Humans, Not Technology, Drive Business Success

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Humans, Not Technology, Drive Business Success

GUEST POST from Greg Satell

Silicon Valley is often known as a cut-throat, technocratic place where the efficiency of algorithms often define success. Competition is ferocious and the pace of disruption and change can be dizzying. It’s not the type of environment where soft skills are valued particularly highly or even at all.

So, it’s somewhat ironic that Bill Campbell became a Silicon Valley legend by giving hugs and professing love to those he worked with. As coach to executives ranging from Steve Jobs to the entire Google executive team, Campbell preached and practiced a very personal style of business.

Yet while I was reading Trillion Dollar Coach in which former Google executives explain Campbell’s leadership principles, it became clear why he had such an impact. Even in Silicon Valley, technology will only take you so far. The success of a business ultimately depends on the success of the people in it. To compete over the long haul, that’s where you need to focus.

The Efficiency Paradox

In 1911, Frederick Winslow Taylor published The Principles of Scientific Management, based on his experience as a manager in a steel factory. It took aim at traditional management methods and suggested a more disciplined approach. Rather than have workers pursue tasks in their own manner, he sought to find “the one best way” and train accordingly.

Taylor wrote, “It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with management alone.”

Before long, Taylor’s ideas became gospel, spawning offshoots such as scientific marketing, financial engineering and the Six Sigma movement. It was no longer enough to simply work hard, you had to measure, analyze and optimize everything. Over the years these ideas have become so central to business thinking that they are rarely questioned.

Yet management guru Henry Mintzberg has pointed out how a “by-the-numbers” depersonalized approach can often backfire. “Managing without soul has become an epidemic in society. Many managers these days seem to specialize in killing cultures, at the expense of human engagement.”

The evidence would seem to back him up. One study found that of 58 large companies that have announced Six Sigma programs, 91 percent trailed the S&P 500 in stock performance. That, in essence, is the efficiency paradox. When you manage only what you can measure, you end up ignoring key factors to success.

How Generosity Drives Innovation

While researching my book, Mapping Innovation, I interviewed dozens of top innovators. Some were world class scientists and engineers. Others were high level executives at large corporations. Still others were highly successful entrepreneurs. Overall, it was a pretty intimidating group.

So, I was surprised to find that, with few exceptions, they were some of the kindest and most generous people I have ever met. The behavior was so consistent that I felt that it couldn’t be an accident. So I began to research the matter further and found that when it comes to innovation, generosity really is a competitive advantage.

For example, one study of star engineers at Bell Labs found that the best performers were not the ones with the best academic credentials, but those with the best professional networks. A similar study of the design firm IDEO found that great innovators essentially act as brokers able to access a diverse array of useful sources.

A third study helps explain why knowledge brokering is so important. Analyzing 17.9 million papers, the researchers found that the most highly cited work tended to be largely rooted within a traditional field, but with just a smidgen of insight taken from some unconventional place. Breakthrough creativity occurs at the nexus of conventionality and novelty.

The truth is that the more you share with others, the more they’ll be willing to share with you and that makes it much more likely you’ll come across that random piece of information or insight that will allow you to crack a really tough problem.

People As Profit Centers

For many, the idea that innovation is a human centered activity is intuitively obvious. So it makes sense that the high-tech companies that Bill Campbell was involved in would work hard to create environments to attract the best and the brightest people. However, most businesses have much lower margins and have to keep a close eye on the bottom line.

Yet here too there is significant evidence that a human-focused approach to management can yield better results. In The Good Jobs Strategy MIT’s Zeynep Ton found that investing more in well-trained employees can actually lower costs and drive sales. A dedicated and skilled workforce results in less turnover, better customer service and greater efficiency.

For example, when the recession hit in 2008, Mercadona, Spain’s leading discount retailer, needed to cut costs. But rather than cutting wages or reducing staff, it asked its employees to contribute ideas. The result was that it managed to reduce prices by 10% and increased its market share from 15% in 2008 to 20% in 2012.

Its competitors maintained the traditional mindset. They reduced cut wages and employee hours, which saved them some money, but customers found poorly maintained stores with few people to help them, which damaged their brand long-term. The cost savings Mercadona’s employees identified, on the other hand, in many cases improved service and productivity and these gains persisted long after the crisis was over.

Management Beyond Metrics

The truth is that it’s easy to talk about putting people first, but much harder to do it in practice. Research suggests that once a group goes much beyond 200 people social relationships break down, so once a business gets beyond that point, it becomes natural to depersonalize management and focus on metrics.

Yet the best managers understand that it’s the people that drive the numbers. As legendary IBM CEO Lou Gerstner once put it, “Culture isn’t just one aspect of the game… It is the game. What does the culture reward and punish – individual achievement or team play, risk taking or consensus building?”

In other words, culture is about values. The innovators I interviewed for my book valued solving problems, so were enthusiastic about sharing their knowledge and expertise with others, who happily reciprocated. Mercadona valued its people, so when it asked them to find ways to save money during the financial crisis, they did so enthusiastically.

That’s why today, three years after his death, Bill Campbell remains a revered figure in Silicon Valley, because he valued people so highly and helped them learn to value each other. Management is not an algorithm. It is, in the final analysis, an intensely human activity and to do it well, you need to put people first.

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

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Innovation and the Silicon Valley Bank Collapse

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Why It’s Bad News and Good News for Corporate Innovation

Innovation and the Silicon Valley Bank Collapse

GUEST POST from Robyn Bolton

Last week, as news of Silicon Valley Bank’s losses and eventual collapse, took over the news cycle, attention understandably turned to the devastating impact on the startup ecosystem.

Prospects brightened a bit on Monday with news that the federal government would make all depositors whole. Startups, VCs, and others in the ecosystem would be able to continue operations and make payroll, and SVB’s collapse would be just another cautionary tale.

But the impact of SVB’s collapse isn’t confined to the startup ecosystem or the banking industry.

Its impact (should have) struck fear and excitement into the hearts of every executive tasked with growing their business.

Your Portfolio’s Risk Profile Just Changed

The early 2000s were the heyday of innovation teams and skunkworks, but as these internal efforts struggled to produce significant results, companies started looking beyond their walls for innovation. Thus began the era of Corporate Venture Capital (CVC).

Innovation, companies realized, didn’t need to be incubated. It could be purchased.

Often at a lower price than the cost of an in-house team.

And it felt less risky. After all, other companies were doing it and it was a hot topic in the business press. Plus, making investments felt much more familiar and comfortable than running small-scale experiments and questioning the status quo.

Between 2010 and 2020, the number of corporate investors increased more than 6x to over 4,000, investment ballooned to nearly $170B in 2021 (up 142% from 2020), and 1,317 CVC-backed deals were closed in Q1 of 2020.

But, with SVB’s collapse, the perceived risk of startup investing suddenly changed.

Now startups feel riskier. Venture Capital firms are pulling back, and traditional banks are prohibited from stepping forward to provide the venture debt many startups rely on. While some see this as an opportunity for CVC to step up, that optimism ignores the fact that companies are, by nature and necessity, risk averse and more likely to follow the herd than lead it.

Why This is Bad News

As CVC, Open Innovation, and joint ventures became the preferred path to innovation and growth, internal innovation shifted to events – hackathons, shark tanks, and Silicon Valley field trips.

Employees were given the “freedom” to innovate within a set time and maybe even some training on tools like Design Thinking and Lean Startup. But behind closed doors, executives spoke of these events as employee retention efforts, not serious efforts to grow the business or advance critical strategies.

Employees eventually saw these events for what they were – innovation theater, activities designed to appease them and create feel-good stories for investors. In response, employees either left for places where innovation (or at least the curiosity and questions required) was welcomed, or they stayed, wiser and more cynical about management’s true intentions.

Then came the pandemic and a recession. Companies retreated further into themselves, focused more on core operations, and cut anything that wouldn’t generate financial results in 12 months or less.

Innovation muscles atrophied.

Just at the moment they need to be flexed most.

Why This is Good News

As the risk of investment in external innovation increases, companies will start looking for other ways to innovate and grow. Ways that feel less risky and give them more control.

They’ll rediscover Internal Innovation.

This is the silver lining of the dark SVB cloud – renewed investment in innovation, not as an event or activity to appease employees, but as a strategic tool critical to delivering strategic priorities and accelerating growth.

And, because this is our 2nd time around, we know it’s not about internal innovation teams OR external partners/investments. It’s about internal innovation teams AND external partners/investments.

Both are needed, and both can be successful if they:

  1. Are critical enablers of strategic priorities
  2. Pursue realistic goals (stretch, don’t splatter!)
  3. Receive the people and resources required to deliver against those goals
  4. Are empowered to choose progress over process
  5. Are supported by senior leaders with words AND actions

What To Do Now

When it comes to corporate innovation teams, many companies are starting from nothing. Some companies have files and playbooks they can dust off. A few have 1 or 2 people already working.

Whatever your starting point is, start now.

Just do me one favor. When you start pulling the team together, remember LL Cool J, “Don’t call it a comeback, I been here for years.”

Image credit: Wikimedia Commons

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Just Because We Can, Doesn’t Mean That We Should!

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Just Because We Can, Doesn’t Mean That We Should!

GUEST POST from Pete Foley

An article on innovation from the BBC caught my eye this week. https://www.bbc.com/news/science-environment-64814781. After extensive research and experimentation, a group in Spain has worked out how to farm octopus. It’s clever innovation, but also comes with some ethical questions. The solution involves forcing highly intelligent, sentient animals together in unnatural environments, and then killing them in a slow, likely highly stressful way. And that triggers something that I believe we need to always keep front and center in innovation: Just Because We Can, Doesn’t Mean That We Should!

Pandora’s Box

It’s a conundrum for many innovations. Change opens Pandora’s Box, and with new possibilities come unknowns, new questions, new risks and sometimes, new moral dilemmas. And because our modern world is so complex, interdependent, and evolves so quickly, we can rarely fully anticipate all of these consequences at conception.

Scenario Planning

In most fields we routinely try and anticipate technical challenges, and run all sorts of stress, stability and consumer tests in an effort to anticipate potential problems. We often still miss stuff, especially when it’s difficult to place prototypes into realistic situations. Phones still catch fire, Hyundai’s can be surprisingly easy to steal, and airbags sometimes do more harm than good. But experienced innovators, while not perfect, tend to be pretty good at catching many of the worst technical issues.

Another Innovators Dilemma

Octopus farming doesn’t, as far as I know, have technical issues, but it does raise serious ethical questions. And these can sometimes be hard to spot, especially if we are very focused on technical challenges. I doubt that the innovators involved in octopus farming are intrinsically bad people intent on imposing suffering on innocent animals. But innovation requires passion, focus and ownership. Love is Blind, and innovators who’ve invested themselves into a project are inevitably biased, and often struggle to objectively view the downsides of their invention.

And this of course has far broader implications than octopus farming. The moral dilemma of innovation and unintended consequences has of course been brought into sharp focus with recent advances in AI.  In this case the stakes are much higher. Stephen Hawking and many others expressed concerns that while AI has the potential to provide incalculable benefits, it also has the potential to end the human race. While I personally don’t see CHATgpt as Armageddon, it is certainly evidence that Pandora’s Box is open, and none of us really knows how it will evolve, for better or worse.

What are our Solutions

So what can we do to try and avoid doing more harm than good? Do we need an innovator’s equivalent of the Hippocratic Oath? Should we as a community commit to do no harm, and somehow hold ourselves accountable? Not a bad idea in theory, but how could we practically do that? Innovation and risk go hand in hand, and in reality we often don’t know how an innovation will operate in the real world, and often don’t fully recognize the killer application associated with a new technology. And if we were to eliminate most risk from innovation, we’d also eliminate most progress. This said, I do believe how we balance progress and risk is something we need to discuss more, especially in light of the extraordinary rate of technological innovation we are experiencing, the potential size of its impact, and the increasing challenges associated with predicting outcomes as the pace of change accelerates.

Can We Ever Go Back?

Another issue is that often the choice is not simply ‘do we do it or not’, but instead ‘who does it first’? Frequently it’s not so much our ‘brilliance’ that creates innovation. Instead, it’s simply that all the pieces have just fallen into place and are waiting for someone to see the pattern. From calculus onwards, the history of innovation is replete with examples of parallel discovery, where independent groups draw the same conclusions from emerging data at about the same time.

So parallel to the question of ‘should we do it’ is ‘can we afford not to?’ Perhaps the most dramatic example of this was the nuclear bomb. For the team working the Manhattan Project it must have been ethically agonizing to create something that could cause so much human suffering. But context matters, and the Allies at the time were in a tight race with the Nazi’s to create the first nuclear bomb, the path to which was already sketched out by discoveries in physics earlier that century. The potential consequences of not succeeding were even more horrific than those of winning the race. An ethical dilemma of brutal proportions.

Today, as the pace of change accelerates, we face a raft of rapidly evolving technologies with potential for enormous good or catastrophic damage, and where Pandoras Box is already cracked open. Of course AI is one, but there are so many others. On the technical side we have bio-engineering, gene manipulation, ecological manipulation, blockchain and even space innovation. All of these have potential to do both great good and great harm. And to add to the conundrum, even if we were to decide to shut down risky avenues of innovation, there is zero guarantee that others would not pursue them. On the contrary, as bad players are more likely to pursue ethically dubious avenues of research.

Behavioral Science

And this conundrum is not limited to technical innovations. We are also making huge strides in understanding how people think and make decisions. This is superficially more subtle than AI or bio-manipulation, but as a field I’m close to, it’s also deeply concerning, and carries similar potential to do both great good or cause great harm. Public opinion is one of the few tools we have to help curb mis-use of technology, especially in democracies. But Behavioral Science gives us increasingly effective ways to influence and nudge human choices, often without people being aware they are being nudged. In parallel, technology has given us unprecedented capability to leverage that knowledge, via the internet and social media. There has always been a potential moral dilemma associated with manipulating human behavior, especially below the threshold of consciousness. It’s been a concern since the idea of subliminal advertising emerged in the 1950’s. But technical innovation has created a potentially far more influential infrastructure than the 1950’s movie theater.   We now spend a significant portion of our lives on line, and techniques such as memes, framing, managed choice architecture and leveraging mere exposure provide the potential to manipulate opinions and emotional engagement more profoundly than ever before. And the stakes have gotten higher, with political advertising, at least in the USA, often eclipsing more traditional consumer goods marketing in sheer volume.   It’s one thing to nudge someone between Coke and Pepsi, but quite another to use unconscious manipulation to drive preference in narrowly contested political races that have significant socio-political implications. There is no doubt we can use behavioral science for good, whether it’s helping people eat better, save better for retirement, drive more carefully or many other situations where the benefit/paternalism equation is pretty clear. But especially in socio-political contexts, where do we draw the line, and who decides where that line is? In our increasingly polarized society, without some oversight, it’s all too easy for well intentioned and passionate people to go too far, and in the worst case flirt with propaganda, and thus potentially enable damaging or even dangerous policy.

What Can or Should We Do?

We spend a great deal of energy and money trying to find better ways to research and anticipate both the effectiveness and potential unintended consequences of new technology. But with a few exceptions, we tend to spend less time discussing the moral implications of what we do. As the pace of innovations accelerates, does the innovation community need to adopt some form of ‘do no harm’ Hippocratic Oath? Or do we need to think more about educating, training, and putting processes in place to try and anticipate the ethical downsides of technology?

Of course, we’ll never anticipate everything. We didn’t have the background knowledge to anticipate that the invention of the internal combustion engine would seriously impact the world’s climate. Instead we were mostly just relieved that projections of cities buried under horse poop would no longer come to fruition.

But other innovations brought issues we might have seen coming with a bit more scenario-planning? Air bags initially increased deaths of children in automobile accidents, while prohibition in the US increased both crime and alcoholism. Hindsight is of course very clear, but could a little more foresight have anticipated these? Perhaps my favorite example unintended consequences is the ‘Cobra Effect’. The British in India were worried about the number of venomous cobra snakes, and so introduced a bounty for every dead cobra. Initially successful, this ultimately led to the breeding of cobras for bounty payments. On learning this, the Brits scrapped the reward. Cobra breeders then set the now-worthless snakes free. The result was more cobras than the original start-point. It’s amusing now, but it also illustrates the often significant gap between foresight and hindsight.

I certainly don’t have the answers. But as we start to stack up world changing technologies in increasingly complex, dynamic and unpredictable contexts, and as financial rewards often favor speed over caution, do we as an innovation community need to start thinking more about societal and moral risk? And if so, how could, or should we go about it?

I’d love to hear the opinions of the innovation community!

Image credit: Pixabay

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Great Customer Experience Work Begins Here

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Great Customer Experience Work Begins Here

by Braden Kelley

What Customer Experience Really Is

Customer experience (CX) is an essential part of any organization’s success. CX is much more than the level of customer service a company provides. CX is the totality of a customer’s interactions with an organization over the course of their shared relationship. Customers develop a perception of an organization across all their interactions. This perception is an accumulation of the physical, emotional, social, and psychological experiences they have when interacting with the product or service itself, to the way they’re greeted on the phone, to the quality of the interfaces to the organization, its employees, and its information.

Successful organizations consciously create a positive and memorable experience for the customer, from the moment they first engage with the organization. Organizations must design their overall experience with the customer in mind, and tailor it as much as possible to the individual customer’s needs and preferences. Creating meaningful interactions with customers and delivering a great customer experience drives loyalty, trust, and word-of-mouth not just now, but for years to come.

Only the Customer Can Improve the Customer Experience – Usually

This may almost sound like I’m blaming the customer for their bad experience, but the customer does play a central role in making their own experience better. But sometimes they are actively prevented from doing so.

When it comes to customer experience improvement initiatives, many organizations behave in a quite parental way. They think they know best, and instead of investing the time, energy and money to gather the voice of the customer, they use of the voice of the business instead.

The voice of the business is what I call it when an organization speaks on behalf of the customer, assuming and asserting that they know what the customer is thinking and knows what they want (or need). This can be a shortcut used to produce a customer journey map on a deadline, but can quickly turn into a detour if you don’t then validate it with real life customers to make sure that your visualization of the customer journey is accurate and representative.

Only the customers know what their experience is. So go talk to them!

Continue reading the rest of this article on HCLTech’s blog

Image credits: Pexels

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Your Core Business – Greatest Strength, Greatest Weakness

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Your Core Business - Greatest Strength and Greatest Weakness

GUEST POST from Mike Shipulski

Your core business, the long-standing business that has made you what you are, is both your greatest strength and your greatest weakness.

The Core generates the revenue, but it also starves fledgling businesses, so they never make it off the ground.

There’s a certainty with the Core because it builds on success, but its success sets the certainty threshold too high for new businesses. And due to the relatively high level of uncertainty of the new business (as compared to the Core) the company can’t find the gumption to make the critical investments needed to reach orbit.

The Core has generated profits over the decades and those profits have been used to create the critical infrastructure that makes its success easier to achieve. The internal startup can’t use the Core’s infrastructure because the Core doesn’t share. And the Core has the power to block all others from taking advantage of the infrastructure it created.

The Core has grown revenue year-on-year and has used that revenue to build out specialized support teams that keep the flywheel moving. And because the Core paid for and shaped the teams, their support fits the Core like a glove. A new offering with a new value proposition and new business model cannot use the specialized support teams effectively because the new offering needs otherly-specialized support and because the Core doesn’t share.

The Core pays the bills, and new ventures create bills that the Core doesn’t like to pay.

If the internal startup has to compete with the Core for funding, the internal startup will fail.

If the new venture has to generate profits similar to the Core, the venture will be a misadventure.

If the new offering has to compete with the Core for sales and marketing support, don’t bother.

If the fledgling business’s metrics are assessed like the Core’s metrics, it won’t fly, it will flounder.

If you try to run a new business from within the Core, the Core will eat it.

To work effectively with the Core, borrow its resources, forget how it does the work, and run away.

To protect your new ventures from the Core, physically separate them from the Core.

To protect your new businesses from the Core, create a separate budget that the Core cannot reach.

To protect your internal startup from the Core, make sure it needs nothing from the Core.

To accelerate the growth of the fledgling business, make it safe to violate the Core’s first principles.

To bolster the capability of your new business, move resources from the Core to the new business.

To de-risk the internal startup, move functional support resources from the Core to the startup.

To fund your new ventures, tax the Core. It’s the only way.

Image credit: Pixabay

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At the Intersection of Innovation Way and Extraordinary Drive

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At the Intersection of Innovation Way and Extraordinary Drive

GUEST POST from Shep Hyken

No matter what business we’re in, our storefront better be located at the intersection of Extraordinary Drive and Innovation Way.

Of course, I am speaking figuratively. But, I’ve literally taken a photo at this real intersection that exists in the middle of High Point University. I am a fan of the university and its leadership. I’ve attended special programs there on several occasions, and every time I go back I’m reminded of its focus on being extraordinary and its innovative approach to education.

We can all learn from HPU. Higher education is a sector that is facing major disruptions from every direction. (Did you think it was just your industry having to find new ways to compete?)

Consider the looming demographic shifts impacting higher ed. According to a CNBC story, undergraduate enrollment is down 9.4% compared to two years ago. Fewer kids going to college in the next few years means a leaner market for universities to fight over. Then there’s all the chatter about whether college is really worth it. Just go to a trade school, a coding boot camp, etc. The headwinds that higher education is facing are stronger than ever.

Yet, HPU has created a distinctive niche in the higher education industry by becoming the Premier Life Skills University. How much of what a student learns in school can really be called life skills? Of course, students must embrace the liberal arts and explore subjects like literature, math, art, history, science and so on. These make us smarter and provide us with more knowledge, but are they translated into life skills? Shouldn’t education go beyond information and theory, and instead prepare us to implement those lessons in real-world scenarios?

What happens when we’re asked to describe ourselves in a job interview? How do we handle ourselves in client meetings and boardrooms? Are we ready for conflict, constant change and complex problem solving? These skills are not typically taught in school, but it’s exactly those abilities in which HPU excels, differentiating it from other colleges and universities.

So, let’s take a lesson from HPU and discover how it has created value for its students (and their parents) and how we can do the same in our businesses and organizations. In short, they’ve done it by living at the intersection of Extraordinary Drive and Innovation Way. Here are a few examples:

When critics of higher education suggest that college isn’t worth it, HPU decides to create extra value by providing every freshman with a professional success coach, equipping its Career Office to deliver an impressive 99% placement rate for recent graduates. It even offers a tuition-free Master’s Degree in Communication and Business Leadership. How are you adding additional value for your clients and customers?

When critics of higher education suggest young people should just learn a trade, HPU’s answer is weaving the “trade” of leadership and life skills into every major. It even has an “In Residence Program” that puts industry leaders in the classroom. Imagine being mentored by founders of companies such as Apple Computer or Netflix. Imagine being coached by the CEO of the Dallas Mavericks or Domino’s Pizza. They, along with dozens of other accomplished executives and leaders, all work with HPU students. So, beyond the fully accredited classroom experience that HPU offers (like every other accredited college in the nation), it has added real-world mentorship to the value equation. What is the lesson for you and me? We better be sure we deliver extraordinary and relevant benefits that add value to our customers’ and clients’ experience.

When critics of higher education suggest just going to a coder boot camp instead of college, HPU reminds families that technical skills aren’t enough when it comes to building a sustainable career. HPU has studied and surveyed employers and proven through its data that life skills are the unshakable foundation for earning and sustaining success no matter our occupation or our age. So, how are you interpreting your value to your clients? Because if you don’t, you are leaving it up to someone else. And that someone else may be your competition!

And beyond the critics who question the value of a college education, there are others who specifically criticize HPU. Success is sweet, but it also comes with competitors and critics putting a target on your back. One of the often-mentioned criticisms is the look of its campus. Really? HPU is proud that almost everyone who sees the campus for the first time says, “Wow!” It’s hard not to be impressed with the manicured campus, the beautiful buildings and the engaging, positive environment that students enjoy. But there’s far more to this university than its good looks. Look beyond the surface and you’ll find some of the most extraordinary and innovative classrooms and programs, such as the $500 million Innovation Corridor filled with cutting-edge labs where research funded by NASA and the National Institutes of Health takes place.

While higher education is in the midst of disruption like most industries, HPU has transformed what a college can do and be, and that by nature draws criticism. But here’s the lesson we can all learn: When your business or organization creates transformational change, it will surely attract criticism. As long as you are rendering value for your clients, then you know you’re doing something right.

We all have critics of our business or industry. And we all have challenges we must overcome. How we succeed or fail is directly related to how we respond to criticism and how we deliver on behalf of our customers. When we make the decision to live at the intersection of Extraordinary Drive and Innovation Way, we have no choice but to keep up our neighborhood and deliver value.

This article originally appeared on Forbes.com

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Navigating the Future to Ensure Long-Term Success

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A CEO Checklist

Navigating the Future to Ensure Long-Term Success

GUEST POST from Teresa Spangler

“Trends are only useful when we look at them through multiple lenses as we gaze across all six time zones. We must think of trends as signposts that can illuminate the conditions we will likely encounter at some point in the future, even if that future is a century away.” — Amy Webb

No one will argue the need today to focus on back-to basics! Challenging economies dictate this type of focus. In my years of experience, those companies that cut to deeply in futures planning struggle more trying to rebound when economies improve. So why is it so important to be a futurist in today’s economy? It’s a formidable way to help you and your organization navigate the world of extreme consequences with optimism. But let’s face it, maintaining good organizational morale and motivation can be challenging as worldly events may create fear and anxiety. That’s why I want to talk to you about an effective method called “signal crafting.”

So, what is signal crafting? This healthy exercise provides insights beyond your day-to-day and even your year-to-year planning. It involves diving deeply into futuristic scenarios by crafting the best-case and worst-case outcomes. Signal crafting exercises help you anticipate future scenarios of global events, giving life and a 360-degree view of circumstances. In turn, by building out these signaling exercises, you are equipping your organization to plan better and, in many cases, alleviate and turn that fear into fuel.

But what are the benefits of signaling in planning for the future? Let me tell you:

  • Signal crafting is an exercise that helps businesses prepare for the future by creating scenarios based on different factors that affect their industry.

  • Companies must focus on attuning to signals of change in the world, including industry trends and emerging technologies, changing consumer behavior, social and cultural shifts, political and regulatory changes, and economic conditions.

  • By combining different factors that affect a business’s future, it can envision various potential outcomes and make strategic decisions based on the most likely scenarios.

  • The exercise helps businesses identify risks and opportunities and develop strategic plans considering possible outcomes.

  • The exercise fosters cross-departmental collaboration and gains multiple perspectives.

  • The exercise can be repeated periodically, allowing companies to adapt to new signals of change and remain future-ready planners and strategists.

So, how do you start the signal crafting exercise? Here are some steps you can take:

Focus teams on attuning to signals of change in the world, including industry trends and emerging technologies, changing consumer behavior, social and cultural shifts, political and regulatory changes, and economic conditions. Here are a few team exercises you could use to gain future insights:

  • Choose a signal of interest: Each team member chooses one signal.

  • Go as deep as you can to envision how the world is affected by this signal of change.

  • Envision the signal, including the details above; in the scenario, it’s ten years from today. What’s happening?

  • Write a futuristic story about that signal. Write about two different outcomes ten years from now.

  • Construct a positive outcome.

  • Construct a worst-case outcome.

  • Share your stories, both optimistic and worst-case scenarios. Talk about these and how each signal may impact your business, people, individuals, environments, governments, etc.

Company teams can create scenarios based on the categories they choose. The teams can then present their scenarios to other groups, fostering cross-departmental collaboration and gaining multiple perspectives. The exercise can be repeated periodically, allowing companies to adapt to new signals of change and remain future-ready planners and strategists.

By creating a range of scenarios that identify potential risks and opportunities, businesses can develop strategic plans that consider different possible outcomes. These actions enable the company to be better prepared for the future and proactively prepare for different outcomes instead of reacting to events as they unfold. The approach will ensure you maintain a competitive advantage, but moreover, you may experience a calming of fear and anxiety in the organization. So many benefits come from this one exercise, but overall it is a future-planning exercise to help the organization achieve long-term success.

These steps are helpful to you as you navigate the tough times ahead. As Amy Webb said, “Trends are only useful when we look at them through multiple lenses as we gaze across all six time zones. We must think of trends as signposts that can illuminate the conditions we will likely encounter at some point in the future, even if that future is a century away.”

Below is a more comprehensive checklist to Future-Visioning:

  1. Focus on signals of change. Pay attention to industry trends, emerging technologies, changing consumer behavior, social and cultural shifts, political and regulatory changes, and economic conditions.

  2.  Identify potential risks and opportunities. Develop strategic plans that consider different possible outcomes. Remain, future-ready planners and strategists.

  3. Choose a signal of interest. Each team member chooses one signal of focus.

  4. Encourage team members to become experts in their chosen signal. Gain a deeper understanding of a specific trend or factor affecting the business.

  5.  Envision future scenarios: Imagine the future based on different possible outcomes. Dive deep into how the world is affected by each signal of change.

  6. Build a 360-degree view of potential scenarios. Anticipate future events and prepare for them proactively. Alleviate fear and turn it into fuel for the organization.

  7. Write a futuristic story. Write a futuristic story about what could happen ten years from now. Construct a positive and worst-case outcome based on the chosen signal.

  8. Envision a range of potential outcomes. Identify potential risks and opportunities. Encourage cross-departmental collaboration and gain multiple perspectives.

  9. Share stories and outcomes

  10. .Discuss the stories and outcomes with other groups. Discuss how each signal may impact the business, individuals, environments, governments, etc.

  11. Foster collaboration and communication within the organization. Gain a better understanding of different perspectives. Develop strategic plans based on a range of possible outcomes.

  12. Repeat periodically. Conduct the exercise periodically to adapt to new signals of change and remain future-ready planners and strategists.

Develop a long-term strategic vision for the organization. Stay up-to-date on industry trends and emerging technologies. Remain adaptable and flexible to changing conditions by evolving these strategies on a periodic basis. Be ready when markets rebound!

Image credit: Unsplash

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Take Charge of Your Mind to Reclaim Your Potential

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Take Charge of Your Mind to Reclaim Your Potential

GUEST POST from Janet Sernack

In our recent blog, we explored how our focus and attention have been stolen, and how our ability to pay attention is collapsing and described why we need to be intentional in reclaiming it. Yet, many of us are constantly challenged by very short attention spans, where we can often be found sitting at our desks, dealing with a range of very urgent deadlines with a distracted, and unfocussed mind. Despite being intrinsically motivated to meet our deadlines, and being self-aware of needing to focus on completing the tasks in front of us, many of us often still struggle to disrupt and stop our thoughts from wandering randomly and haphazardly. Because, we are no longer being in charge of our minds, our time, or of our cognitive capacities and abilities that help us self-regulate, concentrate and focus our attention, kickstart change, innovate and become resilient.

A recent article in Psychology Today “The War For Your Attention” reinforces this problem by stating:

 “We live in a time when attention has become our most valuable asset, one for which multiple stakeholders are competing. Political parties, media outlets, companies, and individuals want a share of it, and if they can have it, they want it all. As a result, remaining in charge of our minds has become a daily challenge. Our attention defines our experience, which sets the mindset of our minds”.

Become Resilient

Because we don’t know if companies will ever return to their pre-pandemic-like worlds, and what new technologies will emerge, we need to become resilient to be future-fit, in this new world of unknowns.

This requires people to unlearn some of their less resourceful “bad pre and post-pandemic habits” and be:

  • Open towards relearning and reskilling in how to focus, concentrate and observe, and how to manage, direct and expand our attention spans.
  •  Intentional, outcome-focused, and therefore, effective, agile, adaptive, and resilient in an uncertain world full of disruption and crises.

This is reinforced by a recent article “Seizing the momentum to build resilience for a future of sustainable inclusive growth” by McKinsey & Co:

“In the past year, leaders have been confronted with a lifetime’s worth of disruption and crises: global conflict, energy uncertainty, food shortages, accelerating inflation, and severe climate events. Natural and human-made disruptions will only persist. To enable long-term, sustainable, and inclusive growth, today’s business leaders and policymakers must strengthen resilience beyond a survival capacity.”

  • From surviving to thriving

The nature and speed of change are not going to slow down, at the same time, our uncertain world full of disruption and crises is having a harsh psychological toll on everyone, impacting negatively on people’s states of emotional and physical health.

If we want people to thrive, we have to start helping people to live better than we ever have.

Taking the first baby steps requires people to confidently and courageously be, think and act differently.

Starting with empowering and enabling people to take charge of their hearts and minds, and commit to focusing their attention on building their resilience.

The Switch-Cost Effect

In his best-selling book Johann Hari – Stolen Focus, describes how Professor Earl Miller, a specialist in neuroscience, at the Massachusetts Institute of Technology, states that “our brains can only produce one or two thoughts” in our conscious minds at once.

Because “we are very, very single-minded” and have “very limited cognitive capacity.”

  • Multi-tasking is an illusion

The delusion that we can multitask, or juggle a number of thoughts and activities at the same time, is revealed, through robust research, as actually “switching, back and forth.”

He states that we don’t notice the switching because:

“Our brain sort of papers it over to give a seamless experience of consciousness, but what they’re actually doing is switching and reconfiguring their brain moment-to-moment, task-to-task – which comes with a cost.”

  • Losing time to refocus

This is described as the “switch-cost effect” and means that every time we switch tasks while trying to work, we are actually losing a huge amount of time required to concentrate and manage our attention spans to refocus afterward.

“For example, one study at Carnegie Mellon University’s human-computer interaction lab took 136 students and got them to sit a test. Some of them had to have their phones switched off, and others had their phones on and received intermittent text messages. The students who received messages performed, on average, 20% worse. It seems to me that almost all of us are currently losing that 20% of our brainpower, almost all the time. Miller told me that as a result we now live in “a perfect storm of cognitive degradation”.

Reducing Cognitive Degradation

There are a number of simple and obvious ways to reduce our cognitive degradation and heal our unconscious “attention deficit syndromes”, and cognitively reappraise to be in charge of our minds, concentrate and effectively manage our attention spans.

It is also the first step we need to take to empower and enable ourselves and others, in taking charge of our hearts and minds and demonstrating our commitment to focusing our attention and becoming initially resilient.

These simple actions require us to be self-disciplined, methodical, and rigorous and open to re-learning how to concentrate and self-regulated our attention spans by habitually:

  • Stripping out distractions,
  • Ceasing to multi-task,
  • Getting more quality sleep,
  • Taking regular short breaks,
  • Doing brain exercises,
  • Doing physical exercises,
  • Listening to music,
  • Setting priorities,
  • Using a timer.

How to be in charge of our own minds

If we want to cultivate a calmer, coherent, and resourceful psychological state, to achieve the outcomes we want to have in our lives, then focus and place our attention on both what we want to manifest (our intention), and on what we want your attention to move away from, to cease.

  • Attention activates

When choosing to consciously slow down, hit our pause buttons, and retreat into stillness and silence, opens the sacred space, that allows us to reflect, focus and pay deeper attention to the impact of our emotions and beliefs on our thoughts.

We can then also attend to, and break down any unresourceful beliefs, emotions, and cognitive distortions about what we can really and truly influence and control to:

  • Create a more normalised state of equilibrium and calm, get grounded and fully present and manage our attention spans to concentrate on what really matters to us, in ways that are self-compassionate and optimistic about the future.
  • Support ourselves by believing that we can succeed in handling our situations, responsibly, creatively, and effectively.
  • Become resilient by knowing how to respond to events in real-time, anticipate events and problems that may occur in the future, and bounce from adversity whilst processing the insights and learnings gained by conquering key challenges.

Developing Resilience

We can then be in charge of our minds, become resilient, and create a safe space and generosity for others to fully show up and connect with us. We can open our eyes, minds, and hearts to all options, unleash possibilities and opportunities, make smart change choices, and innovate, rather than panicking and retreating from the risks emerging in an uncertain world full of disruption and crises.

Find out about our collective, learning products and tools, including The Coach for Innovators, Leaders, and Teams Certified Program, presented by Janet Sernack, is a collaborative, intimate, and deeply personalized innovation coaching and learning program, supported by a global group of peers over 9-weeks, starting Friday, May 12, 2023.

Image Credit: Pixabay, Pexels

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Building a True Revolution

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Building a True Revolution

GUEST POST from Greg Satell

“Revolution” is a term that gets thrown around a lot. There was an Industrial Revolution powered by steam and then another one powered by oil and electricity. The Green Revolution transformed the way we fed ourselves. Many political revolutions have overthrown powerful regimes and the digital revolution changed the way we work with information.

My friend Srdja Popović, who helped lead the Bulldozer Revolution that overthrew Slobodan Milošević in Serbia, told me that the goal of a revolution should be to become mainstream, to be mundane and ordinary. If you are successful it should be difficult to explain what was won because the previous order seems so unbelievable.

The problem with most would-be revolutionaries is that they seek exactly the opposite. All too often, they seek attention, excitement and crowds of admiring fans. Yet all that noise is likely to create enemies just as fast as it makes friends. True revolutions aren’t won in the streets or on the airwaves, but through smart strategies that transform basic beliefs.

A Shift in Paradigms

The idea of a paradigm shift was first established by Thomas Kuhn in his book The Structure of Scientific Revolutions, which explained how scientific breakthroughs come to the fore. It starts with an established model, the kind we learn in school or during initial training for a career. Eventually, those models are shown to be untenable, and a period of instability ensues until a new paradigm can be created and adopted.

While Kuhn developed his theory to describe advancements in science, it has long been clear that it applies more broadly. For example, in my experiences in post-communist countries, the comfort of the broken, but relatively stable, system seemed to many to be preferable to the instability of change.

In the corporate world, models are not only mindsets, but are embedded in systems, processes and practices, which makes them especially pervasive. To bring change about, you need to disrupt basic operations and that comes with costs. Customers, partners and suppliers depend on the stability of how an organization does business.

So, the first step to driving change about is to create a new vision that can credibly replace the existing model without causing so much chaos that the perceived costs outweigh the benefits. As I explain in my book, Cascades, successful revolutionaries are more than just warriors, they are also educators that are able to mobilize others through the power of their vision.

Mobilizing Small Groups, Loosely Connected

We tend to think of revolutions as mass actions, such as protestors storming the streets or excited customers lining up outside an Apple store, yet they don’t start out that way. Revolutions begin with small groups, loosely connected, but united by a shared purpose.

For example, groups like the Cambridge Apostles and the Bloomsbury Group helped launch intellectual revolutions in early 20th century Cambridge. The Homebrew Computer Club helped bring about the digital revolution. Groups like Otpor, Kmara and Pora formed the grassroots of the Color Revolutions in the early 2000s.

What made these groups effective was their ability to connect and bring others in. For example the Homebrew Computer Club would hold convene informal gatherings at a bar after the more formal meetings of the club. In the Serbian revolution that overthrew Slobodan Milošević, Otpor used humor and street pranks to attract people to their cause.

Revolutions are driven by networks and power in networks emanates from the center. You move to the center by connecting out. That’s how you mobilize and gain influence. What you do with that power and influence, however, will determine if your revolution will succeed.

Influencing Institutional Change

Mobilization can be a powerful force but does not in itself create a revolution. To bring change about, you need to be able to influence institutions that have the power to drive change. For example, Martin Luther King Jr. didn’t write a single piece of legislation or decide a single court case but was able to influence the legislative and legal systems through his activism.

In his efforts to reform the Pentagon, Colonel John Boyd went outside the chain of command to brief congressional staffers and a small circle of journalists. As he gained support from Congress and the media, he was able to put pressure on the Generals and create a reform movement within the US military.

Now compare that to the Occupy Movement, which mobilized activists in 951 cities across 82 countries. However, they wanted to have nothing to do with institutions and actually refused opportunities to influence them. In fact, when Congressman John Lewis, himself a civil rights leader, showed up at a rally, they turned him away. Is it any wonder they never achieved any tangible change?

Make no mistake. If you truly want to bring change about, you have to mobilize somebody to influence something. Merely sending people out in the streets with signs won’t amount to much.

Preparing for the Counterrevolution

In his 2004 State of the Union Address, President Bush delivered a full-throated condemnation of same-sex marriage. Incensed, San Francisco Mayor Gavin Newsom decided to unilaterally begin performing weddings for gay and lesbian couples at City Hall, in what was termed the Winter of Love. 4,027 couples were married before their nuptials were annulled by the California Supreme Court a month later.

The backlash was fierce and led Proposition 8, an amendment to the California Constitution that prohibited gay marriage, on the ballot. It was passed with a narrow majority of 52% of the electorate and was so harsh that it not only galvanized LGBT activists, but also began to sway public opinion.

The tide began to change when LBGT activists, began to appeal to values they shared with the general public, such as the right to live in committed relationships and raise happy, healthy families. In a Newsweek op-ed, Ted Olson, a conservative Republican lawyer who had previous served as President Bush’s Solicitor General, argued that legalizing same-sex marriage wasn’t strictly a gay issue, but would be “a recognition of basic American principles.”

Today, same sex marriage has become, to paraphrase my friend Srdja, mundane. It has become a part of everyday life that is widely accepted as the normal course of things. That’s when you know a revolution is complete. Not when the fervor of zealots drive people out into the streets, but when those in the mainstream begin to accept it as the normal course of business.

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

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What Disruptive Innovation Really Is

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What Disruptive Innovation Really Is

GUEST POST from Geoffrey A. Moore

I recently read an article in ZDnet by Sherin Shibu discussing disruptive innovation, primarily through the lens of Clay Christensen’s work at the Harvard Business School. The article itself is very sound, and yet I found myself disagreeing with it on a number of points. In this blog, I want to interleave what Shibu says (presented in standard font) with my own commentary (inserted in italics) so that readers can develop their own point of view from the interaction.

What is disruptive innovation?

Disruptive innovation theory is a cautionary concept for large, established companies: There’s danger in becoming too good at what you do best. Delivering to the mainstream market is good and all, but a disruptor could target a market underserved by your current product with a new business model.

For me, disruptive innovation has a much bigger footprint because it also underlies virtually all venture capital investment. Its fundamental promise is to release an enormous amount of trapped value by reengineering an established system or process. The reason it is a cautionary concept for large established companies is that they are the custodians of the legacy systems and processes that are trapping the value. Yes, they can reduce the overhead by optimizing what they have, but no, they cannot compete with a categorically better way of doing things.

Harvard Business School professor Clayton Christensen developed the concept of disruptive innovation in the 1990s with his groundbreaking book The Innovator’s Dilemma, and the theory became wildly popular in the decades to follow. But in some respects it has become a victim of its own success: “Despite broad dissemination, the theory’s core concepts have been widely misunderstood and its basic tenets frequently misapplied,” notes The Harvard Business Review.

Disruptive innovation is a process by which entrepreneurs break into a low-end or new market and create business models that are different from existing ones in those markets. Disruption has occurred when their business model becomes mainstream.

So, a new company targets an overlooked customer base — and manages to deliver a better product at a lower price point. At first, the incumbents don’t take the threat seriously, which allows the potential disruptors to gain a foothold. Then the disruptors target the incumbents’ mainstream customers. If the potential disruptors create something that the mainstream adopts in volume, they have successfully disrupted the market.

I think this reading of the model overemphasizes the need to attack the low end of the market. Yes, that is a proven path, but it is not the only one. The iPhone disrupted from the high end, for example, as has Tesla.

What is disruptive innovation not?

Defining disruptive innovation isn’t easy and not everyone is going to agree on every example. Classic disruptive innovation should not simply describe just any situation of upheaval. If a new company shakes things up a bit for incumbent competitors, that scene is not necessarily one of disruptive innovation — that could simply be a breakthrough. In order for this theory to have power and be used as an analytical and predictive model, it needs to be precisely defined.

My definition of disruptive innovation is one that overthrows and is incompatible with the existing business model or operating model of an industry. In the case of the iPhone, it was Apple’s ability to go over the top of the carrier to provide products and services directly to the consumer. In the case of Tesla, it is its ability to bypass the dealership model not only in sales but in services as well.

Christensen, for example, argued that Uber is not a disruptive innovator according to his definition. It fails to meet two requirements, in that it did not start in a low-end or new market. Instead, it built a name for itself in a mainstream market and then started drawing unserved customers with less expensive solutions. And being less expensive or creating an app to hail rides sustains the existing model rather than disrupts.

This is just wrong and shows the limitations of the “start at the low end” concept. Uber reengineered both the operating model and the business model of on-demand car transportation, allowing consumers to call a taxi to themselves, and allowing Uber to build a fleet of cars and drivers at no capital expense.

Not everyone thinks that’s the case and other perspectives can be found that argue Uber actually is a disruptive innovator. From this perspective, Uber started with a low-market foothold by offering on-demand black car services. It was only when the startup introduced UberX, a low-end market offering, that it was able to move into the mainstream.

What counts as disruption is up for debate, especially as Christensen’s theory is applied to shifting contexts.

In the case of Uber, focusing on the low end simply misses the point.

Why is it important to define disruptive innovation?

Disruption isn’t a fixed point; it’s the evolution of a product or service from the fringes of customers to the mainstream. It’s important to define it this way because then it becomes more about the experimental nature of the process than about the output. See, disruptive innovations don’t always succeed and not every successful company is a disruptor. The process is about building new business models previously unseen in the target industry and appealing to a more niche customer base at first.

In my view, disruptive innovation is a function of a breakthrough technology intersecting with a pool of trapped value, enabling the reengineering of a system or process that eliminates one or more whole categories of spend in its value chain. It is a categorical innovation as opposed to a product or marketing innovation.

Is disruptive innovation the primary way innovation operates?

No, it is not the primary factor of innovation. According to HBR, “disruption theory does not, and never will, explain everything about innovation specifically or business success generally.” It does, however, help predict which businesses will succeed and it provides a solid foundation for further research – it’s captured academic attention for 27 years.

I agree with the point that disruptive innovation is not the primary type. Most innovation is sustaining, meaning that it improves an existing system rather than overthrowing it—evolution, not revolution. What I disagree with wholeheartedly, on the other hand, is the notion that the theory helps predict which businesses will succeed. Historically, the advantage has gone to start-ups because they are unconflicted in their commitment to the new way. Established enterprises, however, have learned that they can neutralize start-ups if they are willing to be fast followers. Microsoft’s Azure is a superb example of a company that has done this. Disney’s response to Netflix is another good example, and it appears as if General Motors is on a comparable path toward neutralizing Tesla.

What is an example of disruptive innovation?

Netflix was around since 1997, and at first, it didn’t appeal to Blockbuster’s core clientele. Renting movies usually happened in person, and Netflix was all online. Plus, Netflix took a few days to deliver movies because selections came through the mail. Blockbuster could easily ignore Netflix because it didn’t have the brick-and-mortar infrastructure needed to dominate the market at that time.

This glosses over what was the initial disruptive innovation that Netflix provided with its home delivery model based on DVDs. The key differentiator at the beginning was designing out late fees.

Over time though, as streaming technology developed, Blockbuster’s target clients were drawn toward Netflix. The same impulsiveness that made renting a movie right away more desirable than getting a movie a few days later translated into wanting to watch movies with a click of a mouse instead of going to a physical location to rent a DVD. Disruptive innovation technology, in this case, streaming, goes hand in hand with implementing innovation.

There is another story playing out in Netflix’s transition from DVD shipping to streaming. It required the company to disrupt itself. This is an extraordinary ask, as most successful disruptive innovations attack someone else’s profit pool, not one’s own. Reed Hastings deserves enormous credit for leading the company through this change, and I would encourage the academy to focus its research lens on how in the world he was able to do so when so many CEOs have fallen short.

Are there any disruptive innovation technologies to keep an eye on?

Online learning is a technology to watch because it’s reaching a population that in-person learning can’t reach at a lower price point.

The main technologies to keep an eye on are the ones that tackle an underserved market and have the potential to expand their offerings to appeal to the mainstream.

Something like autonomous vehicles, for example, can seem innovative, but they aren’t disruptive according to the theory because they’ll be quickly absorbed into existing industries. The incumbent advantage is strong.

The important thing to remember is that innovation does not always lead to disruption.

I strongly support the idea that online education delivery has the power to disrupt the education market—again, a breakthrough technology intersecting with a boatload of trapped value. I think the point about autonomous vehicles is interesting as well because I agree they will be absorbed into the existing industries. But while they may not disrupt the automotive industry, I do think they can reengineer transportation and logistics.

Overall, I support Shibu’s main thesis which is that we have come to take disruptive innovation for granted and have become careless with how we apply the term. And while we part ways on how best to apply it, I still endorse Clay’s breakthrough insights in The Innovator’s Dilemma, which had a huge impact on a whole generation of companies in Silicon Valley.

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

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