Tag Archives: Innovation

How Compensation Reveals Culture

Five Questions with Kate Dixon

How Compensation Reveals Culture

GUEST POST from Robyn Bolton

It’s time for your company’s All-Hands meeting. Your CEO stands on stage and announces ambitious innovation goals, talking passionately about the importance of long-term thinking and breakthrough results. Everyone nods enthusiastically, applauds politely, and returns to their desks to focus on hitting this quarter’s numbers.  After all, that’s what their bonuses depend on.

Kate Dixon, compensation expert and founder of Dixon Consulting, has watched this contradiction play out across Fortune 500 companies, B Corps, and startups. Her insight cuts to the heart of why so many innovation initiatives fail: we’re asking people to think long-term while paying them to deliver short-term.

In our conversation, Kate revealed why most companies are inadvertently sabotaging their own innovation efforts through their compensation structures—and what the smartest organizations are doing differently.


Robyn Bolton: Kate, when I first heard you say, “compensation is the expression of a company’s culture,” it blew my mind.  What do you mean by that?

Kate Dixon: If you want to understand what an organization values, look at how they pay their people: Who gets paid more? Who gets paid less? Who gets bigger bonuses? Who moves up in the organization and who doesn’t? Who gets long-term incentives?

The answers to these questions, and a million others, express the culture of the organization.  How we reward people’s performance, either directly or indirectly, establishes and reinforces cultural norms.  Compensation is usually the biggest, if not the biggest, expenses that a company has so they’re very thoughtful and deliberate about how it is used.  Which is why it tells you what the company actually does value.

RB: What’s the biggest mistake companies make when trying to incentivize innovation?

KD: Let’s start by what companies are good at when it comes to compensations and incentives.  They’re really good about base pay, because that’s the biggest part of pay for most people in an organization. Then they spend the next amount of time and effort trying to figure out the annual bonus structure. After that comes other benefits, like long term incentives, assuming they don’t fall by the wayside.

As you know, innovation can take a long time to payout, so long-term incentives are key to encouraging that kind of investment.  Stock options and restricted shares are probably the most common long-term incentives but cash bonuses, phantom stock, and ESOP shares in employee-owned companies are also considered long term incentives.

Large companies are pretty good using some equity as an incentive, but they tie it t long term revenue goals, not innovation. As you often remind us, “innovation is a means to the end, which is growth,” so tying incentives to growth isn’t bad but I believe that we can do better. Tying incentives to the growth goals and how they’re achieved will go a long way towards driving innovation.

RB: I’ve worked in and with big companies and I’ve noticed that while they say, “innovation is everyone’s job,” the people who get long-term incentives are typically senior execs.  What gives?

Long-term incentives are definitely underutilized, below the executive level, and maybe below the director level. Assuming that most companies’ innovation efforts aren’t moonshots that take decades to realize, it makes a ton of sense to use long-term incentives throughout the organization and its ecosystem.  However, when this idea is proposed, people often pushback because “it’s too complex” for folks lower in the organization, “they wouldn’t understand.” or “they won’t appreciate it”. That stance is both arrogant and untrue.  I’ve consistently seen that when you explain long-term incentives to people, they do get it, it does motivate them, and the company does see results.

RB: Are there any examples of organizations that are getting this right?

We’re seeing a lot more innovative and interesting risk-taking behaviors in companies that are not primarily focused on profit.

Our B Corp clients are doing some crazy, cool stuff.  We have an employee-owned company that is a consulting firm, but they had an idea for a software product.  They launched it and now it’s becoming a bigger and bigger part of their business.

Family-owned or public companies that have a single giganto shareholder are also hotbeds of long-term thinking and, therefore, innovation.  They don’t have that same quarter to quarter pressure that drives a relentless focus on what’s happening right now and allows people to focus on the future.

What’s the most important thing leaders need to understand about compensation and innovation?

If you’re serious about innovation, you should be incentivizing people all over the organization.  If you want innovation to be a more regular piece of the culture so you get better results, you’ve got to look at long term incentives.  Yes, you should reward people for revenue and short-term goals.  But you also need to consider what else is a precursor to our innovation. What else is makes the conditions for innovating better for people, and reward that, too.


Kate’s insight reveals the fundamental contradiction at the heart of most companies’ innovation struggles: you can’t build long-term value with short-term thinking, especially when your compensation system rewards only the latter.

What does your company’s approach to compensation say about its culture and values?

Image credit: Pexels

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Three Steps from Stuck to Success

Managing Uncertainty

Three Steps from Stuck to Success

GUEST POST from Robyn Bolton

When a project is stuck and your team is trying to manage uncertainty, what do you hear most often:

  1. “We’re so afraid of making the wrong decision that we don’t make any decisions.”
  2. “We don’t have time to explore a bunch of stuff. We need to make decisions and go.”
  3. “The problem is so multi-faceted, and everything affects everything else that we don’t know where to start.”

I’ve heard all three this week, each spoken by teams leads who cared deeply about their projects and teams.

Differentiating between risk and uncertainty and accepting that uncertainty would never go away, just change focus helped relieve their overwhelm and self-doubt.

But without a way to resolve the fear, time-pressure, and complexity, the project would stay stuck with little change of progressing to success.

Turn Uncertainty Into an Asset

It’s a truism in the field of innovation that you must fall in love with the problem, not the solution. Falling in love with the problem ensures that you remain focused on creating value and agnostic about the solution.

While this sounds great and logically makes sense, most struggle to do it. As a result, it takes incredible strength and leadership to wrestle with the problem long enough to find a solution.

Uncertainty requires the same strength and leadership because the only way out of it is through it. And, research shows, the process of getting through it, turns it into an asset.

Three Steps to Turn Uncertainty Into an Asset

Research in the music and pharmaceutical industries reveals that teams that embraced uncertainty engaged in three specific practices:

  1. Embrace It: Start by acknowledging the uncertainty and that things will change, go wrong, and maybe even fail. Then stay open to surprise and unpredictability, delving into the unknown “by being playful, explorative, and purposefully engaging in ventures with indeterminate outcome.”
  2. Fix It: Especially when dealing with Unknowable Uncertainty, which occurs when more info supports several different meanings rather than pointing to one conclusion, teams that succeed make provisional decisions to “fix” an uncertain dimension so they can move forward while also documenting the rationale for the fix, setting a date to revisit it, and criteria for changing it.
  3. Ignore It: It’s impossible to embrace every uncertainty at once and unwise to fix too many uncertainties at the same time. As a result, some uncertainties, you just need to ignore. Successful teams adopt “strategic ignorance” “not primarily for purposes of avoiding responsibility [but to] allow postponing decisions until better ideas emerge during the collaborative process.

This practice is iterative, often leading to new knowledge, re-examined fixes, and fresh uncertainties. It sounds overwhelming but the teams that are explicit and intentional about what they’re embracing, fixing, and ignoring are not only more likely to be successful, but they also tend to move faster.

Put It Into Practice

Let’s return to NatureComp, a pharmaceutical company developing natural treatments for heart disease.

Throughout the drug development process, they oscillated between addressing What, Who, How, and Where Uncertainties. They did that by changing whether they embraced, fixed, or ignored each type of uncertainty at a given point:

As you can see, they embraced only one type of uncertainty to ensure focus and rapid progress. To avoid the fear of making mistakes, they fixed uncertainties throughout the process and returned to them as more information came available, either changing or reaffirming the fix. Ignoring uncertainties helped relieve feelings of being overwhelmed because the team had a plan and timeframe for when they would shift from ignoring to embracing or fixing.

Uncertainty is Dynamic – You Need to Be Dynamic, Too

You’ll never eliminate uncertainty. It’s too dynamic to every fully resolve. But by dynamically embracing, fixing, and ignore it in all its dimensions, you can accelerate your path to success.

Image credit: Pexels

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Don’t Fall for the Design Squiggle Lie

Don't Fall for the Design Squiggle Lie

GUEST POST from Robyn Bolton

Last night, I lied to a room full of MBA students. I showed them the Design Squiggle, and explained that innovation starts with (what feels like) chaos and ends with certainty.

The chaos part? Absolutely true.

The certainty part? A complete lie.

Nothing is Ever Certain (including death and taxes)

Last week I wrote about the different between risk and uncertainty.  Uncertainty occurs when we cannot predict what will happen when acting or not acting.  It can also be broken down into Unknown uncertainty (resolved with more data) and Unknowable uncertainty (which persists despite more data).

But no matter how we slice, dice, and define uncertainty, it never goes away.

It may be higher or lower at different times,

More importantly, it changes focus.

Four Dimensions of Uncertainty

Something new that creates value (i.e. an innovation) is multi-faceted and dynamic. Treating uncertainty as a single “thing”  therefore clouds our understanding and ability to find and addresses root causes.

That’s why we need to look at different dimensions of uncertainty.

Thankfully, the ivory tower gives us a starting point.

WHAT: Content uncertainty relates to the outcome or goal of the innovation process. To minimize it, we must address what we want to make, what we want the results to be, and what our goals are for the endeavor.

WHO: Participation uncertainty relates to the people, partners, and relationships active at various points in the process. It requires constant re-assessment of expertise and capabilities required and the people who need to be involved.

HOW: Procedure uncertainty focuses on the process, methods, and tools required to make progress. Again, it requires constant re-assessment of how we progress towards our goals.

WHERE: Time-space uncertainty focuses on the fact that the work may need to occur in different locations and on different timelines, requiring us to figure out when to start and where to work.

It’s tempting to think each of these are resolved in an orderly fashion, by clear decisions made at the start of a project, but when has a decision made on Day 1 ever held to launch day?

Uncertainty in Pharmaceutical Development

 Let’s take the case of NatureComp, a mid-sized company pharmaceutical company and the uncertainties they navigated while working to replicate, develop, and commercialize a natural substance to target and treat heart disease.

  1. What molecule should the biochemists research?
  2. How should the molecule be produced?
  3. Who has the expertise and capability to synthetically poduce the selected molecule because NatureComp doesn’t have the experience required internally?
  4. Where to produce that meets the synthesization criteria and could produce cost-effectively at low volume?
  5. What target disease specifically should the molecule target so that initial clincial trials can be developed and run?
  6. Who will finance the initial trials and, hopefully, become a commercialization partner?
  7. Where would the final commercial entity exist (e.g. stay in NatureComp, move to partner, stand-alone startup) and the molecule produced?

 And those are just the highlights.

It’s all a bit squiggly

The knotty, scribbly mess at the start of the Design Squiggle is true. The line at the end is a lie because uncertainty never goes away. Instead, we learn and adapt until it feels manageable.

Next week, you’ll learn how.

Image credit: The Process of Design Squiggle by Damien Newman, thedesignsquiggle.com

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Mismanaging Uncertainty & Risk is Killing Our Businesses

Mismanaging Uncertainty & Risk is Killing Our Businesses

GUEST POST from Robyn Bolton

During September 2011, the English language officially died.  That was the month that the Oxford English Dictionary, long regarded as the accepted authority on the English language published an update in which “literally” also meant figuratively. By 2016, every other major dictionary had followed suit.

The justification was simple: “literally” has been used to mean “figuratively” since 1769. Citing examples from Louisa May Alcott’s Little Women, Charles Dickens’ David Copperfield, Charlotte Bronte’s Jane Eyre, and F. Scott Fitzgerald’s The Great Gatsby, they claimed they were simply reflecting the evolution of a living language.

What utter twaddle.

Without a common understanding of a word’s meaning, we create our own definitions which lead to secret expectations, and eventually chaos.

And not just interpersonally. It can affect entire economies.

Maybe the state of the US economy is just a misunderstanding

Uncertainty.

We’re hearing and saying that word a lot lately. Whether it’s in reference to tariffs, interest rates, immigration, or customer spending, it’s hard to go a single day without “uncertainty” popping up somewhere in your life.

But are we really talking about “uncertainty?”

Uncertainty and Risk are not the same.

The notion of risk and uncertainty was first formally introduced into economics in 1921 when Frank Knight, one of the founders of the Chicago school of economics, published his dissertation Risk, Uncertainty and Profit.  In the 114 since, economists and academics continued to enhance, refine, and debate his definitions and their implications.

Out here in the real world, most businesspeople use them as synonyms meaning “bad things to be avoided at all costs.”

But they’re not synonyms. They have distinct meanings, different paths to resolution, and dramatically different outcomes.

Risk can be measured and/or calculated.

Uncertainty cannot be measured or calculated

The impact of tariffs, interest rates, changes in visa availability, and customer spending can all be modeled and quantified.

So it’s NOT uncertainty that’s “paralyzing” employers.  It’s risk!

Not so fast my friend.

Not all Uncertainties are the same

According to Knight, Uncertainty drives profit because it connects “with the exercise of judgment or the formation of those opinions as to the future course of events, which…actually guide most of our conduct.”

So while we can model, calculate, and measure tariffs, interest rates, and other market dynamics, the probability of each outcome is unknown.  Thus, our response requires judgment.

Sometimes.

Because not all uncertainties are the same.

The Unknown (also known as “uncertainty based on ignorance”) exists when there is a “lack of information which would be necessary to make decisions with certain outcomes.”

The Unknowable (“uncertainty based on ambiguity”) exists when “an ongoing stream [of information]  supports several different meanings at the same time.”

Put simply, if getting more data makes the answer obvious, we’re facing the Unknown and waiting, learning, or modeling different outcomes can move us closer to resolution. If more data isn’t helpful because it will continue to point to different, equally plausible, solutions, you’re facing the Unknowable.

So what (and why did you drag us through your literally/figuratively rant)?

If you want to get unstuck – whether it’s a project, a proposal, a team, or an entire business, you first need to be clear about what you’re facing.

If it’s a Risk, model it, measure it, make a decision, move forward.

If it’s an uncertainty, what kind is it?

If it’s Unknown, decide when to decide, ask questions, gather data, then, when the time comes, decide and move forward

If it’s Unknowable, decide how to decide then put your big kid pants on, have the honest and tough conversations, negotiate, make a decision, and move on.

I mean that literally.

Image credit: Pixabay

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Back to Basics for Leaders and Managers

Back to Basics for Leaders and Managers

GUEST POST from Robyn Bolton

Imagine that you are the CEO working with your CHRO on a succession plan.  Both the CFO and COO are natural candidates, and both are, on paper, equally qualified and effective.

The CFO distinguishes herself by consistently working with colleagues to find creative solutions to business issues, even if it isn’t the optimal solution financially, and inspiring them with her vision of the future. She attracts top talent and builds strong relationships with investors who trust her strategic judgment. However, she sometimes struggles with day-to-day details and can be inconsistent in her communication with direct reports.

The COO inspires deep loyalty from his team through consistent execution and reliability. People turn down better offers to stay because they trust his systematic approach, flawless delivery, and deep commitment to developing people. However, his vision rarely extends beyond “do things better,” rigidly adhering to established processes and shutting down difficult conversations with peers when change is needed.

Who so you choose?

The COO feels like the safer bet, especially in uncertain times, given his track record of proven execution, loyal teams, and predictable results. While the CFO feels riskier because she’s brilliant but inconsistent, visionary but scattered.

It’s not an easy question to answer.

Most people default to “It depends.”

It doesn’t depend.

It doesn’t “depend,” because being CEO is a leadership role and only the CFO demonstrates leadership behaviors. The COO, on the other hand, is a fantastic manager, exactly the kind of person you want and need in the COO role. But he’s not the leader a company needs, no matter how stable or uncertain the environment.

Yet we all struggle with this choice because we’ve made “leadership” and “management” synonyms. Companies no longer have “senior management teams,” they have “senior/executive leadership teams.”  People moving from independent contributor roles to oversee teams are trained in “people leadership,” not “team management” (even though the curriculum is still largely the same).

But leadership and management are two fundamentally different things.

Leader OR Manager?

There are lots of definitions of both leaders and managers, so let’s go back to the “original” distinction as defined by Warren Bennis in his 1987 classic On Becoming a Leader

LeadersManagers
·       Do the right things·       Challenge the status quo·       Innovate·       Develops·       Focuses on people·       Relies on trust·       Has a long-range perspective·       Asks what and why·       Has an eye on the horizon·       Do things right·       Accept the status quo·       Administers·       Maintains·       Focuses on systems and structures·       Relies on control·       Has a short-range view·       Asks how and when·       Has an eye on the bottom line

In a nutshell: leaders inspire people to create change and pursue a vision while managers control systems to maintain operations and deliver results.

Leaders AND Managers!

Although the roles of leaders and managers are different, it doesn’t mean that the person who fills those roles is capable of only one or the other. I’ve worked with dozens of people who are phenomenal managers AND leaders and they are as inspiring as they are effective.

But not everyone can play both roles and it can be painful, even toxic, when we ask managers to take on leadership roles and vice versa. This is the problem with labeling everything outside of individual contributor roles as “leadership.”

When we designate something as a “people leadership” role and someone does an outstanding job of managing his team, we believe he’s a leader and promote him to a true leadership role (which rarely ends well).  Conversely, when we see someone displaying leadership qualities and promote her into “people leadership,” we may be shocked and disappointed when she struggles to manage as effortlessly as she inspires.

The Bottom Line

Leadership and Management aren’t the same thing, but they are both essential to an organization’s success. They key is putting the right people in the right roles and celebrating their unique capabilities and contributions.

Image credit: Unsplash

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McKinsey is Wrong That 80% Companies Fail to Generate AI ROI

McKinsey is Wrong That 80% Companies Fail to Generate AI ROI

GUEST POST from Robyn Bolton

Sometimes, you see a headline and just have to shake your head.  Sometimes, you see a bunch of headlines and need to scream into a pillow.  This week’s headlines on AI ROI were the latter:

  • Companies are Pouring Billions Into A.I. It Has Yet to Pay Off – NYT
  • MIT report: 95% of generative AI pilots at companies are failing – Forbes
  • Nearly 8 in 10 companies report using gen AI – yet just as many report no significant bottom-line impact – McKinsey

AI has slipped into what Gartner calls the Trough of Disillusionment. But, for people working on pilots,  it might as well be the Pit of Despair because executives are beginning to declare AI a fad and deny ever having fallen victim to its siren song.

Because they’re listening to the NYT, Forbes, and McKinsey.

And they’re wrong.

ROI Reality Check

In 20205, private investment in generative AI is expected to increase 94% to an estimated $62 billion.  When you’re throwing that kind of money around, it’s natural to expect ROI ASAP.

But is it realistic?

Let’s assume Gen AI “started” (became sufficiently available to set buyer expectations and warrant allocating resources to) in late 2022/early 2023.  That means that we’re expecting ROI within 2 years.

That’s not realistic.  It’s delusional. 

ERP systems “started” in the early 1990s, yet providers like SAP still recommend five-year ROI timeframes.  Cloud Computing“started” in the early 2000s, and yet, in 2025, “48% of CEOs lack confidence in their ability to measure cloud ROI.” CRM systems’ claims of 1-3 years to ROI must be considered in the context of their 50-70% implementation failure rate.

That’s not to say we shouldn’t expect rapid results.  We just need to set realistic expectations around results and timing.

Measure ROI by Speed and Magnitude of Learning

In the early days of any new technology or initiative, we don’t know what we don’t know.  It takes time to experiment and learn our way to meaningful and sustainable financial ROI. And the learnings are coming fast and furious:

Trust, not tech, is your biggest challenge: MIT research across 9,000+ workers shows automation success depends more on whether your team feels valued and believes you’re invested in their growth than which AI platform you choose.

Workers who experience AI’s benefits first-hand are more likely to champion automation than those told, “trust us, you’ll love it.” Job satisfaction emerged as the second strongest indicator of technology acceptance, followed by feeling valued.  If you don’t invest in earning your people’s trust, don’t invest in shiny new tech.

More users don’t lead to more impact: Companies assume that making AI available to everyone guarantees ROI.  Yet of the 70% of Fortune 500 companies deploying Microsoft 365 Copilot and similar “horizontal” tools (enterprise-wide copilots and chatbots), none have seen any financial impact.

The opposite approach of deploying “vertical” function-specific tools doesn’t fare much better.  In fact, less than 10% make it past the pilot stage, despite having higher potential for economic impact.

Better results require reinvention, not optimization:  McKinsey found that call centers that gave agents access to passive AI tools for finding articles, summarizing tickets, and drafting emails resulted in only a 5-10% call time reduction.  Centers using AI tools to automate tasks without agent initiation reduced call time by 20-40%.

Centers reinventing processes around AI agents? 60-90% reduction in call time, with 80% automatically resolved.

How to Climb Out of the Pit

Make no mistake, despite these learnings, we are in the pit of AI despair.  42% of companies are abandoning their AI initiatives.  That’s up from 17% just a year ago.

But we can escape if we set the right expectations and measure ROI on learning speed and quality.

Because the real concern isn’t AI’s lack of ROI today.  It’s whether you’re willing to invest in the learning process long enough to be successful tomorrow.

Image credit: Microsoft CoPilot

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Is All Publicity Good Publicity?

Some Insights from Cracker Barrel

Is All Publicity Good Publicity?

GUEST POST from Pete Foley

The Cracker Barrel rebrand has certainly created a lot of media and social media attention.  Everything happened so fast that I have had to rewrite this introduction twice in as many days. Originally written when the new logo was in place, it has subsequently been withdrawn and replaced with the original one.

It’s probably been a expensive, somewhat embarrassing and sleepless week for the Cracker Barrel management team. But also one that generated a great deal of ‘free’ publicity for them. You could argue that despite the cost of a major rebranding and de-branding, this episode was priceless from a marketing penetration perspective. There is no way they could have spent enough to generate the level of media and social media they have achieved, if not necessarily enjoyed.

But of course, it raises the perennial question ‘is all publicity good publicity?’  With brands, I’d argue not always.  For certain, both good and bad publicity adds to ‘brand fluency’ and mental availability. But whether that is positively or negatively valanced, or triggers implicit or explicit approach or avoid responses is less straightforward. A case in point is of course Budweiser, who generated a lot of free media, but are still trying to drag themselves out of the Bud Light controversy.

Listening to the Customer: But when the dust settles, I suspect that Cracker Barrel will come out of this quite well. They enjoyed massive media and social media exposure, elevating the ‘mindshare’ of their brand. And to their credit, they’ve also, albeit a little reluctantly, listened to their customers. The quick change back to their legacy branding must ave been painful, but from a customer perspective, it screams ‘I hear you, and I value you’.

The Political Minefield. But there is some lingering complexity. Somehow the logo change became associated with politics. That is not exactly unusual these days, and when it happens, it inevitably triggers passion, polarization and outrage. I find it a quite depressing commentary on the current state of society that a restaurant logo can trigger ‘outrage. But like it or not, as change agents, these emotions, polarization and dubious political framing are a reality we all have to deal with. In this case, I personally suspect that any politically driven market effects will be short-lived. To my eye, any political position was unintentional, generated by social media rather than the company, and the connection between logo design and political affiliation is at best tenuous, and lacks the depth of meaning typically required for persistent outrage. The mobs should move on.

The Man on the Moon: But it does illustrate a broader problem for innovation derived from our current polarized society. If a logo simplification can somehow take on political overtones, pretty much any change or innovation can. Change nearly always comes with supporters and detractors, reflecting the somewhat contradictory nature of human behavior and cognition – we are change agents who also operate largely from habits. Our response to innovation is therefore inherently polarized, both as individuals and as a society, with elements of both behavioral inertia and change affinity. But with society deeply polarized and divided, it is perhaps inevitable that we will see connections between two different polarizations, whether they are logical or causal or not. We humans are pattern creators, evolved to see connections where they may or may not exist. This ability to see patterns using partial data protected us, and helped us see predators, food or even potential mates using limited information. Spotting a predator from a few glimpses through the trees obviously has huge advantages over waiting until it ambushes us. So we see animals in clouds, patterns in the stars, faces on the moon, and on some occasions, political intent where none probably exists.

My original intent with this article was to look at the design change for the logo from a fundamental visual science perspective. From that perspective, I thought it was quite flawed. But as the story quickly evolved, I couldn’t ignore the societal, social media and political element. Context really does matter. But if we step back from that, there are stillo some really interesting technical design insights we can glean.

1.  Simplicity is deceptively complex. The current trend towards reducing complexity and even color in a brands visual language superficially makes sense.  After all, the reduced amount of information and complexity should be easier for our brains to visually process.  And low cognitive processing costs come with all sorts of benefits. But unfortunately it’s not quite that simple.  With familiar objects, our brain doesn’t construct images from scratch, but instead takes the less intuitive, but more cognitively efficient route of unconsciously matching what we see to our existing memory.  This allows us to recognize familiar objects with a minimum of cognitive effort, and without needing to process all of the visual details they contain.  Our memory, as opposed to our vision, fills in much of the details.  But this process means that dramatic simplification of a well established visual language or brand, if not done very carefully, can inhibit that matching process.  So counterintuitively, if we remove the wrong visual cues, it can make a simplified visual language or brand more difficult to process than it’s original, and thus harder to find, at least for established customers.  Put another way, the way our visual system operates, it automatically and very quickly (faster than we can consciously think) reduces images down to their visual essence. If we try to do that ourselves, we need to very clearly understand what the key visual elements are, and make sure we keep the right ones. Cracker Barrel has lost some basic shapes, and removed several visual elements completely, meaning it has likely not done a great job in that respect.

2.  Managing the Distinctive-Simple Trade Off.  Our brains have evolved to be very efficient, so as noted above, we only do the ‘heavy lifting’ of encoding complex designs into memory once.  We then use a shortcut of matching what we see to what we already know, and so can recognize relatively complex but familiar objects with relatively little effort. This matching process means a familiar visual scene like the old Cracker Barrel logo is quickly processed as a ‘whole’, as opposed to a complex, detailed image.  But unfortunately, this means the devil is in the details, and a dramatic simplification like Cracker Barrels can unintentionally remove many of the cues or signals that allowed us to unconsciously recognize it with minimal cognitive effort. 

And the process of minimizing visual complexity can also remove much of what made the brand both familiar and distinctive in parallel.  And it’s the relatively low resolution elements of the design that make it distinctive.  To get a feel for this, try squinting at the old and new brand.  With the old design, squinting loses the details of the barrel, or the old man,  But the rough shape of them, and of the logo, and their relative positions remain.  That gives a rough approximation of what our visual system feeds into our brain when looking for a match with our memory. Do the same with the new logo, and it has little or no consistency or distinctivity.  This means the new logo is unintentionally making it harder for customers to either find it (in memory or elsewhere) or recognize it. 

As a side effect, oversimplification also risks looking ‘generic’, and falling into the noise created by a growing sea of increasingly simplified logos. Now, to be fair, historical context matters.  If information is not encoded into memory, the matching process fails, and a visual memory needs to be built from scratch.  So if we were a new brand, Cracker Barrels new brand visual language might lack distinctivity, but it would certainly carry ease of processing benefits for new customers, whereas the legacy label would likely be too complex, and would quite likely be broadly deselected.  But because the old design already owns ‘mindspace’ with existing customers, the dramatic change risks and removal of basic visual cues asks repeat customers to ’think’ at a more conscious level, and so potentially challenges long established habits.  A major risk for any established brand  

3.  Distinctivity Matters. All visual branding represents a trade off.  We need signal to noise characteristics that stand out from the crowd, or we are unlikely to be noticed. But we also need to look like we belong to a category, or we risk being deselected.  It’s a balancing act.  Look too much like category archetypes, and lack distinctivity, and we fade into the background noise, and appear generic.  But look too different, and we stand out, but in a potentially bad way, by asking potential customers to put in too much work to understand us. This will often lead a customer to quickly de-select us.  It’s a trade off where controlled complexity can curate distinctive cues to stand out, while also incorporating enough category prototype cues to make it feel right.  Combine this with sufficient simplicity to ease processing fluency, and we likely have a winning design, especially for new customers.  But it’s a delicate balancing act between competing variables

4.  People don’t like change. As mentioned earlier, we have a complex relationship with change. We like some, but not too much. Change asks their brains to work harder, so it needs to provide value. I’m skeptical the in this case, it added commensurate value to the customer.  And change also breaks habits. So any major rebrand comes with risk for a well established brand.  But it’s a balancing act, and we should remain locked into aging designs forever.  As the context we operate in changes, we need to ‘move with the times’, and remain consistent in our relationship with our context, at least as much as we remain consistent with our history. 

And of course, there is also a trade off between a visual language that resonates with existing customers and one designed to attract new ones, as ultimately, virtually every brand needs both trial and repeat.   But for established brands evolutionary change is usually the way to achieve reach and trial without alienating existing customers.  Coke are the masters of this.   Look at how their brand has evolved over time, staying contemporary, but without creating the kind of ‘cognitive jolts’ the Cracker Barrel rebrand has created.  If you look at an old Coke advertisement, you intuitively know both that it’s old, but also that it is Coke.

Brands and Politics.    I generally advise brands to stay out of politics. With a few exceptions, entering this minefield risks alienating 50% of our customers. And any subsequent ‘course corrections’ risk alienating those that are left. For a vast majorities of companies, the cost-benefit equation simply doesn’t work!

But in this case, we are seeing consumers interpreting change through a political lens, even when that was not the intent. But just because it’s not there doesn’t mean it doesn’t matter, as Cracker barrel is discovered.  So I’m changing my advice from ‘don’t be political’ to ‘try and anticipate if you’re initiative could be misunderstood as political’.  It’s a subtle, but important difference. 

And as a build, marketers often try to incorporate secondary messages into their communication.  But in todays charged political climate, I think we need to be careful about being too ‘clever’ in this respect.  Consumer’s sensitivity to socio-political cues is very high at present, as the Cracker Barrel example shows.  So if they can see political content where none was intended, they are quite likely to spot any secondary or ‘implicit’ messaging.   So for example, an advertisement that features a lot of flags and patriotic displays, or one that predominately features members of the LBGTQ community both run a risk of being perceived as ‘making a political statement’, whether it is intended to or not.  There is absolutely nothing wrong with either patriotism or the LBGT community, and to be fair, as society becomes increasingly polarized, it’s increasingly hard to create content that doesn’t somehow offend someone.  At least without becoming so ‘vanilla’ that the content is largely pointless, and doesn’t cut through the noise. But from a business perspective, in today’s socially and politically fractured world, any perceived political bias or message in either direction comes with business risks.  Proceed with caution.

And keep in mind we’ve evolved to respond more intensely to negatives than positives – Caution kept our ancestors alive.  If we half see a coiled object in the grass that could be a garden hose or a snake, our instinct  is to back off.  If we mistake a garden hose for a snake to cost is small. But if we mistake a venomous snake for a garden hose, the cost could be high. 

As I implied earlier, when consumers look at our content though specific and increasingly intense partisan lens, it’s really difficult for us to not be perceived as being either ‘for’ or ‘against’ them. And keep in mind, the cost of undoing even an unintended political statement is inevitably higher than the cost of making it. So it’s at very least worth trying to avoid being dragged into a political space whenever possible, especially as a negative.  So be careful out there, and embrace some devils advocate thinking. Even if we are not trying to make a point, implicitly or explicitly, we need to step back and look at how those who see the world from deeply polarized position could interpret us.  The ‘no such thing as bad publicity’ concept sits on very thin ice at this moment in time, where social media often seeks to punish more than communicate  

Image credits: Wikimedia Commons

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This AI Creativity Trap is Gutting Your Growth

This AI Creativity Trap is Gutting Your Growth

GUEST POST from Robyn Bolton

“We have to do more with less” has become an inescapable mantra, and goodness, are you trying.  You’ve slashed projects and budgets, “right-sized” teams, and tried any technology that promised efficiency and a free trial.  Now, all that’s left is to replace the people you still have with AI creativity tools.  Welcome to the era of the AI Innovation Team.

It sounds like a great idea.  Now, everyone can be an innovator with access to an LLM.  Heck, even innovation firms are “outsourcing” their traditional work to AI, promising the same radical results with less time and for far less money.

It sounds almost too good to be true.

Because it is too good to be true.

AI is eliminating the very brain processes that produce breakthrough innovations.

This isn’t hyperbole, and it’s not just one study.

MIT researchers split 54 people into three groups (ChatGPT users, search engine users, and no online/AI tools using ChatGPT) and asked them to write a series of essays.  Using EEG brain monitoring, they found that the brain connectivity in networks crucial for creativity and analogous thinking dropped by 55%.

Even worse? When people stopped using AI, their brains stayed stuck in this diminished state.

University of Arkansas researchers tested AI against 3,562 humans on a series of four challenges involving finding new uses for everyday objects, like a brick or paperclip.   While AI scored slightly higher on standard tests, when researchers introduced a new context, constraint, or modification to the object, AI’s performance “collapsed.” Humans stayed strong.

Why? AI relies on pattern matching and is unable to transfer its “creativity” to unexpected scenarios. Humans use analogical reasoning so are able to flex quickly and adapt.

University of Strasbourg researchers analyzed 15,000 studies of COVID-19 infections and found that teams that relied heavily on AI experts produced research that got fewer citations and less media attention. However, papers that drew from diverse knowledge sources across multiple fields became widely cited and influential.

The lesson? Breakthroughs require cross-domain thinking, which is precisely what diverse human teams provide, and, according to the MIT study, AI is unable to produce.

How to optimize for efficiency AND impact (and beat your competition)

While this seems like bad news if you’ve already cut your innovation team, the silver lining is that your competition is probably making the same mistake.

Now that you know better, you can do better, and that creates a massive opportunity.

Use AI for what it does well:

  • Data analysis and synthesis
  • Rapid testing and iteration to refine an advanced prototype
  • Process optimization

Use humans for what we do well:

  • Make meaningful connections across unrelated domains
  • Recognize when discoveries from one field apply to another
  • Generate the “aha moments” that redefine industries

Three Questions to Ask This Week

  1. Where did your most recent breakthroughs come from? How many came from connecting insights across different domains? If most of your innovations require analogical leaps, cutting creative teams could kill your pipeline.
  2. How are teams currently using AI tools? Are they using AI for data synthesis and rapid iteration? Good. Are they replacing human ideation entirely? Problem.
  3. How can you see it to believe it? Run a simple experiment: Give two teams an hour to solve a breakthrough challenge. Have one solve it with AI assistance and one without.  Which solution is more surprising and potentially breakthrough?

The Hidden Competitive Advantage

As AI commoditizes pattern recognition, human analogical thinking and creativity become a competitive advantage.

The companies that figure out the right balance will eat everyone else’s lunch.

Image credit: Gemini

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Creative Confidence Beats Market Signals

And How Johnny Cash Used it to Resurrect His Career

Creative Confidence Beats Market Signals

GUEST POST from Robyn Bolton

The best business advice can destroy your business. Especially when you follow it perfectly.

Just ask Johnny Cash.

After bursting onto the scene in the mid-1950s with “Folsom Prison Blues”, Cash enjoyed twenty years of tremendous success.   By the 1970s, his authentic, minimalist approach had fallen out of favor.

Eager to sell records, he pivoted to songs backed by lush string arrangements, then to “country pop” to attract mainstream audiences and feed the relentless appetite of 900 radio stations programming country pop full-time.

By late 1992, Johnny Cash’s career was roadkill. Country radio had stopped playing his records, and Columbia Records, his home for 25 years, had shown him the door. At 60, he was marooned in faded casinos, playing to crowds preferring slot machines to songs.

Then he took the stage at Madison Square Garden for Bob Dylan’s 30th anniversary concert.

In the audience sat Rick Rubin, co-founder of Def Jam Recordings and uber producer behind Public Enemy, Run-DMC, and Slayer, amongst others. He watched in awe as Cash performed, seeing not a relic but raw power diluted by smart decisions.

The Stare-Down that Saved a Career

Four months later, Rubin attended Cash’s concert at The Rhythm Café in Santa Anna, California. According to Cash’s son, “When they sat down at the table, they said: ‘Hello.’ But then my dad and Rick just sat there and stared at each other for about two minutes without saying anything, as if they were sizing each other up.”

Eventually, Cash broke the silence, “What’re you gonna do with me that nobody else has done to sell records for me?”

What happened next resurrected his career.

Rubin didn’t promise record sales.  He promised something more valuable: creative control and a return to Cash’s roots.

Ten years later, Cash had a Grammy, his first gold record in thirty years, and CMA Single of the Year for his cover of Nine Inch Nails’ “Hurt,” and millions in record sales.

“I wasn’t prepared for what I saw, what I had written in my diary was now superimposed on the life of this icon and sung so beautifully and emotionally. It was a reminder of what an important medium music is. Goosebumps up the spine. It really made sense. I thought: ‘What a powerful piece of art.’ I never got to meet Johnny, but I’m happy I contributed in the way I did. It wasn’t my song anymore.” — Trent Reznor

When Smart Decisions Become Fatal

Executives do exactly what Cash did.  You respond to market signals. You pivot your offering when customer preferences shift and invest in emerging technologies.

All logical. All defensible to your board. All potentially fatal.

Because you risk losing what made you unique and valuable. Just as Cash lost his minimalist authenticity and became a casualty of his effort to stay relevant, your business risks losing sight of its purpose and unique value proposition.

Three Beliefs at the Core of a Comeback

So how do you avoid Cash’s initial mistake while replicating his comeback? The difference lies in three beliefs that determine whether you’ll have the creative courage to double down on what makes you valuable instead of diluting it.

  1. Creative confidence: The belief we can think and act creatively in this moment.
  2. Perceived value of creativity: Our perceived value of thinking and acting in new ways.
  3. Creative risk-taking: The willingness to take the risks necessary for active change.

Cash wanted to sell records, and he:

  1. Believed that he was capable of creativity and change.
  2. Saw the financial and reputational value of change
  3. Was willing to partner with a producer who refused to guarantee record sales but promised creative control and a return to his roots.

Your Answers Determine Your Outcome

Like Cash, what you, your team, and your organization believe determines how you respond to change:

  1. Do I/we believe we can creatively solve this specific challenge we’re facing right now?
  2. Is finding a genuinely new approach to this situation worth the effort versus sticking with proven methods?
  3. Am I/we willing to accept the risks of pursuing a creative solution to our current challenge?”

Where there are “no’s,” there is resistance, even refusal, to change.  Acknowledge it.  Address it.  Do the hard work of turning the No into a Yes because it’s the only way change will happen.

The Comeback Question

Cash proved that authentic change—not frantic pivoting—resurrects careers and disrupts industries. His partnership with Rubin succeeded because he answered “yes” to all three creative beliefs when it mattered most. Where are your “no’s” blocking your comeback?

Image credit: Wikimedia Commons

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Navigating Unwelcome Change

Five Questions with Theresa Ward

Navigating Unwelcome Change

GUEST POST from Robyn Bolton

Picture this: your boss announces a major reorganization with a big smile, expecting you to be excited about “new opportunities.” Meanwhile, you’re sitting there thinking “What the hell just happened to my job?”

Theresa Ward, founder and Chief Momentum Officer of Fiery Feather, has spent years watching this disconnect play out. Her insight? Leaders are expected to sell change while still personally struggling with it, creating what she calls “that weird middle ground” where authenticity goes to die.

Our conversation revealed why unwelcome change triggers the same response as grief, and why leaders who stop pretending they’ve got it figured out are more successful.


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

Theresa Ward: That middle managers need to be enthusiastic about a change, or at least appear enthusiastic, to lead their teams through it.

RB: It seems like enthusiasm is important to get people on board and doing what they need to do to make change happen. Why is this wrong?

TW: Because it makes you wonder if this person is being authentic.  Are they genuinely enthusiastic?  Do they really believe this is the right thing?

To be clear, I’m talking about Unwelcome Change. Change that is thrust upon you.  How we experience Unwelcome Change is the same way we experience grief.

When we initially experience Unwelcome Change, our brain goes into shock or denial which can actually trigger an increase in engagement and productivity.

Then we move into anger and blame, which looks different for all of us. We’ve probably experienced somebody yelling in a meeting, but it can also look like turning off the camera, folding your arms, rolling your eyes, and disengaging.

Bargaining. I always think of that clip from Jerry Maguire, where he’s got the goldfish, and he says, “Who’s coming with me?” because he’s going to make lemonades out of this lemon, even if it’s a completely ridiculous condition.

Then depression sets in.  It’s the low point but it’s also where you’re really ready to admit that you’re upset, sad, and grieving the change that has happened. It’s the dark before the dawn.

RB: If everyone goes through this grief process, why do some leaders seem genuinely enthusiastic about the change?”

TW: If they came up with the idea, they’re not going to be angry or depressed about their own idea.

But even if it’s one announcement, people don’t experience just one change.  It’s not, “Our budget is going from X to Y” and everyone can just get used to it. It’s double or triple that!  It’s a budget cut, then a reorg, then a new boss, then a friend being laid off, then a project you loved getting trashed.  You’re dealing with onion layers of change.

We all go through different stages at speeds. You can’t rush it. Sometimes you just have to be like, “Oh, okay, I’m feeling pretty angry this week. I’m just gonna have to sit through my anger phase and realize that it’s a phase.”

RB: I get that you can’t rush the process, but change doesn’t slow down so you can catch up.  What can people do to navigate change while they’re processing it?

TW: BLT, baby.  These are 3 tools, not a formula, that you can use for different experiences.

B stands for Benefit of Change. This is finding the silver lining, something we often underestimate because it’s such a broad cliche. For it to be effective, you need to look for a specific and personal silver lining.  For example, a friend of mine works for a company that was acquired.  He was not a fan of how the culture was changing, but the bigger company offered tuition reimbursement. So he used that to get his master’s of fine arts for free.

L is Locus of Control.  Take inventory of everything that’s upsetting you and place it into one of 3 categories: What can I control? What can I influence? What do I need to just surrender? Sitting up at night and worrying about whether the budget will be cut again is outside of my control.  So, I shouldn’t spend my time and energy on that.  Instead, I need to focus on what I can control, like my attitude and response.

T is Take the Long View. Every day we find ourselves in situations that get us emotional – a traffic jam, getting cut off in traffic, or flubbing a big client presentation. When we get more emotional than what the situation calls for, ask how you’re going to feel about the situation tomorrow, then in a month, then a year Because when our fight or flight brain mode kicks in, we catastrophize things.  But the reality is that most of it won’t matter tomorrow.

RB: What’s the most important mindset shift leaders need to make to help their teams through unwelcome change?

TW: Find what works for you first then, with empathy, help your team. Like the Airline Safety Video, put your mask on first, then help others.  It allows you to be authentic and builds empathy with the team.  Two things required to start the shift from unwelcome to accepted.


Theresa’s BLT framework won’t make change painless, but it gives you permission to admit that transformation is hard, even for leaders. The moment you stop pretending you’ve got it all figured out is the moment your team starts trusting you to guide them through the mess.

Image credit: Pexels

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