Soren Kaplan: An interview by Bob Morris

Soren Kaplan is a Managing Principal at InnovationPoint, where he works with organizations including Visa, Colgate-Palmolive, Medtronic, Disney, Philips, PepsiCo, and numerous other global firms. Soren previously led the internal strategy and innovation group at Hewlett-Packard (HP) during the roaring 1990’s in Silicon Valley and was a co-founder of iCohere, one of the first web collaboration platforms for online learning and communities of practice. He is an Adjunct Professor within the Imagineering Academy at NHTV Breda University of Applied Sciences in The Netherlands. His latest book is Leapfrogging: Harness the Power of Surprise for Business Breakthroughs, published by Berrett-Koehler (2012). He holds Master’s and Ph.D. degrees in Organizational Psychology and resides in the San Francisco Bay Area with his wife, two daughters, and hypo-allergenic cat.

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

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

Kaplan: Hands down, it’s my wife. Personal growth is all about looking in the mirror, uncovering your unquestioned assumptions, and gaining empathy for others so you can do things differently. My wife’s the best at pushing me to do these things!

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.

Kaplan: My family and I went to Paris for a year so I could focus on writing my book. We experienced a lot of things. We put our kids into public school even though they didn’t speak French. We travelled around France and other parts of Europe. We experienced a lot of different personal surprises during that year ranging from food to culture to people.

One of the big epiphanies I had was walking into a little café called Caféotheque to work on my book. I didn’t realize at the time that of the 35,000 cafés in Paris it was ranked the #1 coffee spot. It was unlike any other café. There were no French waiters with white aprons, outside seating with high cane back chairs, or French food. But the owners had done something that truly changed the game for what it means to be a café in Paris. As I sat in the café I was surprised by how they were running their café. There were a lot of elements which made it a game-changer.

The fact that I had stumbled into this café which was a breakthrough while wanting to write about innovation made me realize that I needed to do some research about surprise. So I then researched surprise. I talked to leaders who I felt had really changed the game so I could understand the back-stories of their more public success stories. I discovered that the whole notion of surprise is an unspoken but critical ingredient to breakthrough innovation. The information about the leaders’ personal surprises led me to some bigger research, thinking and theories about uncertainty and surprise.

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

Kaplan: I studied Organizational Psychology, which is all about how people and teams collaborative and work together. Early on I was working in marketing, business strategy, and innovation. I didn’t see the overt connection. Now I realize that organizations are really just groups of people all trying to work effectively together to make meaningful things happen. I think my education underlies everything I do.

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?

Kaplan: Certain areas of business need to be formulaic with detailed processes where you want to minimize uncertainty. The thing I wished I knew earlier on is that this mindset pervades just about everything in business and leadership, but when you’re going for breakthroughs or charting uncharted territory, relying on a set formula can be your downfall. It’s about fast learning, iteration and even accepting small failures.

Morris: Of all the companies that you have observed, which – in your opinion – best illustrates how important it is to reconsider assumptions when encountering unexpected developments? Please explain.

Kaplan: There’s often an assumption that if we were to take all the right tools, templates, methodologies, and analytics and put them into the big corporate meat-grinder then the result will be innovation. I suggest that big breakthroughs, which change the game and challenge assumptions, are not as formulaic as those who believe in standard business rules and processes want to believe. There is certainly a set of leadership competencies that can be taught and learned, but they’re different from what is been trained for today. Things like balancing data analysis–what the data is telling you–with your intuition and your gut and being able to take steps that combine data with gut, data and intuition, and become open to what Scott Cook of Intuit calls ‘savor surprise’.

Here’s the example. In the 1990’s, Intuit introduced a software program called Quicken to balance checkbooks at home. But kept hearing that small businesses were using this software, which they believed was impossible because small businesses need real accounting software. The leadership team at Intuit ignored this data for over a year. When they decided to look at this ‘pop-up guidepost’, this surprise, they realized that small businesses were using their software incorrectly because they didn’t like accounting. They didn’t know how to do real accounting for their businesses. They didn’t start their businesses to be accountants, and so they were using the wrong software because it was simple.

Intuit had also assumed that the market for the provision of software was saturated, but they realized that maybe it wasn’t. So they revisited their assumptions about why small businesses were using their software, and about the related market opportunity. When they introduced QuickBooks and within 3 months they had captured 70% market share.Because they opened up to surprises, they found a big opportunity that might have otherwise been missed.

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To read the complete interview, please click here.

A Great by Choice Glossary

Last Friday, I presented my synopsis of the new Jim Collins and Morten T. Hansen book, Great by Choice:  Uncertainty, Chaos, and Luck – Why Some Thrive Despite Them All.  It is a great addition to the Jim Collins canon.

Jim Collins is a vocabulary creator.  In his earlier books, he introduced hedgehog circles, and Level 5 Leadership, among other terms.  In this new nook, he continues his tradition.  So here is a Great by Choice glossary, to help you when you run across these terms.

• A Great by Choice Glossary:

1)    10Xers – companies that beat their industry, over the long haul, by at least 10 times
2)    20 Mile March – a set, pre-decided “advance,” on schedule (Learned from the daily goal of Roald Admundsen’s team, which trekked a set, pre-determined distance every day, on their way to the South Pole)
3)    SMaC – Specific; Methodical; and Consistent
4)    Bullets and Cannonballs – Bullets – an empirical test aimed at learning what works, it meets three criteria:  low cost; low risk; low distraction.  Cannonballs:  big cost, big risk, big focus/energy/distraction.
Two kinds:  Callibrated (based on empirical validation)
vs. Uncallibrated (you don’t want many of these!)
5)    The Death Line – the end, with no coming back.  (you don’t want this – “duh!”)
6)    Luck – there’s good luck, there’s bad luck.  And it is in the response to bad luck that the tale is told…  – ROL – Return on Luck. 

 

From Viktor Frankl to Jim Collins – We are Free to Choose

Everything can be taken from a man or a woman but one thing: the last of human freedoms to choose one’s attitude in any given set of circumstances, to choose one’s own way.
Viktor Frankl

We cannot predict the future.  But we can create it.
Jim Collins, Great by Choice

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It’s been a lot of years since I was introduced to Man’s Search for Meaning by Viktor Frankl.  It was one of those “assigned readings” in my graduate school days.   It was worth reading.  Viktor Frankl recounted his own experiences in a series of concentration camps ( he was moved from camp to  camp, including a stint in Auschwitz), a true, dire, “hopeless” prison existence. In the midst of that experience, he developed his “logotherapy.”  The quote above is at the heart of his philosophy – you cannot control much of anything, but you can, you always can, choose your attitude in the midst of whatever circumstances you face.

Jim Collins kept reminding me of Viktor Frankl in his new book Great by Choice.  Here’s a key quote, the last paragraph of the book:

We are not imprisoned by our circumstances.  We are not imprisoned by the luck we get of the inherent unfairness of life.  We are not imprisoned by crushing setbacks, self-inflicted mistakes or our past success.  We are not imprisoned by the times in which we live, by the number of hours in a day or even the number of hours we’re granted in our very short lives.  In the end, we can control only a tiny sliver of what happens to us.  But even so, we are free to choose, free to become great by choice.  

In this book, Jim Collins gives a clear call:  that leaders can, and must, choose to be great – “great by choice.”  It’s a pretty good reminder.  Because, at this moment, circumstances – economic unrest and uncertainty — appear to be the daily struggle all companies face.  But, regardless of the difficulty, to choose to be great, and then to work toward implementing that decision, is what sets apart the 10x companies from the rest.  (10x – his designation for the “great companies,” the companies that beat the industry index by 10.

From Frankl to Collins.  There must be something to this.

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(I will present my synopsis of this new Collins book, Great by Choice, this Friday at the First Friday Book Synopsis).

Great by Choice: A book review by Bob Morris

Great by Choice: Uncertainty, Chaos, and Luck – Why Some Companies Thrive Despite Them All
Jim Collins and Morten T. Hansen
Harper Business/A HarperCollins Imprint (2011)

Additional and even more valuable revelations about “the principles that distinguish great organizations from good ones”

For as long as I can remember, Jim Collins has been a research-driven business thinker. In each of his prior books, he and his associates (usually Morten Hansen among them) share what was revealed during many years of research to learn the answer to an especially important question. For Built to Last, it was “Why are some companies able to achieve and sustain success through multiple generations of leaders, across decades and even centuries?”; in Good to Great, “Why do some companies make the leap from good to great… and others don’t?”; then in How the Mighty Fall, “How and why do some once great companies fall and other companies never give in to the same challenges, problems, and setbacks?”; and now in Great by Choice, “Why do some companies thrive in uncertainty, even chaos, and others do not?”

Collins, Hansen, and their colleagues conducted a nine-year study (2002-2011) and share what they learned. Here are the findings that caught my eye:

1. For reasons best revealed within the book’s narrative, in context, some companies and leaders thrive in chaos. Those on whom the book focuses have out-performed their industry’s index by at least 10 times and (key point) under the same extreme conditions with which others in the same industry must also contend.

2. Characterized as “10X” companies, those selected were paired in a “near-perfect match” — for purposes of both comparison and contrast – with companies during “eras of dynastic performance that ended in 2002, not the companies as they are today. It’s entirely possible that by the time you read these words, one or two of the companies on the list [i.e. Amgen, Biomet, Intel, Microsoft, Progressive Insurance, Southwest Airlines, and Stryker] has stumbled, falling from greatness.”

3. The research invalidates well-entrenched myths (see Pages 9-10) with regard to the 10X companies and their leaders. For example, “the evidence does not support the premise that 10X companies will necessarily be more innovative than their less successful comparisons [during the same timeframe]; and in some cases, the 10X cases were less innovative.”

4. Leaders of 10X companies display three core behaviors that, in combination, distinguish them from the leaders of less successful comparison companies. They also call to mind the behaviors of Level 5 leadership, examined in detail in Good to Great. Specifically, 10Xers exemplify fanatic discipline (“utterly relentless, monomaniacal, unbending in their focus on their quests”), empirical creativity (reliance on “direct observation, practical experimentation, and direct engagement with tangible evidence”), and productive paranoia (channeling their fear and worry into action, preparing, developing contingency plans, building buffers, and maintaining large margins of safety”).

5. In the Epilogue, Collins and his associates acknowledge their sense that “a dangerous disease” is infecting today’s culture, one that incorrectly suggests that greatness “owes more to circumstance, even luck, than to action and discipline.” Yes, they agree, good or bad luck plays a role for everyone, including 10Xers and Level Fivers. However, they offer an eloquent reassurance that many of us need to hear: “The greatest leaders we’ve studied throughout all our research cared as much about values as victory, as much about purpose as profit. As much about being useful as being successful. Their drive and stamina are ultimately internal, rising from where deep inside.”

Organizations do not make choices, their leaders do, and the fate of each of those organizations depends on the quality of the choices its leaders make, especially amidst uncertainty, chaos, and luck…three realities that even the best leaders can only manage rather than control. That is the challenge but also the opportunity to which the book’s title refers. The single most important difference between the 10X companies that Collins and Hansen discuss and those with which they are compared/contrasted is that those who lead them make better choices as they build and then sustain a culture within which everyone else does.