George Kohlrieser is an organizational and clinical psychologist. He is Professor of Leadership and Organizational Behaviour at IMD and consultant to several global companies including Accenture, Alcan, Amer Sports, Barclays Global Investors, Cisco, Coca-Cola, HP, IBM, IFC, Morgan Stanley, Motorola, Nestlé, Nokia, Roche, Sara Lee, Tetra Pak, and Toyota. He is also a Police Psychologist and Hostage Negotiator focusing on aggression management and hostage negotiations. He has worked in over 100 countries spanning five continents.
Kohlrieser is Director of the High Performance Leadership (HPL) Program, an intense six-day IMD program for experienced senior leaders and the Advanced High Performance Leadership (AHPL) for former HPL participants. He completed his doctorate at Ohio State University where he wrote his dissertation on cardio vascular recovery of law enforcement leaders following high stress situations. His research has made significant contributions to understanding the role self-mastery and social dialogue has in helping leaders sustain high performance through life long learning.
He is Associate Clinical Professor of Psychology, Wright State University, Dayton, Ohio, adjunct faculty member of Union Graduate School, Antioch, Ohio, adjunct faculty member of Fielding Institute San Francisco, California, adjunct faculty member of Zagreb University, Croatia. He is past president of the International Transactional Analysis Association, San Francisco, California and is also a member of the Society of International Business Fellows (SIBF). He has consulted for the BBC, CNN, ABC, and CBS and his work has been featured in the Wall Street Journal, the Economist, and other leading newspapers and magazines.
He is author of the internationally bestselling book, Hostage At The Table: How Leaders Can Overcome Conflict, Influence Others, and Raise Performance, and, more recently, co-author of Care to Dare: Unleashing Astonishing Potential Through Secure Base Leadership with Susan Goldsworthy and Duncan Coombe.
Here is an excerpt from my interview of him. To read the complete interview, please click here.
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Morris: Most change initiatives either fail or fall far short of original (perhaps unrealistic) expectations. More often than not, the resistance to change is cultural in nature, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.” Your thoughts?
Kohlrieser: This is a very interesting and challenging point. In fact, research shows that people do not naturally resist change – they resist the fear of the unknown and the pain of the change. The human brain actually thrives on curiosity, innovation, new learning, challenge and change to create new neurons until the day we die. This has come to be known as brain plasticity. Followers with a secure base leader will be empowered to successfully navigate the uncertainty, ambiguity, and other unknowns associated with change. James O’Toole is correct: most people are hostages to the “ideology of comfort” and to the status quo. They do not dare themselves to do something new or different. The challenge for leaders is to build trust that enables them to drive change. If leaders are not driving change, they are not really leading. We must dispel the myth that people naturally resist change – it is simply not true.
Morris: Looking ahead what do you think will be the greatest challenge that CEOs will face?
Kohlrieser: The greatest challenge I see is the “paradox of caring” – being able to both care and also dare followers, teams and organizations to achieve their full potential and to be true innovators. How do leaders show enough caring and bonding, even with difficult people and those they don’t like? Giving regular feedback and conveying hard truths unlock the door to the highest levels of performance. Successful leaders challenge their people by inspiring them and building trust, not by coercion, control or threats.
Leaders must drive change. Without change organizations wither and die. Leaders who don’t drive change put their companies in grave danger. The challenge facing leaders is to explain the benefits that change will bring. I use the term ”secure base leader” to describe someone who gives a sense of safety as well as the inspiration and energy to encourage followers to explore and take risk. In other words, you must care enough to encourage daring by shutting down the defensive nature of the brain and invite the mind’s eye to seek opportunity and possibility. This combination is crucial, and it’s why my new book about unleashing astonishing potential is called Care to Dare.
Morris: In your opinion, why do so many C-level executives seem to have such a difficult time delegating work to others?
Kohlrieser: It comes down to focus and trust. Secure base leaders, referred to in my books, always look for underdeveloped talents and turn delegation into opportunities to stretch people. This means they have to trust people to learn, develop and possibly to fail. Letting go of control is often the most difficult thing for an executive to do. After all, their experience means they often assume they know how to do things better, which may or may not be true. Give people a secure base leader and they will achieve amazing things – delegating is one form of stretching another person to show what they can do. The executive must always be standing behind as a secure base. A good example is flight training. There is a moment when the flight instructor must relinquish the flight controls to the trainee.
Morris: When and why did you decide to write Hostage at the Table?
Kohlrieser: I have been held hostage four times. Early in my career it became clear that hostage negotiators have to establish a relationship with a very unlikeable, even despicable person. They must engage in a dialogue under high pressure and influence the hostage taker to give up their weapons and their hostages knowing that they will likely go to prison. The success rate of hostage negotiators doing this work is an extraordinary 95 per cent. When I described what hostage negotiators do to the executives and other professionals I work with at my IMD High Performance Leadership Program, they wanted to know if the secret of hostage negotiation can be applied to situations when one is being held a psychological hostage.
It is one thing to be a hostage with a gun to your head; it is another to be held hostage by a boss, spouse, situation or yourself. People wanted to know how hostage negotiations applied to everyday situations. So the “hostage” metaphor is a highly empowering concept that I wanted to describe in the book based on theory and actual stories. The fact is even when physically a hostage, you don’t need to feel a hostage. The techniques used to gain freedom in a hostage situation can be used by all of us in everyday life. Warren Bennis and Dan Goleman, my two wonderful mentors, colleagues and friends, encouraged me to formulate these ideas into a book, and I was honored to have Warren Bennis include it in his Leadership series.
Morris: Obviously, much of the material in the book seems to be based on what you learned from your extensive experience as a police psychologist and hostage negotiator. What were the most valuable lessons learned from that experience?
Kohlrieser: I have learned a number of lessons in my 40-year career. The most powerful lessons for me have been:
1. The power of bonding and the impact dialogue can have on an adversary, a hostage taker, or a person threatening violence.
2. The paradox of caring. Hostage negotiation succeeds because the hostage taker feels genuine care, interest and concern from the hostage negotiator.
3. The power of focusing on the goal and not on the danger or the problem. When facing a gun, the brain will naturally focus on the weapon unless you train your brain to focus on the person and the goal.
4. The power of language, dialogue and of asking questions.
5. Making concessions within a negotiation.
6. The power of loss in motivating people and in driving violence, especially hostage taking. There is always a loss that precedes a hostage-taking situation.
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To read the complete interview, please click here.
George cordially invites you to check out the resources at these websites:
His home page
His faculty page
His Amazon page
IMD “Big Think” interview
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: firstname.lastname@example.org.
Here’s an article by Ryan McCarthy that describes how Nokia could have been ahead of the game on the iPhone type phone, and then dropped the ball: Counterparties: Why big companies are bad at innovating.
…as early as 2000, the Finnish phone maker had designed a proto-iPhone – complete with a color touch screen and geo-location, gaming, and e-commerce capabilities.
This McCarthy article, quoting Peter Thiel, (actually, this “criticism” is kind of swirling around on the internet right now) describes how big companies might just get too big to innovate. The bigger they get, the more “set” they become, and the more blind they become to a great new idea – even if the idea comes from someone within their own company.
This has been written about by many, with years of recommendations about “skunk works,” secret teams… But it is just further proof that we get so very , very set in our ways.
It reminds me of the story of the invention of the battery powered watch. I listen to it from the “Paradigm Shift” guy, Joel Barker, every semester, on his video The Business of Paradigms. He tells how a man in a Swiss watch company invented this new fangled watch, and then showed it to the folks in his company. “That can’t be a watch – it doesn’t have a mainspring,” went the refrain. Well, the rest of the world saw it at some international watch convention, Seiko ran with it, and the Swiss lost their dominance in the blink of an eye.
Yes, there are a lot of bad new ideas out there. And, I assume that someone at Nokia said “this is a bad idea” with that new fangled phone. What we know is that they did not develop the idea. But others did.
And the rest, as they say, is history.
Michael Marquardt is Professor of Human Resource Development and International Affairs at George Washington University. Mike also serves as President of the World Institute for Action Learning. He has held a number of senior management, training and marketing positions and has trained managers in over 100 countries since beginning his international experience in Spain in 1969. Consulting assignments have included Marriott, Microsoft, Motorola, Nortel, Alcoa, Boeing, Caterpillar, United Nations Development Program, Xerox, and Nokia as well as the governments of Indonesia, Laos, Ethiopia, Zambia, Egypt, Kuwait, Saudi Arabia, Turkey, Russia, Jamaica, Honduras, and Swaziland.
Mike is the author of 24 books and more than 100 professional articles in the fields of leadership, learning, globalization and organizational change including Optimizing the Power of Action Learning, Leading with Questions, Building the Learning Organization (selected as Book of the Year by the Academy of HRD), Action Learning in Action, Global Leaders for the 21st Century, and Global Teams. More than one million copies of his publications have been sold in nearly a dozen languages worldwide. His latest book, Breakthrough Problem Solving with Action Learning: Concepts and Cases, was co-authored with Roland K. Yeo and published by Stanford University Press (2012). He has received honorary doctoral degrees from universities in Europe, Asia and North America for his work and writings in the field of action learning and leadership development
Here is an excerpt from my interview of him. To read the complete interview, please click here.
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Morris: Before discussing Breakthrough Problem Solving with Action Learning, a few general questions. First, who has had the greatest influence on your personal growth? How so?
Marquardt: My mother certainly had a great influence on my love of learning, my joy in asking questions, and my commitment to making the world a better place for others. No one in any part of our family had ever gone to college, and yet my mother pushed us all to get a college education – 3 of her children got doctoral degrees and 3 obtained Masters Degrees. Whenever we came back from college to our family farm, she would ask about everything we learned. We used to feel sorry for the person sitting next to her on an airplane as she would spend the entire flight asking about everything that person knew. And she wanted us to get into professions that helped others – 2 of my sisters are nurses, another sister was a social worker. One of my brothers ended up being a doctor and the other one is a fellow professor.
Morris: The greatest impact on your professional development? How so?
Marquardt: I would say Len Nadler and Reg Revans. Len Nadler, my professor at George Washington University, is considered the Father of Human Resource Development (HRD) and inspired me to do global HRD work. Reg Revans, considered the Father of Action Learning, inspired me to make action learning the passion of my life.
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.
Marquardt: After 20 years of global work with a number of government agencies and global companies, I became a professor at George Washington University in 1994. The first course I was asked to teach was “Action Learning” as the position I was filling had taught this course before she retired. I did not even know what action learning was, and yet I needed to prepare and deliver this course to 25 senior executive who were part of GWU’s Doctoral Executive Leadership Program. With some trepidation, I prepared the course as well as I could – using the existing syllabus and a Revans textbook. I created 5 teams of 5 students, and asked each team to identify a problem in one of their organizations which they were to solve during the semester. Fortunately, the course turned out well for the students, but I quickly became convinced that action learning was the greatest problem-solving and leadership development tool out there, better than anything I had seen in my previous 20 years of using scores of different tools for training leaders or developing organizations. I have become a devoted advocate and practitioner of action learning ever since.
Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?
Marquardt: I believe all of my formal education has enabled me to understand and appreciate action learning, as action learning is built on a wide array of disciplines that are integrated and generate its power. Thus, my undergraduate degree and studies in philosophy and economics, my master’s degree in education and group dynamics, and my doctorate in HRD that included psychology, management science and adult learning have all been valuable in re-creating action learning.
Morris: Briefly, what are the core principles of action learning?
Marquardt: Simply described, action learning is a dynamic process that involves a small group of people solving real problems, while at the same time focusing on what they are learning and how their learning can better solve the problem, develop leadership skills, build the team and change the organization.
Action learning program derives its power and benefits from six interactive and interdependent components. The strength and success of action learning is built upon how well these elements are employed and reinforced.
1. A problem (project, challenge, opportunity, issue or task)
Action learning centers around a problem (be it a project, a challenge, an issue, or task), the resolution of which is of high importance to an individual, team and/or organization. The problem should be significant, be within the responsibility of the team, and provide opportunity for learning. Why is the selection of the problem so important? Because it is one of the fundamental beliefs of action learning that we learn best when undertaking some action, which we then reflect upon and learn from. The main reason for having a problem or project is that it gives the group something to focus on that is real and important, that is relevant and means something to them. It creates a “hook” on which to test stored-up knowledge.
2. An action learning group or team
The core entity in action learning is the action learning group (also called a set or team). The group is composed of 4-8 individuals who examine an organizational problem that has no easily identifiable solution. Ideally, the make-up of the group is diverse so as to maximize various perspectives and to obtain fresh viewpoints.
3. A process that emphasizes insightful questioning and reflective listening
By focusing on the right questions rather than the right answers, action learning focuses on what one does not know as well as on what one does know. Action learning tackles problems through a process of first asking questions to clarify the exact nature of the problem, reflecting and identifying possible solutions, and only then taking action.
4. A requirement of taking action
For action learning advocates, there is no real learning unless action is taken, for one is never sure the idea or plan will be effective until it has been implemented. Therefore members of the action learning group must have the power to take action themselves or be assured that their recommendations will be implemented, (barring any significant change in the environment or the group’s obvious lack of essential information).
5. A commitment to learning
Solving an organizational problem provides immediate, short-term benefits to the company. The greater, longer-term, multiplier benefit, however, is the learning gained by each group members and how the group’s learnings can be applied on a systems-wide basis throughout the organization. The learning that occurs in action learning has greater value strategically for the organization than the immediate tactical advantage of early problem correction. Action learning places equal emphasis on the learning/development of individuals the team and organizations as it does on solving problems and developing successful action strategies.
6. Action learning coach
Coaching is necessary for the group to focus on the important (i.e., the learnings) as well as the urgent (i.e., resolving the problem). The action learning coach helps the team members reflect on both what they are learning and how they are solving problems. Through selective interventions and insightful questions, the coach enables group members to improve their performance and develop their leadership skills. The learning coach also helps the team focus on what they are achieving, what they are finding difficult, what processes they are employing, and the implications of these processes.
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To read the complete interview, please click here.
To check out his faculty page at GWU’s Graduate School of Education and Human Development, please click here.
To learn more about the World Institute for Action Learning, please click here.
For Mike’s Amazon page, please click here.
To watch a video, please click here.
Richard P. Rumelt received his doctorate from the Harvard Business School in 1972, having previously earned a Master of Science degree in Electrical Engineering from UC Berkeley. He worked as a systems engineer at the Jet Propulsion Laboratories and served on the faculty of the Harvard Business School. He joined the UCLA faculty in 1976. During 1993-96 he was on long-term leave from UCLA, serving on the faculty at INSEAD, France. At INSEAD, Rumelt headed the Corporate Renewal Initiative, a research-intervention center devoted to the study and practice of corporate transformation. Rumelt was President of the Strategic Management Society in 1995-98. He received the Irwin Prize for his book Strategy, Structure, and Economic Performance. In 1997, he was appointed Telecom Italia Strategy Fellow, a position he held until April 2000. He has won teaching awards at UCLA and received a “best paper prize” in 1997 from the Strategic Management Journal.
Rumelt’s research has centered on corporate diversification strategy and the sources of sustainable advantage to individual business strategies. He occupies the Harry and Elsa Kunin Chair in Business and Society. His published works include Fundamental Issues in Strategy: A Research Agenda co-authored with David Teece and more recently, Good Strategy/Bad Strategy: The Difference and Why It Matters. His current research interests center on corporate strategy and issues of institutional governance. Education: D.B.A. Management, 1972, Harvard University; M.S. Electrical Engineering, 1965, UC Berkeley; and B.S. Electrical Engineering, 1963, UC Berkeley.
Here is an excerpt from my interview of him. To read the complete interview, please click here.
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Morris: Before discussing Good Strategy/Bad Strategy, a few general questions. First, to what extent (if any) has your formal training in electrical engineering proven invaluable to your work on strategy.
Rumelt: The gifts of my EE training were many. First there is a capability in mathematics. Second is an appreciation that technical skills are only acquired by drill and practice. Finally, there is a confidence that I can understand almost all technical issues if I apply myself. That keeps me from shying away from a wide range of problems and settings.
Morris: Most change initiatives either fail or fall far short of original expectations. Why?
Rumelt: Change is difficult and it takes time. It is hard for people to change their own behavior, much less that of others. Change programs normally address attitudes, ideas, and rewards. But the behaviors of people in organizations are also strongly shaped by habits, routines, and social norms. Real change requires new power relationships, new work routines and new habits, not just intent.
Morris: In Leading Change, James O’Toole suggests some of the strongest resistance to change is cultural in nature, the result of what he so aptly characterizes as “the ideology of comfort and the tyranny of custom.” What do you think?
Rumelt: I agree with O’Toole that custom and comfort are impediments to change. However, it is important to recognize that resistance to change is logical as well. The new “change masters” literature seems to take change as the norm. It isn’t. Humans naturally see change as risky because it is risky, just as mutations in genes are mostly destructive. You would not want to go to work were everything changed every week! The phone system, the office assignments, who reports to who, and the whole set of job expectations.
Morris: How best to avoid or overcome such resistance?
Rumelt: You overcome the logical resistance to change by proving that a new approach actually works, usually on a small scale.
Morris: Peter Drucker and Michael Porter have provided many valuable insights. For example, from Drucker: ”There is surely nothing quite so useless as doing with great efficiency what should not be done at all.” And now from Porter: “The essence of strategy is choosing what not to do.” What are your own thoughts about all this?
Rumelt: Drucker and Porter are each pointing at vital, though slightly different, aspects of strategy. A good strategy focuses efforts on a target, and that focus can only be achieved by not diffusing energy in other directions—that is the meaning of Porter’s dictum of “choosing what not to do.” At the same time, a good strategy chooses the right target to focus on, not wasting the focus of energy on a target that cannot be affected or that is unimportant—that is the meaning of Drucker’s distinction between efficiency and effectiveness.
Morris: The percentages vary among recent research studies but they all suggest that, on average, C-level executives spend about 10% of their time discussing strategy on a weekly basis and a substantial majority of employees have no idea what their organization’s strategy is. How do you explain these rather astonishing statistics?
Rumelt: Many C-level executives use the term to refer to big deals or forward-looking financial goals and plans. Others use it to mean overall “visions” or “missions,” or other corporate slogans. However, a real strategy is a coherent mix of policy and action designed to overcome a significant challenge. So a sensible employee might indeed say that they have no idea what the organization’s strategy is—because it seems to have none. Senior managers’ so-called “strategies” are heavy with aspirations and goals, but light on how resources and strengths will be combined to achieve them.
Morris: In your opinion, who in the given enterprise should be involved in the formulation of its strategy?
Rumelt: Small groups of very senior people. Real strategy is not bottom up because it deals with issues that require unexpected or unusual types action, especially of coordination among units.
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To read the complete interview, please click here.
Richard Rumelt cordially invites you to check out the resources at these websites:
As Jeremy Hope and Steve Player explain in Beyond Performance Measurement: Why, When, and How to use 40 Tools and Best Practices for Superior Business Performance, sustainability is not a passing fad. “Nor is it a public relations exercise. It offers a host of new opportunities to reduce waste, cut costs, and develop new and exciting products and services. But it means rethinking deeply ingrained management practices, such as the way firms set financial targets and budgets that collide with many principles of sustainability.”
The aim is to cut waste both within and beyond the organization and in a much wider ecosystem. That will require new thinking, obviously, but also new strategies, tactics, processes…and products. With all due respect to economic and operational incentives, I feel very strongly about the importance of “good citizenship.” It is no coincidence that the companies that are annually ranked among those that are most highly admired and the best to work for are also among those annually ranked among the most profitable and having the greatest cap value within their industry.
Here is what Jeremy Hope and Steve Player recommend.
Actions to Avoid
o Stop paying lip service and take sustainability seriously.
o Challenge economies-of-scale thinking.
o Be wary of short-term budgets and targets.
Actions to Take
1. Examine the evidence. (Check out exemplars such as Nokia, 3M, and Toyota.)
2. Embrace lean (or systems) thinking.
3. Measure what’s important.
4. Start measuring the triple bottom line (i.e. economic, environment, and social).
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For a thorough discussion of sustainability and 39 other major business topics, I highly recommend Hope and Player’s aforementioned Beyond Performance Measurement, published by Harvard Review Press (February, 2012).
Here is an abbreviated version of an article written by the staff of Fast Company magazine that appeared in its June 2005 issue. It anticipates the subsequent publication of so many books (e.g. Roger Martin’s The Design of Business, Tim Brown’s Change by Design, and Thomas Lockwood’s Design Thinking) and an even greater number of articles on a subject that has yet to be fully explored.
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Look around you: The evidence of design’s power is everywhere. Customers expect, even demand, more from the design of everything they buy. Companies as varied as Adobe, Nokia, Toyota, and Virgin understand that great design is a prerequisite for turning consumers into customers. Whether it’s software or sippy cups, when something works right, looks right, and feels right, it sparks an emotional connection. People come to love it and loyalty soon follows, along with the three Rs: repurchase, reuse, and recommendations — benefits that fall directly to the bottom line. Such is the power of design.
Design is shaping the way we communicate and educate; it’s a catalyst for reinventing cities and reimagining nonprofits. Look at how companies such as Whirlpool are leveraging design as a competitive weapon — and stealing market share from formidable foes. Or how companies like Procter & Gamble and Samsung are using design thinking to recast their strategic thinking. As Ideo CEO Tim Brown puts it, “Where you innovate, how you innovate, and what you innovate are design problems. When you bring design thinking into that strategic discussion, you introduce a powerful tool to the purpose of the entire endeavor, which is to grow.”
Even a quick look at the design world shows that many of today’s designers defy easy categorization. They might have expertise in architecture, the graphic arts, or industrial design, but increasingly their work takes in many other fields: animation, anthropology, biology — just follow the alphabet. That’s why we devised five categories that encompass all of the design world and reflect this need to break through old boundaries.
Peak Performers have innovated over the long haul; they are design’s leaders and influential thinkers. Impact Players are those who, over the past year or so, have demonstrated design’s capacity to shape strategy.Game Changers are the agitators who are transforming the way we think about design. Collaborators are allies from outside the design world who work with designers to reinvent their organizations and even their cities. Next Generation billboards the rising stars who are creating design’s future.
If you are leading a team or company, mapping out a marketing strategy, innovating part of a supply chain, or streamlining a manufacturing operation — that is, if you are a decision maker facing a problem — think about this question: What are you and your organization doing to fully seize on design’s power and promise?
According to Scott Anthony, the “Great Disruption” refers to the current time when tumultuous change is “ripping through markets at unprecedented pace. Competitive advantage that took decades to build disappears seemingly overnight. While output might shrink and unemployment is sure to rise, companies that master these forces still have a chance to thrive; those that don’t are sure to struggle.” As Richard Florida suggests in The Great Reset, there have been three periods (in the 1870s, the 1930s, and now) when a tumultuous economy destroyed many companies but also created abundant opportunities for others. The key to survival during a process that bears striking resemblance to Charles Darwin’s concept of natural selection was and continues to be the ability to adapt and the methodology for adaptation is innovation.
Anthony observes that “every crisis presents opportunities” and cites several examples of companies that took full advantage of theirs: “3M, General Electric, Microsoft, and Walt Disney were formed in a year that featured an economic downturn.” Those that were founded during a recession include Black & Decker, ConAgra, Dow Chemical, Electronic Arts, Eli Lilly, Enterprise Rent-A-Car, Harley-Davidson, McKinsey & Company, Texas Instruments, and Whole Foods Market.
So what? A great deal. “The biggest silver lining for innovation is the scarcity that is sure to result from the current economic climate is actually a good thing for innovation.” Why? “Abundance is actually the root cause of many corporate struggles with innovation. Too much time or money allows companies to continue to follow fatally flawed strategies for too long or create overly complicated solutions that actually overshoot customer needs.” I wholly agree with Anthony that constant innovation need not be expensive and probably is most productive when initiated under limitations of hours and dollars. That’s why I also agree with him “there’s never been a better time for innovators to face tighter purse strings.” While the bears are ensconced in their caves awaiting better economic conditions, the bulls create (something new) and innovate (make something better). Finally, I agree with Anthony that “guidance about innovating in uncertain times is actually guidance for innovating in any economic climate.” During good times and bad, the most important question to ask remains the same: “Is this the right business decision to make?”
I commend Anthony’s relentless focus on explaining how to
• Identify the “different approach to take when prudently “pruning” by obtaining the answers to five questions (Pages 30-31)
• Recognize the four business unit portfolio “traps” and know to avoid or escape from them (Pages 34-35)
• Conduct four specific analyses that can help to determine the degree to which an existing business has unexploited or under-developed potential (Pages 38-39)
• Learn from three important lessons for cost cutting as revealed by the basic pattern of disruptive innovation (Page 52)
• Follow the three-step process to drive “intelligent cost cutting” (Pages 52-63)
• Follow the three-step process that innovators have used to drive disruption to create “spectacular success” (Pages 75-82)
Note: Table 4-1 (“Identifying constraints on consumption”) on Page 76, all by itself, is worth much more than the cost of the book. The same is true of Tool 4-1 on Pages 88-89
• Recognize and avoid the four common strategic traps that may appear (Pages 96-98)
Here’s the challenge that all business leaders face: Invention or re-invention and transformation. “Perpetual transformation [i.e. constant adaptation] is the only way to thrive during the Great Disruption…Unfortunately, the brutal reality is that most efforts at transformation fail.” There are exceptions (e.g. Apple, IBM, Procter & Gamble, and Nokia. “More often than not, companies fail when they try to go beyond their core business. But in the Great Disruption, companies don’t really have a choice. Investing in transformational efforts in a brutal market appears difficult, but the alternative isn’t stagnation, it is extinction.”
As the book’s narrative clearly indicates, Anthony is a relentless empiricist and a world-class pragmatist who is determined to understand and then share with others what works, what doesn’t, and why when companies attempt to survive – if not thrive — during the current Great Disruption. Innovation offers a “silver lining,” albeit a slim one more often than not, but an opportunity nonetheless. And Anthony offers a “tool kit” (enclosed within a bound volume) for those who refuse to accept the current economic situation as “the beginning of the end.” He also provides a “kick start to transformation” but, obviously, what happens next is up to his reader. Anthony concludes, “The choice is yours.”