Category Archives: Innovation

Is OpenAI About to Go Bankrupt?

LAST UPDATED: December 4, 2025 at 4:48 PM

Is OpenAI About to Go Bankrupt?

GUEST POST from Chateau G Pato

The innovation landscape is shifting, and the tremors are strongest in the artificial intelligence (AI) sector. For a moment, OpenAI felt like an impenetrable fortress, the company that cracked the code and opened the floodgates of generative AI to the world. But now, as a thought leader focused on Human-Centered Innovation, I see the classic signs of disruption: a growing competitive field, a relentless cash burn, and a core product advantage that is rapidly eroding. The question of whether OpenAI is on the brink of bankruptcy isn’t just about sensational headlines — it’s about the fundamental sustainability of a business model built on unprecedented scale and staggering cost.

The “Code Red” announcement from OpenAI, ostensibly about maintaining product quality, was a subtle but profound concession. It was an acknowledgment that the days of unchallenged superiority are over. This came as competitors like Google’s Gemini and Anthropic’s Claude are not just keeping pace, but in many key performance metrics, they are reportedly surpassing OpenAI’s flagship models. Performance parity, or even outperformance, is a killer in the technology adoption curve. When the superior tool is also dramatically cheaper, the choice for enterprises and developers — the folks who pay the real money — becomes obvious.

The Inevitable Crunch: Performance and Price

The competitive pressure is coming from two key vectors: performance and cost-efficiency. While the public often focuses on benchmark scores like MMLU or coding abilities — where models like Gemini and Claude are now trading blows or pulling ahead — the real differentiator for business users is price. New models, including the China-based Deepseek, are entering the market with reported capabilities approaching the frontier models but at a fraction of the development and inference cost. Deepseek’s reportedly low development cost highlights that the efficiency of model creation is also improving outside of OpenAI’s immediate sphere.

Crucially, the open-source movement, championed by models like Meta’s Llama family, introduces a zero-cost baseline that fundamentally caps the premium OpenAI can charge. Llama, and the rapidly improving ecosystem around it, means that a good-enough, customizable, and completely free model is always an option for businesses. This open-source competition bypasses the high-cost API revenue model entirely, forcing closed-source providers to offer a quantum leap in utility to justify the expenditure. This dynamic accelerates the commoditization of foundational model technology, turning OpenAI’s once-unique selling proposition into a mere feature.

OpenAI’s models, for all their power, have been famously expensive to run — a cost that gets passed on through their API. The rise of sophisticated, cheaper alternatives — many of which employ highly efficient architectures like Mixture-of-Experts (MoE) — means the competitive edge of sheer scale is being neutralized by engineering breakthroughs in efficiency. If the next step in AI on its way to artificial general intelligence (AGI) is a choice between a 10% performance increase and a 10x cost reduction for 90% of the performance, the market will inevitably choose the latter. This is a structural pricing challenge that erodes one of OpenAI’s core revenue streams: API usage.

The Financial Chasm: Burn Rate vs. Reserves

The financial situation is where the “bankruptcy” narrative gains traction. Developing and running frontier AI models is perhaps the most capital-intensive venture in corporate history. Reports — which are often conflicting and subject to interpretation — paint a picture of a company with an astronomical cash burn rate. Estimates for annual operational and development expenses are in the billions of dollars, resulting in a net loss measured in the billions.

This reality must be contrasted with the position of their main rivals. While OpenAI is heavily reliant on Microsoft’s monumental investment — a complex deal involving cash and Azure cloud compute credits — Microsoft’s exposure is structured as a strategic infrastructure play. The real financial behemoth is Alphabet (Google), which can afford to aggressively subsidize its Gemini division almost indefinitely. Alphabet’s near-monopoly on global search engine advertising generates profits in the tens of billions of dollars every quarter. This virtually limitless reservoir of cash allows Google to cross-subsidize Gemini’s massive research, development, and inference costs, effectively enabling them to engage in a high-stakes price war that smaller, loss-making entities like OpenAI cannot truly win on a level playing field. Alphabet’s strategy is to capture market share first, using the profit engine of search to buy time and scale, a luxury OpenAI simply does not have without a continuous cash injection from a partner.

The question is not whether OpenAI has money now, but whether their revenue growth can finally eclipse their accelerating costs before their massive reserve is depleted. Their long-term financial projections, which foresee profitability and revenues in the hundreds of billions by the end of the decade, require not just growth, but a sustained, near-monopolistic capture of the new AI-driven knowledge economy. That becomes increasingly difficult when competitors are faster, cheaper, and arguably better, and have access to deeper, more sustainable profit engines for cross-subsidization.

The Future Outlook: Change or Consequence

OpenAI’s future is not doomed, but the company must initiate a rapid, human-centered transformation. The current trajectory — relying on unprecedented capital expenditure to maintain a shrinking lead in model performance — is structurally unsustainable in the face of faster, cheaper, and increasingly open-source models like Meta’s Llama. The next frontier isn’t just AGI; it’s AGI at scale, delivered efficiently and affordably.

OpenAI must pivot from a model of monolithic, expensive black-box development to one that prioritizes efficiency, modularity, and a true ecosystem approach. This means a rapid shift to MoE architectures, aggressive cost-cutting in inference, and a clear, compelling value proposition beyond just “we were first.” Human-Centered Innovation principles dictate that a company must listen to the market — and the market is shouting for price, performance, and flexibility. If OpenAI fails to execute this transformation and remains an expensive, marginal performer, its incredible cash reserves will serve only as a countdown timer to a necessary and painful restructuring.

Frequently Asked Questions (FAQ)

  • Is OpenAI currently profitable?
    OpenAI is currently operating at a significant net loss. Its annual cash burn rate, driven by high R&D and inference costs, reportedly exceeds its annual revenue, meaning it relies heavily on its massive cash reserves and the strategic investment from Microsoft to sustain operations.
  • How are Gemini and Claude competing against OpenAI on cost and performance?
    Competitors like Google’s Gemini and Anthropic’s Claude are achieving performance parity or superiority on key benchmarks. Furthermore, they are often cheaper to use (lower inference cost) due to more efficient architectures (like MoE) and the ability of their parent companies (Alphabet and Google) to cross-subsidize their AI divisions with enormous profits from other revenue streams, such as search engine advertising.
  • What was the purpose of OpenAI’s “Code Red” announcement?
    The “Code Red” was an internal or public acknowledgment by OpenAI that its models were facing performance and reliability degradation in the face of intense, high-quality competition from rivals. It signaled a necessary, urgent, company-wide focus on addressing these issues to restore and maintain a technological lead.

UPDATE: Just found on X that HSBC has said that OpenAI is going to have nearly a half trillion in operating losses until 2030, per Financial Times (FT). Here is the chart of their $100 Billion in projected losses in 2029. With the success of Gemini, Claude, Deep Seek, Llama and competitors yet to emerge, the revenue piece may be overstated:

OpenAI estimated 2029 financials

Image credits: Google Gemini, Financial Times

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Innovation Theater – A Defense

Innovation Theater - A Defense

GUEST POST from Robyn Bolton

I can’t believe that I’m writing this. Honestly, I can’t believe I’m even thinking this. I’m an open-minded person, but I truly never thought that anything would ever change my mind on this topic. And yet, I must confess that I’ve come to the conclusion that…

(deep breath)

Innovation Theater is important.

(Sorry, needed a minute to recover. It’s one thing to think something. It’s another to see it in writing.)

Why We All Hate(d) Innovation Theater.

The term “Innovation Theater” was coined by Steve Blank in a 2019 HBR article to describe innovation activities like hackathons, shark tanks, and workshops that “shape and build culture, but they don’t win wars, and they rarely deliver shippable/deployable product.”

The name stuck because it gave the Innovation Industrial Complex a perfect scapegoat. Innovation efforts weren’t producing results because companies were turning real strategy into theater—events that could be delegated and scheduled instead of the courage, commitment, and willingness to change that actual innovation requires.

And in many cases, this criticism was warranted.

But in our rush to dismiss Innovation Theater, we missed something important.

What I (Almost) Missed.

Recently, I visited a company’s Innovation Center, curious to see what ten years of innovation investments and two floors in a downtown high-rise had produced.

The answer was a framework to think more deeply about equity and inclusion. My immediate reaction was rage.  A decade of investments for this? Millions of dollars spent on the very definition of Innovation Theater? And they’re bragging about it?!?

Once the rage subsided, something remained. Something that I couldn’t shake. An inkling that I had missed something. That inkling became the realization that I was wrong.

Over the past five years, the framework had been used in carefully curated workshops to help teams across the organization see things they had previously overlooked, understand topics that were sensitive or taboo, and envision solutions that no one their heavily regulated industry had even considered.

Not every workshop resulted in action. But over time, something shifted.

Seasons. Not Shows.

Repetition created a shared language. Multiple touchpoints built permission. Small success stories accumulated to make risk feel manageable. The workshops didn’t send off isolated sparks of innovation. They built the conditions where acting on new ideas became progressively safer and more normal.

And after several seasons, enduring value was created. The company now enjoys the highest retention rate of customers in its industry and has attracted more new customers than all its competitors combined. A decade of “Innovation Theater” delivered exactly what innovation is supposed to deliver: measurable competitive advantage and revenue growth.

Don’t Cancel Your Next Innovation Event.

The problem isn’t Innovation Theater itself. It’s how we practice it.

A one-off hackathon? Theater. An annual workshop? Theater. But sustained investment over years, touching dozens of teams, building shared language and accumulated proof points? That’s a strategic bet on transformation that creates lasting competitive advantage.

The question isn’t whether Innovation Theater works. It’s whether you’re willing to commit to the season, not just the show. Are you prepared to invest consistently, measure differently, and wait for compounding effects that won’t show up in next quarter’s results?

Because when you commit to the season, not just the show, it’s the most strategic bet you can make.

Image credit: Pexels

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Top 10 Human-Centered Change & Innovation Articles of November 2025

Top 10 Human-Centered Change & Innovation Articles of November 2025Drum 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:

  1. Eight Types of Innovation Executives — by Stefan Lindegaard
  2. Is There a Real Difference Between Leaders and Managers? — by David Burkus
  3. 1,000+ Free Innovation, Change and Design Quotes Slides — by Braden Kelley
  4. The AI Agent Paradox — by Art Inteligencia
  5. 74% of Companies Will Die in 10 Years Without Business Transformation — by Robyn Bolton
  6. The Unpredictability of Innovation is Predictable — by Mike Shipulski
  7. How to Make Your Employees Thirsty — by Braden Kelley
  8. Are We Suffering from AI Confirmation Bias? — by Geoffrey A. Moore
  9. How to Survive the Next Decade — by Robyn Bolton
  10. It’s the Customer Baby — by Braden Kelley

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

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!

Build a Common Language of Innovation on your team

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 four years:

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Bridging Differences to Drive Creativity and Innovation

Bridging Differences to Drive Creativity And Innovation

GUEST POST from Greg Satell

I have a friend who was once ambushed on a TV show panel. Being confronted with a clearly offensive remark, she was caught off-guard, said something that was probably unwise (but not untrue or unkind), and found herself at the center of a media-driven scandal. It would cost her enormously, both personally and professionally.

I often think about the episode and not just because it hurt my friend, but also because I wonder what I would have done if put in similar circumstances. My friend, who is black, Muslim and female, is incredibly skilled at bridging differences and navigating matters of race, gender and religion. If she fell short, would I even stand a chance?

We are encouraged to think about matters of diversity in moral terms and, of course, that’s an important aspect. However, it is also a matter of developing the right skills. The better we are able to bridge differences, the more effectively we can collaborate with others who have different perspectives, which is crucial to becoming more innovative and productive.

The Challenge Of Diversity

There is no shortage of evidence that diversity can enhance performance. Researchers at the University of Michigan found that diverse groups can solve problems better than a more homogeneous team of greater objective ability. Another study that simulated markets showed that ethnic diversity deflated asset bubbles.

While those studies merely simulate diversity in a controlled setting, there is also evidence from the real world that diversity produces better outcomes. A McKinsey report that covered 366 public companies in a variety of countries and industries found that those which were more ethnically and gender diverse performed significantly better than others.

However, it takes effort to reap the benefits of diversity. Humans are naturally tribal. In a study of adults that were randomly assigned to “leopards” and “tigers,” fMRI studies noted hostility to out group members. Similar results were found in a study involving five year-old children and even in infants. Group identification, even without any of the normal social cues, is enough to produce bias.

The innate distinctions we make regarding each other carry over to work environments. When researchers at Kellogg and Stanford put together groups of college students to solve a murder mystery, teams made up of students from the same sorority or fraternity felt more successful, even though they performed worse on the task than integrated groups.

We rarely welcome someone who threatens our sense of self. So those outside the dominant culture are encouraged to conform and are often punished when they don’t. They are less often invited to join in routine office socializing and promotions are less likely to come their way. When things go poorly, it’s much easier to blame the odd duck than the trusted insider.

Group Identity And Individual Dignity

In western civilization, since at least the time of Descartes, we have traditionally thought in rational terms about how humans behave. We tend to assume that people examine facts to make judgments and that any disputes can be overcome through discussion and debate, through which we will arrive at an answer that is objectively correct.

Yet what if we actually did things in reverse, intuitively deciding what was right and then coming up with rational explanations for how we feel? Discussion and debate wouldn’t achieve anything. If rational arguments are merely explanations of deeply held intuitions, the “arguments” from the other side would seem to be downright lies or just crazy.

In The Righteous Mind, social psychologist Jonathan Haidt points to decades of evidence that suggest that is exactly how we do things. We rely on social intuitions to make judgments and then design logic to explain why we feel that way. He also makes the point that many of our opinions are a product of our inclusion in a particular group.

Hardly the product of cold logic, our opinions are, in large part, manifestations of our identity. Our ideas are not just things we think. They are expressions of who we think we are.

Talking Past Each Other

Clearly, the way we tend to self-sort ourselves into groups based on identity will shape how we perceive what we see and hear, but it will also affect how we share and access data. Recently, a team of researchers at MIT looked into how we share information — and misinformation — with those around us. What they found was troubling.

When we’re surrounded by people who think like us, we share information more freely because we don’t expect to be rebuked. We’re also less likely to check our facts, because we know that those we are sharing the item with will be less likely to inspect it themselves. So when we’re in a filter bubble, we not only share more, we’re also more likely to share things that are not true. Greater polarization leads to greater misinformation.

The truth is that we all have a need to be recognized and when others don’t share a view that we feel strongly about, it offends our sense of dignity. The danger, of course, is that in our rapture we descend into solipsism and fail to recognize the dignity of others. That can lead us to dangerous and ugly places.

In Timothy Snyder’s masterful book Bloodlands, which explores the mass murders of Hitler and Stalin, the eminent historian concludes that the reason that humans can do unspeakable things to other humans is that they themselves feel like victims. If your very survival is at stake, then just about anything is warranted and cruelty can seem like justice.

Once our individual dignity becomes tied to our group identity, a different perspective can feel like more than just an opposing opinion, but a direct affront and that’s what may have precipitated the public attack on my friend. The verbal assault was probably motivated by her assailant’s need to signal inclusion in an opposing tribe.

Building Shared Identity And Purpose

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

As we conform to those around us, we are setting ourselves apart from those who are shaped by different sets of experiences. While there is enormous value to be unlocked by integrating with diverse perspectives, it takes work to be able to bridge those differences. What we hear isn’t always what others say and what we say isn’t what others always hear.

In his book, Identity, political scientist Francis Fukuyama explains that our identities aren’t fixed, but develop and change over time. In fact, we routinely choose to add facets to our identity, while shedding others, changing jobs, moving neighborhoods, breaking off some associations as we take on others. “Identity can be used to divide, but it can and has also been used to integrate,” Fukuyama writes.

Yet integrating identities takes effort. We first need to acknowledge that our truth isn’t the only truth and that others, looking at the same facts, can honestly come to different conclusions than we do. We need to suspend immediate judgment and devote ourselves to a common undertaking with a shared sense of mission and purpose.

This is no easy task. It takes significant effort. However, it is at this nexus of identity and purpose that creativity and innovation reside, because when we learn to collaborate with others who possess knowledge, skills and perspectives that we don’t, new possibilities emerge to achieve greater things.

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

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Innovation Requires Defying Success

Innovation Requires Defying Success

GUEST POST from Mike Shipulski

Innovation is difficult because it requires novelty. And novelty is difficult because it’s different than last time. And different than last time is difficult because you’ve got to put yourself out there. And putting yourself out there is difficult because no one wants to be judged negatively.

Success, no matter how small, reinforces what was done last time. There’s safety in doing it again. The return may be small, but the wheels won’t fall off. You may run yourself into the ground over time, but you won’t fail catastrophically. You may not reach your growth targets, but you won’t get fired for slowly destroying the brand. In short, you won’t fail this year, but you will create the causes and conditions for a race to the bottom.

Diminishing returns are real. As a system improves it becomes more difficult to improve. A ten percent improvement is more difficult every year and at some point, improvement becomes impossible. In that way, success doesn’t breed success, it breeds more effort for less return. And as that improvement per unit effort decreases, it becomes ever more important (and ever more difficult) to do something different (to innovate).

Paradoxically, success makes it more difficult to innovate.

Success brings profits that could fund innovation. But, instead, success brings the expectation of predictable growth. Last year we were successful and grew 10%. We know the recipe, so this year let’s grow 12%. We can do what we did last year, but do it more efficiently. A sound bit of logic, except it assumes the rules haven’t changed and that competitors haven’t improved. But rules and competitors always change, and, at some point the the same old recipe for success runs out of gas.

It’s time to do something new (to innovate) when the same old effort brings reduced results. That change in output per unit effort means the recipe is tiring and it’s time for a new one. But with a new approach comes unpredictability, and for those who demand predictability, a new approach is scary. Sure, the yearly trend of reduced return on investment should scare them more, but it doesn’t. The devil you know is less scary than the one you don’t. But, it shouldn’t be.

Calculate your revenue dollars per sales associate and plot it over time. If the metric is flat over the last three years, it was time to innovate three years ago. If it’s decreasing over the last three years, it was time to innovate six years ago.

If you wait to innovate until revenue per salesperson is flat, you waited too long.

No one likes to be judged negatively, more than that, no one likes their company to collapse and lose their job. So, choose to do something new (to innovate) and choose the possibility of being judged. That’s much better than choosing to go out of business.

Image credit: Pexels

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Leveraging the Power of Play to Innovate!

Leveraging the Power of Play to Innovate!

GUEST POST from Janet Sernack

One of my most potent memories from my career in organizational learning and development was the power of play as an effective adult learning method during a “Money and You” workshop with Robert Kiyosaki, the author of Rich Dad, Poor Dad.

It was a business game called “Win as Much as You Can”, also known now as the “XY Game”. The game involved forming four teams of two players, who alternated scoring across four rounds by choosing to throw either X or Y. The scoring process was the key to unlocking and understanding the game’s impact; if your team kept throwing X’s, you were awarded a significant number of points, enabling you to win as much as you could.

The scoring process subtly shifted in round eight, when the key to winning the game was for all four teams to throw Ys, yet not all teams did!

Because we were all unconsciously stuck in a competitive win-or-lose mindset, aiming to win as much as we could rather than adopting an approach where everyone could win, or being collaborative and playing a win-win game.

It was a moment of deep shame for me when I was announced the winner of my small group of eight players — a deeply impactful moment I have never forgotten, because for me to win, the other seven players had to lose, and they weren’t happy about losing.

Critical Foundational 21st Century Skills

These key lessons are encapsulated in my latest innovative co-creation – The Start-Up Game™. This hybrid board game combines experiential learning with achievement and competitive elements. It features an AI learning component that teaches critical foundational skills—collaboration, mathematical thinking, and adaptability —essential for both individuals and companies in a fast-changing AI world. As technical complexity rises, the glue that keeps talent productive is social skill—communication, empathy, conflict resolution, and the ability to coordinate diverse expertise. In addition to social skills, other fundamental capabilities — such as critical thinking, complex problem-solving, and reasoning — are crucial components of a dynamic, collective work environment in the modern enterprise. Together, they offer a shared platform that unlocks the full value of individuals’ specialized know-how, enables adaptation and innovation as technology and markets shift, and is increasingly in demand.

Games as Metaphors for Real Life

Since games are often metaphors for real life, I have spent many years shifting from the win/lose competitive mindset and way of being I grew up with to recognize the value of experimentation and co-operation, and to understand what it means to be truly collaborative.

Adults Learn by Doing

With the ongoing war for our attention, time scarcity, our increasing reliance on mobile devices, and the seductive nature of AI and TikTok as sources of knowledge and information, we have largely forgotten the importance of developing these foundational skills, especially in a volatile, uncertain, complex and ambiguous world.

All adults can learn these skills through harnessing the power of play.

Play is essential for developing our emotional and cognitive functions and fostering stronger social connections. In organizational learning and development, experiential learning involves gaining knowledge through direct experience and deep reflection, rather than just passive observation, like simply watching a learning video. It is a highly effective adult learning method that allows participants to link theoretical concepts with practical, on-the-job applications.

This approach involves active engagement in simulated real-world scenarios and:

  • Requires critical reflection on the experience to develop new states, traits, mindsets, behaviors, and skills.
  • Helps players increase self-awareness and gain a clearer understanding of how their mindsets and behaviors influence the people and teams they lead or interact with.

The Power of Play

Because focused, structured and intentional play, in the context of experiential learning, can:

  • Stimulate players’ curiosity, imagination and creativity.
  • Help players shift their emotional states, mindsets and behaviors.
  • Develop players’ emotional and cognitive agility.
  • Enhance players’ decision-making and problem-solving skills.
  • Improve leadership and team effectiveness.
  • Build players’ courage, boldness, bravery and resilience.
  • Reduce players’ stress levels by providing a safe space for improvisation and a break from business-as-usual responsibilities and habits.

Engaging in experiential learning activities, such as structured business games, boosts brain function, improves emotional regulation and self-management, encourages experimentation, and builds and strengthens constructive collaborative relationships with others.

In organizations, the power of play can be structured to boost players’ skills in key areas crucial to 21st-century success, including accepting responsibility, building trust, being accountable, communication, teaming, innovation, entrepreneurship, intrapreneurship, and achievement, resulting in overall performance improvements.

The Start-Up Game™ Leverages the Power of Play

The Start-Up Game™ engages and encourages players to think and act differently by safely experimenting with language, key mindsets, behaviors, and the creative and critical thinking, decision-making, and problem-solving skills used by successful intrapreneurs, entrepreneurs, and innovators.

It enables players to develop critical social, emotional, and cognitive mindsets, behaviors and skills that are the crucial components of a dynamic, collective work environment in the modern enterprise.

How to Incorporate the Power of Play into Your Organization

  • Create an environment of permission, safety, and trust, giving people agency and autonomy to learn through play and experimentation, and allowing them to learn from mistakes and failures.
  • Encourage people to “learn by doing and reflecting” to stretch their thinking by shifting business-as-usual mindsets and behaviors, to push the envelope by developing new 21st-century mental maps, behavioral deviations, and crucial new skills in critical and creative thinking and acting that result in smart risk-taking, intelligent decision-making, and innovative problem-solving.  
  • Commit to building an organizational or team culture that promotes continuous learning at a pace faster than the competition.
  • Encourage people to develop a regular reflective practice to harness their collective capacity to create, invent, and innovate by establishing a set of habitual reflective practices.

We are living in an age when technical expertise can become irrelevant in just a few years; foundational skills matter more than ever. Adopting an experiential learning approach to Innovation enables people to be agile and adaptive, to develop creative and critical thinking skills, to collaborate, and to sense, see, and solve complex problems, thereby thriving in a constantly evolving environment.

Please find out more about our work at ImagineNation™. Discover 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 provides 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 up-skill people and teams, developing their future fitness within your unique innovation context.

Image Credit: 1 of 1,000+ quote slides for your meetings and presentations available at http://misterinnovation.com

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Don’t Believe the Courageous Leadership Lie

Don't Believe the Courageous Leadership Lie

GUEST POST from Robyn Bolton

The business press has a new obsession with courageous leadership.

Harvard Business Review dedicated their September cover story to it. Nordic Business Forum built an entire 2024 conference around it. BetterUpMcKinsey, and dozens of thought leaders and influencers can’t stop talking about it.

Here’s what they’re all telling you: If you’re playing it safe, stuck in analysis paralysis, not innovating fast enough, or not making bold moves, then you are the problem because you lack courage.

Here’s what they’re not telling you: You don’t have a courage problem. You have a systems problem.

The Real Story Behind “Courage Gaps”

The VP was anything but cowardly. She had a track record of bold moves and wasn’t afraid of hard conversations. The CEO wanted to transform the company by moving from a product-only focus to one offering holistic solutions that combined hardware, software, and services. This VP was the obvious choice.

Her team came to her with a ideas that would reposition the company for long-term growth. She loved it. They tested the ideas. Customers loved them. But not a single one ever launched.

It wasn’t because the VP or the CEO lacked courage. It was because the board measured success in annual improvements, the CEO’s compensation structure rewarded short-term performance, and the VP required sign-off from six different stakeholders who were evaluated on risk mitigation. At every level, the system was designed to kill bold ideas. And it worked.

This is the inconvenient truth the courage press ignores.

That success doesn’t just require leaders who are courageous, it requires organizational architecture that systematically rewards courage and manages risk.

What We’re Really Asking Leaders to Overcome

Consider what we’re actually asking leaders to be courageous against:

  • Compensation structures tied to short-term metrics
  • Risk management processes designed to say “no”
  • Approval hierarchies where one skeptic can overrule ten enthusiasts
  • Cultures where failed experiments end careers

The courage discourse lets broken systems off the hook.

It’s easier to sell “10 Ways to Build Leadership Courage” than to admit that organizational incentives, governance structures, and cultural norms are actively working against the bold moves we tell leaders to make.

What Actually Enables Courageous Leadership.

I’m not arguing that there isn’t a need for individual courage. There is.

But telling someone to “be braver” when their organizational architecture punishes bravery is like telling someone to swim faster in a pool filled with Jell-O.

If we want courage, we need to fix the things the systems that discourage it:

  • Align incentives with the time horizon of the decisions you want made
  • Create explicit permission structures for experimentation
  • Build decision-making processes that don’t require unanimous consent
  • Separate “learning investments” from “performance expectations” when measuring results
  • Make the criteria for bold moves clear, not subject to whoever’s in the room

But doing this is a lot harder than buying books about courage.

The Bottom Line

When you fix the architecture, you don’t need to constantly remind people to be brave because the system enables. Individual courage becomes the expectation, not the exception.

The real question isn’t whether your leaders need courage.

It’s whether your organization has the architecture to let them use it.

If you can’t answer that question, that’s not a courage problem.

That’s a design problem.

And design is something that, as a leader, you can actually control.

Image credit: Unsplash

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Secrets to Innovating Within a Successful Company

Secrets to Innovating Within a Successful Company

GUEST POST from Mike Shipulski

If you’re trying to innovate within a successful company, I have one word for you: Don’t.

You can’t compete with the successful business teams that pay the bills because paying the bills is too important. No one in their right mind should get in the way of paying them. And if you do put yourself in the way of the freight train that pays the bills you’ll get run over. If you want to live to fight another day, don’t do it.

If an established business has been growing three percent year-on-year, expect them to grow three percent next year. Sure, you can lather them in investment, but expect three and a half percent. And if they promise six percent, don’t believe them. In fairness, they truly expect they can grow six percent, but only because they’re drinking their own Cool-Aid.

Rule 1: If they’re drinking their own Kool-Aid, don’t believe them.

Without a cataclysmic problem that threatens the very existence of a successful company, it’s almost impossible to innovate within its four walls. If there’s no impending cataclysm, you have two choices: leave the four walls or don’t innovate.

It’s great to work at successful company because it has a recipe that worked. And it sucks to work at a successful company because everyone thinks that tired old recipe will work for the next ten years. Whether it will work for the next ten or it won’t, it’s still a miserable place to work if you want to try something new. Yes, I said miserable.

What’s the one thing a successful company needs? A group of smart people who are actively dissatisfied with the status quo. What’s the one thing a successful company does not tolerate? A group of smart people who are actively dissatisfied with the status quo.

Some experts recommend leveraging (borrowing) resources from the established businesses and using them to innovate. If the established business catches wind that their borrowed resources will be used to displace the status quo, the resources will mysteriously disappear before the innovation project can start. Don’t try to borrow resources from established businesses and don’t believe the experts.

Instead of competing with established businesses for resources, resources for innovation should be allocated separately. Decide how much to spend on innovation and allocate the resources accordingly. And if the established businesses cry foul, let them.

Instead of borrowing resources from established businesses to innovate, increase funding to the innovation units and let them buy resources from outside companies. Let them pay companies to verify the Distinctive Value Proposition (DVP); let them pay outside companies to design the new product; let them pay outside companies to manufacture the new product; and let them pay outside companies to sell it. Sure, it will cost money, but with that money you will have resources that put their all into the design, manufacture and sale of the innovative new offering. All-in-all, it’s well worth the money.

Don’t fall into the trap of sharing resources, especially if the sharing is between established businesses and the innovative teams that are charged with displacing them. And don’t fall into the efficiency trap. Established businesses need efficiency, but innovative teams need effectiveness.

It’s not impossible to innovate within a successful company, but it is difficult. To make it easier, error on the side of doing innovation outside the four walls of success. It may be more expensive, but it will be far more effective. And it will be faster. Resources borrowed from other teams work the way they worked last time. And if they are borrowed from a successful team, they will work like a successful team. They will work with loss aversion. Instead of working to bring something to life they will work to prevent loss of what worked last time. And when doing work that’s new, that’s the wrong way to work.

The best way I know to do innovation within a successful company is to do it outside the successful company.

Image credit: Google Gemini

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Top Five Questions These 300 Innovators Ask

Top Five Questions These 300 Innovators Ask

GUEST POST from Robyn Bolton

“Is this what the dinosaurs did before the asteroid hit?”

That was the first question I was asked at IMPACT, InnoLead’s annual gathering of innovation practitioners, experts, and service providers.

It was also the first of many that provided insight into what’s on innovators and executives’ minds as we prepare for 2026

How can you prevent failure from being weaponized?

This is both a direct quote and a distressing insight into the state of corporate life. The era of “fail fast” is long gone and we’re even nostalgic for the days when we simply feared failure. Now, failure is now a weapon to be used against colleagues.

The answer is neither simple nor quick because it comes down to leadership and culture. Jit Kee Chin, Chief Technology Officer at Suffolk Construction, explained that Suffolk is able to stop the weaponization of failure because its Chairman goes to great lengths to role model a “no fault” culture within the company. “We always ask questions and have conversations before deciding on, judging, or acting on something,” she explained

How do you work with the Core Business to get things launched?

It’s long been innovation gospel that teams focused on anything other than incremental innovation must be separated, managerially and physically, from the core business to avoid being “infected” by the core’s unquestioning adherence to the status quo.

The reality, however, is the creation of Innovation Island, where ideas are created, incubated, and de-risked but remain stuck because they need to be accepted and adopted by the core business to scale.

The answer is as simple as it is effective: get input and feedback during concept development, find a core home and champion as your prototype, and work alongside them as you test and prepare to launch.

How do you organize for innovation?

For most companies, the residents of Innovation Island are a small group of functionally aligned people expected to usher innovations from their earliest stages all the way to launch and revenue-generation.

It may be time to rethink that.

Helen Riley, COO/CFO of Google X, shared that projects start with just one person working part-time until a prototype produces real-world learning. Tom Donaldson, Senior Vice President at the LEGO Group, explained that rather than one team with a large mandate, LEGO uses teams specially created for the type and phase of innovation being worked on.

What are you doing about sustainability?

Honestly, I was surprised by how frequently this question was asked. It could be because companies are combining innovation, sustainability, and other “non-essential” teams under a single umbrella to cut costs while continuing the work. Or it could be because sustainability has become a mandate for innovation teams.

I’m not sure of the reason and the answer is equally murky. While LEGO has been transparent about its sustainability goals and efforts, other speakers were more coy in their responses, for example citing the percentage of returned items that they refurbish or recycle but failing to mention the percentage of all products returned (i.e. 80% of a small number is still a small number).

How can humans thrive in an AI world?

“We’ll double down,” was Rana el Kaliouby’s answer. The co-founder and managing partner of Blue Tulip Ventures and host of Pioneers of AI podcast, showed no hesitation in her belief that humans will continue to thrive in the age of AI.

Citing her experience listening to Radiotopia Presents: Bot Loveshe encouraged companies to set guardrails for how, when, and how long different AI services can be used.  She also advocated for the need for companies to set metrics that go beyond measuring and maximizing usage time and engagement to considering the impact and value created by their AI-offerings.

What questions do you have?

Image credit: Google Gemini

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Strategic Self-Righteousness is Not a Thing

Strategic Self-Righteousness is Not a Thing

GUEST POST from Greg Satell

Not long ago I was participating in a discussion on the social audio app, Clubhouse, and I said something a lady didn’t like that triggered her emotions. “Obviously, you need to be educated,” she said before subjecting me to a prolonged harangue riddled with inaccuracies, logical gaps and non-sequiturs.

Yet putting the merits of her argument aside, her more serious error was trying to overpower, rather than attract, in order to further her argument. If anything, she undermined her cause. Nobody likes a bully. Perhaps even more importantly, silencing opposing views restricts your informational environment and situational awareness.

This is why Gandhi so strictly adhered to the principle of ahimsa, which not only proscribed physical violence, but that of words or even thoughts. Everyone has their own sense of identity and dignity. Violating that will not bring you closer to success, but will almost certainly set you on a path to failure. Self-righteousness isn’t a strategy, but the lack of one.

Forming An Identity With Differentiated Values

Humans, by nature, seek out ideas to believe in. Ideas give us purpose and a sense of mission. That’s why every religion begins with an origin story, because it is our ideas that differentiate us from others and give us a sense of worth. What does it mean to be a Christian, Jew, or Muslim, a socialist or a capitalist, if we’re not differentiated by our beliefs?

So it shouldn’t be surprising that when people want to express their ideas, they tend to start with how their beliefs are different, because it is the dogmatic aspects of the concepts that drive their passion. Perhaps even more importantly, it is their conspicuous devotion that signals their inclusion with a particular tribe of shared identity.

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

So when we’re passionate about an idea, we not only want to share it and “educate” others, we will also tend to see any threats to its survival as an affront to our identity. We begin to view ourselves as protectors and bond with others who share our purpose. We need to be aware of this pattern, because we’re all susceptible to it and that’s where the trouble starts.

Echo Chambers And The Emergence Of A Private Language

Spend time in an unfamiliar tribe and you’ll immediately notice that they share a private language. Minnesota Vikings fans shout “Skol!” Military people talk about distance in terms of “klicks,” and might debate the relative importance of HUMINT vs. SIGINT. Step into a marketing meeting and you’ll be subjected to a barrage of acronyms.

The philosopher Ludwig Wittgenstein explained how these types of private languages can be problematic. He made the analogy of a beetle in a box. If everybody had something in a box that they called a beetle, but no one could examine each other’s box, there would be no way of knowing whether everybody was actually talking about the same thing or not.

What Wittgenstein pointed out was that in this situation, the term “beetle” would lose relevance and meaning. It would simply refer to something that everybody had in their box, whatever that was. Everybody could just nod their heads not knowing whether they were talking about an insect, a German automobile or a British rock band.

Clearly, the way we tend to self-sort ourselves into homophilic, homogeneous groups will shape how we perceive what we see and hear, but it will also affect how we access information. Recently, a team of researchers at MIT looked into how we share information—and misinformation—with those around us. What they found was troubling.

When we’re surrounded by people who think like us, we share information more freely because we don’t expect to be questioned. We’re also less likely to check our facts, because we know that those we are sharing the item with will be less likely to inspect it themselves. So when we’re in a filter bubble, we not only share more, we’re also more likely to share things that aren’t true. Greater polarization leads to greater misinformation.

The Growing Backlash

One of the many things I’ve learned from my friend Srdja Popović is that the phase after an initial victory is often the most dangerous. Every revolution inspires its own counter-revolution. That is the physics of change. While you’re celebrating your triumph, the forces arrayed against you are redoubling their efforts to undermine what you’re trying to achieve.

Yet nestled safely within your tribe, speaking a private language in an echo chamber, you are unlikely to see the storm gathering storm. If most of the people around you think like you do, change seems inevitable. You tell each other stories about how history is on your side and the confluence of forces are in your favor.

Consider the case of diversity training. After the killing of George Floyd by a police officer led to massive global protests in over 2,000 towns and 60 countries, corporations around the world began to ramp up their diversity efforts, hiring “Chief Diversity Officers” and investing in training. For many, it was the dawn of a growing consciousness and a brighter, more equitable future.

It hasn’t seemed to turn out that way, though. Increased diversity training has not led to better outcomes and, in fact, there is increasing evidence of backlash. In particular researchers note that much of the training makes people feel targeted. Telling people that they owe their positions to something other than hard work and skill offends their dignity and can actually trigger exactly the behaviors that diversity programs are trying to change.

These misgivings are rarely voiced out loud, however, which is why change advocates rarely notice the growing chorus waiting for an opportunity to send the pendulum swinging in the other direction.

Learning To Survive Victory

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

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

I see the same pattern in our work helping organizations with transformational initiatives. Change leaders feel so passionately about their idea they want to push it through, silence dissent, launch it with a big communication campaign and create strong incentives to get on board. They’re sure that once everybody understands the idea, they’ll love it too.

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

But in order to do that, you need to focus your energy on winning converts, rather than punishing heretics. It’s more important to make a difference than it is to make a point.

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

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