innovation playground Idris Mootee

Most Companies’ Crisis Are Worse When Compounded by Industry Disruptive Forces with a Leadership Crisis

Companies that are facing industry disruptions are bad enough; during these times leadership faces the most important test – the ability to lead during a crisis. The need of foresight, change and organization design are what true leadership looks like. Some sees this an opportunity to gain power and fulfill their thirst for greed and this needs to be stopped. Because strategic leadership matters… whether through malice or naïveté, those who abuse or tolerate the abuse of leadership place companies at risk.

Poor leadership cripples businesses abilities to accept new realities, correct mistakes and make strategic bets. At lower levels in the hierarchy, the problem was even more severe because in decisions and lack of strategy. Seeing things for what they are. Strong crisis leaders live on the front end of reality and speak in future tense. They recognize systemic drivers and their significance and do not shy away from the consequences of what they see. Foresight and strategic intellectual integrity is a key component of crisis leadership; they think of what is best for the organization, not their own personal or political gain. Poor strategic leadership is often the results of the following:

THE FALLACY OF FORESIGHT

Poor leadership assumes that the climate will gradually improve and things will not get worse. They think the future is predictable and they have a good pulse of the market better than others. Often what they have is groupthink. The reality is things do get worse and they are still reacting to the shift rather than getting ahead of the shift. They could not connect all the variables that are shaping the future of the business and fail to calculate the unforeseen market, industry, technological, social, and behavioral shifts. The fallacy of prediction inevitably led to the downfall of many businesses.

Strategic foresight is often lacking to allow the companies think ahead of the curve. Strategy and detail with speed and clarity. They are able to see the big picture. They can see all of the moving parts and understand what is cause and what is effect. They get below the 30,000ft level and can dig deep into detail without being mired in it. They quickly develop a very detailed knowledge of the issues. This ability further enhances their capacity to view the problem realistically.

THE FALLACY OF SECRECY

Poor leadership believes it is better to shield middle and junior employees from the seriousness of the crisis and radiate a false sense of comfort hoping people won’t read what’s out there. The most common defensive speech usually include 1/ We still a very loyal customer base and they are very loyal to us 2/ We still have a lot of cash 3/ Our product is good and we need better marketing 4/ We are not aggressive enough in pricing. All wrong. Many of these can go away very quickly. Companies should connect their passion points to a foresight-based business strategy that are executable to secure their support and commitment.

THE FALLACY OF ORGANIZATION

Poor leadership usually based them on the notion that a new organization structure is important to formally show the transformation. Any formal organization redesign takes too much time to execute and slow down the transformation. This is the time where they should get rid of people’s title and organize as hubs and networks to executive their strategies. It needs to act as an attacker not a defender. Defender usually won’t survive.  Leaders must be strong enough to hold themselves (and the board) accountable for the past transgressions of turning a blind eye from right and poor decisions or indecisions that led to the current state. Current problems are most likely the results of decisions that were made 24-36 months ago. Strong leaders take ownership of the problem and acknowledge that no magic can undo these poor decisions.

They understand, however, that a long-term solution requires the input and involvement of many stakeholders. They identify those individuals and work together towards a solution that everyone can support and can live with. They also need to differentiate from those who take advantage of the crisis by advancing their own agendas even at the expense of the organization. The successful crisis leader seeks out individuals who have a different and strategic perspective on an issue even whose advice may be contrary to that of their board.

Crisis is the time for real strategic leadership. It is the time to deliver bad news when they need to and do it in a way that avoids panic and provides a realistic level of hope for the future. Above all, they are courageous enough to make sharp decisions, act with speed and take carefully calculated risks.

Leadership Without Consensus Is Great Leadership. Great Leadership Means Deciding On What Is Best For the Company. And Sticking With It.

Many times when people walk out of a meeting and look happy it is because they have achieved consensus and can now move forward. I always question if this is a sign of a good outcome or not. While having everyone on the same page and sharing the same vision is without question a good thing. But arriving on a strategic decision based on consensus may not.

So they say a good team worker knows how to get consensus. It is an overly simplistic way of management decisions making. The best teamwork and team leadership is not about getting quick consensus. 99% of the time consensus making is a time wasting exercise (much like those UN meetings) and is a false ideal that many young managers are trying to follow.

Consensus means using the lowest common denominator and is a sure way to achieve under-performance and mediocrity. More, it means poor leadership - you just reduced your leadership capacity to a facilitator and avoided doing the job that you're supposed to do - make decisions that you are capable of and justifiable.

It has been said that true consensus involves "meeting everyone’s or those with the needs." Consensus decision-making is intended to de-emphasize the role of factions and get stakeholders to arrive at a common acceptable solution. Because it seeks to minimize objection, it is great for large organizations so no one will be taking the full responsibility in the event of a bad outcome.

The goal for a CEO is never to seek an OK or acceptable solution for the organization. His/her job is not to please everyone. The job is to make the right decision considering all risks factors and possibilities. Consensus involves debate. It is fine to debate; it is fine to allow people to have a voice; it is also fine to ignore many of these requests; and it is fine to ignore them when there is no logic to support it. Today, if you wait for every last person to agree and add in their feedback, you competition will eat you. Or your great idea will be diluted into some incremental thing that takes 3 years to fully implement.

Consensus often means the status quo. It means not taking the threat lightly and deciding to stay the course, which is human nature. So, when people get together to discuss the possibility of doing something radically innovative, expect 80% of people will vote for avoiding making such changes. Those who push for the status quo will always gain better support because it is easily to show data to support it. Consensus brings people back to the middle where the majority approves but mediocrity reigns.

Consensus often means leaving unresolved conflict or issues and pretending it would go away. Consensus prevents tough conversations from happening and so one will upset anyone so the meeting can end quickly. It helps avoid facing the reality. Then they will talk after meeting. Consensus means forget the idea go big or go home. No one will bet their career on any crazy idea even though deep down in their hearts they like the idea. They are just managerially uncomfortable or incapable of making those bold decisions. They are trained for the opposite.

Good leadership is to make tough decisions and trade offs. Leadership is to know where a company is heading and make decisions that lead to the best results. Good leadership is not wasting too much time to get consensus. Good leadership is making a strategic decision and committing to it.

Random Thoughts On Maturing Companies and Start-Ups. When Do You Need A Reset?

In an interesting conversation with clients this week and discussions were around the question: “should companies plan for the distant future (10 years and beyond) and what is needed to get out of a death spiral where a slow death is in the making?”

There is a big difference between growing with age and growing old. With age, it sometimes comes with wisdom. With more than a dozen of C-suite execs that I have worked with or coached, for most of them, the wisdom came one day after they had passed the age of 50. Growing comes with age, which sometimes take away the energy and urge to make radical change. Ask yourself or your organization, the last 5 years your company or yourself should be referred to as a “growth experience” or “aging experience”.

A CEO’s job is to make sure the company is growing with experience” and not “aging with experience”. Company needs constant renewal, the leadership team is expected to generate enough energy to motivate the entire company. You need a strategy to energize and motivate. Not empty speech and propaganda video and banners. Time doesn’t mean we gain more experience. Reinvention, renewal and resetting are mantras for growing experiences. We shape what we become. When companies are stuck in a stagnant mode or worse in a downward spiral, it is because of the experience they have. Not because the new things that they try. They are usually too old (state of mind), conservative, naive and irrelevant and that managerial mindset is holding the company back for serious reinvention.

A look back at many failing leaders’ biggest attempts to bring their companies back for the past 10 years reveals an embarrassing series of missteps, mistakes, and flat-out bad products, culminating in a flurry of poorly-executed uncommitted attempt to create and own a distinct market positioning. Most of the time, the product failed before they are being introduced. No one can do anything at that time. Think about the following:

• We have been very good in making this and we should be fine.
• We always do things this way. It is too risky for us to change.
• Let’s watch where the market is going first. We can wait.
• We need to do what Apple, Nike, Amazon and Starbucks do.
• We should hedge our bets and try different things too.
• Let’s give the market what they want and make sure we have a competitively cheaper offer.

If you do one or a few of the above, you will most likely be somewhere along the downward spiral. For companies to end the spiral of death, it takes more than cost-cutting and requires an orchestrated effort for everyone involved to imagine and see the possibility forward. It is about applying a practical future-oriented foresight to drive strategy and unleashing the company from legacy people, thinking and even management board. There is no place for the “old" in the world of constant resets.

7 Important Business Lessons You Can Learn From a Bank Robbery

During a bank robbery in China, the bank robbers dressed in fake Hugo Boss fashion, carrying AK47s shouted to everyone as they rushed into a bank: "Everyone don't move. This is a robbery. The money belongs to the People. Your life belongs to you. Your designer handbag we will not take. We don’t take your IDs and we are not identity thefts, that’s not ethical at all. We will take only the money from the bank."

This is called “Staying Focus!”

The older robbers shouted “Don’t do any tricks. I know them because I used to work in a bank too. Just do as you are told.” One guys asked. “Which bank did you work for?”. He replied “The Sperm Bank. But we never had a robbery while I worked there.”

This is called “Domain Knowledge!”

Everyone in the bank got down on the floor. One woman was looking at her smartphone and noticed one of the robbers showed up on her Tinder app and shouted hey you look good and is that a real picture! The younger robber said, “We are only here to do work, not looking for a date. Perhaps after. Now I am busy?" The big brother yelled at him ”You should have turned that off!” And then everyone in the bank started looking at their smartphones.

This is called "Avoiding Distraction!”

Then one of the bank’s staff started asking the robbers. “What are you going to do with that much money? You guys should know investment is risky if you don’t know anything about it. You don’t want to risks your hard earned cash. We have different investment vehicles and the money can be placed in Switzerland and safe even if you got caught.”

This is called “Risks Management!”

When the bank robbers returned home, the younger robber told the older robber: "Big brother, let's count how much money we got" The older robber said: "Don’t bother, the news will tell us. Too much work and let them do the job. I'd rather spend the time look at stocks we want to buy with the money. The market is a good buy now.” The young robber said “Ah yes! Let them do the job!”

This is called “Opportunity Cost!”

Right after the robbers were gone, the bank manager held a meeting. But the supervisor said to him: "Shall we add the $10m that we have lend to our friends and families so we can write them off! Perfect timing.”

This is called “Opportunity Mapping!”

The next day, the TV news reported that $100 million was taken from the bank. The robbers counted and counted and counted, but they could only count $10 million. The robbers were upset: "We risked our lives and only took $10 million. The bank manager took $90 million without doing anything. That’s not fair. I guess that’s what happened when people understand business”

This was adapted from a joke I was told when traveling in China and dramatized.

In Algorithms We Trust. Do We?

Let's try to paint a likely not-too-distant future. In this future, everything around us will be managed by algorithms. They manage and recommend what we want to watch; they control traffic of our driver-less cars; they control those drones which deliver our pizza; predict for you which one of your friends will become your future spouse, etc. They will make our life effortless and predict what things will happen next or what's best for us. We all wish that it is that simple.

As we are picking up massive data every second, algorithms are critical to how we make sense of them and our reliance on algorithms is growing by the second. But how much faith should we put into those algorithms, and how reliable they are depends on who you talk to. The accuracy of the algorithmic differentiation (automatic differentiation) is key in dealing with data volatility in many complex cases where accuracy of data is critical to the final outcome. I don’t know when we can have statistical evidence comparing how often driverless cars mistakes and how often human drivers make mistakes or how well a software program investing in stocks makes mistakes and human making investment mistakes.

We need to develop programs to check whether algorithms are working as they were intended and monitoring algorithms by the results they produce based on machine performance metrics. Vetting algorithms in advance isn't practical at all as many are too complex for their outcome to be predicted. Algorithmic differentiation is used to fine tune algorithms that are complex to optimize. We will be placing our faith into the accuracy of these algorithms and trusting that they will deliver. I think we may be over-optimistic and mining a lot of data using statistical analysis still has a very strong random component to it. To optimize these models we need algorithmic differentiation and sometimes it feels like a scientific random number generator. The more data we have, the more simulation is needed and the more reliance on the significance of data, and significance means sensitivities. We’re in the midst of a transformation when industries are exploring how to use big data to create new business models.

There’s one certain thing in big data, it’s that all algorithms are not created equal. The biggest question is how many jobs will disappear when algorithms take over human jobs? People ask the same question during the first industrial revolution when machines started making goods a lot faster and cheaper. Are we entering a world in which the algorithms themselves will be competing with humans? Honestly, I just don't like it when algorithms make decisions for us. They can help me analyze my options and probabilities, but not making a decision until they prove that they can think smarter than me. And so the game begins…

There Is A Difference Between Business Turnaround and Business Transformation. It Is Easy To Tell Which Is Harder.

All companies go through some kind of crisis at some point but what does it take to get out of it? There aren’t many successful turnarounds in large companies and the bigger the company and the longer the history, the more difficult it is for any turnaround and its success rate is lower. 

Harley Davidson in mid-life crisis when Richard Teerlink joined the company in 1981 as CFO, the company had US market share of 15% and reported a loss of $15m. The company was killed by its strong Japanese competitor led by Honda. In 1989, he took over as CEO and returned the company's focus to increasing quality, improving service and producing world-class heavyweight motorcycles. In the end it is the product that turned the company around. Harley Davidson recovered its U.S. market share to 50% and posted annual sales of more than $1.7 billion. Teerlink left his post as CEO in 1997, and served on Harley Davidson’s board of directors for another 5 years. He did a great job as a turnaround manager.

The story of IBM’s brush with bankruptcy is another greatest business comeback of all time. IBM’s problem was that it was quickly becoming irrelevant and experiencing zero growth. The company had also made some bets that didn’t work out. Lou Gerstner took control in 1993 and created more focus in the company. He did a great job as a transformation manager.

One lessons here is not mix up a turnaround with a transformation. It’s very important to distinguish between a transformation and a turnaround.  A turnaround involves a company that has fallen off the rails and has executed poorly and still competing in the same product/market space. It takes a tough driven executive to make it work.

A transformation is truly a lot more difficult and takes a lot more deep wisdom with execution playing a secondary role. The company must fundamentally change its mental and operating model. It is a reinvention and companies who are used to doing things their way find it difficult to start doing things differently. This is not a 3 or 6-month initiative. It’s very, very strategic, foresight driven and problematic.

For any successful transformation, it takes leadership rather than management. “I hire people brighter than me and I get out of their way” as Lee Iacocca puts it. I am not sure who said something like “Inventories and supply chain parts can be managed but people must be led.”

I’ve both architected and supported quite a few successful turnaround behind the scenes as strategic consultant in my career, my simple advice for transformation leaders is people don’t just care what you know unless they know that you care.  You need to earn that by caring and then knowing.  It takes inspirational motivation to motivate managers to commit to the vision of the organization no matter how hard it is to achieve the vision. It also takes intellectual stimulation to foster innovation and creativity to challene the groupthink or yesthink. It is as much an intellectual undertaking as much as an executional exercise.

The world is not ending. Winning for tomorrow requires a vision. Brilliant strategies don’t show up spontaneously particularly for complex and fast moving industries. It comes from strategic dialogues, strategic foresights, options, even failures and mistakes. The ability to see the problem as a whole and then integrate a variety of perspectives and not simple quick fix. There is no simple quick fix.

Robert Parker's Wine Scoring System Can Be Applied In Business Too.

Robert Parker is the most widely known and influential wine critic in the world today. His popular wine scoring system was the first simple way to determine the quality of wine. Parker is known for his preference for powerful reds from Napa and the Rhone and has inadvertently made becoming a wine critic almost impossible, since— in part because of the success of his scoring system. That takes a lot of fun away. Can you imagine we have scorecards for wine, food, paintings, music and dance? We can do that for business but not for art. Wine is art. Well perhaps business is art too!

Getting 90 points means a wine is of superior quality and character and is something you can share with confidence with friends and clients. And they don’t necessarily have to be expensive and sometime can be within reach. If a 90 point wine costs $30 then it is a smart choice. But it should not automatically means that you will like it? Same thing for business, an outstanding business model that delivers above average return may not necessarily be the right business model for you.

Wines rated 95-100 are considered classics, the best of their kind. Less than 2% of the 20,000 wines we review each year earn “classic” scores. Wines rated 90-94 are outstanding examples of their types. Wines rated 85-89 are “very good,” and under 80-84 are “good,” that is, they are clean, balanced and enjoyable. Anything below 80 points are generally not recommended.

I am not a wine expert. But I pick wine for all my best friends. But I think wines can be both good and good value at any tiers. I can recommend good wines that are ranked under 80 and bad ones over 85. For example, if I want a bottle for a weekend dinner with friends, an 85-point wine at $25 to $30 may be a better choice or good enough choice than a 93-point wine at $75 wine that requires five years in the cellar to reach its full potential. There is something call good enough. And it applies to wine, design, marketing and engineering. Over design, marketing or engineering often achieve the opposite results.

You need to understand the wine descriptors and understanding which wine embodies which traits. Scoring is only for general guidance. I find these traits can equally effective to apply in scoring of business strategies and models.

BALANCE

Wine like Pinot Noir needs to achieve a balance between the acidity of the grape against the flavor and texture. For business, you need to look at the business strategy to ensure a balance between investing for growth and delivering earnings. To avoid underinvesting that can cause a downward spiral. Yes you still need to deliver a P&L at an acceptable level in terms of earnings and ROICs but should never be at the expense of staying relevant and jump starting growth.

Recommended: Montecastro, Ribera del Duero, Northern Spain Red.

STRUCTURED

Structure is the framework that supports the elements of flavor, tannin, acid and sugar. The structure dictates the first taste to mid-palate to the finishing flavor. For business, a proper structure ensure there is a flow from ideation of new business opportunities to understanding what market it is trying to serve to the final go-to-market planning. The first taste of excitement of an innovative idea needs to be executed flawlessly and it takes a good structure.

Recommended: Louis Martini, Sonoma County Cabernet Sauvignon.

FRUIT FORWARD

Remember that first sip of wine provides you with the flavor of fully ripe fruit. That’s the kind of wine I like. The fruitiness rushes into your mouth. Fruit forward wines are primarily about the grape / varietal expression, over the expression of either place (i.e. terroir) or winemaking practices such as the use of oak, lees contact or managed oxidation. This is the same for business, customers need to get the sweet taste and delight in the form of customer experience when they first encounter your brand. Companies that do a good job in creating a memorable delight can be ahead of its competitions. In business, it means Delight Forward. Unboxing is a good example.

Recommended: Dehlinger, Sonoma County’s Russian River Valley.

BRIGHT

A wine can be visually bright, have bright aromas, or flavors. In each instance the wine is perceived vividly with high clarity. A business can be bright, it is when the company successfully create a culture of “brilliance” – a lot of common sense in how decisions are made by mid-level management. Bright is independent of experience. The ability to think quick, to look at options, to compare and synthesize—all these skills are particularly important to build a culture of "brilliance". The cycle of exploring, mapping and reasoning, asking the right questions, is really what builds organization capability to think critically and be brilliant. The best companies are always in pursuit of brilliance.

Recommended: Frei Brothers Reserve, Russian River Valley Chardonnay

There are two more attributes in the scoring system: Creamy and Fine Tannins. Anyhow, these scores make it simple for some to look at a wine, But it is actually quite difficult to pin down. Is an 89 good, very good or great? Is there really a difference between wines rated 91 and 93? Knowing that there are inconsistencies, prejudices and palate differences so wine needs to be re-tasted every couple of years. The same case for business, a business strategy that is working needs to be revisited every few years.

"Nothing makes the future look so rosy as to contemplate it through a glass of Chambertin" -Napoleon Bonaparte

The Best Kept Secrets Of Breakthrough. Everyone Should Start Practicing Them.

Everyone is looking for a breakthrough. The massive shift in generation differences in consumer behavior and rapid technological shift are casuing many companies to fail.... and it will happen fast. Companies that are stuck in their old mental model cannot breakout for many reasons. It is usually a combination of all that causes them to be irrelevant. It includes leadership’s blind sight, organization legacies and lack of foresights and the list goes on and on...

How often companies can act swiftly and not taking a wait and see attitude? All the time. It takes strong leadership to take bold decisions even though they feel fear while making these decisions. Here are a few ideas, which I often make accessible to a my select clients. How do breakthroughs happen? It is not just luck or strategic thinking. Can they be engineered? Are there preconditions? Or is it a skill that we can develop and learned? When companies are stuck whether in an old paradigm of doing business or a legacy business design, they need breakthrough.

Exploring the “Grey” area. The central core of organizations contains beliefs that were built up over the years and a value system that provides us with perspectives of the world and forms the grayscale of our personality. Seeing the world in black and white is terribly dangerous. Sticking to your core does not mean you should not understand the ‘grey’ around it. Making explicit attempt to push the “grey” area of what consider your core.

Anticipate and Leverage Moments Most breakthroughs don’t happen through excessive rationalization or planning. In fact, almost all breakthroughs are sparked by “moments.” This is one of the things I teach people about looking for breakthroughs. The process of finding any breakthrough – whether in business, technology or design – often involve immersing oneself in large amounts of data and extensive debate and synthesizing information. Most people fail to see the moments when they happen or fail to capture them. I have a long list of things you can do to maximize it happening.

Expand Awareness through Emotions. There is so much myth about emotions; we often associate them with the extreme cases when we overreact or how they prevent us from making the right decision or making us too aggressive with the things that we want. These are all true, but emotions also have a positive side – if you know how to use them. Emotions are our inner sensors at work, sending us weak signals from the outside. It triggers our desire to heighten our senses as our whole and even affect our brains in memory, basically expanding the operating parameters of our cognition. It helps us take in more information, store them in a deeper place inside our mind, hold multiple ideas in mind at once, and layers a feeling over objects and situations.

Imagineering as Daily Ritual. Unless you’re in the business of creative production such as film, animation or video gaming, most likely you don’t have a need to use imagination in your daily work. But imagination is not a tool we can call up on demand; we need to practice it every day in order to maintain our ability to imagine. Imagination is a major part of how we frame and solve problems. The practice of applied imagination (or imagineering) can increase the number of creative options available for a specific problem that we’re trying to solve. Imagination is part of our subconscious way to assist with idea generation. You’re not so much thinking of specific ideas of how to solve a problem, but rapidly and randomly envisioning what might be, what could be, and what couldn’t be. It's very easy to compare creativity and knowledge in an abstract, metaphorical sense – but we know that our imagination is developed from the knowledge we gain in the experiences of our daily lives and little encounters.

Practice Design of Meanings. Try to design a breakthrough project or pilot activity for yourself as experiment. Some breakthroughs are sparked by eureka moments based on insights – but far more are based on design. Design-driven innovation is spurred by thinking about possible breakthrough features, meanings and product languages that could emerge in the future. This cannot be done by talking to consumers or looking at current user behaviors. Consumers can’t really imagine radical futures, as they are anchored and invested in the current one; thus they are not helpful in anticipating possible radical changes in new product meanings. Big breakthroughs don’t necessarily come from disruptive applications or advanced functions; sometimes it’s new meanings that shift the universe. Think about how every one of the everyday objects that we see around our home can be transformed: instead of being simply functional, consider how to turn them into symbolic objects of irony, desire and affection.

Let's Not Confuse Drawing Circles And Arrows With Real Sensemaking.

As everything is moving faster and less predictable as it seems while organizations struggling to understand what it means and what options to take and how to land on the right decisions at the right time.The results often are inactions or delayed repsonses that cost companies.

Both senior and middle managers’ job include understanding, interpreting and communicating options for executive decisions, both as change agents and advocates. The toolkit that they have is very limited. Sensemaking is a vital skill and a new managerial discipline that is lacking across many organizations and functional units. How do we define sensemaking? It is how we try to make sense of the world and associated challenges so we can see and act in it. It also carries the concept of sufficiency, which is whether we know enough about the interrelationships and dynamics of the scenarios (events, places, people etc.) to make a contextually appropriate decision.

The two main academic thinkers in the field are Karl Weick and Brenda Dervin both of their work are very user readable. Weick I think tends to apply a more normative and organizational approach while Dervin looks at individuals and communication. Karl Weick emphases the importance of “mapping.” It is not enough to collect a lot of data, as we do these days and it is often overwhelming for managers, what is really important is that we need to take that complexity and map it in a simple way that can be communicated and shared so that a team or an organization can have a shared view of what the environment is like right now. Make complexity communicable but yet not making it overly simple.

I have seen people drawing simple circles or big maps with arrows and boxes but fail to communicate anything except the situation is complex and end up comfusing themselves as well as others. So beware of those fancy arrows and boxes that are useless. Good mapping provide managers with the benefit of seeing what’s going on and comparing that with their mental models. Good decisions making depends heavily on good sensemaking that includes important cues and signals so managers and senior executives can have a bigger capacity to make sense of uncertainty and emerging behavior. It has always been a core part of our strategic design thinking toolkit and there is no shortage of demand from clients to learn that skills. 

How Do Breakthroughs Happen? Here's My Little Secrets For Breakthroughs After Helping Executives For Decades..

How do breakthroughs happen? Can they be engineered? Are they pure luck? Or are they the result of skills that we can develop and improve upon over time? Along with the fear of the unknown and the pressure to make it happen, breakthroughs come with an incredible sense of possibility and satisfaction.

The experience of uncovering a breakthrough is exhilarating and hard to explain. It’s a sense of not knowing exactly where I am going, but knowing that I am going somewhere. Here’s my secrets to achieving breakthroughs:

• Preserve the “Me”. The world we're living in today seems to be a completely different one from 10 or 20 years ago and a crazie one. Sometimes I wonder if the world is really changing that fast at a break-neck pace. There is a notion that if you can’t change the world you should change the way you look at it, but I don’t like the idea of changing myself according to the world and adapting to it. The central core of what’s “me” contains beliefs that we’ve built up over the years and a value system that provides us with perspectives on the world and forms the grey scale of my personality. Black and white only exists in film, photography and my Prada suit; seeing the world in black and white is terribly dangerous. The person who views things only in black and white will always be miserable or unsuccessful in whatever they pursue. That’s not and never was the rule of the universe. Sticking to your core does not necessarily mean you are not open to the world. It means you open the world to “you” and everything you experience adds one more layer of sophistication to the “you” and heightens your awareness and sense of being. Any personal breakthrough need not give away or suppress the “you.” What you experience every day should make a beter “you.” Breakthroughs require the “you” in “you.”

• Anticipate and Leverage Moments. Most breakthroughs don’t happen through excessive rationalization or planning. In fact, almost all breakthroughs are sparked by “moments.” This is one of the things I teach people about looking for breakthroughs. The process of finding any breakthrough – whether in business, technology or design – often involves immersing oneself in large amounts of data and extensive debate and the synthesis of complex information. Most people fail to see the moments when they happen or fail to capture them. I started working to facilitate these moments a long time ago, making them happen more easily and more often. How I ask questions and how I push people to their limits (as I do with my staff) is one way that I try to help them to experience moments. I feel bad for sometimes being seen as critical and demanding, but that’s how I get myself and others to create those moments.
• Expand Awareness through Emotions. There are so many myths about emotions. We often associate them with extreme cases where we overreact, when they prevent us from making the right decision or make us irrational pursuing things that we want. This is all true, but emotions also have a positive side if you know recognize and respond to them. Emotions are our inner sensors at work, sending us weak signals from the outside. They trigger how we expand the operating parameters of our cognition, help us take in more detailed information, hold multiple ideas in our minds at once, and ascribe meaning to the things, people and events in our lives.
• Imagineering as Daily Ritual. Unless you’re in the business of producing film, animation, video games or other highly creative outputs you most likely don’t have a need to use imagination in your daily work. But imagination is not a tool we can call up on demand; we need to practice using it every day in order to maintain our ability to imagine. Imagination is a major part of how we frame and solve problems. Much like yoga, tai chi or voice training, imagining requires that we put in practice time in order to expand our ability. Applied imagination (or imagineering) can increase the number of creative options available for specific problems that we’re trying to solve and help with tasks like ideation. Rather than focusing on developing ideas or how to solve a problem, Imagineering is about rapidly and randomly envisioning what might be, what could be, and what couldn’t be. It's very easy to compare creativity and knowledge in an abstract, metaphorical sense – but we know that our imagination is developed from the knowledge we gain in the experiences of our daily lives and works by employing that information subconsciously until it’s ready to break through into awareness.
• Practice Design of Meanings. Try to design a breakthrough project or pilot activity for yourself as an experiment. Some breakthroughs are sparked by eureka moments based on insights – but far more are based on design. Design-driven innovation is spurred by thinking about possible breakthrough features, meanings and product languages that could emerge in the future. This cannot be done by talking to consumers or looking at current user behaviors. Consumers can’t really imagine radical futures, as they are anchored and invested in the current one; thus they are not helpful in anticipating possible radical changes in new product meanings. Big breakthroughs don’t necessarily come from disruptive applications or advanced functions; sometimes it’s new meanings that shift the universe. Think about how every one of the everyday objects that we see around our home can be transformed: instead of being simply functional, consider how to turn them into symbolic objects of irony, desire and affection.

Strategy Lessons From The Safari. There Is More Than Just The Survival Of The Fittest.

I recently took my strategy and innovation class out of the classroom. Guess where we ended up? A safari or a zoo (whatever you want to call it). What’s a better place that teaching strategy where you can see the survival of the fittest. It was a suggestion from my students.

History is filled with examples of animal species with Dinosaurs as the lead example that were made extinct by their inability to adapt environmental change and the prediction from scientists is that there are more to come. An alarming finding that was published in the scientific journal Nature that suggested more than a million existing species could be extinct by 2050 because of climate change. Probably 80% of those species we have never heard of.

Can studying why species in the safari went extinct provide us with lessons for business? The answer is a yes, the first being that not everyone will survive. Everyone knows that but the big question is how to make sure your company is not on that list? To survive, it means understanding what is your food chain. There is a simple food link between two animals and many animals struggle to obtain adequate amounts of their particular food(s) and cannot simply change their diets as other foods becomes available and ultimately face extinction. For business, the lesson is about your revenue streams might not sustain as the industry structure shifts and you need to reinvent your business models. Companies needs to change diet before they run out of food.

The second lesson is to know your role in the food chain. Some animals in the jungle can eat both plants and each other, as well as use each other for shelter and nesting. Companies need to learn to use other companies by way of strategic alliances to shelter competition to increase their chance of survival especially for those who are not in a position of influence the market. Think about what these terms like predator, prey, continent, climate, and habitat means in business strategy and what role does your company play? Darwin suggested that extinctions were a prolonged and often undetectable process. It is true for business as people or animals in the jungle don’t see survival in a strategic manner.

The third one is understanding your competition and their innovation capabilities. Companies should not just worry about the external change such as discontinuties but need to be aware of the evolutionary potential of other companies or species if we are talking about the safari. Animals cannot do that because they do not posses the intelligence, nor will they hire consultants - but companies can. It is the practice of strategic foresights, what we do that to ensure companies can engineer their own evolution and create their most favorable conditions for that to happen. Someone once said “The rules of the jungle do not apply to those who wrote the rules of the jungle." There is a lot you can learn by spending a day at the safari with me.

 

China Is Pushing The Frontiers Of Innovation. It Needs To Move Beyond Just Technological Progress. China Is Behind In Commercialization And It Is A Big Gap To Fill.

There were lots of interesting debates about "new thinking around innovation and future development of enterprises in China.” With almost three decades of sustained economic growth and orchestrated government support for advance technology research resulted in a large talent pool (but still not large enough) and many are well trained by foreign univerisities and companies.

China has made impressive achievement in many areas including network technologies, article physics, structural biology, genomics, human space exploration, supercomputing and high-speed rail which is part of China's centrally designed and state-led innovation model. Moving towards a more innovative economy is one of the main challenges facing China's President Xi Jinping. He understands what is important for China to sustain prosperity and development. China has developed a range of policies to create "indigenous innovation" to reduce dependence on foreign countries for advanced technologies including government procurement, competing technology standards, and requiring technology transfer from multinational corporations in return for access to Chinese market. Is this enough?

At the same time there is more proof that the western style of management is becoming more and more less effective and sometimes even becoming a barrier to innovation reform. To achieve China’s vision and development goal, China must produce and support innovators whose ideas and execution will enable China to create greater and broader economic wealth beyond manufacturing, infrastructure and real estate development. For most companies in China I've talked to, they are a long way from understanding what it takes to make innovation real beyond basic R&D and to compete outside of its demestic market.

China’s innovation cannot just rely on progress in science and technology but in both education and research; the most crucial piece is to be able to own the core technologies and design applications (let me stress - technology alone is not enough, without design), which China is still reliant on foreign companies. The most important strategy is to acquire innovation skills as a core capability so China’s companies will be less dependent on foreign IP and can create ecosystem of technologies that local companies can build upon.

Innovation goes beyond idea generation but also commercialization. It requires a new level of thinking and cross-industries and collaborative-competition that is currently not happening in China. Currently, the model of business education doesn’t deliver on innovation training as they basically modeled after the west.

Most of today's Western style of management and business problem-solving is primarily made up of prescriptive remedies still very much rooted in decades-old conceptual frameworks, developed in the 80’s as a response to pressing events then. They not only have long outlived their usefulness for Fortune 500s, they were not designed to handle today’s unprecedented pace of continuous disruption nor are they irrelevant when applying in emerging economic power such as China which has a very different historical, political and cultural values as well as a unique operating environment and a well deserved national aspirations.

My guess is that 80% of what they teach in business schools MBA’s curriculum today are not applicable for managers in China. Despite managers in China being thirsty for management development training, the net results are less to be desired. In short, we are beyond the point of questioning the effectiveness of western management practices; we need a China approach to management. Or perhaps China should take on the role to reinvent management.

Will 2014 Be A More Exciting Year For Consumer Electronics? Consider 2013 Was A Disappointing One. More Next Week.

2013 was a disappointing year for consumer technologies. The 3D television push was as I've expected a disaster and who on earth would walk around at home with 3D glasses and the lack of 3D programming etc. created all barriers necessariy for mass adoption. And for smartphones as there were lack of any real innovation from the industries.

Perhaps the dominant design pioneered by Apple is really reaching the end of its S-curve, even the iPhone 5S has only incremental changes (ok a better processor) in design and software. I am ready to bet that the fingerprint sensor will be dropped within 3 years. What is so great about a fingerprint sensor? It is so old school whether it is finger print or facial recognition. The iOS still remains the most polished, stable, and well-designed operating system for smartphone. May be people aren’t even expecting more from smartphones at all. The camera needs some improvement for sure. And the screen size is an interesting discussion.

China is watching and Lenovo is gearing up for the next game or the world game. Lenovo, currently the second largest smartphone vendor in China and aspire to become market leader. Apple is at threat and at this point they may not be afraid of any. They are at its peak. And they are busy with the new headquarters, refreshing the retail experience, designing the iWatch and finding the next color for iPhone whether it is blue silver or rose gold.

Android now accounts for more than 80 percent of smartphone sales, while iOS is down in the mid-teens. Apple need to change the game or someone will. Smartwatches is still a toy category. But that could change when Apple fixes many of the challenges. They will and can. And it will cost $300-$350 and people will buy. It is easy one from a strategy perspectives but also a lazy one. Have they run out of industries to reinvent? At the Consumer Electronics Show this week, I think Samsung will have the biggest, most new products and most populated booth. Apple’s main threat is Samsung, Microsoft, Google and Lenovo are all attacking Apple from behind. The whole wearables will be driving the new game and 2014 will be a more excited here. I do believe that we will see wearables showing signs of becoming mainstream this year, and we've been monitoring and prototyping all kind of ideas for 20 months. 2014 I expect te see different dominant designs emerging, there will be no winners anouncement this year, not until 2016 earliest. But I already know who definitely won't work.

What Do We Need More? Managers Or Strategists? Or Design Thinkers?

In business school we are taught the difference between a good decision and a bad one, and how to leverage a good one to get the most out of it. We are also taught that the best decisions are those that minimize risk and produce the highest return. On the ground, management decision-making is never that simple.

We want managers to have a vision for the long term but be flexible enough to respond to competition in the short term. We want them to produce consistent results and yet experiment with innovative ideas for growth. We want both change and stability. If change is the only constant, its constant companion is the avoidance of change.

Because the future is full of unknowns, it’s far more comfortable for managers to pursue stability by optimizing existing core business operations than to prepare for change. There is no theory to teach managers how to achieve a balance between the known and the unknown; the ability to do that comes from experience. But if your experience is defined by an unwillingness to step outside the envelope of stability, you will never know if or how the unknown may help you make a better decision. You will never think beyond the immediate tactic. You may become the world’s best manager of the known, but the least able to think strategically about the future. And the future is where the money is supposed to be. Just ask your shareholders. This unwillingness to strategically embrace the unknown is often why companies fail. When they do, we naturally apply 20/20 hindsight to expose all their wrong moves or analyze how management didn’t act fast enough or how it refused to act at all.

Sometimes management acts too slow to transform the organization when the value is shifting to other activities. Sometimes it bets on new things and fails to protect the core. Sometimes it just can’t keep up with rate of change caused by technological disruption. Is the lack of management development progress for the last 30 years a contributing factor? We produce tons of MBAs every year (it’s estimated to be over 150,000 in the US and 375,000 globally). Should we not expect companies to be smarter as a result?

In the current business climate, management tends to prioritize risk-avoidance and career protection over bold strategic action. Managers operate in fear and tend not to bring their imagination and empathy to work. They succeed by avoiding blame when things go wrong and taking credit when things go right. We forget that the best managers take calculated risks and develop strategies to encourage others to do the same.

For the strategist, the only true way to maintain a useful level of predictability is to actively engage in the shaping of the organization’s future. Through conceptualization and development of forward-looking scenarios, an organization can equip and prepare itself for the inevitable future. Our emphasis on education and management development has been on training managers more than training strategists. Today, we need strategies more than ever and we need to convert our top managers to strategists. We need to encourage and empower mid-to-senior managers to take bolder risks and become the innovative force that out-strategizes the competition.

The practice of management needs to move away from purely avoiding risks to a deeper understanding of risks and how to master them to develop business opportunities and create value. Ultimately we need to train people that are equally versatile as managers and strategists. That's why Design Thinking can play a big role. Whether you're a good manager or strategist, you also need to be a good design thinker.

This article is an except from the coming issue of MISC magazine the Balance issue which will be available in bookstores Dec 2013.

Some Celebrate Failure. Some Even Romaniticize Failure. The Best Strategy Is To Avoid It!

The new M/I/S/C Bounce Back issue is out in newstand.This issue is packed with great articles about how companies should deal with adversity. It is one of the best issues ever.

For the last few years, magazines have made failure romantic, and start-ups love their failure stories. It’s true, there are some great stories out there: at the top of the list is Steve Jobs who was fired from the very company he founded. J.K. Rowling took Harry Potter to 12 publishers; all of them turned her down. Walt Disney filed for bankruptcy in his early twenties.

And there was Bernie Marcus who was the son of a poor Russian cabinetmaker from New Jersey who got fired from his job working at hardware store. With US $2 million in capital, Marcus and a partner went into business and opened a different format store with hangar-size, no-frills outlets, friendly service and a huge selection of products, they called it Home Depot. For Marcus failing was about character building and part of the journey to excellence.

These stories are both motivational and inspirational. Magazines from Fast Company to Harvard Business Review jumped on the bandwagon, selling the message it’s ok, even cool, to fail. Some people take this as a ticket to push bad ideas forward. Sometimes people carry failure as a badge of honor. There was a guy who wanted to join our company; his resume read ‘six times failure, a proud veteran.’ When I asked him whether he had any confidence that he will succeed the next time, he said no. It sounds like Vegas to me. The organizations we design and operate are not agile enough to support smaller experiments and the bigger the company is, the harder it is to bring innovation to the market.

Companies are using the stage-gate approach, taken from product development, to the innovation process, which is a big mistake. They’re also applying the wrong metrics to measure innovation projects. But the fact is failure is a bad thing – if you can avoid it, avoid it. Instead of putting too much focus on those who ‘made it’, and their struggles and resilience, we should be really be focusing on teaching people how to avoid failure in the first place.

The problem is we should not encourage people to fail, but should not penalize them either. We should be encouraging them to take calculated risks. The danger I am seeing is when young people embrace failure in the wrong way. It almost seems like they’re trying to race through more failures to earn a badge, rather than trying the best they can to give the idea the best chance. This ‘failure movement’ is mostly supported by mediocre people who have few ideas and cannot execute. They continue to romanticize failure, to the extent that they start to expect it. We need to prepare for failure, but never expect it. The failure movement is growing an irresponsible attitude toward risk-taking and Design Thinking.

Just because you fail many times, doesn’t mean that you have a better chance of emerging from challenges unscathed. It gives people an excuse to think harder and learn to apply Design Thinking principles to model scenarios to avoid or minimize failure. Most innovation can’t avoid failure. In fact failure is often by design, it is part of the process of iterative development and market learning. I don’t consider that failure.

Prototyping and learning from mistakes can ultimately lead to a higher chance of success, but it also de-risks project mistakes that usually come from the weaknesses of our human mind, such as hindsight bias. We should be teaching people how to deal with those biases.

The failure movement often falls prey to both of these biases. How many people can you name that went broke while attempting various business ventures, and are still broke? Can you write a list of these people more easily than a list of successful entrepreneurs who overcame immense obstacles to succeed? I think we are giving ‘failure’ too much credit.

I can see why those stories sell, they’re comforting to read and somehow people feels closer to success. This is not the case. If you’ve failed 50 times it doesn’t mean you’re closer to making it. Let’s stop over-glorifying failure and avoid the pain. We know what it means when you have your fingers burnt once. The smartest way is to teach people to learn from Other People’s Failure (OPF). There is so much we can and should learn from it.

When I teach my strategy courses in master level programs, 80% of my teachings are around how companies fail and how to avoid it in the first place. For me, it’s called ‘strategy.’ There are so many free lessons our there, you don’t need to pay the price to feel the pain. Someone did it already. There is no need to romanticize failures, instead, we should learn how to best avoid failure and, in the worst-case scenarios, be prepared to bounce back from it. That’s what Design Thinking can do.

For the full story, pls see the June issue of M/I/S/C which is available in 26 countries and digital subscription is available through Zinio.