“Who are YOU? said the Caterpillar
“I hardly know, sir, just at the present–
at least I know who I WAS
when I got up this morning,
but I think I must have been changed
several times since then.”

I’m not a fan of the traditional ’strategic’ thinking. My experience is business managers haven’t much of a clue about what strategy is. I know that sounds arrogant, but ask someone about their strategy and they’ll hand you a spreadsheet of their plan— often little more than an extended ‘to do’ list. That’s if you’re lucky. Worse, they’ll force you to sit through their slide deck. You know it’s true.

What does impress, however, is how the top layers of most organizations present the very idea of strategy— as if it’s something mysterious; something that requires their particular level of genius. And pay grade. Everyone else’s job is to be the ant and implement. Because traditional strategic thinking follows the laws of gravity and, like sewage, flows downhill.

Implementation must be measured, of course. How can the ant be held accountable if its actions aren’t measured? And, since Peter Drucker warns us that strategy and structure must be aligned, if the ant fails in its efforts to implement, then the organization must either re-org or re-tool. It stands to reason. Because the strategy and those who created it can’t possibly be at fault. To question this ‘truth’ is to risk your future at most organizations.

This isn’t to say that planning and measuring aren’t important. They have their appropriate place. But we’ve gotten to the point in the business world to where the tail is wagging the labrador. To question measurement or accountability is an act of blasphemy and high treason.

Such dogmatic acceptance of machine-age business thinking models has a severe limiting effect on organizations who have a strategic need to innovate. Such devotion to these traditional beliefs may advance a business leader’s short-term individual agenda, but will seldom advance the mission of an innovative business. Organizations who create such cultures will struggle to recruit, hire and retain great creative talent.

At New Kind, we believe that innovative organizations compete stronger when they have a mission. A real mission. Something you can understand. Something you can see. Hold onto. Bite into. Something you can join.

Once you have a true mission, goals can be set. Simple goals. Measurable goals, perhaps. Inspirational goals. If you do it right “a-man-on-the-moon-before-the-end-of-the-decade” type goals. Then the next question follows: what is your strategy for meeting your mission.

But first you must know who you are. And this is the most important strategic question for innovative organizations— those whose leadership possess the courage and self-awareness to answer it.

“Who are you?”

For the second half of the 20th century, business leaders aggressively pursued a strategy based on becoming the most efficient, most productive player in their industry. In an age where many companies were bureaucratic and lazy, out-of-shape competitors were numerous. Those companies who were first or best in advancing the most well-oiled, machine-like structures often enjoyed a distinct competitive advantage.

But one can argue that productivity is now more of a commodity. Fat organizations are hardly the norm. The competitive landscape has changed.

When conditions change, strategy must change. And as Peter Drucker warned, so, too, must structure. If the ‘machine model’ is to be replaced, what will replace it?

Many of us believe the answer lies in innovation. Not innovation as technology. Or innovation in the form of walled-off ‘experts’ in a sterile laboratory. But open innovation. Culturally-driven creativity. True entrepreneurial activity. Practical, dynamic innovation, strategic at the core.

It makes sense then that executives and their human resources departments should employ a strategy to compete based on their ability to identify, recruit, hire, train and retain an innovative— more creative— work force. The bad news is that virtually everything businesses and business leaders do in terms of management and corporate leadership, research shows, is the polar opposite of those things they should do to build a creative work force. And the experience of this misalignment is devastating to creative workers.

Creative people are different. They insist upon being different.

In Aesop’s classic fable— The Ant and the Grasshopper— the ant works hard all summer putting up grain for the winter. The grasshopper plays and enjoys the summer. He concentrates on fun and entertainment. Music, wine and love command his attention– he celebrates the summer feasting on the fresh grass that’s freely available.

Winter comes soon enough and the grasshopper finds himself at the ant’s door begging for shelter and food. The ant explains that he barely has enough to get his family through the winter. He enjoyed the lovely music all summer, but he can’t help his friend. The grasshopper freezes to death. And Aesop warns us “It’s better to prepare for the necessities of life.”

It is easy to view creative workers as grasshoppers– unconcerned with the realities of business competition, lacking commitment to the hard work required to compete and having no respect for the waste of unproductive and inefficient play. Unfortunately, accepting this point of view causes a serious conundrum for business leaders in need of innovation. This leader has to adopt a different point of view.

That should be easy. Because the truth is that creative workers are, in fact, ants. When they are engaged, no teams or individuals work harder, less selfishly or more passionately than creative workers. In a sense, they are really /ants/ who think they’re grasshoppers.

But when creative workers are not engaged, no amount of executive proclamations, management control initiatives, structural re-orgs, documented processes, metrics, money, company events, or internal ‘communications’ campaigns will motivate them.

Sticks and carrots don’t work on grasshoppers. Even the fear of death doesn’t motivate them. Because they know a secret– Aesop’s grasshopper would have been fine if he could have just caught a flight to Rio.

When creative workers are not engaged, they will leave; the best and most talented exiting first. And they will start again somewhere else.

I drive a Toyota Highlander. The Hybrid. I once detested SUVs but bit the bullet a couple of years ago when my son began playing on a travel hockey team. Those 200+ mile weekend trips and a huge equipment bag changed my world view. The hybrid helps me rationalize the decision. But, I must admit— recall and all— I love my Highlander.

One thing I love is the GPS. It makes use of a map provided on a CD available when I bought the car two and a half years ago. As good as the map is, it is out-of-date and incomplete. Occasionally I’ll look at the map and see that the illustrated roads have disappeared and my car appears to be traveling through space like a triangular spacecraft from the original Asteroids video game. I am a modern day Lewis or Clark. I love it when that happens.

Maps are like plans. They’re great when they tell us where we want to go and what we want to do. But things change. Conditions change. Needs change. New options reveal themselves. We have to be prepared to fly into the unknown.

Recently, Peter Bregman blogged about this in Harvard Business Review— Don’t Get Distracted By Your Plan. He relates a lesson he learned getting lost hiking a trail:

… a dangerous thing happens when we follow a trail: we stop paying attention to the environment. Since the trail is so easy to follow, we allow our minds to wander and neglect to observe where we are.

Then we forge ahead, moving with speed and purpose, right to the point where we look up and realize, like I did that day, that the environment around us is no longer recognizable. Our focus blinded us.

We live in a time when our competitive environment can change so quickly and profoundly that it means blindly following a plan can be a very risky business behavior. Maps, plans and spreadsheets are only valuable when they are in service to people who have somewhere to go— not when those people are slaves to the plans.

As we create organizational culture, we have to make sure that our work forces are prepared and comfortable looking up from their plans, evaluating the environmental changes that are occurring around them, and adjusting their path.

Twenty-five years ago, Governor Jim Hunt initiated the annual Emerging Issues Forum focusing on the topic of innovation. This February, the Forum will come full circle as his think-and-do tank, the Institute for Emerging Issues (IEI), prepares for the 25th Annual Forum: Creativity, Inc.

As the IEI began to dive into the topics of innovation and creativity, they quickly found a collaborative partner right in their own backyard. The IEI called on New Kind to bring expertise in collaboration, innovation and design throughout the IEI’s public policy process and especially during the Forum itself.

As always, the Forum will be full of thought-provoking discussions, including presentations from Daniel Pink, best-selling author and expert on innovation and competition, and Bill Strickland, President and CEO of Manchester Bidwell Corporation.

However, in keeping with the spirit of innovation, this year the Forum experience will extend beyond the two days at the Raleigh Convention Center. New Kind and the IEI have developed an online community to promote a statewide exchange of ideas, and are working to establish a Forum alumni network so the conversations begun in Raleigh can continue long after.

New Kind is honored and invigorated by its partnership with the Institute. Together, we will take our discussions and research into action, finding ways to nurture creativity in North Carolina.

In the software development industry the results are in and open source is the winner. As Matt Asay predicts in a recent blog, future dialogues about open source will be less about evangelism and there will be more focus on putting open source into practice.

Which forces us to look, fundamentally, at exactly what we’re putting into practice? Open source software? Or open source itself? What do we mean when we say open source?

At New Kind, we believe that open source is— simply stated—  a beautiful and effective way to scale creative thinking and culture. What is amazing is the rapid acceptance of “open source” beyond software development. Today businesses are looking at open source as a way to create new business models, new management strategies, new marketing, innovation and community-building paradigms.

As we’ve noted before (and will, no doubt continue to note) evangelists in this broader understanding of open source include many of the world’s most influential business thinkers including Gary Hamel, Roger Martin and Tom Peters. Two weeks ago I watched Coke’s VP of Global Branding— David Butler— introduce open source as a powerful branding/design concept to AIGA’s national conference for professional designers. These speakers are not referring to open source software.

But, through the proven success of the open source software development model, in part, they have discovered the competitive power of such creative collaborative, design thinking cultures. And they are advising today’s business leaders to rapidly adopt these new kinds of models across their organizations; internally and externally.

Acceptance will be slow among executives who are just now being introduced to open source creative models. Hamel says they are locked into “archaic beliefs” that must be changed if they are to remain competitive. It took nearly 15 years for the technology acceptance; how long will this take?

The time is now. For organizations where innovation is now a strategic necessity, open source creative cultures are a powerful if frightening alternative to the habitual thinking of analytical-driven, MBA-type cultures. As Martin’s book The Responsibility Virus makes clear, fear is a powerful force that shuts down innovation. Most executives and senior managers have little clue how strongly fear influences their thinking and actions, and the effect that has on the competitive positioning of the organizations they lead.

Open source and design thinking are anecdotes. But there are countless traditional players— individuals and corporations; large and powerful— who have no interest in seeing new competitive threats to their status quo arise. Open source is revolutionary change; landowners seldom start revolutions. These players will not welcome the change open source promises. And they will not play nicely.

Such opposition will look for evidence that open source doesn’t work. To borrow Roger Martin’s language, “reliable” actions will trump more “viable” solutions. When they find ‘reliable’ evidence, they can and will be ruthless adversaries. Open source practitioners must not be naive; evangelism can become a detriment in this environment. Even the Christian Bible (a fair prophet on evangelism) warns, “Faith without works is dead.”

In that context, Matt Asay is correct. Evangelist must begin to play a secondary role to the practitioner. And if Malcolm Gladwell is right, then it takes 10,000 hours for an individual to grasp the nuance and expertise necessary to play that role. That’s a small community of practitioners.

That’s the next challenge for open source.

……………………..

additional resources:

https://www.mckinseyquarterly.com/ghost.aspx?ID=/Strategy/Innovation/Innovative_management_A_conversation_between_Gary_Hamel_and_Lowell_Bryan_2065

http://www.rotman.utoronto.ca/rogermartin/publications.htm

Hopefully, many of you are aware of a project Matthew Muñoz and I have undertaken with Leslie Boney — www.changepapers.org. In a recent post, one of our readers posted this quote from Machiavelli:

“One should bear in mind that there is nothing more difficult to execute, nor more dubious of success, nor more dangerous to administer than to introduce a new system of things: for he who introduces it has all those who profit from the old system as his enemies, and he has only lukewarm allies in all those who might profit from the new system.

This lukewarmness partly stems from fear of their adversaries, who have custom on their side, and partly from the skepticism of men who do not truly believe in new things unless they have actually had personal experience of them. Therefore, it happens that whenever those who are enemies have the chance to attack, they do so in a partisan manner, and those others defend only hesitantly.” — Niccolo Machiavelli

Amen. The Designer’s dilemma.

But that leaves us with little hope. With little hope, how will we have the heart to compete. As the musical Damn Yankees tells us, “You gotta have heart.” [honestly, did I work too hard to make that connection? of course]

Here’s my response that I thought I’d share with you here….

Machiavelli’s quote is spot on. Afterall, land owners seldom start revolutions.

Evolution is fine when one has thousands or millions of years to change; short-term change is more revolutionary in nature. Machiavelli underscores the risk leaders accept when they begin any short-term transformational endeavor.

What is also true is that design/innovative strategies are more commonly used by more desperate competitors. Necessity is the mother of invention. While power, control and other factors were powerful strategies to employ while competing in the Industrial Age, recent evidence is that they are not sustainable in today’s world. They fail society and the businesses themselves overwhelmingly as we try to compete today.

Now we find our institutions facing greater risk, perhaps, than we ever before. From the US Department of Defense to our entire banking system to the UNC Educational System to companies like WalMart and Microsoft, innovative change is a necessity. We are all more desperate.

And here is a fundamental understanding our society and leaders need to understand quickly: Innovation is a creative endeavor.

If we are to compete, we must innovate. If we are to innovate, we must create.

Competing = creativity. That’s the math.

Creativity demands a culture/climate that differs greatly from what we generally experience in our schools, businesses and public institutions today. These institutions must become more creative cultures.

So, is our resolve to compete in this environment great enough for us to overcome the obstacles Machiavelli predicts?

And, can we take on this challenge in ways that prove the worth of such change iteratively, while we reduce risk, and drive fast, efficient and productive new ways to compete? As we better engage our work forces and citizen populations?

That is the challenge. We believe the answer is yes. We’ll discuss these very issues in the upcoming Change Paper #06.

When I first entered the corporate world five years ago after nearly twenty years of running my own business, I was definitely a fish out of water. As a direct report to the CEO, I participated in many of the most important conversations taking place in the company. Being a designer, I often had points of view rather different from the other executives sitting around the table. Sometimes, after offering such a point, I would find them looking at me like I was insane.

The last two days I’ve posted blogs based on articles in recent editions of MITSloan Management Review and the Harvard Business Review. I thought I would share a sample of the best quotes from these magazines— today I’ll focus on HBR (JULY/AUG 2009); tomorrow I’ll look at the MITSloan. While these thoughts and research-based ideas may be new to the business world, they are not to the design world.

The Big Shift— Measuring the Forces of Change

“One of the easiest but most powerful ways firms can achieve the performance improvements promised by technology is to jettison management’s distinction between “creative talent” and the rest of the organization. All workers can continually improve the performance by engaging in creative problems solving, often by connecting with peers inside and outside the firm.”

from HBR; July/Aug 2009; “Leadership in the New World”

“An executive team on its own can’t find the best solutions. But leadership can generate more leadership deep in the organization.”

“Embrace disequilibrium— keeping people in a state that creates enough discomfort to induce change, but not so much that they fight, flee, or freeze.”

from HBR; July/Aug 2009; “Strategy in the New World: The 10 Trends You Have to Watch”

“Corporate leaders need to demonstrate to civil society that they understand popular and political concerns related to executive compensation, risk management, board oversight, and the treatment of employees facing layoffs.”

Management models “need to incorporate more-realistic version of human behavior— most likely by drawing on behavior economics, becoming more dynamic, and integrating real-world feedback— and… business leaders need to get better at using them.”

Regulation in the New World: Government in Your Business

“The changes afoot have been on the horizon for some time, thanks to long-term trends such as deepening public distrust of business.”

Shareholders First? Not So Fast…

“Why should past labor (capital) receive so much preference over current labor (employees)?”

“Consider that there are literally scores of recent studies showing the gains in profitability and productivity that companies have made— not by putting investors’ interests first but by implementing high-commitment work practices. These include investing in training, decentralizing decision making, and having pay contingent on organizational, not just individual, performance. Other sources show the benefits companies reap from customer loyalty and high levels of customer satisfaction.”

[DB NOTE: I was struck by the use of "high-commitment" rather that "accountability" in the paragraph above. Machine parts need to be "accountable" but innovative organizations thrive via deep personal commitment. Fodder for a future blog]

Restoring America’s Competitiveness

“Corporate management must overhaul its practices and governance structures so the no longer exaggerate the payoffs and discount the dangers of outsourcing production and cutting investments in R&D.”

“Stop blaming Wall Street for short-term behavior… When companies promise to increase returns quarter after quarter, that’s what Wall Street expects. But when they articulate a credible long-term strategy and demonstrate a capacity to execute that strategy, the capital markets have given them the necessary room to achieve it.”

“Managers would serve their companies more wisely by recognizing that informed judgment is a better guide to making such decisions than an analytical model loaded with arbitrary assumptions. There is no way to take the guesswork out of the process.

“Only be rejuvenating its innovative capabilities can America return to a path of sustainable growth.”

Sane or insane? You decide. More tomorrow…

I wanted to share a recent article from the influential design blog Core77 that adds New Kind to a growing list of influential regional design groups building on the efforts of the U.S. National Design Policy Initiative (NDPI).

On a state and regional level, independent design groups seek to address the lack of federal funding for design- and innovation-based initiatives. One goal, among many, is to give young designers access to resources so they can create and innovate — seems elementary, but these resources have been sorely lacking to date.

In early 2008, Matt Muñoz traveled to Europe with MASS LBP Principal Peter MacLeod, visiting think tanks Demos and Involve, as well as design organizations Participle and Kaospilots, among others. While there, he saw first hand the support young thinkers receive in countries like England and Denmark, where national programs provide funding and infrastructure to emerging ideas and talent. Muñoz and partner David Burney were inspired by this level of commitment to design and innovation, one thread which compelled the formation of New Kind in 2008.

In her article, Lisa Smith of Core77 writes that companies like New Kind, Design Industry Group of Massachusetts (DIGMA) and Design West Michigan “seek to organize state officials, design industry leadership, and educational institutions to promote design as an agent of economic growth and social change in those regions.” Hear, hear!

Beate Becker, Founding Director of DIGMA, invited Muñoz to attend the launch in Boston this summer, and he hopes that an ongoing conversation between groups like New Kind and DIGMA, the first state-level design industry group, will help lay the groundwork for effecting change on a regional level.

Smith’s Core77 article provided insight into the challenges and opportunities facing the changing landscape of design. Through her efforts with the Chicago-based Object Design League, Smith and co-founder Caroline Linder embody this new way of thinking about design and collaboration. New Kind is honored to be mentioned alongside such inspirational groups.

This blog has been too idle too long.

I’ve been reading the book Iconoclast: A Neuroscientist Reveals How to Think Differently written by Emory professor of neuroeconomics, Gregory Berns. Berns uses brain-scanning technologies to explain the decision-making process of human minds. As such he is a highly respected researcher and speaker on the science of innovation.

According to his publicist, his book asks these questions:
+   what makes true innovators so creative, so successful — and so rare?
+   what makes them tick?
+   how can we learn to be a little more like them?’

Here’s more from Berns’ publicist:
Gregory Berns is the Distinguished Chair of Neuroeconomics at Emory University, where he is a professor in the departments of Psychiatry and Economics, and at the Gouzueta Business School. The field he has helped put on the map, Neuroeconomics, is, fittingly, a blend of neuroscience, economics and psychology. In his work, he is breaking ground in everything from the biological roots of political conflict to predicting which teenagers are likely to make fatally bad judgments. Even better, he possesses a rare ability to translate dense technical material for a general audience. He has been profiled — and his work has been ecstatically reviewed — in The New York Times, Forbes and The Wall Street Journal, as well as other leading business and science publications. In addition to Iconoclast: A Neuroscientist Reveals How to Think Differently, he is also the author of Satisfaction: The Science of Finding True Fulfillment.

I’m digging the book. Great research and surprising observations. It will sit proudly on my shelf next to the books of Roger Martin, Gary Hamel, and Rollo May’s classic The Courage to Create. Well written and funny. Here are a few of my favorite lines:

“This is a story of the search for the holy grail of creativity,
an almost childlike imagination and willful abandonment to dream crazy thoughts.”

“Before one can muster the strength to tear down conventional thinking,
one must first imagine the possibility that conventional thinking is wrong.”

“The brain is fundamentally a lazy piece of meat.” You gotta love that.

“The brain takes shortcuts whenever it can.” Well, that would explain a lot, wouldn’t it.

Business leaders looking to compete by being more innovative would do well to read and follow the professor’s advice. Or they could ask an  artist or designer who’s experienced in managing creative teams.

Some historians don’t like using the term ‘revolution’ when discussing the Industrial Age. Their point is that the transitions between Ages was more evolutionary. Chronologically speaking, I agree with this point of view. But I still prefer the term revolution as it refers to the social effects humans experienced.

With change came an unwritten contract. As people accepted the idea of spending their lives doing machine-like work, their expectations for security grew. Increased power of the worker manifested itself in the form of unions. And over a few hundred years of ardent and often violent interaction, advances on the behalf of the Industrial Age’s laborers continued to improve the workers’ standard of living. Businesses did pretty well too, history shows.

It became easier for individuals to accept the sacrifices of personal freedom. Over time, workers began to feel loyalty to many of the companies who employed them. Thirty and forty year careers with one company became common. Good paying jobs and benefits created safe families and opportunities to better the lives of future generations. Children and grandchildren often looked to follow their parents into the same companies, trusting in the status quo.

But a funny thing happened on the road to efficiency and productivity. Labor unions drove great improvements. But power corrupts. Labor unions were no exception. Soon, one ‘top-down’ boss was replaced by another. The influence of labor unions quickly began to wither.

In 1981, when newly inaugurated president Ronald Reagan fired every striking air traffic controller across the nation, the death knell rang. Corporations began in earnest to redraw the lines. They increased pressure on unions by moving jobs off shore.  As mothers entered the work force in far greater numbers they added substantially to their families’ fortune thereby postponing the real experience such consequences bring. But the writing was on the wall.

Today, the consequences are plain and painful. Mathematics proves that changing one side of an equation necessitates an equal change on the other side. Working conditions— where work still exists— have declined. Yet, over the past 28 years, executive compensation increased from 40 times the pay of the average worker to more than 360 times the pay of average workers by 2007. No one should be surprised that employees are less loyal than they were a generation ago.

While the power of well-organized unions has greatly diminished, workers are now discovering the power of networked associations. Bottoms up. Transparent. Authentic. Power is spread between groups and individuals alike. Nimble. Immediate. Scalable. Regardless of how you label it, we live in a new and equally revolutionary Age. Loyalty to any big power is dead.

‘Engagement’ is the new word. If you believe in meaningful data, take a look at the work Gallup has done in this area. Gallup presents a new kind thinking aimed at the most relevant business management practices for today’s work forces. It is non-intuitive to most current corporate leaders and managers. One key survey question they ask of workers is “do you have a best friend at work?’ The answer is a key indicator of corporate success.

They’ve titled their thinking Human Sigma. Here are the five basic principles:

* Employee and customer experiences must be managed together — not as separate entities.
* Emotions drive and shape the employee-customer encounter.
* The employee-customer encounter must be measured and managed at the local level.
* Employee and customer engagement interact to drive enhanced financial performance. This interaction can be quantified and summarized with a single performance metric.
* Sustainable improvement in the employee-customer encounter requires disciplined local action coupled with a company-wide commitment to changing how employees are recruited, positioned in roles, rewarded and recognized, and importantly, how they are managed.

When the media is the message and your company must be innovative to compete, any leadership discussion of loyalty will be viewed as propoganda. That includes ‘accountability’ and ‘responsibility’ and ‘commitment.’ If it is not transparent that these conversations are two-way processes, then leaders and managers who try to force these messages will lose credibility and relevance.

Loyalty is dead. Love live engagement. Thanks Gallup.