Category Archives: Paradox

  • 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.


  • 0

Connectivity and Decentralization

Category:Collaboration,Connections,Context,Decentralization,Edges,Future,Learning,Opportunity,Paradox,Passion,Potential,Trust,Workgroups

We’re in the early stages of a Big Shift that is transforming our global economy and society. The Big Shift produces many paradoxes, but here’s one that I haven’t written about: it is rapidly creating global connectivity while at the same time generating a growing desire for decentralization. How can we reconcile the two?

I’ve written about the Big Shift for a long time, including here. A key driver of the Big Shift is the ability to connect more quickly and cheaply with anyone or anything around the world. Certainly, this includes our ability to send a message to anyone in the world, but it also includes our ability to monitor in real time physical goods with Internet of Things technology. And it’s not just about communicating and monitoring, but also controlling and directing activities from a distance.

So, with all these connecting capabilities, we might anticipate more and more centralization where activities are controlled and monitored by fewer and fewer large, centralized global entities (e.g., governments and corporations).

Certainly, we are already seeing some of that. But, at the same time, I anticipate that we’re going to see more and more efforts to decentralize our activities – distributing or delegating activities, especially planning and decision-making, away from a central location or group. Why is that?

Accelerating pace of change

Growing connectivity accelerates the pace of change and makes the specific changes more and more challenging to anticipate. In a more rapidly changing and unpredictable world, we need to find ways to respond more quickly to unexpected developments. The conventional approach of tightly specifying business processes in advance from a central location is becoming less and less effective. Those who are in the best position to confront the unanticipated changes quickly are those who are on the front lines, not those who are sitting in some command center, even when supported by more and more powerful computers.

Context matters

Changes don’t occur in isolation. They occur in a specific context that shapes the change and the impact that it will have. Context is complex – it can’t be reduced to numbers or images. Those who are in the best position to “read” context are those who are living in it in the moment. If we want to address change effectively, we need to rely on those who are deeply embedded in the context. Context is becoming more and more important for value creation, as I have written about here.

Learning is an imperative

In a rapidly changing world, learning becomes essential. To be clear, this isn’t about learning in the form of sharing existing knowledge which is the focus of most learning today. Existing knowledge is becoming obsolete at an accelerating rate. The learning we all need to pursue is learning in the form of creating new knowledge and that is best pursued by coming together with others and learning through action, not just conversation.

When I say “coming together with others,” I mean coming together in small groups – I call them “impact groups” – which I have written about extensively, including here and here.  These groups range between 3 to15 participants. They stay small because the need is to build deep, trust-based relationships among the participants so that they can support and challenge each other in a continuing quest to pursue increasing impact in a specific domain.

Passion is the best motivation for learning

Learning in the form of creating new knowledge through action can be very challenging and involves taking a lot of risk. What’s the motivation to do that? Based on my research, the most powerful motivation is a very specific form of passion – the passion of the explorer – which I have written about here and here. People with this kind of passion naturally come together into the impact groups that I mentioned earlier and they seek environments where they can pursue their passion without constraints. They want to be free to take initiatives that have never been done before and to rapidly iterate on those initiatives when they gain insight on how more impact can be achieved.

Customers are gaining more power

Because of all the connectivity globally, customers are becoming more and more powerful and demanding. They have more access to information about more options and the ability to quickly switch from one product or service to another. In this kind of environment, they are less and less willing to settle for mass-market, standardized products and services. Instead, they are seeking products and services tailored to their specific needs and that will evolve rapidly as their needs evolve.

Erosion of trust in large, centralized institutions

Around the world, trust is eroding in all the large, centralized institutions – companies, governments, media, universities, etc. – that are so prominent in our economy and society. There are many reasons for this, but they are driven by a growing realization that these institutions are not addressing our evolving needs and are increasingly unsuited for the rapidly changing world around us.

Tying it all together

Decentralization will be driven by the intersection of many different needs and desires. If I had to summarize, I’d say that the two key forces are our growing need as providers to learn faster and our growing desire as customers to have products and services tailored to our needs. If we’re going to learn faster, we need to come together in small groups, driven by a passion to achieve increasing impact and we need to be able to act more quickly in ways that are tailored to our local context. On the other side, as customers, we are seeking providers we can trust who will address our unique and rapidly evolving needs.

The paradox is that both of these forces are being driven by growing global connectivity. The more connected we become, the faster everything will evolve and the more rapidly we will all need to learn in the form of creating new knowledge. And the more connected we become, the more ability we will have to pick and choose the products and services that meet our specific needs.

What will emerge?

What shape will decentralization take? Of course, that’s hard to predict in detail. But, as someone who enjoys exploring the edge, I am drawn to early indicators of how this decentralization might evolve.

From a corporate (and broader) institutional point of view, I’ve written about the “unbundling of the corporation.” Without going into too much detail, we’re already starting to see fragmentation of businesses in the digital space – everything from software to music and video. That fragmentation is beginning to spill over into physical products like craft beer and chocolate. I believe that’s just the beginning – we’re going to see more and more small, but very profitable, businesses emerging to address small segments of customers.

We’re also starting to see the growth of decentralized, autonomous organizations (DAO’s) that are focusing on decentralizing decision-making within organizations. There’s also a variety of initiatives to organize front-line workers into small pods or workgroups that are given more freedom to take initiative on their own. In China, the Rendanheyi model being championed by Haier with “micro-enterprises” operating within a much large company is beginning to attract more attention from around the world.

Of course, I have to mention blockchain as a major initiative in the technology space that embraces decentralization as a key organizing principle. While there’s been a lot of speculation and “boom/bust” initiatives in the early days of blockchain, blockchain reflects a strong desire for decentralization and is likely to provide a foundation for many initiatives seeking to decentralize Internet activity.

More generally, we’re seeing the spread of initiatives within the “human potential” movement that are organized around small groups of people who share a commitment to achieving more of their potential. Social change movements are increasingly focusing on “bottom up” approaches to change that embrace a cellular structure of small, local groups rather than pursuing a top-down centralized approach to change. In facing the challenges of the pandemic, we’ve seen the growth of mutual aid groups in local neighborhoods and communities.

Admittedly, these are all still early indicators of a trend towards decentralization, but they merit attention because the forces that I described earlier are going to drive significant growth of these kinds of initiatives.

Connectivity and decentralization

To be clear, I’m suggesting that connectivity and decentralization will unfold together. I’m not suggesting that decentralization will lead to increasing isolation of small groups. On the contrary, the proliferation of small groups will become increasingly connected into broader networks that can scale their learning and impact. Decentralization will actually drive a need for greater connectivity in the same way that connectivity is driving a growing need for decentralization. That’s the paradox.

Bottom line

We are in the very early stages of a paradoxical Big Shift. Growing connectivity will foster a growing need for decentralization and decentralization will increase the need for even more connectivity. This will have profound implications for how we organize and create impact in a rapidly changing global economy and society.

Those who are consumed by the connectivity trends are likely to get blindsided as decentralization begins to gain momentum. Decentralization will create enormous opportunities for value creation and will disrupt many of our large, centralized institutions around the world. We need to evolve a profoundly different set of institutions that will embrace the twin gifts of connectivity and decentralization.


  • 1

Our Future Shapes Our Present

Category:Emotions,Fear,Future,Narratives,Opportunity,Paradox

It’s obvious – what we do today shapes our future. The actions we choose to take today will determine what our future will look like.

What’s not so obvious? Our future shapes what we do today. How could that be? The future hasn’t yet happened, so how could it determine our actions today? How could this be true if we embrace the opposite view that our actions today shape our future?

As many of you know, I love paradox because it can expand our horizons and drive us to see things that have remained hidden from view. That’s what this paradox can do.

Our view of the future

We all have a view of the future, even though few of us make the effort to articulate that view, even to ourselves, much less to others.

At the risk of generalizing, I would suggest that we generally fall into two camps when it comes to our view of the future. On one side, we tend to view the future as threatening – it’s full of danger and will be much more challenging that the present. On the other side, we tend to view the future as full of opportunity – we will be able to achieve much more impact that is meaningful to us.

Of course, our view of the future can be very complex, involving a mixture of threat and opportunity but, for most of us, one or the other will tend to dominate and will shape our view of what is ahead.

That view of the future will shape our emotions today. If we look ahead and see primarily threat, we will be consumed by fear. On the other hand, if we look ahead and see primarily opportunity, we will tend to be motivated by hope and excitement.

So, our view of the future is shaping the present, in terms of the emotions that we feel today. But it does even more than that. Our emotions today shape our actions today.

If we’re driven by fear, our time horizons shrink, we become more risk averse and our trust in others erodes. As a result, we tend to become very reactive, simply responding to whatever is happening today, and we become more and more isolated, since we can’t trust others. What happens then? We enter a vicious cycle, where our reluctance to act and collaborate with others feeds our fear and our greater fear makes it even more challenging to make progress in the present.

On the other hand, if we’re driven by hope and excitement, we tend to look ahead and act boldly in the pursuit of the opportunities that we see in the future. We also are more willing to ask for help from others. This tends to create a virtuous cycle. The more motivated we are to pursue opportunities with others, the more likely those opportunities will manifest and that in turn will generate even more hope and excitement.

So, the future is shaping our present in profound ways. It’s shaping our emotions and our actions today. Of course, these emotions and actions today will shape our future as well, but let’s not ignore how our view of the future is having a profound impact on what we do today.

The role of narratives

Here’s the challenge. More and more of us in the world today are becoming consumed by fear. Why is that happening? At one level, it’s understandable because we live in a world that is in the early stages of a Big Shift, driven by long-term forces that are creating mounting performance pressure – competition is intensifying, the pace of change is accelerating, and extreme disruptive events are leaving us scrambling to figure out what to do next.

But this fear is also being fed and intensified by threat-based narratives. Those who follow me know that I have a very different definition of narratives than most. Most people view narratives and stories as the same thing. I believe an important distinction can and should be made.

For me, stories are self-contained – there’s a beginning, a middle and an end to the story. Stories are also about the story-teller or some other people, real or imagined, but they’re not about you.

In contrast, narratives the way I view them are open-ended. There is no end yet, but there’s some significant threat or opportunity out in the future and not clear how the narrative will be resolved. And the resolution of the narrative hinges on you – your choices and your actions will help to determine how this narrative resolves. Narratives have an explicit call to action.

Perhaps not surprisingly, we live in a world where threat-based narratives are increasingly prevalent. Just look at our news media and listen to our politicians – it’s all about the profound threats that are coming to consume us. Once again, there’s a vicious cycle at play. The more prevalent threat-based narratives become, the more consumed by fear we become and that in turn makes us even more receptive to threat-based narratives.

So, how do we escape this vicious cycle? We need to start by recognizing how limiting the emotion of fear is and the role that threat-based narratives are playing in feeding that fear. Then we need to make an effort to shift our view of the future and craft an opportunity-based narrative.

That requires us to reflect on what has excited us the most in our lives to date. We then need to look ahead and frame an opportunity that has the potential to draw out that excitement and keep us focused on achieving something that is really meaningful to us. As that opportunity-based narrative begins to take shape, we will start to feel the excitement that will help us to move beyond fear.

We need a view of the future to focus our actions today – a positive view of the future will lead to much greater impact today as long as we understand the obstacles and challenges that confront us. Opportunity-based narratives do not ignore obstacles and challenges – they are very clear that the opportunity will require effort and action to achieve. They motivate us to seek help from others – we need to connect with others who are also excited about the opportunity out in the future.

The future matters for business and society

This is not just about us as individuals. Our view of the future is shaping how our businesses perform and how our society evolves. We need to craft institutional, geographical and movement narratives that will help all participants to move beyond fear and take action that will help achieve much greater positive impact. If we get this right, we’ll move together into a much brighter future.

Bottom line

Let’s not be blind to how our view of the future shapes our present. The Big Shift is creating mounting performance pressure that is leading more and more of us to adopt a threat-based based view of the future. The paradox is that the same forces that a generating mounting performance pressure are also creating exponentially expanding opportunity. We can create far more value, far more quickly and with far less resources than would have been imaginable a few decades ago. The challenge is that, if we’re driven by fear today, we’ll never even see those opportunities, much less find the motivation to pursue them. How we act in the present is deeply shaped by our view of the future. Let’s come together to evolve a very different view of the future.


  • 2

Embracing Paradox

Category:Connections,Exploration,Growth,Learning,Opportunity,Paradox

We live in a world

Of either/or,

Not both/and.

This is a world

Where reason rules

And does not tolerate

Exceptions to the rules.

But that’s not the world

We really live in.

We’ll never see

The full richness of our world

And we’ll learn a lot less

If we choose not to see

Its complexity and contradiction

And its endless mystery

Hiding beneath the surface.

Paradox can help us to learn

As long as we welcome it

And explore it,

Grateful for its ability

To challenge our deeply held beliefs

And tightly enforced rules.


NEW BOOK

(if you've read the book, click here)

My new book, The Journey Beyond Fear, starts with the observation that fear is becoming the dominant emotion for people around the world. While understandable, fear is also very limiting.

LEARN MORE
BUY NOW

The book explores a variety of approaches we can pursue to cultivate emotions of hope and excitement that will help us to move forward despite fear and achieve more of our potential. You can order the book at Amazon.

Subscribe to Edge Perspectives

Subscribe

* indicates required

Search