You are here: Home / Archives for Innovation

The Curious Observer

May 30, 2013 by Leave a Comment

When I’m asked to enumerate best practices for idea management or group decision-making or team-building or any activity that involves people trying to do something as a group, somewhere on my list is the practice of making sure that somebody (or somebodies) is an observer. In idea management, which typically occurs on-line using some kind of collaboration software, that somebody is called the moderator. For in-person groups (or mostly in-person – sometimes people are connected via video conference, but they see one another and interact in real-time) the term of art is facilitator. While everyone acknowledges that this role is important, in idea management it often goes to a more junior person or an administrative type; i.e., it’s important, but not that important.  For in-person groups, the facilitator is often a more experienced (i.e., “older” person or someone who has had group facilitation training). However, facilitators are rarely required to understand the content of the discussions or decisions that the group makes. They are expected to guide a process. The same holds true for on-line moderators.

However, when observers, whether facilitators or moderators, lack familiarity with the substance of the group’s discussions and decisions – not expertise, but just enough understanding to be dangerous – I believe that the group markedly diminishes its potential for innovation, the truly different way of figuring out how to move forward or solve a very persistent, complex problem. I believe that groups need curious observers. Curious observers play an essential role in discovery – the pivotal moment in all innovation that is perhaps the true “Eureka” moment. Because creating something and recognizing that it might be important in some way rarely occur at the same time. In our idealization of innovation, we tell stories that merge creators and discoverers into one person who has one blinding flash of insight. But more often than not, there are many insights along the way some of which are discovered by curious observers.

Case in point from a story about fungus from a recent New Yorker magazine(1). Mushroom fungus or polypore mycelium to be specific. (Stay with me on this one!)

Two seniors at Rensselaer Polytechnic Institute (RPI) were beavering away at a class project for an Inventors Studio class, which is exactly what it sounds like – a class devoted to guiding students in the process of invention with the long shot hope that their ideas might form the basis of a company that will bring innovative solutions into the market. These two seniors, Gavin McIntyre and Eben Bayer, were casting about for an idea that their very exacting professor, Burt Swersey, would approve for their project. They had pitched a few ideas to Swersey to no avail. Then, Bayer recalled an experiment that he had performed in another class at RPI responding to the challenge of making insulation out of perlite. Most of us know perlite as the little white plastic-like pellets that are mixed in with bagged potting soil. We also know how annoying those little pellets can be – they are lightweight and float around, settling in puffy clumps, making a mess. In his RPI class, Bayer had used mushroom spores to bind the perlite.

As a kid growing up on a farm where his dad made maple syrup and sold it commercially, Bayer had had a lot of chores to do outdoors.  One of his chores was to shovel wood chips from a pile to a burner that boiled the sap.  He had often noticed that the wood chip pile sprouted mushrooms whose mycelium bound the chips so tightly together that he found it difficult sometimes to shovel them.  He had remembered that binding property during his class project to create perlite insulation. He brought the results of that project – a glass jar of solid perlite and mycelium – to Swersey’s class.

Here’s what happened according to Swersey:

“He takes this thing out of his pocket…and it’s white, this amazing piece of insulation that had been grown, without hydrocarbons, with almost no energy used.  The stuff could be made with almost any waste materials – rice husks, cotton wastes, stuff farmers throw away, stuff they have no market for – and it wouldn’t take away from anybody’s food supply, and it could be made anywhere from local materials, so you could cut down on transportation costs.  And it would be completely biodegradable!  What more could you want?”

The rest of the story about Evocative Design, McIntyre and Bayer’s company that produces packaging material out of mushroom fungus, is quite an amazing read and I recommend it. But what stood out for me in the story is that without Swersey it is unlikely that the company and its subsequent success would have happened. McIntyre and Bayer both had jobs lined up after RPI – good jobs. Swersey urged them to forgo these jobs and continue developing their invention. They thought they might be able to work on their invention on an after-work-hours basis, but Swersey emphatically told them this would not be enough. He offered to take money from his retirement savings to invest in their company. He helped them get a grant from the National Collegiate Inventors and Innovators Alliance and got them situated in RPI’s incubator space for start-ups.

Swersey, a curious observer, was an essential part of the discovery process. Neither McIntyre nor Bayer on their own had the perspective to recognize the potential of what Bayer had initially created and what they both further developed in Swersey’s class. Bayer’s flash of insight was based on an idle observation made years earlier in passing. From his point of view at the time, using mycelium to bind perlite was a one-off to complete a class requirement. Bayer threw a “Hail Mary” pass when he brought the idea to Swersey’s class to see if it would pass muster there.

Swersey, while not an expert in mycology or insulating materials engineering, did however operate with a framework that enabled him to see the potential in Bayer and McIntyre’s invention. His “Eureka” moment was every bit as necessary as Bayer’s in this story of invention and innovation. Inventor’s Studio is the search for ruthlessly affordable solutions(2) to existing problems that can make a discernible difference in the lives of the vast majority of people on the planet who live on less than $1 a day. This framework is incredibly clear – expansive and targeted at the same time. Without it, Bayer’s little while disk of perlite and mycelium, would still be an interesting curiosity rather than a biodegradable packaging material which is used by companies like Dell, Crate and Barrel, and Steelcase, and who knows what else in the future.

Without a curious observer to hold this kind of framework in place for groups as they work to solve problems, the connection between creativity and discovery often fails to take place. This is especially true for groups of experts who have even more to overcome than naïve amateurs like the students in Swersey’s class. As their professor, Swersey’s students expected his observations and input to matter, whether or not he was an expert in their project’s specific materials or engineering. Experts, on the other hand, view their facilitator or moderator as someone who is supposed to keep them on time and on task but has little else to contribute to problem solving. And, most facilitators and moderators buy in to this definition of their role. However, when facilitators and moderators are also curious observers, they can help the experts overcome the limitations of expertise. They can call attention to the contrary point of view that groups are quick to dismiss and encourage its exploration. Curious observers can ask questions and offer potential solutions that might be foolish or wrong, essentially acting as a naïve amateur, to challenge a group’s assumptions that often masquerade as facts. The curious observer can catalyze the moment of discovery which grasps the potential in an invention, whether a thing or an idea, and become an integral participant in the process of innovation.

(1)    “Form and Fungus,” Ian Frazier, The New Yorker, May 20, 2013

(2)   Designing for ruthless affordability is a concept from the work of Paul Polak.


Polak Advocates the ‘Ruthless Pursuit of… by FORAtv

Filed Under: Decision-making, Innovation

Just Generally Better All Around

February 21, 2013 by 2 Comments

In planning for disasters, the best preparation comes from making sure that things are better under normal circumstances.  Scientists and engineers who are looking at ways to help governments better prepare their citizenry for climate-related disasters (heat waves, storm surges, hurricanes, etc.) have made two significant discoveries:

  1. The most successful physical adaptations not only protect people and infrastructure when things are bad, they also improve everyday life.
  2. In addition to investing in the physical adaptations necessary to withstand severe climate conditions, investing in social adaptations is equally important.

In disasters like the ones caused most recently in the northeastern United States by Hurricane Sandy and other environmental calamities, it turns out that places where people are more neighborly fare better than those where people are isolated and have little connection to their neighbors. Communities in which neighbors look out for one another, those that exhibit a high degree of social connectedness, are more resilient than those whose inhabitants lack this quality of civic-mindedness. Social network resilience helps neighborhoods bounce back from severe damage to the physical infrastructure. Of course, this sounds reasonable and perhaps obvious (like many insights once they are explicitly stated).  But, even if it seems reasonable and obvious, we do not act as if it is.  That is, we do not think of investments that improve the quality of everyday life in our communities as a prophylactic against bad times.

Instead, when planning to manage environmental risks to our communities, we over-focus on physical infrastructure to protect us from disaster.  For water-related catastrophes, we build dams and levees and other types of storm surge barriers. Most of these measures do little or nothing to improve the quality of life under normal conditions and in some cases, seriously degrade it by consuming scarce resources.  Yet, a philosophical shift is taking place in the realm of physical adaptations. Structures are now being conceived that not only offer protection against environmental calamities, but also make everyday life nicer.

In Rotterdam, The Netherlands, where most of the densely populated country sits below sea level, the story of civilization has been a war with water.  Dikes and other systems that pump water out once it encroaches on the land have long been, and continue to be, a staple of the country’s response to water-related calamities.  However, in the past few years, engineers, architects and city planners have deployed a new water approach. In addition to disaster-prevention and –response, an approach which proactively explores what it means to co-exist with water has emerged. Today, in the middle of the city’s harbor, three transparent domes or Floating Pavilions sit on the water. These buildings are not quite boats and not quite houses but a new blended form of habitat which the city hopes will help it formulate new ways of living with water.   Singapore, another country that lies close to sea level, has always faced the one-two punch of monsoon-season flooding and, perversely, insufficient potable water. The Marina Barrage and Reservoir, located in the city center on one-sixth of Singapore’s entire land mass, is a three-pronged initiative which seeks to simultaneously, “improve drainage infrastructure, reduce the size of flood-prone areas, and enhance the quality of city life.”(1)

Today more than ever, many organizations have elevated risk management and mitigation to a primary position in their resource allocation decisions.  However, I believe that our current views of risk management have more in common with the now abandoned approaches that used to inform environmental disaster planning than those of more recent vintage. We don’t think about risk management and mitigation as making things generally work better most of the time, but rather as protecting us from disaster. We over-focus on structural adaptations in our processes to root out or prevent errors and typically ignore social adaptations altogether. As a result, we often make it harder to get everyday work done and virtually impossible to undertake highly risky activities such as innovation. This may be at least one of the reasons why innovation is so challenging for most organizations.

What if, to think about ways of creating more conducive conditions for innovation, we turned our current view of risk management on its head, borrowing from what is now understood about surviving physical disasters?  What if we focused on physical and social adaptations that not only manage risk but also improve the quality of everyday work life?

Many people who lead innovation initiatives focus on creating a supportive culture, processes and infrastructure that are designed specifically for innovation.  Bespoke.  But what if to achieve breakthrough innovation, you have to have a culture, processes and structures that improve the everyday activities of the organization?  What if designing exclusively for innovation is the wrong way to go about it?

In another potentially perverse turn of the screw, the processes and structures that are set up to encourage innovation often try to weed out the small, incremental ideas that make all aspects of work life better. In the rush to promote game changing ideas, small improvements get shoved aside. This might be a BIG mistake.  It could be that the small improvements are what make it possible for the game changers to be proposed, accepted, and implemented. It’s the slow and steady stream of little things that make life better, creating a solid foundation which strengthens the organization, building the capacity to withstand and support significant change.  Rather than pressing for BIG ideas, innovation might do better promoting a disproportionate number of small ideas.  It might need to partner more closely with those responsible for HR practices and policies so that ideas which improve the day-to-day conditions of most people in the organization are considered to be as important as those that have the potential to transform the business.

The notion that “things just being generally better all around for most of the time” is a precondition for being able to withstand seismic change requires an equally seismic shift in the way we think about effectively managing risk and organizing for innovation.  But, for innovation to succeed, it may be a non-negotiable mindset.

Source:

(1)   “Adaptation,” Eric Klineberg, The New Yorker, January 7, 2013

Filed Under: Change, Decision-making, Innovation, Risk Management

Doesn’t Play Well with Others

January 29, 2013 by Leave a Comment

“They can’t even comply with the rules of the conference.”  This indifference to the rules was apparently the most irksome aspect about the behavior of executives at Uber, an upstart car-hiring service, to the president of the International Association of Transportation Regulators.  “Uber [is a] ‘rogue’ app…the company [behaves] in an unauthorized and destructive way.”

Uber and other similar start-ups (SideCar, Lyft by Zimride) use mobile technology to match people with different kinds of transportation services (taxis, limousines, ordinary people driving their cars) in real-time.  The technology disintermediates the infrastructure that in the past has made those connections (dispatchers) and has regulated them (the transportation authorities).  To rein these new companies in, some municipalities have attempted to pass rules that would make the services they provide illegal.  “…[But] when Washington tried to pass rules that would make Uber illegal, customers bombarded City Council members with thousands of emails in protest.”  The companies claim that since they aren’t actually providing the rides, the regulations don’t pertain to them.

It’s another one of those situations where the writing is on the wall.  While regulators can slow the tide of change in the transportation industry, they are not likely to stop it.  But what seems to really get everyone’s goat is that the new kids on the block are completely disinterested in playing the game, let alone following the rules.  After I read the article, I kept thinking about how we emphasize the importance of collaboration in creating a culture that fosters innovation.  Much of what is written about collaboration has a nicey-nice spin to it – like the classic Coca-Cola commercials from the 1970s (back when there were three network channels and commercials ran for a leisurely one entire minute).  The idea that harmonious collectivism could bring about big change was in the air.  But what if collaborating to innovate looks less like the Coke commercial and more like a nasty fight among toddlers in a sandbox?

There is good reason to suspect that the spirit of getting along, of aiming for group harmony is at odds with the kind of against the grain decision-making and action-taking that is required for innovation.  Innovation requires a calculated approach to risk-taking.  Innovators size up a situation, drawing a line between the survivable worst and the fatal worst that could happen and insure that they stay on the side that lets them live to fight another day.

An in-depth profile that appeared in The New York Times this past December about a group of 16 expert skiers and snowboarders involved in an avalanche reads like a primer on how a group of experts striving to be in harmony make horrible decisions.  This group of highly experienced skiers and snowboarders who had all been tested in extreme situations, collectively made a horrible, life-threatening and, for some, life-ending decision to pursue a run down a challenging slope in iffy weather conditions.  It was a decision that any one of them was unlikely to have made on their own, had they been less invested in being and being seen by the other members of the group as good sports.

The disaster which led to the deaths of three members of the party occurred on Cowboy Mountain which is part of The Cascade Range in the state of Washington.  The skiers (there were snowboarders in the party, but for the sake of brevity, I will refer to all of them as skiers) were drawn to an area just outside the official ski zone known as Tunnel Creek.  It’s a place where experts frequently go to enjoy snow and slope conditions that are not available within the sanctioned ski areas but are still relatively easy to access.  The lure of fresh powder and 3,000 vertical feet angled at about 40 degrees is hard for great skiers to pass up.  But, when combined with weather conditions that create a thin, fragile layer of frost sandwiched between hard packed snow below and soft fluffy powder above, Tunnel Creek becomes an avalanche waiting to happen.  The kind of avalanche that is triggered by the skiers themselves as they ski down the slope, creating stress on the layers of snow.

Individuals within the group had misgivings. They all knew that the official avalanche forecast fell into a gray zone that should have made experts like themselves sit up and take notice.  But, the fact that each of them knew the reputation of the others led them to be overconfident that the group simply could not make a bad decision.

As one skier recalled afterwards:  “This was a crew that seemed like it was assembled by some higher force,….I was thinking, wow, what a bunch of heavies….”

Another thought:  “There’s no way this entire group can make a decision that isn’t smart,” he said to himself. “Of course it’s fine, if we’re all going. It’s got to be fine.”

And yet, some remember having misgivings beforehand, but feeling conflicted about expressing them:

“I can tell circumstances, and I just felt like something besides myself was in charge. They’re all so professional and intelligent and driven and powerful and riding with athletic prowess, yet everything in my mind was going off, wanting to tell them to stop.”

But over-riding everything else was a strong need to go along and get along:

“…[T]here were sort of the social dynamics of that — where I didn’t want to be the one to say, you know, ‘Hey, this is too big a group and we shouldn’t be doing this.’ I was invited by someone else, so I didn’t want to stand up and cause a fuss. And not to play the gender card, but there were 2 girls and 10 guys, and I didn’t want to be the whiny female figure, you know? So I just followed along.”

[But she shouldn’t have worried, because the guys felt just the same.]  “I thought: Oh yeah, that’s a bad place to be. That’s a bad place to be with that many people. But I didn’t say anything. I didn’t want to be the jerk.”

Keep in mind that this was a group of experts, the same kind of domain experts we assemble in our organizations when we need to make complex decisions about taking risks.  And they represented a wide range of ages, from 29 – 53, so you can’t lay blame at the feet of youthful exuberance.  Yet, when you read their reflections on how they viewed the situation, you feel as if you are listening in on a group of teenagers for whom being part of the group and having the group operate smoothly is more important than anything else.

We place a high value on harmonious group behavior   Remember the transportation regulator’s biggest complaint about Uber – they didn’t play by the rules, they were not being good sports.  Yet, playing by the rules, whether they are literally regulations or the way things have been done in the past or the even more forceful social norms that proscribe group dynamics, does not always yield the best outcome.  We might want to rethink what playing well with others looks like in the context of innovation – maybe a few squabbles and some sand-throwing is essential to taking the kind of risks that, even if you don’t succeed, insure that you are around the next day to try again.

Perfect Harmony – Coca Cola Commercial


Sources:

  • “Car-Hiring Apps in a Snarl,” Brian X. Chen, The New York Times, December 3, 2012
  • “Snow Fall: The Avalanche at Tunnel Creek,” John Branch, The New York Times, December 26, 2012

 

Filed Under: Collaboration, Decision-making, Innovation

Fatal Allergies: Part 2

December 17, 2012 by Leave a Comment

If we can’t avoid failure and mistakes, how can we use the fact that we will make mistakes and fail (and maybe even that we should make mistakes and fail) to our advantage?

Let’s start with some dictionary definitions:

Mistake – An error or a fault resulting from defective judgment, deficient knowledge, or carelessness.

Failure – The condition or fact of not achieving the desired end or ends.

Based on the definitions, it’s clear that a mistake is not necessarily a failure, although it is frequently a precursor to failure.  However, both mistakes and failures share the characteristic that they can only be known after the fact (post hoc).  So when and who decides whether a mistake or failure has occurred is key.

Yet, Schoemaker (whose framework for decision-making was described in Part 1 of this blog post) wants us to design mistakes and purposefully make them, so we can’t wait until the outcome to say that what we did was a mistake.  And he doesn’t want us to make just any kind of mistake.  He was us to make brilliant ones.   Shoemaker asserts that there are four basic types of mistake and one of them is the type we should take advantage of more often than we do.(1)

There are trivial mistakes, e.g., not leaving enough time to catch a plane or not putting enough money in the parking meter.  These are annoying, but not worth worrying about.  There are tragic mistakes for which the cost is extremely high and for which there little to no benefit, e.g.,  texting while driving and losing control of your car, indulging in the pleasure of addictive drugs.  These are always to be avoided when possible.  Serious mistakes are not those that you seek out, but if you have to go through them, you can in many instances turn lemons into lemonade.  Examples include losing your job, getting divorced; some might say getting married.  Brilliant mistakes are a close cousin to serious mistakes, but they are a different breed.  They are the mistakes that Shoemaker wants us to design for.

A brilliant mistake has these characteristics:

  • It is an action whose expected utility or value is less than the expected utility or value of not taking action.  It’s an action that you believe at the outset is unlikely to pay off.  All of your previous knowledge and experience would encourage you to bet against a net positive gain from undertaking the action.
  • Something goes wrong or has the potential to go wrong far beyond the range of prior expectations.  The outcome of a brilliant mistake has to surprise us in some way.  It has to be so far from what we anticipated or so difficult to fit within our current operating theory that we literally sit up and take notice.  As a result, brilliant mistakes offer the possibility that insights will emerge whose benefits far exceed the cost of the original mistake.  Brilliant mistakes offer the potential for expanding the field of knowledge and accelerating learning.  They can cross the chasm, making a giant leap forward that results in a breakthrough.  This is why brilliant mistakes are so closely associated with fundamental innovation, what we in the business world call business model innovation.  [Of course, there are many mistakes which could be called quasi-trivial or quasi-brilliant, the edges between types of mistakes are not clearly defined.]
  • Finally, a brilliant mistake occurs in a system with some slack so that even if most people are focused on supporting the status quo, a handful or more can slip free and do something different.  In most of the professional service organizations where I have worked, the little fits and starts of new ideas are often bemoaned as “hobbies.” An innovation process is supposed to cure the organization of its tendency to “indulge in hobbies.”  However, if organizations are too efficient and too effective, brilliant mistakes are virtually impossible to make.

If we want to design a brilliant mistake, where do we start?

There are two wells from which we can source brilliant mistakes:

  1. Defy conventional wisdom.
  2. Act at cross-purposes to our own views

Start with the assumptions that guide how you approach business growth – as I mentioned above, many professional service organizations want to root out and stop instances of people spending time on anything other than client-related work because it is viewed as a waste of time and resources.  A course that defies conventional wisdom might give everyone time to pursue a work-related “hobby” seeing these activities as a potential source of innovation.  We know that some organizations actively pursue this approach – most famously (today) Google, but not so long ago it was 3M.  Both set up a similar mistake-making pipeline, but came at it from different wells.  3M in my mind is the bellwether of defy conventional wisdom and Google embodies acting at cross-purposes to their own views.

Defy conventional wisdom:  3M launched its 15 percent program in 1948. If it seems radical now, think of how it played as post-war America was suiting up and going to the office, with rigid hierarchies and crisply defined work and home roles. But it was also a logical next step for the company. All of its early years in the red taught 3M a key lesson: Innovate or die.  This is an ethos that the company has carried dutifully into the 21st century.(2)

Act at cross-purposes to your own ideas:  Google has taken measures to encourage outside interests, enacting the 70/20/10 rule, which allows employees to spend 20% of their time on “innovation time off” pursuing their own ideas that relate to Google and then 10% of their time on stuff completely unrelated to Google.  This could be reading a book, drawing in Photoshop, or going to a museum.  In so doing, Google gains loyal employees who can purposely enrich their lives without Big Brother looking over their shoulder.  At the same time, the company stimulates  innovative thinking.  Think about it: how many times have your best ideas about solving work-related problems come to you while you were doing something completely unrelated to work? (3)

Once we have an assumption we’d like to test, what else might we consider to help us determine if we might be poised to make a brilliant mistake?  Schoemaker offers several additional criteria to guide us:

  • Potential benefit relative to cost is high.  This point may seem obvious, but it’s important to state it explicitly because it overcomes the major argument against making deliberate mistakes:  why would you undertake an activity that you believe at the outset is most likely to fail?  Because over the long run and across a portfolio of mistakes, the potential benefit will be greater than the cost.
  • Decision is made frequently.  This is an interesting criterion relating to how much activity within the system flows from a particular assumption.  For example, most companies assume that they have accurate insight into the markets they serve and base their investments in new product development on this assumption. Many decisions flow from this assumption.  Decision frequency is the lever that creates the potential for a large ROI – the benefits can be very large relative to the cost.
  • The environment is in flux.  During periods of rapid change, mistakes are common currency – but most of them occur inadvertently.  Instability provides an opening for trying something different because it lowers the barriers to entry.

To illustrate these points and the next two, we turn to The New Yorker’s 2012 fashion week edition that presented a story about how an enterprising individual used a rapidly changing marketplace to build a new kind of company (4).

Back in 2000, a young Italian MBA graduate was captivated by the notion of exploiting a rapidly evolving marketplace – the Internet – and mashing it together with haute couture.  By integrating these two diametrically opposed experiences – the democratic, highly individualized experience of on-line shopping and the elitist, small herd-like experience of high fashion – he hoped to unleash a new market for high end fashion among people who did not physically show up at Fashion Week, but were passionate about fashion.

This was the idea behind Yoox.com which has spawned several new business models in the market for high end fashion.  Yoox has made it possible to purchase haute couture as it debuts on the runway if you are willing to pay full price through design house websites which Yoox operates.   Those who can’t afford full price designer clothing can purchase “vintage” haute couture at deep discounts through the Yoox site (which insures that sales of remaindered clothing don’t cannibalize design house in-season sales).

  •  Experience base is limited.  The less that you know about a new opportunity, theoretically, the more open you should be about different approaches.

The Yoox story also provides a window into how this attribute can contribute to opportunities for making brilliant mistakes.   Many of the design houses initially pooh-poohed the Yoox approach.  They firmly believed that haute couture had no place on the Internet based on an assumption that people shopped for bargains on the Internet, looking for deeply discounted items on sites like eBay.  (Remember this was back in 2003.)  However, at least one design house (Marni)  was willing to experiment, acknowledging that it knew very little about the internet.  Yoox provided the technology, logistics, ability to handle customs, currency conversion and perhaps even more importantly, knowledge about what product was selling where, which it plugged into its algorithm to help companies predict trends.  Now, Marni, Armani, and Zegna, are powered by Yoox.

  • Problem is complex.  Finally and not surprisingly, the more complex the problem, the more possibilities exist for solutions.  The more opportunities to actively make mistakes.  Yet, in many fields, dogma takes hold surprisingly quickly (remember the great wrinkle that time poses for the problem of determining whether a decision outcome is good or bad) and with great tenacity, narrowing the boundaries for new ideas.  Certainly, this has been a challenge for the field of cancer research and treatment.

We wrap up our foray into failure and mistakes by teasing out one strand of Siddhartha Mukherjee’s comprehensive and compelling biography of cancer. (5)

Cancer is a big and growing health problem.  BIG:  In the US, 1 in 3 women and 1 in 2 men will develop cancer during their lifetimes. Of the 156 million women and 151 million men in the US, 128 million Americans now living will develop cancer.  Of the 2.4 million people in the US who die each year, 25% of them die of cancer.  GROWING:  As we live longer, the odds of genetic mutations that result in cancer increase.  It’s a trade-off – as life span increases, so does the incidence of cancer in the population.

Cell division is the source of life – the process by which human beings “grow, adapt, recover, and repair.”  It is also the cause of cancer because cancer cells do all of these things better than normal cells, they have achieved the chimera of eternal youth  – “they are more perfect versions of ourselves.”  But the perfection of cancer is twinned with the destruction of its human host.  Ultimately, from our human point of view, failure is encoded in the biology of growth – inseparable from it.

The awareness of cancer extends far backward in human history, over almost 4,000 years, when evidence of a disease that was most likely what we understand as cancer was first documented.  The Egyptian document from 2500 BC appears to describe a tumor of the breast.   The history of trying to understand the mechanisms by which cancer occurred however, begins almost 1,000 years later, when the Greeks undertook to explain bodily functions in terms of fluids, building on and extrapolating from their knowledge of hydraulics (fluid mechanics).  And yet, since cancer is an age-related disease, until life expectancy began to increase, other diseases (small pox, tuberculosis, the plague, cholera, etc.)  blanketed the historical record and mention of cancer is harder to find.

It is impossible to recount the long history of discoveries and theories that populate the cancer research and treatment roadmap, but the story of radical surgery embodies the hallmarks of the mistakes that have propelled the field  forward and held it back at the same time – the brilliant and the serious mistakes of cancer research and treatment.

Removing cancerous tumors by cutting them out was practiced millennia ago.  But the obstacles that plagued surgery had to be overcome before the benefits of extirpating tumors could be seriously explored.  It wasn’t until 1850 that pain was separated from surgical procedures via ether-induced anesthesia (William T.G. Morton is credited with this innovation).  In 1870 Joseph Lister introduced the use of carbolic acid, an antibacterial chemical, to promote antiseptic surgery, reducing the post-surgical complication of infection.  These two advances were the primary drivers that freed surgeons to conceive the notion of not just removing cancerous tumors, but curing cancer through surgery.  And no one epitomized this approach more than William Halsted who in 1900 pioneered and became associated with the practice of radical mastectomy as a cure for breast cancer.

Radical mastectomy involves removing the breast, chest muscles, and all of the lymph nodes under the arm.  Halsted believed that this approach, while disfiguring, would eradicate cancer from the body – an assumption that ultimately proved to be wrong in most cases.  His approach was based on a theory that cancer spread throughout the body through a kind of centrifugal force that spun metastases outward along a spiral path from the original site.  So it made sense to continually widen the surgical scope in seeking a cure.  It took almost 100 years, for another approach to replace the radical mastectomy as the dominant surgical approach to cancer.

In the 1930s a physician named Keynes combined radiation and limited surgical excision to treat breast cancer.  While his results were as successful as those achieved by practitioners of radical mastectomy, his approach was derided and sneeringly labeled “lumpectomy” – a put-down in surgical terms, implying that the surgical approach was crude, taking out a “lump” of tissue.  [Similarly, when the term “junk” was applied to non-coding DNA mentioned in Part 1 of this Post, it also had the effect of pushing research in this area to the far edges of scientific inquiry.]  It wasn’t until the 1950s that another surgeon (Criles) reconsidered the lumpectomy based on a different theory of cancer metastasis.  Criles proposed that for many breast cancers, the metastases spread not in an orderly spiral path, but in a chaotic, unpredictable fashion to far flung parts of the body, rendering a surgical procedure that extirpated tissue near the original site ineffective.  But it wasn’t for another 30 years, during which physicians were persuaded to enroll patients in trials that would provide enough data to apply statistical tests of validity, that yet another surgeon, Bernard Fisher was able to demonstrate that  “…[t]he rates of breast cancer recurrence, relapse, death and distant cancer metastasis were statistically identical among…[three treatment options – radical mastectomy, simple mastectomy, simple mastectomy followed by radiation].  It took nearly 100 years to render an accurate judgment for radical mastectomy as the correct approach for curing breast cancer – mistake.

You might think that the field of cancer oncologists, surgeons, and radiologists would take this lesson to heart and seek to avoid the path of devastation and delay that accompanied the passion for radical surgery as a cure for cancer.  But just as radical surgery was winding down, radical chemotherapy replaced it as the favored approach for curing cancer (sometimes combined with radiation).  Only recently has a new belief set emerged which does not seek to “cure” cancer, but rather to manage it as a chronic disease.  Today, many are looking to a changing array of targeted pharmaceuticals to manage cancer by inducing the body to isolate cells functioning in this damaging way and destroy them the way that the immune system takes care of other foreign and dangerous invaders.

This approach represents a radical break from two centuries of thinking about cancer.  Cancer, a genetic “mistake” that leads to system failure, is now understood as inseparable from the biology of growth.   Trying to eradicate it is increasingly viewed as fruitless, but effectively managing it is seen as possible.

This is the same sort of radical perspective that I believe Schoemaker wishes for us to adopt with respect to mistakes.  He wishes for us to understand that mistakes and failure are inseparable from individual and organizational growth.  Rather than seeking to eradicate them, Schoemaker urges us to learn how to push past the unpleasant confrontation with human limitation and fallibility that making mistakes brings about and find ways to manage mistakes so that, on balance, we gain more than we lose from our inevitable lot as human beings, the makers of mistakes.

“If a few mistakes can be good, wouldn’t a few more be even better?  Paul Schoemaker

 

Endnotes:

(1)    Paul Schoemaker, Brilliant Mistakes: Finding Success on the Far Side of Failure (Philadelphia:  The Wharton Digital Press, 2011)

(2)    Sourced on 9/12/12 at http://www.fastcodesign.com/1663137/how-3m-gave-everyone-days-off-and-created-an-innovation-dynamo

(3)    Sourced on 9/12/12 at http://99u.com/tips/5766/Encourage-Daylighting

(4)    John Seabrook, The Geek of Chic, The New Yorker, September 10, 2012

(5)    Siddhartha Mukherjee, The Emperor of All Maladies: A Biography of Cancer (New York: Scribner, 2010)

These blog posts were originally delivered as a presentation to The Learning Forum’s Knowledge Council in September 2012.

Filed Under: Decision-making, Innovation, Risk Management

Fatal Allergies: Part 1

November 27, 2012 by 1 Comment

Since making a career transition about a decade ago from knowledge management to innovation, I find that I have spent more and more of my time thinking about failure and mistakes. It seems to me that knowledge management operates under the assumption that what is or can be known is valid and correct.  Innovation in many ways starts with the opposite assumption – that what is or can be known and the frameworks for acquiring knowledge might not be valid or correct any longer.  So, innovation rests on a foundation of failures and mistakes and most of its outcomes add to the store of things that have turned out to be wrong.  However, while organizations desperately want innovation, they are not too excited about embracing failure and mistakes.

At least that’s what I assumed at the outset of exploring this topic.  In an earlier draft, I started this post with the sentences:  “Organizations seem to be allergic to mistakes and failures.  No one wants to say that they made a mistake.”   After having confidently made this assertion it occurred to me that I really didn’t know if it was accurate.   So, I decided to see if I was right.  When I put the search string “CEOs admit mistakes” into Google, I received about 6 million results in less than one second.  It turns out that I was wrong, CEO’s do admit to mistakes – I was mistaken.

The top two results were illustrative of most of the rest (italics in these quotes are mine):

“The past year and a half have had situations where we might [have done] some things differently if we had known [things were] changing so rapidly, even faster than anyone could have predicted, ….Each time the future is difficult to predict, the situation is difficult.”(1)  Stephen Elop, CEO, Nokia

 “…the Goldman chief compared the financial crisis to one historic hurricane season during which four major storms struck the east coast.  “How would you look at the risk of a hurricane?” he asked, noting that the following year, no large storms struck the area.  “Mr. Blankfein, I want to say this,” Angelides responded. “Having sat on the board of California’s earthquake authority, acts of god were exempt. These were acts of men and women. These were controllable.“  Lloyd Blankfein, CEO, Goldman Sachs and Phil Angelides, the chairman of the Financial Crisis Inquiry Commission

From Mr. Angelides’ retort to Mr. Blankfein, it seems our mistakes will not be excused if our only explanation is that we don’t believe we could have foreseen the outcomes.  Even though Nokia’s CEO seems to be on to something  (i.e., the environment in which decisions were being made was in rapid flux) as does Mr. Angelides (who suspects that people might be able to use the possibility of negative outcomes more productively to temper their decisions and subsequent actions), neither Mr. Elop nor Mr. Blankfein are reported as drawing any conclusions about how they might have approached their situations differently. Instead they are content to put forward the argument that the outcome was outside of their control and therefore, they were not responsible for it.

We do evaluate our decisions based on outcomes, which as Mr. Elop and Mr. Blankfein rightly suggest are hard to predict, let alone control (despite Mr. Angelides’ suggestion to the contrary).  We say that a decision was a mistake post hoc (after the fact) but we make our decisions a priori (before the fact).   And despite the major executive mea culpas that are easily found on the Internet in great abundance, we all know that it’s rare inside of organizations for people to associate themselves with a mistake or a failure.  We don’t even use the word “problem” too much anymore.  We prefer “challenge” which implies that we can somehow manage to control outcomes and achieve a positive result.

Should we be concerned?

I believe that we should because mistakes and failure are inseparable from creative and generative processes.  Lacking a useful conceptual model for engaging productively with mistakes and failures, we default to making mistakes inadvertently. We court failure and miss opportunities to learn from it.  As a result we might unwittingly be choking off potential sources of collective and even individual growth.  Are there ways of looking at mistakes and failures that might help us avoid or prevent the ones which cause or lead to organizational decline (or even demise) while at the same time embracing our destiny as human beings who cannot avoid making mistakes and who will undoubtedly experience failure?

Drawing on two books and my own musings, let’s explore the idea that we can figure out how to make “good” mistakes and have “productive” failure. The conceptual framework that I will use comes from Brilliant Mistakes by Paul Schoemaker (2), a decision sciences professor at the Wharton School, and the stimulus that made me see mistakes and failures everywhere was The Emperor of All Maladies: A Biography of Cancer by Siddhartha Mukherjee (3) about the history of cancer research and treatment.

First, let’s look at decisions and determine if we lean towards Mr. Blankfein’s or Mr. Angelide’s point of view.  Can we reasonably predict the outcome of our decisions?  Can we know if we are making a mistake?  Can we know if we will fail?  We start with Mr. Schoemaker’s framework for considering what factors contribute to a decision outcome.

Schoemaker Decision-Making Framework

The quality of thinking and judgment prior to a decision and how well one executes according to plan and adjusts when circumstances necessitate clearly affect the outcome of a decision.  We can all think of major decisions that were reached in haste and those which were carefully considered but poorly executed.  But other factors which are outside the decision-maker’s direct control also play a very large role in decision outcomes.   In situations where complexity and risk are high, the element of chance and the influence and actions of other people loom large.  Even the element of time colors the determination of whether a decision is good or bad.  This is where I see mistakes and failures everywhere (much like the little boy in the film The Sixth Sense who sees dead people everywhere).

For example, when I started to work on this post in early September 2012, The New York Times reported the results of a large federal project that involved 440 scientists in 32 labs around the world.  The study concluded that large chunks of DNA which had previously been dismissed as “junk” are now understood as playing “critical roles in controlling how cells, organs and other tissues behave.”(4)   Why did this misunderstanding which was enshrined in the 1970s persist for so long?  I would argue that this is human nature.  Typically, those who are responsible for a decision (like those who decided that these parts of DNA were junk with no biochemical function) tend to dismiss discomfirming evidence  and respond to signals that reinforce their pre-existing beliefs.  We get caught up in self-fulfilling prophecy (those who decided it was junk, looked for or chose to understand evidence in such a way that confirmed their beliefs).  What typically changes thinking is that new technologies, new tools and, as Thomas Kuhn asserts in The Structure of Scientific Revolutions, new people come along who are unburdened by existing knowledge or experience and, most importantly, were not part of the original decision-making process.

Many decisions have very long tails – their consequences reverberate for a long time.  It’s hard to know that they were mistakes, very serious mistakes with very serious consequences.  Scientific research is replete with long tail decisions.  The second part of this post will relate a story from the history of cancer research and treatment that is a sobering tale of a long tail decision.

I’d like to make two other points about decision outcomes before we leave this topic.  One is related to the limits of our knowledge and the other to the fidelity of history.

  1. Limits of knowledge.  We may judge a decision to have been a good one, but we are often unable to compare it with the choice or choices not taken.  What if you could know about the outcome of the choice you did not make because someone else did make it?  Even if you had done well with your choice, how would you feel about it if you learned that the person who had made the choice you did not ended up doing much better?  How would that affect the way in which you viewed your decision outcome?  Would you then think it was a mistake?
  2. Fidelity of history.  History is written by the winners (or at least the survivors).  This skews our understanding of decision-makers in favor of a belief that the decisions reached by the winners/survivors were better than those reached by the losers.   We want to believe that some people are better able to see a clear way ahead than others even in very complex, high risk situations.  That leaders are leaders because they make better decisions than the rest of us.

Let’s wrap up part 1 of this post by considering two business stories that involve leaders making decisions – read each story, and write down your guess about which leader’s decisions resulted in success.  Then look at the “reveal” and see if you could tell.  Don’t peek.

Story #1:

A $6.5 billion media company spends $20 million for an online start-up that was founded by two recent college grads for $12,000 a year before.  They ask the founders to stay on for the next three years as part of the deal and then essentially leave them alone.  They don’t insist that the new acquisition immediately get absorbed into the larger company and when even being associated with the larger company makes it difficult for the fledgling operation to compete for talent, the company is spun out as an independent subsidiary.  The subsidiary hires a new chief executive who doesn’t have much executive experience, although he has worked at Facebook and Paypal in management positions.  They bring back one of the founders to serve on the board.

 Story #2:

A $3.4 billion commerce giant appears to be in the throes of a death-spiral – its core business has lost a great deal of its uniqueness and relevance in what has become an increasingly crowded marketplace compared to when the company got its start nearly 17 years earlier.  The company’s leadership decides to make a dramatic course correction.  “’It was clear the world had innovated around [us] and [we] had stayed with the same formula….Saying that was considered heresy.  With any company that’s been this successful, there’s enormous momentum to keep doing what you’ve been doing and hope the world will go back to what it used to be….we had to make changes that were unpopular with subsets of our customers and other people.  You have to have the conviction to do what you know is right….We spent three years fixing the fundamentals and tried not to worry about what everyone else was saying.’”  And then the CEO replaces virtually all of the senior management team.

What are the endings to these stories?  Success or failure?

Story #1 is the story of reddit.  In late September 2012, with a mere 20 employees, the company was serving up three billion page views a month and the President of the United States had just signed up for an “Ask Me Anything” session.

Story #2 is the story of eBay.  Its stock price, which had fallen from a high of $58 in 2004 to a low of $10 in 2009, rebounded to a six-year high of about $45 in July 2012 as eBay retooled itself into a mobile retailer based primarily on its significant investment in PayPal as a means of innovating the purchase experience.

What are we to do?  If we can’t avoid failure and mistakes, how can we use the fact that we will make mistakes and we will fail and maybe even that we should make mistakes and should fail to our advantage?  In Part 2, we will attempt to answer these questions.

 

These blog posts were originally delivered as a presentation to The Learning Forum’s Knowledge Council in September 2012.  I’d like to acknowledge and thank Brian Hackett,  Founder of the The Learning Forum, for giving me this opportunity. 

(1) Nokia’s phones historically have relied on an operating system called Symbian which does not dominate the market (4% market share in 2012 down from 17% in 2011).  It has switched recently to the Microsoft’s Windows platform which has a 3.5% market share in 2012.  Sourced from:  http://www.dailyherald.com/article/20120915/business/709159982/] on 11/21/12.

(2) Paul Schoemaker, Brilliant Mistakes: Finding Success on the Far Side of Failure (Philadelphia:  The Wharton Digital Press, 2011)

(3) Siddhartha Mukherjee, The Emperor of All Maladies: A Biography of Cancer (New York: Scribner, 2010)

(4) Gina Kolata, “Study Discovers Road Map of DNA: The Key to Biology,” The New York Times, September 6, 2012.

Filed Under: Change, Decision-making, Innovation, Knowledge Management, Risk Management

Should Capitalists be Kind?

October 11, 2012 by 1 Comment

Last week I attended a one-day conference sponsored by UBS (and hosted by Bloomberg at their architecturally sexy NYC midtown offices).  The conference is designed to convene a diverse group of thinkers and practitioners to discuss, debate and advance important economic issues.  This year’s theme was inflection points – those impossible to put your finger on moments at which a host of factors combine and trigger an upward-sloping curve to explode into a J-curve or reach a tipping point beyond which what was only possible becomes inevitable.

The conference speakers were all impassioned experts in a field of inquiry and practice that is broadly labeled “sustainability.” Sustainability asks rather pointedly whether the models we currently use to create wealth are doing so at the expense of future generations.  From different vantage points, the conference speakers addressed the question as to whether we have reached an inflection point in the world economy with respect to sustainability.  Have we reached the point at which the factors that corporations previously experienced as externalities – poverty, environmental degradation, slavery, resource scarcity, etc. – have become, if not fully, than at least, uncomfortably internalized?  Have we reached the point at which kicking the can down the road, letting future generations bear the cost of remediating environmental, social and governance (ESG) challenges, is no longer a viable (i.e., wealth-creating) strategy?

Almost a week has gone by now and I find that I cannot stop thinking about two of the presentations.  John Mackey, the founder and CEO of Whole Foods, gave one and Michael Porter, Harvard Business School Professor and world authority on strategy, gave the other.  Mr. Mackey offered up a paean to capitalism, but the specific “brand” of it to which he fervently adheres, conscious capitalism.  To borrow from the non-profit’s website:  conscious capitalists embrace free markets, entrepreneurship and competition but they do so with an acknowledgement that trust, compassion and collaboration are integral to value creation which is conceived in the broadest possible sense (financial, social and emotional).  This integration of human values into the capitalist equation is what conscious capitalists believe separates them from corporate social responsibility (CSR) practitioners.  From their vantage point, CSR practitioners do not place human values at the center of the for-profit organization’s reason for being but use them as a corrective after the fact. As a result, CSR lacks the central positioning required to be truly effective because it lies outside the boundaries that define the core purpose of the wealth-creating organization.

Mr. Porter offered up his vision of corporations who go beyond the band-aid of philanthropy and the nicey-nice thinking of corporate social responsibility to find ultimate strategic success in striving to create what he calls “corporate shared value.” This uplifting vision of capitalism exhorts corporate titans to recast their view of currently unattractive markets and see them as holding the potential for BIG, NEW sources of profits. These markets might be ones in which consumers sit at the bottom of the economic pyramid with little disposable income or infrastructure that can be leveraged to reach them profitably or  ones in which meeting demand might put the current business out of business (e.g., helping companies reduce energy costs when your company supplies their high energy consumption infrastructure or equipment).   Mr. Porter and Mr. Mackey share a belief system that embraces economic freedom and profits, but refuses to place improvement of the human condition as a follow-on or afterthought to capitalism.  Instead, they center amelioration of humankind squarely in the center of capitalism’s value creation proposition.

Of course, it might be a bit much to expect UBS and Bloomberg to sponsor a conference of investment academics, investors, and their advisors who are interested in anything other than the capitalist system.  But the unmitigated celebration of enlightened capitalism left me feeling a bit queasy.  Can it really be that capitalism is the silver bullet that will end human poverty and misery if we just evolve it a bit?  Is capitalism the triumphalist economic form which if left free and unfettered transcends all other means of production?  Mr. Mackey looks backward and marshals the weight of history to support his contention that this is true.  Mr. Porter presents an alternative forward-looking theory to bolster his contention that mutual assured wealth-creation is the most attractive strategic option for corporations committed to growth.

But, just in the nick of time for me, I came across another, messier claim about how economic progress might unfold in the 21st century that doesn’t rely on capitalists to be kind or governments to be good.   Steven Johnson grabbed two pages in The New York Times Sunday Magazine on September 23rd to pitch his new book, “Future Perfect: The Case for Progress in a Networked World.”  To distill his central argument for the purposes of this blog post, Mr. Johnson makes the case for commons-based peer production (a phrase coined by Yochai Benkler of the Harvard Law School).  Johnson revisits the tale of “Who invented the internet?” to demonstrate that it was neither the government nor industry, but both of them PLUS an amalgam of techno-peers who freely collaborated in networks, sharing knowledge and building a resource that is owned by no one and that everyone can use to their advantage.  Mr. Johnson wants to create what he calls a “master narrative of creative collaboration…[that teaches us that] there are new models for doing things together…that prove convincingly that you don’t need bureaucracies to facilitate public collaboration, and you don’t need the private sector to innovate.”  For me, stepping away from the model of leadership that embodies the role of the leader in one person who steers the ship of state or the corporate ship and exploring a new model of distributed leadership breathes new life into the discussion of how we might go about solving our common challenges as human beings who share this one planet.

I’m all for enlightened capitalism and I’m all for efficient government, but I’m even more intrigued by mass collaboration that allows people to connect both from within and outside of institutions in a dense web of peer relationships that advance the human condition.  So, capitalists can be kind if it suits them and governments can be less bureaucratic, but I’d rather rely on messy human connections as the ultimate machine of human progress.

John Mackey on Conscious Capitalism

Michael Porter on Corporate Shared Value

Steven Johnson on Peer Networks

Filed Under: Collaboration, Innovation, Sustainability

Starting Over

May 29, 2012 by Leave a Comment

Sometimes it really is impossible to promote fundamental change in existing complex systems.   Systems are always changing, of course. But when we believe that the nature of an existing system is flawed in some fundamental way and we want to initiate changes that we believe might beneficially reconfigure the system, in many instances the system is impervious to our efforts.  The powerful, entrenched interests and ingrained processes resist the prods that might alter the system’s basic operating principles.  This can happen even if the system is clearly not sustainable, even if it is certain that over time, the system is sowing the seeds of its own destruction.  Sometimes the answer may be to not even try.  Sometimes the answer is starting over.

The nation of Honduras has decided that to create cities which are good for everyone it will not try to fix its existing cities; instead, it will start over.  The nation will build an entirely new city that operates under entirely different rules from the rest of Honduras.  The theory behind starting over comes from the work of Paul Romer whose research seeks to understand why it is that even when poor countries have access to the same technologies as rich countries, they are unable to exploit these technologies to create wealth.

Romer’s research led him to conclude that the major constraining factors are “laws and, crucially, customs that prevent new ideas from taking shape.”  In addition, Romer adds the necessity of: 1) allowing people to opt in to living under the new set of rules and 2) the imperative that leaders embrace collaboration (often with other leaders).  In other words, the sum total of existing culture inhibits wealth creation (a).  In 2009, with a newly elected leader in place, Honduras changed its constitution to permit urban development under a new governance structure and is establishing a charter city based on Romer’s theory that good rules and choices are essential enablers that make cities great places for all their inhabitants.

The organizing principles of the charter city are simple, borrowed from places like Hong Kong, Singapore and the UAE:

  • Provide assurance to investors that their capital will be secure.
  • Enact open immigration policies to attract desired talent.
  • Impose strict codes of public behavior.
  • Mandate provision of retirement savings, healthcare and education.

These principles are based on a belief that when people have confidence that they can improve their lot if they play by the rules, the cities that they create are better places for everyone.

When people don’t believe that playing by the rules is the way to get ahead, the results are sadly, all too predictable.  Greece is a country case-in-point.  Economic woes in Greece are exacerbated by estimates that as much as 30% of its GDP is underground translating into billions of uncollected tax euros.  Why?  If no one is paying taxes, why should you pay taxes?  Why play by the rules if the rules are not enforced (amid tales that when the tax collector comes, there is a 40% reduction on the bill, a 40% pay-off to the tax collectors, and an ultimate payment of 20% of the total tax owed)?   We currently have front row seats to the challenges of trying to change an existing complex system as we watch Greece in particular, and Western Europe in general, attempt fundamental system change.

Western Europe and Greece do not have the option of starting over, they must struggle through the long, difficult process of trying to change existing culture.  The new Honduran charter city will attempt to create a different culture by building it from scratch.  It might be successful.  If it is, Romer envisons charter cities springing up in empty arable places around the globe (of which there are many), like oases in the desert.   Once there are enough of these charter cities to reach a tipping point, what next?  What will happen when charter cities and traditional cities collide?

General Motors, something like a small nation, attempted to launch its version of a charter city with the Saturn car division.  Named after the rocket that carried Americans to the moon and initiated to launch GM competitively into the subcompact car market, the Saturn car division got underway in the mid 1980s and rolled out its first cars in the early 1990s.  “A Different Kind of Car Company,” Saturn was created from scratch, outside the GM system so that it could operate by a different set of rules.  And it did, for some time, generating enthusiasm among employees (who had opted to work there) and fervent loyalty from Saturn car owners.  However, within a decade, the division had been sucked back into GM and in another decade, a victim of the 2008 recession, Saturn had been terminated.

One could argue that while Saturn may have had good rules and choices for people (employees), there really were not choices for its leaders who lacked full autonomy.   More importantly, the necessity of creating a different kind of car company whose major reason for being was transparent/no-haggle car purchasing pales in comparison with the moral urgency of figuring out how to make cities great places for all people to live in with a world population growing to 9 billion and urban centers in developing countries swelling by 3 billion as citizens emigrate to them in search of opportunity (b).   Perhaps the stakes have to be much higher than feeding already stuffed consumer markets for leaders to stay the course.

Romer’s theory about the necessity of good rules and real choices for people and leaders when growing livable urban centers may indeed be correct.  But the question of what happens next stands.  If the new charter cities survive their beginnings and grow, will they survive when they are incorporated into the larger ecosystem of which they are a part?  And what do Romer’s theories imply for organizational systems that require fundamental change?  If starting over is the only real option, what happens next?

 

(a)    In Romer’s TED talk he posits three major factors (see above):  Good rules, Choices for people, and Choices for leaders.  He believes that all three are necessary to avoid the mistakes of colonialism which imposed rules on people and seized land that was already inhabited.

(b)   United Nations estimates, 2050.

Source article:  ”Honduras Takes a Mulligan,” Andy Davidson, The New York Times Magazine, May 13, 2012

 

Filed Under: Business Model, Change, Innovation, Sustainability

As Clear as Mud

March 27, 2012 by Leave a Comment

As an undergraduate at Duke University, I majored in religion.  I felt somewhat out of place being a Jewish kid at a university with a Methodist Divinity School, but I ended up taking classes at the Div School in such subjects as Biblical Hebrew and Comparative Literature.  Not surprisingly, I had more than my fair share of conversations about God (or as I more respectfully used to spell it back then, G-d).  They were the standard stuff of “What is God?” A compelling question at 18 because I, like many others, had not really thought much beyond what had been presented to me in my decade of religious education (in my case, Hebrew School*).  Many of these conversations were explorations into shared beliefs and while they were fervent and impassioned, they skimmed the surface.  We probed each other’s beliefs about God or the Bible and were reassured as long as we both said the same thing, content to leave it at that.

However, at some point, it dawned on me that my Bible (the Jewish one) and their Bible (the Christian one) were not at all the same despite sharing one book, and that my God (the vengeful Jewish one who was more powerful than a pantheon) and their God (the benevolent Christian one who was the answer) were only related by blood.  I began to see that when someone asked me if I believed in God or the Bible and we both said “yes,” it didn’t really mean that we agreed on much of anything.  Recently, I have had several experiences which reminded me of this essential insight that I learned so long ago.

During a typical conversation about innovation, the buzzwords fly – collaboration, engagement, stage-gate, transparency, fuzzy front end, etc.  And when the conversation is between two or more people who are in the innovation field, it’s taken for granted that we mean the same thing when we use these terms.  However, a few hours after a recent conversation with a successful innovation executive, I was caught short by the realization that what he meant and what I meant by transparency were not even remotely the same thing.

I had been blabbing away about how one of the great things about using an idea management platform, in addition to how easy it is for everyone in the organization to collaborate, is the degree of transparency that it introduces into the process.  I had received enthusiastic head nodding while I was making this remark and was not paying close attention to his response at the time.  As the conversation floated back to me, I actually heard it for the first time.  He had agreed with me that it was essential for executives to have visibility into the organization at all levels and across all business units – a view from the top.  This was not at all what I meant by transparency.  From my point of view, the kind of transparency that engages everyone in the organization and lays the foundation for energetic collaboration gives everyone visibility into everything – a view from anywhere.

I was shocked that I had not noticed this radical disconnect in the course of the conversation.  Instead I had been lulled into complacency by the comforting faux-solidarity that was assumed when talking to a fellow innovation practitioner.  The shock was heightened because it was so similar to another disconnect that had occurred in the course of completing a large project whose success relied heavily on collaboration across a large company.  As the team charged with governance on that project had thought through the best way to deploy an idea management platform, they had struggled with how much control they needed to impose on the process.   They favored more control because in their view, to put it bluntly, employees could not be trusted to behave any better than kids in high school.  Of course, they didn’t put it this way.  They had lots of other more dignified ways of talking about why they needed to review submitted ideas before they were published or keep the criteria for making decisions within the team or not make themselves as individuals accessible to employees.  In other words, they had lots of reasons why the process could only be somewhat transparent.  And I had to find lots of dignified ways to express why I thought the project would be more successful if the process was radically transparent.

But, if I could have put it bluntly, I’d have said that treating people like grown-ups (warts and all – which I’ll explain in a bit) is essential when asking them to collaborate and contribute their best ideas about how to promote the long term health of an organization.  If you just want employees to do their jobs, you can treat them respectfully, but you don’t have to.  You can justify treating them like high school students by pointing to the “warts and all” of most grown-ups at work – we don’t always do our best, we only do what we’re paid to do and sometimes, grudgingly, will do a bit more, we like to complain more than we like to solve problems, we’re quick to point out what’s wrong and not particularly interested in thinking hard about making things better.  The list goes on.   It’s pretty damn near impossible to ask people who behave like this to think hard about the long term health of an organization and come up with ideas that do something about it.  After all, that’s the job of the executives.  The problem is that the executives on their own can’t foster the long term health of an organization unless the majority of people who work in the organization actively participate in the process.

So, what does it take to get employees to participate?  I’ve already made the claim that it’s essential to treat people like grown-ups.  So, what do I mean?  I believe you need to let go of the rationale that the “warts and all” disqualifies people from being treated like grown-ups.  Just because we still act like kids, doesn’t mean we aren’t grown-up.  I think that what truly separates grown-ups from kids is this: Grown-ups are accountable and responsible for their decisions and actions, so they expect to understand the situation in which decisions are made and actions are taken – even if it is not fully under their control.  They expect transparency.

What’s in it for leadership?  Engaging employees in the process of building a sustainable enterprise is the goal of strategy.  Most organizations go part of the way towards executing strategy.  They “cascade” strategic goals down through the organization.  Fair enough (although we all know the familiar joke about what flows downstream in most organizations and it isn’t strategic objectives).  But this is still planning – it aligns the plans, but it doesn’t necessarily align what people actually do or inspire them to do something different.  In fact, most of the time, it encourages them to do what they’re already doing, but better, faster, cheaper, less risky.  All good stuff, but focused on dragging the past into the present and the future in some leaner, meaner fashion.  Rarely is even 10-20% of that activity un-tethered to the past and experimental.  Infusing transparency – the view from anywhere – into collaboration completes the circuit that begins with a cascade of strategic objectives down through the organization, connecting goals with ideas for not only optimizing but also innovating and then translates those ideas into actions and behaviors which can trigger a virtuous cycle of renewal and growth.

Transparency is a big, overarching construct that is fundamental to innovation within the enterprise.  Technology has enabled large organizations to be radically transparent, something that was not possible all that long ago.  But, there’s a gulf between kind of transparency that is critical for successful innovation and the kind of transparency that most executives are accustomed to.  Going forward, I plan to be clearer when I talk about transparency to describe it as a view from anywhere that engages people as grown-ups, warts and all, in the process of promoting the long term health of their organizations.  Up until now, I’m afraid that I’ve only been as clear as mud.

 

*Why we called our Jewish education Hebrew School is a mystery to me.  We were not Hebrews or focused solely on learning about the Hebrews.

Special thanks to Nick Vitalari for encouraging me to complete this post.

Filed Under: Collaboration, Decision-making, Innovation

Expert Failure

February 14, 2012 by Leave a Comment

Institutional inability to tolerate failure and mistakes is cited as one of the major impediments to innovation. Most organizational activity is directed at existing operations where people deal primarily with “knowns” and, I would even argue, knowable surprises. As a result, failure and mistakes are pushed to the edges of daily organizational life. In stark contrast, innovation ventures into the unknown where failure sits squarely in the center of things. Avoiding it is impossible. Yet, it seems we are built with a bias against failure.  We are literally wired to avoid it, making innovation that much harder to achieve. How do we find a way to work against the grain of our true natures and stop trying to wish failure and mistakes away?

Perhaps we can start by reconsidering some of our sacred cows – like the belief that experts do not fail.  This seems important to me as innovation itself becomes the domain of experts and we look to them in the same way that we look to other experts – as people with knowledge that prevents them from failing at the thing they are expert at doing. Experts are supposed to be able to size up situations, define outcomes, consider alternatives, and take action to achieve goals while avoiding mistakes. Being an expert requires a large amount of confidence.  But confidence doesn’t always deliver the goods.

In the past few years, there’s been a wave of articles and books exploring the gross fallibility of human judgment, especially expert judgment. There are many reasons why we make lousy decisions and most of them have to do with the crazy extent to which we strive to see patterns in random events. Our drive to make meaning creates a bias toward coherence. The easier it is to believe a story, the more confident we are that it is true. The more that those offering an opinion are credentialed and have long impressive resumes, even if there is no statistical basis that judgment yields a better result than random guesses, we  believe in that expert’s opinion. We derive comfort from the illusion of skill.

Daniel Kahneman, one of the leading theorists on the psychology of judgment and behavioral economics, suggests that a confident expert might make a better decision when at least two criteria are met:

  • The environment in which the judgment is made is sufficiently regular to enable predictions from the available evidence.
  • Professionals have adequate opportunity to learn the cues and the regularities of the situation.

The domain of innovation fails on both counts. So, how can we get comfortable with the fact that even our experts are going to make mistakes?  And what can an expert do to incorporate mistake-making into the ongoing process of developing expertise?

An article by Atul Gawande in The New Yorker explored the topic of expert failure in the medical profession. Gawande is looking at expert failure at the tiny mistake end of the failure continuum as he examines the medical profession’s bias against coaching and its preference for teaching.  But even tiny mistakes can combine in unanticipated ways to create colossal failures.

Surgical mastery requires familiarity and judgment and is among what Gawande calls late-peaking careers which deal with complexities of people or nature and are tolerant of less than ideal physical stamina. Late-peaking careers stand in contrast to early-peaking careers – most sports or athletic endeavors, certain of the arts (dance), and mathematics (where it appears people peak early because they are unburdened by the weight of their own theories). Whether late- or early-peaking, experts in any field reach a performance plateau. This is where coaching comes in.

Coaches “observe, judge, and guide.”  They don’t have to be good at what it is they are coaching.  Pro sports coaching is based on the premise that it is virtually impossible to achieve and maintain peak performance on one’s own.  I believe that it is easier to coach people in early-peaking careers precisely because we are comfortable with the idea of younger people benefiting from the knowledge of older people. Another bias that makes coaching the late-peaking career expert more difficult comes from the difference between expertise that is conferred through formal academic education and that which is conferred through other sorting methods (such as sports competitions).  Traditional pedagogy is based on the concept of graduating and not requiring further instruction in a particular area.  For experts in many fields, expertise means not needing to be coached.  That doesn’t mean that experts do not need to keep up in their fields, but they are assumed to have the skills needed to do this on their own.

“The sort of coaching that fosters effective innovation and judgment, not merely the replication of technique, may not be so easy to cultivate.  Yet modern society increasingly depends on ordinary people taking responsibility for extraordinary things….With a diploma, a few [people] will achieve sustained mastery; with a good coach, many could….[Coaching] may prove essential to the success in modern society.”

But, experts getting coached face big problems. When Gawande, a surgeon himself, brought a coach into the operating theatre, it did not reassure his patients.  In fact, it made them nervous.  It made them doubt his skill.  The coach in the operating theatre meant that Gawande might make a mistake, he wasn’t perfect.  Our expectations about perfection, even in the face of what we know is complexity, are not realistic.  We don’t want to believe that our surgeons can fail, even though we sign consent forms that acknowledge this fact.  Intellectually we can accept that there are many variables which are impossible to predict or control.  But emotionally, we are shocked when an expert fails.  We expect experts to succeed.  All the time.

If we must accept mistakes and failure and acknowledge that even experts will encounter them when they operate in highly complex systems, then gaining a better understanding of mistakes and failure despite our wiring to not dwell too much on them seems like a good place to start.  Next up on the blog: a theory of mistakes that might help us learn to love them.

Sources:

  • “Personal Best,” Atul Gawande, The New Yorker, October 3, 2011
  • “The Surety of Fools,” Daniel Kahneman, The New York Times Magazine, October 23, 2011

 

 

Filed Under: Decision-making, Innovation

Back to the Future

December 19, 2011 by Leave a Comment

Sometimes I’m hard pressed to understand why I read what I do.  What is it that actually interests me about some stories?  Then, after a while, I see that it isn’t the content per se  but rather the narrative which keeps me engaged and draws me along.  Of the handful of narratives that mesmerize me, the recursive innovation narrative (or back to future story) stands out.

In this narrative, innovation comes about by rediscovering something that has been lost along the way.  Typically, the loss occurs because popular or commercial interest becomes caught up with an idea that, in the long run, is either revealed or proven to be false.  Or one idea has become so widespread that it crowds out another idea that is equally, if not more, important.  The innovation lies in reclaiming or reasserting the thing that was once known but became lost in the process.

Here are two stories of recursive innovation:

Running Redux

Humans are born runners.  The combination of an ability to cool ourselves through perspiration (rather than panting as other animals do) and the “springiness” of our legs allowed humans to outlast their prey when it came to running.  So, why is it that close to 80% of all contemporary runners suffer injuries each year despite specially engineered running shoes, running surfaces, and training regimes?  And why is it that in some cultures which lack all of these advantages, people we would consider elderly can run 100-mile races as a matter of course?

Christopher McDougall believes “…we don’t need smarter shoes, we need smarter feet”   He has resurrected an exercise routine that rewires the brain and the body to run the way that nature intended – the 100-Up Exercise.  An undeniably simple routine, the 100-Up (see the YouTube video) is a three-minute exercise that upends modern running dogma.  It isn’t about the shoes, the surface, the intensive training – it’s about rediscovering the way that humans were born to run.

So when and where did it go wrong?  Apparently, not so long ago and also apparently, the commercial shoe industry in the U.S. played a major role in leading runners astray.  In the 1970s and 80s, runners became obsessed with the notion that the proper running shoe was the key to great running because the biggest problem with running was heel-strike impact.  The first inkling that the shoe solution to heel-strike impact might be wrong came when researchers began to observe barefoot runners.  What they noticed was that barefoot runners did not land on their heels, but rather, on the balls of their feet.   This was not a shoe-problem, but a form problem.  However, ingrained notions of running are difficult to dislodge and even though barefoot running has taken off, it is still shoe- rather than form-focused for the most part.  The biggest evidence of shoe-bias is the invention of those strange looking glove-like shoes.  You can shell out the bucks for Vibram Five-Fingers, but if you are still running heel first, you are highly likely to injure yourself.  According to those who practice the new method informed by 100-Up, you can run with the shoes you already have because it’s not the shoes, it’s the way you run that matters.

Apples Lost and Found

The apple as a healthy snack is a relatively new invention.  Apples have been around a long time (from a human civilization perspective), but up to the Civil War period they were primarily used as either feedstock for animals or an alternative to water in the form of hard cider for humans because apples were not particularly tasty to eat.  Prohibition was especially bad for apples (hard cider was alcoholic), and it was during this period that they got a PR makeover with an adage promoting their health (“An apple a day keeps the doctor away”) and an agricultural focus on propagating better tasting varieties. Before industrial scale refrigeration, most people enjoyed local apples and there are a multitude of types associated with particular geographies.

Some Fun Apples (Esopus Spitzenberg and Yellow Newton Pippin):

However, with the advent of refrigerated rail cars, apples could be transported over long distances.  Refrigeration and the rise of the national grocery chain combined to promote the apple attributes of durability, long shelf life and aesthetic appeal.  As a result, the plethora of apple species dwindled to three – McIntosh, Red Delicious and Golden Delicious — and apples as a local treat gave way to the national grocery produce staple.  Apple breeding increasingly focused on making sure apples looked rather than tasted good.  We all know how delicious apples can look and how disappointing they can taste.  That shiny, beautiful outside masking a mushy, mealy, flavorless inside.  This is how it came to be that Americans now consume about half the amount of apples as their European counterparts.

The sorry state of affairs persisted for some time until a confluence of events turned the tide to favor a tasty apple with great texture and crunch.  In the 1970s, several new apple varieties – so called “super apples” – were imported from outside the U.S. and began to be cultivated here.   At the same time, price controls were imposed to help the U.S. deal with stagflation, but produce was exempt from this constraint creating an opening for these new apples.   Americans got a taste of delicious, but less than perfectly formed apples and loved them. Once again, the apple as a flavorful, nutritious food found in many varieties was back on the scene and apple consumption began to increase.

Recursive Innovation

The article from which my much abbreviated apple mini-history is derived goes on to describe the equally fascinating business model of patenting and controlling the production of apple varieties.  But what struck me as I read about apples past and present was how much it reminded me of the story about running.   The themes in both stories are the same. In the push to scale an innovation, to achieve industrial capacity, a critical artisanal element was lost, left by the wayside because its importance was not understood.  This element would turn out to be a sustainability factor which had to be rediscovered in order to breathe life back into the innovation.

I am not suggesting that the sustainability factor is always apparent.  Clearly if people knew what it was they would not so casually allow it to be jettisoned in favor of other elements which might turn out to be helpful for a time, but ultimately outlive their usefulness.   Yet this challenge – knowing what to discard and what to retain – remains a key challenge of innovation.

As we come to the close of the year, this question – what to hold onto and what to let go of as we move ahead – has particular resonance, both organizationally and individually.  Much of the world is  captivated by the idea of sustainability whose light and fluffy exterior is characterized by “doing well by doing good” and whose dark underbelly is the stuff of self-preservation.   What I like most about sustainability as a screen for what should be retained or discarded is its strategic urgency.  Strategic – doing well by doing good.  Urgency – self-preservation.  I’ve been told and have experienced it to be true in my own life that what gets done is whatever is threatened by a burning platform (regrets to the “what gets measured, gets done” crowd – burning platform trumps measurement).   As we move into the new year and look for new ways to separate the proverbial wheat from the chaff, one possibility might be found in the recursive innovation narrative and its North Star of sustainability.

Sources:

  • “The Once and Future Way to Run,” Christopher McDougall, The New York Times Magazine, November 6, 2011
  • “Crunch,” John Seabrook, The New Yorker, November 21, 2011
Filed Under: Business Model, Innovation, Strategy, Sustainability
«Older Posts