Here is an excerpt from an article written by Paddy Miller and Thomas Wedell-Wedellsborg for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.
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You have an idea for a daring, innovative project that could have a significant impact on your business. However, you suspect that your idea will meet with internal resistance: The innovation would upend the status quo, and chances are good that other parts of the organization will try to stop it. What’s your next step?
The conventional answer is simple: Get a mandate from the top. As many innovation experts rightly point out, only the most incremental ideas pass through the corporate-approvals gantlet unscathed. The more unusual your idea, the greater the risk that it will fall victim to turf wars, myopic incentive systems, or simple resistance to change. For this reason, innovators are often counseled to go straight to the top, secure backing, and build a corporate sense of urgency around their ideas.
The “top first” strategy, however, carries its own risks. CEOs of large organizations are constantly barraged with proposals for new, untested projects, and typically, the ideas get a five-minute perusal followed by a “no.” And even if your idea does win support from the C-suite, early exposure is a double-edged sword: It buys you legitimacy and resources, but it also thrusts you squarely into the corporate spotlight—and that can be a dangerous place for young, unproven ideas. Our experience working with innovative managers has revealed an alternative approach: innovating under the radar.
Consider the story of pfizerWorks. Jordan Cohen, then a human resources manager in Pfizer’s New York office, created the productivity initiative to allow employees to outsource “grunt work” and other routine parts of their jobs, giving them more time to focus on important tasks and allowing Pfizer to make better use of its highly skilled (and highly paid) employees. PfizerWorks, launched in 2008, quickly became an acknowledged success story, and Cohen was featured in BusinessWeek, Fast Company, and other publications. In a 2011 internal survey, the users of pfizerWorks rated it as the company’s most popular service offering, even though they had to pay for it out of their own budgets.
But Cohen didn’t bring his idea to fruition by going straight to the top. To the contrary, he stayed under the radar for more than a year, developing the service, accumulating evidence, and gaining allies. When he finally pitched it to Pfizer’s top executives, he was able to show them much more than an idea: He presented existing users who were passionate about the project, outlined a proven business case, and pointed to the backing of several senior managers. Pfizer’s decision to support the project came quickly, and Cohen received not just a budget for it but a new job as the head of pfizerWorks.
Innovating under the radar carries its own set of challenges, to be sure, but going into stealth mode can often yield better results than trying to get the CEO on board from day one. In our experience, stealth innovation involves four critical challenges. First, you need to marshal allies who can help you operate off the grid and make sure that you don’t lose perspective as you do so. Second, you need to build proof of concept so that when you’re ready to make your case to the higher-ups, you have hard evidence to support you. Third, you must obtain access to funds and other resources to keep your project afloat. And finally, you need a good cover story so that you can work on the project without attracting unwanted attention or scrutiny. If you address these challenges effectively, you can sidestep corporate obstacles and give your idea the best possible chance for success.
Why Early Exposure Can Kill
The conventional overt approach to innovation is more risky than it may seem. Consider a company we’ll call RedTec Media, whose European division came up with an idea for a potentially game-changing consumer product aimed at the luxury market. Excited about the idea’s potential, the European team presented it to leaders at corporate headquarters. The response was much less enthusiastic than the team had expected. While the executives didn’t kill the idea outright, they questioned the project’s technical feasibility and expressed strong doubts about whether there was a market for it.
The European team members, recognizing that their enthusiasm was not contagious, set out to make a better case for the idea. So over the next few months, they built a working prototype and tested it with consumers, with great success. They also asked key retailers whether they thought the product would sell. The response was overwhelming; several of them asked, “Can I get this now?” Even better, the price the retailers suggested was higher than the team had hoped.
The team members made sure that their testing was rigorous and reliable, and carefully documented their findings. Consumers’ reactions, for instance, were not only recorded on paper but also filmed and compiled in a short video that demonstrated their support for the product.
But none of the new evidence seemed to change the minds of the top managers. After a long silence, the team received the news that headquarters had decided to kill the project. “To be fair, there were legitimate reasons to oppose the project,” one team member told us. “But we also got the feeling that the leadership made an early judgment call based on their gut feelings about the first presentation, and then pretty much stuck by that call irrespective of all the evidence we sent them subsequently.”
The phenomenon is not unusual. As research by the behavioral economist Daniel Kahneman and others has demonstrated, people suffer from what is called confirmation bias: Once you’ve made a decision, however uninformed, you tend to look for more evidence supporting it, and ignore or discredit evidence that points in other directions. This effect is exacerbated if the judgment call is made in public or in front of colleagues or a boss. That’s because in corporate life, as elsewhere, it’s often considered preferable to be wrong than to be a flip-flopper. Just look at any political campaign and see what happens to candidates who change their stance on an issue, no matter how legitimate the reasons. As an innovator, you often get only one shot at pitching an idea to people at the top—and their default reaction is frequently “no.” You don’t want to waste your shot too early in the process, before you’ve built sufficient evidence for your idea.
A premature judgment call is just one of the dangers that come with early exposure. Ideas can be held hostage in political power plays; they can be forced Procrustes-style to follow corporate procedures that prevent rapid iteration; they can be appropriated and distorted by other stakeholders with legitimate but differing goals; and perhaps most frequently, they can face crushing pressure for short-term results that either kills them or warps them beyond recognition. In The Little Black Book of Innovation, Scott Anthony shares Clayton Christensen’s concept of the “ticking clock,” a deadline for creating results that all innovators face. “You never know quite how fast the clock is ticking,” Anthony writes, “or when the alarm is set, but you can be darn sure that at some point, it will ring….If that moment comes and all you have is potential, you’d better start polishing your résumé.”
This is where stealth innovation comes into the picture. While aiming to deliver some quick wins is excellent advice, and if at all possible, you should follow it, the nature of your idea may be such that doing so is simply not possible. By starting your project in stealth mode, you can postpone the moment that the clock starts ticking for your idea. Let’s now look in detail at the four challenges of stealth innovation and how to overcome them.
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Paddy Miller is a professor at IESE Business School. Thomas Wedell-Wedellsborg is a partner at the Innovation Architects. They are the co-authors of Innovation as Usual: How to Help Your People Bring Great Ideas to Life (Harvard Business Review Press, 2013), from which this article is adapted.
Here is a brief excerpt from an interview of Chip Heath co-conducted by Lenny T. Mendonca and Matt Miller. It was featured in The McKinsey Quarterly, published by McKinsey & Company. To read the complete interview, check out a wealth of free online resources, and learn more about the firm, please click here.
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The key to effective communication: make it simple, make it concrete, and make it surprising.
The ability to craft and deliver messages that influence employees, markets, and other stakeholders may seem like a mysterious talent that some people have and some don’t. Jack Welch, for example, created ideas that inspired hundreds of thousands of GE employees. But many other leaders are frustrated to find that key messages sent one day are forgotten the next—or that stakeholders don’t know how to interpret them.
Why do some ideas succeed while others fail? Chip Heath, professor of organizational behavior in Stanford University’s Graduate School of Business, has spent the past decade seeking answers to that question. His research has ranged from the problem of what makes beliefs—urban legends, for instance—survive in the social marketplace of competing ideas to experiments that show how winning ideas emerge in populations, businesses, and other organizations. Earlier this year Heath published his findings in Made to Stick: Why Some Ideas Survive and Others Die, written with his brother, Dan, who founded a business that specializes in this very subject.
In July 2007 Chip Heath spoke with Lenny Mendonca, a director in McKinsey’s San Francisco office; Matt Miller, an adviser to McKinsey; and Parth Tewari, who was then a Sloan fellow at the Stanford Graduate School of Business, about the key principles for making an idea “stick” and how executives can use them to communicate more successfully. The conversation took place at Stanford.
The Quarterly: Let’s start by defining success. What is a sticky idea?
Chip Heath: A sticky idea is one that people understand when they hear it, that they remember later on, and that changes something about the way they think or act. That is a high standard. Think back to the last presentation you saw. How much do you remember? How did it change the decisions you make day to day?
Leaders will spend weeks or months coming up with the right idea but then spend only a few hours thinking about how to convey that message to everybody else. That’s a tragedy. It’s worth spending time making sure that the lightbulb that has gone on inside your head also goes on inside the heads of your employees or customers
The Quarterly: Give us an example of a sticky idea.
Chip Heath: John F. Kennedy, in 1961, proposed to put an American on the moon in a decade. That idea stuck. It motivated thousands of people across dozens of organizations, public and private. It was an unexpected idea: it got people’s attention because it was so surprising—the moon is a long way up. It appealed to our emotions: we were in the Cold War and the Russians had launched the Sputnik space satellite four years earlier. It was concrete: everybody could picture what success would look like in the same way. How many goals in your organization are pictured in exactly the same way by everyone involved?
My father worked for IBM during that period. He did some of the programming on the original Gemini space missions. And he didn’t think of himself as working for IBM—he thought of himself as helping to put an American on the moon. An accountant who lived down the street from us, who worked for a defense contractor, also thought of himself as helping to put an American on the moon. When you inspire the accountants you know you’re onto something.
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To read the complete interview, please click here.
Chip Heath is a Professor of Organizational Behavior in the Graduate School of Business at Stanford University. His research examines why certain ideas – ranging from urban legends to folk medical cures, from Chicken Soup for the Soul stories to business strategy myths – survive and prosper in the social marketplace of ideas. His research has appeared in a variety of academic journals, and popular accounts of his research have appeared in Scientific American, the Financial Times, the Washington Post,BusinessWeek, Psychology Today, and Vanity Fair. He lives in Los Gatos, California. He has co-authored two books with his brother Dan: Made to Stick: Why Some Ideas Survive and Others Die and Switch: How to Change Things When Change Is Hard.
Lenny Mendonca is a director in McKinsey’s San Francisco office, and Matt Miller is an adviser to McKinsey. The co-authors wish to acknowledge the contributions of Parth Tewari, who helped initiate and shape this interview. Tewari recently left Stanford to become the India director of TechnoServe (a nonprofit organization that helps create business solutions to fight poverty), where he is using these ideas to shape his communications.
On October 4, 2011, Demand: Creating What People Love Before They Know They Want It, will be published by Crown Business. Written by Adrian Slywotzky with Karl Weber. In my opinion, it is one of the most valuable and will, over time, become one of the most I influential business books ever written.
It takes full advantage of the breakthrough revelations generated by dozens of major research projects that seek answers to questions such as these questions:
• During the decision-making process (e.g. making a purchase), what role does reason play?
• What role do the emotions play?
• By what process can it be determined what people want even if they don’t know it?
• Which companies have most effectively created demand for what they offer? How?
• Precisely how and why is demand “a modern alchemy”?
• What is the “Achilles heel” of creating or increasing demand? Why?
• What is Netflix’s “two-hundred-year-old secret”?
• How to “get smarter faster” about what consumers do and do not want?
Slywotzky and Weber provide a brilliant analysis of what the research reveals, citing dozens of real-world examples of what the demand principles offer and how to develop mastery of them.
To read my first interview of Slywotzky, please click here.
To read Curt Finch’s excellent interview of him, featured in the June (2011) issue of Inc., please click here.
Adrian Slywotzky is a Partner of Oliver Wyman, a leading global management consulting firm. Since 1979, he has consulted to Fortune 500 companies from a broad cross-section of industries, working extensively at the CEO and senior executive level for major corporations on issues related to new business development and creating new areas of value growth. Adrian has written several books on strategy and growth, including Value Migration, The Profit Zone, and The Upside. BusinessWeek named The Profit Zone one of its Top 10 Business Books of 1998. The Upside was on the Financial Times list of Best Business Books of 2007. Adrian has been a keynote speaker at a number of senior executive conferences, including the Microsoft CEO Summit, the Forbes, Fortune, and BusinessWeek CEO Conferences, and CFO Magazine and Conference Board conferences. The Times of London has named Adrian one of the top 50 business thinkers, and Industry Week has named him one of the six most influential management thinkers. He holds degrees from Harvard College, Harvard Law School, and Harvard Business School.
Karl Weber is a writer specializing in business, politics, and social issues. He has collaborated with Adrian Slywotzky on four previous books, including The Upside and How Digital Is Your Business? Karl has also collaborated with Nobel Peace Prize laureate Muhammad Yunus, founder of Grameen Bank and author of Creating a World Without Poverty, and he edited the best-selling movie companion books Food Inc. and Waiting for Superman. He lives with his wife Mary-Jo Weber in Irvington, N.Y.
Dan Roam is the author of two international bestsellers, The Back of the Napkin: Solving Problems and Selling Ideas with Pictures and Unfolding the Napkin: The Hands-On Method for Solving Complex Problems with Simple Pictures, both published by Portfolio Trade, a Penguin imprint. The former was selected as BusinessWeek and Fast Company’s best innovation book of the year, and Amazon’s #5 selling business book. The Back of the Napkin has been published in 25 languages and is a bestseller in Japan, South Korea, and China. His latest book is Blah-Blah-Blah: What To Do When Words Don’t Work, also published by Portfolio/Penguin Group (November, 2011).
Roam has helped leaders at Microsoft, eBay, Google, Wal-Mart, Boeing, Lucas Film, Gap, Kraft, Stanford University, The MIT Sloan School of Management, the US Navy, and the United States Senate solve complex problems through visual thinking. Dan and his whiteboard have been featured on CNN, MSNBC, ABC News, Fox News, and NPR. His visual explanation of American health care was selected by Business Week as “The World’s Best Presentation of 2009″. This inspired the White House Office of Communications to invite him in for a discussion on visual problem solving.
Roam is the founder of Digital Roam Inc, a management consulting company that helps business executives solve complex problems through visual thinking. Through lectures, workshops, books, and hands-on projects with many of the world’s most influential organizations, He as helped teams learn to solve complex problems by relearning how to see after discovering the power of pictures as a business problem-solving tool in the 1990′s when he founded the first marketing communications company in what was then the Soviet Union. With no Russian language skills, he quickly realized that his business pictures transcended the language barrier. Since that eye-opening experience, Dan has been fine-tuning the visual thinking tools he introduces in his books.
Roam received two degrees at the University of California, Santa Cruz: fine art and biology. This combination of art and science kicked off Dan’s cross-disciplinary approach to problem solving. Dan is a licensed pilot, a skill that demands constant practice in understanding complex visual information displays. He has applied his business-oriented visual thinking skills while working in Switzerland, Russia, Thailand, France, Holland, and the US. He lives in San Francisco.
Note: Here is an excerpt from my first interview of Dan Roam. To read the complete interview, please click here. There will be a second interview in conjunction with the publication of his new book, Blah-Blah-Blah, in November.
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Morris: Before discussing any of your specific books, a few general questions. First, to what extent (if any) have you had any formal training in the creative arts such as painting, drawing, and sculpting?
Roam: I have drawn all my life. My earliest memories are of drawing pictures on my parents’ kitchen table. In school I attended the same basic art classes as everyone else. But while I showed talent and loved drawing, I didn’t like the way art was taught. It was too wishy-washy; too much about “being creative” and “expressing myself” at the expense of actually learning anything.
By the time I entered the University of California at Santa Cruz, I had no interest in pursuing art. I signed up for the Pre-Med track and studied biology, chemistry, physics, and environmental studies. But in my junior year at the university, two events occurred which were to have a profound impact on my perception of “creativity.”
The first was that I unexpectedly fell in love with organic chemistry; it turned out to be completely visual. Remember those plastic “ball and stick” models of molecules? I spent hours building shapes with them, and excelled at chemistry. The second was that I discovered that “art” could be taught as a rigorous discipline with rules and tools. Those rules had nothing to do with applying paint; they were about how people THINK — and that was exactly what I was looking for. Before long, I realized that painting was every bit as intellectually challenging as science and that the same fundamental ways of thinking applied to both.
In the end, I extended my undergraduate career by another year so that I could complete degrees in both biology and painting. I never went on to medical school, instead finding my call helping businesspeople see for themselves the connections between planning, science, finance, communications, and “art”.
Morris: I have a large family and Pictionary is one of our favorite games to play. One son is a highly-renowned professional illustrator. (He created the illustration for the homepage of my website.) Whenever we play, his team never wins because his drawings are elaborate and consume so much time. I thought about that as I read your two books. Chip and Dan Heath assert that the “stickiest” ideas are always the simplest. Why is it also true that, when communicating ideas, the simplest drawings (i.e. those involving circles, squares, arrows, and stick figures) are most effective?
Roam: Without a doubt, the simplest, fastest drawings are the most effective for communicating an idea. I understand well your son’s Pictionary challenge; I suffered the same fate as I always tried to make my drawings “better”, inevitably destroying their essential character along the way. Now I realize that I’ve actually spent the last thirty years learning how to “draw badly really well.”
Morris: With all due respect to your response to the previous question, I think one of the greatest benefits of your approach to communication is that it requires people to have a solid, crystal clear understanding of what they want to communicate and how they plan to organize their ideas before they begin to draw. Is that a fair assessment?
Roam: I believe that we do not truly know something until we can clearly explain it to someone else – and the younger the person we can explain it to, the better we know it. I’m not alone in this belief, of course. Einstein himself said, “All physical theories, their mathematical expressions notwithstanding, ought to lend themselves to so simple a description that even a child could understand them.” Since an effective picture of an idea must by definition account for the essentials, being able to draw a simple picture of your idea is just about the best test I can think of to prove that you really do understand it yourself. It’s far harder to fake a simple picture than it is a wordy essay. The picture you create is your mind standing there for all to see, unprotected by verbiage. If you can’t draw it, you don’t get it.
Morris: The creative and performing arts are often referred to as “international languages.” Having lived and worked in so many different countries, have you found that to be true?
Roam: The creative and performing arts clearly transcend language and cultural barriers, which is what makes painting and music in particular so enchanting regardless of origin. But the cognitive power of what we call “art” goes far deeper than that. When I first moved to Moscow in 1990, it was still the days of the Soviet Union. Here I suddenly found myself in a strange land, surrounded by people whose language I didn’t understand – and I was supposed to be running an advertising agency! That was crazy: in those days it was still illegal to earn a profit. In that environment, nobody – not my colleagues, employees, or clients – had a clue what “business planning” was. It was drawings that saved the day. I found that if I could map out an idea graphically (what is “profit,” for example, and why it might be a good thing), then we could begin to understand each other.
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To read the complete interview, please click here.
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Here is an excerpt from an article written by Larry Hughes and featured by The Huffington Post. I do not remember when, where, or why I first encountered Larry but during the years since, I have posted reviews of countless books with which he has had a direct or indirect connection. He characterizes himself as “a book flack at large” but those of us privileged to know him think his talents have been developed far wider and far deeper than those required of a publicist in the publishing industry.
In the account that follows, Larry shares an encounter at The Third Place where patrons have a whale of a time socializing prior to their next voyage. Rumor has it that Larry once served as a harpooner’s apprentice aboard HMS Robert Charles Benchley but he refuses to discuss the matter.
To read the complete article and check out others produced by this colleague and friend, please click here.
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Whenever it was a damp, drizzly November in my soul, I would drop by Mr. Starbuck’s for a steaming double-cupped grande vanilla latte with extra foam. Our industrious First Mate made a habit of buying coffee from local growers in whatever far-flung lands The Pequod made port — from Brazil to Peru, from Sumatra to New Guinea — hand-selecting beans at the peak of their ripeness and flavor. He would double-roast them in the same vats we used to render oil from whale flesh, then grind and blend them into full-bodied brews that bore aromatic hints of tropical flora and blubber. His potables were quite popular among the crew; in particular, I found his Spermicetti Breakfast Blend to have a dark, robust flavor that was more palatable then it sounds.
Such shipboard entrepreneurial enterprises were not unusual among seamen of the day. Many an evening Queequeg and I took our supper at the berth of Popeye, a sailor whose fried chicken and biscuits were counted a bargain; and Long John Silver was said to serve up a hearty batch of popcorn shrimp and hushpuppies for a reasonable price.
Captain Ahab was not known to visit Starbuck’s often, nor to partake of his offerings. The Captain kept to his cabin and preferred the consumption of grog to coffee drinks. He was thought to consume the former in such prodigious quantities that it was common for members of the crew to jest that Ahab must have a hollow leg. This witticism was one of the few sources of mirth aboard The Pequod, the other being the assertion that the Captain’s wife was named Peg.
One evening a cohort of the crew was gathered at Starbuck’s, sipping their drinks and staring at their laptops (where they were carving scrimshaw). Outside in the passage we heard the approach of Ahab’s familiar measured tread — clip-clop…clip-clop… clip-clop. In he limped, a scarred, brooding figure, whose powerful chilling effect on the men was diluted somewhat when his ivory leg became momentarily stuck in a knothole. So fearsome was his countenance that none dared snigger at his predicament.
As Ahab hobbled further into the cabin Mr. Starbuck called out to a waiting seaman, “Here’s your white mocha, Dick!” The Captain, who counted poor hearing among his sundry afflictions, misconstrued Starbuck’s cry for an alarm that Moby Dick had been sighted. He became violently agitated and barked a confusion of orders at the men — “In stunsails! Down top-gallants! Stand by boats! Over the side! Larboard! Starboard! Prepare to dive! Luff a point! Hoist the mizzen! Flush the heads!” Soon The Pequod was sailing in figure eights. It was some time before the Mate could convince Captain and crew that Moby Dick was not in the immediate neighborhood.
The White Whale was the object and focus of Ahab’s vengeful wrath, but in truth his hatred extended to all cetaceans, no matter their shape, size or species. Some months earlier, on the occasion of Ahab’s birthday, the Fourth Mate, Mr. Carvel, had surprised the Captain with his playfully configured comestible Fudgie the Whale. The Captain instinctively snatched up a harpoon and drove the iron straight through the frozen confection. To save face, he then ordered us to take it below and boil it down for the marzipan.
“I would speak with ye, Mr. Starbuck,” said Ahab.
“Aye, sir,” said Starbuck. “But first, might I get thee a cup of joe?”
“If ye must,” growled the Captain. Starbuck then pressed him for his preferences, employing the arcane lexicon of his avocation as if he were a medieval alchemist. The captain grew increasingly perturbed as the First Mate wielded cryptic words such as grande, venti, trenta, and frappuccino.
“Damn it, man!” thundered Ahab. “Are ye speaking in tongues?”
“I’ll just give thee a latte,” said Starbuck, and set about preparing the captain’s libation.
“I wish to speak again of Moby Dick,” said Ahab.
“Thou knowest my feelings in the matter,” said Starbuck. “‘Tis blasphemous to seek vengeance on a dumb brute. I have told thee this before.”
“Hark ye,” cried Ahab, “I strike at the inscrutable malice behind the White Whale! All visible objects, man, are but as pasteboard masks…”
“Speaking of pasteboard, Captain, here’s a little sleeve for thy cup, that thou wilt not burn thy fingers.
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To read the complete article, please click here.
Larry Hughes’s writing has appeared in the New York Times, New York Post, Publishers Weekly, McSweeney’s Internet Tendency, and other outlets. He is featured in two McSweeney’s anthologies, Mountain Man Dance Moves (2006) and The McSweeneys’ Joke Book of Book Jokes (2008). Hughes blogs for The Huffington Post and writes his own blogs, Book Flack at Large and Classics Rock! Hughes has enjoyed a distinguished career in the publishing industry, and is currently Associate Director of Publicity at the Free Press. “One of my favorite folks to work with,” BusinessWeek’s Diane Brady wrote of him, “always smart about bringing the right authors to our attention and framing their ideas in ways that work for our readers.” Gloria McDonough-Taub of CNBC calls him “One of the best publicists out there…one of the best in the business.” And author Douglas Rushkoff (Life Inc.), writing in Publishers Weekly, calls him “One of the most talented publicists in the industry.” After leaving HarperCollins in 2009, Hughes focused his skills on promoting himself and was featured on CNN, Fox News Channel, U.S. News & World Report, New York Post, BusinessWeek.com, CNBC.com, and other outlets.
Peter Sims is an author, speaker, and entrepreneur. He is the author of is Little Bets: How Breakthrough Ideas Emerge from Small Discoveries, from Simon & Schuster: Free Press. Previously, he was the co-author with Bill George of True North, the Wall Street Journal and BusinessWeek best-selling book, and he worked in venture capital with Summit Partners, a leading investment company, including as part of the team that established the firm’s London Office.
His work has appeared in Harvard Business Review, Tech Crunch, and Fortune and he’s a contributor to the Reuters, Fast Company, and Harvard Business Review blogs. He received an M.B.A. from Stanford Business School where he and several classmates established a popular course on leadership and has had a long collaboration with faculty at Stanford’s Institute of Design (the d.school). He frequently speaks or advises at corporations, associations, and universities, including Google, Eli Lilly, Cisco, ConAgra, Pixar, and Stanford University.
He lives in San Francisco and his great-great-great grandfather, Jacob Gundlach, founded Gundlach Bundschu (GunBun) in Sonoma, California’s oldest family-owned winery, which is run today by his cousins who, unlike Peter, know a lot about wine.
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Morris: Before discussing any if your books, a few general questions. First, when and why did you begin your association with Stanford’s Institute of Design (the d.school)?
Sims: I was introduced to George Kembel, the cofounder and Executive Director of the d.school in 2002. George became my design thinking teacher and mentor, while I shared about my experiences as an entrepreneur, investor, and student of leadership and entrepreneurship with George and his d.school colleagues. Understanding design methods literally changed the way I think; all of a sudden, I was immensely more creative, and the key insight I had was that those methods overlapped with the way entrepreneurs worked in the unknown. That became the basis for Little Bets.
Morris: What business lessons have you since learned from that association that have direct relevance to successful change initiatives in almost any organization, whatever its size and nature may be? For example, is it possible to design initiatives that will avoid or overcome cultural resistance?
Sims: There are a few principles from design that will influence the business world for years to come. The first is the ability to do rapid, low-cost prototyping at the early stages of developing ideas. We never learned that in business school, yet planning in PowerPoint and Excel is often a terrible waste of time when the answers exist outside the office, in the unarticulated needs of potential users of that idea. That’s where ethnographic observation and need-finding techniques from design, the kind used by anthropologists, play an important role. People in business are surprisingly bad at truly understanding their customers’ needs. Market research doesn’t work for identifying unarticulated needs; just ask Steve Jobs who often says, “People don’t know what they want if they haven’t seen it.”
Morris: Thomas Edison once observed, “Vision without execution is hallucination.” Here’s my question: Even after having designed the best strategy, what should leaders do if there is no buy-in?
Sims: I’ve experienced this; it happens all the time. If there is no buy-in, leaders should wonder if they are hallucinating. That’s one reason I’m very happy to see the rise of a number of schools of thought featured in Little Bets, such as design, lean startups, and counterinsurgency that advocate failing quickly to learn fast, in order to test assumptions and build on gains that work. We’re living in an era that rewards bottom up innovation, yet top-down thinking is still the dominant management norm, an outgrowth of industrial management. The world is far too uncertain for top-down management – just ask Generals in the Army as they’ve learned in the Middle East, where they don’t know the problems they’ll encounter each day. They have to be able to rapidly adapt.
Morris: In your opinion, are investment opportunities for venture capital firms better, worse, or about the same today as they were when you were associated with Summit Partners? Please explain.
Sims: The market is far more competitive and saturated with capital today than it was several years ago. As the investment hold periods get longer, and the return profiles fall, venture capital as an industry is going through a recalibration, where name brand firms will make it, while a lot of dumb money will go away. In addition, the social media valuations we see today, such as Linked In at 30+ times revenue, or Facebook valued the way it is indicates a bubble. The only question I cannot answer is how long that bubble will last.
Morris: Now please shift your attention to True North, a book you co-authored with Bill George. For those who have not as yet read it, what is “true north” and what is its significance?
Sims: Your True North represents your most deeply held values and aspirations.
Morris: What are the defining characteristics of “authentic leadership”?
Sims: Bill George defined authentic leadership along five dimensions in his book Authentic Leadership, most importantly leading from an ethical set of values, and a sense of purpose.
Morris: Throughout history, who do you think offer the best examples of an “authentic” leader? Please explain.
Sims: Abraham Lincoln, Nelson Mandela, Jane Adams, Bill Hewlett and Dave Packard. Oprah and Pixar’s Ed Catmull is a great modern day example, as are the leaders Jim Collins profiles as Level 5 Leaders in Good to Great.
Morris: Were Hitler and Stalin authentic leaders? Please explain.
Sims: No, because they weren’t ethical.
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To read the complete interview, please click here.
Peter Sims cordially invites you to check out the resources at these websites: