Category Archives: Strategy

Cede or Seed: What’s Your Innovation Strategy?

Cede or Seed: What's Your Innovation Strategy?

GUEST POST from Robyn Bolton

To Cede, or to Seed, that is the question:

Whether ‘tis nobler in the mind to suffer

The slings and arrows of a down quarter or year,

Or to take arms against the Tyranny of Now

And by opposing overcome it.

To Cede – to withdraw,

Spend no more; and by stopping to say we end

The innovation and the thousand natural insights

That pave the way: ‘tis a necessity

Stoically to be endured

To Seed, to spend;

To spend perchance to grow – ay there’s the rub:

For in that spending on innovation what revenue may come,

When we have emerged from this uncertainty,

Must give us hope – there’s the advantage

That makes success of such a business

  • Hamlet, if he were a senior executive making budget decisions during periods of uncertainty (and with my deepest apologies to Shakespeare)
The Question

To cede or seed is the question facing so many executives right now.

The same question faced executives in 2001, 2008, and 2020.

And an answer is required.

But what’s the right answer?

As a friend likes to say, “It’s contextual.”

To Cede

Cede is the most common answer for two main reasons: (1) executives feel they don’t have a choice because super-senior executives mandated an x% budget, or (2) executives need to boost results by allocating resources to things with “guaranteed” ROI.

Whatever the reason, innovation is a luxury the business can no longer afford, and the core business is a necessity to be supported at all costs. As a result, rather than scaling back a little in a lot of places, managers believe it is safer and easier to eliminate innovation entirely and maintain, or even increase, resources for operations.

Sometimes, this is also the right answer.

If the business is hemorrhaging cash, its value is plummeting, and people are questioning whether or not it can stay in business, then Cede is the right answer. There’s no sense in investing for success in one, three, or five years if there’s little chance of seeing the next day, week, or month.

But odds are, you’re not in that situation.

To Seed

The Dot-com bubble. The Great Recession. COVID-19 recession.

The 21st century has allowed us to study the impact of different decisions during and after economic crises.

And when it comes to innovation, evidence shows that companies that continue to invest in innovation during times of economic uncertainty outperformed the market by 10% during the crisis and by up to 30% in the five years immediately following the crisis.

But not all companies.

A study of 4,700 companies during three global recessions (1980 – 1982, 1990 – 1991, and 2000 – 2002) found that “Businesses that boldly invest more than their rivals during a recession… enjoy only a 26% chance of becoming leaders after a downturn.”  However,

“Companies that master the delicate balance between cutting costs to survive today and investing to grow tomorrow do well after a recession. Within this group, a subset that deploys a specific combination of defensive and offensive moves has the highest probability—37%—of breaking away from the pack. These companies reduce costs selectively by focusing more on operational efficiency than their rivals do, even as they invest relatively comprehensively in the future by spending on marketing, R&D, and new assets. Their multipronged strategy…is the best antidote to a recession.”

The takeaway – Seed, don’t splurge.

The Answer (sort of)

It’s easy, and incredibly biased, of me to assert that there is one and only one right answer. That the executive who cuts innovation spending (along with travel budgets and probably a few other things) is woefully short-sighted and dooming his business to a never-ending cycle of cutting back, losing ground, and racing to catch up, only to cut again when the next downturn hits.

It’s also very unfair because I’d be using history and theory to judge an executive grappling with the reality of organizational mandates, limited resources, and very real responsibilities.

The right answer is the one you can live with.

Ceding makes sense in the short term, but it’s a liability in the medium and long term.

Seeding pays off in 2-3 years, but you’ll endure skepticism and risk your bonus or job while waiting.

Research says Seeding is the right answer.

Reality often dictates Ceding.

The choice is yours.

Just remember that, like Hamlet, you live (or die) with the results. Innovation

Image credit: Pixabay

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

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

by Braden Kelley and Art Inteligencia

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

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

The blank template has a gravity problem

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

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

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

What “start with foresight” actually means

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

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

Then, and only then, open the template.

Why timing matters more than people think

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

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

A way to try it this week

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

The next step, if you want it

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

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

Before you hit “accept” on that invite

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

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

Image Credits: Gemini

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

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Turning Foresight Into an Actual Strategic Roadmap

From “What If” to “What Now”

Turning Foresight Into an Actual Strategic Roadmap

by Braden Kelley and Art Inteligencia

I have seen more beautiful scenario maps gather dust than I can count. Gorgeous work — well-researched signals, genuinely thoughtful trends, three or four possible futures mapped out with real rigor, presented to an engaged room that nodded along and felt smarter walking out than they did walking in. And then, six months later, nothing about how the organization actually operates has changed. The binder is still on someone’s shelf. This is the single most common way foresight work dies, and it has nothing to do with the quality of the thinking.

“What if” is the fun part. That’s the problem.

Exploring possible futures is genuinely engaging work. There’s something almost playful about it — imagining how the market could shift, what technology could disrupt, which future would be exciting to build toward. Rooms come alive during this part of a planning session in a way they rarely do during budget reviews. That energy is valuable, and I’d never want to dampen it. But it’s also exactly why so much foresight work stalls right there: the “what if” conversation is satisfying enough on its own that it can feel like the destination, when it was only ever supposed to be the on-ramp.

Nobody’s job is the translation

Here’s the structural reason this happens, and it’s not about laziness or lack of follow-through. In most organizations, nobody’s actual job description includes turning a set of possible futures into this year’s specific strategic priorities. The strategy team’s job, as usually defined, ends at “here are the scenarios and here’s the probable one.” Execution teams’ jobs start from wherever the strategic plan already tells them to begin. The translation step — the actual “so given all that, what do we do differently starting Monday” — falls into a gap between two functions that both assume the other one owns it.

What “what now” actually requires

Turning a preferable future into a real roadmap means doing something more specific than restating the future in more urgent language. It means identifying the near-term moves that make sense regardless of exactly how the future unfolds — the no-regret moves, the ones that pay off whether your probable future arrives on schedule, arrives differently than expected, or gets overtaken by one of the other futures you mapped. It means sequencing those moves against a realistic timeline instead of listing them all as equally urgent. And it means naming specific owners for each one, because a strategic priority without a named owner is, in practice, nobody’s priority at all.

It also means building in signposts — specific, observable things you’ll watch for that would tell you your probable future is actually arriving, or that one of the other futures is starting to look more likely instead. Without signposts, “what now” plans quietly calcify into exactly the single-future thinking foresight was supposed to prevent in the first place. With them, the roadmap stays genuinely responsive instead of becoming next year’s version of the plan that goes stale by Q2.

This is exactly why I built a specific step for it

This translation gap is precisely why FutureHacking™ doesn’t stop at mapping possible futures. The methodology includes a dedicated step — I call it NowBuilder™ — built specifically to take the output of the “what if” work and force the room through the “what now” conversation before anyone leaves: near-term moves, sequencing, ownership, and the signposts that tell you when to adjust course. It exists because I watched too many organizations do genuinely excellent scenario work and then have no structured way to turn it into anything that showed up on an actual roadmap the following Monday.

You can learn more about the full methodology at FutureHacking™ — it’s the art and science of getting to the future first, and getting there requires both halves: the imagination to genuinely hold multiple futures, and the discipline to convert that thinking into something your organization actually does.

Where to start

The free FutureHacking Signal Picker is the right first step if your team hasn’t run a structured foresight exercise yet — it walks you through identifying and prioritizing real signals, the foundation everything else in the methodology builds on, at no cost.

Something new I’m building

I’m also finishing a second tool — the FutureCanvas Picker — that carries a planning team through the full arc in one sitting: from signals, to the trends they suggest, to a genuine set of possible futures, narrowing to your most probable future, and mapping the path to your preferable one. It’s the closest thing I’ve built yet to running a complete FutureHacking™ session on your own.

I’m opening early access to a select group first — strategic planners, CSOs, and leaders actively running planning processes right now — because I want real feedback from people using it under real deadline pressure before it’s available more broadly. If that’s you, and you’d like to be considered for early access, reach out and let me know — I’ll be following up personally with the first few who get in.

A scenario map tells you what could happen. It’s still just a very well-organized guess until something in your organization actually moves because of it.

Image Credits: Gemini

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

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Why Your Strategic Planning Offsite Needs a Foresight Exercise, Not Just Another SWOT

Why Your Strategic Planning Offsite Needs a Foresight Exercise, Not Just Another SWOT

by Braden Kelley and Art Inteligencia

I’ve sat in more strategic planning offsites than I can count, and I can predict the SWOT exercise before it starts. Someone draws a four-quadrant grid on the whiteboard. The room fills in Strengths and Weaknesses quickly, because those are about the company as it exists right now, and everyone in the room already agrees on most of them. Then it gets to Opportunities and Threats, and the energy noticeably drops — because now the exercise is quietly asking the room to predict the future, and SWOT gives them no actual tool for doing that. So they default to whatever opportunities and threats came up in last year’s version of the same exercise, lightly reworded.

SWOT was never built for what you’re using it for

SWOT is a genuinely useful tool for organizing what you already know about your current position. It was never designed to help a group reason about an uncertain future — there’s no mechanism in the exercise for surfacing real signals, testing which trends they suggest, or imagining more than one way things could unfold. When a room uses it to fill in “Opportunities” and “Threats,” what actually happens is everyone reaches for whatever future feels most familiar or most recently discussed in the trade press, and the exercise quietly becomes a confidence-building ritual around a single assumed future rather than genuine strategic thinking.

The offsite is the right room. It’s the wrong exercise.

Here’s what I’d push back on if someone suggested dropping the offsite structure entirely: getting your leadership team in a room together, away from daily operations, is exactly the right container for this kind of thinking. The problem isn’t the offsite. It’s that the exercise running inside it isn’t built for the actual question a strategic planning session needs to answer, which isn’t “what do we already know about ourselves” — it’s “what’s actually changing around us, and what should we do about it before it’s obvious to everyone else.”

What a foresight exercise does differently

A structured foresight exercise starts somewhere SWOT never goes: the real signals your team is picking up from the market, technology, customer behavior, and adjacent industries — not opinions about the future, but the actual early evidence of it. From there, it asks the room to genuinely work through which trends those signals suggest, and to hold more than one possible future seriously rather than converging immediately on whichever one the most senior person in the room already believes. Only after that does it narrow toward a most-probable future and, critically, a preferable one — the future you’d actually choose to build toward, and the specific path to get there. That’s a fundamentally different exercise than filling in a quadrant, and it produces a fundamentally different kind of strategic plan.

Why this matters more in the room than anywhere else

The offsite is where organizational alignment either happens or doesn’t. A room that’s just filled in a familiar SWOT grid leaves with a comfortable, mostly unchanged view of the future — which feels productive in the moment and shows up as a strategic plan that’s already outdated within a couple of quarters. A room that’s worked through real signals together, disagreed about what they mean, and built a shared view of multiple possible futures leaves with something SWOT structurally can’t produce: genuine, tested alignment on what’s actually likely to happen and what the team is going to do about it either way.

Bringing this into your next offsite

This is exactly the gap FutureHacking™ was built to close — a structured, visual, collaborative foresight methodology any leadership team can run in a room together, without needing a dedicated foresight function or an outside futurist facilitating every session. FutureHacking™ is the art and science of getting to the future first, and the fastest way to feel the difference is to bring it into the room where your planning conversations already happen.

Where to start before your next offsite

The free FutureHacking Signal Picker is a genuinely useful way to arrive at your next offsite with real signals already identified and prioritized, instead of starting the room from a blank whiteboard. It’s the foundational first step of the full methodology, and it’s free.

Something new I’m building

I’m also finishing a second tool — the FutureCanvas Picker — that carries a planning team further into the full arc in a single sitting: from signals, to the trends they suggest, to a genuine set of possible futures, narrowing to your most probable future, and then mapping the path toward the future you’d actually prefer to build. It’s the closest thing I’ve built yet to running a full FutureHacking™ session in miniature.

I’m opening early access to a select group first — strategic planners, CSOs, and leaders actively running planning processes right now — because I want real feedback from people using it under real offsite deadline pressure before it’s available more broadly. If that’s you, and you’d like to be considered for early access, reach out and let me know — I’ll be following up personally with the first few who get in.

Your next offsite is going to happen either way. The only real question is whether the room leaves with a shared view of one comfortable future, or a genuine head start on several possible ones.

Image Credits: Pexels

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

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The Hidden Cost of Strategic Planning Built on a Single Future

The Hidden Cost of Strategic Planning Built on a Single Future

by Braden Kelley and Art Inteligencia

Nobody puts a line item in the budget for “cost of assuming we knew what was going to happen.” And yet, if you looked honestly at what a single-scenario strategic plan actually costs an organization when the future doesn’t cooperate, it would be one of the largest hidden expenses on the books. It just never gets counted, because it’s spread across a dozen decisions that never get traced back to the plan that caused them.

The cost of defending a plan past its expiration date

Once a strategic plan is approved, it develops a kind of institutional gravity. Budgets are allocated against it. Teams are staffed against it. Leaders have put their names on it in front of the board. When early signals suggest the assumed future isn’t materializing quite the way the plan predicted, the natural organizational instinct isn’t to update the plan — it’s to defend it, because updating it can feel like admitting the original thinking was wrong. I’ve watched organizations spend months, and real budget, propping up a strategy that the market had already started to move past, simply because nobody wanted to be the one to say so first.

The cost of the resources you didn’t allocate to what was actually happening

This is the harder cost to see, because it’s a cost of omission rather than a line item you can point to. Every dollar and every hour committed to executing a single assumed future is a dollar and an hour not available to the future that was actually starting to emerge in the market signals your team either didn’t collect or didn’t take seriously. You don’t see this cost in a budget review. You see it eighteen months later, when a competitor who built in flexibility is suddenly in a category you didn’t think was coming yet.

The cost of strategic surprise

There’s a specific, expensive kind of organizational chaos that happens when a shift arrives that the strategic plan gave leadership no framework for anticipating. It’s not just the scramble to react — it’s the credibility cost inside the organization when leadership is visibly caught off guard by something that, in hindsight, had been signaling for a year. Teams notice. Boards notice. The plan’s failure to hold more than one possible future becomes a trust problem, not just a strategy problem.

The cost of decision paralysis when the single future finally, visibly breaks

Counterintuitively, some of the most expensive moments I’ve seen come after a single-scenario plan visibly stops working. Leadership, having built no muscle for holding multiple futures at once, doesn’t know how to respond except by freezing — commissioning study after study, delaying decisions that can’t actually wait, because the organization has no established process for reasoning under genuine uncertainty. A team that’s practiced foresight moves faster in exactly this moment, not slower, because they’ve already done the work of imagining more than one path.

Why the fix isn’t more analysis — it’s a different structure

None of this means the answer is spending more time forecasting, or hiring more analysts to build a more detailed single prediction. A more detailed wrong future is still wrong. What actually closes this gap is a structured way of holding multiple possible futures at once — genuinely mapping from the real signals in your market, to the trends they suggest, to a real set of possible futures, then identifying which one is most probable while still building a deliberate path toward the future you’d actually prefer. That’s the specific gap FutureHacking™ was built to close — a structured, visual, collaborative methodology any leadership team can run, without needing to build an internal foresight department first. FutureHacking™ is the art and science of getting to the future first, and the organizations that practice it don’t avoid uncertainty — they get better at moving through it faster than everyone still defending last year’s single-scenario plan.

Where to start

If your team has never run a structured foresight exercise, the free FutureHacking Signal Picker is the fastest way to find out what it feels like — it walks you through identifying and prioritizing the real signals worth watching, at no cost, and it’s the foundational first step of the whole methodology.

Something new I’m building

I’m also finishing a second tool — the FutureCanvas Picker — that carries you further into the full arc: from signals, to the trends they suggest, to a genuine set of possible futures, narrowing to your most probable future, and then mapping the path toward the future you’d actually prefer to build. It’s the fastest, clearest way I’ve built yet to feel the full power of FutureHacking™ in a single sitting.

I’m opening early access to a select group first — strategic planners, CSOs, and leaders actively running planning processes right now — because I want real feedback from people doing this work under real deadline pressure before it’s available more broadly. If that’s you, and you’d like to be considered for early access, reach out and let me know — I’ll be following up personally with the first few who get in.

The organizations that get to the future first aren’t the ones who guessed correctly. They’re the ones who stopped betting everything on a single guess.

Image Credits: Gemini

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

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Why Your Annual Strategic Plan is Obsolete by Q2

Why Your Annual Strategic Plan is Obsolete by Q2

by Braden Kelley and Art Inteligencia

Every January, I watch the same ritual play out inside otherwise well-run organizations. Leadership spends weeks, sometimes months, building a strategic plan for the year ahead: a single narrative about where the market is going, what the company will do about it, and how success will be measured twelve months from now. By the time Q2 closes, half of that plan is already quietly out of date, and everyone in the room knows it. Nobody says so out loud, because saying so would mean admitting the process itself is the problem, not the plan.

The plan was never wrong. It was just singular.

Here’s what I’ve learned after two decades of helping organizations navigate exactly this moment: the plan usually wasn’t badly built. The people in the room were smart, the research was real, the logic held together. The failure isn’t in the thinking, it’s in the structure. A traditional strategic plan describes one future and commits real budget, real headcount, and real organizational attention to it. When that one future doesn’t materialize exactly as modeled, and it never does, not exactly, the plan doesn’t bend. It breaks, quietly, and everyone starts working around it instead of updating it.

Strategic planning and strategic foresight are not the same discipline

This is the distinction most planning processes skip entirely. Strategic planning asks: given what we believe about the future, what should we do? Strategic foresight asks a prior question: what do we actually know, and don’t know, about the future we’re planning for? Skip that second question, and you’re not really planning for uncertainty, you’re planning for a single scenario and hoping it holds. Most organizations skip it not because they don’t value it, but because nobody on the team has been trained to do it, and hiring a dedicated foresight function feels like a luxury reserved for companies with a research budget most teams don’t have.

Why I built FutureHacking™

That gap, real demand for foresight, no accessible way to practice it, is exactly what I built FutureHacking™ to close. It’s not a framework that asks your team to become professional futurists. It’s a structured, visual, collaborative methodology that takes a cross-functional leadership team from raw signals in the market, through the trends those signals suggest, to a set of genuinely possible futures — and from there, to identifying which future is most probable and building a real path toward the future you’d actually prefer. “FutureHacking™ is the art and science of getting to the future first” isn’t a tagline I use lightly. It’s the whole point: the organizations that see a shift coming, and start moving before it’s obvious to everyone else, are the ones who get to shape what happens next instead of reacting to it after the fact.

Where to start before your next planning cycle

FutureHacking Signal PickerIf your team has never run a structured foresight exercise, the fastest way to feel what this actually looks like is with the free FutureHacking Signal Picker — it walks you through identifying and prioritizing the real signals worth watching, the first and most foundational step in the whole methodology, at no cost. Run it before your next planning offsite, and bring the output into the room instead of starting from a blank whiteboard.

Something new I’m building

I’m also putting the finishing touches on a second tool, the FutureCanvas Picker, that goes a step further than signal identification. It’s designed to give planners a genuine taste of the full arc: moving from signals, to the trends they suggest, to a real set of possible futures, then narrowing to your most probable future, and finally mapping the path to the future you’d actually prefer to build. It’s the clearest, fastest way I’ve built yet to feel what FutureHacking™ makes possible in a single sitting.

I’m not opening this one to everyone right away. I’m looking for a select group of strategic planners, CSOs, and leaders running planning processes right now to get early access before it’s broadly available — partly because I want real feedback from people doing this work under real deadline pressure, not from a general audience. If that’s you, and you’d like to be considered for early access, reach out and let me know — I’ll be following up personally with the select few who get in first.

The organizations that get to the future first aren’t the ones with the biggest planning budgets. They’re the ones who stopped mistaking a single confident narrative for genuine foresight, and built a process that can hold more than one future at a time.

Image Credits: Gemini

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

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You Need a Strategy Not a Slogan to Overcome Resistance to Change

You Need a Strategy Not a Slogan to Overcome Resistance to Change

GUEST POST from Greg Satell

When we’re passionate about an idea, we want others to see it the same way we do, with all its beautiful complexity and nuance. We want to believe that if others can just understand it, they will embrace it. That’s why most change management practices focus on persuasion, explaining the need for change and creating a sense of urgency.

But consider recent research that finds that we can’t even agree on simple concepts such as what a penguin is and it becomes clear that for any given initiative, people are bound to see it differently. The simple truth is that change doesn’t fail on its own, it fails because people resist it. If we are to bring about genuine change, our first job is to overcome that resistance.

We need to internalize that humans form attachments to people, ideas and other things and, when those attachments are threatened, we act in ways that don’t reflect our best selves. Every change strategy has to begin with that. Clever gimmicks or snappy slogans won’t bring about true transformation. We have to build a strategy to overcome resistance from the start.

First, Follow The Energy

There’s something about human nature that, when we’re really excited about an idea, makes us want to go convince the skeptics. That’s almost always a bad idea. A much better strategy is to start with people who are enthusiastic about your change, who want it to succeed. They can help you strengthen it and spread it to others, who can spread it further still.

For example, in his efforts to reform the Pentagon, Colonel John Boyd began every initiative by briefing a group of collaborators he called the “Acolytes,” who would help hone and sharpen the ideas. He then moved on to congressional staffers, elected officials and the media. By the time general officers were aware of what he was doing, he had built up too much support to ignore.

In a similar vein, a massive effort to implement lean manufacturing methods at Wyeth Pharmaceuticals began with a single team at one factory, but grew to encompass 17,000 employees across 25 sites worldwide and cut manufacturing costs by 25%. The campaign that overthrew Serbian dictator Slobodan Milošević started with just 5 kids in a coffee shop.

One advantage to starting small is that you can identify your apostles informally, even through casual conversations. In skills-based transformations, effective change leaders often start with workshops and see who seems enthusiastic or comes up after the session. Your apostles don’t need to have senior positions or special skills, they just have to be passionate.

“You have to go where the energy is,” John Gadsby, who built a movement for process improvement inside Procter & Gamble that has grown to encompass 60,000 employees, told me. “We’ll choose energy and excitement and enthusiasm over the right position, or the person at the right leadership level, or the person whose job it is supposed to be to do that.”

Identify Shared Values

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

So it’s natural that when we feel passionately about an idea, we want to focus on how it’s different, to create our own tribe. For example, the Agile Manifesto has inspired fierce devotion and helped build a vibrant community around Agile product development. So it shouldn’t be surprising that when evangelists try to attract others to the movement, it’s the Agile Manifesto that they want to emphasize.

Yet for those outside the Agile development community, its principles can seem strange and impractical. It emphasizes adaptability over planning which can appear to be chaotic for those who are used to a more traditional approach. If you want to bring in new people, it’s better to focus on shared values, such as the ability to produce better quality projects faster and cheaper.

One of the biggest challenges in driving transformation is that while differentiating values make people excited about an idea, it is shared values that help build genuine and widespread support. That doesn’t mean you abandon or water down your beliefs. It just means that you need to meet people where they are, not where you wish them to be.

Design A Dilemma Action

Unfortunately, building a shared purpose isn’t always possible. Whenever we set out to make a significant impact you are bound to get pushback, not for any rational logic, necessarily but because, for whatever reason, but because for whatever reason, it offends some people’s dignity, their identity, their sense of self. A simple truth is that we all form irrational attachments and when those are threatened, we tend to act out in ways that don’t reflect our best selves.

When that happens — and it always does eventually — we can get sucked into a conflict, which will likely take us off course and discredit what we’re trying to achieve. Yet, here too, developing empathy skills to identify shared values can be extremely helpful. They can help us to design a dilemma action, which puts the opponents into an impossible position.

Dilemma actions have only recently become an active area of research, but have been used by practitioners for at least a century — famous examples include Gandhi’s Salt March, King’s Birmingham Campaign and Alice Paul’s Silent Sentinels. They are just as effective in an organizational context, using an opponent’s resistance against them.

One of the great things about dilemma actions is that you approach them exactly the same way you approach building allies — by identifying a shared purpose. Once you do that, you can design a constructive act rooted in that shared purpose that advances your agenda. Your opponent then has a choice: they can disrupt the act and violate the shared value or they can let it go forward and let change progress.

For example, I was once leading a transformation project that was being impeded by a sales director hogging accounts. Although it was agreed that she would distribute her clients, she never got around to it, so I set up a meeting with a key account and one of our salespeople. When she tried to disrupt the meeting, she violated the shared value we had established, was dismissed from her position and everything fell into place after that.

Planning To Survive Victory

Many change leaders assume that once they win an initial victory that everything will get easier after that. They work for months — and sometimes years — to get a project off the ground. Yet just when they think they’re turning the corner, when they’ve won executive sponsorship, signed up key partners and procured enough financing to have a realistic budget, all the sudden things seem to get mired down.

That’s no accident. Just because you’ve won a few early battles doesn’t mean opposition to your idea melts away. On the contrary, faced with the fact that change may actually succeed, those who oppose it have probably just begun to redouble their efforts to undermine it. These efforts are often not overt, but they are there and can easily derail an initiative.

As Saul Alinsky once put it, every revolution inspires its own counterrevolution. That’s why every change effort must plan from the beginning to survive victory. You need to anticipate resistance, think about where you’re vulnerable and how you’ll mitigate those attacks by leveraging shared values.

The truth is that change is always a journey, never a particular destination, which is why lasting change is always built on the common ground of shared values. The answer doesn’t lie in any specific strategy or initiative, but in how people are able to internalize the need for change and transfer ideas through social bonds. A leader’s role is not necessarily to plan and direct action, but to inspire and empower belief.

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

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After the Chasm – Scaling Beyond the Beachhead

After the Chasm - Scaling Beyond the Beachhead

GUEST POST from Geoffrey A. Moore

Crossing the chasm is the single most important goal for a B2B application that seeks to disrupt the status quo. The playbook has held up for more than 30 years because it continues to just work. That said, it does not say anything about what to do if you’re stuck in the mud on the other side. So, let’s suppose your enterprise has successfully crossed the chasm, achieved tens of millions of dollars in ARR, but is no longer growing at a rate to keep pace with the Rule of 40 percent (the sum of your profit and your growth rate). Your investors are getting antsy. Now what?

First of all, know your place. You are still sub-scale for a customer CFO to consider you desirable as a go-to vendor. Same goes for a CIO who is trying to consolidate rather than expand the list of vendors they are working with. So, as with crossing the chasm, your only ally will be a process owner with a problem process that is not getting the IT support they need. This time, however, you are looking for an adjacent process owner, someone for whom your chasm-crossing sponsor would make a good reference. This lowers the bar for how problematic the use case may be because there is already some proof that the solution will work.

Note that we are still at the departmental level, still a point-product app, not a platform, not a suite. Those are all worthy ambitions for the future, but if you try to activate them now, the CFO and the CIO will get involved, and you will get bogged down in proof-of-concept exercises that will take forever to scale.

That said, it is not too early to recruit ecosystem partners to help secure your beachhead and expand your reach. The key here is to engage with companies that are big enough to help but small enough to give you their full attention—not Tier 1 systems integrators, more like outsourced service providers to small and medium businesses or specific departmental functions. You don’t need a lot of these, but the ones you do recruit have to lean in, so make sure that there is enough trapped value in the target use case to pay both you and them a premium for resolving it. To accelerate this effort, ask your professional services team to package up their hard-won knowledge and make it available to the partners who can expand your beachhead market. You want your team to be plowing in the adjacent field, not harvesting in the initial one.

On the go-to-market side, you still need to be disciplined in deploying most of your resources into the target market segment and not letting them get distracted by chasing one-off opportunities elsewhere. That said, you can relax a bit from the laser focus of chasm-crossing as long as, say, two-thirds of the marketing and sales resources are directly aligned with your current goal. Remember at this point that marketing is still a territory capture game, so you want to go after targets that are big enough to matter but small enough to lead, and as always, a good fit with your crown jewels.

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

Image Credit: Geoffrey Moore

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Is it Possible to be Incorruptible?

Is it Possible to be Incorruptible?

Exclusive Interview with Eric Ries

This candid, wide-ranging Q&A dives deep into what Eric Ries calls the “physics of organizations” — the hidden structural and financial forces that dictate whether a company thrives or decays over time. Moving past superficial business trends, the conversation tackles the intense psychological toll of entrepreneurship, the systemic flaws of shareholder primacy, and the historical reality of alternative corporate governance.

Over the last two decades, Eric Ries’ ideas about continuous innovation, long-term thinking, governance, and market reform have reshaped company building and management practices. He is the creator of the Lean Startup method, and the author of the New York Times bestseller The Lean Startup; The Leader’s Guide; and The Startup Way.

Eric RiesAs a founder, he has put his own ideas into practice with The Long-Term Stock Exchange (LTSE); Answer.AI, an AI R&D lab; Virgil, a legal services startup; and IMVU. On The Eric Ries Show, he talks with world-class technologists, thought leaders, and executives building for the long-term. He lives in the San Francisco Bay Area with his wife and three children. He is excited to announce his latest book Incorruptible: Why Good Companies Go Bad… and How Great Companies Stay Great.

Ries offers a provocative look at how truly resilient, mission-driven institutions can protect themselves from the gravitational pull of short-term financial systems to prioritize long-term human flourishing.

Below is the text of my interview with Eric and a preview of the kinds of insights you’ll find in Incorruptible presented in a Q&A format:

1. Why do purpose-driven companies create so much value for society?

The evidence shows that purpose driven companies outperform conventional companies financially as well as in almost any other dimension you care to measure, including the social dimension. Intuitively, this makes a lot of sense, because entrepreneurship is very difficult. Everyone says they know this, but I don’t think we really grapple with this fact nearly enough. If you just want to make money, there simply are better, more convenient ways than entrepreneurship. So to get not just the founder, but the early team, the early investors, all these people to take a risk to do this crazy thing generally requires some kind of extra-financial purpose or goal. Sometimes we call that vision, sometimes we call that, in a more demeaning way, strategy. But it’s also fine to call it purpose, which is really what intuitively makes the most sense to people that do this. This is one of those cases where intuition and the evidence agree, yet it is somehow still considered a controversial fact.

2. What were some of the most important lessons you absorbed during your time on the bathroom floor?

As I’ve been going around talking about the book, this is one of the stories that actually gets a very different reaction depending on whether I’m talking to an entrepreneur or somebody else. Entrepreneurs all recognize this moment, where I really thought my company was going to fail and I couldn’t handle it. A lot of non-entrepreneurs don’t get it. They’re like, “Why? It seems like a bit of an overreaction. Okay, you had a business setback. We’ve all had career setbacks — what’s the big deal?” But what you don’t realize until you’re in it is how much, especially if you’re doing something out of a sense of purpose or passion that’s personally meaningful to you, you start to identify with it and start to become inseparable from it. So that story is very important in the book because I learned a lot of important business lessons. I thought the company was going to die, but it didn’t. It survived precisely because of its mission, not in spite of it. I learned, in a very visceral way, about the forces, that prevent reform from coming to fruition in so many areas of our life, not just financial. And of course I learned a personal lesson about the importance of equanimity and the need to tackle the psychological and even spiritual dimensions of entrepreneurship if we’re going to create real change in the world.

3. How much chance is there of us getting companies to more broadly redefine profit to include elements of maximizing human flourishing?

This question reminds me of a of an incredible video of the great Steve Jobs before he died. He’s being interviewed at an industry conference at the time of the launch of the iPhone, when the Blackberry was the dominant smartphone in the world. It had something like 80 or 90% market share. A journalist asks this question something like, “Do you really think realistically you can take share from this dominant player?” And you can tell Steve is irked by this question, and I’m expecting because we all know his famous temper, that he’s going to lash out at the person. But he doesn’t. Instead, he says, “You know, that’s not really up to me. My job, our job at Apple, is to make the best phone we can, the one that we’re proud of. Market share is up to the customer. That’s their decision, their choice. We don’t think about that, we don’t know, and we don’t need to know in order to do our best work.” I’m paraphrasing because I haven’t seen this video in a long time, but that’s how I feel about this, too. I get this question a lot because people want to feel like, if I’m going to jump on the bandwagon, I want to know that it’s going to work. But the truth is none of us know what’s going to work, even those of us who advocate for these ideas. You, who’s reading this, are the only one who gets to decide if this is likely or unlikely. This is not what the economist John Maynard Keyes called a beauty contest. You don’t have to worry about what everyone else is going to do. You only have to decide for yourself if you think this makes sense to you. And if it does, well, like I said — like Steve said — it’s up to you.

4. As America becomes more capitalist and less of a free market economy, what steps can we take to reverse the regulatory capture, lawfare and other methods that degrade competition, purchasing power, class mobility and the American dream? Do we need a pCombinator? (purpose-driven company accelerator)

You’re asking questions about words that we no longer have consensus about what they mean. What is a free market economy? What is capitalism? What is regulatory capture? The very definition of these words is what’s under threat. If you look at the broader media landscape, the political landscape, in many, many pockets of our society now the very idea of a for-profit company is being attacked as inherently exploitative or extractive. The consensus that we used to have that we can be working commercially to improve the world and make it a better place, that used to be seen as quite obvious and now that whole idea is under threat. I don’t blame the people doing the attacking, especially the young people who have, after all, lived their whole lives, under this regime of a very extractive flavor of capitalism that goes by the anodyne-sounding name “shareholder primacy”. This is the simple idea that customers, employees, communities all exist as resources to be mined for the benefit of shareholders. But this question is also loaded with so many other political issues of our time that we are going to have to tackle if we’re going to come out of this darkness, as our grandparents who battled fascism once had to do. So, I don’t think it’s going to be as simple as fixing one thing. But I think that one of the things we have to do, among many, is build a power base, an economic gravity pulling towards the values aligned with human flourishing. And many of the political, economic, and social challenges of our time are downstream of this action in the same way that the catastrophes that we’re currently living through are downstream of what seem like very simple and relatively benign policy changes from the past century.

5. What should purpose-driven companies look for in a CEO as the company outgrows or outlives the founder(s)?

IncorruptibleThis is a really important part of the architecture of institutional longevity. Most companies fail the test of succession. The evidence seems to suggest that people who train and hire from within have a big advantage here. I think that is something we don’t even really teach anymore as a corporate value, but that is actually super valuable. There’s a reason why that old story of the employee that worked their way up from the mail room was such an important legend in the previous century. Now we hardly tell stories like that anymore. We tend to want the big fancy turnaround, the bold new strategy, the external CEO, which for companies that are in crisis makes sense. And since our modern best practices tend to ruin companies, they tend to be in crisis quite a lot. But what we want to do is we want to find a CEO who combines two really important elements. One, they personally, deeply and profoundly reflect the ethos of the company. This is why a company that doesn’t have an ethos can never pass this test because they don’t even know who to pick. But you don’t want someone who, who apes the values of the past, or is slavishly loyal to the specific things that worked in the past. You need someone who is both deeply aligned to the ethos, and who nonetheless is very performance oriented, meaning they see that when the ethos is working, it should generate long-term performance. They can’t get distracted by short-term blips but they have to have the adaptability to realize when sacred cows need to be challenged. Now, it’s commonly said that only a founder can have the moral authority to do this unique combination of things I’m describing, only they can go into founder mode, as it’s called. But I don’t think that is supported by the evidence. When companies have the right structure, they actually can imbue subsequent generations of managers with this moral authority.

6. Why is magnetic alignment so important for purpose-driven organizations and their survival?

I conceived of this book as a look into the physical forces, the underlying forces, that affect organizations. So not the surface level characteristics that we spill so much ink about, org chart, culture, business model strategy, even vision, things we can touch and taste and control. Those things are important, don’t get me wrong. But there is a deeper layer to this, like a physics of organizations. In the book, I explore very dominant force that I call financial gravity. This is the gravity that pulls companies down into mediocrity or worse and is exacerbated by our heavily financialized economy. So to build an organization that is going to endure and is going to maintain its distinctiveness or its sovereignty over time, we have to have a force that is stronger than gravity with which we can power both the alignment that we need of people, and the structural integrity to resist outside pressure. And I call that the force of magnetic alignment. This is the mechanism by which companies gain that most valuable and underrated asset: trustworthiness. And the evidence shows that companies that have this asset, that activate this force, have numerous superpowers that conventional companies simply cannot touch.

7. Is super voting stock the silver bullet for purpose driven companies or are their other possibly better or complementary ways for purpose-driven companies to protect themselves?

It’s funny because the simple answer to your question is no. And yet I advocate for super voting shares all the time. I may be the most negative advocate of super voting shares! To understand, you have to see it this way: Imagine I went to a political science professor, an expert in political philosophy and I said, “I’m thinking of setting up a new city state, a new polis. I want your advice about what kind of governance it should have.” The professor’s going to be really excited. “Oh, great. What are you considering?” And I’ll say, “Well, I’ve only got two options. Option one is a situation in which whoever borrows the most money gets the most votes. Also, the tourists can vote, and you only have to borrow the money or be a tourist on election day, after which you can release your loans or leave the country and your vote is still binding on the whole polity.” The professor’s going to look at me and be like, “That’s pretty terrible. What else you got?” So, I’ll say, “Okay, option two is despotic emperor for life and my heirs and assigns.” The professor is going to say, “That’s all you got? Those are the only two options you can think of, really? You know, in the political science department, we’ve been working on this problem for a couple hundred years. We could maybe suggest a few other things!” That is the state of corporate governance today. It is such a paucity of thinking and originality. It is so bare of our human birthright, which is to imagine different ways that power can be shared amongst people. Human beings have been experimenting with this question since there have been human beings. So, the fact that companies are choosing despotic emperor for life to me should be read not as an endorsement of autocracy, but rather as an indictment of standard governance. Standard governance is so bad that emperor for life looks like an improvement. So yes, I do think it is an improvement. I do think there are times when that’s the best we can do, but we know from the research that it is not really the best long-term solution. We know that having too much power centralized in too few people leads to what psychologists called hubris syndrome, and many other problems besides. On top of being, ultimately not that long-term, since it’s limited by the human lifespan, this also puts a lot of founders into really an untenable and very undesirable psychological situation, where they are basically indentured servants and can never leave, for fear that their creation will be destroyed. So, maybe it’s the least bad of the current available options. But of course, we can think of far better ideas. In the book I argue for what I call “constitutional governance”, which is a set of concepts that take us beyond this false dichotomy.

8. How do you think we escape the big food doom loop? (healthy food company starts, wins customers, seeks an exit to get paid, big food makes it unhealthy and lower quality – i.e. Naked, Ben ‘n’ Jerry’s, Breyer’s, etc.)

This question is not really about food, so I’m not going to address big food. What does that even mean? Because we have a tendency to want to personalize these dramas, looking for villains. I understand that there are some villains out there. I get it. But this phenomenon that you’re describing, where someone figures out a more enlightened way to create any kind of product — doesn’t matter if it’s a food product or a tech product or a product design to bring a little beauty into people’s lives — it doesn’t matter what it is. The more successful it becomes, the more valuable it is as a target. And the more of a premium someone bigger will pay to acquire it. On this book tour, I have encountered many people who’ve told me their horror stories. They tend to want to tell food stories. That’s why I like this question. They’ll be like, look, private equity took over my favorite restaurant. Now the food is disgusting. Someone said to me a couple of weeks ago about a certain brand, “I hope they’re really successful,” and then they had to amend their statement to “Well, actually, I hope they’re somewhat successful. Successful enough to keep going, but not so successful that they get bought out by private equity.” That’s how much this idea that when things become successful, they get ruined has passed into the mainstream culture. So this is not about food. In the book, I describe this phenomenon, dating back at least two hundred years, and give the mechanics of how it happens and why. Why are we so conditioned to reenact the parable of the killing of the golden goose? And more importantly, what we can do to stop it?

9. Is it time to change the ‘corporations number one duty is to its shareholders’ narrative (aka shareholder primacy)? Is that part of what you’re trying to do with this book?

Yes. I believe that the era of shareholder primacy is actually already over, for two reasons. One is, this is an idea that has proved to be self-defeating. It was originally enacted — not in ancient times, but in the 1980s, at least in Delaware — to be beneficial to shareholders, but that is not how it has proved. We’ve actually metastasized into what I would call “extraction primacy”, in which investors themselves are now locked in a zero sum prisoner’s dilemma struggle where each has to try to squeeze as much out of everything they invest in lest someone else beat them to it. I think even investors are ready for change. The second reason I think it’s already over, and that we’re like the road runner having run off this cliff and haven’t looked down yet, is there’s a massive generational shift underway. As I mentioned before, the younger generation who has lived their whole lives under the hegemony of this idea, increasingly find it absolutely repugnant. They may not know to call it shareholder primacy, they may not realize that this is an idea that, by the way, has never been democratically enacted ever in history and therefore has no democratic legitimacy. But they are hungry for something new. And so I think our energy needs to be spent not on complaining about shareholder privacy anymore. It’s over. The question needs to be, what should the successor idea be? In the book I suggest mission primacy as one alternative.

10. You mention Novo Nordisk and its foundation in the book, which apparently is about to be passed by the OpenAI foundation for the mantle of the largest foundation (much bigger than the Bill & Melinda Gates Foundation) through their 26% ownership of OpenAI shares. Is this a model that we should encourage more startups to embrace from the outset?

I’d be very careful drawing lessons from the OpenAI experience because that company is quite singular and there’s a lot of stuff going on there quite unusual, a lot of big ego people like Elon and Sam. But interestingly, people often claim that the foundation ownership of OpenAI is unusual, and that’s not true. The idea that a for-profit company can be governed by a nonprofit foundation is an old one. The German optics company Zeiss had the structure in the 1880s. And as the question asked, Novo Nordisk has had it since the 1920s. In fact there are so many of these companies in the world that they have been studied and found to be dramatically more stable. Companies that have this structure are simply more likely to invest counter-cyclically. They are more likely to invest more in R&D. They have better financial performance and they are something like five or six times more likely to live to year fifty than conventional companies. Now the key to the structure’s stability is to have a system of checks and balances, which, as far as I understand, OpenAI struggled with for much of its existence. OpenAI had only one board, but what makes companies like Novo Nordisk, Patagonia, and Tony’s Chocolonely distinctive is that they have two entities — a for-profit board of directors who’s held accountable or in some cases even appointed by an outside board of trustees. That checks and balances, two-entity structure seems in the data to the most stable corporate form in the world.

11. As we enter the age of AI and the disruption it is beginning to cause, can the displaced really rely on enlightened capitalism to keep their families from starving?

This is a very grim question, and it presupposes one of the many, many doomsday scenarios about AI that is circulating. In order to think clearly about what it makes sense to do with AI, you have to realize two really interesting facts about this moment. The first is that almost every future scenario about this technology depends on a series of empirical facts that no one on this planet really knows the answer to. And these facts are very strange. Only a few years ago, they would have been considered post-modernist, irrelevant debates in your local philosophy department about questions like, “is there such a thing as reasoning or is it all just language?” And “what is the nature of intelligence and consciousness?” Of course, we as human beings have studied these questions for many generations. But I was on CNBC talking about this the other day — it’s rare that they are of such economic import that stock traders are wondering about them. To give one example, one of the most important questions you have to ask about AI is when or if the scaling laws will ever run out. So far, for quite a number of years,, thanks to pioneering researchers, including many far-sighted ones like my co-founder at Answer.AI Jeremy Howard, have figured out that simply by applying more computation to a very simple learning algorithm, you can create language models that seem quite intelligent, at least at first glance. So far, the more computation we use to train and run these models, the more capable they become. I think most people generally assume that this is some kind of S-curve and that eventually this curve will level off. Some even think that it already has leveled off. Others think we are years, or even decades, away from it leveling off, and of course some people believe it will never level off. This is the law of the universe. Depending on which of those things is true, the future scenarios are almost comically different from each other. A world in which the scaling laws level off next year is almost unimaginably different from one in which we have ten more years of this. And many of the doomsday scenarios, but also many of the utopia scenarios, depend critically on knowing the answer to this fundamental question about the universe that nobody knows. So, back to your question: How do we know what actions to take when the range of possible futures is so wide, so different from each other and so dependent on facts not in evidence. I think there’s only one thing that makes sense, which is to ask ourselves what are actions that would make sense, that you’ll be glad that you did, in a wide variety of potential futures? And I think that takes us out of the job of having to predict the future, which is very difficult, and rather into a more prudence-based mindset of what can be done to prepare for many possible futures. And when you go through that analysis, many of the things that you want to do to protect yourself against future AI scenarios are actually things you probably should be doing anyway. Think about having better mandatory disclosure, hardening our critical infrastructure, making sure that the gains from new technologies are widely distributed, going back to the era of widely shared prosperity. So if people are going to be displaced, should they just sit around and hope that the leaders who do the displacing will wind up being enlightened? Absolutely not. Of course not. In fact, the whole point of this book is to show how unless we make changes, the gravitational field of our financial system will warp and even destroy, turn malignant, any company. But where does the gravitational field come from? I think the most surprising part of the book for many readers is in later chapters when we reveal how the same tools that we’ve been discussing about how to create more resilient companies are also tools that can be wielded by all of us to shape the gravitational field of the future and affect what kinds of companies can and can’t form, how those companies can and cannot behave. And while some of those levers are traditional levers, like policy changes, of course., the book is primarily about the other, more surprising lovers, that I bet most readers have not thought of before.

I hope everyone has enjoyed this peek into the mind of the man behind the insightful new title Incorruptible!

Image credits: Eric Ries, Google Gemini

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What Defines a Good Strategy?

What Defines a Good Strategy?

GUEST POST from Greg Satell

One of the most frustrating statements I come across is that “we had a good strategy, but just couldn’t execute it.” That’s nonsense. Obviously, if you couldn’t execute, there were some important factors that you didn’t take into account. You miscalculated in some significant way. So how was that a good strategy?

This raises an important question: What makes a strategy good? The concept of strategy gets thrown around so much and so incompetently, few stop to define the term. Strategy often becomes self-referential, a consensus-driven story that no one dares to question, but everyone is duty bound to carry out, for better or worse.

One helpful concept is the German military principle of Schwerpunkt, which roughly translates to “focal point.” You need to pick the battles that will prove decisive, the ones that matter and which you can win. Or, as Richard Rumelt has put it, good strategy puts relative strength against relative weakness. Figuring that out is what makes the difference.

Choosing The Right Battles, Fighting With The Right Weapons

Che Guevara was, in many ways, the prototypical revolutionary. Charismatic and brilliant, he was a master at guerilla warfare, launching revolutions against authoritarian regimes across Africa and South America. Yet although he may have won some battles, he lost the wars and, in the end, was executed for his actions.

That’s not unusual. Violent uprisings almost always fail and studies have shown that nonviolent revolutions do much, much better. In the early 1960s a political scientist named Gene Sharp began to figure out why. Governments have significant advantages in the use of violence. Successful revolutionaires, he found, use alternate weapons rooted in psychology, sociology and economics, where they can build strength and regimes are vulnerable.

In much the same way, innovative firms are often poorly served by trying to identify the largest addressable market for a new product or service. Those are the customers incumbents have been serving for years, where they have vastly superior knowledge, experience and relationships. Competing for that business will inevitably be an uphill battle.

A better strategy is to identify a hair on fire use case — a customer who needs a problem fixed so badly that they are willing to overlook the inevitable glitches in a new product or service. They will help identify shortcomings early and collaborate to correct them. As things get ironed out you can gain traction and compete for bigger markets.

For example, Tesla didn’t try to sell electric cars to everyone, at least not at first. Instead it sold high performance, environmentally friendly roadsters to Silicon Valley millionaires. Rather that compete with the big automakers head on, it pursued a market they couldn’t. A good strategy is specific. It doesn’t apply to everyone, but rather to a particular context.

Undermining Sources Of Power

During the civil rights movement, activists faced an uphill battle in the deep south, where the segregationists enjoyed a monopoly on state power, controlling not only legislatures, but police departments and the courts. Black citizens were terrorized and had absolutely no legal recourse. In many cases, it was the law enforcement officers who were doing the terrorizing.

But what if the activists weren’t poor, black and vulnerable, but elite, white and connected? That was essentially the strategy of the Freedom Summer Project, which recruited students from prestigious schools to spend the summer in Mississippi working to register voters and educate poor black children.

Almost immediately three of the activists disappeared and a national crisis ensued. President Johnson sent an army of FBI agents to investigate and the media descended onto the state. Terrified parents, whose children remained in Mississippi, sent urgent letters to their representatives in Congress. Local media in upscale white communities in the north closely covered events as they unfolded.

Of course, given that blacks were killed and tortured with complete disregard for decades, this sudden torrent of concern only underlined the inherent racism of the system. Yet still, that’s what made the strategy work. Civil rights leaders were able to put the strength of the national media and federal government, as well as the clout of industry, against the relative weakness of what passed for power in Mississippi.

The Freedom Summer’s exposure of Jim Crow would have significant ripple effects throughout the 1960s. It would help lead to the 1965 Voting Rights Act the very next year and many of the activists would go on to lead movements for women’s equality, for workers’ rights and against the Vietnam war. The country would be forever changed.

Creating A Dilemma Instead Of A Conflict

I once had a six-month assignment to restructure the operations of a troubled media company and the sales director was a real stumbling block. She never overtly objected. but was quietly sabotage progress. For example, she promised to hand over the clients she worked directly with to her staff, but never seemed to get around to it.

It was obvious that she intended to slow-walk everything until the six months were over and then return everything back to the way it was. As a longtime senior employee, she had considerable political capital within the organization and, because she was never directly insubordinate, creating a direct confrontation with her would be risky and unwise.

So rather than create a conflict, I designed a dilemma. I arranged with the CEO of a media buying agency for one of the salespeople to meet with a senior buyer and take over the account. The Sales Director had two choices. She could either let the meeting go ahead and lose her grip on the situation or try to derail the meeting. She chose the latter and was fired for cause. Once she was gone, her mismanagement became obvious and sales shot up.

Key to the success of a dilemma action is that it is seen as a constructive act rooted in a shared value. In the case of the Sales Director, she had agreed to give up her accounts and setting up the meeting was aligned with that agreement. That’s what created the dilemma. She had to choose between violating the shared value or giving up her resistance.

When you respond to an attack, you are fighting a battle in a time, place and context that your opposition has chosen. When you design a dilemma, on the other hand, you are setting the parameters, which allows you to bring relative strength to bear against relative weakness.

Mastering Strategic Conflict

We tend to think of change as a journey to bring about some alternative future state, but that’s only half of the story. The truth is that future state is in a strategic conflict with the status quo, which has inertia on its side and never yields its power gracefully. You can never bring about the desired future state until you address the status quo.

The key to doing that is to define the focal point of your efforts—the Schwerpunkt—where you can bring relative strength to bear against relative weakness. However Schwerpunkt is a dynamic, not a static, concept. As your actions impact the context, the focal point will necessarily change, requiring you to adjust with strategic agility.

In How Big Things Get Done, Bent Flyvbjerg argues that any planning big project requires experimentation and testing. You don’t start with answers, but questions. Planning consists of a series of low-cost virtual experiments in which you are exploring possibilities, identifying opportunities and exposing problems. We want to fail in planning, where it’s cheap, so we minimize failure in the real world, where it costs us dearly.

That’s why we need to take a more Bayesian approach to strategy, in which we don’t pretend that we have the “right” strategy, but endeavor to make it less wrong over time. Good strategy isn’t a master plan, but a process of discovery. It is, most of all, an iterative set of choices made about how to address meaningful challenges.

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

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