Leave Those Resolutions Behind

As we enter the New Year, we all tend to embrace it as an opportunity for some new beginnings. New Year’s resolutions abound, all made with the best of intentions. Some resolutions are truly audacious while others focus on small improvements on the edges of our lives. Whether big or small, most of these resolutions soon fall by the wayside as the pressures of day to day living resume their relentless quest to consume every minute available.

Having had this experience myself many, many times, I’ve begun to realize that the key to lasting change and improvement is to embrace the paradox that small moves made now are the best way to set big things in motion. How is that possible? Well, the small moves must be smartly made, otherwise they just remain small moves and quickly become engulfed by the unfolding events of our lives.

What do I mean by “smartly made”? Well, this requires carefully knitting together three elements – focus, leverage and accelerate. Without all three of these elements, those small moves run a high risk of remaining just that – small moves with little impact on our lives or the lives of those around us.

Focus

Let’s take each of those elements and explore them in a bit more detail. First, start with focus, because that’s the foundation of everything else. Focus means that we must have a sense of direction and destination before we craft our small moves. We have to have some view of the bigger impact we are trying to achieve. What would it look like? Why would it be so important or valuable? What makes us think that it is achievable? We don’t need to have a detailed blueprint of the destination, but it has to have enough clarity so that we can make some more effective choices in the short-term regarding the small moves that have the greatest potential to move us in that direction. Otherwise, we’ll just randomly be pursuing small moves and spreading ourselves way too thinly across too many initiatives that consume time and energy with minimal results.

Leverage

If we can articulate that focus to ourselves and to others, it also can draw others to us who are inspired by that focus. That leads to the second key element of “smartly made” – leverage. We need to rid ourselves of the illusion that we alone can, or should, achieve the broader impact defined by our focus. No matter how smart and accomplished we are, we’ll accomplish a lot more if we can motivate and mobilize others to join us in our quest. Rather than applying all of our resources to achieving that impact, if we’re smart about it, we can get others to contribute resources of their own. By attracting a more diverse set of resources and participants, we’ll increase the potential for more creative and effective moves that will expand our potential for impact. Leverage therefore both reduces the investment of time and resources we need to make as well as increasing the quality and magnitude of our impact.

Accelerate

But there’s also a third element of “smartly made” – accelerate. Does that just mean moving faster? Well, it’s a little bit more complicated than that. It’s actually built on another paradox – we’ll in the end be able to move faster if we take the time along the way to reflect on the progress that we’re making. By taking that time, we’ll be able to continually refine our efforts based on the learning that we accumulate by assessing what elements of our moves are achieving greater impact than expected and what elements of our moves are achieving less impact than expect. If we just rush forward on a particular path, we might move faster in the early rounds, but we’ll never achieve the acceleration that comes from reflection, learning and refinement.

If we’re really serious about achieving very significant impact, we need to assess the trajectory of our progress. Are we achieving greater impact over time? Is our impact improving linearly or is our impact accelerating over time? The only way to set really big things in motion is to strive for acceleration of impact rather than settling for linear improvements. That becomes the context for the reflection, learning and refinement that we need to continually engage in along the way.

And when we engage in this reflection, learning and refinement, let’s not make the mistake of doing it in isolation. We need to reach out to others who are contributing resources and efforts to engage them in this process. We’ll benefit from having diverse backgrounds, perspectives and skill sets – it will help us to learn faster than we ever could on our own. In fact, we should also reach out to others who are in the domains that we’re trying to impact but not directly involved in our efforts to get an outside in perspective.

These three elements need to be pursued in parallel; they aren't sequential. For example, as we accelerate through learning, we’ll also refine our view of the direction that we’re pursuing and what’s required to achieve the even more of the potential that motivated us to choose that direction in the first place. We’ll also motivate others to join us as they see the kind of acceleration that we’re achieving along the way.

Let's begin the New Year right

If we get this right, the rewards will be great. Small moves, smartly made, will indeed set big things in motion. For those of you who are intrigued by this approach, you might want to check out The Power of Pull which lays out this approach in much greater detail.

And, who knows? In this New Year, we might for the first time have the potential to achieve something truly remarkable. But first we need to leave behind all those resolutions, large and small, and focus instead on smartly making small moves.

The Real Unemployment Innovation Challenge

While unemployment rates in certain parts of the world appear to be slowly improving, unemployment in many other parts of the world remain stubbornly high and, in some cases, are even increasing. More fundamentally, there’s a growing concern that rising unemployment may be one of the most significant economic, social and political issues that we will face in the decade ahead.

As we mobilize to address this issue, we need to avoid the temptation to rush too quickly into developing solutions until we’ve clearly understood and framed the problem. Otherwise, we may end up treating symptoms and, at best, providing temporary relief, rather than addressing the real issues in a more fundamental and permanent way.

So, what is the problem? Well, there are many problems – that’s one thing that makes it so complicated and challenging.

Matching supply and demand

One set of problems involves various gaps between labor supply and demand.  For example, there are many jobs out there that go unfilled, even though there are people who have the ability to do the work, simply because of information imperfections.  

At another level, there’s a mismatch between the jobs that are available and the skills that are required to do the jobs.  Some skills are in very high demand and yet the supply of workers with those skills is very limited.

There’s yet another challenge in matching supply and demand.  Many workers have the necessary skills, yet aren’t able to connect with the work requiring these skills because of powerful biases among potential employers – gender, ethnic and racial biases continue to make it difficult to connect the right workers with the right jobs.

If we go beyond the US to a global level, we see even more significant mismatches between labor supply and demand. There’s a powerful generational imbalance, with more developed economies dealing with rapidly aging populations while the younger generations are increasingly concentrated in developing economies where work is in shorter supply. Parts of the world are mired in conflict and corruption, limiting the availability of work for those who need it. The symptoms of this global imbalance are manifest in increasing concern over the influx of refugees and illegal immigration in certain countries.

As serious as these problems are, they’re only a small part of the real challenge that we’ll face in the decades ahead.  These are static problems – they reflect an existing mismatch between the supply and demand of labor. But that mismatch has the potential to become much more significant over the decades ahead, driven by dynamic forces that are rapidly changing the global business landscape, something that I’ve called the “Big Shift.”

The changing nature of supply and demand

As a growing number of commentators have warned, the pace of automation is accelerating, driven by exponential improvements in the price/performance of digital technology. Robotics is increasingly making inroads into manual labor while artificial intelligence and deep learning technologies are targeting a growing array of white collar, “knowledge worker” jobs.

And for the jobs that remain, the skills required to perform these jobs are rapidly evolving. The skills that we have today are becoming obsolete at an accelerating rate.  By some estimates, the half-life of a skill today is shrinking to about five years.

In the face of this accelerating pace of change, our educational system is not keeping up, so we have a growing imbalance between the output of our educational system and the jobs that are available. Rather than training students for a period of time and certifying that they then have a given set of skills, we increasingly need a learning system that will foster life-long learning and help all of us to rapidly evolve our skill sets on an ongoing basis.

As we look ahead, the changing nature of labor supply and demand will rapidly overshadow the existing mismatch between supply and demand. If we don’t address this more fundamental set of issues, we will at best be putting a Band-Aid on a wound that will continue to spread and become more painful.

Re-framing innovation

Many people have put their faith on innovation as a way to resolve the unemployment challenges that we face.  Yet, their focus is on how to create more jobs at a faster rate, rather than fundamentally changing the nature of the jobs that are created.

If we’re going to address the challenges ahead, we need to re-frame what we mean by innovation. Rather than focusing on product or service innovation, or even process and business model innovation, we need to focus on a form of innovation that isn’t yet on the agenda of our leaders – institutional innovation. What do I mean by that?  I mean that we need to innovate regarding the basic rationale for all of our institutions.

Today, the rationale for all of our institutions is scalable efficiency. We justify our institutions because it is easier and lower cost to coordinate activities across a large number of participants if they are within a single institution than if they are spread across many independent organizations.

The way we have implemented scalable efficiency is to tightly specify all activities, carefully standardize them so they are performed in the same efficient way anywhere in the organization and tightly integrate all activities to remove those inefficient buffers across activities.  What have we done as a result? We have defined a computer algorithm – work that can be done far more efficiently, predictably and reliably by a computer than by a human being.  We have put a bull’s eye target on the back of every worker, making it just a matter of time before a machine comes and takes their job.

This rationale defines a task centered view of the organization. It’s a view that expects people to fit into their precisely defined role within the organization.

There are many problems with this rationale. First of all, it’s less and less compelling as a rationale simply because powerful digital technology infrastructures now make it far easier and lower cost to coordinate activities across a very large number of independent entities. It's also shaped by the assumption that we live in more stable times, where the highest priority is to get to lower cost operations through predictable activities.

Even more fundamentally, it defines work in a way that makes it highly vulnerable to automation, thereby dramatically increasing the risk that more and more work will be taken by the machine.

So, is there an alternative? Our work on the Big Shift suggests that there is a powerful alternative rationale – scalable learning. In a world that is increasingly driven by exponential change and growing uncertainty shaped by exponential technologies, if we’re not learning faster and improving performance ever more rapidly, we increasingly risk being marginalized and ultimately pushed out of the market.

If we were to pursue this rationale seriously, we would finally create work environments that would encourage each of us to achieve more of our potential and deliver more and more value to our organizations and stakeholders.This is, in effect, the highest form of pull that I explored in The Power of Pull – pulling out of each of us more and more of our potential.

Rather than viewing workers as expense items to be squeezed and cut as much as possible, we would finally see workers as resources capable of creating and delivering growing value. And this wouldn't just be the case for "knowledge workers" – it would drive home that every worker is ultimately a knowledge worker, capable of driving accelerating performance improvement wherever they are in the organization by learning faster. The focus would shift to how to hire more people so that even more value could be created, rather than finding ways to fire them so that costs could be reduced.

Shifting our focus to scalable learning would also broaden our horizons. Rather than just focusing on the people within the four walls of our organizations, we would systematically seek to reach out and cultivate broader networks of participants.  Rather than viewing these outsiders as “contractors” to be squeezed, we would begin to view them as potential catalysts to help all of us learn faster by working together around challenging performance issues. Rather than focusing on narrowly defined transactions with outsiders, we would seek to build much deeper trust-based relationships that would enhance our ability to work together to learn faster. We would evolve towards much more networked institutional models that could scale very rapidly.

This scalable learning rationale fosters a people-centered view of the organization, one in which the challenge is for the organization to adapt to the needs of each individual as they seek to learn faster, rather than squeezing the individual into pre-defined roles in the organization.

In these work environments, employees would certainly benefit from the rapid improvements in digital technology that would help to give them more leverage in their work. But we would focus on the imagination, creativity and social and emotional intelligence that are uniquely human and that would help us to learn even faster as we work with the machines.

Re-framing our mindsets

At an even more fundamental level, all of us are going to need to re-frame our mindsets about what work really is. Today, the vast majority of workers around the world go to work to earn a paycheck – work is viewed as a means to support oneself and one’s family so that we can pursue the things that excite and interest us outside of work.

We need to change that view of work. We need to find ways to more effectively integrate our passion with our work.  Passion turns mounting performance pressure from a source of growing stress and burn-out to a source of excitement, driven by the potential to take our capabilities and impact to a new level. If we go to work simply to earn a paycheck, we will never learn as fast or improve our performance as rapidly as someone who is pursuing their passion.  

Here’s the challenge.  Based on research that I’ve led at the Center for the Edge, only 12% of the US workforce has what we call “the passion of the explorer” – the kind of passion that fosters rapid learning and performance improvement. That leaves 88% of us who have to find ways to more effectively integrate our passion with our work.

The opportunity ahead

There’s no doubt about it.  The dynamic forces that I described above are going to intensify the risk of significantly increasing unemployment and social turmoil around the world in the decades ahead. Without a doubt, they are going to lead to a painful and tumultuous transition phase as we begin to question some of our most fundamental assumptions about work and the institutions that provide us with that work.

But, I’m an optimist.  I believe these forces are going to be a significant catalyst in getting us to step back and re-think work at a fundamental level. The institutional innovation and mindset shifts that I’ve just described will come together in powerful ways to redefine our work environments.  Together, they will redefine work in ways that will help all of us to achieve more of our potential and, in the process, lead to new forms of economic growth that will create more opportunity for all of us.  

Here’s the thing, though.  This is not an opportunity. It’s an imperative.  If we don’t get to this more fundamental level of change, we’re going to become increasingly stressed and face more and more economic, social and political turmoil as the work that we had taken for granted slips away from all of us. We need to move beyond the static imbalances that frame a lot of our discussions of unemployment today and focus on the fundamental forces that are shaping the real challenges ahead.

Drawing Inspiration From Independence Day

Independence Day in the US is a time of celebration, recalling a historic milestone when a small group of fragmented colonies in a distant part of the world came together and bravely declared independence from a world power. Rather than simply celebrating an event in the distant past, maybe we can use the occasion to inspire ourselves to pursue a different kind of independence today.

The prison of conformity

What do I have in mind? I’m thinking this might be a good occasion for all of us to step back and assess how much we might still be prisoners of social pressures. We all face daily pressures to “fit in”, to carefully craft a façade that shows we are part of the “team” and to win the approval of others by presenting ourselves in ways that we perceive others want us to be. We resist the temptation to do what we want because we fear disappointing others. We downplay our own needs and desires because we put the needs and desires of others above our own.

Perhaps this a good time to reflect on what we have given up as we seek to accommodate the demands and needs of others. What would our lives look like if we resisted these pressures and expressed more of our own unique individuality? How much more might we enjoy every hour of the day? How much more might we accomplish? How much more could we contribute to others?

It’s easy to blame society and our institutions for pressuring us to become someone different from who we really are. But what if we drew inspiration from those colonists who dared to challenge a mighty power? What if we were to move beyond victimhood to rediscover our agency, our ability to take action on our own and to achieve greater impact from that action?

What if we stopped blaming others for pressuring us to be someone we’re not and instead took responsibility for making the choices and taking the actions that would enable us to express ourselves more fully? What might we become if we looked inside to discover who we were really meant to be? How much more could we accomplish?

Serving others by serving ourselves

Here’s a paradox: we often justify our conformity to social pressures in terms of our desire to please others, to make them happy. Yet, perhaps the most effective way ultimately to serve others is to discover and become who we were meant to be. By doing this, we’ll not only be able to make a unique contribution to others, but we’ll also serve as role models for others, inspiring them to strive to achieve more of their own unique potential and possibility as well.

We certainly won’t please all of those around us today, but maybe that’s OK.  Maybe it will help us to learn who really would draw inspiration and benefit from our actions. Maybe rather than pushing ourselves on others with carefully crafted presentations of ourselves, we should pull others to us by expressing who we really are and seeing who is drawn to us.

At the same time, we might learn who wants us to be someone we’re not, and distance ourselves from those people, so that we can focus more time and attention on those who would get the greatest benefit from who we really are. We might set into motion a powerful virtuous circle – drawing support and encouragement from those who embrace us for who we really are and who encourage our further growth to achieve more and more of our potential. That in turn would provide us with the opportunity to achieve even more impact and draw even more support and encouragement.

Responding to mounting performance pressure

Many of us justify our urge to conform in terms of growing performance pressure. We fear that if we don’t conform, we’ll lose the support of others and become increasingly marginalized. Well, here’s another paradox: if we’re trying to be someone that we’re not, we’re much more likely to under-perform on the dimensions that really matter – and become deeply stressed in the process.  The only way to effectively respond to growing performance pressure is to use it as a catalyst to discover who are really meant to be and to stay as true to that reality as possible.  The best way to respond to mounting performance pressure is to differentiate ourselves by finding our unique individuality so that we stand out from others and achieve impact that no one else could achieve.

One of the benefits of making this choice is that we’ll find it much easier to build trust-based relationships. If we’re pretending to be someone who we’re not, we’ll never win deep and lasting trust. Others will sense that we’re not who we say we are.  If we’re going to effectively respond to performance pressures, we won’t be able to do it alone. We’ll need to build rich personal networks shaped by deep, trust-based relationships where we can not only work together but learn more rapidly together.  Those who persist in pretending will end up in much more shallow and fragile relationships that will undermine the ability to take risk and learn more rapidly.

Short-term risk for long-term reward

Now, I don’t want to under-estimate the challenges in doing this.  We're surrounded by institutions driven by scalable efficiency that pressure us to fit into pre-defined roles and to perform tightly specified tasks reliably and predictably. Our school system was explicitly designed to prepare us to play those roles. But that economy is increasingly challenged as we plunge deeper into the Big Shift. As performance pressures mount, every tendency of our institutions is to squeeze harder and demand even more conformity from all the participants. As a result, in the short-term we're likely to experience even more pressure to conform. As change and uncertainty increases, our institutions strive to create the illusion of stability through conformity.

We’ll certainly be taking significant short-term risk by expressing who we really are but, for the reasons outlined earlier, that risk will position us to be much more effective in turning pressure into potential.  It will be a catalyst to make some transitions in the short-term that can be quite uncomfortable and even painful, but essential if we’re going to shape our personal and professional networks to help us succeed in a more challenging world.

Women and other marginalized groups will find it particularly challenging to throw off this pressure to conform in the short-term because they're typically the first to suffer in environments experiencing mounting performance pressure.  And yet they are ultimately the ones who will benefit the most from taking this opportunity to connect with their unique individuality and bringing it forward.  The economy that will ultimately emerge from the Big Shift will be one driven by innovation and accelerating performance improvement. This in turn will lead to the evolution of institutions that not only respect diversity and individuality but that systematically create environments that help all of us to draw out more and more of our unique potential.

Let’s all draw inspiration from those who came before us and who stood up for the opportunity to create a freer society.  We have an opportunity to re-shape all of our institutions in ways that will make all of us as individuals and as institutions better able to turn pressure into potential.  But it begins with each of us, with the choices we will make and the actions we will take as we face growing pressure to conform.

The small moves that each of us take to express more of our unique individuality and to come together with others who respect and embrace us for who we really are can set some very big things in motion.

And, by the way, if we do this in all dimensions of our economy and society, we'll lay the foundation for a dramatic expansion of political freedom around the world.

Disruption by Trusted Advisors

What’s “the next big thing”?  Coming from Silicon Valley, I often get this question from executives around the world.  Usually, they frame the question in terms of the next wave of technology innovation. They want to know what’s the next big technology that could disrupt everything?

That’s an important question, but I often shift the question to disruptive business models. Too often we get distracted by the latest new technology, but we don’t spend enough time thinking about the profoundly new business models enabled by these technologies.  We fail to ask the Willie Sutton question: “where’s the money?”

In this context, I’m intrigued by the growing potential to scale a business model that’s been around for centuries, but only for the very wealthy and successful.  It’s what I call the “trusted advisor.” What’s that? It’s someone who, rather than sitting on the other side trying to push more and more products and services to me, crosses the table to sit next to me and gets to know me so well that he/she can proactively recommend things to me that I had not even asked about, but that turn out to be extremely relevant to my context, needs and aspirations.

From affluent niches to mass market

The very wealthy have had trusted advisors for ages, in the form of wealth managers, concierge doctors or personal shoppers.  This business model worked for them because the very wealthy could spend enough to justify the significant time and effort it required to get to know those people deeply enough to become trusted advisors. The rest of us simply could not access this kind of expertise and advice.

But that’s all changing now.  With the advent of Big Data, sophisticated analytics, social software, the Internet of Things and cloud computing, just to name a few of the enabling technologies, the “trusted advisor” business model now has the potential to expand from the niche of the very wealthy to become a mass market event. These technologies make it feasible to compile a detailed understanding of the social and economic context of the individual at much lower cost than previously imaginable. We don’t have to submit to detailed interviews or fill out endless questionnaires to provide this information. The trusted advisor, with our permission, can simply watch and analyze the “digital exhaust” from our activities to develop deep insight into who we are and what is important to us.

Not only is this opportunity emerging because of the untapped capabilities of a growing array of digital technology. It also addresses an unmet need that a growing number of us have given the long-term forces that are driving the Big Shift on a global scale.  The Big Shift is significantly expanding and rapidly evolving the array of options that are competing for our attention and money, and providing us with far more information about these options than we ever had before.

Yet, the truth of the matter is that, even with amazing technology advances, we still only have 24 hours in the day. One of our growing needs is to increase our ROA – in this case, return on attention.  If we had a trusted advisor or agent who knew us intimately and who could help us sift through all the options available to us, we’d get far more value per unit of attention than we ever could on our own.

Building trust

But, the key is we would need to deeply trust the business serving as our advisor or agent. How does that trust get built and preserved over time? This is especially challenging in a world where all the surveys indicate we are rapidly losing trust in all of the traditional institutions – businesses, governments, schools and all kinds of civic institutions.

Trust comes in part from the realization that the business knows us as an individual very broadly and deeply and is not just treating us as one more nameless consumer based on aggregated data that covers only a slice of our existence.  That’s the easy part, given the new technologies that are increasingly powerful and cost effective in capturing, compiling and analyzing large amounts of data related to our activities and interests.

The real challenge is in convincing us that the business will use all of this data to serve our interests, rather than the interests of others who are trying to “target” and “own” us. For a business to do this, it must reverse the trend of current online business models that have been moving from subscription based revenue models to advertising based business models.  

As long as the business depends upon advertisers or commissions from vendors for its revenue, can there be any doubt about where the loyalty of that business lies?  It will first and foremost be loyal to the advertisers that pay the bills. If I am truly going to trust my advisor or agent, I have to be willing to pay that business for its services and be confident that the business is not being paid by the product or service vendors trying to reach me.

As mentioned above, the good news is that new technology platforms are significantly reducing the cost of building and running such an agent business at scale.  The result is that the subscription services are likely to be increasingly affordable to a growing segment of the population.

There’s another key ingredient for trust.  We need to be confident that the business will not artificially constrain our choices but instead provide us with the full array of options that are available and relevant to us.  This will make it very difficult for the Internet-based businesses that are diligently trying to build “walled gardens” to keep us from venturing out and exploring broader options.

It also makes it very difficult for any established product or service vendor to build the trust necessary to play the trusted advisor role.  If you have some products or services that you’re trying to sell me, how can I trust you to present me the options offered by other competing product or service vendors? Would you really be willing to recommend a competitor’s products or services if they were in fact better suited to my needs?

Doc Searls, in his great book, The Intention Economy and its concept of “vendor relationship management,” came close to identifying the opportunity for a trusted advisor. My only reservation about his concept is that it tends to be very transaction focused and triggered by an explicit intention of the user.  The trusted advisor concept that I am outlining goes well beyond transactions to be helpful to the users in getting maximum value from the products and services they are using after purchase. It requires a deep relationship and understanding of the context and aspirations of each of us to be as helpful as possible in achieving our aspirations and adhering to our values.  The trusted advisor also doesn’t just wait for us to express an intention – it helps to shape intentions by proactively suggesting actions that we hadn’
t even thought about but that turn out to be enormously valuable.

The disruptive potential of trusted advisors

The trusted advisor business is likely to be disruptive to established businesses, both on the Internet and in the bricks and mortar space.  Internet businesses have become deeply addicted to advertising revenue models and will find it very challenging to shift to a subscription based model. Bricks and mortar businesses – whether product manufacturers or retailers – have their own products that they’re trying to sell and would be deeply averse to recommending products or services sold by competitors.

But this is also why the mass market trusted advisor business model is such an interesting opportunity. There’s a white space out there defined by untapped capabilities and unmet customer needs that existing players will find very challenging to address.

When trusted advisor businesses begin to establish themselves, they could begin to capture much of the economic value that today is held by traditional product and service businesses and retailers. These trusted advisor businesses will now have a much deeper and intimate relationship with the customer than any of these traditional companies have been able to establish and they will have a growing ability to shape customer purchasing behavior.

These trusted advisor businesses could ultimately become infomediaries – a business concept that I first explored in Net Worth.  Infomediaries have the potential to shift the ownership of customer data from the product and service vendors to the customers themselves.  In this case, the trusted advisor could become the custodian of customer data and, subject to the direction of the customers, manage it on their behalf and determine who can have access to the data and under what conditions.

As we’ll see below, the rise of trusted advisors could also undermine the scale advantages that have driven the growth of established businesses in the past, creating an interesting structural advantage over time that could marginalize large, established players.

Economies of scale and scope

The rewards will be significant for companies that target and successfully occupy the trusted advisor role. The economics driving this business model have powerful economies of scale and scope.  The more I know about you as an individual customer, the more helpful I can be to you in terms of recommending things that are truly relevant to you.

This, by the way, is a key obstacle for product and service vendors – they typically see only a slice of the activity of the customer. It’s the classic “share of wallet” problem – for example, if I’m a bank, am I handling 90% of your financial activity or only 10%?

Economies of scale and scope go one step further as well.  The more customers I serve as a trusted advisor, the more helpful I can be to each customer, since I am in a better position to look for patterns of needs and value across a larger number of more diverse customers.  This can often prompt valuable recommendations: “You haven’t expressed an interest in this, but I’ve noticed that many people like you are using and getting a lot of value from this product or service.  Would you be interested in more information about it?”  And the more customers I serve as a trusted advisor, the more insight I can gain from feedback loops in terms of responses to recommendations that I’ve made.  I’ll learn a lot faster than a business that is serving a narrower segment of customers.

As a result, the mass market trusted advisor business enabled by digital technology is likely to become very concentrated over time.  In the early stages, we are likely to see trusted advisors emerge in specific domains like financial services, wellness and healthcare, home ownership and travel. Over time, though, leaders in each of these individual domains are likely to extend out into adjacent domains, until the trusted advisor is helping customers across all domains of their activity.  Think about it. As an example, if I’m advising you about your financial needs and I know more about your health, wouldn’t I be more helpful to you on a variety of fronts, including issues like investment goals and insurance coverage?

Accelerating fragmentation

On a macro-economic front, the rise of trusted advisors is likely to accelerate fragmentation in other parts of the economy, especially in product and service businesses.  A niche product or service business is likely to have much more success in connecting with the most relevant customers if there are trusted advisors that are investing in getting to know the individual needs of customers. 

In contrast, the tendency of many consumer product businesses to consolidate in order to get preferred positioning in large “big box” retailers will likely diminish as trusted advisors become more active in shaping customer purchase activity and demonstrate their unwillingness to be influenced by product or service vendors.

And what about all those “big box” retailers? Will customers have as much need for their breadth of selection in a brick and mortar store if they are becoming more reliant on trusted advisors who can help them to quickly narrow the selection of what they might be looking for?

A path forward for existing companies

Does that mean that existing companies are precluded from addressing this emerging business opportunity? Not necessarily.  It will be challenging, but there are evolutionary paths that existing companies might pursue.  In particular, they might begin to develop a different approach to marketing, something that I have called “collaboration marketing.”

Rather than staying wedded to traditional push-based marketing approaches that focus on intercepting, isolating and insulating the “target” customer, collaboration marketing harnesses the power of pull to attract customers, motivating them to seek you out because you are becoming more and more helpful, assisting them to get more value from the products you’re selling.  One of the most effective way to be helpful to customers is by mobilizing a large number of third parties who have complementary products and services that can help the customer get more value from your own products and services.

Companies that master the techniques of collaboration marketing will start to build more trust with customers based on their increasing helpfulness in addressing the customer’s needs.  As I’ve suggested earlier though, companies traveling this path will ultimately need to make a very difficult choice if they are truly going to win the deep trust that they will need from the customer.  They will eventually need to shed their own product businesses to reinforce with customers that they are truly impartial in terms of evaluating the full array of products and services that might be relevant to their needs. I have explored the “unbundling” imperative for existing companies in a Harvard Business Review article here.

Bottom line

The mass market trusted advisor role is not here yet, but companies aspiring to target this role should not be complacent and sit on the sidelines.  This new type of business will be driven by powerful economies of scale and scope that will make it increasingly difficult to challenge early entrants once they build critical mass. This is a business that will not be kind to “fast followers.”

Given this, what should companies who are intrigued by this business opportunity do?  Here are some early steps you might want to consider taking:

• Assess the customer data you might already have and determine where and how you might be able to proactively help customers (and resist the temptation to use this data for narrow cross-sell and up-sell purposes)

• Determine how you might be able to harness the Internet of Things and other technology to gain even more insight into who your customers are, how they are actually using the products and services you have sold them and their broader context

• Seek out and mobilize third parties that can help add value to the customers you are serving and connect them to your customers in ways that help them and provide you with more data and insight regarding their needs

• Find ways to engage in short term value exchanges that will demonstrate to customers that you are using their data to increase the value that they derive from your products and services and that will motivate them to share even more data with you

Remember, it’s not about the data you capture but the value that you unleash from the data and deliver back to the customer. The data will ultimately migrate to the businesses that can create the most value for the customer from the data.

The Big Shift in Strategy – Part 2

In my last blog post, I suggested that we’re going through a big shift in strategy from strategies of terrain to strategies of trajectory.  In that blog post, I made the case that strategies of terrain are increasingly dangerous in times of accelerating change, but I left you hanging in terms of what strategies of trajectory might look like.

Most strategies (strategies of terrain) tend to look from the present out to the future. Strategies of trajectory start with a view of the future and work back to the implications for action in the present.  

Here’s the paradox: strategies of trajectory become more and more essential in times of rapid change and uncertainty, while at the same time becoming more and more difficult.  But that’s exactly what makes strategies of trajectory so valuable. Most of us tend to fall back into our comfort zone and just focus on the present, leaving us vulnerable to the changes just ahead.  Only a few will venture beyond their comfort zone. Those few who craft strategies to focus action today based on an anticipated future that’s quite different from today will be in the best position to reap the rewards of a rapidly changing environment. They will stand out from the rest of us who are scrambling to respond to the latest event and, in the process, spreading our limited time and resources more and more thinly.

So, what’s required to craft these strategies of trajectory? Five elements can help to make these strategies successful:

• Challenging
• Shaping
• Motivating
• Measuring
• Learning

Challenging

In a world of accelerating change, one of our greatest imperatives is to "unlearn" – to challenge and ultimately abandon some of our most basic beliefs about how the world works and what is required for success. But, how do we challenge ourselves when these beliefs are often so deeply held that they are often never even articulated, much less questioned?

I’m a proponent of scenario development as a tool to identify, assess and ultimately achieve alignment around potential futures. One of the great elements of scenario development is that it explicitly starts with the proposition of alternative futures. That in itself helps to pull us out of our comfort zones and challenges our preconceptions about where the future is headed. But, from my experience, this needs to be combined with two other elements to really challenge our most deeply held beliefs about the world around us and about the actions that will lead to success.

First, we need to find people who are deeply creative but from very different domains. Give them a deep dive into our current business and market arenas and then ask them to participate in the scenario development exercise with the specific task of imagining some potential futures that could disrupt our company’s business. It’s important that the scenario development includes people who will challenge the thinking of the leadership team.

Second, integrate the scenario development process with another key question: given the most likely future, what are the two or three business initiatives that we could take in the next 6 – 12 months that would have the greatest impact in accelerating our movement towards the kind of company we need to be successful in that future – and do these initiatives have a critical mass of resources and funding today?

One of the common traps of scenario exercises is that it’s often easy to get senior leadership to sit around a table and nod in agreement to a likely scenario when it is viewed as a theoretical construct with no implications for what one would do differently today.  By adding the question about near-term initiatives, it makes clear that this scenario will have significant near-term implications. In my experience, this surfaces all kinds of disagreements that would have been shoved under the rug if the participants believe it will make no real difference to what they do tomorrow. For more exploration of this FAST strategy approach, click here.

Strategies of trajectory can only succeed if the participants are aligned around a shared view of the future. In an exponentially changing world, that future is likely to be quite different from the present. The challenge is to ensure that the participants have escaped from the prison of the present and have a view of the future that is likely given the forces at work on the global business landscape. The good news is that view of the future doesn’t need to be (and, in fact, shouldn’t be) a detailed blueprint. It should be a high level view of key elements that can help us to focus and make difficult choices today.

Shaping

Here’s another potential problem with scenario exercises.  They tend to put us into a passive mindset – we can assign probabilities regarding alternative futures but, at the end of the day, we’re put into the position of analysts on the sideline, simply trying to assess how the future will play out.

What about the opportunity to materially alter the probabilities regarding potential future outcomes? Rather than just focusing on which future is most probable, ask which future is most attractive to the company in terms of positioning it to capture a disproportionate share of economic value. Then ask what actions the company might take to increase the likelihood of that future and to ensure that it is positioned in the most attractive part of the market.

In times of rapid change and growing uncertainty, we actually have far more degrees of freedom to restructure entire markets and industries than in more stable times. Yet, senior executives often fall into a passive, reactive posture in these kinds of environments, rather than exploring how they might proactively shape the future. Shaping strategies are classic strategies of trajectory – they begin by defining a desired market or industry structure and then focus on mobilizing third parties to invest to support the shaping strategy.  

I’ve written extensively about the opportunity to pursue a shaping strategy and the three key elements that are key for the success of these strategies, including a Harvard Business Review article summarized here.

These shaping strategies are particularly powerful because they’re highly leveraged on two levels – they mobilize the resources of a large and growing number of participants and they create a rich opportunity for distributed innovation so that everyone learns faster as more participants join.

Motivating

People tend to magnify risk and discount reward when faced with rapid change and high uncertainty, prompting them to delay action or, at best, to make very modest and tentative moves.  Successful strategies of trajectory need to find ways to motivate people to overcome risk averseness and to take bolder action.  

Scenarios can be helpful in this regard, but they’re unlikely to be sufficient.  Scenario planners tend to emphasize the value of framing scenarios as stories that can emotionally engage participants. I would take it one step further. There’s an opportunity to craft a powerful narrative, one that highlights a compelling opportunity out in the future and that provides a call to action for others to help achieve that opportunity. (For those who aren’t familiar with the key distinctions that I make between story and narrative, check them out here).

Narratives are tailor-made for strategies of trajectory.  They focus on defining a future opportunity and then work back to the present by making clear what choices and actions today will help to achieve that longer-term opportunity. Some of these choices and actions are clearly specified, but most are left open to the people we’re trying to reach so that they have room to experiment, improvise and innovate in terms of approaches to achieving that longer-term opportunity.

These narratives become particularly powerful if they’re framed as an opportunity for many others beyond an individual company.  They can become a significant source of leverage by motivating others to invest to support and amplify the efforts of a single company.

Measuring

As the name suggests, strategies of trajectory are ultimately about measuring movement in a particular direction.  Any strategy of trajectory must therefore be explicit about the metrics that will indicate whether we’re on track to establishing the desired position in the future.  

Two important points about metrics.  First, resist the temptation to focus on financial metrics.  These are lagging indicators telling us how we have done. Wherever possible, identify operating metrics that are effective leading indicators of the kind of performance you are seeking to achieve. And focus on operating metrics that are specific to the desired position in the future even if these operating metrics are marginal to your current business performance. For example, if your strategy is to become a “trusted advisor” to customers in a particular domain, focus on the number of proactive recommendations you provide to relevant customers and the response rate of these customers.

Here’s the second point. Forget about performance snapshots that focus on your performance at any specific point in time.  Strategies of trajectory focus on acceleration – they’re about performance over time. Is your performance stable, increasing linearly or accelerating? If it’s not accelerating in an exponential world, something is wrong.  So, strategies of trajectory are relentlessly focused on patterns of movement over time.

Learning

In a time of accelerating change, learning is essential to success. Whatever we know today is depreciating in value at an increasing rate. Strategies of trajectory are ultimately about how to accelerate learning at scale. In fact, the four elements explored above each contain a strong learning component.

No matter how fast things are moving, there’s a paradox: the more time we take to reflect on our experiences, the faster we’ll be able to move. But this only works if we have a destination in mind. Without a destination in mind, we will surely learn from our experiences but the learning will be random. If we have an idea of where we’re headed, then we can profit much more from reflecting on our near-term initiatives and assessing how effective they are in accelerating our movement towards our destination.

And, by the way, we’ll also learn a lot more about the destination we’re striving to reach. Part of the learning process is to continually step back and ask how we might refine our view of the destination to help us make even more progress.  That’s the power of the “zoom in, zoom out” approach in the FAST strategies discussed earlier – we’re constantly striving to learn more about the nature of the destination and about the approaches that will accelerate our progress. The key is to carve out the time to reflect on what can be learned from the progress (or lack of it) that we’ve achieved and to adjust our actions accordingly.

Bottom line

Forget about the path in front of you, no matter how familiar or well paved it might be.  First, figure out where you want to be, then craft the path that will be most likely to get you there quickly. The terrain around you today is important, but only to the extent that it provides resources to support you in the journey to the terrain that’s already taking shape under the surface.

If you’re not continuously operating on two horizons simultaneously – a five-ten year horizon and a six-twelve month horizon – and rapidly iterating back and forth between these two horizons, you’ll quickly get sidelined. But just remember, there’s a very big upside: in an exponential world, small moves, smartly made, can set very big things in motion.

Some additional resources

In my quest to craft strategies of trajectory, I’ve been influenced by the following books, many of them ironically written over a decade ago:

Hugh Courtney, 20/20 Foresight
Gary Hamel and C. K. Prahalad, Competing for the Future
Bob Johansen, Get There Early
Peter Schwartz, The Art of the Long View

The Big Shift in Strategy – Part 1

In an exponential world, it stands to reason that our traditional, linear approaches to strategy will need to be re-thought from the ground up. One way to characterize the big shift in strategy is that we are moving from strategies shaped by terrain to strategies shaped by trajectory. What do I mean by this?

Strategies of terrain

If you think about traditional approaches to strategy, they were profoundly shaped by the current landscape. The job of the strategist was to look across the surrounding terrain from the vantage point of the company and determine what were the most favorable positions to occupy – where could the company build positions of sustainable competitive advantage? Sure, there was a dynamic component to the strategy – your actions could alter the landscape and any good strategist would need to anticipate the likely actions of existing competitors and potential new entrants. But the starting point was always your current position and the current landscape surrounding your existing position.

But as the world changed, so did strategy.  As the terrain become more unstable, evolving at a faster and faster rate with increasing uncertainty as to potential outcomes, the horizon of the strategist began to shrink in two ways.  First, strategists shifted from a view of the external terrain to a view of the internal terrain.  Rather than looking at the structure of markets or industries, the strategist began to focus on “core competencies.”  Strategists started to look inward, at the terrain within the company, in a systematic effort to identify the existing capabilities that were world-class and focus on approaches to strengthen those core competencies even more.

In parallel, there was a move to strategy as “hustle”.  Since the external terrain was evolving more and more rapidly with increasing uncertainty about outcomes, this school of strategy argued that those who could sense and respond most quickly to the near-term events would be the ultimate winners.  The only terrain that mattered was the terrain immediately surrounding the company and the relevant time frame was today, not tomorrow.

But here’s the problem. In a world that’s more rapidly changing, there’s a significant risk involved in focusing on a narrowing terrain today.  The core competency approach can be easily blind-sided if it turns out that the capabilities that are creating great economic value today suddenly become obsolete. We may be focusing on making better and better buggy whips while missing the fact that the market is shifting from horse drawn carriages to cars.  

The hustle approach has a different problem.  First, it runs the risk of spreading the resources of the company way too thinly across too many fronts as the company races to respond to all incoming actions without any ability to prioritize which of these events are really enduring versus one-off distractions. Second, day to day hustling as a hard time dealing with fundamental disruptions that require more than an incremental, short-term response.  If we are moving from horse drawn carriages to cars, we may need to respond with more than hustle.

I would suggest that our efforts to evolve terrain-based strategies to cope with an exponential world are yielding rapidly diminishing returns. If you want evidence of this, check out our analysis of the collapse of return on assets for all public companies in the US since 1965. 

Strategies of trajectory

What we need to do at this point is to step back and reassess at a more basic level our approach to strategy.  Rather than focusing on terrain, however narrowly or broadly defined, perhaps we should shift our attention to trajectory.

Here’s the paradox. At precisely the time that change is accelerating and uncertainty increasing, we need more than ever to have a clear view of the trajectory of change and how it will reshape the business landscape in the decades ahead. We also need to assess carefully what degrees of freedom we might have in shaping these outcomes through our actions, rather than simply taking them as a given. We then need to develop strategies that will put our companies on a trajectory to compete more effectively on a rapidly changing terrain.

Rather than looking from the present out to the future, we need to look from the future back to the present to determine which actions will have the greatest impact and create the most economic value over time. As Yogi Berra famously observed, "You've got to be very careful if you don't know where you're going, because you might not get there." The winners in a more intensely competitive world will be those who know where they are going and accelerate their movement in the most promising direction.

Position in the future, not the present

As I indicated in a couple of earlier blog posts here and here, strategies of position still matter, but I didn’t sufficiently emphasize that these new strategies need to focus on the most attractive and advantaged positions in future landscapes, not the current landscape. If we just focus on position in the current landscape, we risk being blindsided as the landscape rapidly evolves into something quite different.  What looks like solid high ground today can quickly become quicksand, dragging us under.

Perhaps even more importantly, the most advantaged locations in the future landscape often are not even part of today’s landscape and they will tend to emerge and be shaped by significant economies of scale and network effects that will play out very quickly once critical mass has been achieved. Playing a wait and see game in the hope that things will become clearer over time can be very dangerous. By the time you see what’s happening, it may be too late to do anything about it. Fast followers in an exponential world will increasingly find that they are on a path to the grave.

Anticipating the future

But I can already hear the pushback. “John, the future’s just too uncertain. We can’t possibly know what the landscape is going to look like a decade from now.” There’s no question that there’s a lot of uncertainty, but part of the problem when we shrink our time horizons is that we get more and more buffeted about by surface events and lose our ability to distinguish what is lasting versus momentary change. As a result, the more we shrink our time horizons, the more uncertain the world looks. It’s easy to get overwhelmed and fall into a vicious cycle where the more we shrink our time horizons, the more uncertain the world looks and then we shrink our time horizons even more.

It helps to know that we don’t need a detailed blueprint of that future landscape – all we need is enough detail to give us a sense of direction and to help us make some difficult choices in the near-term.  In fact, by moving away from a perceived need for a detailed blueprint and focusing instead on the broad outlines of the future, we now have greater incentive to identify and understand the fundamental forces that are shaping the business landscape, rather than getting lost in the details. This greatly simplifies our task since the long-term forces shaping the business landscape are more predictable in terms of their broad direction than the swirling surface events that emerge unpredictably and just as quickly disappear.

So, what are the winning strategies of trajectory to replace the strategies of terrain that are getting us into more and more trouble? I’m afraid I’ll have to leave that to my next post because this one is already reaching a length that will prove challenging for those of you who are struggling to keep up with the surface events that are competing for our attention on a daily basis.  I assure you, there is more to come so be sure to carve out the time to explore this with me.

Companies and Movements

On Labor Day, I posted about movements and the foundations for successful movements.  Many of the executives that I work with me gave me quizzical looks. They asked, “Why are you writing about movements? You’re a business consultant. What does this have to do with business?”

Good questions. Let me see if I can offer some answers.

Movements and companies – what’s the intersection between these two? Sure, there are movements against companies – we all can name dozens of boycotts against specific companies for a variety of reasons, ranging from unfair labor practices to the politics of the countries they’re from. Even the labor movement that gave rise to Labor Day was at one level a movement against companies. But, what about companies that are catalysts and drivers of movements of their own? How many of those can you name?

There’s something unnatural about the question. Companies aren’t movements and movements aren’t companies. We all know that.

I want to suggest something a bit heretical. Maybe it’s time to call for a new set of movements – this time initiated by companies, but engaging large segments of the population in a collaborative quest to discover new ways to create value in an increasingly challenging economy.

Before I develop the reasoning for this, let me step back and quickly re-cap the definition of movement that I offered in my earlier blog posting. I suggested that a movement is “an organized effort mobilizing a large number of independent participants in a grassroots effort to pursue a broad agenda for change.”

The Big Shift

So, again, what does this have to do with companies? As I’ve written elsewhere, we’re in the early stages of a Big Shift that profoundly changes how we do business.  We’re only beginning to understand the new practices and institutional arrangements that will lead to success in this Big Shift.  But one thing we know for sure: the new practices and institutional arrangements will require significant movement from where companies are today. (If you doubt this, see the significant long-term erosion in ROA for all U.S. public companies since 1965).

Now, companies can undertake this journey in isolation or they can invite others to join them in a movement of mutual discovery.  If we try to make this journey in isolation, it will be a lot more challenging. No matter how smart we are in any single firm, we’ll likely be a lot more successful if we enlist the help of others outside our firms and motivate them to make the journey with us.

This is especially true if, as we’ve suggested in the past, one key dimension of the journey is the shift from an institutional rationale of scalable efficiency to one of scalable learning.  It’s not surprising that companies and movements were viewed as so different in the past.  Scalable efficiency fostered a quest to bring activities inside the four walls of an enterprise and to organize them as efficiently as possible. If outsiders were needed for anything (and inevitably they were, since no firm is completely self-sufficient) the focus was on reducing the number of participants from the outside and carefully dictating their activities to enhance efficiency.

Scalable learning changes all that. If we’re seriously committed to learning at scale, we’re inexorably pulled beyond the four walls of our enterprise and drawn to connect with an expanding array of other participants who can help us to learn faster. In other words, we’re drawn to join, or organize, movements.

It may not be an exaggeration to say that movement of this magnitude requires a movement to significantly increase the odds of success. But, here’s the problem. Most companies don’t yet see the need for help (except, of course, for the ever generous subsidies from our government) and the few who see the need for help would be loath to admit it publicly.

But that’s just the point.  The few companies who see the need for help and are willing to be vulnerable and express that need just might differentiate themselves in a powerful way from their struggling colleagues.  And they might find that they pull together a growing number of people and institutions who can be extremely helpful in exploring new pathways towards much more powerful value creation.

Movements shaped by companies

So, what would such a movement look like? Well, we’re not talking about the conventional “corporate social responsibility” movement that’s driven by some noble purpose above and beyond the company. We’re talking about the future of the company – re-inventing its core rationale so that it can turn the mounting pressure of the Big Shift into growing success.

But, it can’t just be about the company itself. One way of thinking about the Big Shift is that it’s a movement from an era when individuals had to find ways to fit into the pre-determined slots established by our institutions to one where our institutions will need to find ways to organize around individuals. In this respect, movements are just a natural extension of this new reality – and companies will need to find ways to spawn and participate in movements.

It’s about identifying an opportunity for the company and others to come together to create something of much greater value than the company ever could on its own.  And, it’s about finding a common purpose that can motivate and mobilize many others beyond the company to participate in a shared quest.  It’s ultimately about creating an environment for scalable learning where all participants can learn faster and achieve more of what is valuable to them.

What would we need to do that? Well, as I suggested in my earlier post, successful movements of any type are built on two key foundations: (1) a powerful and engaging narrative and (2) a creation space that focuses on accelerating the learning of a growing number of small groups committed to making a growing difference in their arenas of action.

The role of narrative

Just to re-cap, I drew a sharp distinction between stories and narratives. I suggested that stories are self-contained (they have a beginning, middle and resolution) and they're about the story teller or some other people, they're not about the listener.  In contrast, narratives are open-ended, they are yet to be resolved and their resolution depends upon the choices and actions of the listener.  As a result, they're a powerful call to action, emphasizing the ability that we all have to make a difference.

Now, here’s the problem.  As I discussed here, here and here, very few companies have anything resembling a narrative. At best, they have an open-ended story about how they had humble beginnings, faced enormous obstacles and achieved extraordinary things, with much more to come. It’s still a story about them – the only thing that people outside the company are supposed to do is stand back in awe and await the accomplishments ahead. It’s certainly not a call to action, except perhaps to buy more of the company’s products.

An effective corporate narrative would identify an opportunity that’s beyond the reach of a company today, an opportunity not just for the company, but for many, many others. An opportunity so great that it can’t be achieved in isolation but requires collective action. It would move others to join forces and take action in powerful new ways. What would such an opportunity look like?

Well, in the context of the Big Shift, such a narrative might focus on harnessing the exponential opportunities made possible by the forces driving the Big Shift. Depending on the market or industry, it could be the opportunity to generate unprecedented economic value and wealth, the opportunity to achieve levels of wellness and longevity that were previously unimaginable, the opportunity to discover and express one’s unique individuality and expand impact by connecting with others, or the opportunity to nurture our children so that they can achieve previously unimaginable levels of impact. These are just some of the possible opportunities that a narrative might focus.

The role of creation spaces

But articulating an opportunity is only a first step. A movement requires action and creation spaces are powerful ways to amplify action.  As I discussed in more detail in my earlier post on movements, creation spaces help to organize activities in ways that accelerate learning. The basic organizational unit of a creation space is a small group of people. These people come together and collaborate in ways that help them individually and collectively to achieve higher levels of impact. Through this collaboration, they form deep trust-based relationships within their group because they're sharing their vulnerabilities in a quest to learn from each other. The real power of a creation space is that it creates an environment that can scale in ways that help the small groups to learn even faster by connecting with each other.  

Companies can play a powerful role in catalyzing, nurturing and scaling these creation spaces. The key here is to move beyond organizing communities of interest (something that I wrote about extensively in Net Gain) and focus on organizing communities of action. Note also that these creation spaces are quite different from conventional crowdsourcing efforts that are usually focused on narrowly defined tasks or problems. In creation spaces, the opportunity is open-ended and invites the sustained collaboration of large numbers of individuals coming together in small groups that form deep, trust-based relationships as they experiment and improvise approaches to expand their impact.

The benefits of movements

But, what’s in all this for companies? As I mentioned earlier, the Big Shift is requiring all companies to pursue models of scalable learning that extend far beyond their own four walls. Movements shaped by narratives and creation spaces can become powerful engines of scalable learning.  By mobilizing a large number of third parties, movements create rich environments to accomplish the following:

• Distributed innovation – Lots of groups proceeding in parallel, each pursuing different approaches towards a shared opportunity, can become a much more powerful engine for innovation than a single company proceeding in isolation

• Accelerated learning and performance improvement – As the smaller groups share their results and see which approaches are yielding higher impact and which approaches a falling short, they can learn much faster than if they just focus on their own efforts and move to higher and higher levels of performance

• Leveraged growth – Properly framed, these movements can mobilize the resources and capabilities of a very diverse set of participants to generate far more economic value at far lower cost than the traditional “make versus buy” approaches to growth

• Shaping strategies – These movements can profoundly restructure entire markets or industries, pulling companies out of a short-term reactive posture and positioning them to build positions of competitive advantage that will be very difficult to attack.

• Deeper and more sustained relationships – By building trust and focusing participants on a long-term opportunity, these movements can quickly move companies out of their largely short-term transactional relationships with customers and other third parties. These deeper relationships in turn amplify the conditions for even more rapid innovation, learning, performance improvement and growth, setting into motion an increasing returns dynamic that will be hard to resist.

• Greater passion among participants – As I’ve discussed elsewhere, a specific form of passion – the passion of the explorer – is becoming more and more central to scaling learning and accelerating performance improvement in increasingly uncertain environments. Movements built upon compelling narratives and high impact creation spaces are powerful catalysts for this kind of passion.

Bottom line

The Big Shift can't be addressed in isolation. To make the transition from mounting performance pressure to exponential opportunity, institutions will need to catalyze broader movements, pulling in more and more participants over time to pursue a shared opportunity. If done right, small moves smartly made can set very big things in motion.

To get started, companies should focus on five questions:

• What is a narrative with the power to engage and mobilize the participants that will be most helpful in embarking on a quest to achieve a shared opportunity?

• Where are these participants gathering today in communities of interest and how can we pull them into communities of action where the goal is not just to learn about something but to actually achieve greater and greater impact within a specific domain?

• How can we reduce barriers to entry for participation in this movement?

• What tools or resources can we provide to these creation spaces to accelerate and expand impact?

• What metrics can we develop to determine whether this movement is achieving more and more impact and to provide a compass for the participants we’re mobilizing?

Making a Movement: Narratives and Creation Spaces

What better day than Labor Day in the US to explore movements and narratives? Labor Day emerged directly from the powerful labor movement in the US. Throughout history, we’ve had a lot of movements that have shaped our economic, social and political arenas.

I believe we’re on the cusp of a new wave of movements. These new movements will be built on two solid pillars – compelling narratives and nurturing creation spaces. In this post, I’ll explore the role that both of these pillars play in generating movements that can make a difference. Narratives help to provide motivation and focus while creation spaces help to harness scalable learning.

What is a movement?

Here we run into the inevitable challenge of semantics – movement, like many words in our language, is used very loosely and can mean many things. One dictionary defines a movement as “an organized effort to promote or attain an end.” This suggests two key elements: intentionality and organization. There must be an intent or goal that provides the rationale for a movement to exist and there must be some degree of organization to help focus collaborative effort to achieve that intent or goal.

But, like many definitions, this one has limitations. For example, by this definition, all corporations would have to be considered movements – they’re all working to promote an end, whether it be shareholder value increase or enhancing the delight of the customers they’re seeking to address.

So, let’s modify the definition a bit to capture the kind of movement I have in mind: “an organized effort mobilizing a large number of independent participants in a grassroots effort to pursue a broad agenda for change.” That certainly encompasses the labor movement that gave rise to Labor Day, as well as such well-known movements as the evangelical movement, the Civil Rights movement, the anti-Vietnam War movement, the women’s movement and the Tea Party movement.

The rise and fall of movements in the US

It’s interesting that movements were once central to American history, but they seem to have been marginalized in recent years. At least, that’s the implication of Google’s NGram analysis which shows that the usage of the term in books increased by almost 15 fold in a steady rise between 1800 and 1973, when it peaked, and then began a long and sustained decline of 25% over the past four decades.

What happened? Perhaps it’s a reflection of the passivity that our mass market society has instilled in us. When there’s mounting pressure to make a living and so much to see and experience outside of work, who has time to focus on a sustained program of change? And besides, it’s all futile any way. Hipster cynicism suggests it’s all a waste of time – far better to savor the kale salad and that interesting new Chardonnay. If it’s something short and sweet, like dumping an ice bucket on our head or posting a pledge on Facebook, sure, we might be lured into doing that, but just don’t expect any sustained effort.

Here’s the paradox – movements become more and more feasible given rapidly improving technology infrastructures that can help us to connect with each other and collaborate in rich ways across great distances. Yet, it’s exactly at this time that movements seem to be either receding or floundering.

Time for a change

Maybe, just maybe, it’s time to revive the term and explore opportunities to bring a growing number of us together to drive meaningful change. We just might tap into that growing dissatisfaction on the edge of society with the passive consumerism and celebrity voyeurism that has defined our culture in recent decades.

Pockets of people are beginning to say “Basta!” and wanting to become more active “makers” of the products and experiences that shape their lives. Others are challenging the “wisdom” that one should go to work to earn a paycheck and save whatever passion they might have for after-hours hobbies or friends.

What would we need to see a resurgence of movements? Two things will need to come together and, when they do, they’ll provide a powerful antidote to the passivity and cynicism that dominates much of our lives today. Those two things are: narratives and creation spaces. I’ve written a lot in the past about both of these, but I’ve never really tied these two together and certainly haven’t addressed them in the context of movements.

The power of narratives

I began my exploration of narratives in contrast to stories here. To briefly recap, I’ve suggested that stories are self-contained (they have a beginning, middle and resolution) and they're about the story teller or some other people, they're not about the listener. In contrast, narratives are open-ended, they are yet to be resolved and their resolution depends upon the choices and actions of the listener. As a result, they're a powerful call to action, emphasizing the ability that we all have to make a difference. If you want to move people to action, narratives are a powerful way to get people off their sofas and into the streets.

Stories are very emotionally powerful but narratives are far more powerful. Throughout history millions of people have given their lives – the ultimate act of sacrifice – on behalf of narratives.

Narratives are also a powerful way to address the cognitive biases that grip us in times of high uncertainty and rapid change. In these times, we tend to magnify perception of risk and discount perception of reward, shorten our time horizons, fall into zero sum views of the world (it’s a win/lose world) and lose trust in those around us.

Opportunity based narratives can change all that – they magnify our perception of reward, lengthen our time horizons, highlight the potential for a positive sum world (where the total value is increasing) and strengthen our ability to trust those who are on a shared quest – all key requirements for successful movements

As I’ve suggested before, narratives are also powerful vehicles to catalyze and amplify the passion of the explorer. Three attributes define the passion of the explorer – a long-term commitment to making an increasing contribution to a domain, a questing disposition that is excited by new challenges and a connecting disposition that seeks to find and collaborate with others in addressing these challenges. If you want to build a successful movement, wouldn’t you want to instil this kind of passion in its participants?

Look at every successful movement for change throughout history – its foundation was built on a compelling and energizing opportunity based narrative that moved people to come together and act. We could learn a lot by analyzing these narratives and understanding how they might help us to craft new narratives to accomplish even greater things today.

The power of creation spaces

Narratives can be powerful catalysts for movements but they’re not sufficient. Movements really take off when they’re combined with a distinctive form of organization – something that I’ve called creation spaces.

Creation spaces help to organize activities in ways that accelerate learning. The basic organizational unit of a creation space is a small group of people who come together and collaborate in ways that help them individually and collectively to achieve higher levels of impact. Through this collaboration, they form deep trust-based relationships within their group because they are sharing their vulnerabilities in a quest to learn from each other. These small groups multiply and take a lot of local initiative – they’re constantly experimenting and improvising in an effort to discover ways to achieve more impact.

These small groups are very effective in driving learning, but they have one critical limitation – they don’t scale. Once they grow beyond 10 to 20 participants, they tend to fragment and weaken the deep trust-based relationships that are so critical to driving the learning process.

The real power of a creation space is that it creates an environment that can scale in ways that help the small groups to learn even faster by connecting with each other. These small groups learn from each other through a variety of mechanisms, ranging from regular gatherings of participants across groups to online discussion forums where participants in one group can ask questions and get advice from participants in other groups about a particular challenge they’re facing.If you want to know more about creation spaces, I’ve written extensively about them in “The Power of Pull.”

I originally came across creation spaces in arenas where you see sustained extreme performance improvement – arenas as diverse as extreme sports like big wave surfing and online video games like World of Warcraft. As diverse as these arenas were, they spawned environments with a set of common characteristics designed to scale learning so that the more participants who join in, the faster everyone learns. We begin to see collaboration curves in action.

I had been exploring creation spaces for quite some time but never made the connection to movements until I read an article by Malcolm Gladwell in the New Yorker on “The Cellular Church.” His article addressed a key misconception about the evangelical movement. The media tends to focus on the mega-churches of pastors like Rick Warren where the faithful gather every Sunday by the thousands to worship together. Gladwell urged readers to pay attention to where the real action is in the evangelical movement – small groups of faithful who come together in “cells” and often meet a couple of times each week. The goal of these groups is to work together to develop practices that can increase their impact in their local community – their focus is on action and learning from that action. The participants in these small groups then come together on Sunday and in other forums to share their experiences and learn from the experiences of others.

This article really resonated with me. It certainly was exciting as yet another example of the creation space model of organization. It also reminded me of my days in the anti-Vietnam War movement of the 1960s where the focus of action was not in the massive street demonstrations which drew all the media attention, but in the local chapters of SDS and similar groups that were meeting and acting on a much more frequent basis to inform and mobilize people in a growing range of acts of resistance. And the more I researched other successful social movements, the more I saw this same pattern of organization in action.

The interplay between narratives and creation spaces

What’s really interesting to me is how narratives and creation spaces reinforce and amplify each other.

Narratives provide the context and shared purpose that pull others into the movement and keep them motivated and focused as they encounter and deal with the myriad of unexpected obstacles standing in the way of meaningful change. Creation spaces provide an environment that encourages and supports local initiative in collaboration with others while also providing a much richer set of resources that these local groups can draw on, and learn from, as they mount their local initiatives.

The more rapidly participants at the local level learn, the richer the overarching narrative becomes, both regarding the nature of the opportunity ahead and the journey that participants will need to make in order to achieve that opportunity. The more compelling the narrative becomes, the more it draws in others to participate and learn from each other.

Bottom line

So, let’s say we’re interested in reviving movements as engines of social change. What are some tangible first steps that we might take? This is worthy of a series of blog postings, but let me start with some brief suggestions, all driven by one of my mantras: “small moves, smartly made, can set big things in motion.”

First, bring together a small group of like-minded individuals and take on the task of crafting a short but compelling narrative that highlights the nature of the opportunity ahead, the forces that are making this opportunity more viable and the obstacles that are likely to make it challenging to achieve this opportunity. If it’s going to be an opportunity based narrative (and it should), be sure to avoid falling into “oppositional” mindsets and languages – remember, it’s now what you’re against but what you’re for.

Second, circulate this draft narrative to a larger group of people and invite their suggestions for refinement and improvement.

Third, as people begin to indicate their support for this narrative and the opportunity it describes, encourage them to find others in their local community who might share an interest in collaborating on this adventure. Encourage them to meet and identify some actions that they might quickly take to begin the journey. As they take these actions, encourage them to reflect on what’s working and what’s not working and how they might refine these actions to achieve even greater impact.

Fourth, create some shared discussion forums/workspaces where these people can share their stories of success and the lessons they’ve learned along the way. Remember, we can learn as much, if not more, from our failures as our successes. Willingness to share failures also helps to build trust.

Then, stand back and watch what happens. Double down in areas where you seem to be gaining traction and be alert to emerging unmet needs within the movement to see what you can do to help others achieve even more impact and accelerate their learning.

Just remember – the key to the success of movements is movement. Talking and theorizing is fine but only if it leads to action. Action is helpful, but only if it is focused and directed towards a shared goal. The real power emerges when theory and action combine to change the world.

Shift Happens

I’m writing to announce an edge initiative from the Center for the Edge. It’s the publication of a really, really short book, “Shift Happens”, written by John Seely Brown, Duleesha Kulasooriya and me (with the significant help of our crew at the Center), now available on Amazon (bulk orders available here).

We all know that most executives are pressed for time – it’s one of the main reasons companies fall into the “short-termism” trap. Who has time to pay attention to long-term trends? We all want the “sound-bite” or the executive summary that gives the key points and the “so-whats” in a fast, concise and compelling way.

In our quest to fight “short-termism”, we’ve been evangelizing the “long view.” We trade in paradox – one of our key beliefs is that the long view is increasingly essential to drive short-term success. Focusing just on the short-term will actually lead to short-term failure.

So, the Center for the Edge has been investing heavily to explore the “Big Shift”, the long-term forces that have been playing out for decades and are re-shaping the global business landscape in profound ways. We’ve written a lot about this and, starting in five years ago, we’ve been publishing a “Shift Index” with 25 metrics that will help executives to better understand the rate of progress of the Big Shift.

But, here’s the problem. Who has the time to read what we’ve written? Yes, a brave minority of you have carved out the time to dive into the details. And, for that, we’re grateful. But what about the rest of you?

With “Shift Happens,” we’re trying something new.

In a very few pages with a very few words on each page, we focus on the broad themes of the Big Shift:

• What are the two key forces that are shaping the global business landscape?

• What are the three most important shifts that are occurring as a result of these forces?

• What are the three things that we all need to do to turn mounting performance pressure into expanding opportunity?

Our goal isn’t just to make sense of what’s happening around us – we want to help all of us make progress in harnessing these forces to create powerful new forms of wealth.

One key point: this isn’t just about the future; it’s about today. We’re working harder and harder and performing less and less well because we’re stuck in old ways of doing business, rather than seeing and shifting to the new ways of doing business that are available to us now.

At the risk of over-simplifying, the choice is extinction or evolution. While extinction may not happen tomorrow, the sooner we make this choice, the better off we’ll be.

So, what choice will we make? The time to decide is now, not tomorrow. “Shift Happens” will help. And spread the word – your friends and colleagues will thank you for it.

Based on your feedback, we’ve got several more of these really, really short books on the way. Edgy idea, but then again . . .

(And, yes, this is the shortest blog post I've ever written!)