Category Archives: Transformation

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Improving Return on Attention in the Idea Business

Category:Connections,Context,Emotions,Learning,Opportunity,Transformation

I recently participated in an interesting discussion with prolific authors who were becoming concerned about the future of books as a way to communicate ideas and as a source of income. It prompted me to return to a theme that has engaged me for quite some time. Everyone focuses on “return on assets” as a key measure of performance in business, but I’ve come to believe that a different form of ROA will become increasingly critical as a performance measure – “return on attention.”

Return on attention

What do I mean by this? I’m talking here about the return that customers receive when they allocate their attention to something. It certainly doesn’t have to be a financial return (even though for some reason we talk about “paying” attention), but it has to be the value they perceive they are receiving when they spend time paying attention to something. I’ve been writing about this for over 15 years, including in these two blog posts here and here from 2015.

Why is this form of ROA becoming increasingly important? It’s one of many outcomes of the Big Shift that is transforming our global economy and society. The Big Shift has many dimensions but one key trend is the expanding array of options that are competing for our attention, which is a limited resource – limited by 24 hours in the day. Because our attention is a limited resource, we as customers are becoming more and more powerful and demanding. It’s becoming more and more challenging to attract and retain the attention of customers given the growing options that are competing for our attention.

The shift in return on attention

How do we choose to allocate our attention in the realm of ideas? We understandably want to earn a return on that attention. Over the past couple of decades, this has taken the form of scalable efficiency. Customers have been seeking faster and cheaper ways to access ideas. The result has been the decline of longer formats like books and lengthy papers that require a significant investment of our time. Instead, we have been drawn to social media where we can quickly access ideas for free. Our approach to increasing return on attention is to reduce the time and money we spend, rather than focusing on maximizing the value we are receiving.

I believe that’s about to change. In a world of mounting performance pressure, the quest for efficiency yields diminishing returns. The faster and cheaper our quest for ideas becomes, the harder it becomes to get that next increment of efficiency improvement. More importantly, we are under increasing pressure to achieve greater impact that is meaningful in our lives.

As a result, I believe we as customers are going to become increasingly focused on the impact that we achieve when we allocate our attention, rather than narrowly focusing on the time spent or the money spent. What are the implications for those of us who are in the “idea business”?

Implications for idea providers

We’re going to need to expand our focus beyond the ideas themselves. In the recent past, we’ve focused on how novel and interesting our ideas are and whether we can present the ideas in an entertaining and engaging way. It’s all about the ideas themselves. And, of course, we’ve become increasingly focused on how much time is required to present the ideas, so that we can attract a bigger audience when we find shorter and more concise ways of presenting our ideas.

As customers focus more on value received from the ideas, those developing and presenting the ideas are going to have to shift their focus as well. Success in the idea business will increasingly hinge on the extent to which we’re able to move beyond simply attracting attention. We’ll need to find ways to help the recipients of our ideas to act on those ideas and to achieve impact that is meaningful to them. Even better, we’ll need to find ways to help the recipients of our ideas to learn from the action they take and the impact they achieve, so that they can achieve increasing impact over time.

So, how can we do this? It starts with explicitly framing some compelling calls to action as part of the presentation of an idea. What should the audience do differently as a result of this idea and what kind of impact could be achieved from that action? It would be even better if we can provide some advice on how to act in ways that will be most likely to yield the impact that is being sought. Of course, there’s also the opportunity to cultivate trainers and coaches who could help the audience to take action that yields greater impact. By clarifying what kind of impact might be achieved as a result of this action, we can help people to focus on assessing how much impact has been achieved and reflecting on how to achieve even more impact, so that they can learn how to achieve even more impact over time.

That’s a powerful way to increase the return on attention of the audience we’re trying to reach. It has the potential to significantly increase the size of the audience we reach as word spreads about the growing impact that’s being achieved. Of course, we want to make this approach as efficient as possible as well, starting with how much time it takes to access and absorb our ideas and extending out into the time and effort required to action, impact and learning. But the key is shifting beyond time spent to focus on impact achieved as the key component of return on attention.

This isn’t just a theoretical perspective from me. I’m living it. Many of you know that I published my 8th book last year – The Journey Beyond Fear. I’m not just stopping with book. My plan is to create a new Center that will offer programs based on the book and help people to take action that can significantly increase impact that is meaningful to them. I want to significantly increase their return on attention. If this sounds interesting, you can see more here.

Early indicators of the shift ahead in return on attention

What are some early indicators of the shift ahead in return on attention? Well, one interesting indicator is the growth of coaching businesses across a broad spectrum of impact, ranging from physical performance improvement to overcoming emotional obstacles. Customers are increasingly seeking help in achieving more impact that is meaningful to them – of course, it starts with ideas, but the focus is on action, impact and learning.

Another indicator is the “Great Resignation” that we’re seeing as the global pandemic continues to unfold. More and more people are realizing that they spend a significant amount of their time and attention at work but that they’re not achieving enough impact that’s meaningful to them. The result is that they’re seeking new work that will offer them a significant increase in their return on attention.

Bottom line

If you’re in the idea business, you need to focus on the return on attention that you’re delivering to the people you are trying to reach. Rather than narrowly focusing on how much time people need to spend in accessing your ideas, expand your focus on how to help your audience achieve greater impact from your ideas through action and learning. In a world of mounting performance pressure, the ideas that can lead to more and more impact that is meaningful to people will be the ideas that prevail. Those are the ideas that will generate the greatest return for the idea providers. In short, if you want to improve your return on assets, find ways to increase the return on attention of the people you are seeking to reach.


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The Imperative for Two Dimensions of Transformation

Category:Collaboration,Edges,Institutional Innovation,Learning,Opportunity,Passion,Strategy,Transformation

Now, more than ever, we live in a world of massive change. Not surprisingly, “transformation” has become a buzzword throughout our economy and society.

Transformation has been a focus of my work for decades and I’ve learned many lessons along the way. In this post, I want to explore two distinct transformation imperatives as we scale the edge.

Scaling the edge

Those who have been following my work know that I’ve become a strong champion of scaling the edge as a way to drive transformation in large, traditional institutions. This approach is in stark contrast to the more conventional “top down, big bang” approaches that are used to drive change. By seeking to transform the entire core of the institution, these efforts require a lot of money and they will take a long time – you can’t turn around a battleship overnight. As a result, these approaches have a high failure rate because they under-estimate the significant power of the immune system and antibodies that exist in all large institutions. The immune system and antibodies will mobilize aggressively to crush efforts at massive change, especially those that will require a lot of money and take a lot of time.

Scaling the edge can reduce the risk of immune system attack because it doesn’t seek to transform the core of the institution. Instead, it focuses on finding an edge to the existing institution that, given the forces at work in the broader economy and society, has the potential to scale very rapidly to the point where it will become the new core of the institution. To be clear, this is not just an “experiment” or a diversification or growth initiative – the commitment is to make it the new core of the institution and, in the process, drive the transformation that will be required to thrive in a rapidly changing economy and society. I’ve written a lot more about the design principles for successful edge scaling initiatives here.

The two transformation imperatives

But what does transformation really mean? Virtually every large institution today has a “digital transformation” program, but the focus of these programs is to apply digital technology so that existing tasks can be done faster and cheaper. That’s not transformation from my perspective. I use the metaphor of the caterpillar to the butterfly to describe transformation – it has to produce something completely different from before. If we’re just helping the caterpillar to walk faster, that may be helpful to the caterpillar, but please let’s not describe that as transformation.

So, what is transformation in the context of our existing institutions? I believe it will have to occur on two dimensions given the Big Shift that is transforming our global economy and society.

The first dimension involves re-thinking at a fundamental level the value that will be delivered to customers and other stakeholders. The nature of the value being delivered will change at a very basic level.

The second dimension involves re-thinking at a fundamental level what is required to deliver that value to customers and other stakeholders. The approach to delivering value must be redesigned from the ground up.

Let’s explore both of these dimensions more deeply.

Transforming the value delivered

We live in a world of exponential change. In that kind of world, there is a natural tendency to shrink our time horizons and just focus on today’s needs.

That tendency needs to be resisted. Instead, we need to look ahead, far ahead, to anticipate emerging needs that are fundamentally different from the needs we are addressing today. That’s certainly challenging in a rapidly changing world.

That’s why I’ve become a strong champion of a very different approach to strategy that I call “zoom out/zoom in.” I’ve written about that approach extensively here. This approach calls on leadership of institutions to move beyond their comfort zone and to look ahead 10-20 years. The two key questions to address are: What will our relevant market or environment look like 10-20 years from now? What will be the biggest unmet needs of our customers and stakeholders that will provide an opportunity to build an institution that is far bigger and more successful than the one we have now?

If we truly understand the nature of exponential change, we need to be prepared to embrace the fact that the value we are delivering today will become obsolete and that we need to embrace very different forms of value that will address emerging needs and become a key to success in the future.

What would be an example? Take the example of a large fossil fuel company today. Given the changes that are occurring in the energy industry, there may be a need to leverage some of the expertise that this company has developed and focus it in a very different direction. For instance, one of these companies might decide to leverage its expertise in resource extraction to provide extraction services in a wide range of industries that rely on natural resources. Another possibility would be to focus on its expertise in building and managing large-scale distribution networks to provide these services to a wide range of industries. Whatever path these companies take, they are likely to be serving a very different set of customers and delivering a very different form of value.

The zoom out/zoom in approach to strategy has many benefits, but one key benefit is that it can help the leadership of an institution to select an edge to their existing institution that has the potential to scale rapidly to the point where it becomes the new core. And they won’t just select the edge, they will commit to scaling it because it represents a much bigger opportunity than anything they have addressed in the past.

Transforming the delivery of value

But transformation doesn’t stop there. There’s another dimension of transformation that needs to be understood and addressed. This is transformation in how the value is created and delivered to customers and other stakeholders.

What do I mean by this? Large institutions around the world have been pursuing a scalable efficiency model for the past century. For them, the key to success has been becoming more and more efficient at scale – finding ways to do their activities faster and cheaper. They have determined that the best way to do this is to tightly specify every activity that needs to be performed, highly standardize those activities so they are done the same efficient way throughout the organization and tightly integrate those activities, removing all inefficient buffers.

This approach has been highly successful around the world for the past century. The challenge is that the world is rapidly changing and this approach to efficiency is paradoxically becoming more and more inefficient. Workers are confronting more and more “exceptions” – unexpected situations that cannot be addressed by the process manual. They are scrambling inefficiently to find ways to address these unexpected situations.

In this rapidly changing world, we need another dimension of transformation – institutional transformation. We need to shift from a scalable efficiency institutional model to a scalable learning institutional model where the focus is on helping everyone in the organization to learn faster together. This is especially challenging because the learning that is increasingly required is not learning in the form of sharing existing knowledge in training programs but instead learning in the form of creating new knowledge. That doesn’t occur in a training room – it occurs in the workplace when people act together to address new situations and reflect on the impact that they are achieving so that they can evolve their actions to achieve even more impact. I have written about this institutional transformation extensively here.

If we take this seriously, it will require challenging and changing virtually every aspect of how institutions organize and operate today. We’ll need to move from hierarchical, command and control organizations to networked organizations that organize around small, front-line groups of 3-15 workers – I call them impact groups. We’ll need to move from a focus on business process re-engineering to business practice redesign, cultivating practices within the impact groups that help all participants to learn faster. We’ll also have to redesign our work environments to provide all the participants with the tools they need to learn faster. One key objective is to help draw out and cultivate the passion of the explorer in all workers so that they become excited, and truly motivated, by the opportunity to learn faster together.

This dimension of transformation will need to be pursued in parallel with the other dimension of transformation.

Bottom line

If we’re going to unleash the exponential opportunities that are being created by the Big Shift, we need to commit to drive transformation on two intersecting paths – transforming the value that we are delivering to our stakeholders and transforming how that value gets delivered to the stakeholders. This is certainly very challenging – it’s why I urge leaders to focus on scaling the edge as the most effective way to drive transformation. Significant opportunities await those who see the need for both dimensions of transformation and aggressively pursue them on the edge of existing institutions.


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