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AI, Cognitive Obesity and Arrested Development

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AI, Cognitive Obesity and Arrested Development

GUEST POST from Pete Foley

Some of the biggest questions of our age are whether AI will ultimately benefit or hurt us, and how big its’ effect will ultimately be.

And that of course is a problem with any big, disruptive technology.  We want to anticipate how it will play out in the real world, but our forecasts are rarely very accurate, and all too often miss a lot of the more important outcomes. We often don’t anticipate it’s killer applications, how it will evolve or co-evolve with other emergent technologies, or predict all of the side effects and ‘off label’ uses that come with it.  And the bigger the potential impact new tech has, and the broader the potential applications, the harder prediction becomes.  The reality is that in virtually every case, it’s not until we set innovation free that we find its full impact, good, bad or indifferent.

Pandora’s Box

And that can of course be a sizable concern.  We have to open Pandora’s Box in order to find out what is inside, but once open, it may not be possible to close it again.   For AI, the potential scale of its impact makes this particularly risky. It also makes any meaningful regulation really difficult. We cannot regulate what we cannot accurately predict. And if we try we risk not only missing our target, but also creating unintended consequences, and distorting ‘innovation markets’ in unexpected, potentially negative ways.

So it’s not surprising there is a lot of discussion around what AI will or will not do. How will it effect jobs, the economy, security, mental health. Will it ‘pull’ a Skynet, turn rogue and destroy humanity? Will it simply replace human critical thinking to the point where it rules us by default? Or will it ultimately fizzle out to some degree, and become a tool in a society that looks a lot like today, rather than revolutionizing it?

I don’t even begin to claim to predict the future with any accuracy, for all of the reasons mentioned above. But as a way to illustrate how complex an issue this is, I’d like to discuss a few less talked about scenarios.

1.  Less obvious issues:  Obviously AI comes with potential for enormous benefits and commensurate problems.  It’s likely to trigger an arms race between ‘good’ and ‘bad’ applications, and that of itself will likely be a moving target.  An obvious, oft discussed potential issue is of course the ‘Terminator Scenario’ mentioned above.  That’s not completely far fetched, especially with recent developments in AI self preservation and scheming that I’ll touch on later. But there are plenty of other potential, if less extreme pitfalls, many of which involve AI amplifying and empowering bad behavior by humans.  The speed and agility AI hands to hackers, hostile governments, black-hats, terrorists and organized crime vastly enhanced capability for attacks on infrastructure, mass fraud or worse. And perhaps more concerning, there’s the potential for AI to democratize cyber crime, and make it accessible to a large number of ‘petty’ criminals who until now have lacked resources to engage in this area. And when the crime base expands, so does the victim base. Organizations or individuals who were too small to be targeted for ransomware when it took huge resources to create, will presumably become more attractive targets as AI allows similar code to be built in hours by people who possess limited coding skills.

And all of this of course adds another regulation challenge. The last thing we want to do is slow legitimate AI development via legislation, while giving free reign to illegitimate users, who presumably will be far less likely to follow regulations. If the arms race mentioned above occurs, the last thing we want to do is unintentionally tip the advantage to the bad guys!

Social Impacts

But AI also has the potential to be disruptive in more subtle ways.  If the internet has taught us anything, it is that how the general public adopts technology, and how big tech monetizes matter a lot. But this is hard to predict.  Some of the Internet’s biggest negative impacts have derived from largely unanticipated damage to our social fabric.  We are still wrestling with its impact on social isolation, mental health, cognitive development and our vital implicit skill-set. To the last point, simply deferring mental tasks to phones and computers means some cognitive muscles lack exercise, and atrophy, while reduction in human to human interactions depreciate our emotion and social intelligence.

1. Cognitive Obesity  The human brain evolved over tens of thousands, arguable millions of years (depending upon where in you start measuring our hominid history).  But 99% of that evolution was characterized by slow change, and occurred in the context of limited resources, limited access to information, and relatively small social groups.  Today, as the rate of technological innovation explodes, our environment is vastly different from the one our brain evolved to deal with.  And that gap between us and our environment is widening rapidly, as the world is evolving far faster than our biology.  Of course, as mentioned above, the nurture part of our cognitive development does change with changing context, so we do course correct to some degree, but our core DNA cannot, and that has consequences.

Take the current ‘obesity epidemic’.  We evolved to leverage limited food resources, and to maximize opportunities to stock up calories when they occurred.  But today, faced with near infinite availability of food, we struggle to control our scarcity instincts. As a society, we eat far too much, with all of the health issues that brings with it. Even when we are cognitively aware of the dangers of overeating, we find it difficult to resist our implicit instincts to gorge on more food than we need.  The analogy to information is fairly obvious. The internet brought us near infinite access to information and ‘social connections’.  We’ve already seen the negative impact this can have, contributing to societal polarization, loss of social skills, weakened emotional intelligence, isolation, mental health ‘epidemics’ and much more. It’s not hard to envisage these issues growing as AI increases the power of the internet, while also amplifying the seduction of virtual environments.  Will we therefore see a cognitive obesity epidemic as our brain simply isn’t adapted to deal with near infinite resources? Instead of AI turning us all into hyper productive geniuses, will we simply gorge on less productive content, be it cat videos, porn or manipulative but appealing memes and misinformation? Instead of it acting as an intelligence enhancer, will it instead accelerate a dystopian Brave New World, where massive data centers gorge on our common natural resources primarily to create trivial entertainment?

2. Amplified Intelligence.  Even in the unlikely event that access to AI is entirely democratic, it’s guaranteed that its benefits will not be. Some will leverage it far more effectively than others, creating significant risk of accelerating social disparity.  While many will likely gorge unproductively as described above, others will be more disciplined, more focused and hence secure more advantage.  To return to the obesity analogy, It’s well documented that obesity is far more prevalent in lower income groups. It’s hard not to envisage that productive leverage of AI will follow a similar pattern, widening disparities within and between societies, with all of the issues and social instability that comes with that.

3. Arrested Development.  We all know that ultimately we are products of both nature and nurture. As mentioned earlier, our DNA evolves slowly over time, but how it is expressed in individuals is impacted by current or context.  Humans possess enormous cognitive plasticity, and can adapt and change very quickly to different environments.  It’s arguably our biggest ‘blessing’, but can also be a curse, especially when that environment is changing so quickly.

The brain is analogous to a muscle, in that the parts we exercise expand or sharpen, and the parts we don’t atrophy.    As we defer more and more tasks to AI, it’s almost certain that we’ll become less capable in those areas.  At one level, that may not matter. Being weaker at math or grammar is relatively minor if our phones can act as a surrogate, all of my personal issues with autocorrect notwithstanding.

But a bigger potential issue is the erosion of causal reasoning.  Critical thinking requires understanding of underlying mechanisms.  But when infinite information is available at a swipe of a finger, it becomes all too easy to become a ‘headline thinker’, and unconsciously fail to penetrate problems with sufficient depth.

That risks what Art Markman, a psychologist at UT, and mentor and friend, used to call the ‘illusion of understanding’.  We may think we know how something works, but often find that knowledge is superficial, or at least incomplete, when we actually need it.   Whether its fixing a toilet, changing a tire, resetting a fuse, or unblocking a sink, often the need to actually perform a task reveals a lack in deep, causal knowledge.   This often doesn’t matter until it does in home improvement contexts, but at least we get a clear signal when we discover we need to rush to YouTube to fix that leaking toilet!

This has implications that go far beyond home improvement, and is one factor helping to tear our social fabric apart.   We only have to browse the internet to find people with passionate, but often opposing views on a wide variety of often controversial topics. It could be interest rates, Federal budgets, immigration, vaccine policy, healthcare strategy, or a dozen others. But all too often, the passion is not matched by deep causal knowledge.  In reality, these are all extremely complex topics with multiple competing and interdependent variables.  And at risk of triggering hate mail, few if any of them have easy, conclusive answers.  This is not physics, where we can plug numbers into an equation and it spits out a single, unambiguous solution.  The reality is that complex, multi-dimensional problems often have multiple, often competing partial solutions, and optimum outcomes usually require trade offs.  Unfortunately few of us really have the time to assimilate the expertise and causal knowledge to have truly informed and unambiguous answers to most, if not all of these difficult problems.

And worse, AI also helps the ‘bad guys’. It enables unscrupulous parties to manipulate us for their own benefit, via memes, selective information and misinformation that are often designed to make us think we understand complex problems far better than we really do. As we increasingly rely on input from AI, this will inevitable get worse. The internet and social media has already contributed to unprecedented social division and nefarious financial rimes.   Will AI amplify this further?

This problem is not limited to complex social challenges. The danger is that for ALL problems, the internet, and now AI, allows us to create the illusion for ourselves that we understand complex systems far more deeply than we really do.  That in turn risks us becoming less effective problem solvers and innovators. Deep causal knowledge is often critical for innovating or solving difficult problems.  But in a world where we can access answers to questions so quickly and easily, the risk is that we don’t penetrate topics as deeply. I personally recall doing literature searches before starting a project. It was often tedious, time consuming and boring. Exactly the types of task AI is perfect for. But that tedious process inevitably built my knowledge of the space I was moving into, and often proved valuable when we hit problems later in the project. If we now defer this task to AI, even in part, this reduces depth of understanding. And in in complex systems or theoretic problem solving, will often lack the unambiguous signal that usually tells us our skills and knowledge are lacking when doing something relatively simple like fixing a toilet. The more we use AI, the more we risk lacking necessary depth of understanding, but often without realizing it.

Will AI become increasingly unreliable?

We are seeing AI develop the capability to lie, together with a growing propensity to cover it’s tracks when it does so. The AI community call it ’scheming’, but in reality it’s fundamentally lying.  https://openai.com/index/detecting-and-reducing-scheming-in-ai-models/?_bhlid=6a932f218e6ebc041edc62ebbff4f40bb73e9b14. We know from the beginning we’ve faced situations where AI makes mistakes.  And as I discussed recently, the risks associated with that are amplified because of it’s increasingly (super)human or oracle-like interface creating an illusion of omnipotence.

But now it appears to be increasingly developing properties that mirror self preservation.  A few weeks ago there were reports of difficulties in getting AI’s to shut themselves down, and even of AI’s using defensive blackmail when so threatened. Now we are seeing reports of AI’s deliberately trying to hide their mistakes.  And perhaps worse, concerns that attempts to fix this may simply “teach the model to become better at hiding its deceptive behavior”, or in other words, become a better liar.

If we are already in an arms race with an entity to keep it honest, and put our interests above its own, given it’s vastly superior processing power and speed, it may be a race we’ve already lost.  That may sound ‘doomsday-like’, but that doesn’t make it any less possible. And keep in mind, much of the Doomsday projections around AI focus on a ’singularity event’ when AI suddenly becomes self aware. That assumes AI awareness and consciousness will be similar to human, and forces a ‘birth’ analogy onto the technology. However, recent examples of self preservation and dishonesty maybe hint at a longer, more complex transition, some of which may have already started.

How big will the impact of AI be?

I think we all assume that AI’s impact will be profound. After all,  it’s still in its infancy, and is already finding it’s way into all walks of life.  But what if we are wrong, or at least overestimating its impact?  Just to play Devils Advocate, we humans do have a history of over-estimating both the speed and impact of technology driven change.

Remember the unfounded (in hindsight) panic around Y2K?  Or when I was growing up, we all thought 2025 would be full of people whizzing around using personal jet-packs.  In the 60’s and 70’s we were all pretty convinced we were facing nuclear Armageddon. One of the greatest movies of all time, 2001, co-written by inventor and futurist Arthur C. Clark, had us voyaging to Jupiter 24 years ago!  Then there is the great horse manure crisis of 1894. At that time, London was growing rapidly, and literally becoming buried in horse manure.  The London Times predicted that in 50 years all of London would be buried under 9 feet of poop. In 1898 the first global urban planning conference could find no solution, concluding that civilization was doomed. But London, and many other cities received salvation from an unexpected quarter. Henry Ford invented the motor car, which surreptitiously saved the day.  It was not a designed solution for the manure problem, and nobody saw it coming as a solution to that problem. But nonetheless, it’s yet another example of our inability to see the future in all of it’s glorious complexity, and for our predictions to screw towards worse case scenarios and/or hyperbole.

Change Aversion:

That doesn’t of course mean that AI will not have a profound impact. But lot’s of factors could potentially slow down, or reduce its effects.  Not least of these is human nature. Humans possess a profound resistance to change.  For sure, we are curious, and the new and innovative holds great appeal.  That curiosity is a key reason as to why humans now dominate virtually every ecological niche on our planet.   But we are also a bit schizophrenic, in that we love both change and stability and consistency at the same time.  Our brains have limited capacity, especially for thinking about and learning new stuff.  For a majority of our daily activities, we therefore rely on habits, rituals, and automatic behaviors to get us through without using that limited higher cognitive capacity. We can drive, or type, or do parts of our job without really thinking about it. This ‘implicit’ mental processing frees up our conscious brain to manage the new or unexpected.  But as technology like AI accelerates, a couple of things could happen.  One is that as our cognitive capacity gets overloaded, and we unconsciously resist it.  Instead of using the source of all human knowledge for deep self improvement, we instead immerse ourselves in less cognitively challenging content such as social media.

Or, as mentioned earlier, we increasingly lose causal understanding of our world, and do so without realizing it.   Why use our limited thinking capacity for tasks when it is quicker, easier, and arguably more accurate to defer to an AI. But lack of causal understanding seriously inhibits critical thinking and problem solving.  As AI gets smarter, there is a real risk that we as a society become dumber, or at least less innovative and creative.

Our Predictions are Wrong.

If history teaches us anything, most, if not all of the sage and learned predictions about AI will be mostly wrong. There is no denying that it is already assimilating into virtually every area of human society.  Finance, healthcare, medicine, science, economics, logistics, education etc.  And it’s a snooze and you lose scenario, and in many fields of human endeavor, we have little choice.  Fail to embrace the upside of AI and we get left behind.

That much power in things that can think so much faster than us, that may be developing self-interest, if not self awareness, that has no apparent moral framework, and is in danger of becoming an expert liar, is certainly quite sobering.

The Doomsday Mindset.

As suggested above, loss aversion and other biases drive us to focus on the downside of change.   It’s a bias that makes evolutionary sense, and helped keep our ancestors alive long enough to breed and become our ancestors. But remember, that bias is implicitly built into most, if not all of our predictions.   So there’s at least  chance that it’s impact wont be quite as good or bad as our predictions suggest

But I’m not sure we want to rely on that.  Maybe this time a Henry Ford won’t serendipitously rescue us from a giant pile of poop of our own making. But whatever happens, I think it’s a very good bet that we are in for some surprises, both good and bad. Probably the best way to deal with that is to not cling too tightly to our projections or our theories, remain agile, and follow the surprises as much, if not more than met expectations.

Image credits: Unsplash

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Making it Safe to Innovate

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Building Emotional Safety

Making it Safe to Innovate - Building Emotional Safety

GUEST POST from Janet Sernack

When my husband and I became accredited as foster parents for children in need, I thought my skills as a trainer and facilitator would help me navigate the challenges we faced. I quickly discovered that when children arrived at our home late at night, often physically injured and emotionally distraught due to a tragic accident or being separated from their families, their primary need was for emotional safety. This began my long and enlightening quest into what it truly means for someone to develop both emotional and psychological safety. To discover and explore why both emotional and psychological safety are crucial for people to survive, innovate and thrive in the post-pandemic, unstable, and uncertain world.

The whole issue of “safety” is a crucial one. Causing many people, especially those in the change, learning and coaching space, to stop, pause, retreat, and reflect upon how to personalize and contextualize it for ourselves and others we care about and interact with. Yet so few people understand the importance of creating safe environments, especially today when there is so much hatred and violence happening on many of our streets.

We all deserve to, and are entitled to, feel emotionally safe and secure in all aspects of our lives.

What does it mean to be safe?

Because safety: the condition of being protected from or unlikely to cause danger, risk, or injury, impacts everyone and everything in our entire world system. It is an essential element required for our survival, growth, and ability to navigate and innovate in the post-pandemic era. Safety is critical in enhancing people’s capacity to connect, belong, and engage in purposeful relationships, build happy families and secure communities, as well as produce creative, inventive, and innovative work that helps make the world a better place.

What is emotional safety?

Emotional safety exists in an environment where individuals feel valued, respected, and heard, regardless of their values, beliefs, or religious or cultural origins. It involves allowing people to feel safe and secure, nurturing vulnerability, and sharing personal thoughts and feelings without fear of having their words judged as “bad” or “wrong.” Without facing punishment, discrimination, persecution, diminishment, blame, shame, hatred, or violence by others.

It’s a space where it’s safe to say “I don’t know” or “I made a mistake” without being labelled as incompetent or “lacking” in some vital way.

  • Improving well-being, engagement and productivity

Emotional safety is a vital element of an emotionally and mentally healthy environment that fosters well-being, boosts engagement, and enhances productivity. In such an environment, individuals feel secure enough to express, explore, and share their thoughts and feelings about themselves, their colleagues, managers, leaders, and even their organization as a whole. People feel respected and trusted to share ideas, establish boundaries, and be accepted for who they are, what they believe in, flaws and all. 

  • Building mutuality

The intention is to build mutuality, defined by the American Psychological Association as:

“The tendency of relationship partners to think of themselves as members of a dyadic relationship rather than as distinct individuals. As close relationships, particularly romantic ones, develop over time, partners display increasing levels of mutuality, which may influence their affect, cognition, and behavior. In interdependence theory, the tendency of partners to depend equally on each other’s behavior for the attainment of desirable outcomes”.

We live in an interdependent, globalized world where developing emotionally safe, positive, and interactive mutual relationships across geographies, technologies, demographics, and functions is more important than ever. Mutuality lays the groundwork for creating a shared understanding that fosters a safe and open space for learning and effective interactions, based on cooperative, co-petitive, and collaborative relationships in the workplace.

  • Becoming attuned

Emotional intelligence, empathy, trust, and effective communication are vital for fostering emotional safety and form the basis for developing effective emotional regulation and management strategies. This enables us to attune to and connect with others with whom we wish to build relationships.

According to Dr. Dan Seigal:

“When we attune with others, we allow our internal state to shift, to come to resonate with the inner world of another. This resonance is at the heart of the important sense of “feeling felt” that emerges in close relationships. Children need attunement to feel secure and to develop well, and throughout our lives we need attunement to feel close and connected.”

As a foster carer, my ability and willingness to attune with them represented the most important gift I could offer the children. It allowed them to feel close and connected to someone who genuinely cared for them by simply providing the most basic essentials. With no judgement or strings attached, and with both detachment and empathy, it also provided them with crucial evidence that this could indeed continue to be possible for them in their future lives.

As a trainer, facilitator, and coach, these are the key ingredients for establishing an emotionally safe and effective learning intervention, particularly about the people side of innovation and in building an organization that fosters a culture of failure. 

Developing a psychologically safe culture

Emotional safety is closely linked to psychological safety, which is the belief that individuals can be themselves at work and share their opinions and ideas without fear of negative repercussions.  According to Dr Timothy Clarke at the Leaderfactor, psychological safety empowers individuals and teams to reach new levels of creativity, collaboration, and innovation by nurturing a culture of inclusion and vulnerability. It is a social condition where people feel accepted and secure enough to learn, contribute, and question the status quo, free from fear of embarrassment, marginalization, or punishment, by creating an environment founded on permission, safety, and trust.

  • Embodying a way of being

Creating this emotional state or culture is much harder than most people think. Most organizations believe it’s something they must achieve through process and system changes, rather than by embodying it as a way of being a manager, leader, trainer, or coach who creates:

  • Sanctuaries of inclusion—a space where individuals feel safe and are encouraged to express their feelings, thoughts, opinions, and ideas, fostering a profound sense of inclusion, connection, and belonging.
  • Safe containers – a space where individuals confidently disrupt conventional or habitual ways of doing things, step outside their comfort zones, and challenge the status quo, allowing dissonance, contradiction, paradox, and conflict as sources of creative tension to disrupt, differ, and deviate from the norm. 
  • Collective holding spaces—where individuals accept responsibility, take ownership, and are trusted to contribute to the entire system. By fostering co-creative, interdependent relationships both internally and externally, we work towards achieving the team’s and organization’s vision, mission, purpose, and collective goals.
  • Incubators and accelerators of innovation—where team members are free to emerge, diverge, and converge possibilities. They are empowered, enabled, and equipped to transform these into creative ideas and opportunities. Individuals and teams feel safe in unlearning, learning, and relearning new ways of being, thinking, and acting. This environment challenges the status quo by encouraging disruptive questions, taking calculated risks, and experimenting with new ideas within an authentic, fail-fast culture that promotes quick learning.

Benefits of emotional and psychological safety

  • Enhances individual, team, and collective engagement, connection, and belonging. It establishes a foundation for harnessing and mobilizing people’s collective intelligence in line with the organization’s vision, mission, and purpose. 
  • Promotes effective team collaboration, where individuals feel at ease sharing their ideas, opinions, and concerns. It cultivates an environment where diverse perspectives can be openly discussed alongside differing views: 
  • Inspires people to be emotionally energetic, agile, and adaptable in the face of uncertainty and chaos, as well as in a rapidly changing business landscape.

AI will continue to disrupt job stability and security.

Developing emotional and psychological safety is a key success factor that underpins a culture of innovation, as it creates the essential space for individuals to think and act differently. This is achieved through experimentation, learning from failures, and exploring new methods that lead to breakthrough ideas and innovative solutions, enabling individuals to survive and thrive in the age of AI.

  • Both job losses and opportunities

Fast Company shares that Anthropic CEO Dario Amodei has a stark warning for the developed world about job losses resulting from AI. The CEO told Axios that AI could wipe out half of all entry-level white-collar jobs. This could result in a 10% to 20% rise in the unemployment rate over the next one to five years, Amodei says. The losses could come from tech, finance, law, consulting, and other white-collar professions, with entry-level jobs being hit the hardest.

Just as the children we fostered needed emotional safety, we all require emotional safety when walking our city streets. Similarly, while at work, we all need a psychologically safe working environment rooted in mutuality and trust. This is what allows individuals to attune to each other, feel secure, bonded, and connected, fostering a sense of belonging and unity. This requires investing in the co-creation of emotionally and psychologically safe spaces that attract and retain top talent, enabling individuals to feel valued, as they truly matter, and helping them adapt, innovate, grow, perform and thrive in a post-pandemic, unstable, and uncertain world.

This is an excerpt from our upcoming book, “Anyone Can Learn to Innovate,” scheduled for publication in late 2025.

Please find out about our collective learning products and tools, including The Coach for Innovators, Leaders, and Teams Certified Program, presented by Janet Sernack. It is a collaborative, intimate, and profoundly personalized innovation coaching and learning program supported by a global group of peers over nine weeks. It can be customized as a bespoke corporate learning program.

It is a blended and transformational change and learning program that will give you a deep understanding of the language, principles, and applications of an ecosystem-focused, human-centric approach and emergent structure (Theory U) to innovation. It will also upskill people and teams and develop their future fitness within your unique innovation context. Please find out more about our products and tools.

Image Credit: Pixabay

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The Unsung Heroes of Culture

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Employee Experience Advisory Boards and the XMO

The Unsung Heroes of Culture - Employee Experience Advisory Boards and the XMO

by Braden Kelley and Art Inteligencia

We live in an age where the war for talent is fiercer than ever, and employee engagement surveys, while useful, often feel like a lagging indicator. Organizations are realizing that a truly thriving culture isn’t built from the top down alone, nor can it be accurately measured by a single annual pulse check. To genuinely understand and nurture the employee experience, you need to go beyond surveys. You need a dedicated, empowered voice from within the ranks: the Employee Experience Advisory Board (EXAB).

For too long, the ‘people’ aspect of business has been relegated to HR, often seen as a cost center rather than a strategic imperative. But the truth is, the employee experience *is* the customer experience. It *is* the innovation engine. And it *is* the foundation of a resilient, high-performing organization. This is where the EXAB, working hand-in-hand with an Experience Management Office (XMO), becomes not just a nice-to-have, but a strategic necessity.

Why an Employee Experience Advisory Board?

An EXAB is a diverse group of employees, representing various levels, departments, and demographics, who serve as a living, breathing feedback loop for the organization. They are the frontline observers, the informal leaders, and the unvarnished truth-tellers who can articulate the nuances of the daily employee journey. Their value stems from several key areas:

  • Authentic Insights: Surveys tell you *what* happened; an EXAB tells you *why* and *how it felt*. They provide qualitative data that quantitative metrics often miss.
  • Early Warning System: They can spot emerging issues, potential pain points, and cultural shifts long before they escalate into widespread problems.
  • Design Thinking in Action: By involving employees in the design of their own experience, you foster a sense of ownership and co-creation. This moves beyond ‘listening’ to ‘co-creating.’
  • Bridging the Gap: EXABs serve as a crucial bridge between leadership and the broader employee base, fostering trust and transparency.
  • Innovation Catalysts: A positive employee experience directly fuels innovation. Engaged employees are more likely to contribute ideas, take risks, and collaborate effectively.

Integrating with the Experience Management Office (XMO)

While an EXAB provides invaluable insights, these insights must be acted upon systematically. This is where the Experience Management Office (XMO) comes in. An XMO is a centralized function dedicated to orchestrating, measuring, and improving all experience touchpoints – be they customer, employee, or partner. When an EXAB and XMO collaborate, a powerful synergy emerges:

  • The EXAB identifies opportunities, pain points, and innovative solutions directly from the employee perspective.
  • The XMO then takes these insights, analyzes them within the broader experience ecosystem, prioritizes initiatives, allocates resources, and implements changes. They provide the strategic framework and operational muscle.
  • The EXAB, in turn, can serve as a testing ground for proposed solutions and provide real-time feedback on their effectiveness, ensuring that changes resonate with the employee base.

Think of it this way: the EXAB are the eyes and ears on the ground, providing rich, contextual intelligence. The XMO is the brain and hands, translating that intelligence into actionable strategy and execution across the entire experience landscape. Without the EXAB, the XMO risks making decisions in a vacuum. Without the XMO, the EXAB’s valuable insights might remain unacted upon.

Case Studies in Collaboration: EXAB + XMO in Action

Case Study 1: “Ignite” at a Global Tech Giant

A major technology company, facing increasing attrition rates and feedback indicating a disconnect between leadership vision and daily employee reality, established an EXAB they called “Ignite.” Comprising 25 employees from diverse roles, Ignite met monthly with the newly formed XMO. One of Ignite’s early observations was a pervasive feeling among junior engineers that their ideas weren’t heard and that career progression was opaque. The XMO, informed by Ignite’s granular feedback, launched a series of “Innovator’s Guild” workshops, providing a structured forum for idea submission and mentorship. Simultaneously, they revamped career pathing resources and introduced a transparent internal mobility portal. Within 18 months, not only did attrition rates for junior engineers drop by 15%, but the company also saw a 20% increase in patent submissions directly linked to ideas generated through the guild. The EXAB’s qualitative insights directly fueled the XMO’s strategic interventions, leading to measurable improvements in both culture and innovation output.

Case Study 2: “CareConnect” at a Healthcare Provider

A large healthcare network, grappling with burnout among its nursing staff and a perceived lack of voice, established “CareConnect,” an EXAB specifically for frontline healthcare professionals. Their XMO, initially focused primarily on patient experience, quickly realized the inseparable link between employee well-being and patient outcomes. CareConnect highlighted critical issues such as inefficient shift scheduling, inadequate break facilities, and a desire for more mental health support. The XMO, leveraging this input, implemented a new AI-driven scheduling system that gave nurses more control, redesigned break rooms into “recharge zones,” and launched a comprehensive mental wellness program with on-site counselors. The impact was profound: a 10% reduction in nurse turnover, a significant improvement in patient satisfaction scores (as reported in post-visit surveys), and a visible boost in staff morale. This case demonstrates how an EXAB can pinpoint specific, actionable improvements that directly impact both employee well-being and core business objectives, with the XMO providing the structured approach to scale and sustain these changes.

Building a Culture of Continuous Improvement

The establishment of an EXAB, seamlessly integrated with an XMO, signals a fundamental shift in how organizations approach culture. It moves from a reactive, survey-driven approach to a proactive, co-creative one. It’s about empowering employees not just to report problems, but to be part of the solution. It’s about creating a living, breathing mechanism for continuous cultural improvement.

In a world of constant change, the most resilient and innovative organizations will be those that prioritize the human experience at their core. The Employee Experience Advisory Board and the Experience Management Office are not just strategic tools; they are the architects of a future where work isn’t just a place we go, but a place where we truly belong, contribute, and thrive. If you’re serious about creating a culture that attracts, retains, and inspires the best, it’s time to unleash the power of your people through these vital structures.

Contact me if you’re interested in working together to build or enhance your Experience Management Office (XMO).


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Content Authenticity Statement: The ideas are those of Braden Kelley, with a little help from Google Gemini to shape the article and create the illustrative case studies.

Image credit: Unsplash

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Your Legends Define Your Culture

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Your Legend Defines Your Company Culture

GUEST POST from Shep Hyken

It was about 50 years ago, in or around the mid to late 1970s, when a brand’s legendary story was born. This true story perfectly articulates this brand’s culture. It perfectly demonstrates how empowered employees should act and defines how customers should be treated. The story is Nordstrom’s legendary tire story.

The short version of the story is that a customer brought a pair of tires into a Nordstrom store in Fairbanks, Alaska, and asked to return them. He insisted he purchased them at that location. Craig Trounce, the store associate who was working that day, gave the customer a refund.

Obviously, Nordstrom doesn’t sell tires—and never did. However, in 1975, Nordstrom purchased three retail stores owned by Northern Commercial Company, which did sell tires. Once Nordstrom took over the stores, it restocked them with its own inventory, which didn’t include tires.

According to the story on the Nordstrom website, “Instead of turning the tires away, Craig wanted to do right by the customer, who had driven more than 50 miles with the intention of returning these tires. Knowing little about how tires are priced, Craig called a tire company to get their thoughts on how much the tires were worth. He then gave the customer the estimated amount, took the tires and sent him on his way.”

That story became the legend that defines Nordstrom’s culture. So, as a leader of your organization, what story does your company or brand have that defines your culture? If you don’t have one, maybe it’s time to find it. And it’s never too late.

John W. Nordstrom and his partner, Carl F. Wallin, opened their first store, a shoe store, in 1901. It wasn’t until 22 years later that they had their second store. In 1963 the store expanded beyond shoes and started selling clothing, and in 1971, the company went public and officially changed its name to Nordstrom.

The point is that it took almost 75 years for a company that already had a reputation for delivering an excellent service experience to create its legend. This single act of customer service has been told countless times in training sessions, books, articles and keynote speeches. It’s not just about tires or refunds. It’s about empowering employees to make good decisions. It’s about emphasizing a company’s culture. And if you could monetize it, how much money would a company have to pay to generate the positive PR this created for Nordstrom?

Many other companies have similar stories. Some of the more recognizable brands with “legend status” stories can be found through a Google search and include the Zappos 10-hour phone call that some say is an all-time customer service call record, the story of how empowered employees at the Ritz-Carlton are allowed to spend up to $2,000 to solve guest problems and many more.

So, what’s your legend? And if you don’t know, how do you find it?

I’m going to bet there is some account of how someone in your organization responded to a customer or did something of note that is worth sharing and turning into your version of the Nordstrom tire story. That’s the place to start. And the best way to go about it is to simply ask every employee to share their favorite story about how they created an amazing experience for one of your customers.

In this first round, don’t make this a huge writing assignment. Just ask for a few sentences. From there, someone (or a team) will sift through the responses and look for five or 10 that stand out. You’re looking for:

  1. moments in which employees went above and beyond
  2. situations that perfectly demonstrate your values
  3. stories that are simple to tell but powerful in impact

Then go back to the sources of these stories and ask for more detail. In a short time, you’ll have several great stories to consider. And in the process, you’ll also discover ideas based on these stories to turn into “best practices” examples that other employees can learn from and emulate.

Your service legend doesn’t need to involve tires or thousand-dollar gestures. It simply needs to authentically represent who you are as a company and what you stand for. The best legends aren’t manufactured. They’re discovered in the everyday actions of employees who truly understand and embrace your culture. When you find your story, celebrate it, share it and let it inspire the next generation of customer service excellence in your organization. After all, somewhere in your company today, an employee might be creating the next legendary story that will define your culture for years to come.

Image Credit: Pexels

This article originally appeared on Forbes.com

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Change Behavior to Change Culture

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Change Behavior to Change Culture

GUEST POST from Mike Shipulski

There’s always lots of talk about culture and how to change it. There is culture dial to turn or culture level to pull. Culture isn’t a thing in itself, it’s a sentiment that’s generated by behavioral themes. Culture is what we use to describe our worn paths of behavior. If you want to change culture, change behavior.

At the highest level, you can make the biggest cultural change when you change how you spend your resources. Want to change culture? Say yes to projects that are different than last year’s and say no to the ones that rehash old themes. And to provide guidance on how to choose those new projects create, formalize new ways you want to deliver new value to new customers. When you change the criteria people use to choose projects you change the projects. And when you change the projects people’s behaviors change. And when behavior changes, culture changes.

The other important class of resources is people. When you change who runs the project, they change what work is done. And when they prioritize a different task, they prioritize different behavior of the teams. They ask for new work and get new behavior. And when those project leaders get to choose new people to do the work, they choose in a way that changes how the work is done. New project leaders change the high-level behaviors of the project and the people doing the work change the day-to-day behavior within the projects.

Change how projects are chosen and culture changes. Change who runs the projects and culture changes. Change who does the project work and culture changes.

Image credits: 1 of 850+ FREE quote slides available for download at http://misterinnovation.com

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Beyond Continuous Improvement Culture

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Beyond Continuous Improvement Culture

GUEST POST from Mike Shipulski

We’ve been too successful with continuous improvement. Year-on-year, we’ve improved productivity and costs. We’ve improved on our existing products, making them slightly better and adding features.

Our recipe for success is the same as last year plus three percent. And because the customers liked the old one, they’ll like the new one just a bit more. And the sales can sell the new one because its sold the same way as the old one. And the people that buy the new one are the same people that bought the old one.

Continuous improvement is a tried-and-true approach that has generated the profits and made us successful. And everyone knows how to do it. Start with the old one and make it a little better. Do what you did last time (and what you did the time before). The trouble is that continuous improvement runs out of gas at some point. Each year it gets harder to squeeze out a little more and each year the return on investment diminishes. And at some point, the same old improvements don’t come. And if they do, customers don’t care because the product was already better than good enough.

But a bigger problem is that the company forgets to do innovative work. Though there’s recognition it’s time to do something different, the organization doesn’t have the muscles to pull it off. At every turn, the organization will revert to what it did last time.

It’s no small feat to inject new work into a company that has been successful with continuous improvement. A company gets hooked on the predictable results of continuous which grows into an unnatural aversion to all things different.

To start turning the innovation flywheel, many things must change. To start, a team is created and separated from the continuously improving core. Metrics are changed, leadership is changed and the projects are changed. In short, the people, processes, and tools must be built to deal with the inherent uncertainty that comes with new work.

Where continuous improvement is about the predictability of improving what is, innovation is about the uncertainty of creating what is yet to be. And the best way I know to battle uncertainty is to become a learning organization. And the best way to start that journey is to create formal learning objectives.

Define what you want to learn but make sure you’re not trying to learn the same old things. Learn how to create new value for customers; learn how to deliver that value to new customers; learn how to deliver that new value in new ways (new business models.)

If you’re learning the same old things in the same old way, you’re not doing innovation.

Image credits: misterinnovation.com (1 of 850+ free quote slides for download)

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From Resistance to Reinvention

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Overcoming Cultural Barriers to Transform Innovation Capability

From Resistance to Reinvention

GUEST POST from Noel Sobelman

For large, established companies, driving innovation is more than a strategic priority, it’s a necessity for survival in competitive and fast-changing markets. Yet, fostering innovation in a legacy organization can be a daunting task, especially when cultural inertia stands in the way. This article draws on my experiences working with global companies who have undertaken the bold initiative to transform their innovation capabilities and provides practical insights into overcoming the culture and behavior challenges that stand in the way of change.

I’ll share proven methods and tactics leaders can use to drive change. While some companies have seen significant progress in areas like employee involvement and crafting compelling cultural narratives, they have also encountered challenges in achieving consistency in leadership actions and aligning incentives. These successes and setbacks highlight the complexity of applying change management techniques in real-world settings and offer valuable lessons for senior leaders grappling with similar transformations.

To illustrate how companies have navigated these transformations, I’ll examine the key mechanisms that shape change initiatives while highlighting both successes and obstacles. By analyzing initiative governance, leadership actions, system interdependence, employee engagement strategies, rewards, symbols, and HR system alignment, I will identify the factors that drive lasting change and the barriers that hinder progress. This analysis will shed light on the practical realities of fostering a culture of continuous innovation, equipping leaders with actionable insights to guide their own transformation efforts.

Making the Case for Change

For meaningful change to occur, it is essential to first establish a shared understanding of the current state, the benefits of change, the risks of inaction, the specific capability gaps, and the precise ways the organization needs to adapt. In large, well-established companies, innovation spans multiple functions, business units, geographies, growth horizons, and management levels, each presenting its own unique challenges and perspectives. Consequently, reaching consensus on the core issues is rare and it often takes a crisis, such as declining revenue, a major product failure, the departure of critical team members, or the threat of disruption to ignite change. Successful transformations begin with a sharpened and clearly communicated “why change” narrative.

Figure 1 below illustrates how one company used a benchmark analysis to compare its current innovation performance to industry best-in-class standards across multiple dimensions. The benchmark helped identify performance gaps, highlighting the need for change and enabling the company to set realistic improvement targets. The data provided objectivity and fostered a shared understanding of the need for improvement.

Figure 1. Sample Performance Gap Analysis

Establishing Ownership & Governance

Innovation is inherently cross-functional, involving multiple management layers. But when execution issues or launch failures persist, who is responsible? The tendency is to assign blame to a specific function, often R&D or Marketing in technology-driven companies, and expect that group to diagnose and fix the problem. This siloed mindset fosters finger-pointing and defensiveness while overlooking the interconnected systems required for meaningful improvement. In reality, the necessary changes extend beyond the control of any single individual or department.

To overcome these challenges, it is essential to establish a clear governance framework that aligns responsibilities across different functions and organizational levels. In large corporations, this means differentiating between corporate, business unit, and product line levels, as each operates with distinct strategies, operational objectives, and decision-makers.

Governance for transformation is most effectively managed by a cross-functional steering team consisting of leaders from each impacted business unit and function, including R&D, marketing, operations, quality, regulatory, and finance. This team provides strategic oversight, sets performance targets, approves critical design and policy decisions, removes obstacles, and ensures consistent, enthusiastic communication. Strong endorsement from the CEO is essential to guarantee unwavering prioritization of the initiative and to secure organizational buy-in, while a dedicated cross-business working team handles day-to-day activities and champions the cultural changes needed to embed innovation practices throughout the organization.

The following graphic illustrates a sample governance structure that enables this coordinated approach. It outlines the key roles and responsibilities at various organizational levels, highlighting how leadership oversight, cross-functional collaboration, and operational execution come together to drive transformation success.

Figure 2. Sample Initiative Governance Structure

Demonstrating Leadership Action

Leaders shape employee behavior through consistent actions and messages that highlight priorities and expectations, demonstrating what they do, not what they say they do. Employees listen to what leaders say, observe their actions and where they focus their attention, recognize what they value, and use these cues to align their actions and priorities accordingly. For example, a CEO who makes time on his or her calendar to meet regularly with the initiative’s working team sends a powerful signal that the effort is a top priority for the organization.

In the most successful transformations, leadership begins by aligning on a clear change roadmap. This blueprint serves as a shared vision, mapping the path from the company’s current state to its desired future with well-defined actions, sequencing, and responsibilities. Leaders must agree on initiative goals, progress metrics, organizational changes, and time horizon. The roadmap incorporates both high impact “quick wins” and longer-term, advanced capabilities, along with the relative timing of activities and dependencies across each capability-building workstream. A well-constructed and actively maintained roadmap sets clear expectations for value realization and prevents isolated initiatives from emerging. By agreeing on this roadmap, leaders ensure that their messages, decisions, and actions remain consistent throughout the organization.

Figure 3. Sample Change Roadmap

Not all transformations maintain this level of cross-functional leadership alignment and focus. Over time, the priorities of well-intentioned leaders can shift, leading to unintended consequences. As the pressures of day-to-day operations and quarterly performance demands mount, these leaders often redirect their focus to immediate business needs, allocating resources to these areas or assigning transformation responsibilities as additional work without adjusting existing workloads. Similarly, when leadership priorities shift or the organization takes on too many initiatives simultaneously, focus on the transformation declines, and a wait-and-see approach tends to emerge.

This shift in focus has a ripple effect throughout the organization. What begins as a coordinated, integrated effort becomes piecemeal. Cross-business unit collaboration weakens, as leaders prioritize their own immediate challenges over broader, long-term goals. Pockets of resistance emerge, especially among middle managers who perceive the transformation as a threat to their authority or control. These managers openly question the legitimacy of the cross-business coalitions, making statements like, “They don’t really understand the nuances of how we operate in our business unit.” Such comments sow doubt and fracture the coalition, leaving the transformation adrift.

A transformation doesn’t fail overnight, it fades when leaders stop prioritizing it. Therefore, the CEO must act as the ultimate guardian, continuously and visibly reinforcing the business imperative, aligning leadership, and holding them accountable.

Building an Interdependent Innovation System

Companies typically start their improvement journey by making changes where there is an immediate need. This may involve implementing an improved gated-development process with Agile methods to guide core business execution or adopting design thinking and lean startup approaches to discover, incubate, and scale new business models. The results these capabilities provide can be significant, but unfortunately, they represent only a fraction of the potential value they can offer, and success is hard to sustain unless they are implemented as part of an interdependent innovation system.

Figure 4. The Innovation System

The above graphic illustrates innovation as an interconnected set of capability areas, where key elements, each with their own processes, organizational structures, governance mechanisms, workflows, and tools, function together as a cohesive system. While individual elements can be enhanced independently with significant success, the greatest value is achieved when all elements operate together. The effectiveness of any single element is ultimately reliant on the strength of the others. It takes a coordinated set of integrated initiatives that support and reinforce one another to achieve truly transformational results.

Involving Employees

Employee involvement is critical to transforming a company’s culture, fostering ownership, aligning diverse perspectives, and ensuring the adoption of new methodologies for lasting change. Employees are far more likely to embrace changes they help design, particularly in innovation process transformations.

Successful transformations prioritize employee involvement from the start. Establishing a cross-functional team with representatives from each business unit ensures a shared understanding of capability gaps and improvement opportunities. Using performance benchmarks, these teams gain insights into organizational challenges and build a collective commitment to address them.

Interactive workshops play a pivotal role giving key stakeholders the experience of being involved in shaping the future state. These sessions are designed to define guiding principles for new processes, build consensus around success metrics, and identify practical steps forward. Rather than generating extensive documentation, the focus is on creating actionable, outcome-driven processes that drive meaningful progress.

Process pilots are vital for testing and refining new approaches. Instead of lengthy design phases, pilot teams implement and validate key elements right away, demonstrating success and building momentum. Visible wins convert skeptics into advocates, creating enthusiasm and offering a clear vision of how the transformation benefits employees and the organization.

Hands-on engagement during these pilots fosters a sense of ownership as employees actively design, test, and refine new processes. This approach embeds new practices into the culture and drives the transformation forward.

However, when employee involvement is mishandled or overlooked, transformations can falter. Excluding employees from early stages, such as identifying performance gaps or defining future processes, leads to disengagement. Without a clear understanding of the reasons for change, employees may see the transformation as irrelevant or forced, leading to fear, resistance, and reversion to old habits.

How many people should be directly involved in the change effort? McKinsey research, shown below, finds that involving at least 7 percent of employees as transformation initiative owners significantly increases the likelihood of outperforming sector and geographic stock indices. This 7 percent can represent hundreds of fully engaged employees, a number far above the average 2 percent involvement in most organizations.

Figure 5. McKinsey Transformation Employee Involvement Study Results

While the number of employees involved will vary with the initiative’s scope and complexity, the principle remains clear: early, meaningful involvement drives success.

Aligning Incentive Systems

Aligned incentives, such as rewards, recognition, approval, and status, play a vital role in shaping behavior and reinforcing organizational culture. Innovation, which relies on collaboration across diverse teams, succeeds when incentives align with company, business unit, product line, and project goals.

Adjusting incentive systems in established companies is challenging, as these systems are deeply rooted in organizational culture and long-standing practices. Changes often face resistance from employees concerned about fairness or uncertainty. Balancing short-term performance goals with long-term strategic priorities adds complexity, requiring careful re-calibration to prevent misaligned priorities or unintended consequences.

Effective incentive systems must align with corporate strategy. Too often, a gap exists between a company’s innovation investments and its growth ambitions. Leaders driven by quarterly targets tend to prioritize safe, short-term innovation projects, resulting in an over-reliance on incremental improvements that hinder long-term growth and increase vulnerability to disruption. Successful companies link growth strategy to a balanced innovation project portfolio optimized across growth horizons.

A major challenge for companies enhancing their innovation capabilities is transitioning from siloed functional objectives to a model of team-based accountability. In this approach, team members share responsibility for product success, fostering a culture of mutual accountability. Leading organizations tackle this shift by restructuring reward systems to prioritize team performance. For example, they evaluate more than half of a team member’s performance based on peer feedback and project outcomes, ensuring that contributions to collective success are properly recognized.

However, even with the right structural changes, incentives can still fall short if they don’t resonate with employees. Many leaders unintentionally mis-align rewards with what employees truly value, leading to disengagement rather than motivation. As Jennifer Chojnacki, Executive Director, Innovation & New Product Introduction at Carrier Corporation, explains, “Incentives are a tough topic. I see leaders get this wrong more often than they get it right, offering unrealistic rewards that can’t be fulfilled or mis-aligning incentives with what employees actually value. Too often, leaders assume their own motivations apply universally, rather than taking the time to understand what truly drives their teams.”

Financial incentives, while important, must support desired behaviors to avoid undermining transformation efforts. Misaligned rewards, such as prioritizing individual achievements over team success, can hinder collaboration and innovation. Thoughtful design ensures financial incentives complement non-financial rewards, fostering a culture where employees and teams feel both valued and motivated.

Aligning HR Systems

Aligning human resource (HR) systems with transformational change initiatives ensures that recruitment, training, rewards, and promotions support change objectives and reinforce cultural norms. Candidates are evaluated on their skills and alignment with organizational values, and employees are trained in expected behaviors. Career paths and promotions recognize those excelling in both performance and cultural fit, ensuring the organization’s values and change objectives are consistently upheld.

Successful companies also align recruitment strategies and career development to address skill gaps, enhance competencies, and teach new ways of working. Training programs are tailored to specific roles, including project team members, functional managers, and business leaders governing the innovation pipeline. Just-in-time training, meaning applied training on live projects, and role-playing exercises prove far more effective than traditional classroom methods for driving significant behavior and process changes.

To support recruitment and career progression, organizations establish clear role expectations that extend beyond standard job descriptions. These expectations define the skills, capabilities, and success criteria for roles within innovation teams, functional management, and portfolio management.

By aligning HR systems with initiative goals, organizations create a unified approach to change. This empowers employees to embrace the desired culture, building a strong foundation for sustainable innovation and long-term success.

Reinforcing Through Signals, Symbols, & Rituals

In transformational initiatives, organizations establish clear behavioral expectations to signal shared values and emphasize cultural evolution. Celebrating individuals who embody these values reinforces desired behaviors, while symbols like unique language or rituals foster belonging and alignment with the organization’s identity. These elements embed cultural messages throughout the initiative, ensuring consistent reinforcement.

Cultural alignment is strengthened by the tone and actions of senior leaders, whose influence shapes innovation teams and their approach to challenges. During project funding reviews, for instance, leaders can demonstrate trust and foster accountability through the questions they ask and the perspectives they promote. Instead of demanding, “Pull in your schedule,” they might ask, “What would it take to pull in your schedule?” This subtle shift in tone signals confidence in the team’s ability to evaluate tradeoffs and make informed recommendations. In customer-centric cultures, directives like “Start development as soon as possible” give way to “Ensure unmet customer needs are fully understood before advancing to development.” Similarly, leaders foster progress by re-framing early innovation project failure as rapid learning, celebrating cost savings when un-viable projects are identified and cancelled prior to full-scale development.

The use of distinctive language further encapsulates cultural values and reinforces the organization’s identity. Phrases like “customer obsession” or “bias for action” become part of daily conversations, serving as constant reminders of priorities. Successful companies also adapt leading innovation practices, such as lean startup, design thinking, and Agile, to suit their unique needs and culture. Instead of rigidly adhering to a single approach, they tailor terminology and processes to align with their organizational context.

Sustaining Momentum and Long-Term Commitment

Large, established companies often underestimate the effort required to achieve lasting success and embed it into the organization. Transforming the way a company innovates impacts every function and management level, necessitating significant cultural change. This is challenging because employees have operated within the existing culture for years. Some may perceive the initiative as a threat to their power and authority, while others may strongly resist any deviation from the status quo. Moreover, these changes must be implemented without disrupting daily operations.

Transformation is an ongoing process, not just a destination. While early results can emerge within months, providing momentum for the initiative, full internalization of the changes takes years. Successful rollout and adoption require all innovation teams and their leaders to experience the new processes and learn how to integrate them into their daily routines. The transformation unfolds gradually as success builds credibility and reinforces the new approach.

As Bridget Sheriff, VP of Engineering at Carrier Corporation, puts it, “I learned long ago that you never get something for nothing—true transformation demands relentless effort and stamina. Lasting change isn’t achieved through sporadic bursts of energy; it’s a journey that requires persistence, resilience, and a willingness to push through resistance. People are naturally inclined to stick with what they know, so shifting mindsets and behaviors takes time, trust, and continuous reinforcement.”

Start with the fundamentals, demonstrate success, build momentum, be willing to evolve as you learn, and layer in advanced processes, techniques, and tools over time. Leaders with a short-term outlook will struggle to sustain the necessary support for this long-term effort. Moreover, inconsistent effort, fluctuating funding, and repeated starts and stops will undermine progress and lead to change fatigue.

This is why leaders must embrace transformation as a long-term commitment, prioritizing continuous improvement, fostering a culture of learning and adaptability, and celebrating each stage of value realization. By sustaining momentum and consistently reinforcing the value of change, they can prevent complacency and drive lasting success.

Conclusion

Transforming innovation processes in large, established companies is no small feat, but the rewards of a cohesive, adaptive, and innovation-driven culture are immeasurable. The experiences shared in this article illuminate the power and complexity of cultural transformation, highlighting both the potential for extraordinary progress and the pitfalls that can derail well-intentioned efforts.

The keys to successful transformation demonstrate that success lies not in isolated actions but in a carefully orchestrated, holistic approach. From the unwavering commitment of leadership to the deep engagement of employees, aligned reward systems, compelling cultural narratives, supportive HR systems, and a commitment to stay the course, every lever plays a vital role in driving sustainable change.

However, true transformation goes beyond implementing processes and frameworks; it demands a steadfast dedication to consistency, collaboration, and learning. It calls for organizations to move beyond short-term wins to foster an enduring culture of innovation that can withstand market pressures and disruptions. Leaders must be relentless in their alignment, employees must feel empowered to design and execute the change, and integration must take precedence over fragmented solutions.

As Tobi Karchmer, Chief Medical and Scientific Officer for Baxter International, explains, “Transforming innovation capability isn’t just about changing processes, it requires shifting deeply ingrained mindsets. Without addressing cultural barriers, even the most well-designed initiatives will struggle to take hold and deliver meaningful impact.”

The lessons outlined here provide a roadmap for companies embarking on similar journeys. By embracing both the successes and the missteps, organizations can navigate the challenges of transformation and position themselves as innovation leaders. In the end, the path to innovation excellence may be complex, but it is a journey well worth taking for the organization, its employees, and the customers who value their breakthroughs.

References

  1. Laura London, Stephanie Madner, and Dominic Skerritt, “How many people are really needed in a transformation?” McKinsey Insights, 2021
  2. Daniel Coyle, The Culture Playbook: 60 Highly Effective Actions to Help Your Group Succeed, 2022
  3. Charles O’Reilly, “How Microsoft Transformed Its Culture,” Management and Business Review, Volume 4, Issue 1, 2024

Related articles for a deeper dive on the topic:

  1. “Pizzas, Minivans, and the Innovation Core Team,” Mind the Product, 2018
  2. “Innovation Process Design and Software Tool Enablement,” PDMA Visions, Issue 2, 2014, Volume 38, 2014
  3. Noel Sobelman and Tony Ulwick, “Outcome-Driven Venturing: Build the Right Solutions and Build Them Right,” The Marketing Journal, 2021
  4. “The Journey Toward World Class Innovation: 5 Keys to Successful Implementation,” 2022
  5. “Innovation Project Governance Do’s & Don’ts,” 2022

Image credits: Noel Sobelman, McKinsey, Pixabay

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‘Twas the Night Before Launch Day

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Twas the Night Before Launch Day

GUEST POST from Robyn Bolton

‘Twas the night before launch day, when throughout HQ,
Not a worker had left, there was too much to do;
The plans were laid out by the whiteboard with care,
While our Innovation Chief Sarah planned with great flair;

The team was all nestled all snug at their posts,
While visions of success inspired them the most;
And Sarah in her blazer, so sharp and so bright,
Had just settled in for a long working night,

When out in the hall there arose such a clatter,
She sprang from her desk to see what was the matter.
When what to her wondering eyes should appear,
But the CEO and board, spreading holiday cheer!

“Now, ARCHITECTURE!” they cried, “We need strategy and rules!
Now BEHAVIORS and CULTURE!” – these ABC tools.
“Tell us Sarah,” they said, “how you’ll lead us to glory,
Through bringing new value – tell us your story!”

She smiled as she stood, confidence in her stance,
“The ABCs of Innovation aren’t left up to chance.
Architecture’s our framework, our process and measure,
Our governance model not built at our leisure;

“The Behaviors we foster? Curiosity leads,
With courage and commitment to meet future needs.
And Culture,” she said, with a twinkle of pride,
“Is how innovation becomes our natural stride.”

Her cross-functional team gathered ’round with delight,
Each bringing their skills to help win this big fight:
“From concept to testing, from planning to more,
We’re ready to launch what we’ve worked toward before!”

The CEO beamed and the board gave a cheer,
“This is exactly the progress we’d hoped for this year!
With Architecture to guide us, and Behaviors so strong,
Plus Culture to fuel us – well, nothing could go wrong!”

Then Sarah exclaimed, as they turned out the light,
“Happy launching to all, and to all a good night!
For tomorrow we share what’s been worth all the wait,
Guided by ABCs, we’ll make something great!”

Image credit: Microsoft CoPilot

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Purpose Matters Because …

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Purpose Matters Because ...

GUEST POST from Greg Satell

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

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

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

Failed Cartesians

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

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

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

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

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

The End Of History And The Washington Consensus

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

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

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

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

The Silicon Valley Myth

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

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

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

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

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

Identity, Dignity And Purpose

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

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

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

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

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

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

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We Are in an Employee Experience Recession

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We Are in an Employee Experience Recession

GUEST POST from Shep Hyken

The title of this article is very similar to the title of the first chapter of John DiJulius and David Murray’s latest book, The Employee Experience Revolution. As the world emerged from the Covid-19 pandemic, many employees realized what made them happy—and unhappy. The result was that many companies experienced The Great Resignation, as employees left their current employers hoping for something better.

Some companies have struggled to replace employees. Many claim there is a shortage of workers. I’ll argue that a shortage of workers isn’t the problem. There is a shortage of workers for that specific company. Why? They haven’t created the employee experience that makes employees want to stay. For example, one of my favorite restaurants has the same employees today as it did pre-pandemic. But the restaurant across the street has struggled to get good people to stay. The reason is simple—and it’s not the food. It’s the management/ownership.

Just as you want your customers to come back, you want your employees to come back. That’s why the employee experience must be in alignment with the customer experience. For years, I’ve preached the Employee Golden Rule, which is to do unto your employees as you want done unto your customers. You can’t treat employees harshly and expect them to go out and be nice to customers. Incongruent behavior can eventually result in a company’s version of The Great Resignation.

I had a chance to interview John DiJulius for an episode of Amazing Business Radio to talk about his new book. I’m so in alignment with his ideas that I thought it was an interview with myself. Below are five of his concepts (in bold), followed by my commentary.

  1. There is not a labor shortage. There is a turnover crisis. As mentioned above in the restaurant example, two restaurants on opposite sides of the street have completely different labor experiences. One has kept its core group of employees. The other can’t keep employees. It’s not a labor shortage. As DiJulius points out, “I don’t think there are fewer human beings walking planet Earth than there were five years ago.” It’s all a turnover problem.
  2. Because some companies struggle to keep people, they hire almost anyone. When many employees leave, some companies are too quick to hire. Desperation can cause companies to hire too quickly, which means they may get the wrong people. What’s worse, according to DiJulius, is that “Companies look the other way on poor performers and people with bad attitudes because they need to replace so many employees.”
  3. Your employees are the average of the five people they work closest to. Motivational speaker Jim Rohn is often credited with saying, “You’re the average of the five people you spend the most time with.” DiJulius says this is the same in a company, but there’s a difference. In your personal life, you choose your friends. At work, you don’t get a choice. If you put a superstar in the midst of a group of underachievers, you shouldn’t be surprised if your expectations aren’t met.
  4. The employee experience starts with the recruitment experience. DiJulius believes that everything should be an experience. That includes your recruiting, hiring and on-boarding process. Today we are in an “employees’ market.” Candidates can demand more money and benefits. But what if you created an experience that transcended a paycheck? Yes, we need to pay a fair wage, but if the experience of working at a company is strong enough, employees will factor that into their decision to come and work for you. I summarize this concept by asking, “Do you want an employee working for a paycheck or working for the company?”
  5. Build a moat around your rock stars. Just as you work to attract and keep your customers, you should focus similar efforts on hiring the right employees and keeping them. So what are you doing to ensure that after 90 days, your employees think, “This is where I belong”? What experience are you creating that would have them turn down offers from others? DiJulius says, “This is the moat you build around your employees.”

How do we beat the Employee Experience Recession? Cultivate an engaging experience — an appealing and supportive work environment that extends beyond competitive salaries. Foster a culture in which employees feel valued and are an integral part of the organization. Just like you create an experience that gets customers to return, you must prioritize building a workplace where employees are inspired to sign on, come back, and not leave.

This article originally appeared on Forbes.com

Image Credits: Pixabay

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