Listen up, biz leaders: It’s time to rethink everything

Here is an excerpt from article co-authored by Geoff Colvin that appeared in Fortune magazine. To read the complete article, check out other resources, obtain subscription, and sign up for email alerts, please click here.

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We’re not living in ordinary economic times. Every company needs to determine if its strategy requires an overhaul or just thoughtful tweaks. Here’s how to start.

FORTUNE — Remember when Motorola (MMI) ruled the mobile phone business worldwide? And then Nokia (NOK) did? And then BlackBerry (RIMM) did? And now none of them do? As Fortune headlined a recent BlackBerry article, “What the Hell Happened?”

We all ask the same question about Kodak, monarch of the global photo industry for a century, now bankrupt, while Instagram, a photo-sharing service with a dozen employees, is sold to Facebook (FB) for $1 billion. And while we’re at it, what happened to Hewlett-Packard (HPQ)? To Yahoo (YHOO)?

We’re not living in ordinary economic times. The convulsions of the past five years have left many business people asking the most fundamental questions about their companies: Will our strategy work in this environment? What must we change, and what must we not change? Do we need a new business model?

Reconsidering strategy can turn into a miasma that consumes endless time and yields nothing. Yet the process is manageable. One way to think through your strategy in today’s uncertain environment is to answer three basic questions.

[Here is the first.]

1. What is our core?

A finding that’s consistent across cycles is that the best performing companies keep investing in their core no matter how bad things get. Look at what Dupont (DD) did during the Great Depression. Even as profits plunged, the company resolved to keep funding chemical research — its core — no matter what. Among the results: nylon, neoprene, and other products that brought Dupont billions of dollars over the following decades.

In good times, companies often wander into businesses for which they command no special capability. Then, when a downturn hits, those non-core businesses blow up and have to be axed. Pioneer bailed out of the grindingly competitive flat-screen TV business in the recent recession. Home Depot (HD) shut down its Expo chain of home design centers. Google (GOOG) closed non-core businesses that sold advertising on radio stations and in newspapers.

Excellent companies are certain of their core. Early on in the recession, Brad Smith, CEO of software firm Intuit (INTU), said, “We’re not going to cut innovation. This company for 25 years has been fueled by new product innovation. We’re protecting the innovation pipeline so we come out of this strong.” He would cut elsewhere if necessary, but in the realm of personal and small business finance software, he’s up against mammoth competitors, including Microsoft (MSFT). He cannot afford to fall even a fraction of a generation behind.

Are you sure of your company’s core? If not, you’ve got to do some corporate soul-searching.

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To read the complete article, please click here.

Geoff Colvin is senior editor at large at Fortune magazine. A longtime Fortune editor and columnist, he is one of America’s sharpest and most respected commentators on leadership, globalization, wealth creation, and management. As former anchor of Wall Street Week with Fortune on PBS, he spoke each week to the largest audience of any business television program in America. His national bestseller, Talent Is Overrated: What Really Separates World-Class Performers From Everybody Else, won the Harold Longman Award as the best business book of 2009. His email address: gcolvin@fortune.com.

Leapfrogging: A book review by Bob Morris

Leapfrogging: Harness the Power of Surprise for Business Breakthroughs
Soren Kaplan
Berrett-Koehler Publishers (2012)

The power and value of serendipity on the other side of complexity

As I began to read this book, I was reminded of an observation by Oliver Wendell Holmes: “I wouldn’t give a fig for simplicity this side of complexity but would give my life for simplicity on the other side of complexity.” This is what Soren Kaplan has in mind when suggesting that the single most important factor in fostering true game changers in innovation is “the way leaders and organizations handle the discomfort, the disorientation, and the thrill (and pain) of living with uncertainty, finding clarity from ambiguity, and being surprised.” Very few business leaders and their organizations are both willing and able to work heir way through the complexity of what I view as “the fog of innovation” until, finally, there is a business breakthrough.

In Leading Change, James O’Toole suggests that many change initiatives fail because of cultural resistance that results from what he so aptly characterizes as “the ideology of comfort and the tyranny of custom.” Kaplan duly acknowledges that leapfrogging – “the process of overcoming limiting mindsets and barriers to create business breakthroughs – is almost never easy. On the contrary, the status quo always has staunch defenders and many of them reside in the C-suite. More often than not, the current status quo is one they created by the same process of transformation to which Kaplan refers. That is, in response to what was then the status quo, they and their associates “delivered exactly what groundbreaking innovations always deliver: something new, something powerfully effective, and – most important – something [begin italics] unexpected [end italics].” Now the target is on their backs. Moreover, the greatest threat the organization now faces is not from a competitor. Rather, it is internal: an obsolete mindset among its leaders who cannot respond effectively to “an age of wrenching change and hyper competition.”

Kaplan inserts real-world examples of business executives in dozens of quite different organizations (e.g. DuPont, Four Seasons, Google, Kimberly-Clark, KIPP, PepsiCo, and Unilever) who struggle – with mixed results – to “harness the power of surprise for business breakthroughs.”  These are among the dozens of passages that caught my eye:

o  Breakthroughs Can Come from Anywhere (Pages 17-22)
o  Big Surprises Can Come in Small Doses (41-45)
o  New Mindsets Are the Missing Link (52-54)
o  The LEAPS Model (58)
o  Liberating the Brain Delivers the Big Picture (64-69)
o  “Leapfrogging Tools” (77-79)

Note: Kaplan adds to his reader’s “tool box” with other “tools” on Pages 98-103, 121-125, 150-153, and 176-180.

o  New Insights Come from Pushing Beyond Comfort Zones (87-91)
o  Small Steps Can Lead to Big Things (107-110)
o  External Criticism Is Rooted in Old Assumptions (161-166)
o  Humility Opens Us Up to Seeing Surprise [and Being Surprised] (161-166)
o  The Paradox of Surprise (188-189)

Readers will also appreciate Kaplan’s strategic insertion of “Questions to Consider” sections within – rather than one at the conclusion of — Chapters 1-8 that will facilitate, indeed expedite review of key points and issues later. Moreover, of equal importance, the questions enable the reader to interact with the material by thinking about how best to apply appropriate portions of it within the reader’s own organization.

Those who share my high regard for this book are urged to check out three others: Peter Sims’s Little Bets: How Breakthrough Ideas Emerge from Small Discoveries, Jason Jennings’ Think Big, Act Small: How America’s Best Performing Companies Keep the Start-up Spirit Alive, and Paul Schoemaker’s Brilliant Mistakes: Finding Success on the Far Side of Failure.

Michael Michalko: An interview by Bob Morris

Michael Michalko

Michael Michalko is one of the most highly acclaimed creativity experts in the world and author of the best sellers Thinkertoys (A Handbook of Business Creativity), ThinkPak (A Brainstorming Card Deck), Creative Thinkering (Putting your Imagination to Work), and Cracking Creativity (The Secrets Of Creative Genius).

 As an officer in the United States Army, Michael organized a team of NATO intelligence specialists and international academics in Frankfurt, Germany, to research, collect, and categorize all known inventive-thinking methods. His international team applied those methods to various NATO military, political, and social problems and in doing so it produced a variety of breakthrough ideas and creative solutions to new and old problems.  After leaving the military, Michael facilitated CIA think tanks using his creative thinking techniques. Michael later applied these creative-thinking techniques to problems in the corporate world with outstanding successes.  Michael has provided keynote speeches, workshops, and seminars on fostering creative thinking for clients who range from Fortune 500 corporations, such as DuPont, Kellogg’s, General Electric, Kodak, Microsoft, Exxon, General Motors, Ford, USA, AT&T, Wal-Mart, Gillette, and Hallmark, to associations and governmental agencies.  In addition to his work in the United States, Michael has worked with clients in countries around the world.

Here is an excerpt from my interview of him. To read the complete interview, please click here.

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Morris: Before discussing any of your books, a few general questions. First, who has had the greatest influence on your personal growth? How so?

Michalko: My mother was my greatest influence because she taught me by example that your life and happiness are determined by what you choose to or refuse to do.

We do not choose to be born. We do not choose our parents. We do not choose our historical epoch, or the country of our birth, or the immediate circumstances of our upbringing. We do not, most of us, choose to die; nor do we choose the time or conditions of our death. But within all this realm of choicelessness, we do choose how we shall live: with purpose or adrift, with joy or with joylessness, with hope or with despair, with humor or with sadness, with a positive outlook or a negative outlook, with pride or with shame, with inspiration or with defeat and with honor or with dishonor. We decide that what makes us significant or insignificant. We decide to be creative or to be indifferent. No matter how indifferent the universe may be to our choices and decisions, these choices and decisions are ours to make. We decide. We choose. In the end, the meaning of our own life is decided by what we choose to do or what we refuse to do. And as we decide and choose, so are our destinies formed.

Morris: The great impact on your professional development? How so?

Michalko: While in the military I observed that the more an expert one became in an area of military specialization, the less creative and innovative that person became. The paradox is that people who know more, see less; and the people who know less, see more. Consequently, the majority of the generals had a fixed mindset about what is possible and what is not. The creative and innovative solutions to military problem came from the youngest noncoms and officers who still had open minds.

I discovered the same paradox in civilian life. An example of this is when Apple Computer Inc. founder, Steve Jobs, attempted, without success, to get Atari and Hewlett-Packard interested in his and Steve Wozniak’s personal computer. As Steve recounts, “So we went to Atari and said, ‘Hey, we’ve got this amazing thing, even built with some of your parts, and what do you think about funding us? Or we’ll give it to you. We just want to do it. Pay our salary; we’ll come work for you.’ And their experts laughed and said, ‘No.’ So then we went to Hewlett-Packard, and they said, ‘Hey, we don’t need you. You haven’t gotten through college yet.”

It seems that once a person has formed an expectation concerning the subject being observed–this influences future perceptions of the subject.  Ken Olson, president, chairman and founder of Digital Equipment Corp., thought the idea of a personal computer absurd, as he said, “there is no reason anyone would want a computer in their home.” Robert Goddard, the father of modern rocketry, was ridiculed by every scientist for his revolutionary liquid-fueled rockets. Even the New York Times chimed in with an editorial in 1921 by scientists who claimed that Goddard lacked even the basic knowledge ladled out daily in high school science classes. Pierrre Pachet, a renowned physiology professor and expert, declared, “Louis Pasteur’s theory of germs is ridiculous fiction.”

If we experience any strain in imagining a possibility, we quickly conclude it’s impossible. This principle also helps explain why evolutionary change often goes unnoticed by the experts. The greater the commitment of the expert to their established view, the more difficult it is for the expert to do anything more than to continue repeating their established view. It also explains the phenomenon of a beginner who comes up with the breakthrough insight or idea that was overlooked by the experts who worked on the same problem for years.

Morris: Years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.

Michalko: The realization that most educated people have a fixed mindset that encourages robotic thinking and determines a person’s outlook and behavior. Think of the fixed mindset shaped like an upside down funnel. At the wide bottom, there is a wide variety of different experiences. At the top, there is the narrow opening which represents a fixed mindset that superimposes itself on all the experiences. Once people with a fixed mindset have settled on a perspective, they close off all other lines of thought. Whereas, a creative thinker’s mind is shaped like a right side up funnel with the narrow opening over one experience. At the wide top there is a wide variety of different ways to see and think about the one experience. This represents a creative thinker’s growth mindset.

Imagine a mud puddle waking up one morning and thinking, “This is an interesting world.  I find myself in this hole and I find that it fits me perfectly. In fact, it fits me so well, it must have been made to have me in it. Everything is fine and there is no need for me to worry about changing anything.” Yet every day as the sun rises in the sky and the air heats up, the puddle gets smaller and smaller. Yet the puddle frantically hangs on to the notion that everything’s going to be all right, because the puddle believes the world is what it is and was meant to have him in it. The moment he disappears catches him rather by surprise.

People with fixed mindsets are like the mud puddle. They were taught by authority figures that their genes, family, education and environment have determined their destiny, and they, like the atom, just are. Many of them were taught that they are not creative. Consequently, they believe they are a certain kind of person and there is not much they can do to change that. They might be able change some small things but the important part of who they are can’t be changed.

It was this realization that encouraged me to research, write and teach the importance of understanding these cognitive mindsets, how they influence us and how we can easily change the dynamics of a mindset and change the way we think and see things.

Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?

Michalko: What I learned from observing and listening to academics in college was their curious tendency to assimilate new information into their pre-existing views. Their mental image of the established view interferes with their perception and understanding of new ideas and concepts. In the case of real life, physicists could not see Einstein’s theory of relativity because of their established, accepted view. For years, they tried to incorporate his view into the established view without success.

Experts always try to assimilate new insights, ideas and concepts into their view. What happens in real life is, despite ambiguous stimuli, people form some sort of tentative hypothesis about what they see. The longer they are exposed to this hypothesis, the greater confidence they develop in this initial and perhaps erroneous impression, so the greater the impact this initial hypothesis has on subsequent perceptions.

Suppose an expert has an established theory about the danger of boxes and their effect on human life and the environment. The theory is that boxes might be harmful and the use of boxes should be regulated. Now, suppose that I leave a box on the floor, and my wife trips on it, falling against my son, who is carrying a carton of eggs, which then fall and break. The expert’s approach to an event like this would be that the best way to prevent the breakage of eggs would be to outlaw leaving boxes on the floor. As silly as this example is, it is analogous to what is happening in the world of global warming. If you survey the history of science, it is apparent that most individuals who have created radical innovations did not do so simply because they knew more than others. One of the most important experiences Noble laureate, Richard Feynman, had in his life was reading a copy of James Watson’s typescript of what was to become his famous book, The Double Helix, about his discovery, together with Francis Crick, of the structure of DNA. Feynman had become unproductive and began to believe he had run out of ideas. The discovery Feynman made was that Watson had been involved in making such a fundamental advance in science, and yet he had been completely out of touch with what everybody else in his field was doing.

As told in Watson’s classic memoir, The Double Helix, it was a tale of boundless ambition, impatience with authority and disdain, if not contempt, for received opinion. “A goodly number of scientists,” Watson explained, “are not only narrow-minded and dull but also just stupid.” Feynman wrote one word, in capitals: DISREGARD on his notepad when he read that. This word became his motto. That, he said, was the whole point. That was what he had forgotten, and why he had been making so little progress. The way for thinkers like himself to make a breakthrough was to be ignorant of what everybody else was doing and make their own interpretations and guesses.

So Feynman “stopped trying to keep up with what others were doing and went back to his roots, comparing experiment with theory, making guesses that were all his own.” Thus he became creative again, as he had been when he had just been working things out for himself, before becoming a famous physicist in academia. While this is an important lesson for science, it is a supreme lesson for any discipline where “current knowledge” can be dominated by theories that are simply incoherent.

Make your own interpretations of your experiences to shape your own beliefs and concepts about your world. This is the lesson Feynman called the most important of his life. This is the lesson I learned during my college years.

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To read the complete interview, please click here.

Michael cordially invites you to check out the resources at these websites:

His website

Psychology Today Blog: Creative Thinkering

Blog

Twitter 

Facebook Fan Page

21 Ways to Kill Your Creativity

Here is an excerpt from an article written by Michael Michalko, author of business classics that include Cracking Creativity: The Secrets of Creative Genius (2001), Thinkertoys: A Handbook of Creative-Thinking Techniques, 2nd Edition (2006), and Creative Thinkering: Putting Your Imagination to Work (2011).

Here are [seven of] 21 suggestions, recommendations and habits to help you kill your creativity, guaranteeing that you will never come up with a good idea. If used by supervisors effectively, they are also guaranteed to kill creative and innovative thinking throughout an entire organization.

To read the complete article and check out countless others. please click here.

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1. Always think the way you’ve always thought. When confronted with a problem, fixate on what you were taught about how past thinkers solved it. Then analytically select the most promising logical past approach and apply it to the problem, excluding all other possibilities.

2. Be focused. The key to logical, linear thinking is knowing what to exclude from your mental space. Exclude everything that is dissimilar, unrelated or is in some other domain from your subject. If you want to improve the can opener, only study existing can openers and how they are made. Then work on improving what exists.

3. Always do what you’ve always done. If you always do what you’ve always done, you’ll always get what you’ve always got. This will minimize surprises and mistakes. We are all a product of our experience. Stay within your comfort zone and don’t waste time and energy exploring what people in unrelated areas do.

4. Don’t embarrass yourself. You are labeled and categorized by your personal history, I.Q., and education. Don’t embarrass yourself and your family and friends by pretending to be something you’re not. Always remember an atom is an atom and cannot be anything else. Neither can you.

5. Know your limitations. Most of us do not have the genes, family history, intelligence, or education to be creative. Listen to your inner voice when it tells you that you are not creative. Play it safe. Do not take risks. If you work for yourself, don’t break what is not broken. If you work for someone else, remind yourself that you don’t get paid to create ideas. Be happy receiving a paycheck.

6. Be skeptical. Whenever an idea is offered, analyze it, criticize it and judge it. Never defer judgment. Be skeptical. Look for reasons why it can’t work or can’t be done. Take pride in being the devil’s advocate. Where’s the data? The research? Where’s the evidence it can work? What’s the history of the person who suggested the idea? Always remember people equate skepticism with wisdom.

7. Always listen to the experts. They spend their lives studying their subjects and know what’s possible and what is not. You do not. Respect their expertise and follow their advice religiously.

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To read the complete article and check out countless others. please click here.

Michael Michalko is one of the most highly acclaimed creativity experts in the world and author of the best sellers Thinkertoys (A Handbook of Business Creativity), ThinkPak (A Brainstorming Card Deck), and Cracking Creativity (The Secrets Of Creative Genius).

As an officer in the United States Army, Michael organized a team of NATO intelligence specialists and international academics in Frankfurt, Germany, to research, collect, and categorize all known inventive-thinking methods.  His international team applied those methods to various NATO military, political, and social problems and in doing so it produced a variety of breakthrough ideas and creative solutions to new and old problems.  After leaving the military, Michael facilitated CIA think tanks using his creative thinking techniques.

Michael later applied these creative-thinking techniques to problems in the corporate world with outstanding successes.  Michael has provided keynote speeches, workshops, and seminars on fostering creative thinking for clients who range from Fortune 500 corporations, such as DuPont, Kellogg’s, General Electric, Kodak, Microsoft, Exxon, General Motors, Ford, USA, AT&T, Wal-Mart, Gillette, and Hallmark, to associations and governmental agencies.  In addition to his work in the United States, Michael has worked with clients in countries around the world.

Find out more at http://www.creativethinking.net.

Book Review: Denial

Denial: Why Business Leaders Fail to Look Facts in the Face – and What to Do About It
Richard S. Tedlow
Broadway Books (2010)

Denial is Tedlow’s latest book and, in my opinion, his most important and most valuable…thus far. As he explains in the Introduction, “Denial is the unconscious calculus that if an unpleasant reality were true, it would be too terrible, so therefore it cannot be true. It is what Sigmund Freud described as a combination of ‘knowing with not knowing.’ It is, in George Orwell’s blunt formulation, ‘protective stupidity.’” Tedlow acknowledges that there are several short-term benefits of denial (e.g. it is soothing, convenient, allows us to live in a world we have created and thus control…“while it lasts”) and that is why it is so seductive. “Denial sometimes actually works,” as with entrepreneurs who refuse to be discouraged despite the fact that the overwhelming majority of new businesses fail. Also, the inevitability of catastrophe does not mean that we personally will suffer the consequences.” In most circumstances, denial does work in the short-term.

What we have in this extraordinarily informative as well as eloquent book is a comprehensive explanation of what the subtitle correctly indicates: “why business leaders fail to look facts in the face – and what to do about it.” Tedlow carefully organizes his material within two Parts. In the first, he examines those who “got it wrong” (i.e. refused to face realities). They include Henry Ford and his denial of what consumers wanted, five major tire manufacturers (i.e. Goodyear, Firestone, Uniroyal, BFGoodrich, and GenCorp) who denied the significance of the “radial revolution” initiated in Europe, and A&P’s denial of emerging demographics and consumer preferences. In Part II, Tedlow shifts his attention to several examples of those business leaders who “got it right” at DuPont, Intel, and Johnson & Johnson.

Tedlow devotes the final chapter to providing what he characterizes as a “new point of view,” one that is guided and informed by eight “lessons” to be learned, from those business leaders who, in ways and to an extent best revealed in context, overcame he “unconscious calculus” of “protective stupidity.” Throughout his lively narrative, Tedlow’s focus is on helping his reader understand to (a) what denial is, (b) why it is so “seductive,” and (c) how to resist its appeal. The eight lessons discussed in the final chapter help to achieve that worthy objective and should be reviewed from time to time. Why? Because denial is not an all-or-nothing proposition. “It is a continuum. Individuals and organizations have the power to determine where on that continuum they fall…human brings and companies are capable of positioning themselves further toward the ‘facing facts’ end of the spectrum than the ‘denial’ end.” Resisting denial requires a continuous “battle” that must be fought every day on many fronts.

Thanks to Richard Tedlow, those who read this book will be well-armed.