From Dinosaur to Disruptor in Three Quotes

From Dinosaur to Disruptor in Three Quotes

GUEST POST from Robyn Bolton

If you’re leading a legacy business through uncertainty, pay attention. When The Cut asked, “Can Simon & Schuster Become the A24 of Books?” I expected puff-piece PR. What I read was a quiet masterclass in business transformation—delivered in three deceptively casual quotes from Sean Manning, Simon & Schuster’s new CEO. He’s trying to transform a dinosaur into a disruptor and lays out a leadership playbook worth stealing.

Seventy-four percent of corporate transformations fail, according to BCG. So why should we believe this one might be different? Because every now and then, someone in a legacy industry goes beyond memorable soundbites and actually makes moves. Manning’s early actions—and the thinking behind them—hint that this is a transformation worth paying attention to.

“A lot of what the publishing industry does is just speaking to the converted.”

When Manning says this, he’s not just throwing shade—he’s naming a common and systemic failure. While publishing execs bemoan declining readership, they keep targeting the same demographic that’s been buying hardcovers for decades.

Sound familiar?

Every legacy industry does this. It’s easier—and more immediately profitable—to sell to those who already believe. The ROI is better. The risk is lower. And that’s precisely how disruption takes root.

As Clayton Christensen warned in The Innovator’s Dilemma, established players obsess over their best customers and ignore emerging ones—until it’s too late. They fear that reaching the unconverted dilutes focus or stretches resources. But that thinking is wrong. Even in a world of finite resources, you can’t afford to pick one or the other. Transformation, heck, even survival, requires both.

“We’re essentially an entertainment company with books at the center.”

Be still my heart. A CEO who defines his company by the Job(to be Done) it performs in people’s lives? Swoon.

This is another key to avoiding disruption – don’t define yourself by your product or industry. Define yourself by the value you create for customers.

Executives love repeating that “railroads went out of business because they thought their business was railroads.” But ask those same executives what business they’re in, and they’ll immediately box themselves into a list of products or industry classifications or some vague platitude about being in the “people business” that gets conveniently shelved when business gets bumpy.

When you define yourself by the Job you do for your customers, you quickly discover more growth opportunities you could pursue. New channels. New products. New partnerships. You’re out of the box —and ready to grow.

“The worry is that we can’t afford to fail. But if we don’t try to do something, we’re really screwed.”

It’s easy to calculate the cost of trying and failing. You have the literal receipts. It’s nearly impossible to calculate the cost of not trying. That’s why large organizations sit on the sidelines and let startups take the risks.

But there IS a cost to waiting. You see it in the market share lost to new entrants and the skyrocketing valuations of successful startups. The problem? That information comes too late to do anything about it.

Transformation isn’t just about ideas. It’s about choosing action over analysis. Or, as Manning put it, “Let’s try this and see what happens.”

Walking the Talk

Quotable leadership is cute. Transformation leadership is concrete. Manning’s doing more than talking—he’s breaking industry norms.

Less than six months into his tenure as CEO, he announced that Simon & Schuster would no longer require blurbs—those back-of-jacket endorsements that favor the well-connected. He greenlit a web series, Bookstore Blitz, and showed up at tapings. And he’s reframing what publishing can be, not just what it’s always been.

The journey from dinosaur to disruptor is long, messy, and uncertain. But less than a year into the job, Manning is walking in the right direction.

Are you?

Image credit: Pexels

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How to Leverage Haters to Your Advantage

How to Leverage Haters to Your Advantage

GUEST POST from Greg Satell

What can be hardest about change, especially when we feel passionately about it, is that at some point, we need to accept that others will not embrace it. Not every change is for everybody. Some will have to pursue a different journey, one to which they can devote their own passions and seek out their own truths.

Yet there’s something about human nature that makes us want to convince those who vehemently oppose our idea. That’s almost always a mistake. Often, the reason for their opposition has less to do with any rational argument than their identity and sense of self. For whatever reason, it offends their dignity.

Still, we can learn to love our haters, because they can often help us find the way forward. All too often, we end up preaching to the choir instead of venturing out of the church and mixing with the heathens. That’s how change efforts fail. On the other hand, if we can learn to use their tactics and rhetoric to our own advantage, we have a powerful weapon for change.

“Separate But Equal” as a Force for Justice

In 1896, the Supreme Court case of Plessy vs. Ferguson codified the doctrine of separate but equal into constitutional law, which allowed states to discriminate against black Americans. Many saw it as fundamentally unjust and argued passionately against it. But a brilliant lawyer named Charles Hamilton Houston saw it as an opportunity to use his opponent’s evil idea for good.

The principle of “separate but equal” was designed to prevent blacks from benefiting from common resources, such as a water fountain or a grade school. However, when applied to rare resources, such as a graduate school, its logic began to unravel. When a man named Lloyd Gaines was refused admission to the University of Missouri law school because he was black, Houston brought suit.

But he didn’t argue against “separate but equal.” In fact, he argued for it. Clearly if the State of Missouri was going to refuse Gaines admission, there had to be a separate but equal facility. Yet there was only one law school in the state and it would be out of the question for the state to build an entire law school just to satisfy the doctrine. The Supreme Court ruled in Gaines’ favor and he was admitted to the program.

Houston would continue to argue similar cases along with his protege, Thurgood Marshall, and began taking down Jim Crow brick by brick. Unfortunately, he would die of a heart attack in 1950, before Brown vs. The Board of Education would strike down the doctrine of “separate but equal” in 1954, but his legacy lives on through Howard University Law School, which he helped build and shape.

Using Arrests To Bring Down A Regime

One of the primary tools a repressive regime has to intimidate its citizens is arrests. Getting arrested being treated like a common criminal is scary and degrading. You are made to feel alone and helpless. Yet the Serbian movement Otpor was able to figure out how to turn arrests to their advantage so that they furthered, rather than weakened their cause.

The first step was preparation. The protesters were trained so that they knew what to expect during arrests and how to respond. One key procedure was to always have “reserve” activists at every action to observe what took place. If the police arrived and began taking the comrades away, they would alert teammates who would set a plan in motion.

Phone calls would immediately go out to lawyers, friendly journalists and international NGOs as well as musicians, actors and other celebrities. While the lawyers met with the police, a protest would be organized outside the precinct, including music, games and “Mothers of Otpor” who would demand to know why the police were abusing their children.

After the fall of the Milošević regime, internal documents made it clear how frustrated the police became with all of this. The protests outside the police stations, along with the media spotlight they created, would tie their precinct up for hours. Any brutality on their part would be publicized, undermining their authority further. Often, Otpor would get more and better publicity from the arrests than from the initial protests.

This is what my friend Srdja Popović calls a dilemma action because it puts your opponent in a bind. The police had two choices, they could either stop arresting Otpor activists or continue to arrest them, but either way Otpor would grow stronger.

Betting On The Muscle Of Electric Cars

Environmentalists make the case that the long-term dangers of pollution and climate change far exceed the costs of the short-term sacrifices required. They advise us to turn down the thermostat and wear a sweater in winter, check the air in our tires and buy small cars. Clearly, these are not insurmountable challenges with the fate of the planet in the balance.

Yet the truth is that people don’t like to be inconvenienced, especially when it comes to their cars. Americans in particular have always had a love affair with big, fast muscle cars. Sure, a Prius will get you from point “A” to point “B”, but you can’t feel POWERFUL. It’s like going to a steakhouse and only eating the vegetables.

That’s why the first electric vehicle Tesla came out with in 2008, the Roadster, was anything but “responsible. It was a $100,000 status symbol for Silicon Valley millionaires. Because these customers could afford multiple cars, range wasn’t as much of a concern, but in any case the high price tag made a larger battery more feasible.

Compare that to Shai Agassi and the strategy for his electric car company, Better Place, which was a much more expansive vision. Instead of building a high-performance sports car, he built a family car for the masses and sought to overcome the challenges of range through a network of battery switching stations. It blew through $700 million before it went bust.

Musk understood a car is far more than a mode of transportation. It is a part of people’s identity. You can ask people to change just about anything, except to stop being who they think they are.

Your Targets Determine Your Tactics

When we feel passionately about change, we want to take action. We want to take to the streets, argue against injustice. We want to make decisions, launch a business, get things done. Activity gives us something to point to. It’s something rather than nothing. When we take action we can tell ourselves that we’re not just sitting idly by.

Yet actions without a sound strategy are doomed to fail. That’s why we need to learn to love our haters. If we listen to them they will show us how to win. Charles Hamilton Houston could have railed against the doctrine of “separate but equal,” but he leveraged it to take down Jim Crow instead. Otpor used the Milošević regime’s own repressive tactics to their advantage. Elon Musk didn’t ask Tesla’s customers to sacrifice, but satisfied their desire for high-performance cars.

In each case, redefining the target made all the difference. “Separate but equal” was designed for grade schools, but its significance changed completely when applied to graduate programs. A cop on the beat is almost all-powerful, but vulnerable at a precinct. The Tesla Roadster wasn’t designed for regular families to use every day, but for millionaires to zip around in on the weekends.

To change the world, we need to learn to see it differently. We can’t just fight the same losing battles. We need to redefine the terms of our struggle in ways that tilt the playing field to our advantage. In the final analysis, that’s what makes the difference between people who want to make a point and those who actually make a difference.

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

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An Organizational, Leadership and Team Dynamics Perspective on Innovation Trends

An Organizational, Leadership and Team Dynamics Perspective on Innovation Trends

GUEST POST from Stefan Lindegaard

I recently worked with a European client to map their innovation challenges and opportunities, particularly focusing on how they align with global trends in leadership and team dynamics.

As businesses face increasingly complex challenges, innovation – especially in how teams are structured and how leaders respond to change – has become a critical differentiator for long-term success.

Below are some key trends that we are exploring further in this context. We plan to narrow these down to 4-6. Which ones do you think are the most important to keep in mind? And why?

1. Leadership Agility and Adaptive Decision-Making

Leaders today must navigate complex, fast-moving environments. One key innovation trend in leadership is the ability to shift between strategic, operational, and entrepreneurial mindsets. This agility allows leaders to respond to uncertainty while driving innovation forward, particularly in ambiguous or volatile conditions. Adaptive leadership enables organizations to experiment with new ideas while managing operational excellence.

2. Innovation as a Team-Driven Process

The top-down approach to innovation is giving way to more team-driven processes. Leaders are increasingly leveraging cross-functional teams that work in agile frameworks to co-create solutions. This decentralization not only improves innovation speed but also empowers teams by giving them ownership over the innovation process. Teams are no longer just executing on leadership directives; they are actively shaping organizational innovation strategies.

3. Purpose-Driven Leadership and Team Motivation

In the context of innovation, aligning leadership and team efforts with a larger organizational purpose is proving to be a powerful motivator. Purpose-driven leadership focuses on innovation that not only drives profitability but also addresses broader societal and environmental challenges. Teams motivated by a sense of purpose are more engaged and creative, which fosters a culture of continuous innovation.

4. Remote and Hybrid Collaboration for Innovation

With the rise of hybrid work models, teams are innovating how they collaborate remotely. Leadership needs to ensure that innovation thrives in distributed teams by adopting digital collaboration tools, fostering a culture of open communication, and using technology to bridge physical distances. Effective remote collaboration also involves maintaining team cohesion and ensuring that all voices are heard, regardless of location.

5. Building a Culture of Psychological Safety

For innovation to thrive, leaders must cultivate an environment where team members feel safe to take risks and share unconventional ideas. Psychological safety is essential for fostering creativity within teams, especially when it comes to innovation. Leaders who encourage experimentation and tolerate failure as part of the innovation process tend to build more resilient and dynamic teams.

6. Data-Driven Leadership and Innovation

Leaders and teams are increasingly leveraging data to drive innovation decisions. Data analytics and AI-powered insights are being used to forecast market trends, optimize team performance, and identify areas for innovation. By building data-driven cultures, organizations can make informed decisions faster and enhance both team dynamics and leadership effectiveness.

7. Diversity and Inclusion as Innovation Catalysts

Diverse teams bring a wider range of perspectives to the innovation process, which enhances creativity and problem-solving. Inclusive leadership that emphasizes the importance of diversity in innovation efforts not only reflects societal values but also produces better business outcomes. Diversity in teams accelerates the generation of new ideas and encourages out-of-the-box thinking.

8. Sustainability as a Leadership Priority

Sustainability has emerged as a top priority for leaders, impacting how teams innovate. Organizations are now focusing on sustainable innovations that address environmental concerns while also driving business growth. Leadership that prioritizes sustainability tends to inspire teams to develop long-term solutions that benefit both the organization and society at large.

9. Collaboration with External Partners

Open innovation models, where companies collaborate with external partners, startups, and even competitors, are becoming increasingly popular. Leaders are building ecosystems of innovation that go beyond internal teams, involving external stakeholders to co-develop new solutions. This trend broadens the scope of innovation and helps organizations tap into a wider pool of ideas and expertise.

10. Learning and Development for Innovation Skills

For teams to remain innovative, continuous learning and upskilling are essential. Leaders are now focusing on creating environments where team members can constantly update their skills in areas like AI, digital tools, and design thinking. By embedding a learning culture into the team’s DNA, organizations ensure they remain competitive in the ever-evolving innovation landscape.

A key observation for us is that innovation today requires a holistic approach, one that integrates leadership vision with team dynamics to foster environments where creativity and agility can thrive.

By narrowing down to the most impactful trends, we can better equip organizations to innovate effectively in a world that demands both speed and sustainability.

A Roadmap for Corporate Innovation

Image Credits: Stefan Lindegaard, Pexels

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Innovation Truths

Innovation Truths

GUEST POST from Mike Shipulski

If it’s not different, it can’t be innovation.

With innovation, ideas are the easy part. The hard part is creating the engine that delivers novel value to customers.

The first goal of an innovation project is to earn the right to do the second hardest thing. Do the hardest thing first.

Innovation is 50% customer, 50% technology and 75% business model.

If you know how it will turn out, it’s not innovation.

Don’t invest in a functional prototype until customers have placed orders for the sell-able product.

If you don’t know how the customer will benefit from your innovation, you don’t know anything.

If your innovation work doesn’t threaten the status quo, you’re doing it wrong.

Innovation moves at the speed of people.

If you know when you’ll be finished, you’re not doing innovation.

With innovation, the product isn’t your offering. Your offering is the business model.

If you’re focused on best practices, you’re not doing innovation. Innovation is about doing things for the first time.

If you think you know what the customer wants, you don’t.

Doing innovation within a successful company is seven times hard than doing it in a startup.

If you’re certain, it’s not innovation.

With innovation, ideas and prototypes are cheap, but building the commercialization engine is ultra-expensive.

If no one will buy it, do something else.

Technical roadblocks can be solved, but customer/market roadblocks can be insurmountable.

The first thing to do is learn if people will buy your innovation.

With innovation, customers know what they don’t want only after you show them your offering.

With innovation, if you’re not scared to death you’re not trying hard enough.

The biggest deterrent to innovation is success.

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Six Revolutionary AI CX and Customer Service Strategies

Six Revolutionary AI CX and Customer Service Strategies

GUEST POST from Shep Hyken

Artificial Intelligence (AI) is reshaping customer service and customer experience faster than we could ever imagine. But some are getting it wrong. While everyone’s racing to implement AI, many are missing the most important part – keeping the human element alive. Smart companies have found the balance between the human touch and the digital experience.

One of my favorite AI and marketing experts is Ford Saeks, who recently released his latest book, AI Mindshift: Unleash the Power of AI, Avoid the Pitfalls, and Keep the Human Experience. The book is filled with practical strategies and tactics to help organizations leverage AI while maintaining the personal touch. The book isn’t about which specific AI tools to use. Many of those will be obsolete in a very short time. It’s about how to think about AI, hence the title, AI Mindshift. With that in mind, here are some of my top takeaways from the book:

  1. The Human-AI Balance Is Essential: This is the book’s central theme. Don’t fall into the trap of thinking AI can replace your customer service team. Instead, let AI handle the routine questions and problems while keeping your people focused on what they do best – building relationships and handling more complicated issues. This creates efficiency without sacrificing the personal touch customers value.
  2. Speed Matters: Your customers want answers now, not later. AI can deliver immediate first responses through chatbots, but here’s the key – make sure your customers can seamlessly transition to a human agent when needed. I refer to this as Time to Happiness – how quickly you can move a customer from frustrated to satisfied. The faster, the better.
  3. Feedback Is Your Friend: Create processes to continuously gather both customer and employee feedback about AI interactions. Consistently use this data to refine and improve your AI systems. If customers are frustrated with certain AI responses, fix them quickly. Otherwise, your faulty systems may frustrate your customers and drive them to the competition.

  1. Practice “Ethical AI” in Customer Service: Saeks emphasizes two big areas: transparency about when customers interact with AI versus humans and making sure your AI technology protects your customers’ privacy and data.
  2. Proactive Support: If you want to impress your customers, identify issues or problems before the customer finds them. Then, tell them you did. AI can help identify these issues.
  3. Think Big, but Start Small: Begin AI implementation with specific, manageable customer service tasks rather than trying to overhaul everything at once. For example, start with AI handling basic FAQs, then gradually expand to more complex customer interactions as you learn what works. Remember the old saying, “Rome wasn’t built in a day.”

The bottom line is this: AI isn’t about replacing your customer service team. It’s about making them more amazing at what they do. Saeks’ book reminds us that the future of customer service and CX isn’t about choosing between AI and humans. It’s about combining both to create experiences that get your customers to say, “I’ll be back!”

Image Credit: Pexels, Shep Hyken

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Contemporary Science versus Natural Language

Contemporary Science versus Natural Language

GUEST POST from Geoffrey A. Moore

Item 1. The fastest human-created spacecraft goes 165,000 mph. Pretty amazing. But for it to travel one light year would take roughly 3000 years—basically, the length of recorded human history. The closest star system that hosts an earth-like planet (Alpha Centauri) is 4.4 light years away. Thus, it would take today’s fastest vehicle 14,000 years to make a one-way trip. On our earth, 14,000 years ago humanity’s most sophisticated technology was a stone axe. Thus, while we love to talk about space travel outside the solar system, as well as aliens in UFOs coming to Earth, neither is remotely possible, not now, not ever.

Item 2. There are 30 trillion cells in the average human body. There are 100 trillion atoms in a typical human cell. That means there are three thousand trillion trillion atoms, give or take, in you or me. Atoms are so small that it is not clear any words we have would apply to how they actually operate. Particle and wave are two of the ones we end up using the most. Neither of them, however, can coherently explain something as simple as the double-slit experiment.

Item 3. The metabolic reactions that support all life are mind-bogglingly fast. Take mitochondria for example. They are the organelles that produce the bulk of our ATP, the energy molecule that drives virtually all life’s chemical reactions. Of the 30 trillion cells in your body, on average each one uses around 10 million molecules of ATP per second and can recycle all its ATP in less than a minute. There is simply no way to imagine something happening a million times per second simultaneously in thirty million different places inside your own body.

Item 4. Craig Venter has been quoted as saying, “If you don’t like bacteria, you’re on the wrong planet. This is the planet of the bacteria.” In one-fifth of a teaspoon of seawater, there are a million bacteria (and perhaps 10 million viruses). The human microbiome, which has staked out territory all over our body, in our gut, mouth, skin, and elsewhere, harbors upwards of three thousand kinds of bacteria, comprising some 3 million distinct genes, which they swap with each other wherever they congregate. How in the world are we supposed to keep track of that?

Okay, okay. So what’s your point?

The point is that contemporary science engages with reality across a myriad of orders of magnitude, from the extremely small to the extremely large, somewhere between sixty and one hundred all told. Math can manage this brilliantly. Natural languages cannot. All of which means: philosophers beware!

Philosophers love analogies, and well they should. They make the abstract concrete. They enable us to transport a strategy from a domain where it has been proven effective and test its applicability in a completely different one. Such acts of imagination are the foundation of discovery, the springboard to disruptive innovation. But to work properly they have to be credible. That means they must stand up to the kind of pressure testing that determines the limits to which they can be applied, the boundaries beyond which they must not stretch. This is where the orders of magnitude principle comes in.

It is not credible that there could be a cause that is a million million times smaller than its effect. Yes, it is theoretically conceivable that via a cascading set of emergent relationships, one could build a chain from such an A to such a B, but the amount of coordination that would be required to lever something up a million million times is just ridiculously improbable. So, when philosophers refer to the uncertainty principles embedded in quantum mechanics, and then infer or imply that such uncertainty permeates human affairs, or when they trace consciousness down to quantum fluctuations in messenger RNA, when, in short, they are correlating things that are more than a trillion, trillion times different in size and scope, then they are misusing both the mathematics of science and the resources of natural language. We simply have to stay closer to home.

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

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ChatGPT Blew My Mind with its Strategy Development

ChatGPT Blew My Mind with its Strategy Development

GUEST POST from Robyn Bolton

It’s easy to get complacent about your strategy skills.  After all, our yearly “strategic planning” processes result in quarterly “strategic priorities” that require daily “strategic decisions.” So, it’s reasonable to assume that we know what we’re doing when it comes to strategy development.

I’ll admit I did. After all, I’ve written strategic plans for major brands, developed strategies for billion-dollar businesses, and teach strategy in a Masters program.

I thought I knew what I was doing.

Then ChatGPT proved me wrong.

How it Began

My student’s Midterm assignment for this semester is to develop, recommend, and support a strategy for the companies they’ve studied for the past seven weeks. Each week, we apply a different framework – Strategy Kernel, SWOT, Business Model Canvas, Porter’s 5 Forces, PESTLE, Value Chain – to a case study. Then, for homework, they apply the framework to the company they are analyzing.

Now, it’s time to roll up all that analysis and turn it into strategic insights and a recommended strategy.

Naturally, they asked me for examples.

I don’t have a whole lot of examples, and I have precisely none that I can share with them.

I quickly fed The LEGO Group’s Annual Report, Sustainability Report, and Modern Slavery and Transparency Statements into ChatGPT and went to work.

Two hours later, I had everything needed to make a solid case that LEGO needs to change its strategy due to risks with consumers, partners, and retailers. Not only that, the strategy was concise and memorable, with only 34 carefully chosen words waiting to be brought to life through the execution of seven initiatives.

Two hours after that, all of my genius strategic analysis had been poured into a beautifully designed and perfectly LEGO-branded presentation that, in a mere six slides, laid out the entire case for change (which was, of course, supported by a 10-page appendix).

The Moment

As I gazed lovingly at my work, I felt pretty proud of myself. I even toyed with the idea of dropping a copy off at LEGO’s Back Bay headquarters in case they needed some help.

I chuckled at my little daydream, knowing no one would look at it because no one asked for it, and no implementers were involved in creating it.

That’s when it hit me.

All the reasons my daydream would never become a reality also applied to every strategy effort I’ve ever been part of.

  • No one looks at your strategy because it’s just a box to check to get next year’s budget.
  • No one asks for it because they’re already working hard to maintain the status quo. They don’t have the time or energy to imagine a better future when they’re just trying to get through today.
  • No one responsible for implementing it was involved in creating it because strategy is created at high levels of the organization or outsourced to consultants.

What the strategy is doesn’t matter.*

What matters is how the strategy was created.

Conversation is the only way to create a successful, actionable, and impactful strategy.

Conversation with the people responsible for implementing it, they people on the ground and the front lines, the people dealing with the ripple effects of all those “strategic” decisions.

How It’s Going

Today, I’m challenging myself—and you—to make strategy a dialogue, not a monologue. To value participation over presentation. Because strategy without conversation isn’t strategy at all—it’s just a beautiful document waiting to be forgotten.

Who are you inviting into your next strategy conversation that isn’t usually there but should be? Share in the comments below.

Image credit: Pexels

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Why So Many Smart People Are Foolish

Why So Many Smart People Are Foolish

GUEST POST from Greg Satell

When I lived in Moscow, my gym was just a five-minute walk from my flat. So rather than use a locker, I would just run over in my shorts and a jacket no matter what the weather was. The locals thought I was crazy. Elderly Russians would sometimes scream at me to go home and get dressed properly.

I had always heard that Russians were impervious to the effects of weather, but the truth is that they get cold just like the rest of us. We tend to mythologize the unknown. Our brains work in strange ways, soaking up patterns from what we see. Often, however, those experiences are unreliable, such as the Hollywood images that helped shape my views about Russians and their impenetrability.

The problem is that myths often feel more real than facts. We have a tendency to seize on information that is most accessible, not the most accurate, and then interpret new evidence based on that prior perception. We need to accept that we can’t avoid our own cognitive biases. The unavoidable truth is that we’re easiest to fool when we think we’re being clever.

Inventing Myths

When Jessica Pressler first published her story about Anna Sorokin in New York Magazine, it could scarcely be believed. A Russian emigrant, with no assets to speak of, somehow managed to convince the cream of New York society that she was, in fact, a wealthy German heiress and swindled them out of hundreds of thousands of dollars.

Her crimes pale in comparison to Elizabeth Holmes of Theranos, who made fools of the elites on the opposite coast. Attracting a powerful board that included Henry Kissinger (but no one with expertise in life sciences), the 20-something entrepreneur convinced investors that she had invented a revolutionary blood testing technology and was able to attract $700 million.

In both cases, there was no shortage of opportunities to unmask the fraud. Anna Sorokin left unpaid bills all over town. Despite Holmes’s claims, she wasn’t able to produce a single peer-reviewed study that her technology worked even after 10 years in business. There were no shortage of whistle blowers from inside and outside the company.

Still, many bought the ruses and would interpret facts to support them. Sorokin’s unpaid bills were seen as proof of her wealth. After all, who but the fabulously rich could be so nonchalant with money? In Holmes’ case, her eccentricities were taken as evidence that she truly was a genius, in the mold of Steve Jobs or Mark Zuckerberg.

The Halo Effect

People like Sorokin and Holmes intentionally prey on our weaknesses. Whenever anybody tried to uncover the facts, they threw elaborate defenses, making counter-accusations of any who dared to question them. Often, they used relationships with powerful people to protect them. At Theranos, there was very strict corporate security and an army of lawyers.

Still, it doesn’t have to be so diabolical. As Phil Rosenzweig explains in The Halo Effect, when a company is doing well, we tend to see every aspect of the organization in a positive light. We assume a profitable company has wise leadership, motivated employees and a sound strategy. At the same time, we see the traits of poorly performing firms in a negative light.

But what if it’s the same company? Rosenzweig points out that, when Cisco was at its peak before the dot-com bust, it was said to have an “extreme customer focus.” But a year later, when things turned south, Cisco was criticized for “a cavalier attitude toward potential customers” and “irksome” sales policies. Did its culture really change so much in a year?

Business pundits, in ways very similar to swindlers, prey on how our minds work. When they say that companies that employ risky strategies outperform others who don’t, they are leveraging survivorship bias and, of course, firms that took big risks and failed are never counted in the analysis. When consulting companies survey industry executives, they are relying more on social proof than uncovering expert opinion.

The Principle Of Reflexivity

In the early 70’s, a young MBA student named Michael Milken noticed that debt that was considered below investment grade could provide higher risk-adjusted returns than other investments. He decided to create a market for the so-called junk bonds and, by the 80’s, was making a ton of money.

Then everybody else piled on and the value of the bonds increased so much that they became a bad investment. Nevertheless, investors continued to rush in. Inevitably, the bubble popped and the market crashed as the crowds rushed for the exit. Many who were considered “smart money” lost billions.

That’s what George Soros calls reflexivity. Expectations aren’t formed in a vacuum, but in the context of other’s expectations. If many believe that the stock market will go up, we’re more likely to believe it too. That makes the stock market actually go up, which only adds fuel to the fire. Nobody wants to get left out of a good thing.

Very few ever seem to learn this lesson and that’s why people like Anna Sorokin and Elizabeth Holmes are able to play us for suckers. We are wired to conform and the effect extends widely throughout our social networks. The best indication of what we believe is not any discernible fact pattern, but what those around us happen to believe.

Don’t Believe Everything You Think

One of the things that I’ve learned over the years is that it’s best to assume people are smart, hardworking and well-intentioned. Of course, that’s not always true, but we don’t learn much from dismissing people as stupid, lazy and crooked. And if we don’t learn from others’ mistakes, then how can we avoid the same failures?

Often, smart people get taken in because they’re smart. They have a track record of seeing things others don’t, making good bets and winning big. People give them deference, come to them for advice and laugh at their jokes. They’re used to seeing things others don’t. For them, a lack of discernible evidence isn’t always a warning sign. It can be an opportunity.

We all need to check ourselves so that we don’t believe everything that we think. There are formal processes that can help, such as pre-mortems and red teams, but most of all we need to own up to the flaws in our own brains. We have a tendency to see patterns that aren’t really there and to double down on bad ideas once we’ve committed to them.

As Richard Feynman famously put it, “The first principle is that you must not fool yourself—and you are the easiest person to fool.” Smart people get taken in so easily because they forget that basic principle. They mythologize themselves and become the heroes of their own stories. That’s why there will always be more stories like “Inventing Anna” and Theranos.

Suckers are born every minute and, invariably, they think they’re playing it smart.

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

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Five Questions Great Leaders Always Ask

Five Questions Great Leaders Always Ask

GUEST POST from David Burkus

It may seem like leaders need to have all the answers. Presumably, they became leaders by being smart, hardworking individual contributors who had the answers most of the time. But while knowing what to do is important, great leaders believe that knowing what questions to ask is even more vital. Especially when it comes to leading the team. Asking them the right questions instead of barking out the answers will lead to a higher performing team.

In this article, we’ll outline five questions great leaders ask to promote growth, collaboration, and trust within their teams. These questions are not just about directing the team, but also about understanding the team’s strengths, identifying areas for improvement, providing necessary support, and seeking feedback for personal growth. These questions align the team towards common goals, focus on strengths, encourage feedback and improvement, and promote a servant leadership mentality.

1. Where Are We Going?

The first question great leaders ask is, “Where are we going?” This question helps to identify the projects and progress of the team, providing a clear direction and goals for everyone involved. It’s about understanding the key performance indicators and aligning the team towards a common vision, often referred to as the North Star or Commander’s Intent. This vision serves as a guiding light, ensuring that all team members are moving in the same direction and working towards the same objectives.

By asking this question, leaders can ensure that everyone understands the team’s mission and goals. It promotes transparency and clarity, reducing the chances of confusion or misalignment. It also allows leaders to gauge the team’s understanding of the goals and make necessary adjustments to ensure everyone is on the same page.

2. What Is Going Well?

The second questions great leaders ask is “What is going well?” This question emphasizes the importance of recognizing achievements and successes within the team. It’s about identifying areas of strength and expertise and encouraging more of what is working well. This approach is more effective than constantly pointing out what’s wrong, as it builds confidence and motivates the team to continue performing at their best.

By focusing on what’s going well, leaders can foster a positive work environment where team members feel valued and appreciated. It also helps leaders understand the team’s strengths better, allowing them to leverage these strengths to achieve team goals more effectively.

3. Where Can We Improve?

The third question great leaders ask is “Where can we improve?” This is about seeking feedback and identifying areas for improvement as a team. It involves asking the team for their ideas and perspectives, identifying blind spots and weaknesses, and addressing collaboration issues or client problems. This question promotes a culture of continuous improvement, where everyone is encouraged to share their ideas and take ownership of the team’s progress.

By asking this question, leaders can create an open and inclusive environment where everyone’s opinions are valued. It also helps leaders identify areas where they might not have noticed a need for improvement, allowing them to make necessary changes to enhance team performance.

4. How Can I Help?

The fourth question great leaders ask is “How can I help?” This question emphasizes the role of a leader in providing support and resources to the team. It’s about understanding the leader’s responsibility to assist the team and adopting a servant leadership mentality. This question ensures that the team has what they need to succeed, whether it’s resources, guidance, or moral support.

By asking this question, leaders can show their commitment to the team’s success and their willingness to provide necessary support. It also allows leaders to understand the challenges and obstacles that the team is facing, enabling them to provide appropriate assistance and resources.

5. Where Do I Need Help?

The final question great leaders ask is “Where do I need help?” This question shifts a leader’s attention toward seeking their own feedback and continuously learning and growing. It’s about recognizing the value of feedback from the team, building trust through open communication, and encouraging personal development and growth. This question shows that great leaders are not afraid to ask for help and are always seeking to improve themselves.

By asking this question, leaders can foster a culture of mutual learning and growth, where everyone, including the leader, is continuously improving. It also helps build trust within the team, as it shows that the leader values the team’s feedback and is willing to learn from them.

These five questions – Where are we going? What is going well? Where can we improve? How can I help? And where do I need help? – are essential tools for great leaders. They promote growth, collaboration, and trust within the team, fostering a positive and productive work environment. By asking these questions regularly, leaders can ensure that their teams are aligned, motivated, and doing their best work ever.

Image credit: Pixabay

Originally published on DavidBurkus.com on December 19, 2023

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

Top 10 Human-Centered Change & Innovation Articles of March 2025Drum roll please…

At the beginning of each month, we will profile the ten articles from the previous month that generated the most traffic to Human-Centered Change & Innovation. Did your favorite make the cut?

But enough delay, here are March’s ten most popular innovation posts:

  1. Turning Bold Ideas into Tangible Results — by Robyn Bolton
  2. Leading Through Complexity and Uncertainty — by Greg Satell
  3. Empathy is a Vital Tool for Stronger Teams — by Stefan Lindegaard
  4. The Role Platforms Play in Business Networks — by Geoffrey A. Moore
  5. Inspiring Innovation — by John Bessant
  6. Six Keys to Effective Teamwork — by David Burkus
  7. Product-Lifecycle Management 2.0 — by Dr. Matthew Heim
  8. 5 Business Myths You Cannot Afford to Believe — by Shep Hyken
  9. What Great Ideas Feel Like — by Mike Shipulski
  10. Better Decision Making at Speed — by Mike Shipulski

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

If you’re not familiar with Human-Centered Change & Innovation, we publish 4-7 new articles every week built around innovation and transformation insights from our roster of contributing authors and ad hoc submissions from community members. Get the articles right in your Facebook, Twitter or Linkedin feeds too!

SPECIAL BONUS: While supplies last, you can get the hardcover version of my first bestselling book Stoking Your Innovation Bonfire for 44% OFF until Amazon runs out of stock or changes the price. This deal won’t last long, so grab your copy while it lasts!

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