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.

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.

Even If You See The End Is Coming. You Still Need A Strategy Out. It Is The Time To Think New Game.

Almost all companies at some point face some serious crisis. Sometimes it is clear that the end is near or coming and no can see the light at the end of the tunnel, at least not until you see it. Sometimes you know there is a way out but not sure how.Facing with disruptive changes driven by innovative technologies or shifting regulations, it is clear that the strategy is no longer working. You see the demand of your products is disappearing or new business models or low cost payers are eating your lunch. What do you do?

There is often a short window of opportunity to do something radically different; it has to be drastically different. Any incremental change or window dressing will push you closer to the end. If there’s a chance (there are always chances) of saving the company, make sure your executive team is focusing on three things. Read on.

For decades, I have been studying, observing, advising, and directing companies globally on their journeys to find growth, reignite growth, avoid decline, avoid death and reinvent themselves. Here are the three things you must pay attention to:

The first one is stop and think. Don't push the panic button. Go on a short vacation (go somewhere far) and find some time away from the madness and clear your mind. Think how to steer your organization’s course away from the one that got you into this mess in the first place. Don’t madly run around rearranging the decks chairs on a sinking ship. Find the source of problem and stop the leaking. Avoid hanging to the past, board of directors have different views and industry lifecycles are showing something different. The one thing for sure is what was working in the beginning would not work today and in times of uncertainty people go back to the past and hang on to something that once worked well.

Think what strategy will leapfrog you into the future. What business model options are there and what behavior will impact customer preference in the future. You need to think ahead more. Executive focus on rather short-term horizons due to public pressure in the case of public companies and forget about how important it is to create the future. They assume the same formula that gets them there in the first place can get them there to the future. Or they focus on internal politics and as a result cause inactions. The organizations are operating on old mental models and not recognizing that their business models have expired. They failed to reinvent their core and yet they have no clue on to how to invent the future. There are endless debates and power points but no action to invent the future.

The second one is to give your company a larger purpose. Don't underestimate the power of purpose. It needs to be big. It cannot be about you or customers, that’s not enough. What is your version of “making a dent in the universe?”

To keep people focused and inspired, give them something to work toward. We all need a reason to come to work (at least for the best people) and there is not a more important time to remind them. Otherwise they will leave. We all need a purpose; it is the only thing that people can hang on to through tough times. It is what makes the company resilient.

The third one is maintaining positive emotive energy. People are going to be worried, insecure, frustrated and even angry. You need to care about them and allow room for them to express it while making sure leadership radiates a sense of energy, not fear. Energy doesn’t come from empty words but a real sense of optimism backed by strategy and action.

A sound strategy to bring back the company is what forms the core of the energy and radiates them through open dialogue – not newsletter or email. Don’t drive these discussions underground and make sure all senior executives are available to talk with people. Open communication is important to maintain the trust.

All great companies go through very difficult times at some point and some even have near death experiences. They survive disruptions and even self-destruction in order for them to get to the next level. No companies are immune and anytime we think we are safe we are taking the first step on the path to decline. The concept of core competencies is an interesting idea. Whether the companies’ core competencies are giving products and services unique functionality or building a worldwide distribution, this could lead to a decision with companies avoiding to think "New Game." It provides logic for the strategy but also limiting strategic options. In the strategic making process, competencies need to go beyond the core. It is not a time to be academic. Strategy making is a dynamic exercise that allows you to see the whole system (industry) before you zoom into your value-creating activities.

When companies are on a path of rapid decline, and see the decline accelerating, they go into a panic mode and embark on multiple tactical measures that are not addressing the core problems. Being able to frame the core problems even under extreme pressure is critical and not putting 100% of your energy on things that doesn't matter. All the repeated unsuccessful tactical attempts will drain the company’s resources, human energy and customer confidence until they have no turning point. Maintaining the energy or Chi (Chi is a Chinese word meaning aliveness, life force energy or life breath) is vital for turnaround and it doesn’t matter if you have the right strategy, without the energy or Chi, you won’t be able to execute the strategy.

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…

Virtual Reality Is The Next Big Thing. Beyong Shocking And Disruptive. It Will Create Tens Of Billions Of Value. Who Will Win This Game?

The world is becoming crazier and more exciting as Virtual Realities are becoming more real and the lines between our physical world and virtual word are fast becoming blurred. Next year 2016 will be an important year as companies are finally making virtual reality real with only 2 main players participating on the race: HTC/Valve, Facebook/Oculus will be making VR products available. Microsoft is partnering with both Valve VR and Oculus while Sony is pushing hard not to miss the bandwagon with Morpheus.

The user behavior of VR has yet to come to shape and will be evolving for the next 5 years, the idea of information conveyance is interesting and playing a special role in the realm of virtual and augmented reality. We are learning to design cues in the VR world to tell users where to move or go or to touch. This is still a challenge as don’t think about it that much in the physical world. We walk into a room assuming the chairs are moveable and the cabinets are not. That sense of reality has changed in the VR world. Anything can happen to everything. It is like living in a dream.Those who have experienced the HTC/Valve Vive were completely fascinated by the experience. HTC Vive is clearly ahead of the game.

For VR, unlike 2D gaming or in the real world, we have arrows and signage to tell people where they can go. In the VR world when user is wearing a head-mounted display, the users are actually operating in two realities – the real, knowing that the user is wearing these gears and the virtual, which is so immersive (more so for the HTC/Vive roomscale technology that allows you to walk around the room) and therefore difficult to find a frame of reference.

The question is do we want user to have the feeling of wearing a space suit or simply feeling they are acting as normal with no gears on them? The awareness of wearing a suit will remind people they are in a VR world unless the suit is a normal suit. While body motion sensing is great when body movements are being interpreted by motion sensors as perceived input and turns it into commands and controls. Basically, with this technology, you are the controller.

KOR-FX is making an interesting gaming VR vest that uses acoustic feedback that, in turn, is processed into haptic feedback. Its software analyzes the feedback felt by the user, depending on what’s going on with the on-screen and what the user is doing it with. The controller “acousto-haptics” is to define acoustic feedback that is being felt.

Sixense is another company currently developing a wireless solution to hand input in virtual reality with the STEM System making use of alternating current (A/C) electromagnetic field to accurately track body movements in terms of position and orientation within a radius of a stationary base.

In designing VR experience, the haptic side of things is perhaps the most difficult to address. Oculus has yet to demonstrate an “official” control mechanism for the Rift, instead letting each developer use the peripherals they find most suitable. I am speculating they may end up figure out a visual hand-tracking technology from a front mounted camera. So what is the best way to navigate in the VR world? Input is still a key challenge for VR as a pure look-based movement (turning your heads) supported with some analog input (mouse in your hand as an example) but sometimes the head is looking at a different direction and the hands are not in sync. This can causes problems as if the system is receiving two very different commands.

Expanding information conveyance is still early in the usability learning curve and we are a few years away before arriving at a dominant model. There are still many creative options we can explore and they are not mutually exclusive either. A voice based system guiding the user as an example. Once we start adding social interaction in shared virtual environments, it will explode. Social VR means social presence and this is a $20 billion dollar business at a minimal.

The inevitable evolution of inputs in some form of controllers will keep coming. Xbox and Playstation will need to think how to migrate their current controllers to take advantage of the new requirements (not easy) and we can expect to see more innovation from start-ups including companies such as Razer Hydra from Sixense, or camera-based systems which are limited by the camera’s line of sight. HTC/Valve is also working on some cool solutions aiming to provide the best and not just the first.

Immersive VR systems that alter your sense of physical reality can give user the illusion that you are located inside an unreal virtual environment – or a telepresence - the ‘sense of being there’ or ‘feeling of being there’. In the early 1990s this idea was transplanted to virtual reality, where instead of being at the remote physical environment, the participant was in a virtual environment with a sense of being at the place depicted by the virtual displays.

A Swiss healthcare hybrid MindMaze announced its pioneering move into the VR and gaming spaces with MindLeap. Combining headset-mounted neural sensors and motion-capture cameras, the system is designed to “facilitate neuro-powered immersive virtual and augmented reality” on consoles platforms as XBOX, PlayStation and Android. This is still in development and I am not sure if it can be done soon. They leverage technology developed by the company for a range of medical applications in treating neurological deficits, such as helping amputees control robotic limbs. Neurologial control is still a bit of science fiction and will be a long way before it can be mass commercialized. I like to dial my HTC M9 with my brain some day.

For now, we will be sticking with head-mounted and handheld controllers. They are enough for us to re-create boundaries and rethink presence. Every time you pick up a HTC Vive,  you are about to enter a virtual boundary that didn't exist before. Exciting and also scary!

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.

Five Deadly Mistakes of Organization Transformation That Leaders Must Avoid.

So you are ready to transform your organization? You want your organization to leapfrog the industry? You want to deliver above industry average growth? And do you know what are the most common mistakes that leaders and even very smart and experienced leaders make? The most common one is sticking with the usual way, the easy way and the proven way. There is no usual, easy and safe way if the company has not been doing well or satisfactorily underperforming. It is not just about making a good product anymore. Leaders need to ask how does one make a meaningful contribution to society with product?

Whenever I was tasked to help global enterprises to move the next level, the first thing I did was to stop them from doing things the same old way. It was never easy. You don’t go the next level without taking calculated risks, offending people and forcing people to do things differently. No one wants change despite whatever slogan or lip service about how people want change. And everyone wants breakthrough. There is no free lunch. No pain no gain.

I’ve been working with some of the best high performance global leaders for decades to breakthrough and manage large scale transformation. These are the five most common mistakes CEO and their executive team make and all can easily be avoided.

Failing to build organization energy and momentum. Organizational energy is the invisible force which an organization uses to purposefully put things in motion and drives positive behavior to advance the company’s mission and business objectives. The strength of organizational energy manifests in the extent to which a company has mobilized its emotional, cognitive, and behavioral potential in pursuit of its goals and it makes company resilient. Energy traps often endanger productivity and innovation. You must understand how to release them from being trapped. This is not a one off exercise and cannot be performed by consultants. It is the executive team’s job.

Failing to have a vision and to translate that into a compelling and relevant story. Company cannot develop a strategy without a vision. A vision is not just a statement that vaguely describes a company’s aspiration. It needs to be authentic and anchored on the industry’s competitive reality and illustrate how that future if realized will benefit the organization and allow it to prosper and thrive. The vision needs to show the shared common destiny and a path to get there. Vision without strategy is worst than not having a vision.

Failing to understand how to create value and understand the core value drivers. This is very common for management and it is critical for the top 10 and all C-2 executives to understand what are the critical drivers of value for the organization. These ideas need to be deeply embedded in day-to-day managerial decisions. In mapping out company’s processes and decision structures, the CTV (Critical to Value) notion needs to be reflected in CTQ (Critical to Quality), QTR (Critical to Revenue) and CTC (Critical to Culture). Three of the most important metrics to organizational health. Getting the right decisions on a few of these key CTV points, the company cannot be too wrong even though it may make many execution mistakes which sometimes is unavoidable.

Failing to assemble a super team fast. Any successful transformation needs to have the support of a small high performance super team. It takes time for an organizational to rebuild capability and even hiring new people from the outside takes time. It is crucial that a company needs to assemble a swat team for quick deployment to solve any problem. Any problems that are left alone will signify that new management’s inability to drive change. Problems need to be fixed fast. Otherwise there is no credibility. This super team should always be looking out for the organization. They are people who take decisive action to solve problems. They are people who understand the vision of the company. And they are the people with high analytical ability (typically with management consultants training) and ready to look at any problems even without the experience and domain knowledge.

Failing to get rid of bad organizational habits and the incompetents. Any underperforming organization has bad habits and usually a lot of them. Be it leadership habits or organizational habits embedded in the mental model of leadership or organizational design. The first thing leaders must do is to get rid of these old habits and dogmas and people that are underperforming. The bottom 10% of managers must go. Don’t waste time on them. What do we mean by being strategic?

At the end of the day, smart leaders must ask the following five questions:

1. Do you understand the critical drivers of value and what are critical to quality/competition/performance/culture? Are they part of your management team’s KPIs?
2. Are you doing enough to focus or leverage investments in your core value proposition and brand story? Are you cutting back or divesting fast enough on unnecessary and non-strategic investments?
3. Can you name the top 5-10 people in the organizations that could potentially become part of your super team? If you can’t name at least 5, you have a problem.
4. Where are you spending the time? Are you devoting enough attention to matters that are important to building strong energy and momentum?
5. Are you applying data-driven perspectives on all aspects of decision makings and what areas you are not feeling comfortable that data might not be right or not properly interpreted?

Design Leadership Is More Than Simplicity. It Is About Design Discipline.

El·e·gant, an adjective and define or characterized by or exhibiting refined, tasteful beauty of manner, form, or style. Marc Jacob? Chanel? Jil Sander? Hermes? All are unquestionably elegant by design in the fashion world. How about smartphones or interfaces? Can they be elegant? Or what about customer experiences? Can you describe a banking or customer service experience as elegant? Most people don’t.

Is elegant a word reserved solely for tangible product? The design world likes to use words such as “elegant”, “simple” and “user friendly”, many designers understand how to subtract in creating simple and elegant design solutions. Human factors usually subtract more than add. Good designers often take away complexity in objects or interfaces. Design is more than just making things simple. They appears simple but not necessarily simple. Design is the most complicated process but least understood.

Design should be strategic. Being strategic also means being human. 9 out of 10 designers barely understand what that means. Most are trained as design craftsman. There are very few design visionary and I only know a handful of them. They are also very few design managers. And that’s the reason why designers never made it to the boardroom and they complain they don’t have a voice. Because they are not strategic. Design becomes a competitive advantage for corporations when it is used strategically. At a meta level, design connects the dots between mere survival and humanism supporting by the underlying economics to make it feasible to produce and sell.

I have been hiring and mentoring designers (including some of the very best talents) for decades and can tell you which typology they belong in 5 minutes. It is very easy to find designers, it is not too difficult to find good designers, it is very hard to find design visionary. Because they are not trained in design schools. They need to be cultivated.

But there are so much business can learn from design. If the best design can be elegant, then can a business strategy be “elegant”? Or can a particular management style be described as “elegant”? Anything elegant is often simple; not everything simple is elegant. Things that are simple are often user friendly, not everything simple is user friendly. Sometimes complexity is needed. Simplicity has different meanings. Good businesses need to be simple and easy to understand, and that’s the investment criteria for Warren Buffet. Businesses are getting too complex these days and same for design. Long gone are the days where a few talented young folks sketching out ideas in a room. That's a mindset that stops designers from growing up to a highly complicated world.

Design process is never simple, it is often very messy as everyone has an opinion. Don't try to make it simple. But the result shouldn't be complicated. Design needs strong leadership and no different from other disciplines. Design never works in a highly politically environment and as a result you get design by committee – which is a recipe for disaster. Design management is to take the politics out and allow the essence remains. And the process is true to the mission - design to delight and make profits - not one but both.

Design needs strong leadership. Design never works if it is not managed. Best designers perform well in a professionally managed environment. Not the most desirable for many, but it is necessary. Apple design team is professionally managed and same for Mercedes and Burberry or BMW. There is no design without discipline. There is no discipline without intelligence. Strong design leaders are never popular, because they need to cut out the non-sense that designers to hide behind. To force people to unlearn old theories of design.

Designers wants to remain small, fully independent and less disciplined and that’s why most design firms cannot scale beyond certain size and fail after a few years. They want to ignore the commercial complexities and stay pure. I appreciate that too but companies cannot afford it. Unless it is your own business and you don't care about making profits.

Design for elegance is better for design for simplicity. Oliver Wendell Holmes Jr. once said, “I wouldn’t give a fig for simplicity on this side of complexity, but I would give my life for simplicity on the other side of complexity.” Elegance is “far side” simplicity that is emotionally engaging, profoundly intelligent, and artfully crafted to be two things at once: simple and powerful. In today's super connected world, the proliferation of digital devices and experiences require designers to create new ways of harmonizing software and hardware with elegant connectivity – connecting humans in an elegant way. Industrial designers, human interface designers and mechanical engineers need to explore new theories for them to make physical products real and meaningful and elegant. Why elegance? It is not an elusive target? Industrial designers should stop thinking about functional ease and simplicity, that is an over simplify way of thinking design. Some times people love things that are not so easy. Think about your personal relationships, you don’t go for the easiest one, you go for where your hearts is. Design is the same. How do you put love in an industrial produced object? That’s our job.

Do You Know What A Growth Strategy Is?

This marks the end of another year. A very busy and fruitful year for us. Personally I was on the road for more than 200 days and I need to take a break - perhaps 3 days. What about my New Year's resolution? I need to cut down on drive and email. I need to cut down on attending unprodcutive meetings. I need to find three people to mentor that they can become the best. I need to revisit places from my childhood that were memorable. I need to back up my hard drive (I am 96 days behind). I need to produce a mini feature film and shot entirely with my HTC phone. I need to cut down on my public speaking. I need to have more discipline on getting enough sleep.

For companies, it is time to think about growth. Every company wants growth and it is harder and harder to come by. Many companies are busy defending their shares and don't even the luxury to think growth. The most successful growth companies adopt at least four best practices:

• Earn the rights for growth (business design/cash flow/business architecture etc.) and first focus on the core
• Understand discontunuties and when is the next S-curve coming
• Always think like a designer and think "customer value" first
• Seeing the whole opportunity horizon and understand what it means

A common mistake is comanies jumping into some cool ideas that are simply just novelty and blindly believe that it is growth. The secret for growth is having a robust strategy. Here I will share a little of my secrets or not so secrets. Before that I want to make sure you know that easiest way to fail is by jumping into the future without figuring out a path to get there. You must have a plan. A plan that shows the whole opportunity horizon (built-on-robust foresight) and careful analysys of the industry economics.

There’s no magic solution to jump-starting growth. Growth is a strategy but also a mindset, it depends on how you see and shape your future by the action you take today. It takes more than a vision. It goes beyond just having the best product on this planet. Best product is no gurantee of success today. Often good enough products stand a better chance.

Remember, some used to say that strategy is about “Speed, Price, Quality – just pick two.” I’d tell them, even if you picked them all, it is still not enough. You need to pick, “Speed, Agility, Focus, Quality, Relevance and Price”. Not one, but all, if you are playing to win. Despite popular books and articles may be telling you to try and fail often and even to celebrate failure, I don’t buy those ideas at all - these are excuses for people taking uncalculated risks. Risks are not just unavoidable, but needs to be managed. It needs to provide a calculated return, and not just say take risks and fail fast. That’s for amateurs.

Companies need to understand the full spectrum of their opportunity horizon. And once it is understood, then it takes focus. You also cannot just react to the future because by sitting and waiting you will miss it. You also need to understand the opportunity horizons that you are looking at and how each horizon can be impacted by different degrees of uncertainty. It is more than just aspirations; it takes strategic thinking and a lot of sense-making. After all, corporate strategy is a game of sense-making and organizing for the future. Yet there are multiple futures and the trick is how do you decide to play just one or more than one. This is the part that is difficult for many as they see strategic planning as a mechanical and linear exercise.

First we need to look at the future through three different opportunity horizons then we have a pretty good picture on what is needed and how to act to positively impact a winning business strategy. When we look at successful companies that often playing in different horizons while not necessarily winning all, there are a lot of common factors. But that’s a much longer post to write and for today, let’s look at these opportunity horizons in three stages:

Opportunity Horizon 1: Redefine and reinvent the core. This is about rethinking the core and how to make it relevant. Or how to defend against low-cost high value competition etc. At the minimum it needs to stop market share erosion and if done properly it should be able to jumpstart growth. Reinventing the core requires going deep into the company's core belief system and to realign it with what's going on.

Opportunity Horizon 2: Extend core businesses into related adjacencies. Companies should expect 20-30% of their revenue to come from products or services that didn’t exist today and they should share some economic synergies with the core. Not only should it deliver additional revenue, it should enhance the core to strengthen its portfolio.

Opportunity Horizon 3: Initiate strategic transformation. At this stage, the company should in a good position (both strategically, organizationally and financially) to invest in full transformation, which includes shuffling of business units, assets and markets. Not every company can afford a transformation and they need to earn the right to do so. Many make the mistake of starting a transformation on day one when the company was not in any strategically or financially sound position to do so. Transforming without a stabilized core is a recipe for failure.

I have helped many large companies to orchestrate growth and it takes more than creating continuous alignment and killing projects that are sucking up resources. Killing projects that are not strategically aligned means signaling a changing behavior. A lot of energy is needed to deal with changing legacy behaviors — those that are expended toward the old strategy and not the new strategy. Companies often run on auto-pilot without even knowing it.

Implementing a growth strategy means one must balance activity between constant reinvention of existing current management practices and fostering behavioral change to prepare for the new. It means they should challenge managerial assumptions about how do get things done, what risks to take and the rationale behind them, and develop a list of desired or optimal behaviors that align with strategic goals, and have managers create a “let it go” list of legacy behaviors to eliminate. It is about getting rid of the old and creating new ones all at the same time. Perhaps that is the plan for the New Year.

Happy 2015!

The Come Back Of Hardware. Is Software Becoming A Commodity?

The world is suddenly obsessed with smart technologies and this time around it seems unstoppable. Our everyday electrical and mechanical industrial object will now be occupied and ran by software and connected to the cloud. It also means each object (as small as some smoke detectors and as large as automobiles) will now be equipped with tons of sensors and can be able to adapt to different environment and individual needs.

It is essential that the next wave of industrial revolution will make us more efficient and empowered (and more human I hope), and data will be at the heart of this revolution. That's another big conversation. All the Nest, GoPro and Beats received multi-billion-dollar valuations through private investments or acquisitions and everyone is wondering why these hardware companies suddenly in such high demand. Because hardware and software are going through different commodity lifecycles and now software is becoming a commodity. They used to be difficult and expensive to develop and even to deploy, that that is changing. It is hard for software company to get into hardware much as hardware companies struggle to get into software. Hardware cannot be done by a few geeks in the basement, and involves massive R&D and specialists including megatronics engineers, electrical engineers, industrial designers, wireless engineers and usually takes a longer time to develop.

Software you can fix it with a download, and hardware you can’t. They are massive supply chain challenges when it comes to logistics and component supplies. The value of firms who can marry software and hardware will have a competitive advantage over their competitors. Essentially everything we use today will be fitted with some sensors, processors perhaps, and may be a screen and will recarnate and become of Internet of Things. For the last three decades, software engineering has advanced to a state that sophisticated codes can be embedded into machines. And the availability of cheap sensors and super powerful processors is powering this cycle of data revolution. All of a sudden, software, hardware and communications infrastructure are advancing us into a new era. Old world manufacturing + low cost computer processing + ubligious computing + cloud = smart new world and many cool products.

It sounds like the Apple story all over again, does it? The hardware and software integration capability of Apple, the ecosystem, the brand and user experience are now not only inspiring consumer gadgets company, not it’s influence is beyond its own industry. I know this is an overused story, but he Apple influence is still here, and perhaps it will be here for a long time even when the company stop creating great stuff one day. Microsoft ex-CEO Ballmer saw that coming in 2012 in a letter to shareholders. "It's important to recognize a fundamental shift under way in our business, we see ourselves as a devices and services company." Microsoft had the strategy right but couldn’t execute it fully with the exception of X-Box. Microsoft’s future revenue will still be coming in from software and it isn't going to change anytime soon. The transformation from software to hardware is harder that you think.

The idea that hardware is now the new software is pretty real. There is a business model implication here. These hardwares are mostly priced between $100 to $250 and they a gateway and great way to sell software. We are seeing a revival of hardware and this time, it is hardware first and software and then date on the cloud, it will bring new technological advances in cloud-powered hardware that boosts productivity, efficiency and manifests as beautifully designed objects that fit into our hands and homes.

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.

 

The Bionic Man/Woman Is Now Possible! It Gives New Meanings To Wearables!

Remember that Six Million Dollar Man TV Series? When ace test-pilot Steve Austin's crashed, he ended up in a poor shape that his only chance of survival was to replace human spare parts with technologies. That was the beginning of “wearables” I supposed. The government decided to invest millions to use the latest technology to rebuild him with cybernetic parts which gave him superhuman speed, response and strength and the superagent.

Thirty-five years later, DARPA's Reliable Neural-Interface Technology (RE-NET) is working on it and  trying to improve the speed and accuracy of neural interfaces. Such interfaces can happen in the brain, as in the case of Hemmes, or someplace else farther down the line, closer to the missing limb. It is a highly complicated task to try to translate these commands to muscles that drives the myoelectric arm. Most important is that any of these won’t need a brain surgery or implant. The challenges include weather change and other external factors can affect the myoelectric arm and there is the issue of electrodes slipping on the skin.

The idea of implanted electrodes is very attractive with the goal to provide near-natural hand movement. Another sign og progress is FDA just approved the world’s first approved bionic eye. The Argus II, which treats patients with the rare genetic condition known as retinitis pigmentosa was approved by the FDA after twenty years of research and $200mm of investments. The Argus II Retinal Prosthesis System, which was approved to treat people with severe to profound retinitis pigmentosa, doesn't actually restore vision or allowing them to see, just enough to detect light and dark and the contrast can identify the movement or location of objects. Almost like the first generation of cell phones. We are a few years away before they have advance features. When the photoreceptor cells in the eye's retina are damaged, people can tell the difference between light and dark.

To restore light and dark vision, a tiny chip containing many electrodes is implanted on the patient's retina. The patient wears a pair of glasses with a video cam attached to it. The camera sends the recorded image wirelessly to the electrodes in the chip, which then turns the information into a signal that the brain can understand. It will be a low-resolution 60-pixel image only and enough to give people a sense of what’s in front of them.

The breakthrough in nanochip will open up tons of opportunities to improve our senses or replace in medical cases or enhance in other cases. In less than ten years, those who can afford to spend $25,000 can get a bionic eye to capture wider light spectrum or advanced your visual search functions through Google. I won’t be an early adopter for sure.