Category Archives: Leadership

Is There a Real Difference Between Leaders and Managers?

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Is There a Real Difference Between Leaders and Managers?

GUEST POST from David Burkus

The debate between leaders vs managers has been a long-standing conversation in professional circles. Some elevate the role of leaders, casting them as visionaries who inspire, while relegating managers to the shadows of administrative drudgery. But does this distinction really matter? More importantly, how can a manager evolve into a true leader? Let’s explore the heart of this conversation and break down why separating leadership from management can sometimes lead to dangerous misconceptions.

Why the Debate Between Leaders vs Managers Matters Less Than You Think

Much of the debate over leaders vs managers hinges on over-idealization. Leaders are often depicted as charismatic figures, visionaries who drive change and inspire their teams. Managers, by contrast, are often painted as the ones who carry out routine, less glamorous tasks. However, this binary thinking is a gross oversimplification. When we separate leaders vs managers too starkly, we set both roles up for failure.

In reality, great leaders need managerial skills to succeed. Likewise, strong managers must cultivate leadership qualities if they aim to have a meaningful impact. Consider recent examples: Adam Neumann of WeWork or Elizabeth Holmes of Theranos—visionaries without the grounding managerial skills to make their ambitious plans a reality. Even Steve Jobs, who is lionized as a leader, struggled as a manager and needed skilled managerial partners like Tim Cook to bring his vision to life. This demonstrates the inherent interdependence of the leader vs manager roles.

Management as a Foundation for Leadership

To understand why leadership is inseparable from management, let’s break down what being a manager entails. In the leader vs manager conversation, management often gets short-changed as “administrative,” but it encompasses setting objectives, removing obstacles, allocating resources, delegating tasks, and ensuring accountability. These tasks are not merely about managing people; they are about creating results and making progress happen.

In contrast, leaders serve to inspire, unify, and mobilize teams around a shared mission. They cast a vision of what can be, rallying people to pursue a goal together. But what use is vision if there is no plan for how to achieve it? This is why the idea of leaders vs managers being wholly distinct from one another can be damaging; leadership without a managerial foundation is fragile.

The Leader vs Manager Hybrid in Action

Successful professionals embody the blend of both roles in the leaders vs managers debate. Consider Steve Jobs again: his visionary prowess would not have led to Apple’s success without the operational grounding provided by Tim Cook. The true distinction between effective leaders and ineffective ones often boils down to their ability to marry visionary leadership with operational execution, revealing that the line separating leaders vs managers is not as clear as it might seem.

Great leaders do not abandon their managerial roots. Even CEOs, often perceived as paragons of leadership, must manage resources, oversee strategy, and allocate people effectively. Leadership might soar at 30,000 feet, but it always requires an anchor on the ground—a reminder that even the most inspiring figures must master the duality inherent in the leader vs manager dynamic.

Evolving From Manager to Leader

For those starting out in management, the path from manager to leader is not instantaneous. When you are first assigned a managerial role, your primary tasks center around administrative competence: running effective meetings, managing budgets, and ensuring project deadlines are met. This foundational period is essential for anyone navigating the leader vs manager journey. Only by mastering these skills can you then focus on expanding your influence, building relationships, and inspiring others.

True leadership emerges gradually. It begins with influence over your team and, as you grow, expands to influence your broader organization. The journey from manager to leader involves understanding the company’s strategic direction, aligning your team’s objectives with broader organizational goals, and participating in or leading conversations about that strategy. For those grappling with the leaders vs managers dichotomy, take note: growth happens through learning and doing, not simply by aspiring.

The Practical Blend of Leaders vs Managers

Ultimately, the debate between leaders vs managers is less important than understanding their interconnectedness. Every organization needs individuals who can inspire and guide while also ensuring operational discipline. Leaders who lose sight of practicalities can steer organizations into chaos. Managers who refuse to inspire can stifle innovation and morale. The true magic lies in combining these strengths: casting a compelling vision and navigating the gritty realities that make it possible.

By blending strong leadership qualities with grounded managerial skills, you become the kind of leader who doesn’t just talk about vision but delivers results. In the end, the best leaders are those who understand their dual responsibility in the leader vs manager equation—and execute both roles masterfully.

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Four Pillars of Innovation

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People, Learning, Judgment and Trust

Four Pillars of Innovation

GUEST POST from Mike Shipulski

Innovation is a hot topic. Everyone wants to do it. And everyone wants a simple process that works step-wise – first this, then that, then success.

But Innovation isn’t like that. I think it’s more effective to think of innovation as a result. Innovation as something that emerges from a group of people who are trying to make a difference. In that way, Innovation is a people process. And like with all processes that depend on people, the Innovation process is fluid, dynamic, complex, and context-specific.

Innovation isn’t sequential, it’s not linear and cannot be scripted.. There is no best way to do it, no best tool, no best training, and no best outcome. There is no way to predict where the process will take you. The only predictable thing is you’re better off doing it than not.

The key to Innovation is good judgment. And the key to good judgment is bad judgment. You’ve got to get things wrong before you know how to get them right. In the end, innovation comes down to maximizing the learning rate. And the teams with the highest learning rates are the teams that try the most things and use good judgement to decide what to try.

I used to take offense to the idea that trying the most things is the most effective way. But now, I believe it is. That is not to say it’s best to try everything. It’s best to try the most things that are coherent with the situation as it is, the market conditions as they are, the competitive landscape as we know it, and the the facts as we know them.

And there are ways to try things that are more effective than others. Think small, focused experiments driven by a formal learning objective and supported by repeatable measurement systems and formalized decision criteria. The best teams define end implement the tightest, smallest experiment to learn what needs to be learned. With no excess resources and no wasted time, the team wins runs a tight experiment, measures the feedback, and takes immediate action based on the experimental results.

In short, the team that runs the most effective experiments learns the most, and the team that learns the most wins.

It all comes down to choosing what to learn. Or, another way to look at it is choosing the right problems to solve. If you solve new problems, you’ll learn new things. And if you have the sightedness to choose the right problems, you learn the right new things.

Sightedness is a difficult thing to define and a more difficult thing to hone and improve. If you were charged with creating a new business in a new commercial space and the survival of the company depended on the success of the project, who would you want to choose the things to try? That person has sightedness.

Innovation is about people, learning, judgement and trust.

And innovation is more about why than how and more about who than what.

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The Intersection Between Ethics and Metaphysics

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The Intersection Between Ethics and Metaphysics

GUEST POST from Geoffrey A. Moore

Ethics partners with metaphysics in order to create strategies for living. Metaphysics provides the situation analysis and ethics the prescribed course of action. The two are indispensable to one another. Metaphysics without ethics is idle speculation, ethics without metaphysics, arbitrary action. Taken together, however, they supply our fundamental equipment for living.

In that context, ethics is chartered to help us “do good.” It has two central questions to answer: What kind of good should we want to bring about? and What is the right way to achieve that end? Each one raises its own set of issues to work through.

With respect to what is good, the core issue is that, in English at any rate, the word good has three distinct meanings. It can refer to what is pleasurable, what feels good. It can refer to what is fit for purpose, what works good. And it can refer to actions beneficial to others, what I would argue simply is good. Importantly, these three dimensions can team up with one another to create as many as eight different categories of goodness, illustrated by the table below:

Geoffrey Moore Pleasurable Effective Table

Many of the ethical quandaries philosophers wrestle with arise from trying to unite some or all of these categories into a single concept of goodness. This is simply a mistake. That said, the type of goodness that is most proper to ethics is benevolence, actions beneficial to others (see rows 1,2, 5, and 6). It need not concern itself with either pleasure or effectiveness, both of which, while certainly desirable, are intrinsically amoral.

Focusing on actions beneficial to others, the core of ethics is prescriptive, offering behavioral guidelines that are most likely to generate benevolent outcomes. This is the realm of virtue. Once again, however, there is more than one dimension to take into account, leading to more than one kind of virtue. In this case, it is determined by the situation or context in which the action is undertaken, what we called in The Infinite Staircase the geography of ethics.

The geography of ethics is organized into four zones divided by two defining axes. The first axis distinguishes between society and community, the former being the realm of impersonal third-party relationships, the latter that of personal first-and-second-party relationships). This is essentially the distinction between them and us, and while in its polarized form it can be highly disruptive, it is nonetheless universally observed and absolutely essential to managing human relationships.

The second axis addresses the degree of contact involved, contrasting global situations which involve large populations that have little to no direct contact with each other versus local situations where we participate in exchanges with people we encounter in our daily lives. There is still a distinction between them and us, but local relationships require us to enact and incorporate our responses into our everyday behavior.

When paired, the axes generate four zones, each highlighting a different virtue:

Geoffrey Moore Geography of Ethics

Kindness is unique in that it is the only virtue that is universally valued. It is anchored in unconditional love, something that we as mammals have all personally experienced in our infancy, else we would not be alive today. Unlike the other virtues called out here, it does not depend upon the resources of culture, language, narrative, and analytics to activate itself. Once we engage with those forces, we will find ourselves increasingly at odds with people who have opposing views, but prior to so doing, we are all one family. Kindness, thus, is the glue that holds community together, and as such it deserves our greatest respect.

Fairness comes next. The ability to play fair, something children learn at a very early age, sets us apart from all other animals. That’s because it calls upon narrative and analytics to operationalize itself. Specifically, it asks us to imagine a situation in which we are the other person, and they are us, and to then determine whether or not we would endorse the action under consideration. This is the first bridge to connect us with them, and thus is the foundation for social equity and inclusion. Importantly, it is distinct from kindness, for it is possible to be kind without being fair and to be fair without being kind. Kindness by nature is personal, fairness by nature is impersonal, and together they govern our day-to-day ad hoc relationships.

To scale beyond local governance we must transition from the essentially intuitive disciplines of kindness and fairness to the more formalized ones of morality and justice. Both the latter are essential to social welfare, but neither comes into being easily, and each poses challenges humankind continues to struggle with.

Morality is the actionable extension of metaphysics. It teaches us how to align our behavior with the highest forces in the universe, be they sacred or secular. It does so through inspirational narratives that recruit us into imitating role models and committing to values we will live by, and if necessary, be willing to die for. These values are captured in moral codes that assist our day-to-day decision-making. We judge ourselves and others in terms of how well our actual behavior measures up to these codes.

In this way morality becomes foundational to identity. As such, we want it to be both stable and authoritative. Religion provides stable authority by holding certain texts and traditions to be both sacred and undeniable. This works fine up to the boundaries of the religious faith, but beyond that, it encounters disbelief and unbelief, as well as counter-beliefs, all of which deny such authority. The question for the believers then becomes, is such denial acceptable, or must it be confronted and overcome?

Call this the challenge of righteousness. Deeply moved by their own commitments, the righteous seek to impose moral sanctions on entire populations that do not share their views. The current engagement with abortion rights in the U.S. is a relatively benign example. Conservative parties empowered by the recent action of the Supreme Court are challenging a secular tradition of tolerance that is deeply ingrained in American culture. This tolerance is anchored by the First Amendment’s guarantee of religious freedom, itself a product of the European Enlightenment’s efforts to counteract more than a hundred years of sustained religious warfare between Protestants and Catholics, fueled by righteousness of a similar kind. At present, the First Amendment still has the upper hand, but in other societies, we have watched the opposite unfold, and it can leave deep rents in the social fabric.

Whereas conservatives on the right are challenged when they seek to bend the domain of morality to their ends, progressives on the left are equally challenged when they seek to bend the domain of justice to theirs. Justice represents society’s best attempt to institutionalize fairness at scale. It is comprised of two domains—legal justice and social justice. Legal justice represents the rule of law. It is foundational to safety and security, ensuring accountability with respect to personal acts, laws, elections, and dispute resolution. Social justice, in contrast, represents a commitment to equity. It is aspirational, anchored in empathy for all those who are disadvantaged.

The challenge is that legal justice can reinforce, even institutionalize, social injustice, as both our prison and homeless populations bear witness. This is further exacerbated by failed autocratic states exporting their disadvantaged populations to democratic nations, creating crises of immigration around the world. In response, progressives committed to social justice often seek to subvert legal controls in order to create more equitable outcomes, turning a blind eye to illegal immigration and encampments, as well as misdemeanor crimes like shoplifting and drug use. This has the unintended consequence, however, of encouraging free riders to further exploit these looser controls, pushing the boundaries of tolerance ever closer to intolerability, as cities like San Francisco, Portland, and Seattle can testify.

To operate successfully at scale, both morality and justice call for a balance between accountability and empathy. The righteous tend to withdraw empathy in the name of accountability, the progressives to withdraw accountability in the name of empathy. Neither approach suffices. Citizenship calls for us all to hold these two imperatives in tandem, even when they pull us in opposite directions.

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

HALLOWEEN BONUS: Save 30% on the eBook, hardcover or softcover of Braden Kelley’s latest book Charting Change (now in its second edition) — FREE SHIPPING WORLDWIDE — using code HAL30 until midnight October 31, 2025

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Why Putting Employees First and Customers Second Works

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Why Putting Employees First and Customers Second Works

GUEST POST from David Burkus

What if your company announced that, moving forward, it would be place customers second on its list of priorities?

Sounds crazy. The customer is always right. Surely the customer is always first as well.

But that’s exactly what Vineet Nayar, CEO of HCL Technologies did over a decade ago. He announced that the company’s senior leaders would be placing the needs of employees first, and customers second. And the results have been spectacular.

How The Employees First Strategy Started

In 2006, Vineet Nayar, CEO of HCL, a digital engineering company based in India, boldly told his clients they were no longer the company’s top priority. Instead, the focus would be put on employees first. His belief was simple: happy employees make happy customers. Nayar labeled employees who actually interacted with customers as the “value zone,” where the real business magic happens — and any employee in the value zone received the dedicated focus of managers and support functions.

To bring this to life, he flipped the traditional management structure. He made the organizational chart look like an upside-down pyramid. Turning the hierarchy upside down required making managers accountable to front-line employees and ensuring that those in the support functions actually supported those front-line employees, instead of just insisting that they follow the hierarchy’s rigid systems.

Nayar focused his attention on two areas to ensure that the management and support functions served the front-line: reversing accountability and building transparency. Specifically, 360-degree feedback evaluations were expanded to include more front-line workers’ feedback for managers and senior level executives (that’s the accountability), and crucially those evaluations were made public so everyone who contributed to the survey could see the results (there’s your transparency). In addition, when problems occurred for front-line workers, they could create and own support tickets that their managers would have to address (usually, it’s the other way around in top to bottom organizations).

It’s important to note that HCL Technologies wasn’t a little start up in a garage or even a 50-person company. This was done at a 55,000 person, multinational organization. And, spoiler alert, it’s now grown to over 200,000 employees. Pulling off this flip was no small feat, but the results speak for themselves. Employee satisfaction soared, customer service improved, and revenues nearly tripled. By 2009, HCL was named India’s best employer.

Contrast this story with an example of what can go wrong when employee experience is overlooked. In 2001, Robert Nardelli was the newly minted CEO of Home Depot. Expectations were high given his track record at his old job at General Electric, where he had led several successful manufacturing operations.

At Home Depot, Nardelli noticed the stores were staffed with knowledgeable, full-time employees, and in his opinion, a bit too many. What do new leaders, wrongfully, do when they want to make waves and save money?

Yep, he downsized to optimize costs.

He decided to hire more part-timers, many of whom had less expertise in home improvement. The results were not what he expected. Customers quickly noticed the absence of their favorite employees and the decline in service quality. It turned out that managing a service organization like Home Depot was very different from managing a manufacturing operation.

This story underscores a critical point: leading a service organization requires a different approach — one that prioritizes employee engagement and expertise.

“Employees first, customers second” is still about serving the customer, but it’s about serving the customer through the employees whose job it is to serve the customer. Weird how that works, isn’t it? Understand that helping your employees helps your customers. These two parties are intrinsically tied together.

Research On Employees First

Nayar’s success story isn’t an isolated incidence of dumb luck. There’s research behind this. Researchers at Harvard University found a link between employee satisfaction and profitability. They took aim at a long-standing assumption in the business world that market share is the primary driver of profitability. If a company can increase market share, the thinking went, it will increase sales while taking advantage of economies of scale to lower costs and thus increase profits.

However, when they examined a variety of companies and the existing research, they found that market share is one factor in profitability. But that another factor better explains the most profitable companies: customer loyalty.

Based on their research, they estimated that a mere 5 percent increase in customer loyalty can yield a 25 to 85 percent increase in profitability.

Here’s how it works in practice: Profits are driven by customer loyalty. Customer loyalty is driven by employee satisfaction. And employee satisfaction is driven by putting employees first. They called this The Service-Profit Chain and managers who understand this can create a thriving cycle where employee and customer satisfaction drive each other, ultimately leading to greater business success.

In simple terms, if your business provides a service that your employees have front-line participation in, they are in essence an embodiment of the company, not you or the CEO. The entire brand, the experience, the service rests on those front-line employees. If they aren’t taken care of — if they aren’t satisfied — the customer tends to notice.

How Employees First Creates Customer Loyalty

Employee loyalty is a deep indicator of future performance for service organizations. It’s worth noting that there is a subtle difference between employee satisfaction and employee loyalty. Satisfaction derives from how happy employees are in their role. Loyalty comes from having a real stake in the success of the business. Without loyalty, employees leave for better opportunities, then high turnover rates drive up recruitment and training costs, disrupt productivity, and can negatively impact customer experiences. When employees stay longer, companies save on hiring costs, maintain productivity gains, and create a more positive environment for customers.

Simply put, loyal employees lead to loyal customers.

Great service leaders recognize that improving employee retention involves providing opportunities for growth and advancement. This approach keeps talented employees closer to the customer for longer periods, which directly impacts customer satisfaction and loyalty.

Take Whole Foods Market, for example. They have crafted their entire system — from their rigorous selection process to compensation methods — to encourage front-line employees to stay and thrive. Teams at Whole Foods are responsible for setting key metrics, making decisions on how to meet these targets, and even choosing what food items to buy locally. They’re rewarded with bonuses based on team performance, which often includes finding creative ways to boost sales to balance out labor costs. After three years on the job, employees receive stock options, which further incentivizes them to stay.

Additionally, Whole Foods allows employees to vote every three years on various aspects of the benefits package, from community service pay to health insurance provisions. All these factors contribute to Whole Foods’ remarkably low turnover rate of less than 10 percent for full-time employees after the probationary period — far below the industry average.

The results speak for themselves: Whole Foods is regularly rated as one of the best places to work, known for excellent customer service, and boasts some of the highest profits per square foot in the grocery retail industry.

This success is a testament to the power of employee loyalty in driving exceptional service. Great service leadership isn’t just about managing day-to-day operations — it’s about creating an environment where employees feel valued, empowered, and committed. By focusing on employee loyalty, service leaders can build stronger customer relationships and achieve sustainable success.

Employees First For All Leaders

You may not have the power in your organization to completely flip the hierarchy. But there’s still an important lesson for leaders at all levels: Flip the accountability. This can look like bringing in more feedback from front-line employees or just seeing the structure of your team differently. You work for your team. Don’t squeeze your team; foster them to do well.

In addition, give your employees real stakes and invest in them. Prioritize training and growth opportunities for your employees so they know you’re committed to not just their output, but their career. Parties, gift certificates, awards, summer Fridays, bonuses — all of these are great. Do those things. But those are more employee appreciation, not real development. Development looks like sending your rising stars to conferences, workshops, night school even, if you have the budget. Things you think will help them grow as employees, spark innovation, and create future leaders.

Conclusion

If I could put a message on a billboard in front of every Fortune 500 company, it would be this:

People don’t work for you.

Smart leaders know that employees work with them, and ultimately, leaders work for their people. Embracing the “employees first, customers second” philosophy means prioritizing the well-being and growth of employees, enabling them to deliver outstanding service. Happy, engaged employees create satisfied customers. When leaders invest in their teams’ success and happiness, they cultivate a culture where customers feel valued, leading to long-term loyalty and a thriving business.

HALLOWEEN BONUS: Save 30% on the eBook, hardcover or softcover of Braden Kelley’s latest book Charting Change (now in its second edition) — FREE SHIPPING WORLDWIDE — using code HAL30 until midnight October 31, 2025

Image credit: David Burkus

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Picking Innovation Projects in Four Questions or Less

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Picking Innovation Projects in Four Questions or Less

GUEST POST from Mike Shipulski

It’s a challenge to prioritize and choose innovation projects. There are open questions on the technology, the product/service, the customer, the price and sales volume. Other than that, things are pretty well defined.

But with all that, you’ve still go to choose. Here are four questions that may help in your selection process:

1. Is it big enough?

The project will be long, expensive and difficult. And if the potential increase in sales is not big enough, the project is not worth starting. Think (Price – Cost) x Volume. Define a minimum viable increase in sales and bound it in time. For example, the minimum incremental sales is twenty five million dollars after five years in the market. If the project does not have the potential to meet those criteria, don’t do the project. The difficult question – How to estimate the incremental sales five years after launch? The difficult answer – Use your best judgement to estimate sales based on market size and review your assumptions and predictions with seasoned people you trust.

2. Why you?

High growth markets/applications are attractive to everyone, including the big players and the well-funded start-ups. How does your company have an advantage over these tough competitors? What about your company sets you apart? Why will customers buy from you? If you don’t have good answers, don’t start the project. Instead, hold the work hostage and take the time to come up with good answers. If you come up with good answers, try to answer the next questions. If you don’t, choose another project.

3. How is it different?

If the new technology can’t distinguish itself over existing alternatives, you don’t have a project worth starting. So, how is your new offering (the one you’re thinking about creating) better than the ones that can be purchased today? What’s the new value to the customer? Or, in the lingo of the day, what is the Distinctive Value Proposition (DVP)? If there’s no DVP, there’s no project. If you’re not sure of the DVP, figure that out before investing in the project. If you have a DVP but aren’t sure it’s good enough, figure out how to test the DVP before bringing the DVP to life.

4. Is it possible?

Usually, this is where everyone starts. But I’ve listed it last, and it seems backward. Would you rather spend a year making it work only to learn no one wants it, or would you rather spend a month to learn the market wants it then a year making it work? If you make it work and no one wants it, you’ve wasted a year. If, before you make it work, you learn no one wants it, you’ve spent a month learning the right thing and you haven’t spent a year working on the wrong thing. It feels unnatural to define the market need before making it work, but though it feels unnatural, it can block resources from working on the wrong projects.

Conclusion

There is no foolproof way to choose the best innovation projects, but these four questions go a long way. Create a one-page template with four sections to ask the questions and capture the answers. The sections without answers define the next work. Define the learning objectives and the learning activities and do the learning. Fill in the missing answers and you’re ready to compare one project to another.

Sort the projects large-to-small by Is it big enough? Then, rank the top three by Why you? and How is it different? Then, for the highest ranked project, do the work to answer Is it possible?

If it’s possible, commercialize. If it’s not, re-sort the remaining projects by Is it big enough? Why you? and How is it different? and learn if It is possible.

HALLOWEEN BONUS: Save 30% on the eBook, hardcover or softcover of Braden Kelley’s latest book Charting Change (now in its second edition) — FREE SHIPPING WORLDWIDE — using code HAL30 until midnight October 31, 2025

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Why Best Practices Fail

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Five Questions with Ellen DiResta

Why Best Practices Fail

GUEST POST from Robyn Bolton

For decades, we’ve faithfully followed innovation’s best practices. The brainstorming workshops, the customer interviews, and the validated frameworks that make innovation feel systematic and professional. Design thinking sessions, check. Lean startup methodology, check. It’s deeply satisfying, like solving a puzzle where all the pieces fit perfectly.

Problem is, we’re solving the wrong puzzle.

As Ellen Di Resta points out in this conversation, all the frameworks we worship, from brainstorming through business model mapping, are business-building tools, not idea creation tools.

Read on to learn why our failure to act on the fundamental distinction between value creation and value capture causes too  many disciplined, process-following teams to  create beautiful prototypes for products nobody wants.

Robyn: What’s the one piece of conventional wisdom about innovation that organizations need to unlearn?

Ellen: That the innovation best practices everyone’s obsessed with work for the early stages of innovation.

The early part of the innovation process is all about creating value for the customer.  What are their needs?  Why are their Jobs to be Done unsatisfied?  But very quickly we shift to coming up with an idea, prototyping it, and creating a business plan.  We shift to creating value for the business, before we assess whether or not we’ve successfully created value for the customer.

Think about all those innovation best practices. We’ve got business model canvas. That’s about how you create value for the business. Right? We’ve got the incubators, accelerators, lean, lean startup. It’s about creating the startup, which is a business, right? These tools are about creating value for the business, not the customer.

R: You know that Jobs to be Done is a hill I will die on, so I am firmly in the camp that if it doesn’t create value for the customer, it can’t create value for the business.  So why do people rush through the process of creating ideas that create customer value?

E: We don’t really teach people how to develop ideas because our culture only values what’s tangible.  But an idea is not a tangible thing so it’s hard for people to get their minds around it.  What does it mean to work on it? What does it mean to develop it? We need to learn what motivates people’s decision-making.

Prototypes and solutions are much easier to sell to people because you have something tangible that you can show to them, explain, and answer questions about.  Then they either say yes or no, and you immediately know if you succeeded or failed.

R: Sounds like it all comes down to how quickly and accurately can I measure outcomes?   

E: Exactly.  But here’s the rub, they don’t even know they’re rushing because traditional innovation tools give them a sense of progress, even if the progress is wrong.

We’ve all been to a brainstorm session, right? Somebody calls the brainstorm session. Everybody goes. They say any idea is good. Nothing is bad. Come up with wild, crazy ideas. They plaster the walls with 300 ideas, and then everybody leaves, and they feel good and happy and creative, and the poor person who called the brainstorm is stuck.

Now what do they do? They look at these 300 ideas, and they sort them based on things they can measure like how long it’ll take to do or how much money it’ll cost to do it.  What happens?  They end up choosing the things that we already know how to do! So why have the brainstorm?”

R: This creates a real tension: leadership wants progress they can track, but the early work is inherently unmeasurable. How do you navigate that organizational reality?

E: Those tangible metrics are all about reliability. They make sure you’re doing things right. That you’re doing it the same way every time? And that’s appropriate when you know what you’re doing, know you’re creating value for the customer, and now you’re working to create value for the business.  Usually at scale

But the other side of it?  That’s where you’re creating new value and you are trying to figure things out.  You need validity metrics. Are we doing the right things? How will we know that we’re doing the right things.

R: What’s the most important insight leaders need to understand about early-stage innovation?

E: The one thing that the leader must do  is run cover. Their job is to protect the team who’s doing the actual idea development work because that work is fuzzy and doesn’t look like it’s getting anywhere until Ta-Da, it’s done!

They need to strategically communicate and make sure that the leadership hears what they need to hear, so that they know everything is in control, right? And so they’re running cover is the best way to describe it. And if you don’t have that person, it’s really hard to do the idea development work.”

But to do all of that, the leader also must really care about that problem and about understanding the customer.

We must create value for the customer before we can create value for the business. Ellen’s insight that most innovation best practices focus on the latter is devastating.  It’s also essential for all the leaders and teams who need results from their innovation investments.

Before your next innovation project touches a single framework, ask yourself Ellen’s fundamental question: “Are we at a stage where we’re creating value for the customer, or the business?” If you can’t answer that clearly, put down the canvas and start having deeper conversations with the people whose problems you think you’re solving.

To learn more about Ellen’s work, check out Pearl Partners.

To dive deeper into Ellen’s though leadership, visit her Substack – Idea Builders Guild.

To break the cycle of using the wrong idea tools, sign-up for her free one-hour workshop.

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Why Words Matter

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Why Words Matter

GUEST POST from Mike Shipulski

We all want to make progress. We all want to to do the right thing. And we all have the best intentions. But often we don’t pay enough attention to the words we use.

There are pure words that convey a message in a kind soothing way and there are snarl words that convey a message in a sharp, biting way. It’s relatively easy, if you’re paying attention, to recognize the snarl and purr. But it’s much more difficult to take skillful action when you hear them used unskillfully.

A pure word is skillful when it conveys honest appreciation, and it’s unskillful when it manipulates under the banner of false praise. But how do you tell the difference? That’s where the listening comes in. And that’s where effective probing can help.

If you sense unskillful use, ask a question of the user to get at the intent behind the language. Why do you think the idea is so good? What about the concept do you find so interesting? Why do you like it so much? Then, use your judgment to decide if the use was unskillful or not. If unskillful, assign less value to the purr language and the one purring it.

But it’s different with snark words. I don’t know of a situation where the use of snarl words is skillful. Blatant use of snarl words is easy to see and interpret. And it looks like plain, old-fashioned anger. And the response is straightforward. Call the snarler on their snarl and let them know it’s not okay. That usually puts an end to future snarling.

The most dangerous use of snarl words is passive-aggressive snarling. Here, the snarler wants all the manipulative benefit without being recognized as a manipulator. The pros snarl lightly to start to see if they get away with it. And if they do, they snarl harder and more often. And they won’t stop until they’re called on their behavior. And when they are called on their behavior, they’ll deny the snarling altogether.

Passive-aggressive snarling can block new thinking, prevent consensus and stall hard-won momentum. It’s nothing short of divisive. And it’s difficult to see and requires courage to confront and eviscerate.

If you see something, say something. And it’s the same with passive-aggressive snarling. If you think it is happening, ask questions to get at the underlying intent of the words. If it turns out that it’s simply a poor choice of words, suggest better ones and move on. But if the intent is manipulation, it must be stopped in its tracks. It must be called by name, its negative implications must be be linked to the behavior and new behavioral norms must be set.

Words are the tools we use to make progress. The wrong words block progress and the right ones accelerate it.

Why not choose the right words?

Image credit: Unsplash

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You Must Accept That People Are Irrational

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You Must Accept That People Are Irrational

GUEST POST from Greg Satell

For decades, economists have been obsessed with the idea of “enlightened self-interest,” building elaborate models based on the assumption that people make rational choices. Business and political leaders have used these models to shape competitive strategies, compensation, tax policies and social services among other things.

It’s clear that the real world is far more complex than that. Consider the prisoner’s dilemma, a famous thought experiment in which individuals acting in their self-interest make everyone worse off. In a wide array of real world and experimental contexts, people will cooperate for the greater good rather than pursue pure self-interest.

We are wired to cooperate as well as to compete. Identity and dignity will guide our actions even more than the prospect for loss or gain. While business schools have trained generations of managers to assume that they can optimize results by designing incentives, the truth is that leaders that can forge a sense of shared identity and purpose have the advantage.

Overcoming The Prisoner’s Dilemma

John von Neumann was a frustrated poker player. Despite having one of the best mathematical minds in history that could probably calculate the odds better than anyone on earth, he couldn’t tell whether other players were bluffing or not. It was his failure at poker that led him to create game theory, which calculates the strategies of other players.

As the field developed, it was expanded to include cooperative games in which players could choose to collaborate and even form coalitions with each other. That led researchers at RAND to create the prisoner’s dilemma, in which two suspects are being interrogated separately and each offered a reduced sentence to confess.

Prisoner's Dilemma

Here’s how it works: If both prisoners cooperate with each other and neither confesses, they each get one year in prison on a lesser charge. If one confesses, he gets off scot-free, while his partner gets 5 years. If they both rat each other out, then they get three years each—collectively the worst outcome of all.

Notice how from a rational viewpoint, the best strategy is to defect. No matter what one guy does, the other one is better off ratting him out. If both pursue self-interest, they are made worse off. It’s a frustrating problem. Game theorists call it a Nash equilibrium—one in which nobody can improve their position by unilateral move. In theory, you’re basically stuck.

Yet in a wide variety of real-world contexts, ranging from the survival strategies of guppies to military alliances, cooperation is credibly maintained. In fact, there are a number of strategies that have proved successful in overcoming the prisoner’s dilemma. One, called tit-for-tat, relies on credible punishments for defections. Even more effective, however, is building a culture of shared purpose and trust.

Kin Selection And Identity

Evolutionary psychology is a field very similar to game theory. It employs mathematical models to explain what types of behaviors provide the best evolutionary outcomes. At first, this may seem like the utilitarian approach that economists have long-employed, but when you combine genetics with natural selection, you get some surprising answers.

Consider the concept of kin selection. From a purely selfish point of view, there is no reason for a mother to sacrifice herself for her child. However, from an evolutionary point of view, it makes perfect sense for parents to put their kids first. Groups who favor children are more likely to grow and outperform groups who don’t.

This is what Richard Dawkins meant when he called genes selfish. If we look at things from our genes’ point of view, it makes perfect sense for them to want us to sacrifice ourselves for children, who are more likely to be able to propagate our genes than we are. The effect would logically also apply to others, such as cousins, that likely carry our genes.

Researchers have also applied the concept of kin selection to other forms of identity that don’t involve genes, but ideas (also known as memes) in examples such as patriotism. When it comes to people or ideas we see as an important part of our identity, we tend to take a much more expansive view of our interests than traditional economic models would predict.

Cultures of Dignity

It’s not just identity that figures into our decisions, but dignity as well. Consider the ultimatum game. One player is given a dollar and needs to propose how to split it with another player. If the offer is accepted, both players get the agreed upon shares. If it is not accepted, neither player gets anything.

If people acted purely rationally, offers as low as a penny would be routinely accepted. 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 because they offend people’s dignity and sense of self.

Results from ultimatum game are not uniform, but vary in different cultures and more recent research suggests why. In a study in which a similar public goods game was played it was found that cooperative—as well as punitive—behavior is contagious, spreading through three degrees of interactions, even between people who haven’t had any direct contact.

Whether we know it or not, we are constantly building ecosystems of norms that reward and punish behavior according to expectations. If we see the culture we are operating in as trusting and generous, we are much more likely to act collaboratively. However, if we see our environment as cutthroat and greedy, we’ll tend to model that behavior in the same way.

Forging Shared Identity And Shared Purpose

In an earlier age, organizations were far more hierarchical. Power rested at the top. Information flowed up, orders went down, work got done and people got paid. Incentives seemed to work. You could pay more and get more. Yet in today’s marketplace, that’s no longer tenable because the work we need done is increasingly non-routine.

That means we need people to do more than merely carry out tasks, they need to put all of their passion and creativity into their work to perform at a high-level. They need to collaborate effectively in teams and take pride in the impact their efforts produce. To achieve that at an organizational level, leaders need to shift their mindsets.

As David Burkus explained in his TED Talk, humans are prosocial. They are vastly more likely to perform when they understand and identify with who their work benefits than when they are given financial incentives or fed some grandiose vision. Evolutionary psychologists have long established that altruism is deeply embedded in our sense of tribe.

The simple truth is that we can no longer coerce people to do what we want with Rube Goldberg-like structures of carrots and sticks, but must inspire people to want what we want. Humans are not purely rational beings, responding to stimuli as if they were vending machines that spit out desired behaviors when the right buttons are pushed, but are motivated by identity and dignity more than anything else.

Leadership is not an algorithm, but a practice of creating meaning through relationships of trust in the context of a shared purpose.

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

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The Need for Organizational Learning

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The Need for Organizational Learning

GUEST POST from Mike Shipulski

The people within companies have development plans so they can learn new things and become more effective. There are two types of development plans – one that builds on strengths and another that shore up shortcomings. And for both types, the most important step is to acknowledge it’s important to improve. Before a plan can be created to improve on a strength, there must be recognition that something good can come from the improvement. And before there can be a plan to improve on a shortcoming, there must be recognition that there’s something missing and it needs to be improved.

And thanks to Human Resources, the whole process is ritualized. The sequence is defined, the timing is defined and the tools are defined. Everyone knows when it will happen, how it will happen and, most importantly, that it will happen. In that way, everyone knows it’s important to learn new skills for the betterment of all.

Organizational learning is altogether different and more difficult. With personal learning, it’s clear who must do the learning (the person). But with organizational learning, it’s unclear who must learn because the organization, as a whole, must learn. But we can’t really see the need for organizational learning because we get trapped in trying to fix the symptoms. Team A has a problem, so let’s fix Team A. Or, Team B has a problem, so let’s fix Team B. But those are symptoms. Real organizational learning comes when we recognize problematic themes shared by all the teams. Real organization learning comes when we realize these problems don’t result from doing things wrong, rather, they are a natural byproduct of how the company goes about its work.

The difficulty with organizational learning is not fixing the thematic problems. The difficulty is recognizing the thematic problems. When all the processes are followed and all the best practices are used, yet the same problematic symptoms arise, the problem is inherent in the foundational processes and practices. Yet, these are the processes and practices responsible for past success. It’s difficult for company leaders recognize and declare that the things that made the company successful are now the things that are holding the company back. But that’s the organizational learning that must happen.

What worked last time will work next time, as long as the competitive landscape remains constant. But when the landscape changes, what worked last time doesn’t work anymore. And this, I think, is how recipes responsible for past success can, over time, begin to show cracks and create these systematic problems that are so difficult to see.

The best way I know to recognize the need for organizational learning is to recognize changes in the competitive landscape. Once these changes are recognized, thought experiments can be run to evaluate potential impacts on how the company does business. Now that the landscape changed like this, it could stress our business model like that. Now that our competitors provide new services like this, it could create a gap in our capabilities like that.

Organizational learning occurs when the right leaders feel the problems. Fight the urge to fix the problems. Instead, create the causes and conditions for the right leaders to recognize they have a real problem on their hands.

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How Incumbents Can React to Disruption

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How Incumbents Can React to Disruption

GUEST POST from Geoffrey A. Moore

Think back a couple of years and imagine …

You are Jim Farley at Ford, with Tesla banging at the door. You are Bob Iger at Disney with Netflix pounding on the gates. You are Pat Gelsinger at Intel with Nvidia invading your turf. You are virtually every CEO in retail with Amazon Prime wreaking havoc on your customer base. So, what are you supposed to do now?

The answer I give in Zone to Win is that you have to activate the Transformation Zone. This is true, but it is a bit like saying, you have to climb a mountain. It begs the question, How?

There are five key questions executives facing potential disruption must ask:

1. When?

If you go too soon, your investors will lose patience with you and desert the ship. If you go too late, your customers will realize you’re never really going to get there, so they too, reluctantly, will depart. Basically, everybody gets that a transformation takes more than one year, and no one will give you three, so by default, when the window of opportunity to catch the next wave looks like it will close within the next two years, that’s when you want to pull the ripcord.

2. What does transformation really mean?

It means you are going to break your established financial performance covenants with your investors and drastically reduce your normal investment in your established product lines in order to throw your full weight behind launching yourself into the emerging fray. The biggest mistake executives can make at this point is to play down the severity of these actions. Believe me, they are going to show, if not this quarter, then soon, and when they do, if you have not prepared the way, your entire ecosystem of investors, partners, customers, and employees are going to feel betrayed.

3. What can you say to mitigate the consequences?

Simply put, tell the truth. The category is being disrupted. If we are to serve our customers, we need to transition our business to the new technology. This is our number one priority, we have clear milestones to measure our progress, and we plan to share this information in our earnings calls. In the meantime, we continue to support our core business and to work with our customers and partners to address their current needs as well as their future roadmaps.

4. What is the immediate goal?

The immediate goal is to neutralize the threat by getting “good enough, fast enough.” It is not to leapfrog the disruptor. It is not to break any new ground. Rather, it is simply to get included in the category as a fast follower, and by so doing to secure the continuing support of the customer base and partner ecosystem. The good news here is that customers and partners do not want to switch vendors if they can avoid it. If you show you are making decent progress against your stated milestones, most will give you the benefit of the doubt. Once you have gotten your next-generation offerings to a credible state, you can assess your opportunities to differentiate long-term—but not before.

5. In what ways do we act differently?

This is laid out in detail in the chapter on the Transformation Zone in Zone to Win. The main thing is that supporting the transformation effort is the number one priority for everyone in the enterprise every day until you have reached and passed the tipping point. Anyone who is resisting or retarding the effort needs to be counseled to change or asked to leave. That said, most people will still spend most of their time doing what they were doing before. It is just that if anyone on the transformation initiative asks anyone else for help, the person asked should do everything they can to provide that help ASAP. Executive staff meetings make the transformation initiative the number one item on the agenda for the duration of the initiative, the goal being at each session to assess current progress, remove any roadblocks, and do whatever possible to further accelerate the effort.

Conclusion

The net of all of the above is transformation is a bit like major surgery. There is a known playbook, and if you follow it, there is every reason to expect a successful outcome. But woe to anyone who gets distracted along the way or who gives up in discouragement halfway through. There is no halfway house with transformations—you’re either a caterpillar or a butterfly, there’s nothing salvageable in between.

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

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