon formalized a process called “Working Backwards,” which uses a document-based prototype. Before a single line of code is written, a team must write a Press Release (PR) announcing the finished product to the world. The PR is a one-page, customer-centric narrative explaining the product’s benefit, the problem it solves, and its release date. Accompanying the PR is a detailed FAQ and mock Customer Reviews.

The Innovation Impact:

This simple, text-based prototype forces immediate clarity and user focus. Writing the press release first ensures the team can articulate the customer value proposition before spending any engineering time. If the PR isn’t compelling, the idea is instantly shelved or iterated upon. This low-fidelity, high-discipline prototyping method de-risks multi-million-dollar projects by ensuring the idea is sound and clearly focused on the human need before the execution even begins. It is the ultimate example of prototyping the communication and the value proposition.

Conclusion: Leading with Iteration and ROL

Prototyping the future is the most responsible way to lead change. It replaces the paralyzing certainty of the five-year plan with the agile confidence of constant, low-cost learning. Leaders must create the cultural conditions for this to thrive: namely, by celebrating fast learning and treating failed prototypes as valuable data points, thereby building an organization defined by high Psychological Safety and high ROL.

The innovation landscape moves too fast for slow, secretive, and large-scale commitments. By adopting the three imperatives—speed, empathy generation, and shared vision creation—through prototyping, you ensure that your organization remains perpetually adaptive.

“Stop trying to predict the future. Start building disposable versions of it.” — Braden Kelley

That is the definitive strategy for unlocking continuous, human-centered innovation.

Extra Extra: Because innovation is all about change, Braden Kelley’s human-centered change methodology and tools are the best way to plan and execute the changes necessary to support your innovation and transformation efforts — all while literally getting everyone all on the same page for change. Find out more about the methodology and tools, including the book Charting Change by following the link. Be sure and download the TEN FREE TOOLS while you’re here.

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Effective Facilitation for All

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How Leadership Fundamentals Benefit Everyone

Effective Facilitation for All

GUEST POST from Douglas Ferguson

Effective facilitation isn’t limited to the inner workings of staff meetings. True facilitation goes beyond simply setting an agenda: it’s a mindset, framework, and way of being.

Excellent facilitators know how to get the best out of their teams and design conversations that are innovative, exciting, and productive.

In this article, we explore how the fundamentals of facilitation affect an organization in the following topics:

Leading with Great Expectations
Effective Facilitation for Everyone
Facilitation with a Purpose

Leading with Great Expectations

At its core, great facilitation is an engaging conversation. In practicing effective facilitation, leaders make sure all communication is as clear and thoughtful as possible. Facilitators can begin this conversation by intentionally setting their expectations with all stakeholders in every conversation, meeting, and project.

Often, meetings end with attendees unaware of their colleagues’ and leaders’ expectations. By focusing on effective facilitation, leaders can identify and communicate their expectations as well as the expectations of everyone else in the room.

Consider the following facilitation fundamentals when identifying others’ expectations and needs ahead of a meeting:

Personal Preparation

Preparation is essential for any form of facilitation. Whether you’re leading a meeting or heading up a project, participants expect you to come prepared. Demonstrate proper facilitation techniques by preparing to be physically, emotionally, and mentally ready for your presentation.

Practice

Practice is the next step in proper facilitation. In practicing, you’ll be able to review your process and identify any areas needed for adjustment. Moreover, practicing will help you visualize your upcoming session, anticipate problems, and prepare alternative plans should something go wrong.

Process

Effortless facilitation follows a seamless process designed specifically for your audience. Facilitators have a variety of processes to choose from, including strategic planning, problem-solving, decision-making, and more.

Place

Your physical or virtual environment plays an important role in your facilitation ventures. It’s essential to be as intentional as possible in selecting the space for your next session. Consider the requirements for a space, such as the size of the room, what equipment is needed, and any other elements that may affect the flow of your meeting.

Purpose

The purpose may be the single most important component of effective facilitation. Your purpose will outline the end goal of a meeting and will communicate why the session is taking place.

Perspective

Perspective is as essential to effective facilitation as the purpose. Your perspective allows you to contextualize the goals, mission, vision, and purpose of your meeting.

Product

As effective facilitation hinges on meeting with a purpose, understanding what that purpose will produce is just as important. Consider what deliverables should be created by the end of a project, meeting, or conversation. Additionally, be sure to define the most important goals and actionable steps required to achieve them.

People

Facilitate with intention by identifying who should be in attendance. Learn more about each participant by researching the bias, potential barriers, and preconceived ideas that they may bring to each meeting. Likewise, be sure to highlight their strengths to further assess how they can be an asset in your conversation.

Effective Facilitation for Everyone

Integrating effective facilitation skills and techniques goes far beyond the walls of a meeting. A facilitative approach to leadership zeroes in on the positives of leading an active and engaged group. Facilitation techniques such as active listening and encouragement work to stimulate participative group conversation and collaboration.

Every member of an organization can benefit from the power of facilitative leadership. Leaders that demonstrate and embody proper facilitation skills can impart these practices to their employees.

Facilitation techniques benefit employees in the following ways:

1. Fostering Collaboration and Learning

Facilitation skills are essential in encouraging an environment of collaboration and learning. Encouraging team members to look at a situation from a different perspective, consider new solutions, and understand how to bring the best out of each other will result in the most productive experiences.

In creating a culture of learning, leaders should take the time to learn from their teams as well. Giving your employees a platform to offer their own insights is the best way to invite them into this collaborative process of co-creating learning.

2. Getting More From Meeting Attendees

As employees adopt the elements of effective facilitation, they’ll bring more of their skills, focus, and energy to each meeting. Equipped with the skills to act as influencers amongst their peers, each employee will become an active participant in the meeting, encouraging each other to make the most out of their time together.

3. Improving Productivity

As team members work together on various projects, effective facilitation skills allow them to move forward in the most productive, cost-effective, and timely manner. When employees incorporate their finely-honed facilitation skills, they work together efficiently, converse productively, and solve problems effectively. Ultimately, facilitation fundamentals allow everyone from team members to management to make the most of their time at work.

4. Boosting Group Dynamics

Incorporating effective facilitation skills helps improve group dynamics as well. All team members benefit from improved communication strategies, both in and out of the structured setting of meetings. These strategies allow all participants to better express their thoughts, opinions, and concerns as they work together to achieve a common goal.

Teams that invest in developing their communication skills are likely to retain the best employees. Statistics show that organizations that practice strong communication skills experience 50% less attrition overall.

5. Encouraging Active Participation

While effective facilitation is often considered from a leadership perspective, it is also an excellent catalyst in driving employee participation. Oftentimes, team members don’t feel comfortable enough to share their true opinions in a meeting. Moreover, they tend to bring the bare minimum to the workplace if they don’t feel as though their participation, efforts, and insights are valued.

Organizations that champion effective facilitation as part of their company culture are actively shaping an environment that makes employees feel as though they are truly part of their team. Feeling this sense of psychological safety allows all stakeholders to feel comfortable enough to put their all into their work.

6. Encouraging Team Competency

Leaders that excel in facilitation techniques are able to engender a sense of self-efficacy in their team. Oftentimes, leaders fail to go beyond methods of coaching to help their team members understand and internalize pertinent information. Effective facilitation helps to bridge the gap of competency in an organization.

Leaders must encourage team members on the path toward true competency. This approach to facilitation is essential to incorporate a culture where facilitation skills are easily transferable.

Lauren Green, Executive Director of Dancing with Markers, shares that the path to competency starts with meeting employees where they are:

“First, you’re unconsciously incompetent. You’re unconscious. And then you become aware [of] your incompetence, and then you’re consciously competent. And then you start to grow your skills. So then you’re consciously competent. And then when you don’t have to think about it anymore, then you’re unconsciously competent.”

Facilitation with a Purpose

Just as the purpose is a powerful tool in leading a meeting, it’s also essential in building effective facilitation skills in others. Intentionally investing in facilitation training allows organizations the opportunity to teach, practice, and embody the structured techniques of effective facilitation.

The nature of effective facilitation is that nothing can take place without purpose. From managing meetings to running projects, leading with the fundamentals of facilitation helps every facet of an organization run smoothly.

Lead with purpose by focusing on the following effective facilitation practices:

Listening first and speaking second
Leading with effective communication
Managing time and tracking deadlines
Asking intentional questions
Inviting others to engage
Creating a focused and psychologically safe environment
Providing unbiased objectivity
Acting as a decider in group discussions

Effective facilitation benefits everyone, whether you’re leading a meeting or encouraging employees to take their leadership skills to the next level. At Voltage Control, we help leaders and teams harness the power of facilitation. Contact us to learn how to apply these fundamentals to your organization.

Article originally published on VoltageControl.com

Image credit: Pexels

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Black Friday Cyber Deal on Charting Change

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Black Friday Cyber Deal on Charting Change

Wow! Exciting news!

From now until November 30, 2022 you can get a 55% discount on my latest best-selling book Charting Change – plus FREE shipping!

You must go to SpringerLink for this Cyber Sale:

The offer is valid until November 30, 2022
Please use CYB22 at check-out to get your discount on books & eBooks*
Free shipping

Click here and enter the code CYB22 before checkout

*This offer is valid for English-language Springer & Palgrave books and eBooks and is redeemable on link.springer.com only. Titles affected by fixed book price laws, forthcoming titles and titles temporarily not available on link.springer.com are excluded from this promotion, as are reference works, handbooks, encyclopedias, subscriptions, or bulk purchases. The currency in which your order will be invoiced depends on the billing address associated with the payment method used, not necessarily your home currency. Regional VAT/tax may apply. Promotional prices may change due to exchange rates. This offer is valid for individual customers only. Booksellers, book distributors, and institutions such as libraries and corporations please visit springernature.com/contact-us. This promotion does not work in combination with other discounts or gift cards.

Connecting Individual Contribution to Organizational Impact

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Purpose-Driven Work

Connecting Individual Contribution to Organizational Impact

GUEST POST from Chateau G Pato

In the modern economy, organizations are locked in a perpetual battle for talent, engagement, and sustainable growth. Yet, many leaders overlook the single most powerful, renewable resource at their disposal: the human desire for meaning. As a human-centered change and innovation thought leader, I argue that the future of work is not defined by perks or paychecks alone, but by a deep, authentic connection between an individual’s daily tasks and the organization’s overarching impact. This is the essence of Purpose-Driven Work. When employees understand precisely how their efforts contribute to a mission bigger than the bottom line, their productivity transforms from mere labor into inspired contribution.

The challenge for innovation leaders is moving purpose from a glossy mission statement on the wall to a dynamic, daily operating principle on the shop floor. True purpose-driven work requires a transparent system that links a junior analyst’s spreadsheet update or a warehouse worker’s careful packing directly to the organization’s larger societal or customer value. When this connection is clear, the result is exponential: lower attrition, higher engagement, better customer service, and a powerful engine for organizational resilience and human-centered innovation.

The Three Levers of Purpose Alignment

To institutionalize purpose-driven work, organizations must strategically pull three key levers:

1. The “Why” Transparency: Every employee must not only know the company’s mission but also regularly see proof of that mission in action. This involves transparently sharing impact metrics, customer testimonials, and success stories that highlight the human outcome of the work.
2. Contribution Mapping: Leaders must create clear pathways—literally mapping the work—that show how each department, team, and individual role acts as a critical link in the chain of impact. This eliminates the feeling of being a “cog in the machine” and emphasizes individual ownership of the final result.
3. Amplifying Micro-Innovations: When purpose is clear, employees feel safe and motivated to innovate at the local level. Organizations must create structures to capture and celebrate these small, purpose-aligned improvements, reinforcing the idea that everyone is an innovation driver in the service of the mission.

“Purpose is not a destination; it’s the GPS for daily decision-making. If your people don’t know the destination, they can’t navigate the complex roads of innovation.” — Braden Kelley

Case Study 1: The Healthcare Tech Company – Connecting Code to Care

The Challenge:

A rapidly growing healthcare technology firm, specializing in electronic health records (EHR), found that its software developers were experiencing burnout and disconnection. They understood they built software, but the abstraction of code separated them from the mission of patient care. This led to quality dips and high turnover.

The Purpose-Driven Solution:

The company instituted a mandatory, recurring program called “Empathy Days.” Instead of simply reading bug reports, developers and testers were required to spend a dedicated day each quarter in a hospital or clinic setting, shadowing nurses and doctors who used their software. They witnessed firsthand how a one-second lag in loading patient data could impact a critical decision, or how a poorly designed interface created friction for an overwhelmed medical professional.

The Organizational Impact:

The impact was immediate and profound. The developers, now emotionally invested, returned to their desks with a renewed sense of urgency and accuracy. Bugs were fixed faster, and the quality of user-centered design skyrocketed because the team shifted its focus from meeting feature specifications to reducing friction for the user-in-crisis. Attrition among technical staff dropped by 15%, proving that connecting a technical task (coding) to a human outcome (saving time for a nurse) is a powerful driver of engagement and quality innovation.

Case Study 2: Global Retailer – The Sustainable Supply Chain Steward

The Challenge:

A global apparel retailer had a strong public commitment to sustainability and ethical sourcing, but this purpose felt remote to the logistics and distribution center teams, whose performance was measured almost exclusively by speed and volume (Output Metrics).

The Purpose-Driven Solution:

The retailer fundamentally altered its performance management system to incorporate Purpose-Driven Metrics. They introduced the role of the “Sustainable Supply Chain Steward” at every distribution hub. Employees were trained on the specific environmental impact of packaging choices, waste management, and shipping routes. Their contribution mapping was changed to show: “Your choice of pallet wrap today saved X amount of plastic from landfill, directly supporting the company’s 2030 goal.”

The Organizational Impact:

By empowering front-line employees with purpose and impact data, the organization unlocked a wave of decentralized, cost-saving innovation. Logistics teams began identifying new recycling partnerships and optimizing packaging designs, not because they were told to, but because they were measured and recognized for their contribution to the sustainability mission. The retailer not only saw a measurable reduction in waste and shipping costs but also achieved higher scores in employee satisfaction related to the company’s ethical practices, demonstrating a clear link between local purpose alignment and global brand equity.

The Leadership Imperative: Curating Meaning at Scale

Purpose-driven work is not a motivational poster; it is a systemic leadership commitment. The ultimate responsibility of the innovation leader is to be the chief curator of meaning, ensuring that the work environment constantly reflects the value being created for humanity. This requires intentional transparency regarding impact, courageous willingness to expose employees to the human beneficiaries of their work, and a commitment to measuring Outcome over mere Output.

When you transform a job description from a list of duties to a statement of impact, you stop hiring for compliance and start attracting talent driven by conviction. That conviction — the authentic belief that “my work matters” — is the non-replicable, human-centered competitive advantage that will define the most resilient and innovative organizations of the next decade.

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We Must Begin Investing in Resilience

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We Must Begin Investing in Resilience

GUEST POST from Greg Satell

In 1964, as the financial revolution was gathering steam, an MIT economist named Paul Cootner published a collection of essays called The Random Character of Stock Market Prices. Based largely on an obscure dissertation by a forgotten frenchman, it laid the foundations for a new era of financial engineering.

Yet among the papers included was one that told quite a different story. Written by Benoit Mandelbrot—a mathematician not an economist—it showed that the seemingly sophisticated models significantly underestimated volatility and risk. In effect, he was predicting that these models would massively blow up one day.

No one disputed Mandelbrot’s facts, because they were clear and indisputable. Nevertheless, reputations were invested and there was of money to be made. So Mandelbrot’s warnings, although not altogether forgotten, were put in the back seat and we paid an enormous price. Clearly, then as now, we failed to invest in resiliency. Will we ever learn our lesson?

The Path to Pandemic

The Coronavirus crisis, for all of its severity, shouldn’t have been a surprise. There was the SARS pandemic in 2003, the Swine Flu outbreak in 2009, MERS in 2012 and, of course, Ebola in 2014. Each of these had potential for global catastrophe that was, thanks to some decisive action and no small amount of luck, averted.

There were also no shortage of warnings. George W. Bush sounded the alarm back in 2005, saying, “If we wait for a pandemic to appear, it will be too late to prepare.” RAND issued a report in 2012. Bill Gates was explicit about our lack of preparedness in his 2015 TED Talk.

To highlight the risk, before leaving office the Obama administration set up an exercise for the incoming Trump administration based on their earlier experience with pandemics.

Yet to say we dithered greatly understates the problem. From its very first year in office, the current administration proposed deep cuts to the NIH and CDC. Even in January 2020, when it was clear that the danger from the virus was growing, it was calling for cuts to those same agencies. Administration officials then doubled down on these cuts as late as March.

The lights had been blinking red. There had been 4 major outbreaks in the last 20 years. Experts and public officials had repeatedly called for preparations. Instead, we got tax cuts and deregulation. The pandemic’s path was cleared by public inattention and government inaction. While the ship was sinking, the crew was sleeping.

Unfortunately, our problems don’t end there.

Multiple Ticking Clocks

Clearly the Coronavirus crisis is a tragedy, yet it’s not the only light that has been blinking red for a while now. Just as Mandelbrot warned of the financial meltdown that came in 2008 and experts had been warning about the danger of pandemics for at least 20 years, there are a number of crises waiting to happen that we’re currently ignoring.

Take the climate crisis for example. A 2018 climate assessment published by the US government warned that we can expect climate change to “increasingly affect our trade and economy, including import and export prices and U.S. businesses with overseas operations and supply chains.” Another study found that the damages from climate related disasters since 1980 exceeds $1.7 trillion. That will only grow.

In the US our debt had already been a concern, especially considering that Medicare spending is set to explode. Now, with the Coronavirus crisis, we can expect to be adding trillions more to that, which doesn’t even include our massive environmental debt and infrastructure debt. Add it all up and our debts could easily exceed $30 trillion and possibly much more than that

It doesn’t end there either. Our electricity grid is insecure and vulnerable to cyberattack. As we increasingly delegate decisions to machines, we are realizing that we often do not understand how many of those decisions are made and we desperately need to make artificial intelligence explainable, auditable and transparent. We are also in the beginning of a genomics revolution, which will also create profound challenges.

A Proven Model

The challenges we face today, while profound and potentially catastrophic, are not at all unprecedented. In the 1950s, when we first began to understand the possibility of a nuclear holocaust, Albert Einstein and Bertrand Russell issued a manifesto highlighting the dangers of nuclear weapons, which was signed by 10 Nobel Laureates. Later, a petition signed by 11,000 scientists helped lead to the Partial Test Ban Treaty.

In the 1970s, when the dangers of gene editing became real, Paul Berg, one of the leading researchers, organized the Asilomar Conference to establish guidelines. The result, now known as the Berg Letter called for a moratorium on the riskiest experiments until the risks were better understood and instituted norms that were respected for decades.

Both efforts benefitted from a broad array of expertise. It was the partnership of Einstein, the world’s most famous physicist and the prominence of Bertrand Russell as a philosopher that jump-started the non-proliferation movement. The Asilomar conference included not only scientists, but also lawyers, politicians and members of the media.

In a similar vein, the Partnership on AI, which was formed to address ethical issues in artificial intelligence, includes not only leading tech companies, but also organizations like the ACLU, Human Rights Watch and Chatham House. CRISPR pioneer Jennifer Doudna has called for a similar effort to establish guidelines for synthetic biology, especially as it relates to germ-line editing.

Either Way, We Pay the Price

In a response to Mandelbrot’s paper in 1964 about the dangers of financial models, Cootner wrote that it forced economists “to face up in a substantive way to those uncomfortable empirical observations that there is little doubt most of us have had to sweep under the carpet until now.” He then added, “but surely before consigning centuries of work to the ash pile, we should like to have some assurance that all of our work is truly useless.”

In other words, the concerns were real, but the costs of addressing them seemed too great to bear. The era of financial engineering had begun and, although there were some hiccups along the way, such as a major stock market crash in 1987, things went relatively smoothly until the bottom fell out in 2008. It was only then that concepts like kurtosis and fat-tailed models came into wide-use to create more resilience in the system.

It was that same line of thinking that led congress to underfund our emergency medical stockpile to save money. It’s easy to underinvest today for a future risk that may never come. To many, it can even seem like the prudent thing to do. At any given time, the needs of the present can seem overwhelming. Borrowing from the future can help address those needs.

Yet as we’ve seen, in 2008 and 2020, eventually we pay the price, one way or another. Just as we will pay the price for some future catastrophe, whether it is a financial crisis, a pandemic, a climate event, social unrest or some other calamity. We can choose to invest in greater resilience now and save untold suffering in the future. We have that power.

Unfortunately, if recent events are any indication, we still haven’t learned our lesson.

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

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