Rich Horwath helps people live strategically–to get more out of their business and more out of their life. He is a New York Times and Wall Street Journal best selling author on strategy. As the CEO of the Strategic Thinking Institute, he leads executive teams through the strategy process and has helped more than 50,000 managers around the world develop their strategic thinking skills. As a former chief strategy officer and professor of strategy, he brings both real-world experience and practical expertise to help groups build their strategy skills. Rich’s work has been profiled on ABC, CBS, CNBC, NBC, CNN and FOX TV. His most recent books include Deep Dive: The Proven Method for Building Strategy and Strategy for You: Building a Bridge to the Life You Want.
This is an excerpt from my second intervew of him. To read the complete interview, please click here.
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Morris: Before discussing Strategy for You, a few general questions. First, years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.
Horwath: About 15 years ago I created a process called Purpose Channeling to help me identify my true purpose in life. After working through the process, the theme that came through was “competition.” Competition is from the Latin competere which means, “to strive together.” For me, life is about striving with others to reach our full potential. I included the Purpose Channeling process in this book because I believe one must understand their purpose before they can channel their talents and energy into productive outlets.
Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?
Horwath: Formal education pointed me in the direction of my current vocation, but informal education has played an equally, if not more important role. Once I honed in on strategy as my channel for competition during my graduate work, I read hundreds of articles and nearly a hundred books on the subject to build a foundation of expertise. It was years of this informal education, which created my heightened interest in the field of strategic thinking.
Morris: What do you know now about business world that you wish you knew when you when to work full-time for the first time? Why?
Horwath: Make no assumptions. Don’t assume the person above you has the answers. Don’t assume the customer who said “no” last time will say “no” this time. Don’t assume the competition will match what you do. Still today, not assuming is an ongoing challenge.
Morris: Of all the films that you have seen, which – in your opinion – best dramatizes important business principles? Please explain.
Horwath: I view movies through a strategy lens. The movie “Walk the Line” about the life of Johnny Cash provides a good example of a key strategy principle: It’s not about being better; it’s about being different in ways that people value. Johnny Cash didn’t have the best singing voice, but he was successful because he was different than all of the other recording artists of his day. He also took great risks in singing about killing people back in the 1950s, but his stories resonated with a large number of people. Strategy involves differentiation and risk and Johnny Cash exemplified both.
Morris: From which non-business book have you learned the most valuable lessons about business? Please explain.
Horwath: Napoleon Hill’s classic Think and Grow Rich emphasizes the importance of having a purpose and then following that purpose with dogged determination. Too many people make excuses and rationalize away their interests and talents because they don’t have the guts to follow their purpose. It’s sad and true.
Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-Tzu’s Tao Te Ching:
“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”
Horwath: Proverbs 27:17 says, “As iron sharpens iron, so man sharpens his fellow man.” I believe we all have talents that can help others. The question is: Do we know what those talents are and are we willing to help others?
Morris: Next, from Voltaire: “Cherish those who seek the truth but beware of those who find it.”
Horwath: The truth can be wonderful, painful, revealing and necessary for progress.
Morris: And then, from Oscar Wilde: “Be yourself. Everyone else is taken.”
Horwath: Step 2 in building a Strategy for You is Differentiation. If you haven’t identified what is unique about you that brings value to others, it will be difficult to reach your potential.
Morris: From Albert Einstein: “We cannot solve our problems with the same thinking we used when we created them.”
Horwath: New growth comes from new thinking. Without new thinking, one cannot reasonably expect substantial growth in achievement, happiness or any other undertakings.
Morris: Finally, from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”
Horwath: Great strategy is as much about what we choose [begin] not to do as it is about what we choose to do.
Morris: Here’s a brief excerpt from Paul Schoemaker’s latest book, Brilliant Mistakes: “The key question companies need to address is not ‘Shouldwe make mistakes?’ but rather ‘Which mistakes should we make in order to test our deeply held assumptions?’” Your response?
Horwath: Recently, it’s a popular notion to “fail fast and make as many mistakes as you can early on,” and I’ve seen a number of leaders espouse it. I think it’s one of those cool things to say which is ridiculously dumb in practice. While it’s important to take calculated risks in developing strategy, some of which may result in mistakes, continually making mistakes shows a lack of thinking more than anything else.
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To read the complete second interview, please click here.
To read my first interview of him, please click here.
Rich cordially invites you to check out the resources at these websites:
Strategic Skills Institute homepage
His Greenleaf Book Group page
His Amazon page
Deep Dive page
Strategy for You page
Richard Florida is author of the global best-sellers, The Rise of the Creative Class and Who’s Your City? A more recent book, book, The Great Reset, explains how new ways of living and working will drive post-crash prosperity. Other works include The Flight of the Creative Class and Cities and the Creative Class. His previous books, especially The Breakthrough Illusion and Beyond Mass Production, paved the way for his provocative looks at how creativity is revolutionizing the global economy.
Richard is senior editor for The Atlantic and a regular CNN contributor. He has written for The New York Times, The Wall Street Journal, The Washington Post, The Boston Globe, The Economist, The Globe and Mail and The Harvard Business Review. He has been featured as an expert on MSNBC, BBC, NPR and CBS, to name just a few. Richard is Director of the Martin Prosperity Institute and Professor of Business and Creativity at the Rotman School of Management, University of Toronto. Previously, Florida held professorships at George Mason University and Carnegie Mellon University and taught as a visiting professor at Harvard and MIT. Florida earned his Bachelor’s degree from Rutgers University and his Ph.D. from Columbia University. His research provides unique, data-driven insight into the social, economic and demographic factors that drive the 21st century world economy.
His latest book is The Rise of the Creative Class, Revisited: 10th Anniversary Edition–Revised and Expanded, published by Basic Books (June, 2012).
Here is an excerpt from my second interview of him.
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Morris: To what extent is The Rise of the Creative Class, Revisited a sequel? To what extent does it plow entirely new ground?
Florida: A great deal of the book has been rewritten or rearranged—this is not so much a revision as a full-blown revisiting of the original book. My team and I brought all the statistics up to date, provided new ones, and incorporated a decade’s worth of new research. I took advantage of the opportunity to address my major critics, too. Finally, there are five completely original chapters, covering the global effects of the Creative Class, quality of place in our cities and suburbs, the widening—and increasingly damaging—role of class and inequality in society, and the political challenges and opportunities that the rise of the creative class represents.
Morris: Were there any head-snapping revelations while writing the book? Please explain.
Florida: One big insight is the worsening inequality and underlying class divide that plagues not just nations but cities and metro areas. You can see it in US cities and metros and also in London and even in Toronto where I now live. That said, the rise of the creative class and post-industrialism needn’t exacerbate wage and income inequality. In fact, the wages and salaries for working and service class members are higher in metros with greater concentrations of the creative class. Interestingly enough, the US is something of an outlier when it comes to post-industrialism and inequality across the advanced nations. In many of them, especially in Scandinavia and North Europe, post-industrialism and the rise of the creative economy has been accompanied by higher living standards and far less inequality that in the US. In the revised edition, I look in detail at inequality across US metros. I find that the class divide accounts for about 15 percent of income inequality, a significant amount for sure, but more is at work. Income inequality across US metros has a lot to do with entrenched poverty, race, weakened labor unions, and an unraveling safety net than it is the result of the Creative Class’s relative prosperity. The solution, in other words, isn’t to roll the Creative Class back—it’s to lift up the classes that aren’t doing as well.
Morris: To what extent (if any) does the book in final form differ significantly from what you originally envisioned?
Florida: Books always turn out different than expected. When I started the idea was to update the data (which was ten years old) and revise and update the existing chapters. But that’s where my research and thinking took me. I certainly did not expect to write five entirely new chapters The whole issue of the creative class going global and the need to include more data and information on the creative class around the world; and also widening inequality and the growing class divide – those are things that needed to be treated in detail. The last chapter – “Every Single Human Being is Creative”— discusses the need for a new Creative Compact based on harnessing the creativity and talent of every single human being. We are at such a critical turning point: our society is changing as fundamentally as it has since the shift from agriculture to manufacturing. The old industrial order of relentless production and consumerism, of brute growth, has proven itself unsustainable; it’s left us with a degraded environment, a broken financial system, and a sclerotic political culture. We have an incredible opportunity to remake ourselves in a better way—for maybe the first time ever, to align human and economic development. But to do that, we need to create new institutions that will both help to develop and utilize everyone’s innate creativity. It won’t happen by itself, and no Invisible Hand is going to guide it.
The University of Chicago economist Raghu Rajan said it well: “The advanced countries have a choice. They can act as if all is well except that their consumers are in a funk, and that ‘animal spirits’ must be revived through stimulus. Or they can treat the crisis as a wake-up call to fix all that has been papered over in the last few decades.” I’m trying to sound that wake up call.
Morris: Please explain the reference to “the key underlying forces that have been transforming our economy and culture” for several decades.
Florida: Our economy is shifting from an industrial to a post-industrial basis—our most valuable products are no longer the natural resources we scour out of the ground, or the durable goods that we manufacture in factories but the things that spring from our creativity: software, movies, medicines, applications. Human beings have always been creative, of course, but now creativity itself—“the ability to create meaningful new forms,” as Webster’s Dictionary has it—is what powers our economy.
As creativity has become more fundamental, it’s given rise to a whole new social class that works in creative fields (the sciences, education, medicine, technology, media, the arts). Many of them have embraced a new ethos and a new set of meritocratic norms that in turn have shifted our whole society.
If anything Creativity is an even more powerfully transformative force than it was a decade ago. The Creative Class has come through the last decade—and through the economic crash of 2008—stronger and more influential than ever.
Morris: In your opinion, why have we not as yet unleashed “that great reservoir of overlooked and underutilized human potential”?
Florida: If a third of our most fortunate workers belong to the Creative Class, the other two great classes are not faring anywhere near as well. The working class, our blue collar sector, has lost a third of its members in just the last decade—it represents just 20 percent of the workforce today, about the same share that farmers held at the turn of the last century (they are less than one percent of the economy today). About half of the workforce belongs to the Service Class—the people who serve our food, cut our lawns and our fingernails, take care of our elderly. Most of them are paid terribly and there are very few opportunities for advancement.
Class and geography have a huge impact on your destiny in the US—if your parents don’t have good jobs and good educations and you live in a state that has a smaller Creative Class share, the odds are that you’ll be poorer, travel less, and receive a worse education than your peers in more creative states. That’s not snobbery or elitism—that’s just statistics. Poorer states have shorter life expectancies too—there is more smoking and obesity, more gun violence, and worse health outcomes across the board.
This is why I’m so passionate about the need for change—for a new Creative Compact, as I put it, that will do for our own epoch what the New Deal did for its own generation.
Morris: What are the defining characteristics of the Creative Class?
Florida: I define the Creative Class by what people do—by the kinds of jobs they hold. What I call the Super-Creative Core of the Creative Class are scientists and engineers, university professors, poets and novelists, artists, entertainers, actors, designers, and architects, as well as the thought leadership of modern society: nonfiction writers, editors, cultural figures, think-tank researchers, analysts, and other opinion shapers. I define the highest order of creative work as the production of new forms or designs that are readily transferable and widely useful—such as designing a consumer product, coming up with a theorem or strategy that can be applied in many situations, or composing music that can be performed again and again.
The Creative Class doesn’t just solve problems—it finds problems that we didn’t know we had. It invents the iPod and then it figures out a better way to organize its music library—and to combine it with a telephone, and an e-book reader while giving its battery longer life.
Beyond this core group, the Creative Class also includes “creative professionals” who work in a wide range of knowledge-intensive industries, such as high-tech, financial services, the legal and health professions, and business management, who engage in creative problem solving. Creative Class people are smart and skilled; they’re often (but not always) highly educated. Three quarters of degree holders belong to the Creative Class, but less than 60 percent of the Creative Class has degrees.
I talk a lot about “creatifying” jobs that are not considered Creative Class, but could be, such as retail sales. With the addition of creativity such jobs can become more productive and earn higher and higher salaries. Services can be creatified too, as their providers become more entrepreneurial.
Richard cordially invites you to check out the resources at these websites:
To read the complete second interview, please click here.
To read my first interview of him, please click here.
To read my review of his latest book, The Rise of the Creative Class, Revisited: 10th Anniversary Edition, please click here.
In a stunning reversal against the digital book market, the Wall Street Journal reports that a successful author has turned to phyiscal paperbacks through a contract with a traditional publisher. The article, authored by Jeffrey A. Trachtenberg, is entitled “E-Book Author Tries New Format: Real Paperbacks” (August 23, 2011, p. B4).
The author, John Locke, was the first self-published writer to sell more than one million digital books on Amazon.com. The contract with CBS Corporation’s Simon & Schuster will distribute eight of Locke’s thrillers that feature Donovan Creed, a former CIA assassin.
Despite the trend of books moving to the digital format, and despite the trend of traditional bookstores such as Borders closing, the good news is that “there are still lots of retail outlets for books,” according to a quote in the article from Adam Rothberg, a spokesperson for Simon & Schuster.
Are you surprised by this?
Let’s talk about it really soon!
Here is an excerpt from an article written by Jeffrey Pfeffer for Harvard Business Review‘s “The Conversation” series. 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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Recently when Cathleen Black resigned after just three months as New York City’s schools Chancellor, many influential New Yorkers decided that the way to analyze the event was as evidence of their mayor’s stumbling.
That’s quite a turn of interpretation for a man who, for several years, seemed to be able to do no wrong. Not that long ago, Michael Bloomberg was being talked about widely as a post-partisan presidential possibility. The fact that the bloom is now off the rose, and constituents are said to be tiring of him, offers an important lesson in power for all of us.
Let’s start by observing the obvious: that anyone who wields great power is bound to rub some people the wrong way, and those disaffected people accumulate over time. They also tend to have longer memories. As Dan Julius, a senior academic administrator now in the University of Alaska system told me years ago, “the things you did that upset people and create enmity live on much longer than what you did that people liked and created supporters.” Thus, the goodwill Bloomberg earned during the successful tenure of former schools chancellor Joel Klein, and for the many things he has done to make New York more economically vibrant and livable, is rapidly degrading. People are already forgetting how he took on budget problems inherited from his predecessor, Rudy Giuliani, and helped the city successfully live within its means. Accomplishments seem to have a shorter half-life — at least in people’s memories — than animosities.
This is one reason that leaders need to be “repotted” after a long tenure, believed Ernie Arbuckle, the Stanford Business School dean who did much to put the school on its successful trajectory. He noted that it becomes harder to get things done as resentments build and people get tired of you. Arbuckle stayed as dean for 10 years, then left to become chairman of the board of Wells Fargo for ten years, and after that, chairman of Saga Foods, also for ten years. (It will not surprise you to hear that he thought the right moment to “repot” was after ten years.) But he didn’t see it as only a problem of perception. He also thought that, after a while in a given position, one’s ability to see new challenges and opportunities clearly diminishes.
The problem is that most people, having attained a position of power, are reluctant to leave it and venture into new territory. Often, having racked up accomplishments and seen them celebrated, they are fired up by the possibility that, with a little more time, they could do more. In some cases, they cling to office because their age suggests they will not go on to scale any greater heights. Yale professor Jeffrey Sonnenfeld described this phenomenon in his decades-old book, The Hero’s Farewell.
In it Sonnenfeld noted that while some aging CEOs exited gracefully while they still enjoyed wide acclaim, many hung on too long, reluctant to face their own mortality. There was William Paley, the titan of CBS, who challenged his biographer by asking just why he had to die. And there was Armand Hammer, CEO of Occidental Petroleum, who put in place a long-term incentive plan for himself with a ten-year payout horizon — when he was in his 90s. Few executives or political leaders are as wise as UCLA’s legendary basketball coach, John Wooden, who retired after winning his tenth championship — quitting while he was on top.
[To read the complete article, please click here.]
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Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University, where he has taught since 1979. His newest book, from HarperBusiness, is Power: Why Some People Have It and Others Don’t.
It is worth noting that CBS’s 60 Minutes is the longest running prime-time television show in history. In fact, its #1 ranking for five consecutive years has been equaled only by All in the Family and The Cosby Show. Its creator and producer, Don Hewitt, once explained the reason for its success: “Even the people who wrote the Bible were smart enough to know: Tell them a story. The issue was evil; the story was Noah. I latched on to that.” The title of the memoirs that Hewitt later published is Tell Me a Story.
Storytelling is universal. Our ancestors covered their caves with the PowerPoint presentations of their time: the images they painted to tell stories about the hunt. Then and now, we need stories; a story is a single coherent whole out of a lot of parts. Aesop, Jesus, Muhammad, Moses, Confucius, and the followers of the Buddha all knew it; every religion has memorable stories at its center.
How to get into and then capture people’s hearts and souls? Hewitt answered with a simple strategy that today’s most successful companies follow every day: “At 60 Minutes, we do what everyone should be doing: Tell me a story. Learn to do that well and you’ll be a success.”
Richard Florida is the author of several global best-sellers: The Rise of the Creative Class, The Breakthrough Illusion, Beyond Mass Production, The Flight of the Creative Class, and Who’s Your City? In his latest book, The Great Reset, he explains how new ways of living and working will drive post-crash prosperity. Florida is a regular correspondent for the Atlantic Monthly and a regular columnist for The Globe and Mail. He has also written for The New York Times, The Wall Street Journal, The Washington Post, The Boston Globe, The Economist, and The Harvard Business Review. He has been featured as an expert on MSNBC, CNN, BBC, NPR and CBS, to name just a few. He has also been appointed to the Business Innovation Factory’s Research Advisory Council and recently named European Ambassador for Creativity and Innovation. Florida’s ideas on the “creative class,” commercial innovation, and regional development have been featured in major ad campaigns from BMW and Apple, and are being used globally to transform the way regions and nations do business and “reset” their economies. He is one of the world’s leading public intellectuals on economic competitiveness, demographic trends, global trends, economics, prosperity, competitiveness, and disruptive growth as well as cultural and technological innovation.
Morris: For those who have not as yet read The Great Reset, what is a “Reset”?
Florida: Economies and societies invariably remake themselves in the wake of a crisis. It’s a necessary component of rebound and recovery. Outmoded industries and tired consumption habits make way for new goods and services, new careers and forms of employment, and population realigns itself in the landscape. All these developments are connected to lifestyle changes.
Morris: In which specific ways are economic systems “embedded within the geographic fabric” of a society?
Florida: Many ways. I have always argued that the place and geography has a significant impact on economic systems. With this Great Reset, we will see an even greater emphasis on place – more specifically the rise of the mega region, which are new and incredibly powerful economic units. No longer will we focus on the city versus suburb but on how to increase our connection to our respective mega regions. Worldwide there are just 40 significant mega regions, which are home to 1/5 of the world’s population, 2/3′s of the globaleconomic output and 85% of all worldwide innovation. The rise of vast mega-regions such as the corridors stretching from Boston to New York and Washington, D.C., which will intensify our use of land and space the way that the industrial city did during the First Reset and suburbia did in the Second.
Morris: Where were the most significant consequences of the First Great Reset in the 1870s? And of the Second Great Reset in the 1930s?
Florida: Each of the previous two Resets were actually vibrant periods of innovation. Inventors and entrepreneurs rushed to fill the voids left by struggling industries with new ideas and new technologies that led to new forms of infrastructure like railroads, subways, and highways systems. All of that innovation powers economic growth. The First Reset saw power and communication grids and streetcar and subway systems spread across the country, speeding the movement of goods, people, and ideas. This was the era of Thomas Edison and Alexander Graham Bell, Andrew Carnegie and J.P. Morgan, after all. The Second Reset brought huge developments in media, mass-produced consumer goods, and the role of large corporations, when companies like IBM rose to prominence and when what was good for General Motors was good for the nation. It also saw the rise of a suburban, mass-consuming nation.
Morris: In Chapter Thirteen, you discuss Toronto. Why do you think this city has “tremendous upside potential coming out of the current crisis”?
Florida: I’m convinced that Toronto has a tremendous upside potential coming out of the current crisis. It won’t topple New York or London as a financial center, nor will it dethrone Los Angeles as the international entertainment capital, but with its large and stable banks, numerous knowledge-based industries thriving in the surrounding mega-regions, and an increasingly diverse population, it will gain ground. And with employment opportunities in the largest centers eroding, it can make a big move on top global talent. It stands as a model of an older, once heavily industrial Frostbelt city that has not only turned itself around but continues to grow and thrive.
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To read the complete interview, please click here.
You are cordially invited to check out the wealth of resources at http://www.creativeclass.com/.