Leadership – John Hagel

10
Aug 23
4

From Expert to Explorer

Category:Exploration,Growth,Institutional Innovation,Leadership,Learning,Opportunity,Passion,Trust,Uncategorized

We are in a Big Shift from experts to explorers. What do I mean by this? We live in societies around the world where “experts” run the show. Given the profound changes that are unfolding in our global economies and societies, we need to shift to explorers who can help us craft new pathways that can create far more value for all of us. Let me explore this in more detail.

Our heritage

Over the past century, we have witnessed the growth of large institutions around the world that have been driven by a “scalable efficiency” model. In this model, the key to success is to do what we have always done, faster and cheaper, at scale.

This model worked very well in a more stable world. The large institutions that run our economies and societies have embraced this model and were able to scale at a rapid rate globally.

In the scalable efficiency model, leadership is awarded to “experts.” These are people who have relevant academic degrees and experience in running similar institutions. Evaluating experts requires a deep dive into their past to ensure they have acquired the knowledge required to manage tightly specified processes and demonstrated the ability to squeeze harder so that all relevant activities can be done faster and cheaper.

Experts have ambition. They are driven to accumulate more credentials and experience that will help them to achieve even greater influence and power than they currently have. But they’re not excited about the unknown – if anything, they are in denial or resisting the unknown.

In a Big Shift world with mounting performance pressure, we trusted leaders who had the relevant expertise – it was all about credentials. These were leaders who claimed to have the answers to all the relevant questions and these claims were credible because they had the relevant credentials.

These leaders embraced the “command and control” approach that governs all scalable efficiency institutions. People needed to obey their commands because the leaders were the experts with all the answers. If they deviated from the scripts and process manuals that were provided to them, they were likely to be fired. Experts pursued a push-based model of resource allocation, pushing the right people and resources into the right places to meet their forecasts of demand.

Our future

We are in the early stages of a profound transformation of our global economy and society. To navigate successfully through these changes, we will need to embrace a very different leadership model. We will need to seek out and nurture explorers, rather than experts.

What do I mean by explorers? I am talking about people who have found and are pursuing a very specific form of passion – I call it the “passion of the explorer.” These people are excited about opportunities to have more and more impact in domains that matter to them. They are constantly seeking new challenges that can help them to learn faster by creating new knowledge that never existed before. They also are actively seeking help from others in addressing these new challenges – they freely acknowledge that they don’t know the answers and that they need help in finding the answers.

As you can see, explorers are very different from experts. They are looking ahead to anticipate emerging opportunities and recognize that existing knowledge is becoming obsolete at an accelerating rate. As leaders, they are framing powerful and inspiring questions that can pull more and more people to them in an effort to explore and discover answers that can create far more impact that is meaningful.

I don’t want to suggest that experts cannot become explorers. Experts – those with significant credentials and experience – can also be driven by the passion of the explorer. But then they become explorers – they are excited about the questions that don’t yet have answers and the opportunities ahead that have not yet been addressed.

Rather than motivating people with fear, explorers seek to draw out the passion of the explorer in others, so that more and more people are excited about venturing out into new territories and addressing emerging opportunities. Explorers create work environments that support exploration and accelerate learning by drawing people together and focusing them on emerging opportunities. Rather than organizing into hierarchical command and control structures, explorers focus on becoming a catalyst for bringing people together into small impact groups that are focused on action and impact and then expanding impact by organizing larger and larger networks of impact groups.

Explorers generate a very different form of trust compared with experts. Rather than focusing on credentials and past experience, explorers demonstrate a commitment to addressing unmet needs that are meaningful to people. They are constantly seeking out new unmet needs and make it clear they are determined overcome whatever obstacles and barriers that stand in their way as they address those needs. People trust explorers because they see that determination and excitement that will let nothing stand in their way.

While experts tend to be inward looking, focused on how to do existing activities faster and cheaper, explorers are outward looking. They are constantly searching for new unmet needs of stakeholders that can help them to create far more value.

I’ve become a strong proponent of the explorer leadership model in part because of more than 40 years of experience in Silicon Valley. I’ve seen the extraordinary value that explorers can create in startups. Unfortunately, once these startups achieve some scale, investors begin to pressure the explorers to hire “adult supervision.” That means they want the explorers to hire experts who can implement more traditional ways of doing business at scale. As a result, many of these companies becoming captives of the experts.

Why is the explorer leadership model so important? Organizations that continue to pursue the expert model will experience diminishing returns at best – the more efficient one becomes, the long and harder they will need to work to get the next increment of efficiency. In contrast, organizations embracing the explorer model are able to unleash exponentially expanding value. The paradox of the Big Shift is that, at the same time that it creates mounting performance pressure for all of us, it is also creating exponentially expanding opportunities – we can create far more value, far more quickly, and with far less resources than ever before. Explorers are driven to find and address those opportunities.

Bottom line

We’re on the cusp of a profound shift in leadership models. The expert model that served us so well over the past century is now proving less and less useful. We need to embrace a very different model – the explorer model. This model will help us to unleash the exponential value creation opportunities generated by the Big Shift and help all of us to achieve more and more of our potential. This isn’t just an opportunity – it’s an imperative, given our rapidly changing world. The best is yet to come.

28
Apr 23
2

What Does Strategy Really Mean?

Category:Collaboration,Emotions,Future,Growth,Institutional Innovation,Leadership,Learning,Opportunity,Strategy,Transformation

Strategy is a commonly used word, but it’s rarely defined. I’ve become concerned that we are using the term “strategy” much too loosely in our business world. We can gain considerable insight by making an effort to define the term and reflecting on what makes it so valuable in a rapidly changing world.

What does strategy mean today?

Again, business strategy is rarely defined by those using the term. When I search for a definition of the term, I get many examples like the following

a plan of action or policy designed to achieve a major or overall aim
a plan of actions that fit together to reach a clear destination

Stepping back, I find it hard to differentiate between this meaning of strategy and an operating plan. Is that all it is? An operating plan?

I have to say that, when I talk with leaders about their strategy, I’m often directed to their five-year plan. That’s their strategy. Yet, when I read through the five year plan, it very much seems like an operating plan. It specifies goals to be achieved and the actions that will need to be taken to achieve the goals.

This approach to strategy is very consistent with the institutional model of “scalable efficiency” that I’ve written about here. It certainly gives people a sense of direction and specifies the actions required to become more efficient at scale. But is this really a strategy?

We certainly need operating plans but, in my view, strategy provides a context for developing these operating plans – it’s not the operating plan itself.

What will strategy need to become?

We live in a world of intensifying competition and accelerating change, something that I call the Big Shift. In this kind of world, strategy needs to evolve into something very different. Strategy will be about anticipating growing unmet needs of people outside the organization and developing approaches that can deliver more and more distinctive impact over time by addressing those needs.

Successful strategies will

Anticipate growing unmet needs of people outside the organization
Develop rewarding approaches that
can deliver more and more impact over time with fewer and fewer resources
are fundamentally different from any other provider
are very difficult to replicate
Evolve those approaches in response to a rapidly changing environment

Anticipating growing unmet needs

In a rapidly changing world, we need to look ahead and try to anticipate emerging opportunities that can create enormous value with relatively modest effort. Rather than focusing on the five year time horizon of the five year “strategy” plans that are so prevalent today, we should seek to look ahead 10 – 20 years since that will encourage us to see the most significant changes ahead. I have called this the Zoom Out/Zoom In approach to strategy.

In looking ahead, we need to start by anticipating the growing unmet needs of the people our organization will be seeking to serve. We should start by asking whether these will be the same people we are serving today or whether there will be others that we might want to, or need to, serve 10-20 years from now.

We then need to explore how the unmet needs of these people are likely to evolve. Why are these needs evolving? What are the trends that are shaping these needs? What unmet needs are likely to be most meaningful to these people?

In this context, we need to move beyond the material world and make a concerted effort to understand the evolving emotions of the people we are seeking to serve. To what extent is fear shaping their choices and actions? What would really excite them and motivate them to achieve much greater impact? These emotions will shape how meaningful the unmet needs are.

Developing approaches that create value for the providers as well as people being served

Anticipating meaningful unmet needs of people provides an important foundation for successful strategies, but it’s just the beginning. Strategy requires developing ways of meeting those unmet needs in ways that will create growing value for the provider as well as for the people being served.

In our Big Shift world, successful strategies will focus on leveraged growth. This means discovering ways to deliver more and more value with fewer and fewer resources. It stands in sharp contrast with the approaches of large institutions today which focus on scalable efficiency – how to provide the same products and services faster and cheaper using internal resources.

Leveraged growth shifts the focus from cost to value delivered. It seeks to rapidly expand the value being delivered by orchestrating larger and larger networks of third-party providers who can help to address the unmet needs of the people being served. By doing this, the provider will restructure the broader market and industry, pursuing what I have described as a “shaping strategy.” Rather than simply taking existing industry structures for granted, shaping strategies recognize that, in a rapidly changing world, we have far greater ability to restructure entire industries to our advantage.

The value being delivered from these growing networks needs to be very different from the value that other providers are delivering. It needs to be value that is carefully tailored to meet the unmet needs of the people being served in much more effective ways than any other provider is delivering.

Equally importantly, the value needs to be very difficult for other providers to replicate. Once other providers see how powerful this value is in attracting a growing number of people to the provider offering it, they will make significant efforts to replicate it. Winning strategies deploy approaches that are very challenging, if not impossible, to replicate.

It’s important to emphasize that these approaches are not yet operating plans. They are high level efforts to frame ways of delivering more and more distinctive value. These approaches then provide a foundation for much more detailed operating plans that focus on how to deliver this value.

Rapidly evolving approaches to delivering value

In a rapidly changing world, any strategy, no matter how effective at the outset, will need to evolve quickly to anticipate changing needs and resources. That’s why successful strategies in the future will ultimately need to be learning strategies driven by leaders with a learning mindset.

Leaders need to pursue their strategies with a desire to learn on two fronts. First, what impact are they achieving with their current approach? Where are they achieving more impact than they expected and why? And where are they achieving less impact than expected and why? This is learning through action and can be very powerful especially given the increasing ability to unleash richer and more real-time feedback loops.

To pursue learning through action, leaders will need to make a fundamental shift from the current institutional models of scalable efficiency to institutional models that seek scalable learning. In this context, it’s important to emphasize that the most necessary form of learning is learning in the form of creating new knowledge, not just sharing existing knowledge. To scale this form of learning, it needs to spread beyond necessary research centers or innovation centers – it should be an imperative for all participants in the organization. It should also not be limited to participants within the provider’s organization – the provider should seek to pursue this form of learning among all participants within the growing ecosystem of providers that it orchestrates in pursuit of leveraged growth.

Second, the learning should not just be about reacting to the impact achieved from action already undertaken. The learning should also result from relentlessly tracking the trends that led the leadership to believe that specific and significant unmet needs are emerging among the people being served. Are those trends evolving as expected? Are there other trends that will also play a significant role in shaping those unmet needs? In what ways could these evolving trends help to anticipate even more significant unmet needs?

Learning in the form of creating new knowledge by acting together with others requires cultivating a set of capabilities among all participants – curiosity, connection, imagination, and creativity. That’s curiosity in exploring what’s changing, connecting with others to explore how the world is changing, imagination in seeing how the world and new opportunities are evolving, creativity in developing approaches that can deliver more and more value to the customers.

These capabilities are often highly suspect within existing organizations where the focus is on doing the assigned tasks without asking questions or deviating from the script. As a result, these capabilities, if they exist, are siloed in research labs or innovation centers.

This is one reason that successful strategies will be so difficult to replicate. They’re not a fixed target. They will be continually evolving as leaders learn how to deliver even more distinctive value.

Bottom line

Strategy is an evolving approach on how to achieve greater impact over time that is meaningful to the participants with the least amount of effort (and that is very difficult for other providers to replicate). It’s very difficult for existing organizations to pursue, which is why the five year plan has become the default strategy for most organizations. It may be difficult to pursue, but it will be increasingly necessary for success in a rapidly changing world.

26
Feb 23
0

Evolving Boards Into Springboards

Category:Collaboration,Connections,Emotions,Fear,Future,Leadership,Opportunity,Transformation

In a rapidly changing world, Boards of Directors (or Trustees) can play a significant role in becoming a catalyst for change within large, traditional companies and other institutions. Unfortunately, this role is still an untapped opportunity in most institutions.

What’s the need?

As I’ve written about extensively, we are in the early stages of a Big Shift that will transform our global economy and society. The paradox of the Big Shift is that it creates mounting performance pressure and exponentially expanding opportunities at the same time.

Mounting performance pressure takes many different forms – intensifying competition, accelerating pace of change and extreme, disruptive events. That pressure creates an imperative for change – if we continue to do what we’ve always done, we’ll become increasingly marginalized and ultimately be wiped out.

But the good news is that the same long-term forces are creating exponentially expanding opportunities – we can create far more value with far less resources and far more quickly than ever before. These are not just opportunities – they are imperatives. In the Big Shift world, only those who see and address these exponentially expanding opportunities will navigate successfully through the mounting performance pressure.

Re-imagining the role of boards

Boards today are generally viewed as fiduciaries for shareholders in the institution. Unfortunately, this role is generally defined too narrowly in today’s world. Board members are expected to represent the interests of shareholders as they currently express those interests. The problem is that shareholders are increasingly focused on maximizing short-term returns. “Short-termism” reigns supreme.

If the shareholders truly understood the exponentially expanding opportunities being created by the Big Shift, their interests would shift from maximizing short-term returns to unleashing the exponential returns that can be generated in the Big Shift. So, the challenge for Board members is whether they should continue to pursue the current short-term interests of shareholders or become catalysts to help shareholders (and management) see the much bigger opportunities that could generate far greater returns over time.

Catalysts for change

Boards are uniquely positioned to become catalysts for change in large, traditional institutions. While boards typically include some leaders from within the organization, they also bring together a group of individuals from outside the organization who represent diverse backgrounds. These individuals are uniquely positioned to provide an “outside-in” perspective for the management of the institutions who tend to become consumed by “inside-out” perspectives as they embrace scalable efficiency institutional models.

But to harness the potential of this “outside-in” perspective, board members must be willing and able to become provocateurs, challenging the implicit assumptions held by the internal management of the organization. They must invest time in exploring how the world outside the organization is changing and they are uniquely positioned to do this, given their backgrounds and experience outside the organization. They can not only rely on their own experience – they can also be proactive in inviting more outsiders to engage with them and the leadership of the organization regarding the trends that are re-shaping the environment of the organization.

These perspectives can help to build greater awareness of the large, emerging unmet needs of customers and other stakeholders of the organization (e.g., business partners and suppliers). They can also increase understanding of the potential to mobilize a broader set of resources to address those unmet needs and create much more value, with far less resources, and far more quickly than ever before.

These emerging perspectives can be catalysts for change at two levels. They can engage the internal management of the organization. At the same time, they can engage the external investors who are likely still pursuing narrow, short-term returns.

From provocation to excitement

Board members should never under-estimate the challenge of shifting the perspectives of the internal management or the external investors. To shift these perspectives, board members need to move beyond provocation. They need to frame exciting opportunities for creating much more value and focus on identifying the trends that are making these opportunities more and more feasible. Where possible, they should provide explicit examples of organizations that are already starting to address these opportunities and the impact that they have achieved. If those examples are not yet available, they should focus on identifying some short-term initiatives that the organization can pursue in addressing these opportunities and demonstrate tangible progress with relatively modest effort.

Those who have followed my writing will recognize that I am suggesting that board members should embrace a version of the “zoom out/zoom in” approach that can help to drive change by helping to overcome the fear and skepticism that often makes people resistant to change.

While the primary focus should always be on the exciting opportunities that can overcome fear and skepticism, board members can also be helpful in broadening the perception of risk among management and investors. Most risk management discussions focus on the risks associated with new initiatives. Very rarely is there any discussion of the risks associated with continuing on the current course. In the Big Shift world, continuing on the current course is often the highest risk option of all, yet few leaders or investors understand those risks.

The key is to understand that just focusing on the risk of the current path will only strengthen the fear that will increase resistance to change. If Board members want to become catalysts for change, they need to focus on framing exciting opportunities that can motivate management and investors to abandon their current beliefs and embrace new approaches that can deliver much greater rewards.

Bottom line

Board members are uniquely positioned to become catalysts for change, creating a springboard for the delivery of much greater impact and value in a rapidly changing world. To harness this potential, board members need to leverage their position as outsiders and help both management and investors to see exciting opportunities that are not yet on their radar screen. The key is to help both management and investors move beyond fear and cultivate intense excitement about exponentially expanding opportunities.

By playing this role, board members will become true fiduciaries for investors, helping them to significantly increase the return on their investment, while at the same time helping management to achieve much greater impact.

18
Jan 23
0

The Untapped Opportunity of Institutional Narratives

Category:Emotions,Fear,Growth,Leadership,Narratives,Opportunity,Strategy

Everything I do is connected, even when the connections aren’t immediately apparent, even to me. Almost 15 years ago, I started writing about shaping strategies as a powerful way to unleash enormous value for companies – including here and here. Much more recently, I published The Journey Beyond Fear, a book that explored the role that narratives can play in helping to motivate people to achieve much greater impact that is meaningful to them. In that book, I discussed how institutional narratives can help organizations connect more deeply with their customers and third parties to create more value. Unfortunately, I have not yet made the connection between institutional narratives and shaping strategies explicit, even though they are deeply connected.

Institutional narratives

For those who haven’t read my writing, let me start by explaining what these two approaches are. Institutional narratives are not stories, even though most people view them as synonymous. For me, stories are self-contained – they have a beginning, a middle and an end. Stories are also about the story teller or some other people, real or imagined, but they’re not about you.

In contrast, narratives are open-ended. There’s some kind of big threat or opportunity out in the future and it’s not clear how the narrative will be resolved. The resolution of the narrative hinges on the listeners in the audience – it’s a call to action to them to determine how the narrative will be resolved.

In this context, institutional narratives are not about the institution. They are about some big, inspiring opportunity for the customers and stakeholders and the action they will need to take to address the opportunity. There are very few examples of this kind of institutional narrative, but a classic one was the narrative by Apple Computer in the 1990s that was condensed to the slogan “Think Different.”

Shaping strategies

Shaping strategies focus on opportunities to restructure entire markets or arenas in ways that create significant value for the shapers. Shaping strategies mobilize a large number of third parties to pursue the restructuring of the market or arena.

Shaping strategies rely on three elements. First, there’s a shaping view that focuses on what the new market or arena structure could look like and the benefits it could provide to the participants. Second, there’s a shaping platform that helps participants to come together and achieve greater impact with less effort. Third, there are shaping acts and assets which the shaper can use to demonstrate its commitment to pursuing the shaping opportunity.

Most organizations take the existing market or arena structure as a given and focus on how to thrive in the existing structure. In a world of accelerating change, the challenge is that existing structures are rapidly becoming obsolete. The missed opportunity is to imagine and pursue a new structure that could create far more value. Some of the most successful shapers in the business world have been Dee Hock (Visa), Malcolm McLean (containerized shipping), Victor Fung (Li & Fung), Bill Gates (Microsoft), and Marc Benioff (Salesforce.com).

Connecting

So, what’s the connection between institutional narratives and shaping strategies? The connection is through the shaping view. When I originally developed the perspective on shaping strategies, I saw shaping views as very business-like, focusing on risks and rewards. As I’ve shared before, Dee Hock, the founder of Visa opened up my eyes. In one of our conversations, he cautioned me that it was not about risk and reward, it was about fear and hope, because that was ultimately what motivated people to act. It was an “a-ha” moment for me that helped me shift my attention to the world of emotions, which became the focus of The Journey Beyond Fear.

Institutional narratives emerged in my thinking as a way for organizations to create much deeper emotional connections with their customers and stakeholders. By framing really inspiring opportunities for those outside the organization, institutional narratives communicate a much deeper understanding of what really motivates these participants and help move people from fear to excitement as they look into the future.

For this reason, institutional narratives can become the foundation for a powerful shaping view. Once leaders have framed the really inspiring opportunity that can excite and motivate participants to take action, they can take the institutional narrative to another level by focusing on defining a market or arena structure that can help participants to address the exciting opportunity out in the future. This could attract a growing number of participants to join in the effort to evolve this new market or arena structure.

Exploring an example

So, what would this look like in practice? Let’s look at the wellness arena. More and more people are becoming focused on strengthening their wellness and not just waiting until they get sick to get help and support. Today, the wellness business is highly fragmented with wellness coaches and a growing array of wellness service providers, ranging from gyms to nutrition experts.

I believe there’s a significant opportunity for wellness coaches to evolve into trusted advisors that orchestrate growing networks of specialized service providers to serve the needs of their clients. This could be a platform for significant growth by mobilizing more and more diverse expertise based on larger and larger networks of participants.

To address this opportunity, a small wellness coaching business today could begin by framing an institutional narrative that focuses on the growing ability of people to improve their wellness, driven by new technology and deeper understanding of what our bodies need to function at better and better levels. The narrative would emphasize that this opportunity requires action from people inspired by the opportunity to improve wellness to adopt new practices – it won’t just happen on its own.

This opportunity for improved wellness can then provide the context for framing an opportunity for a growing number of third parties to come together into a broader network that will be orchestrated by the wellness coaching business. Because these third parties will bring a very diverse set of skills and capabilities, the network will be a lot more effective in improving the wellness of its clients. These third parties can become excited by the potential to improve the wellness of clients much more than if they were just operating as isolated service providers.

This institutional narrative can thus become the foundation for a powerful shaping view. The institutional narrative focuses on cultivating emotions of excitement and passion among both clients and third parties that can help the clients. This will motivate them to act boldly to pursue the opportunity. A more detailed shaping view can then help to provide the third parties with a road map to guide them in the actions they can take to come together and address the opportunity. It will also help them to see how they can collaborate in ways that will create more value for clients as well as for themselves.

Bottom line

Institutional narratives can play many different roles in helping organizations to connect more deeply with their customers and stakeholders so that they all can achieve greater impact. One key role of institutional narratives is to motivate third parties to come together and act more boldly in ways that will restructure an entire market or arena. Based on my research, there are very few examples of organizations that have made the effort to develop a powerful institutional narrative, but there are even fewer examples of organizations that have pursued the potential of institutional narratives to support shaping strategies. This is an untapped potential that needs to be addressed.

11
Aug 22
0

Shaping Markets and Shaping Psychology

Category:Collaboration,Emotions,Fear,Future,Leadership,Opportunity,Paradox,Passion,Strategy,Transformation,Trust

Dee Hock, the founder of Visa, recently passed away. It’s been a catalyst for me to reflect on the role he played in expanding my horizon beyond strategy to explore the role of psychology in shaping our impact. This post will take one of my approaches to strategy – shaping strategy – and focus on its ability to shape our psychology.

Shaping strategies

I’ve written extensively about the untapped potential of shaping strategies, including here and here. In a world of accelerating change, business leaders have been embracing approaches like agility that focus on rapidly and flexibly responding to the events of the moment. The goal is to react to whatever is happening at the moment.

As a contrarian, I have challenged that view. In times of accelerating change and increasing uncertainty, we have more degrees of freedom to shape the markets and environments around us to create more value for ourselves and for other participants. But we have to see that opportunity and pursue it. And, to do that, we need to escape the reactive mindset that shrinks our time horizons.

Three elements of shaping strategies

Shaping strategies focus on addressing this opportunity. They rely on three elements: a shaping view, a shaping platform, and shaping actions and assets. The shaping view is the foundation of these strategies – it looks ahead and describes how a future market or industry might be structured in a very different way to create and capture much more value for its participants. Shaping platforms then provide a way for more and more participants to join in the effort – they help to reduce the effort and cost of participation while bringing quicker and larger returns. Finally, shaping actions and assets are ways that the shaper can overcome skepticism of potential participants that the shaping opportunity is achievable.

Even though we are in a world where shaping strategies are becoming more and more viable, very few companies or other institutions have pursued these strategies. Some of the most successful shapers have been Dee Hock (Visa), Malcolm McLean (containerized shipping), Victor Fung (Li & Fung), Bill Gates (Microsoft), and Marc Benioff (Salesforce.com). I discuss their approaches and the lessons that can be learned in my book, The Power of Pull.

Shaping psychology

So, how does this shaping strategy approach connect with shaping psychology? All three elements of a shaping strategy can be very effective in shaping the emotions of the participants.

Let’s start with the shaping view. When I developed this approach to strategy, I focused on the role of shaping views in framing an opportunity that would increase our perception of rewards and reduce our perception of risk. When I was talking with Dee Hock about this, he interrupted me and said “you’ve got it all wrong. It’s not about risk and reward, it’s about fear and hope. That’s ultimately what motivates people to act.”

That was a wake-up call to me. I had been thinking in narrow business terms, when the real need was to focus on the emotions that shape our actions. I began to realize that the most effective shaping views seek to overcome the fear holding back many participants and cultivate hope and excitement about an opportunity that could be achieved if they all came together. After all, it’s fear that is holding us back from seeing big opportunities in the future and focusing us on simply reacting to whatever is going on at the moment.

Shaping platforms also help to shape the emotions of participants. By reducing the effort required to participate and creating more rewards for participation, these platforms make it easier to participate, even if participants still have some fear. They also help participants to overcome fear and build hope when they see more rapid rewards and connect with others who are enjoying similar rewards. These platforms would be even more effective if they were explicitly designed to address these emotions and help participants to make the journey beyond fear.

Shaping actions and assets provide a way for the shapers to demonstrate their commitment to the shaping opportunity. This can be a powerful way to overcome the lack of trust that comes with fear. For example, the shaper could make a large investment that would be viewed as a “bet the company” investment to demonstrate its commitment. If it is a smaller, entrepreneurial company, the shaper could also develop some early partnerships with larger and more influential companies that would increase the perception that the shaping strategy will succeed. These actions and assets help to strengthen hope and excitement that the shaping opportunity is real and will be accomplished.

Bottom line

I have written before about the paradox that we confront in the Big Shift that is transforming our global economy and society. On the one side, the Big Shift is creating mounting performance pressure – global competition is intensifying, the pace of change is accelerating and extreme, disruptive events come in out of nowhere. At the same time, the Big Shift is creating exponentially expanding opportunity – we can create far more value, far more quickly with far less resource than would have been imaginable a couple of decades ago. Shaping strategies are a powerful approach to help many of us to move from giving in to the mounting performance pressure and instead seeing and addressing the exponentially expanding opportunities.

22
Jan 21
6

Emotion as the Foundation of Strategy

Category:Collaboration,Connections,Context,Emotions,Leadership,Learning,Narratives,Opportunity,Strategy,Trust

Credit to CuriousArtLab

As we head further into the new decade, we need to reflect on how the world is changing on so many levels. Given all these changes, it’s perhaps time to reassess our approach to strategy. At the risk of being viewed as a heretic, let me suggest that the successful strategies going forward will be strongly rooted in addressing the emotions of participants, rather than simply relying on facts and figures.

The Big Shift in the world

We are in the early stages of a Big Shift that is transforming our global economy, something that I have written about a lot, including here and here. This Big Shift is creating exponentially expanding opportunity – we can create far more value with far less resources far more quickly. The paradox is that, at the same time, the Big Shift is creating mounting performance pressure, making it more and more challenging to sustain the performance we’ve enjoyed in the past.

How do we resolve this paradox and make the journey from mounting performance pressure to exponentially expanding opportunity? We need to re-think strategy at a fundamental level and focus much more on the emotions of all participants so that we can truly unleash the power of pull.

The opportunity for strategy

The opportunity for strategy in the next decade and beyond is to unleash ways to deliver more and more value with fewer and fewer resources. If we’re going to succeed at that, we need to be able to anticipate the rapidly evolving unmet needs of the people we are trying to reach. We then need to be able to find ways to increase leverage, mobilizing the resources of others. We also need to find ways to accelerate learning – not learning in the form of training programs sharing existing knowledge, but learning in the form of action with others in ways that can rapidly increase impact over time by creating new knowledge in a rapidly changing world.

In the industrial age that brought us to where we are today, unmet needs were largely defined in material terms – what products and services could address our material needs, whether it involved our physical needs for food, or our broader needs to be comfortable in the physical world, like homes and cars. Meeting those material needs has been more and more successful, despite temporary setbacks like financial crises or pandemics.

Certainly, there are still large segments of the population with significant material needs, especially in trying times like this pandemic. But the mounting performance pressure of the Big Shift is also generating unmet needs at the emotional level. More and more of us are becoming consumed with the emotion of fear – and given the long-term forces shaping our world today, that fear is likely to intensify. While fear is certainly understandable, we as humans don’t want to live in fear – we have a deep hunger for hope and excitement. The institutions that understand and act to address that unmet emotional need will create enormous value for their stakeholders. Now, tell me, when was the last time you sat through a strategy discussion that began with an effort to understand the emotional needs of the participants being served by your institution?

Focusing on unmet emotional needs

The successful strategies of the next decade will begin with cultivating a deep understanding of these unmet emotional needs and then developing unique approaches that are effective in addressing these emotional needs. In this context, I have written extensively about institutional narratives, including here and here, which I believe can become a powerful instrument to build much deeper relationships with stakeholders by addressing their unmet emotional needs. I hasten to add that these new strategies will not be focused on manipulating the emotions of participants, but instead deeply understanding these emotional needs, why they exist, and how they can be addressed.

In this context, we need to be careful to “Zoom Out and Zoom In.” Don’t just look at the emotions around you today. Look ahead and anticipate how long-term forces will generate much deeper unmet emotional needs and then look for the highest impact steps you can take today to begin address those unmet needs.

Increasing leverage

But this is just the beginning. To harness the exponential opportunities that are being created by the Big Shift, all institutions will need to be much more aggressive in seeking leverage. The key to successful strategies will be to deliver significant value with as few of your own resources as possible. The global connectivity that is being fostered by the Big Shift makes it far easier to connect with a broader range of third-party resources.

But the ability to connect makes it even more important to understand what will be required to motivate third parties to invest the time and resources required to amplify the impact of your own products and services. Once again, this involves delving deeply into the emotions of the third parties that can be most helpful to you. Sure, you can and will have to offer them material rewards for collaborating with you, but you’re going to get much greater value from them if you can find ways to build trust and excite them about the longer-term opportunities for impact that can be created by coming together.

Accelerating learning

This is particularly powerful because of another strategic lever that is becoming more and more important in the Big Shift. In a rapidly changing world, the ability to learn faster becomes key to success. To be clear, I’m not talking about learning in the form of going to classes and getting credentials. I’m talking about the most powerful form of learning which is creating new knowledge through action. And, no matter how smart we are as individuals or individual institutions, we will learn a lot faster if we act together with others and challenge each other to find more creative ways to deliver more impact. In this Big Shift world, this form of learning becomes The Only Sustainable Edge.

This takes leverage to another level. When they talk about leverage, most strategists focus on transactions to access existing expertise and resources from third parties. While that is certainly helpful, the most powerful form of leverage is learning leverage, where participants come together to learn faster together.

But what’s required to motivate participants to learn faster together? My experience suggests that participants learn much faster together if they are excited by an opportunity to create more impact that is meaningful to them. Once again, though, this requires a deep understanding of the emotions of the participants. We need to understand where there’s fear and how that fear can be overcome by cultivating excitement.

Learning in the form of creating new knowledge can generate a lot of fear. After all, it’s risky. It’s never been done before. It could fail. But those who are excited about an opportunity that’s never been achieved before are driven to learn faster. They actively seek out opportunities to learn and are challenging themselves and others to find ways to achieve even greater impact. They are restless when they are not learning.

Loyalty and the pull it generates

In the end, all of this comes together in a powerful way. If we are able to excite participants about a meaningful opportunity that can bring people together and help them to learn faster together, what happens? We develop deep loyalty. This is no longer about short-term transactions that can be measured in material terms. This is about building deep and lasting trust-based relationships where we can see impact that matters to all the participants.

In a more connected world, loyalty matters. With all the connectivity we’ve created, it has become far easier to leave someone who is not meeting our needs and connect with someone else. This is a growing challenge for all institutions, especially in a world of eroding trust. Loyalty will be a powerful source of strategic advantage because it unleashes a virtuous cycle of more rapid learning with greater and greater impact.

But, it’s not just about loyalty. It’s about the Power of Pull. If we’re addressing significant unmet emotional needs of participants, word of mouth will spread and more and more participants will seek us out and want to find ways to build deeper relationships with us. Network effects will take hold and we’ll begin to see exponentially expanding impact and this in turn will unleash another virtuous cycle that will pull more and more participants together.

I should hasten to add that this exponential opportunity will not be available for all businesses. As I’ve written elsewhere, businesses will face a painful choice in the decades ahead in terms of defining more clearly what business they are in. While all businesses will benefit by shifting to strategies that are focused on the emotions of participants, the exponential opportunity will be largely reserved for businesses that choose to become “trusted advisors.” That’s a largely untapped business opportunity today, even though everyone claims to be a “trusted advisor” to their customers.

The Big Shift in strategy

Looking back over decades, the focus of strategy has shifted in a profound way. Certainly the early days of business strategy focused on analyzing the structure of markets and industries to identify positions that could create sustainable strategic advantage.

In the past couple of decades, we’ve seen a shift away from strategies of structure to strategies of movement. Given the accelerating pace of change, the emphasis in strategy has been on how to move faster – agility has become the buzzword.

I believe we’re now on the cusp of another shift in strategy from movement to emotion. The strategies that will succeed in the future are those that focus on the emotions of the participants and find ways to cultivate deep, long-term, and trust-based relationships among a growing array of participants by meeting their deepest emotional needs. To be clear, structure and movement are still relevant, but only in the context of a deep understanding of the emotional environment. That’s a dimension that’s been largely ignored by the previous schools of strategy.

The bottom line

Strategy is ultimately about how to deliver greater impact and value with less resources in a way that is sustainable and rewarding to the provider. It’s all about doing more with less over the long-term. The strategies that generated success in the past are proving less and less effective in a rapidly changing world. To succeed in the future, we will need to evolve strategies that are shaped by a deep understanding of the emotional context and focused on addressing the unmet emotional needs of the participants. Those who do this well will succeed in tapping into the exponentially expanding opportunities created by the Big Shift.

While this post has focused on strategies for institutions, I would suggest that this shift in strategy also applies to us as individuals. But that’s a topic for another blog post

06
May 20
3

Leaders Learn

Category:Collaboration,Leadership,Learning

If you’re not learning,

You’re not a leader.

If you’re learning alone,

You’re not a leader.

Leaders mobilize many

To learn together.

They inspire others with awesome opportunities,

Inviting people to come together

And venture out to the edge,

Beyond their comfort zone.

Leaders pose powerful questions

And ask for help from others

To find the answers.

These questions focus,

Inspire

And challenge,

While building trust.

They urge us all to explore

Uncharted land

And expand our horizons

While driven by a shared quest.

Leaders inspire others

To lead others

In their quest for answers

That matter

Which, of course,

Will only lead to more questions

To be pursued

In a never-ending quest

For expanding opportunity

For everyone.

Don’t measure leaders

By the number of followers.

Instead measure leaders

By the number of leaders

They unleash.

Dare I say?

Leaders inspire us

To pursue our exponential potential.

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