What Is To Be Done (Part 3)

It’s fitting that we reach this third installment of my “What Is To Be Done?” series on Martin Luther King day.  He’s an icon of the power of narrative and its role in building movements that can fundamentally change how we live and work.  Narratives are a third key component in our quest to move beyond the dark side of technology. So far, I’ve highlighted the importance of both passion and institutional innovation in this quest, but these alone are unlikely to be sufficient in moving us to where we need to be.

What will motivate and sustain us as we connect more effectively to our passion and connect with each other to take on the task of institutional innovation?  One of the most powerful forces that will give us strength to pursue this path will be the opportunity-based narratives that have the potential to emerge as we begin to see the opportunity that lies ahead.

The power of narratives

I’ve written elsewhere about the distinction between stories and narratives.  Narratives are far more powerful than stories because they actively call for participation – they are open-ended, with the resolution hinging on the choices and actions that each of us will take in the days and years ahead. The outcome depends on us. What will we choose to do?

Why are opportunity- based narratives so powerful? There are many reasons.

• They excite the imagination – the future they paint is not fully formed, it’s only suggestive, leaving much to the imagination of the participants. 
• They call for action – it’s not sufficient to simply sit back and listen to the narrative – the outcome depends on us getting off our butts and joining the struggle despite significant challenges.  We begin to act upon our imagination, experimenting and exploring new approaches to achieving the opportunity framed by the narrative.
• They pull us out of our short-term thinking and expose us to a much more energizing long-term opportunity. We begin to make short-term sacrifices in order to participate in accomplishing something much more important. 
• They bring us together into collective action – we begin to see others who have embraced the narrative and share our desire to shape its outcome and we start to come together. We realize we’re not alone – there are others who are facing the same challenges. We can learn together how to overcome these challenges as well as draw comfort and reassurance from each other when we stumble along the way. Before we know it, we’ve come together in a movement.

Every successful movement throughout human history – whether political, religious or social – has been shaped and driven by a powerful narrative, one that invites participation by many and makes it clear that the outcome hinges on that participation. Stories can be used to reinforce narratives by showing us in very tangible form how individuals and groups successfully confronted challenges and enjoyed the rewards that came from taking initiative and being persistent.  But the over-arching narrative is ultimately what sustains and amplifies the impact of movements.

The American Narrative and the Civil Rights Narrative

One example of a successful narrative is the American Narrative – suggesting that there is a country where anyone, regardless of origins or wealth, can achieve great success. But this isn’t pre-destined – it requires each of us to make the choice to come to this land from wherever we are today and to make the effort required to achieve that success. Countless stories of individual success fed that narrative, but it was the narrative that motivated (and continues to motivate) a growing number from around the world to make the journey against great odds and build a new life for themselves.

Martin Luther King was a key contributor to framing a powerful narrative that built on the American Narrative but focused on the opportunity to include those who had been excluded by prejudice and segregation.  Here’s an excerpt from his powerful “I Have a Dream” speech:

And so even though we face the difficulties of today and tomorrow, I still have a dream. It is a dream deeply rooted in the American dream.

I have a dream that one day this nation will rise up and live out the true meaning of its creed: "We hold these truths to be self-evident, that all men are created equal." . . .

With this faith, we will be able to hew out of the mountain of despair a stone of hope. With this faith, we will be able to transform the jangling discords of our nation into a beautiful symphony of brotherhood. With this faith, we will be able to work together, to pray together, to struggle together, to go to jail together, to stand up for freedom together, knowing that we will be free one day. . . .

And when this happens, and when we allow freedom ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God's children, black men and white men, Jews and Gentiles, Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual:

Free at last! Free at last!
Thank God Almighty, we are free at last!

Tying it back to passion and institutional innovation

So, how do narratives and movements connect back to the elements of passion and institutional innovation that I explored in my “What Is To Be Done” series?  Well, I’ve explored the role of narratives in catalyzing and amplifying the passion of the explorer in a previous posting. Three elements come together to define the passion of the explorer. 

• First, there’s a long term commitment to a domain.  Narratives help to cultivate this by focusing our attention on a long-term opportunity. 
• Second, there’s a questing disposition – an orientation towards seeking out new challenges as an opportunity to get to that next level of performance and impact.  Narratives foster this by inviting participation of each of us in overcoming the challenges that stand between us and the long-term opportunity that we can realize. 
• Finally, there’s a connecting disposition – an orientation towards finding and connecting with others who either share our passion or have relevant capability to help us address the challenges ahead. Narratives encourage this by making it clear that the opportunity is a broad-based one, addressable by many and urging us to join forces to increase the likelihood of success.

And how do narratives and movements connect with the element of institutional innovation? As I discussed in my previous post, institutional innovation for large, established institutions is very challenging – powerful antibodies will resist any effort at large scale organizational change. In this context, scaling edges is a promising approach that can dampen the effect of those antibodies. 

Opportunity based narratives help us in scaling edges because they focus us on opportunities. They help us to resist the temptation to focus on threats and directly confront the core of our institutions, something that will quickly mobilize the antibodies.  These narratives, by providing a compelling view of opportunities that can be shared by many, also can help to pull people from the core of the institutions out to the edges we are seeking to scale.  They also help us to identify and connect with people in other institutions who are driven by the same narrative. As a result, we can leverage our own efforts by going outside the institution rather than depending only on the resources within the institution.  As we come together in a broader movement shaped by a compelling narrative, we’ll find support and encouragement from like-minded individuals as we face the inevitable frustrations and even near-term defeats in our quest to transform massive institutions.

What’s needed now

What we need now is a new narrative, one that isn’t confined to a specific country, race or religion, but one that highlights the incredible opportunity created by digital technology infrastructures on a global scale that are continuing to evolve at an exponential rate. One that focuses on the ability of each of us to achieve far more of our potential than we ever would have imagined possible and the opportunity to achieve even more when we come together on a global scale to learn faster than we ever could on our own. One that is clear about the challenges we’ll face as we seek to address this opportunity, but one that is also compelling about the abundance that will result as we overcome these challenges. One that helps us to find each other as we begin to gather on the edges of existing institutions and gain support from each other across multiple edges in different institutions and different parts of the world as we embark on this amazing quest.

Such a narrative can’t be written up and published. Like any great narrative, it must be crafted.  “Craft” is an evocative term because it suggests that narratives are not just created on paper, but built through the actions that we begin to take as we start to see the opportunity ahead. Narratives emerge through action and interaction as we collectively begin to sense an opportunity and learn through action what it will take to achieve that opportunity.

Yes, there are those who will begin to give voice to the narrative and articulate the forces shaping the opportunity as well the forces that will seek to prevent us from achieving the opportunity.  This is something that Martin Luther King did so powerfully in the Civil Rights movement. It wasn’t an accident that he was a Baptist minister who was intimately familiar with the Christian narrative and the power it had to move people over millennia.

But no great narrative has had a single author or emerged overnight. In addition to Martin Luther King, a host of talented leaders like A. Philip Randolph, Bayard Rustin and WEB DuBois emerged to drive the Civil Rights movement to success by helping to craft a collective narrative that spoke to a larger and larger portion of the population. They didn’t always agree with each other on tactics, but they were firmly united by a shared narrative that emerged from collective action and, in particular, from acts of enormous bravery by people like Claudette Colvin, Rosa Parks and James Meredith.

Narratives take time to take shape and acquire the texture that will make them compelling to potential participants. But, as they emerge and evolve, they can motivate us to do amazing things.  Many people (including Martin Luther King himself) gave up their lives to participate in the Civil Rights Narrative – the ultimate sacrifice that shows the incredible power of narratives.

At this point in time, we lack a shared narrative that can amplify our efforts to change the world.   A broad range of movements are in various stages of development – just think of such efforts as the maker movement, the open government movement, the unschooling movement, the singularity movement, the social entrepreneuring movement, the quantified-self movement and countless others. And then layer in a broad set of emergent efforts to mobilize change agents – for example, the Corporate Rebels United movement, the REX movement, the Stoos movement, and the thrivable movement, just to name a few. All of these efforts have lots of promise and potential, but they’re fragmented and have not yet found a way to come together around a shared view of the opportunity to accomplish something awesome.

Bottom line

So, what will it take to escape the dark side of the digital technology that's enveloping the world? Three things need to come together – individual passion, institutional innovation and opportunity-based narratives.  Without them, we’ll sink deeper and deeper into the dysfunctional world that can, and already is, being shaped by this technology.

We have an extraordinary opportunity to turn stress into abundance. But that opportunity is not inevitable.  Far from it.  There are growing forces on a global scale that are fearful of these new technologies and will do anything they can to bring the development and deployment of these technologies to a halt, all in the name of preserving what we have today.

The path we take from here will depend on each and every one of us. Will you fall prey to the dark side or will you help to do what’s necessary to truly harness the awesome potential of the technologies that we have brought into the world? The last thing we should do is become complacent, to take these benefits for granted. We need to renew our efforts to frame the opportunity ahead and to help all of us re-connect with the passion that we all had at an earlier point in our lives, but that most of us lost as we succumbed to the institutional imperative from our schools and our companies to fit in and get along.

The good news is that, if we choose to act, small moves, smartly made, can indeed set very big things in motion.

What Is To Be Done? (Part 2)

In my post last week, I made the case that we’ll only be able to overcome the dark side of technology by re-integrating passion and profession. But this is only the first step. If this is all we do, we’ll be doomed to lives of frustration and discontent.

Institutions as obstacles

Here’s the problem. We live in a world of institutions that were built in a different era – one that relentlessly sought to suppress passion in the name of predictability and efficiency. And when I say institutions, I mean all of our institutions – corporations, schools, NGO’s and government.

It’s no accident that only 11% of the US workforce is passionate about their work. This is a sign of great success. This is exactly what these institutions were designed to do – suppress passion. It starts with our schools that seek to prepare us for all the other institutional environments seeking people who can reliably follow instructions and execute in a predictable manner. Think of our current institutions as powerful chisels, relentlessly chipping away at our edges until we fit neatly into the tightly defined roles that our institutions have create.

If we’re fortunate enough to connect with our passion and find a way to pursue it professionally, our institutions will work tirelessly to put out the flame of passion and squeeze us back into the programmed roles that the institutions designed for us. We’ll find the passion slowly but inexorably squeezed out of us or we’ll find ourselves marginalized, forced to flee institutions (and the sad truth is we can never truly be free from the institutions that shape the society around us) or hiding on the edges of institutions that treat us with suspicion and disdain.

Taking innovation to a higher level

If we truly want our passion to flourish, we’ll need to change all of this. We’ll need to be innovative at an entirely new level.  Rather than focusing narrowly on technology and product innovation, we’ll need to broaden our horizons and engage in institutional innovation, imagining and then crafting an entirely new set of institutional arrangements based on a fundamentally different rationale for institutions. We’ll need to begin the long march through our institutions and redesign all aspects of them from the ground up.

We need to challenge the most basic rationale for why we have institutions to begin with. Our existing institutions were built on a rationale of scalable efficiency. It was easier to coordinate and scale transactions if they occurred within a single institution, rather than spread across multiple institutions. And efficiency in relatively stable environments required predictability.  This in turn led to increasingly fine-tuned systems driven by standardization of work, tight specification of activities and tight integration of activities. Risk undermined predictability so these systems became very risk averse.

It’s no surprise that these systems sought to squash passion – passion leads people to take risks as they embark on new quests, passion drives experimentation and tinkering, and sometimes even bold leaps, that undermine tightly integrated systems, and passion drives people to connect in unexpected ways that are not carefully programmed in advance.

Passion drives us to learn faster in our never-ending quest to achieve higher levels of impact within our chosen domain.   But our institutions today are driven by scalable efficiency, not scalable learning. In fact, scalable efficiency (at least as traditionally defined) is profoundly hostile to scalable learning – how could anyone really learn in an environment that is highly risk averse, standardizes all activity and tightly specifies every step that must be taken?

What would institutions look like if their core rationale were scalable learning?  What if the reason we’ll come together in institutions in the future is that we’ll learn faster as participants in these institutions than we ever could on our own?  These are the questions that should focus and drive our efforts to craft a new set of institutional arrangements.

Scalable learning requires passion.  If we’re not truly driven to achieve more of our potential, we'll never learn as rapidly as those who are.  Rather than being optional, or worse, something to be viewed with suspicion, passion of all the participants becomes a pre-requisite for the success of the institution.

If we take this seriously, we'll have to re-think all aspects of our institutions, starting with a systematic redesign of our work environments to accelerate learning. We’ll need to design and deploy scalable pull platforms that can help all of us to draw out people and resources when we need them and where we need them to support our questing and connecting dispositions. The Power of Pull develops this opportunity much more fully.

It’s only in this kind of environment that our passion will find fertile ground to take root and truly blossom, enabling us to achieve more of our potential.  Without it, we’ll be relegated to the margins, viewed with suspicion and confronted on a daily basis with efforts to contain, if not extinguish, the passion that we have so carefully nurtured.

Getting from here to there

But, how do we create such institutional environments? Certainly part of the answer is to build entirely new institutions from the ground up. But does that mean that all is lost for our existing institutions? Not at all. Every institution, no matter how hard-wired and set in its ways has the capacity for change.
But it won’t be easy. We’ll need to resist the temptation to challenge our institutions head on and persuade them of the need to change. Our institutions have great strength, with powerful antibodies specifically designed to suppress any efforts to change them.

Rather than confronting the core, we’ll need to start on edges that have the potential to scale rapidly, driven by the exponential forces that our re-shaping our economy and society. By designing alternative institutional arrangements on the edge and harnessing the capabilities of new generations of digital technology, we’ll quickly be able to rapidly scale these edges and demonstrate the power of new institutional forms in drawing out the potential within all of us to achieve ever higher levels of performance.

Over time, we’ll be able to pull more and more of the people and resources from the core of our established institutions out to the edges as they rapidly scale. This is a much more promising approach to change than conventional efforts to push change into the core. Before we know it, the once-powerful cores will become increasingly marginalized and fade into irrelevance as the edges become the new cores of a very different set of institutions.

But why should institutions care?

OK, so far, I’ve made the case that we need institutional innovation to create environments that catalyze and amplify the passion that resides within all of us. That’s certainly important for us as individuals to overcome the dark side of technology. But what’s in it for the institutions?

In a world of mounting performance pressure, this is the only hope for institutions to survive and thrive. You see, the old model of scalable efficiency is irretrievably broken. What used to be highly efficient becomes hugely inefficient in a world marked by growing uncertainty and unanticipated disruptions. The paradox is that the only way to get scalable efficiency in our current and future business environment is precisely by shifting our focus to scalable learning and adopting a fundamentally different set of practices and institutional arrangements.

If institutions get this right, they’ll be able to tap into powerful collaboration curves where we'll learn faster, and achieve ever higher levels of performance, as more participants join in.  We’ll shift from institutions trapped by diminishing returns in performance to ones that finally are able to grow and thrive through increasing returns.

Bottom line

If we are to escape the dark side of technology, we need to do more than tap into the passion that resides within each of us.  We need to take on the difficult challenge of transforming our institutions to nurture our passion and amplify the impact of our actions. We need to transform institutions so that, rather than representing barriers to passion, they become catalysts and amplifiers of passion.

But we’ll never succeed if we try to take this on as isolated individuals. We need to come together in movements. This is a third piece to the puzzle. We’ll need it to support us on our journey from the dark side to the frontiers of opportunity created by the Big Shift. Stay tuned – there’s more to come.

What Is To Be Done? (Part 1)

My last post on The Dark Side of Technology definitely seems to have hit a responsive chord. Many of us see evidence of this dark side of technology every day in the world around us.

But it doesn’t have to be that way. The same digital technologies producing this dark side also have the potential to produce a world of unparalleled opportunity.  But the dark side is the default – if we choose to do nothing, the dark side will take hold in all of its dysfunctional potential. It is up to us to take the steps necessary to turn pressure into opportunity. So, what are those steps?

If we’re going to carve out an alternative path, it begins with us as individuals and then expands out into our institutions and broader social arenas. I’m going to explore three elements of this path – passion, institutional innovation and narrative – that will have to come together if we are to successfully navigate the Big Shift and harness the opportunity it creates. This blog post will focus on the first element – passion – and in subsequent blog posts I’ll layer in the other two elements.

Integrating passion and profession

First, we all have to find ways to more effectively integrate our passion and our profession.  Here’s the thing. If we aren’t truly passionate about our work, we’ll inevitably experience mounting performance pressure as a source of growing stress. That stress will ultimately consume us and marginalize us, until we finally drop out or drop dead. 

On the other hand, if we’re truly passionate about our work, that stress will turn into excitement – it’s an opportunity for us to test ourselves, to draw out more of our potential and to make an even bigger difference as we reach new levels of performance. We’ll begin to actively seek out the next challenge and not just wait for it to come to us. Passion is a powerful energy source that is not only self-renewing, it generates even more energy as the challenges multiply.

When I talk about passion, I’m referring to the passion of the explorer, a particularly powerful form of passion because it drives us to learn faster over an extended period of time. The passion of the explorer brings together three attributes.  First, there’s a long-term commitment to making an increasing difference over time in a specific domain, usually broadly defined.  This ensures that the learning is sustained and cumulative. Second, there’s a questing disposition – actively seeking out and pursuing new challenges as an opportunity to get to that next level of performance and impact.  This provides us with a never-ending supply of learning opportunities. Third, there’s a connecting disposition – an orientation to find and connect with others who either share our passion or who can help us to more effectively address the challenges you’re pursuing. This amplifies our ability to learn by drawing on diverse experiences and perspectives as we work collaboratively to come up with creative new approaches. These three attributes come together to create a powerful catalyst for learning to drive sustained extreme performance improvement.

Integrating our passion with our profession is no longer just optional, something that might be desirable if it happens.  It’s become an imperative if we want to continue to succeed in our professional life. We’ll increasingly be competing with those who are passionate about their work – wherever they might be in the world. No matter what our credentials or current skills might be, we’ll find ourselves at a growing disadvantage as others, driven by passion, learn faster than we ever will and achieve ever higher levels of performance. And let’s not forget those robots that are also learning faster and coming up from behind.

Integrating our passion and profession will be a huge challenge for most of us.  Based on recent research we’ve done, only 11% of the U.S. workforce truly is passionate about their work.  That leaves 89% of us exposed and vulnerable to the dark side.

We’ll need to do whatever it takes to find our passion if we don’t yet know what it might be, and then craft a way to earn a living from pursuing that passion. We’ll need to challenge and discard the belief many of us have that we’re not capable of passion. I’ll wager that even the most jaded and downtrodden of us can reach back into our memory banks and recover experiences where we truly connected with passion, even if only briefly. 

Many of us have safely hidden our passion and pursue it outside a work environment that is deeply suspect of, if not hostile to, passion. We’ll need to step back and find out how we can either pursue that passion in our current work or find a work environment that will provide us an outlet for that passion. Anything short of this will leave us deeply immersed in the dark side that is gathering force around us.

As we find our passion, the cognitive biases that blossom on the dark side will begin to recede. In their place, we’ll find ourselves looking at the world through new (and much more productive) lenses.  We’ll begin to be more motivated by perceived rewards and discount the perceived risks along the way. Our time horizons will lengthen and we’ll become much more proactive, able to resist the distractions that bombard us minute by minute, as we stay focused on the longer term opportunities ahead. We’ll also embrace a positive sum view of the world, one where we will create more value by working together and the real question is how much value can we create rather than how much value we can carve out for ourselves. We’ll find it much easier to build trust and work collaboratively with others who share our passion, secure in the knowledge that we’ll make an even bigger difference by working together. We’ll still compete in an effort to discover the most productive approaches to dealing with the challenges we face, but we’ll find that collaboration is ultimately the most powerful form of competition.

As we connect with this passion, something interesting will happen – we’ll increasingly shed the masculine archetype that dominates our society today and embrace the feminine archetype that helps us to more effectively pursue the passion of the explorer.

Bottom line

Passion is the key starting point in our journey from the dark side to the frontiers of opportunity created by the Big Shift.  Before we seek to change the world, we first have to find a way to change ourselves.  There’s much to be done to create a world that can help us to achieve more of our potential.

But let’s not get distracted. If we’re not connecting with and nurturing our passion first and foremost, we won’t have what it takes to change a world that is deeply entrenched in outmoded institutions and practices.

Let me be clear, passion alone will not save us from the dark side. Virtually all of our institutions today are explicitly designed to squash passion and squeeze us into the molds that have been carefully programmed for each of us. These institutions will do everything they can to weaken and disillusion us.

But if we are able to connect with our passion, it will energize and sustain us on the long road ahead. It’s a powerful antidote to the pressures gathering force on the dark side. So, what’s your passion and is it an integral part of your work?

The Dark Side of Technology

I’m going to disrupt the Silicon Valley script. You know the one.  Every talk or article coming out of Silicon Valley follows the prescribed template: start with a dazzling description of awesome new digital technologies and then proceed to explore all the wonderful benefits and opportunities that these technologies will bring to us.

I’m going to do something different.  I want to explore the dark side of these technologies.  The side that very few tech evangelists want to acknowledge, much less talk about.

What do I mean? It’s the fact that all of these amazing digital technologies are coming together to create a world of mounting performance pressure for all of us, one where the performance pressure will continue to grow and expand on a global basis for the foreseeable future, rather than plateau and recede. Let me repeat: this pressure is not going away. Far from it. It will continue to intensify. If we make the mistake of standing still, we will fall farther and farther behind.

But that’s just the beginning.  It’s not just that performance pressure is relentlessly growing for all of us.  The combined impact of all of these technologies also accelerates the pace of change, making it more and more challenging for us to get to that next level of performance in a shorter and shorter period of time.

But there’s more. It wouldn’t be so bad if the pace of change was accelerating along some completely predictable path.  These digital technologies are also increasing uncertainty – we are more and more vulnerable to extreme events, Taleb’s “black swans”, that come out of nowhere, gather enormous force very quickly through a global network of connections, and disrupt all of our carefully laid plans, our carefully compiled knowledge bases and our comfort levels.

Put it all together and it spells out a growing challenge. How do we keep up? How do we learn faster? How do we prepare ourselves for the cascades of unexpected events coming our way? How do we avoid mounting anxiety and the looming risk of marginalization and burn-out?

I don’t mean to deny the incredible benefits that all these technologies are bringing us.  There’s a delicious paradox here: the very same technologies that bring us awesome opportunity and new possibilities are at the very same time bringing us mounting performance pressure, accelerating change and growing uncertainty. To truly harness these opportunities, we first need to acknowledge and deal with the dark side.

The forces at work

Digital technologies are coming together into global technology infrastructures that straddle the globe and reach an ever expanding portion of the population. In economic terms, these infrastructures systematically and substantially reduce barriers to entry and barriers to movement on a global scale.  They make it far easier for any of us to reach anyone else around the world and to offer our goods and services wherever they might be needed. So, whatever position you have achieved today, watch out. There’s that person or company that you never heard of who is putting together a plan to take your customer away from you.

These infrastructures are also increasing the volume, variety and richness of connections. One effect of this is to accelerate the pace of change – information flows at a faster and faster pace to more and more nodes, making it possible for all of us to see things faster and to change our actions more quickly than ever before.  As anyone who understands complexity theory knows, the more connected we become, the more vulnerable the system becomes to cascades of information and action that can disrupt the system in unexpected ways.

But here’s the kicker.  This digital technology infrastructure is not stabilizing.  We’ve had plenty of technology disruptions throughout history – the steam engine, electricity, the telephone, just to name some.  But, as Carlotta Perez has shown, all of these disruptions followed a common pattern.  They began with a burst of innovation at the technology level, but then quickly stabilized with only incremental performance improvements afterwards.  That in turn led to a burst of innovation at the infrastructure level, figuring out how to most effectively organize and deliver the value of this technology to business and society. But then that too rapidly stabilized so we could then figure out how to most effectively harness this technology.

Our digital technology infrastructure is unprecedented in human history.  It’s not stabilizing.  The core technology components – computing, storage and bandwidth – are continuing to improve in price/performance at accelerating rates and the best scientists and technologists suggest that this exponential pace will not slow down in the foreseeable future.

And the power and scope of impact of these technologies is amplified by their interaction with each other and their ability to accelerate the performance improvement of an expanding array of other technologies, ranging from genomics to nanotechnology.  Singularity University has led the way in exploring these technology advances and interactions and a recent working paper that I co-authored suggests that the biggest risk is to continue to view these technologies in isolated siloes. 

So, whatever performance pressure, pace of change and uncertainty we're experiencing today is just going to intensify in the years ahead as the infrastructures become ever more powerful. more diversified and accessible to more and more people.

Impact at individual and institutional levels

To be clear, we experience this mounting performance pressure at both an individual and institutional level. At the individual level, one compelling indicator is a billboard that reads: “How does it feel to know that there are at least one million people around the world that can do your job?” The message is clear: no matter what your credentials or experience, you are increasingly competing with a lot of other smart and motivated people on a global scale and you can’t become complacent about your current position.

At an institutional level, the best indicator of mounting performance pressure is the analysis that we did in the Shift Index tracking the performance of all public companies in the US from 1965 to 2012.  As measured in terms of return on assets, performance has plummeted – it has declined by over 75%. There is no sign of it leveling off and certainly no sign of it turning around. It’s not just that competitive intensity is increasing – it’s also about the increasing mismatch between the non-linear world emerging around us and the linear institutions, practices and mindsets we continue to hold on to.

Many executives are fond of comparing themselves to the Red Queen. You know the story: she ran faster and faster just to stay in the same place.  But she actually had it pretty good – she ran faster and faster and managed to stay in the same place. We’re running faster and faster and falling farther and farther behind.

The insidious impact

All of this mounting pressure has an understandable but very dangerous consequence.  It draws out and intensifies certain cognitive biases that I’ve written about elsewhere so I’ll just briefly summarize them here:

• They magnify our perception of risk and discount our perception of reward
• They shrink our time horizons
• They foster a more and more reactive approach to the world (one of the key reasons for the dysfunctional use of technology so graphically described in Sherry Turkle's Alone Together)
• They lead us to adopt a zero sum view of the world – if you win, I will lose
• They erode our ability to trust anyone or any institution

As I’ve also written elsewhere, these cognitive biases also help to reinforce the masculine archetype. This is war and if you’re not macho enough to engage in battle, stand back and let the real men run the show. The feminine archetype is banished to the bedroom and the kitchen.

The combined effect of these cognitive biases increases the temptation to use these new digital infrastructures in a dysfunctional way: surveillance and control in all aspects of our economic, social and political life. Our corporate leaders embrace new technologies that offer the promise of being able to track worker activities and output in real time and in ever more fine grained detail. It also motivates employers to accelerate the process of automation: machines cost less to maintain and they’re far more predictable.

Ultimately, these cognitive biases significantly increase the likelihood of an economic, social and political backlash, driven by an unholy alliance between those who have power today and those who have achieved some modest degree of income and success.  Both of these segments will feel profoundly threatened by these new technology infrastructures and deeply fearful of their impact in undermining their current position. Those in power will harness the growing fear and frustration of broader segments of the population that desperately want to hold on to the little that they have already accumulated.

Such a backlash would be a tragedy of global proportions.  It would mean that our ability to tap into the incredible opportunity that these new technologies offer would come to an end. All of us as customers and as human beings have the opportunity to experience unparalleled and ever expanding well-being enabled by these technologies. But the backlash would push us back into our assigned roles and likely generate friction and war on a global scale that would significantly expand human suffering.

What is to be done?

Yikes! This is a pretty bleak picture I’m painting. Fasten your safety belt, this is going to be a very bumpy ride.

But I’m an optimist. What am I doing constructing such a bleak view of the world? Because I believe that, until we face the reality of what is happening around us, we will not take the steps necessary to harness these technologies to create a very different kind of world, one that turns pressure into opportunity and stress into success.

What are those steps? I’ll lay out an alternative, much more exciting, path in my next blog post but, for now, let’s just really absorb the dark side of technology – understand it, feel it, acknowledge it and confront it. It’s there. It won’t go away. If we truly embrace that, we’ll be more ready to take the difficult steps required to turn this all around.

Not So Grand Narratives

Narrative is a powerful concept with enormous potential. But it’s also fraught with misunderstanding because of the many different meanings attached to the term. By unpacking those different meanings, leaders of institutions and movements can begin to better understand the power of narratives.

Recently, I’ve tried to establish a distinction between story and narrative here and here. For most people, story and narrative are used interchangeably. But others, particularly in the academic world, have a very specific meaning they attach to narrative, although they usually refer to it as “Grand Narrative” or “meta-narrative.”  It may help to explore why I don’t regard these as narratives.

The concept of "Grand Narrative"

First, let’s explore what this version of narrative is meant to describe. The term “Grand Narrative” was coined by Jean Francois Lyotard in his 1979 book The Postmodern Condition but it has subsequently been embraced by many in the post-modernist movement.  Lyotard was referring to the efforts by ruling elites to explain how the status quo had evolved and, in the process, to rationalize why the status quo was destined to emerge and needed to be embraced.

An example of this kind of Grand Narrative would be the view widely held in the 18th and 19th centuries, and even well into the 20th century, that Western society was driven by a civilizing mission as it expanded into other parts of the world – “primitive” societies needed the West to occupy and transform them so that they too could savor the benefits of Western culture.

Russia’s leaders, following the Bolshevik revolution, developed a very different kind of Grand Narrative. It explained that Russia had emerged as a staging ground for a global communist revolution and that its draconian domestic policies were needed to mobilize the resources required to spread the revolution far and wide.

"Grand Narratives" are really stories

These Grand Narratives are much more like stories than like narratives as I have described them. They are descriptive and explanatory – they establish causal connections across a series of events to show how certain outcomes came to be and, indeed, were inevitable.  They often contain quite a bit of drama in the sense of people encountering and overcoming challenges to get to where they are today but the resolution is pre-determined. 

These Grand Narratives are about the people who got us to where we are today – they’re not about you, the audience. If you have any role to play, it’s simply to fit into the pre-ordained order of things and play the assigned role that has already been scripted. More often than not, your role is simply to accept the inevitability of the status quo. These Grand Narratives become a powerful way to indoctrinate and suppress independent thinking in favor of conformity and passivity.

These Grand Narratives thus have the attributes of stories as I’ve defined them: they have a resolution that is pre-ordained (even if it hasn’t fully played out yet) and they’re about others, they’re not about you. They’re stories masquerading as narratives.

OK, is this just a semantic distinction that doesn't really matter? Let me make the case that it makes a big difference that matters alot.

The power of opportunity based narratives

Narratives as I’ve defined them are quite different. They’re open-ended – the resolution is yet to be determined and the resolution hinges on choices and actions that you make. It’s ultimately about you. It highlights possibility rather than certainty. It’s future oriented rather than looking backward and trying to explain what has already happened. 

Narratives are designed to intrigue, excite and motivate people to act, especially if they’re opportunity based narratives.

These narratives intrigue and excite by only partially revealing an opportunity ahead. They don’t pretend to have a comprehensive view of the opportunity – instead, it’s very clear that the full dimensions of the opportunity are yet to be determined.  But the opportunity as partially revealed is an awesome one with great potential to make us better human beings and give us a much more satisfying life. It invites participants to use their imagination to explore what that opportunity might look like. A recent article on brain science suggests that this appeal to the imagination can be a powerful vehicle to motivate us to delay gratification, take more risks and go on a quest that will take time and effort to pursue.

But narratives do more than excite the imagination. It’s not just about imagining an opportunity – it’s about making choices and taking action to achieve that opportunity. Opportunity based narratives move us from passive acceptance to action.  They help us to re-discover our agency – our capacity to act and make a difference in the world.

The search for stability

In a time of accelerating change and growing uncertainty, we all have a natural human desire to seek stability.  “Grand Narratives” can be very reassuring because they help us to make sense of an increasingly confusing and complex world. But at the same time, they cultivate complacency, making us think that we have things figured out, when in fact we are increasingly likely to be blindsided by some black swan coming at us out of nowhere. 

Opportunity based narratives take a different approach to stability.  Rather than providing the stability of an answer, they provide the stability of an exciting question for us to pursue.  They help us to focus in a time of great distraction. They reassure us that, if we stay focused on the core question posed by the narrative, we’ll acquire new insight and tap into potential that we didn’t even know existed. They in fact help us to resist the urge to explain with the knowledge we have today and instead highlight the opportunity and need to develop new knowledge.

In fact, at some basic level, opportunity based narratives are profoundly hostile to “Grand Narratives.” “Grand Narratives” seek to reassure us that we have all the relevant answers and that the only challenge is to understand and accept the explanations embedded in the narrative. They carve out a comfort zone and invite us to relax in it.  Opportunity based narratives disrupt the status quo with questions that have not yet been answered and emerging opportunities that have not yet been achieved. They call us to leave our comfort zone and embark on a quest that will surely be challenging but also very rewarding.

Bottom line

So, why does this distinction matter to people in business? It can all sound pretty abstract and theoretical, far removed from the day to day practicality of running a business.

In fact, this distinction is central to how we run our business.  In a world of scalable efficiency, we feel an urgency for answers, for ways to understand the world around us so that we can more effectively predict what will happen next. That’s why, when executives begin to pursue the power of narratives, they have a tendency to embrace “Grand Narratives.” You know the kind – “let me explain who we are, how we came to be and why we are an inevitable product of the world around us.”

As the Big Shift drives us into a world of scalable learning, opportunity based narratives can help us mobilize a much broader group of participants on a set of questions and opportunities so that we can all learn faster by working together. This kind of narrative is rarely used in business today. Those who master this form of narrative have the potential to create significant advantage by accelerating learning while at the same time differentiating themselves from companies still mired in self-important “Grand Narratives.”

This is just the beginning. In a forthcoming post, I’ll pursue the question of why opportunity based narratives are becoming central to business success. In the meantime, let me know what you think. Does this distinction make sense? Does it matter?

Narrative and Passion

Narrative and passion are becoming increasingly central to performance at all levels – individual, institution and ecosystem.  But are they completely separate topics or are they related in some way? I believe they’re deeply related and that, together, they amplify performance improvement in powerful ways.  Let me explain.

Let’s get definitions out of the way

Narrative and passion are terms that are widely and loosely used.  I’ll start by clarifying what I mean by them.

For me, narratives are related to, but different from, stories.  Stories are self-contained – they have a beginning, a middle, and an end. Narratives on the other hand are open-ended – the outcome is unresolved, yet to be determined.  Stories are also about me, the story-teller, or other people; they’re not about you.  In contrast, the resolution of narratives depends on the choice you make and the actions you take – you will determine the outcome and you are therefore an integral part of the narrative.

Passion, on the other hand, comes in many different forms.  My focus here is on what I call the passion of the explorer. 

This form of passion, most often found in arenas where there is sustained extreme performance improvement, has three primary attributes. First, there’s a long-term commitment to a specific domain. The commitment is not just to learn about the domain, but to make an increasing difference in that domain. The other two attributes are dispositions – orientations to take action in specific contexts.  There’s a questing disposition – a tendency to seek out new challenges, to become excited by them as opportunities to get to that next level of performance and to want to move on to a new challenge as soon as one challenge has been successfully addressed. And then there’s also a connecting disposition – a tendency to seek out and work with anyone who can be helpful in addressing the challenges that are on the horizon. 

OK, but how are narratives and passion related?  Here’s the thing – narratives create the conditions that catalyze and draw out the three attributes that define the passion of the explorer.

Long-term commitment to a domain

Let’s take it one step at a time.  Narratives are typically about a broad domain rather than narrow slices of experience.  Think about famous social narratives like the Christian narrative, the American narrative or the Silicon Valley narrative. I’ve talked about institutional narratives like the Apple narrative or the Nike narrative – the former is about the role of technology in re-shaping our identity in society while the latter is about our ability to move from passive observers of sports to active participants in achieving exciting new levels of physical performance. Whatever the level of the narrative, it maps out a broad domain. And, because it calls us to make choices and take action, it helps us to move beyond simple curiosity to a commitment to make a difference.

But it does more than that, especially if it’s an opportunity based narrative.  It identifies wonderful opportunities within that domain that are available to each and every one of us if we choose to pursue them. Narratives can help orient us towards a specific domain and encourage us to make a long-term commitment to that domain because of the exciting opportunity that awaits us there. But, it’s up to us. Will we make that commitment? Will we take the actions required to participate in that opportunity?

Nurturing a questing disposition

Now, let’s look at questing dispositions.  Opportunity based narratives are not just about opportunities – they also typically frame the challenges that we’ll encounter along the way. It’s not going to be easy. To participate in the long-term opportunity, you need to take on and overcome the challenges that await you. 

The dual focus on opportunity and challenges helps to draw out the questing disposition in us. Rather than trying to avoid challenges when they occur, narratives encourage us to seek out the challenges because we won’t be able to participate in the long-term opportunity until and unless we confront and overcome the challenges that stand between us and the opportunity.

Fostering a connecting disposition

And what about the connecting disposition?  Narratives tell us that the opportunity ahead is not just for one individual; it’s available to many if not all of us. We’re not alone in this. These are not zero sum opportunities where one winner crowds out all of the others.  We can all participate in the opportunity. That message encourages us to come together to help each other over the finish line.

The dissemination of the narrative itself helps to build up a community – or dare I say a movement? – of participants who share a common excitement about overcoming the challenges that await on the way to a big and transformative opportunity. It cultivates a larger and larger gathering of people who are united by a shared commitment to a domain and an eagerness to confront and overcome the challenges ahead. As we see more and more people who share our excitement, we are much more likely to reach out and collaborate with others in overcoming the challenges ahead.

The virtuous cycle between narrative and passion

So, opportunity- based narratives can be very powerful in catalyzing and amplifying the passion of the explorer. But there’s also a virtuous cycle here.  As participants begin to acquire this passion of the explorer, they accomplish awesome things. The stories of their amazing accomplishments begin to spread and give additional credibility to the broader narrative – look at what others have accomplished, you can do the same or even better.  Will you join us? Will you make the choices and take the actions required to pursue this exciting opportunity? The narrative is enriched by the experiences of others, spreads more broadly as others see the tangible evidence of what can be accomplished and acquires far more credibility.

Narratives as beacons

Now, not all of us will be drawn equally to any particular narrative. But narratives can become bright beacons calling us to reflect on whether the opportunity being framed is one that is meaningful to us as individuals. They are powerful antidotes to the institutions and practices we have today that discourage and ultimately squash passion in their quest for predictability, standardization and tight specification of all the actions we must take. They call us to re-connect with the passion we all felt as children and to move from the passion of the player that most of us had as kids to the passion of the explorer, motivating us to make a long-term commitment to a specific domain.

The dark side of narratives

Let me hasten to add that there’s a dark side to narratives.  So far, I’ve been talking about opportunity based narratives.  There’s another kind of narrative – threat based narratives. You know the kind – we’re increasingly surrounded by them.  These narratives focus on an imminent threat – we’re under attack and if we don’t band together now, we’re all going to die or at least all the things we hold precious are going to disappear. Threat-based narratives are deeply conservative or even reactionary – they want to preserve what we have rather than explore exciting new opportunities.

These kinds of narratives tend to ignite a different form of passion – the passion of the true believer. In this kind of passion, the destination is very clear and the path we all need to take to reach that destination is tightly mapped out. In contrast, the passion of the explorer has no idea what the ultimately destination will be much less the path that we will need to pursue to reach that destination – the key is simply to get started and to craft our own path with the help of others.

Threat-based narratives and the passion of the true believer have combined throughout history to create many of the social movements that have wreaked havoc in our world. Nevertheless, even here the tight connection of narrative and passion helps to explain the power that these movements have exhibited.

Bottom line

Why does all of this matter? As I’ve explored in the Big Shift, we live in a world of mounting performance pressure – it’s not going away.  In that kind of world, we need to find ways to draw out sustained extreme performance improvement.  We simply cannot do that without deep and widespread passion, as I’ve argued elsewhere. The problem is that, based on our recent research into passion levels within the workforce, only 11% of the US workforce has passion about the work they do. If I’m right, narratives can play a key role in drawing out passion, both within each of us and within our institutions.

If we can’t find ways to re-connect with our passion as individuals, we’ll continue to feel mounting stress, become more and more marginalized and ultimately burn out and drop out.  If we can’t find ways as institutions to tap into the passion of our participants, we’ll experience diminishing performance and ultimately topple out of existence.

It doesn’t have to be that way.  Narratives can create a very different world, one where pressure evolves from a source of stress to a source of excitement, calling us to achieve even more of our potential, both as individuals and collectively. By drawing out the passion that lies dormant within most of us, narratives can help us to accomplish things that we would have never believed possible.

Some Further Thoughts on Corporate Narratives

Last week, I posted a blog exploring the power of corporate narratives while challenging what most people view as a corporate narrative. This was only the latest installment in my continuing exploration of narratives that began with an earlier blog posting and a talk that I gave earlier this year at SXSW.

At its core, I'm trying to draw a distinction between “stories” and “narratives” as I define them. From my perspective, stories are self-contained – they have a beginning, a middle and an end. Narratives on the other hand are open-ended – the outcome is unresolved, yet to be determined.  Stories are also about me, the story-teller, or other people; they are not about you.  In contrast, the resolution of narratives depends on the choice you make and the actions you take – you will determine the outcome and you are therefore an integral part of the narrative.

This latest blog posting has triggered a lot of response – most of it very positive but also some strong criticism. I thank all those who have embraced my perspective, but I’d like to take a moment to address some of the key elements of the criticism I’ve received, because it reflects some serious misunderstandings and responding may help to clarify my message.

Stories versus narratives?

First, the most common criticism is that I am somehow recommending abandoning stories or “taking stories out of narratives.” Nothing could be further from the truth.  I'm a strong proponent of stories and their ability to engage and deepen understanding.  I simply believe that narratives, as I've defined them, have even greater power to engage, deepen understanding and, most importantly, motivate action.

But this is not an either/or proposition.  Stories play a key role in helping to make narratives more tangible, believable and relevant in very diverse contexts.  Narratives, on the other hand, can help to draw connections across stories and link them to a much broader series of events. Narratives also make clearer to the listeners what they can and need to do in order to achieve the potential outlined by the narrative. I strongly believe that stories and narratives not only can and should co-exist, but they in fact amplify and reinforce each other in powerful ways.

Narratives as a connected set of related events

At least some of this misunderstanding stems from my somewhat abbreviated summary (this is a blog after all, not an essay or book) of the corporate narratives communicated by Apple and Nike. A number of people have commented that my rendition of these narratives seemed more like a set of beliefs or a mental model rather than a “connected set of related events.”  Both of these narratives in fact capture an important connected set of related events and it was my fault for not rendering this more explicitly.

Let me try to illustrate with an enhanced rendition of the Apple narrative as I understand it. Here it is:

The earliest generation of computers came into society [Event 1] and transformed the way we run our institutions. [Event 2] But, in the process, they also reinforced the grip of mass society on all of us as individuals, converting us into numbers to be processed by mainframes so that we can be more easily manipulated by those who run the computers [Event 3]. Now, we have a new generation of computers and related technology [Event 4] that provides us for the first time with tools that we can individually use to free ourselves from the constraints and pressures to fit into mass society and that allow us to express our unique individuality and achieve more of our potential [Event 5].  But, this outcome is not a given; it requires each of us to “think different” – will you “think different”? [Possible Event 6 to infinity]. Now, I may be wrong, but to me this is a connected set of relevant events that speaks to all of us.

Yes, there are beliefs and perhaps even a mental model buried in this narrative but I suspect there are beliefs and mental models buried in all engaging stories or narratives.  I don’t think the presence of beliefs or mental models diminishes a narrative.

A key point about this narrative that I tried to underscore in my earlier posting is that it's not about Apple – it's about us and the challenges and opportunities created by new generations of technology. Of course, Apple has a role to play in the unfolding of the narrative, but the narrative is about what new generations of technology mean for us and the choices we increasingly will need to make to harness the potential of this technology. Even some of the folks who have supported my view of narratives tend to fall back to old ways when giving examples of corporate narratives – the narratives are much more about the company, rather than about us.

Narratives and slogans

Someone also made the claim that narratives can’t be condensed into slogans. I beg to differ – “think different” admirably captures the much richer narrative of Apple. Of course, it can never replace the narrative, but slogans can be a great way to get to the essence of a narrative, especially the call to action.

The goodness of narratives

One critic commented that there's nothing intrinsically good about narratives – that there are many dysfunctional and debilitating narratives.  Point well taken but, again, I don’t think I ever made the case that all narratives are good.  I simply am trying to make the case that narratives are a powerful tool to inspire action and participation.  Like any powerful tool, narratives can be used for good or evil.

What is a story anyway?

Others have challenged my effort to characterize stories as self-contained with a beginning, middle and an end and as being about a story-teller or other people, not about you.  The push back appears to be that these are not really stories, that really well-crafted stories are open-ended and about you.  Well, if they’re not stories, what are they?  I have to say that virtually all the stories I’ve heard have these two characteristics.  To simply say these are not “true” stories seems a bit disingenuous. 

Bottom line

I still believe there’s a powerful distinction to be made between stories and narratives as I’ve defined them and that we diminish our impact by just focusing on stories.  At the end of the day, we can disagree on semantics and what to call the two entities that I’m describing – perhaps there are better terms, but I’ve not yet heard anyone suggest viable alternatives. Call them "bloop" and "bleep" for all I care. My key point is that, whatever we call them, we need to pay attention to the distinction. As an optimist, I’d like to be believe that many of my “critics” would embrace my perspective if I can further clarify misunderstandings that give the impression of disagreement.

I’ll be exploring the power of narratives more fully in postings ahead and I look to all of you to challenge me and encourage me to elaborate where I may not be clear. Together, we can do amazing things.

The Untapped Potential of Corporate Narratives

At a time when we’ve all become obsessed with the power of story-telling, I’ve become increasingly focused on the missed opportunity to harness the much greater power of narratives, especially for institutions. In a time of mounting performance pressure and growing uncertainty, narratives will make the difference between institutions that crumble and institutions that grow stronger.

Yes, yes, I know that most of us use these two terms interchangeably – stories and narratives are viewed as the same thing. But I draw two critical distinctions which I’ve developed in more detail elsewhere (my early thinking on this topic is available in a blog and a SXSW talk).

Stories versus narratives

To recap, here are the distinctions.  First, stories are self-contained – they have a beginning, a middle and an end. Narratives on the other hand are open-ended – the outcome is unresolved, yet to be determined.  Second, stories are about me, the story-teller, or other people; they are not about you.  In contrast, the resolution of narratives depends on the choice you make and the actions you take – you will determine the outcome.

Everyone is captivated by the emotional power and engagement of stories and it’s true, they have enormous power.  But to understand the much greater power of narrative, I point out that throughout history, millions of people have given their lives for narratives.  Every successful social movement in history has been driven at its core by a narrative that drove people to do amazing things, whether it’s the Christian narrative, the American narrative or the Marxist narrative. Narratives have an extraordinary power of pull.

Narratives are relevant at multiple levels – they can shape our lives, our institutions and the social arenas that surround us. I'm going to focus here on narratives at the institutional level, especially companies.

The pseudo-narrative

When I talk to executives about narrative, I tend to get puzzled looks – why are we talking about narratives?  We have a business to run, profits to make and competitors to keep at bay. A few times, executives will proudly announce their company has a narrative: it had very humble beginnings, overcame enormous obstacles, accomplished great things and has the potential to do much more.
Alas, I point out that this so-called “narrative,” so common to many companies, is about themselves. It’s not about the people they are trying to reach and move.  It’s not really a narrative – at best, it’s an open-ended story.

Examples of corporate narratives

Very few companies have in fact developed powerful narratives. One of the best, in my mind, is Apple.  Their narrative is condensed into the slogan, “think different.” Unpack the narrative and it goes something like this: there’s a new generation of technology that for the first time in history has the potential to free us from the constraints and pressures to fit into mass society and that makes it possible for us to express our unique individuality and achieve more of our potential.  But this is not a given – it depends on one thing: you have to think different. Are you willing to do that?

Apple’s narrative is about us and what we need to do; it’s not about Apple. Of course Apple epitomized what it meant to think different. Certainly, if you go back to its two founders – Steve Jobs and Steve Wozniak – it’s hard to find two individuals who more epitomized what it means to think different. Given the power of this narrative, it’s not surprising that Apple has generated a quasi-religious movement around its products and services.

Just briefly, one other powerful example of a corporate narrative is Nike’s – once again, condensed into a powerful slogan: “Just do it.”  Unpack the slogan and a narrative begins to emerge.  You’re surrounded with distractions and time pressure, but you have an opportunity to break personal barriers and achieve new levels of physical fitness and health.  Others have shown that it’s possible to overcome perceived limits to human performance with determination and perseverance.  Sure, it’s hard work and there’s going to be a lot of challenges along the way. In the end, though, the quest to become your personal best is filled with beauty, drama, moral uplift and fun. But, to get started on this journey, you need to “just do it.” Will you?

I give these example and they resonate among executives. But I still find them skeptical about what narrative could do for them and their companies.  So, I’m going to explore here the specific benefits that narratives can provide to companies and why I believe narrative is becoming so much more powerful in our evolving global business economy.

Differentiation

In a world characterized by an expanding array of options competing for attention, a powerful narrative can differentiate – it can help a company to stand out from the crowd in a powerful and sustainable way. Narratives are by definition a long-term, sustaining call to action. They far outlive any individual product or service offering (although of course the evolving product or service offerings must be consistent with and reinforce the narrative). More importantly, the differentiation is based on a deep understanding of what drives the people a company is trying to reach and taps into a powerful unmet need that these people have. It’s a far more powerful differentiation than the features and functions of a product.

Leverage

A narrative can mobilize people outside the company to act in ways that support and reinforce the goals that a company is trying to achieve.  In a time when performance pressure is mounting and resources are becoming more limited relative to needs, a narrative can mobilize resources from a broad array of participants that can amplify the efforts of the company.  Think of the community of application developers around Apple that are driven to support their platform, at least in part because of their narrative.

Distributed innovation

We live in a rapidly changing world where even the smartest of us no longer have all the answers. We need to tap into a much broader community of expertise and capability to help us come up with the next wave of insight, practices and products.  A powerful narrative can focus a much broader community on an exciting opportunity that can spur innovation in very unexpected directions.  For example, what would it take to help people to “think different”? A rich and diverse collection of application developers are deeply engaged in figuring this out and coming up with a growing array of innovative apps. Narratives encourage people to take initiative – properly framed, they can unleash a wave of experimentation, tinkering and exploration that can lead to accelerated learning and breakthrough insights from very unexpected quarters.

Attraction

A powerful narrative pulls people to you.  Word spreads rapidly by those who have already been engaged by the narrative. Participants will want to find others who either might help them attain the opportunity defined by the narrative or who might share their feeling that this opportunity is worth attaining.  Rather than trying to push your message out to an increasingly saturated audience, they will swarm to you, drawn by the opportunity and the challenge you have laid out.   Properly articulated, a narrative taps into a deep need that will drive people to find you wherever you are – they will not rest until they have connected with the institution that spoke to them in such a powerful way.

Relationships

In a world of attention scarcity, simply gaining attention is not enough.  Attention can be fleeting, gone as quickly as it came. What we need to be successful in business is deep, long-term, trust-based relationships. In a world that is constantly conspiring to draw our attention to the next shiny object, these relationships can be very challenging to build and they’re even more difficult to maintain.

Narratives frame long-term opportunities that require sustained relationships to achieve.  We naturally seek connection with others who have fallen under the spell of the narrative and with the institution that crafted the narrative.  By working together to achieve an exciting opportunity, we get to know each other in far deeper ways than we ever would through casual conversations. We develop trust as we learn whom we can really rely on. These relationships can sustain an institution in turbulent times when the going gets tough far better than the commercial “relationships’ that fray as soon as the tides change.

Overcoming cognitive biases

So far, I’ve been framing the power of narrative in terms of the benefits of connecting with and mobilizing others beyond the boundaries of the institution.  But there’s another benefit that encompasses both the individuals within the institutions and those outside. Narratives help us to overcome cognitive biases that tend to take hold in times of growing uncertainty and turbulence.

While completely understandable and natural, these cognitive biases can lead to increasingly dysfunctional behavior.  I've written about this aspect of narratives in an earlier blog posting, but the cognitive biases that narratives can overcome are: risk aversion, shortening time horizons, zero-sum views of the world and erosion of trust. 

If executives want to build institutions that can grow stronger in turbulent times, rather than weaker, they have to find ways to overcome these cognitive biases among their employees as well as among those they are trying to serve and collaborate with outside. Narratives can play an important role in accomplishing this.

Bottom line

Hopefully you can begin to see the untapped power of narrative in a business context. If you do, resist the temptation to simply write up a powerful narrative. Effective narratives emerge from collective action, not just words on a page.

There’s a lot that remains to be done to explore the power of narratives for business.  I’ve cited Apple and Nike as examples of corporate narratives but surely there are other examples.  What examples have you come across?  What criteria can we use to evaluate the power of a narrative? What makes for a great narrative versus just a so-so narrative? What are the most effective approaches to defining and spreading a narrative? How can narratives evolve over time?  I need your help in fleshing this perspective out.

Narratives are not just “nice to have.”  They are increasingly the foundation that will drive business success.  Those who master this opportunity will be able to harness increasing returns while those who don’t will remain trapped in the purgatory of diminishing returns until the inevitable collapse. Narratives harness the power of pull in ways that almost nothing else can – especially that third, and most powerful, level of pull: achieving more of our potential.  With narratives, small moves, smartly made, can indeed set very big things in motion. Will you join me?  It’s up to you.

Strategy Made Simple – The 3 Core Strategy Questions

In increasingly turbulent and complex times, we understandably fall prey to a dangerous temptation – both as institutions and individuals. We’re tempted to abandon long-term strategy and fall back on rapid adaptation as the only winning game – sense and respond quickly enough to events as they occur and everything will be OK. 

Don’t get me wrong, we all need to find ways to be more adaptable. But adaptation as a strategy is fraught with risk. While compelling in theory (who could be against adaptation?), adaptation in practice leads us to spread our resources way too thinly as we fall into a reactive mode, unable to prioritize or focus as we get bombarded with events occurring at a faster and faster rate. It leads us into a narrow incrementalism that often ends up at a dead-end.

So, what’s the option? The option is to focus more than ever on three core strategy questions that can help provide us with focus and stability even as the turbulence increases around us – and help us to prioritize where we need to respond and where we don’t.

What’s my differentiation? 

Strategy at one level is about differentiation – meaningful differentiation in the eyes of the target constituencies we’re trying to reach and serve.  To be successful, we have to be able to clearly identify who we’re trying to reach and put ourselves in the place of these people. We’ll need not just to understand their needs as they might express them, but their broader context, how it’s evolving and how it shapes needs that may not even be articulated today.

The ultimate goal of differentiation is to avoid direct confrontation with our competitors. In the words of SunTzu and The Art of War, if we have to engage the enemy in battle, then we’ve already lost. If there’s any uncertainty about why we are different, we won’t be able to focus effectively and we’ll be fighting an uphill battle to gain and sustain the attention of our audience.

Of course, differentiation has always been important to success in any environment.  What’s different now is that people face an exponentially increasing array of alternatives.  They have more information and more ability to switch across as larger and larger array of options. In a world of power laws, we’re competing not only with the blockbusters in the head of the power curve, but an ever expanding long tail of options that are able to serve very narrow niches. That’s why it’s more critical than ever to be able to answer this question clearly and compellingly, for ourselves and the people we want to reach.

One more thing.  Too many people still view differentiation as a matter of features and functions in the product or service they are trying to deliver to the market.  Sure, that matters. But it’s the most superficial level of differentiation.  As many observers have recognized, differentiation is much more about the overall experience that the “customer” has with a vendor – both pre-transaction AND post-transaction.  In a world of more and more options competing for scarce attention, being able to increase the return on attention for people is a much more powerful form of differentiation. An extraordinary experience, filled with value that is meaningful to someone in a way that no one else could match, is a much more effective form of differentiation than narrowly defined features and functions.

As we think about experience, let’s broaden our horizons even further. What are we trying to help people accomplish? Rather than starting with what we have to offer today, let’s start by asking what the people we want to reach are trying to do in their own lives. What’s most meaningful to them in terms of achieving more of their potential? If we could articulate that in a compelling way and then figure out how we can contribute something really different that helps them to make a difference – well, that’s a differentiation that’s very powerful.

From my perspective, the ultimate form of differentiation is a compelling narrative (not a story, as I try to make clear here) – a unique and unfolding opportunity for the audience that invites their participation to help shape the outcome. The most powerful narratives are ones that speak to the most basic needs of the people you are trying to reach.  The narrative is not about you; it’s about them. Yes, you have some role to play in the narrative but only as a catalyst or enabler – the outcome depends completely on the people you’re trying to reach. Very few companies have crafted compelling narratives, but those who do, have achieved powerful differentiation. (For more on narratives, see my SXSW talk here)

What is it that makes narratives so successful to strategy? In a world of accelerating change and uncertainty, they provide a compass to focus people (both within and outside our organizations) and reassure them that they can make a difference at a time when everything seems out of control.
Of course, for narratives to be successful, they must in fact identify opportunities that are emerging and that can make a significant difference in the lives of many people. They require a deep understanding of relevant edges where forces are gathering that will have the power to make a very big difference.  They require an ability to go below the surface events that buffet us about on a daily basis and zero in on the long-term forces that are re-shaping our environment. And, of course, narratives can’t just be written or spoken words. They have to be backed up with meaningful actions sustained over an extended period of time.

In times of exponential change, what matters is dynamic differentiation – the ability to learn and evolve rapidly to continue to offer meaningful differentiation. Static differentiation, no matter how powerful it is today, becomes increasingly vulnerable to competitors. Narratives can provide a powerful context to shape that learning and evolution, both for you and the people you are trying to reach.

How can I maximize my leverage?

This is a relatively new, but increasingly important, strategic question.  To be clear, I’m not talking about financial leverage here – we’ve seen in graphic terms how dangerous financial leverage can be in turbulent times. What I’m focusing on here is the ability to leverage our own resources by connecting and mobilizing complementary resources to deliver more and more value to the market.

In more stable times, people wanted and needed to control all the resources required to deliver value to their market. 

Two things are happening to change that. First, in a world of exponential, rather than linear, change it becomes increasingly important to maximize flexibility. The same resources that were a source of strength in stable times become an anchor that limit the ability to move in more turbulent times. Second, many forces are converging that help make it easier to connect and coordinate resources from a growing array of more specialized entities.  In more and more cases, we don’t need to own all the resources required to deliver value to our market.

In a world of mounting performance pressure, we need to aggressively find ways to do more with less. Those with the most effective leverage will win against those still struggling to do it all themselves. If done right, leverage can help small moves, smartly made, to set big things in motion.

Of course, to do this effectively, we have to be able to answer the first strategic question – what’s my differentiation? If we don’t know the answer to that one, we risk giving up resources that are critical for our differentiation.  If we are clear on the answer to that question, it gives us freedom to shed everything else that isn’t critical to our differentiation and frees up important resources to further deepen our areas of differentiation. We’ll be able to tap into world-class capability in all the areas that are not critical to our differentiation and augment those resources as needs and capabilities change.

When thinking about leverage, most people stop at the notion of static ecosystems – tapping into existing resources that can augment our own value. The resources already exist; the only question is how to most effectively connect and mobilize them.  The real power of leverage can only be realized in dynamic ecosystems where the focus is on how to build relationships that help all participants to learn faster by working together.  Dynamic ecosystems take powerful network effects and amplify them with learning effects that compound the value that can be delivered to the market.

Dynamic ecosystems harness the potential of distributed innovation.  It’s not just up to us as the organizer of an ecosystem to figure out how to deliver more value in a rapidly changing market – we’re helping to create the conditions for all participants to innovate individually and collectively in terms of new forms of value. We and others can then observe and learn from the efforts of other participants in the ecosystem. What’s working and why?

Ultimately, leverage isn’t just a powerful way to deliver more value with fewer resources. It can also become a powerful differentiator in its own right. Those who can mobilize vast ecosystems of diverse and specialized participants to deliver value to their markets will stand out relative to those who continue to try to do more of it themselves.

As we move from a linear to an exponential world, ecosystems become central to harnessing exponential value.

How will we measure success?

For some, the answer to this will be annoyingly obvious – it’s all about shareholder value, at least in the corporate world.

Well, here’s the problem. Financial metrics, while important at one level, are ultimately lagging indicators.  In a world moving from linear to exponential change, lagging indicators can get us into a lot of trouble, breeding complacency and blindness to the forces that are building up on the edge.

Many people have moved beyond financial metrics to operating metrics like customer churn rate or lead-times to introduce new products and services to market.  These are better because they can be more helpful in anticipating performance and spotting potential problems (and opportunities) earlier.

But, of course, without a clear answer to that first question above, it’s hard to know which operating metrics really matter.

Here’s an example. Which customers really matter to us? Without a clear answer to that, it’s hard to evaluate customer churn rates. Are we losing the customers we’re really trying to reach and serve or are we losing customers who might not care about the differentiation we’re offering? If we try to serve all customers without differentiation, we’ll soon find ourselves serving no one effectively.

But, operating metrics are just the beginning. As we harness technologies that make the invisible visible, we’re finding ways to monitor interactions both within and across organizations that give an even earlier indication of potential impact on the operating metrics that matter.  For example, we’re discovering that certain patterns of interaction within the organization can help to accelerate the introduction of more successful new products and services.  If we focus our attention on how these patterns of interaction are evolving, we’ll have a better sense of how our operating metrics are likely to evolve and ultimately how we will perform financially.

The winners in this exponential age will be those who can focus most effectively on the relevant leading indicators of performance. And, of course, if you have more than 2 or 3 core metrics that ultimately will tell you how well you are doing, you probably have too many. 

And it’s not just about taking snapshots of performance. In an exponential world, absolute performance at any point in time is becoming more and more meaningless.  The real question is the relative trajectory of performance.  How rapidly are we improving on relevant metrics relative to others in similar arenas? If we can’t maintain a superior trajectory, we’ve lost the game, no matter how good our performance is at any point in time.

It’s also not just about tracking these metrics and trajectories.  It’s also about taking the time to gather relevant participants and systematically reflect on performance trends in rapid iterations.  What can we learn from these results? What are the implications for how we move differently in the next round? Where are we improving most rapidly and how can we do more of that? Where is improvement slowing down and how can we change what we’re doing to improve the trajectory?

Bottom line

At the end of the day, strategy still matters.  In fact, it matters more than ever.  As I’ve maintained elsewhere, we are moving from a world of push to pull (LINK).  We can’t pull effectively if we’re in react mode, simply responding to the latest crisis or opportunity.  Accessing, attracting and achieving more of our potential – the three core levels of pull – all depend on differentiation, leverage and clear metrics for success. Without these building blocks for strategy, we’ll end up being pulled, rather than the ones pulling to create more and more value in turbulent times.

Finally, I’ve framed most of this post in terms of strategy for our institutions, especially firms. But I believe these three strategic questions are equally, if not more important, in our personal lives. Try re-reading the post from the viewpoint of you as an individual.  How well can you answer the questions?

Pivots and Portfolios: A Contrarian View

We live in turbulent times.  We struggle to find ways to cope with this turbulence but many of our approaches only aggravate the situation rather than alleviate it.  Case in point: portfolios and pivots.

These two approaches have gained strong champions as turbulence mounts. Portfolios have become a popular element of strategy for larger companies as they wrestle with growing uncertainty.  Since the future is hard to predict, a growing number of strategists have embraced a portfolio approach – spread your bets across many different options in the hope that at least a few of them will produce large returns and cover the investment required to pursue multiple options.

Smaller companies, especially start-ups, don’t have the luxury of enough resources to pursue a portfolio of options so many of them have begun to embrace a different approach: pivots.  If the company runs into unexpected roadblocks in entering a market, the pivot approach suggests that the best option is to quickly move to an alternative strategy, even if it means a 180 degree shift in direction.

Both of these approaches are examples of a broader philosophy that agility and flexibility are keys to surviving in uncertain times. Sense and respond quickly to any unexpected events that arise and you’ll be fine.  Sounds very persuasive, perhaps even compelling.

Let me venture out onto the edge, though, and suggest that these seductive approaches are fraught with peril. They distract many of us from the real keys to success in times of growing uncertainty.  In these times, distraction is the biggest risk because it reduces our ability to focus on what is truly important.

Portfolios – spreading your bets

Let’s look at portfolios first. This appears to be a compelling way to manage the risk of uncertainty. After all, it’s what venture capitalists and financial investors do all the time to manage risks. Why shouldn’t executives do the same, especially if they have sufficient resources to spread across multiple initiatives?  Conceptually, this sounds very compelling but in practice I’ve seen many problems with this approach.

First, there is a temptation to place too many bets, as many as resources will permit. The more bets that are on the table, the greater the probability that at least some of them will pay off.  As a result, resources are often spread far too thinly, with none of the initiatives having the critical mass of resources required to be successful. 

To complicate matters, the executives in charge of the core of the business have great power and they use this power to minimize the resources that would be siphoned off to a portfolio of new initiatives. So, even the largest companies end up having limited resources to invest in the portfolio.

That’s just the beginning of the problem. Because there are many bets, a powerful psychology takes hold.  If one of the bets begins to turn south, a complacency that sets in. The reasoning goes: not to worry, there are a lot more bets on the table so we don’t have to engage in extraordinary efforts to salvage the bet that appears challenged. Let’s just shift our focus to the other bets; one of them will surely pay off.  In times of mounting performance pressure, this kind of complacency can be deadly.

The difference relative to venture capitalists and investors is that they are investing in companies with an executive team that will live and die based on the success of the venture. In a large company, the executive team of a failed portfolio bet will usually find a safe haven in some other part of the company if their initiative doesn’t succeed.  After all, we all knew there was high uncertainty about success when the bet was made.

Pivots – shifting your bets

Pivots have a similar kind of psychological challenge.  If we are ready to quickly and fundamentally change course when the going gets rough, we are much less inclined to invest the time, energy and resources in problem solving when confronted with unexpected challenges. We know the future is highly uncertain. We guessed wrong, so let’s move on to a new approach and try that for a while. Surely, the next pivot will be more successful.

The bottom line issue with both of these approaches is that they tend to undermine commitment to any particular course of action, or even any particular view of how a market or arena is likely to evolve. So, what’s wrong with that?

Magnifying risk rather than reducing it

What’s wrong is that we fall prey to one of the greatest risks in times of uncertainty. We become distracted by surface events and lose our focus on the fundamental forces that are shaping our surroundings. The more we pay attention to surface events, the more likely we are to shorten our time horizons and spread ourselves too thinly in a vain attempt to respond to the latest unexpected developments. We lose our ability to prioritize – everything seems to have equal urgency.  In a turbulent sea, the worst thing that can happen is that we get buffeted from surface wave to surface wave and lose any sense of the direction of underlying currents that might carry us to safety.

There’s another price to be paid by these seductive approaches to growing uncertainty: loss of trust and the erosion of long-term relationships that are critical to accelerating learning. If you communicate through your actions that you lack the conviction or courage to pursue a given path, why should anyone else commit resources to support your journey? With pivots and portfolios, one also loses any potential to harness the increasing returns that are a key reward in an increasingly networked world.

Stay focused on fundamental forces

So, if portfolios and pivots are dangerous, what are our options?  First, we need to invest the effort required to pierce below surface events and understand the fundamental forces that are shaping the turbulence we experience on a daily basis.  It’s surely not easy  – those forces are deep and often hidden from view. They certainly will not be discerned from the daily headlines that compete for our attention. These forces also extend well beyond any market or industry that we are targeting.

But the rewards are worth the effort.  The direction and often the timing of these fundamental forces are often much more predictable than the surface events that seem to come out of left field on a daily basis. For example, look at both digital technology and demographic forces that are re-shaping the world we live in. There is reasonable certainty that the key foundations of digital technology – computing, storage and bandwidth – will continue to experience exponential improvement in price/performance for the foreseeable future.

On the demographic front, it is predictable that we will experience a rapidly aging population in developed economies and that the bulk of the younger generation globally will be concentrated in developing economies. We also have reasonable certainty that the accelerating urbanization movement will continue on a global scale.

As we shift our focus to these fundamental forces, we can begin to identify the key assumptions we are making about these forces and proactively scan the horizon for early indicators that would either confirm or call into question these assumptions.  Since these fundamental forces will over time shape a much broader array of surface events, we begin to develop an important set of leading indicators that can help us to anticipate changes that might disrupt our strategies and market positions.

Use scenarios to assess uncertainty

Scenario planning can help to systematically assess the likely impact of variables that are more uncertain and frame a likely set of alternative futures.  This provides a useful context to assess the potential robustness of major options in strategic direction – how well would these options fare in each of the scenarios that have been defined? In assessing the likelihood of potential scenarios, it is important to ask what initiatives we might be able to pursue that would materially alter the probability of outcomes that our more favorable to us.  One of the biggest errors in scenario planning is to treat probabilities as a given rather than something that can be shaped by our own actions.

Pursue a FAST strategy

By deploying a FAST strategy framework, we can then begin to operate on two horizons simultaneously – defining a ten to twenty year strategic direction shaped by these fundamental forces and a much more short term set of initiatives over the next six to twelve months designed to accelerate our movement towards the longer-term strategic destination. Rather than a portfolio of initiatives, these are a set of mutually reinforcing initiatives with near-term milestones that can be used to test and refine our understanding of the fundamental forces affecting our markets and industries.  They set into motion a set of feedback loops that accelerate our learning. 

Rather than pivoting, we can periodically step back and reflect on our progress, then rapidly iterate and enhance the initiatives we are pursuing to achieve near-term impact. By constantly zooming out and zooming in, we maintain focus on what is really important and avoid spreading ourselves too thin. Within the context of a stable framework, agile methodologies of rapid iteration and learning can become powerful vehicles for progress.

The bottom line

There's no doubt that we’ll frequently encounter unanticipated obstacles or challenges as we pursue our strategic direction. But these obstacles and challenges are an opportunity to learn and gain greater insight about the forces shaping our environment. If we surrender too quickly and either shut down the initiative or pivot in a fundamentally different direction, we lose the opportunity to learn and grow from our experiences. Learning generally requires engagement, struggle and reflection. To use the old cliché, “no pain, no gain.”

Portfolios and pivots make it far too easy to give up and sacrifice the deep insight that comes with learning.  While they may offer the appearance of an escape from uncertainty, they ultimately lead us to become more and more mired in short-term shifts that drain our resources and reduce our ability to reflect and grow.

This is the core paradox: in a time of increasing change and uncertainty, we must be clear on what will not change. Those who succeed in maintaining focus while all those around them are progressively losing theirs will surely reap the rewards of persistence and harness the true potential of increasing returns.