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Learning and Strategy

Scalable learning will be the key to institutional success as we move deeper into an exponentially changing world. But to really scale learning, we’re going to need to adopt a very different approach to strategy – the “zoom out, zoom in” approach. This post will explore why these two approaches are so tightly connected.

Scalable learning                                                                                                                                                                        I’ve written a lot about scalable learning. In our research on the Big Shift that is transforming the global economy, we’ve come to believe that all our institutions will need to make a fundamental shift from a scalable efficiency model to a scalable learning model.

Over the past century, the scalable efficiency model has driven the growth and success of large institutions around the world – corporations, governments, universities, NGO’s, etc. In this model, the primary focus is how to perform complex tasks very efficiently and reliably at scale. The way to achieve this has been to tightly specify and highly standardize all tasks. In a more stable world, this produced significant efficiency.

But here’s the challenge. Our world is no longer stable. It’s evolving at an accelerating rate with growing uncertainty. Customers are also being more powerful and less and less willing to settle for standardized, mass market products and services. The combination of these two forces creates a paradox: scalable efficiency is becoming less and less efficient.

So, what’s the alternative? Scalable learning. In a rapidly changing world, the ability to learn faster at scale will increasingly determine success.

Let me clarify. By learning, I don’t mean training programs or the sharing of existing knowledge. I’m talking about learning in the form of creating new knowledge by confronting situations that have never been seen before and developing new approaches to create value. That kind of learning occurs in the work environment on the front line. It’s learning through action, not just sitting and reading books or thinking great new thoughts.

And it will encourage us to come together into tightly knit workgroups rather than working in isolated cubicles. No matter how smart any one of is, we’ll learn a lot faster if we are working closely with a small group of others who are equally committed to achieving higher and higher impact. In short, this form of learning will require redefining work for everyone at a fundamental level and the adoption of new practices within workgroups to accelerate learning.

If we understand the implications of scalable learning, we’ll realize that it’s in fundamental conflict with the scalable efficiency models that prevail in all our institutions today. We’re going to have to choose which institutional model to adopt and, if we choose scalable learning, it will require us to pursue a broad program of institutional innovation, rethinking every aspect of our existing institutions.

And, here’s a key observation: scalable learning will actually be much more efficient at scale than the traditional scalable efficiency model. Rather than tightly specifying and standardizing all tasks, the most efficient way to respond to rapidly changing contexts will be to help participants on the front line to learn faster about the new approaches that will deliver the most value efficiently.

The challenge                                                                                                                                                                            This shift will not be easy. It will be extremely challenging, requiring transformation of all our institutions. It will require leaders to overcome the resistance of the immune system and antibodies that exist in all large institutions.

To do that, institutional leaders will need to develop the conviction and commitment to embark on that challenging journey of change. Many things are holding them back. One key obstacle is the widespread view that learning is an expense and something to be tightly managed in the name of scalable efficiency. Leaders need to discard that conventional view of learning and begin to see how critical learning is to creating significant new value, while at the same time helping the institution to become more efficient. What can help them do that?

Zoom out, zoom in approach to strategy                                                                                                                                     This is where a new approach to strategy can play a key role. It can help leaders to see that learning is actually key to unlocking significant new value for the institution. It’s not an expense, but something that can be unleashed to quickly deliver rapid improvements to performance.

Institutions have increasingly moved to reactive forms of strategy where the key goal is to sense and respond as quickly as possible to what is happening at the moment. This approach fosters incrementalism and tends to spread the resources of the institution across a growing number of initiatives, so that nothing receives a critical mass of attention or resources. It’s actually very inefficient.

That’s why I’ve become a big proponent of an alternative approach to strategy. It’s called the zoom out, zoom in approach to strategy, an approach that’s outlined in detail here.

In brief, this approach focuses on two time horizons in parallel. The zoom out time horizon is 10-20 years and addresses two key questions: What will our relevant market or industry look like 10-20 years from now and what kind of institution will we need to be to be successful in that market or industry?

The zoom in time horizon focuses on a very different time horizon – 6-12 months. On that horizon, the key questions are: what 2-3 initiatives could we pursue in the next 6-12 months that would have the greatest impact in accelerating our movement towards that longer-term opportunity and do we have a critical mass of resources against those 2-3 initiatives in the next 6-12 months?

Tying strategy back to scalable learning                                                                                                                                       The power of this approach to strategy is that it focuses the institution on a long-term opportunity to create unparalleled value and impact by harnessing the exponential forces that are re-shaping our global economy and society. In an exponential world, those opportunities will require fundamentally different approaches and organizations relative to the ones we have today. It will require profound learning at scale in the form of creating new knowledge, not just sharing existing knowledge.

This is very powerful on two levels. First, it helps to focus learning efforts. In a rapidly changing world, the risk is that there is so much potential for learning that we could easily spread ourselves too thinly and consume all our time and attention on learning things that are quite peripheral to the impact we are trying to achieve. By zooming out, we can focus our learning efforts on the most significant opportunities for impact.

Second, by framing an unprecedented opportunity to create value and impact, the zoom out approach can help to inspire participants to engage in learning aggressively. Remember, when we talk about learning in the form of creating new knowledge through action, there’s likely to be a lot of failure along the way. That’s very risky and naturally generates fear. The zoom out approach helps to move people from fear to hope and excitement as they begin to focus on an amazing opportunity.

But, there’s more. The zoom in approach helps to focus participants on the action they can take in the near-term to achieve impact and accelerate their movement towards the longer-term opportunity. That’s a significant opportunity to learn through action. As we pursue the zoom in initiatives we can begin to see what impact is being achieved and learn how to evolve our approaches to generate even more impact over time. These near-term initiatives will also help us to refine and evolve our view of the longer-term zoom out opportunity as we begin to see whether we are achieving the impact that we anticipated.

This zoom in approach helps to generate tangible impact in the near-term that is also powerful on two levels. First, it addresses the need that all our institutions have to demonstrate impact quickly. If we just focus on a 10-20 year opportunity without addressing the need for near-term impact, we risk consuming ourselves in initiatives that may or may not produce results for a long time with a lot of wasted resources and investment along the way. On the other hand, by framing the short-term initiatives in the context of a very big longer-term opportunity, we reduce the risk of falling into incremental moves that may produce short-term results, but ultimately lead us to a dead-end.

Second, the emphasis on near-term impact also helps to overcome the skepticism and fear that naturally arises if we are presented with a very big opportunity that has never been achieved before. By focusing on delivering short-term results, we again help to move participants from fear to hope and excitement.

Bottom line                                                                                                                                                                                  By pursuing a zoom out, zoom in approach to strategy, we can build conviction and commitment to the imperative of shaping scalable learning institutions. Focusing participants on an unprecedented longer-term opportunity to create more value and impact makes it clear that significant learning will be required – simply becoming more efficient with our tried and true approaches will not get us there. If it’s a really big opportunity – an exponentially big opportunity – it will also make it clear that this learning will need to be scaled rapidly throughout the institution.

At the same time, focusing participants on a small number of short-term initiatives that can quickly deliver tangible results helps to focus learning through action. It also overcomes the widespread belief that learning is an expense item that needs to be tightly controlled in the name of efficiency. Now, learning through action will produce significant near-term impact on metrics that matter. In fact, learning is a by-product of initiatives designed to find ways to increase impact, rather than an investment that may never yield returns.

Learning is not an expense. Properly focused, it is a key to unlocking expanding value creation, while at the same time improving efficiency. Zoom out, zoom in can make those economics much more tangible while at the same time helping participants overcome fear and develop excitement about the opportunities that learning can unleash.

But, what about investors and their relentless quest for short-term earnings and nothing else? I’ll avoid the temptation to make this post even longer, and instead invite you to stay tuned for my next blog post that will address that question.

Narratives to Drive Exponential Learning

In our Big Shift world, the imperative of scalable learning is becoming increasingly urgent. If we’re smart about it, we have the potential to unleash the potential of exponential learning.

As many of you know, I have spent over a decade studying the long-term forces that are re-shaping our global economy, something that I call the Big Shift. There are many ways of representing the Big Shift, but one dimension is the need to shift from institutional models driven by scalable efficiency to ones driven by scalable learning.

Scalable learning                                                                                                                                                                     When I talk about scalable learning, I'm not focused on learning in the form of training programs that simply share existing knowledge. In a world that is changing at an accelerating pace, existing knowledge rapidly becomes obsolete and the most valuable form of learning is creating new knowledge. Those who learn faster at scale will thrive in the Big Shift world, while those who just focus on sharing what they already know will soon be marginalized. To learn faster at scale, we’ll need to redefine work and cultivate business practices within front-line workgroups so that workers can learn through action by addressing previously unseen problems and opportunities to create more value.

Doing this at scale will require a profound transformation of our institutions – how they are organized, how they operate and how they are led. I want to spend this blog posting exploring the potential of opportunity-based narratives to drive exponential learning.

Opportunity-based narratives                                                                                                                                                   Those who have been following me for a while know that I make a key distinction between stories and narratives, even though most people treat these two words as synonyms, something that I’ve developed here and here. For me, a story is self-contained – it has a beginning, middle and an end. Also, stories are about me, the story teller, or some other people – they're not about you in the audience.

In contrast, for me, narratives are open-ended, there is no resolution – yet. There’s some kind of significant opportunity or threat out in the future and it’s not clear whether it will be effectively addressed. The resolution of the narrative hinges on you, the listener. It is a call to action since your choices and your actions will help to resolve this narrative.

Narratives as a catalyst for learning                                                                                                                                            Why are opportunity-based narratives so critical to learning? There are many reasons. They’re a call to action and the key to creating new knowledge is action – people who passively sit around, even if they’re thinking great thoughts, aren’t going to learn as fast as those who are actively trying out new approaches to create value and reflecting on the impact that’s been achieved so that they can refine the approaches to create even more value. Action is key to accelerating knowledge creation.

Narratives help to focus learning by framing a powerful opportunity that can inspire and motivate people to explore new approaches that are all seeking to address the same opportunity. While helping to focus people, narratives also make it clear that the best approaches are not yet known and invite many diverse efforts to frame approaches that can be more effective in addressing the opportunity.

Narratives are also a powerful way to bring people together. No matter how smart any individual is, they will learn a lot faster if they are working together to address a new opportunity. And here’s the real opportunity: institutional narratives are not directed at the people within the institution. They are a call to action to people outside of the institution – so they speak to a much larger group of potential participants.

One of the few examples of this kind of institutional narrative can be found in the slogan developed by Apple in its early days: Think different. Unpack the slogan and it's a powerful narrative. It started by describing the early impact of digital technology in taking away our names and giving us numbers, putting us in cubicles and making us cogs in a machine. It then suggested that we had a new generation of technology that for the first time would enable us to express our unique individuality and achieve more of our potential. But that wasn’t going to happen automatically. We all had to think different – that was the call to action and it spoke to such a deep aspiration that it’s the reason why, for many, Apple became the equivalent of a religion.

It inspired many people to explore how to think different, so that they could achieve more of their potential. It also inspired a growing number of third parties to develop software applications that could help people to think different and become more creative. And, of course, it inspired the employees within Apple to find ways to develop products and services that could support this quest. Groups began to come together, connecting people both within the company and outside the company, inspired by the opportunity to find ways to think different and to create the tools to help people to think different.

Effective opportunity-based narratives are not just about inspiration. These narratives can often become catalysts for a much deeper form of motivation – a specific form of passion that I call the passion of the explorer, that I’ve written about here and here. The combination of a powerful opportunity that hasn't yet been addressed and the ability to come together with others to explore ways to achieve that opportunity can draw out the passion of the explorer in many of the participants. These people are driven to find ways to have more and more impact as they embark on a quest shaped by the opportunity ahead. Without this passion, people can certainly learn, but they will not learn as quickly or deeply as those who are driven by this passion. Passionate explorers are unstoppable.

Going exponential                                                                                                                                                          Opportunity-based narratives have the unique ability to drive exponential learning because they harness the power of network effects where, the more people who participate in the effort to address the opportunity, the faster everyone learns. The pace of learning doesn’t just improve linearly, it accelerates to the point where learning begins to improve exponentially. In a world that’s increasingly shaped by exponential change, the ability to unleash exponential learning can be a significant source of advantage.

It’s worth noting here that, if we continue to focus on learning in the form of sharing existing knowledge, there’s no way that form of learning can go exponential. In fact, sharing existing knowledge has diminishing returns – the more knowledge we share, the longer and harder we have to work to share that knowledge to a smaller and smaller pool of people who have not yet received that knowledge. By focusing on learning in the form of creating new knowledge, we unlock the ability to go exponential because there is no limit to the new knowledge that can be created and people can learn much faster when they come together.

What can help learning to go exponential? Two things – a cellular form of organization and a zoom out/zoom in approach to learning.

Cellular organization                                                                                                                                                                  The most effective form of learning occurs in small groups of 3-15 people who get to know each other very well and develop deep, trust-based relationships with each other. That deep trust helps the participants to ask for help and to be more supportive of each other’s efforts to take risks and learn faster. Once you get more than about 15 people in a group, that deep form of trust is much more challenging to build, which is why the most effective cells tend to stay small.

But, if it were just about individual cells, there would be no ability to harness network effects and go exponential. The key is to connect these cells into broader and broader networks so that participants in cells can look beyond their cells to observe the impact achieved by each cell and learn from the diverse experiences as more and more cells seek to pursue new approaches in addressing the opportunity that brings everyone together. They can also reach out to participants in other cells when they have specific questions or needs that their own cell cannot answer.

What I’m describing here are creation spaces, a very different way of organizing than the hierarchical approach that defines most institutions today. And here’s the thing – these creation spaces can and should extend beyond the boundaries of any single institution. Individual cells might even include participants from both inside and outside the institution, but cells will increasingly form both within and outside institutions as the opportunity-based narrative inspires more and more people to join in the quest to address the opportunity.

These creation spaces naturally form in arenas that display sustained extreme performance improvement, ranging from extreme sports like big wave surfing and extreme skiing to online wargames. They are a powerful way to accelerate learning.

Zoom out/zoom in                                                                                                                                                         Opportunity-based narratives are very effective in helping people to zoom out and see a big, long-term opportunity. But the zoom out/zoom in approach that I've championed in the business strategy arena is relevant here as well because it focuses participants on two horizons simultaneously.

In addition to framing a compelling long-term opportunity, this approach encourages participants to zoom in and identify the two or three things that they could do in the next 6-12 months to accelerate their movement towards that longer-term opportunity. This is important because it helps to focus participants within each cell on what they can do to act now and begin to learn from the impact that they achieve. Without this zoom in focus, it’s easy to get overwhelmed by such a big, long-term opportunity. And, the sooner participants in each cell can begin to see impact from their efforts, the more they will be motivated to put even more effort into evolving their approaches in their quest to achieve even more impact and to learn from their actions.

Bottom line                                                                                                                                                                                   If we’re not learning faster, we’re going to be increasingly marginalized in the Big Shift. The most powerful learning is in the form of creating new knowledge. To accelerate that kind of learning, we need to find ways to harness the power of opportunity-based narratives. The power of these narratives can be augmented by creation spaces and a zoom out/zoom in approach that helps to strengthen the commitment of participants. If we get this right, we can watch learning go exponential and create value in ways that would have been unimaginable with more traditional models of learning.

The Paradox of Connection

We are becoming more connected with each other and less connected with each other at the same time. The Big Shift that we're experiencing on a global scale is full of paradox – this is just one of many, but a particularly important paradox to acknowledge and address.

Let’s explore the forces that are shaping both dimensions of the paradox.

More connection.

We're seeing the exponential growth of a broad range of digital technologies that are connecting us globally at a speed and scale that would have been unimaginable a few decades ago. The foundation is a digital infrastructure that is exponentially improving in terms of processing power, storage capability and transmission speed. Wireless technology has made it possible for us to connect to this digital infrastructure (and to each other) regardless of where we are in the world with much less expense and effort.

Translation technologies are making it easier and easier for us to communicate with each other even if we don’t speak the same language. Tracking technologies can monitor our movements and activities and provide real-time updates regarding our whereabouts without requiring any effort on our part. And, of course, social media makes it possible for us to share news about ourselves to a large and growing number of friend, acquaintances and followers.

And it’s not just technology that’s expanding the ability to connect. There’s a global and accelerating movement of our population into densely settled cities. It’s far easier to connect with more people if you are in a city than if you are living in some small village in the countryside.

Less connection.

Many observers have commented that the exponentially expanding array of connections tends to become overwhelming. We find ourselves spread so thinly across so many connections that we can rapidly lose the ability to deepen our relationships with anyone.

And we don’t just have the ability to connect with more and more people, we also have the ability to connect with more information and resources through online networks. It used to be that if we had a question, we would have to find someone to ask. Now we can just go online and use a search tool to find the information on some website. That reduces our need to connect with others with urgent and pressing questions.

These factors are definitely in play, but I suspect that there’s something much more fundamental driving the erosion of connection. I suspect that fear is a growing factor in weakening our connections. I’ve written in an earlier post about the growth of fear around the world. Many forces feed the fear, but I believe there are two fundamental ones: mounting performance pressure and the accelerating pace of change. Either one of those alone would have the potential to generate fear but the combination of the two surely draws out this emotion.

So, what does fear have to do with connection? One might assume that growing fear would deepen connection as we are motivated to seek the support and comfort of others, but there are several barriers to deepening those connections. First, we live in institutions and societies where expressing fear is generally viewed as a sign of weakness. For this reason, we tend to try to hide and suppress our fear rather than expressing it and seeking the help of others. Instead, we try to maintain our distance so that few, if any, others will see our fear.

Fear also tends to erode trust. If I’m afraid, you may seem like a nice person, but I am less and less willing to trust my perceptions or to trust you. If I don’t trust you, I am even less willing to share emotions that might be perceived as a sign of weakness. This becomes a vicious cycle, because the less willing I am to share my emotions, the less willing others are to trust me and the less willing I will be to trust them in return.

As fear grows and trust erodes, there’s often a tendency to resort to narcissistic behavior. We see this a lot on social media, especially among the younger generations. They are prolific in posting pictures of the great meals they are eating, the wonderful places they are visiting and the large group of friends they are meeting. They want to assure everyone that they’re having a great time and that they are doing very well – they don’t want anyone to worry about them. In fact, they hope that everyone will envy them. Of course, this behavior further erodes trust because we all know that life is full of ups and downs. If we’re only sharing the ups, then we must be hiding the downs, and that makes us less trustworthy. Trust ultimately requires a willingness to express vulnerability, especially in times of mounting performance pressure and rapid change.

The net result of this is that our connections with others become thinner and more fragile. So, it’s not just about the challenge of juggling more connections; it’s about our willingness and ability to support deeper connections in an environment of growing fear and eroding trust. Until we address that, we’ll never be able to reap the benefits of more connections.

What is to be done?

The first step is to acknowledge that we are living in a world of growing fear and eroding trust. Then the question becomes what to do about it? How do we help people to overcome their fear and rebuild trust in each other?

It won’t be easy, but I’ve come to believe that a specific form of narratives can play a key role. As many of you know, I've written extensively about narratives, including here and here. I draw a distinction between stories and narratives, even though most people use these two terms to mean the same thing. In short, the distinction I make is that stories are self-contained – they have a beginning, middle and end – something happens to end the story. Stories are also typically about the story-teller or about some other people, either real or fictional, but they’re not about you.

In contrast, narratives are open-ended. There is some big opportunity or threat out in the future and it’s not yet clear how the narrative will be resolved. And the resolution of the narrative hinges upon you, the listener – it is a call to action declaring that your choices and your actions will help to resolve the narrative.

And there’s a big distinction between threat-based narratives and opportunity-based narratives. Threat-based narratives tend to generate and strengthen fear – we’re under attack and we’re going to lose everything if we don’t mobilize now and resist. Opportunity-based narratives, in contrast, tend to generate hope and excitement – we can accomplish some amazing things that will benefit us all if we come together and act together.

Unfortunately, we live in a world that is increasingly dominated by threat-based narratives. What’s missing are opportunity-based narratives that could help us overcome our fear and build deeper trust in each other as we come together to address some inspiring opportunities. These opportunity-based narratives also have the power of pull because they attract people who are inspired by the opportunity, even though we had no prior connection with these people. Powerful network effects take hold as word of mouth spreads and more and more participants share their excitement with others they know. Narratives have the potential to drive a deep sense of connection across a growing number of participants that can reach thousands and even millions of people – they are all united by a shared desire to achieve an inspiring opportunity.

Appropriately framed, opportunity-based narratives can become a catalyst for drawing out the passion of the explorer among the participants. Again, I’ve written about this specific form of passion a lot, including here and here. In this context, passion of the explorer is particularly powerful because it motivates people to connect in a much deeper manner. People with this form of passion will readily ask for help from others because they are driven to achieve more and more impact in their chosen domains. They’re willing to express vulnerability and acknowledge that they don’t have all the answers and resources they need, which in turn helps to build trust. They’re driven to connect with many others because they are constantly searching for better and better ways to address the challenges they’re facing.

Opportunity based narratives and passion are valuable on multiple dimensions but, in the end, they help people to develop a sense of agency, cultivate a motivation to come together, and build deep, trust-based relationships with each other. Narratives and passion help people to overcome a sense of hopelessness and helplessness and they strengthen a sense that people can and should make a difference through action. They also underscore that, no matter how smart or accomplished a person is, they will be able to achieve far more impact if they come together and act together than if they act in isolation. Finally, they drive people to ask for help from each other in ways that build a deep sense of trust and strengthen the sense of connection.

The bottom line.

We have the ability to connect with more and more people around the world, but our emotions are undermining our ability to make deeper and more fulfilling connections that can help all of us to achieve more of our potential. There’s a vicious cycle under way that continues to erode our ability to make connections that matter – the more fear we feel, the less likely we are to trust others and that leads to a growing sense of isolation which in turn feeds the fear, leading to even less trust and the cycle continues. While this emotion is understandable, it's preventing us from harnessing the potential that's created by the ability to connect with others more broadly and more deeply. We need to embrace opportunity-based narratives and the passion of the explorer to turn this around and, for the first time, discover the enormous power that comes from broader and deeper connections.

Infomediaries – A Significant Untapped Opportunity

In a book I wrote 20 years ago, I identified an opportunity that has yet to be addressed, but is becoming more and more attractive. Sometimes when you’re on the edge, it takes a little more time than you thought for opportunities to emerge in practice.

The book is Net Worth: Shaping Markets When Customers Make the Rules and I wrote it with my friend and collaborator, Marc Singer. In that book, we suggested that a new type of business – an infomediary – could address significant unmet customer needs.

What is an infomediary? It was a new word that we made up, short for “information intermediary.” The notion was that we as customers will increasingly need a trusted third party or personal agent to act on our behalf to help us get more value from data about ourselves. Among other services, the infomediary would act as custodian of our personal data and negotiate with various third parties to provide limited access to the data in return for significant value received.

Forces shaping the infomediary opportunity                                                                                                                             There were a variety of forces coming together to make this a promising business opportunity back at the turn of the century. First, we as customers were gaining power as we gained visibility into more and more options and we were becoming more demanding in terms of services received from vendors. We as customers wanted more personalized value at much lower cost, but to get that personalized value we would need to share information about ourselves.

Second, digital technology was making it far easier to capture and share information about ourselves. A growing number of third parties were capturing this information without our permission and there was an increasing concern about how that information might be used, hence an erosion of trust in the third parties capturing this information.

Third, we as customers were facing more and more choices in terms of products and services that were rapidly evolving. We would increasingly value someone who knew us extremely well as an individual and whom we could trust to connect us with the resources that would be most valuable to us given our aspirations.

These three forces have continued to accelerate over the past 20 years, creating even more opportunity for the emergence of very large and profitable infomediaries. So, what happened? Why haven’t infomediaries taken off? From my perspective, the key reason is a failure to understand the real unmet need of customers.

Efforts to build infomediary businesses                                                                                                                                        The book Net Worth actually catalyzed two waves of new business startups seeking to target the infomediary opportunity. The first wave of startups focused on the issue of privacy – their goal was to help people hide information about themselves and limit their visibility online. None of these startups scaled. Their failure stemmed from a misunderstanding of the real need we have as customers.

Based on our research at the time we wrote the book, I believe that a very small number of us really want to be invisible. On the contrary, I believe we are very ready and willing to share information about ourselves if we receive tangible value in return. The concerns about privacy today largely involve lack of trust that our data is being used for our benefit, rather than for the benefit of others.

So, that led to a second wave of infomediary startups. This second wave focused on providing users with payments in return for access to their data. They met with the same lack of success as the first wave. Once again, they misunderstood the real opportunity. It turns out that the payments one might receive for access to data about ourselves are trivial. Either we are very wealthy and the payments are small relative to our total income or we are much less wealthy and the amount that vendors would be willing to pay diminishes significantly because we don’t represent a significant selling opportunity.

In Net Worth, when we focused on the value that could be created by the infomediary, we were not talking about monetary value in the form of payments in return for access to data. We were focused on the broader value we would receive by connecting in a timely fashion with resources that really mattered to us. This assumed that the infomediary would be a trusted advisor who would be proactive in connecting us to relevant resources based on deep insight into our individual needs and aspirations. Very few, if any, of these trusted advisor infomediaries have yet to emerge, although there are some early signals of the potential.

A big barrier for incumbents to enter the infomediary business                                                                                                         One of the reasons that so few trusted advisor infomediaries have yet to emerge is that addressing this opportunity requires a very different business model relative to the ones that we see around us today. The rise of the big Internet businesses over the past twenty years has been driven by two business models – advertising and commission-based models. The key assumption is that customers are unwilling to pay for value received and someone else needs to foot the bill.

But, here’s the problem. If someone else is paying the bill, do we really trust the business to be loyal to us and to serve our needs? On the contrary, the fact that someone else is paying the bills is a key factor in the erosion of trust that we are witnessing on the Internet, especially when we realize how much data about us is becoming available to Internet-based businesses. Who knows what they’re going to use this data for and who will have access to the data?

To truly build a trusted relationship with customers, infomediaries will need to be paid by the customers themselves, rather than accepting payments from third parties. The good news is that digital technology is making the cost of providing infomediary services less and less expensive, so the infomediary can provide a rich set of services at a very low price. But this represents a challenge for large, established companies who have become hooked on advertising and commission revenue – it’s very painful for them to walk away from these established revenue services and target a different, and more speculative, revenue source.

That creates a window of opportunity for new entrants who can target a growing unmet need of customers without worrying about intense competition from large incumbents. The key is to pick the right entry point and to build trust and scale as rapidly as possible.

Entering the infomediary business                                                                                                                                           Rather than focusing on data management as the primary value to the customer at the outset, my advice to aspiring infomediaries is to start by concentrating on building trust through advice that is valuable to the customer. As I’ve explored elsewhere, building trust is an incremental process that involves asking some targeted questions at the outset and providing tangible value in return to customer based on the answers provided. That sets the stage for the ability to ask some more questions and provide even more value in return, rapidly building trust that increases the willingness of the customers to share more and more data about themselves.

It’s also important to start in a relatively narrowly defined arena that is meaningful to customers. One area that is emerging as a potential launchpad for trusted advisors/infomediaries is the wellness domain, addressing a growing interest in finding ways to maintain or improve wellness. Other, largely untapped, areas would involve needs like raising small children, pursuing lifelong learning, or remaining productive and fulfilled post-retirement.

Expanding opportunity to scale infomediary businesses                                                                                                                  As these aspiring trusted advisor/infomediaries build trust that they in fact are committed to helping customers achieve more of their potential, they will create an opportunity to gain access to more and more of the data of the customers they are serving. This creates an opportunity on three fronts.

First, these businesses will be able to scale by leveraging powerful economies of scope. The more they know about an individual customer across more and more domains, the more helpful they can be to those customers in terms of providing them with advice and connecting them with the resources that matter the most to them. And the more customers they serve, the more helpful they can be to each customer, because they can start to see patterns, and become more proactive by suggesting things to a customer based on an observation that other people like them have derived significant value from some resource that the customer has not even asked about. In a world where significant parts of the economy will experience business fragmentation, the trusted advisor/infomediary businesses in contrast have potential to become very large and concentrated over time, as we explored in this research report.

Second, as the trusted advisor/infomediaries scale, they also have the potential to provide additional value to customers by bargaining for volume discounts given the amount of business they could potentially bring. Of course, this involves a balancing act to make sure that the infomediaries are connecting their customers with the products and services that are most relevant to them, even if they cannot obtain a deeper discount.

Third, these businesses will be able to provide additional services regarding management of the customer’s data, ensuring that vendors will only get access to data required to provide a product or service and managing restrictions on the use of that data by the vendors who are given access to it. They will help to ensure that the data is accessible in ways that benefit the customer but not abused in ways that might hurt the customer.

Growing unmet need                                                                                                                                                                     As mentioned before, the forces that were shaping the opportunity for infomediary businesses to emerge have continued to gather strength over the past twenty years. One element that is worth emphasizing is the growing ability of digital technology to capture information about ourselves even when we’re not on the Internet. With sensors and other Internet of Things technologies being deployed everywhere, virtually all our activities are becoming visible, regardless of where we are, and not just when we are online. That becomes very scary at one level but, at another level, it increases the ability of the trusted advisor/infomediary to provide more value to each of us as customers because the business will have much more visibility into our activities in physical space as well as virtual space.

The bottom line                                                                                                                                                                            As concern grows over the increasing amount of information that is being captured about us and our activities, and as trust in existing institutions continues to erode, there is an expanding opportunity for a new form of business to emerge and address our unmet needs. It will require a very different business model that will make it challenging for incumbents to address this opportunity, leaving a significant white space for new entrants to address. Those who understand the real opportunity and move quickly to address it will reap very substantial rewards. This is not an opportunity that will be accessible to fast followers. On the other side, addressing this opportunity can be done through small moves that, if smartly made, can set big things in motion.

The Push and Pull of Paradox

Paradox is everywhere
We just have to see it
But first we must look
And want to see
But we don’t.
We crave understanding
And simplicity.
Paradox makes us uncomfortable.
We want order
And harmony.
And paradox challenges that.
We push paradox
Out of sight.
But if we’re driven to learn,
Paradox has powerful pull.
Paradox can propel us
To new levels.
It invites us to explore
And challenges our beliefs.
How can two opposites be true?
But we must be willing
To evolve.
Even better, we must be excited
To evolve
And gain deeper insight.
But that requires humility
And curiosity
And a willingness to venture out
Beyond our comfort zone.
Open yourself to paradox
And you will
See it everywhere
And it will become irresistible.

Expanding Our Horizons – Efficiently

In our Big Shift world, we confront the imperative of institutional innovation – shifting from institutional models built on scalable efficiency to institutional models built on scalable learning. I’ve written and spoken about this a lot over the years and one of the most common pushbacks I get is – “so, are you against efficiency?” This post seeks to answer that question.

Let me lead with the answer – no, I’m not against efficiency. I’m instead suggesting two things. First, we need to broaden our horizons to look beyond efficiency. Second, while efficiency is still important, our existing ways of achieving efficiency are becoming increasingly inefficient

Broadening our horizons
I’ve written about the paradox of the Big Shift. On the one hand, it’s creating exponentially expanding opportunity. On the other hand, it’s generating mounting performance pressure. Our imperative is to find ways to harness the expanding opportunities while responding to the mounting performance pressure.

While some of the opportunities created by the Big Shift involve ways to become more efficient, those are actually a very modest segment of the overall opportunity. The opportunity that’s exponentially expanding involves the opportunity to create and deliver far more value to markets and society. As one small example, just think for a minute about the potential that biosynthesis has to extend lives and dramatically increase the quality of our lives.

We need to become much more aware of the new capabilities that are becoming available to deliver far more value and find ways to harness those capabilities so that we can have a much more positive impact on those around us and, in the process, create more value for the institutions that are delivering that impact.

If all we do is focus narrowly on efficiency, we’re going to miss most of the opportunity that’s emerging. Here’s the thing – while efficiency is important, it’s ultimately a diminishing returns proposition. The more efficient we become, the longer and harder we’re going to have to work to get that next increment of efficiency. That’s not an exciting future.

On the other hand, if we focus on addressing exponentially expanding opportunities to create more value, the sky’s the limit, especially if we find ways to pursue leveraged growth. For the first time, we have the ability to tap into an increasing returns curve where the value increases exponentially over time. Who wouldn’t want that?

But to tap into that opportunity, we need to find ways to learn faster – at scale. That’s why I put so much emphasis on the imperative to move from scalable efficiency to scalable learning institutional models. These emerging opportunities are new opportunities, never encountered before. We need to rapidly learn what these opportunities are and what approaches will be most effective in addressing the opportunities. And the opportunities will be rapidly evolving, so we can’t just learn once and be done with it – the challenge is to learn more and more rapidly at scale, forever.

And, just in case it’s not abundantly clear, the learning I’m talking about here is a very different form of learning relative to the learning that we do in most institutions today. All large institutions have learning programs, but these programs focus on transmitting existing knowledge. We go into a training room and listen to an “expert” who shares what they know.

The learning that’s going to be necessary to harness these opportunities is learning in the form of creating new knowledge. That kind of learning isn’t done in a training room – it’s done in the work environment where workers are confronting new opportunities to create value on a daily basis. As I’ve explored in a recent research report – Redefine Work – this involves redefining work for everyone – rather than executing tightly specified routine tasks, we need all workers to address unseen problems and opportunities to create more value. If we take that seriously, it involves cultivating a whole new set of practices and redesigning work environments from the ground up.

Achieving efficiency differently
So, we need to expand our horizons to target opportunities to create more value. Does that mean than efficiency no longer matters? Of course it matters. In a world of mounting performance pressure, we need to strive to become more and more efficient in everything we do.

But, how do we become more efficient? The traditional approach to scalable efficiency was very clear – we tightly specify every task and standardize it so that it’s done in the same efficient way throughout the institution. We tightly integrate those tasks, removing all the inefficient buffers between them, by crafting highly efficient end to end business processes.

This approach worked very well throughout the past century, providing a foundation for large, global institutions that generated enormous wealth. But, now the world is changing, and that traditional approach is paradoxically becoming less and less efficient.
The traditional approach to scalable efficiency worked very well in more stable environments. That’s what made it possible to specify in advance, standardize and tightly integrate. But, how well does that approach work in a world that’s more rapidly changing, with more and more uncertainty and unexpected events that no one anticipated?

Not very well at all. In fact, based on surveys we’ve done, we found that 60 – 70% of worker time in large companies is spent on “exception handling” – dealing with unexpected situations that can’t be handled by the existing processes and that require workers to scramble around and improvise to find ways to address something that’s never been seen before. And they do that very inefficiently, precisely because the organization hasn’t been designed to address these exceptions. In fact, there’s a strong tendency to try to deny that these exceptions even exist, because they call into question the scalable efficiency model.

If we want more evidence that the scalable efficiency model is fundamentally broken, perhaps our analysis of the performance of all public companies in the United States from 1965 until today provides an important indicator. We used return on assets as our measure of performance and it turns out that ROA has basically collapsed over this time period – declining by 75%. There’s no sign of it leveling off, much less turning around. So much for scalable efficiency.

So, efficiency is still very important, but the approach to become more efficient is fundamentally changing. Rather than tightly specifying and standardizing all tasks in advance, we need to create environments and practices that help workers to address unseen problems and opportunities whenever and wherever they emerge. And we need to find ways to “loosely couple” all those tasks so that workers have more room and ability to improvise and test new approaches without creating unintended ripple effects that cascade into some major disaster further down the process chain.

In fact, it turns out that the scalable learning model that I’ve advocated is far more efficient in a rapidly changing world than the scalable efficiency model. By creating environments that help workers to see, address and learn from unexpected situations, we will build much more efficient institutions. Efficiency is still essential – it’s just that we have to pursue very different approaches to achieve it.

Models don’t mix
I hope I’ve persuaded you that I am very committed to efficiency as well as learning – in fact, I see them as increasingly tightly integrated. Scalable learning will produce more and more efficient institutions.

On the other hand, I hasten to add that I'm not a proponent of trying to embed both scalable efficiency and scalable learning models within the same institution. I know there's a lot of interest in the “ambidextrous” organization, where one part of the organization executes routine tasks and another part pursues innovative and creative initiatives, but count me as a deep skeptic of this idea for two reasons.

First, as I’ve suggested, in a rapidly changing world filled with uncertainty, I question whether routine tasks are even feasible, much less helpful. To the extent that routine tasks are necessary, I've made the case that they will be quickly taken by robots and AI – they shouldn’t be done by humans. My belief is that all workers should be focused on addressing unseen problems and opportunities to create more value.

Second, my experience is that these two institutional models are fundamentally incompatible and that scalable efficiency quickly and “efficiently” crushes any attempt to foster innovation and creativity. The scalable learning model that I’ve proposed as a replacement for scalable efficiency requires a fundamentally different culture and way of organizing and operating that is viewed as deeply threatening, or at the very least as a distraction, by those who hold on to the scalable efficiency model. I have yet to find an institution where these two models co-exist at scale.

A choice needs to be made, but it’s a choice in institutional models, not a choice between efficiency and more value creation. The scalable learning model delivers both greater efficiency and more value creation.

The bottom line
We don’t need to choose between greater efficiency and more value creation, but we do need to choose between institutional models. We also need to choose to expand our horizons and move beyond a narrow focus on greater efficiency.

This is not just an opportunity – it’s an imperative. In a world of mounting performance pressure, if we just focus on efficiency, we’ll ultimately be squeezed out of existence. Those who will survive and thrive in the Big Shift world are those who aggressively pursue both value creation and efficiency. And the key to both, in a rapidly changing world, is to learn faster at scale.

Zoom In Filters for High Impact

Small moves, smartly made, can set big things in motion. That’s a key to succeeding in a world of mounting performance pressure. In a previous post, I briefly alluded to the need to “zoom out” to smartly make small moves. In today’s post, I want to focus in more detail on the need to zoom in.

Zoom out/zoom in strategies                                                                                                                                                       For those who’ve been following me, you know my passion for the “zoom out, zoom in” approach to strategy, which I’ve written about extensively, especially here. For the others, let me summarize this approach. It focuses on two time horizons in parallel. I’m going to talk about companies in the discussion below, but this approach to strategy is increasingly necessary for all institutions, not just businesses.

The first time horizon, the zoom out horizon, is 10-20 years. On that horizon, the two key questions are: What is my relevant market or industry going to look like 10-20 years from now? What are the implications for the kind of company I will need to become in order to be successful?

The second time horizon, the zoom in horizon, is very different – it’s 6-12 months. On this horizon, the key questions are: What are the two or three initiatives I can pursue in the next 6-12 months that will have the greatest impact in enhancing my ability to reach my destination? Do I have a critical mass of resources committed to those initiatives in the next 6-12 months? How will I measure success for these initiatives?

Both horizons are required for small, smart moves. If we don’t have a destination, we’re unlikely to ever reach it. Instead we’re likely to incrementalize our way into oblivion. On the other hand, if we just have a long-term view and don’t focus on near-term impact, we’re likely to over-invest in “mega-projects” that limit our ability to learn and ultimately collapse from their own weight.

So, we need to zoom in and force ourselves to pick the 2-3 most promising initiatives to pursue in the next 6-12 months. Given all the options competing for our attention and resources, that’s a tall order. Is there any more guidance that we can provide to help in picking those initiatives?

Yes, there is. I’ve developed three filters to use in assessing proposed zoom in initiatives.

Find and scale an edge                                                                                                                                                             First, one of the initiatives should focus on identifying and moving aggressively to begin to scale an edge of the current business. This refers to my perspective on “scaling edges” as the most promising way to drive transformation of large, existing companies. Rather than trying to drive transformation in the core, my advice is to find an edge to the current company – something that today is relatively modest in revenue, but which, given the exponential forces driving change, has the potential to scale quickly to the point where it becomes the new core of the business. Drive the transformation on the edge, rather than tackling the immune system and antibodies that reside in the core and that will mobilize quickly to resist any effort to drive fundamental change.

The zoom out effort can be very helpful in identifying and assessing an edge that really has the potential to become the new core. It’s admittedly a high bar – the edge must have the potential to become the new core in a relatively short period of time. But, given the exponential forces that are re-shaping our global economy, it’s more and more feasible to scale a promising edge with relatively modest resources. The key is to identify the edge, commit to it and be very aggressive in doing whatever we can in the next 6-12 months to scale that edge as rapidly as possible. That’s a small move that can set big things in motion.

Strengthen the existing core                                                                                                                                                  Second, one of the initiatives should focus on identifying the one move that can have the greatest impact in strengthening the existing core of the business. We live in a world of mounting performance pressure and the existing core is what generates our current profitability. We need to do whatever we can to prolong the life of that core, while at the same time recognizing that its life span is limited.

As I’ve indicated elsewhere, I’m a big fan of the Pareto Principle, otherwise known as the 80/20 rule – in short, 20% of the causes in virtually any domain typically generate 80% of the effects. In business, that means that 20% of the products, customers and facilities typically generate 80% of the profits. While most people are familiar with the 80/20 rule, relatively few executives systematically apply that lens to identify the 20% of the products, customers and facilities that are generating 80% of the profits.

To have the greatest impact, this second zoom in initiative needs to focus on the highest performing parts of the business today. It needs to identify missed opportunities to further strengthen the performance of these parts of the business and to address potential short-term vulnerabilities. That will help to determine what measure can be taken in the short-term with the greatest potential to strengthen and amplify the profitability of these parts on the business. That’s a small move because it focuses on a relatively small part of today’s business, but it can set big things in motion by extending the life of the most profitable part of the business.

Find something to stop doing                                                                                                                                                  There’s a third zoom in initiative that, in my experience, is typically the most challenging one. It requires us to identify what significant part of the business we are going to shut down or divest in the next 6-12 months in order to free up more resources to scale the edge and strengthen the core. Once again, the 80/20 rule can provide a very helpful lens here. What about the 80% of the products, customers or facilities that are only generating 20% of the profits of the business? Why are we still in these parts of the business?

I’m not by any means suggesting we need to shut down all these parts of the business – there may be good reasons why some of these parts are marginally profitable today, but have the potential to increase in profitability over time. Nevertheless, we need to become much more rigorous in addressing the need to be in these parts of the business. In the next 6-12 months, we should force ourselves to ask how much of these parts of the business could be shut down or divested so that we can free up more resources. That’s a relatively small move that could set big things in motion by freeing up resources to devote to the areas that have much greater potential for profitability.

So, there you have it. Three small moves that could set big things in motion, but only if smartly made.

Bottom line
We live in a world of mounting performance pressure and the small moves that we’re making today are having diminishing returns. That’s because they focus narrowly on preserving our scalable efficiency businesses, rather than addressing the more fundamental imperative to transform everything we do in order to build institutions driven by scalable learning.

Transformation suggests that we need really big moves. Resist that temptation. Instead, focus on identifying the small moves that, if smartly made, can set big things in motion. The zoom out, zoom in approach to strategy can provide a powerful lens to smartly make small moves. It requires a balance between a clear view of one’s destination while emphasizing the need to act now to accelerate learning and movement towards that destination. That’s the essence of smartly made – having a long-term destination while emphasizing the need to identify the highest impact initiatives that can be pursued in the near-term to reach that destination more rapidly.

One final note. Everything I’ve covered here can also be applied to us as individuals. We need to apply the zoom out, zoom in approach to ourselves in order to increase our own impact. If we’re smart about it, we can set really big things in motion. Now, that’s something that I need to pursue further in a future blog post!

Images Matter – Shaping Our Current Social and Political Discourse

I recently wrote about the growing fear produced by the mounting performance pressure of the Big Shift. As fear grows we have a natural human reaction to hold onto what we have. While very understandable, that reaction can also be very dangerous and lead us to miss the expanding opportunities created by the Big Shift.

The two most prominent images – walls and safety nets – dominating much of our conversation these days are manifestations of our fear and desire to hold onto what we have. I would suggest that we would benefit from shifting to two other images – bridges and launch pads – that can cultivate hope and excitement and motivate us to pursue expanding opportunity.

Walls and safety nets

One side of our political spectrum has become obsessed with walls. These walls – either physical or virtual – are designed to protect us from a range of perceived threats that may vary depending on what part of the world we are in – immigrants, foreign competition and subversive ideas. There’s an understandable desire to create barriers that will insulate us and help us hold onto what we have.

On the other side of the political spectrum, there’s growing discussion about the need for safety nets that will help people who lose their jobs or suffer some other kind of adversity to recover. It’s interesting that the discussion of safety nets often uses the term “bounce back” – the key goal is to help people to return to their previous state. Once again, the goal is help us to hold onto what we have and, if we lose anything, to recover what we’ve lost as quickly as possible.

Here’s the irony – while both sides of the spectrum are becoming increasingly polarized and hostile to the other side, at some fundamental level, they’re both driven by the same fear, and the same desire to hold on to what we already have. Their view of who the enemy is and what the threat might be clearly differs, but they share a feeling of fear and the same protective urge to help people address the threats ahead.

But, here’s the problem with both sides – they hold a very static view of the world in terms of the resources that can be deployed and the opportunities that can be created. It’s all about protecting what we have in the face of growing threats.

Fixed versus growth mindsets

In this context, I’m reminded of the wonderful writing of Carol Dweck in her pathbreaking book, Mindset: The New Psychology of Success. In that book, she made an important distinction between two mindsets that appear to shape most of our behavior – a fixed mindset and a growth mindset. As she describes it, “in a fixed mindset, people believe their basic qualities, like their intelligence or talent, are simply fixed traits.” In contrast, “in a growth mindset, people believe that their most basic abilities can be developed through dedication and hard work—brains and talent are just the starting point.”

While her focus was on the mindset of the individual and their beliefs about themselves, I suspect these beliefs in turn shape broader beliefs about society. If we hold a fixed mindset about ourselves, we’re likely to hold a fixed mindset about society and the resources that are available to it. On the other hand, if we hold a growth mindset, we’re more likely to see the opportunity to create more and more impact and value as we cultivate the resources available to us and find ways to expand them.

But, what shapes these mindsets? There are many factors at work, but this is where there’s an opportunity to refer to my earlier perspectives on mindset and heartset. I suggested there that we don’t pay enough attention to the role of emotions in shaping our beliefs and perceptions.

In this context, I would suggest that fear tends to shift us to a fixed mindset and a focus on protecting the fixed resources and capabilities that we believe we have. This is all understandable and a natural human reaction to perceived threats.

Bridges and launch pads

But, what can we do to overcome the fear and shift our focus from threat to opportunity? Here’s where images matter. Walls and safety nets focus on the threat and the need to protect what we already have. What’s the alternative? I suggested above that perhaps we should shift our attention to bridges and launch pads.

What do these images suggest? Bridges are about connecting areas that were previously separated – they’re about bringing people together. The underlying belief in building bridges is that we’ll benefit from connecting with others that we couldn’t previously reach. They focus on the opportunity created by connecting people.

If you’ve been following our work on scalable learning, you’ll know that I am a strong believer that there are powerful network effects to learning. The more of us who come together with a shared goal of learning, the faster we’ll all learn. Opportunity to develop more of our potential is unlimited but to address that opportunity more fully more of us need to come together. That’s where bridges come in. And, like walls, these bridges can take on both a physical or virtual form – the key is finding ways to connect more people more effectively at scale so that they can achieve more of their potential together.

That brings me to my other image – the launch pad. I find this image much more intriguing than the safety net image because the key is to launch people into new arenas that are very distant and full of potential to learn. Rather than bouncing people back to where they were, the goal with a launch pad is to take them to much higher terrain and to accomplish things that were never accomplished before. The goal is to move forward rather than bounce back. The mindset when confronting adversity should be how to use it as a growth opportunity to accomplish even more, rather than simply going back to where one was. Imagine what we could accomplish if our programs and initiatives to help people in trouble were designed to help them get to even higher ground rather than just returning them to where they were.

Another benefit of the launch pad image is that it doesn’t just wait for people to fall and then catch them. Launch pads could be for everyone, especially the marginalized people in our population who never had the opportunity to begin with. They haven’t fallen – they never had the opportunity to get up in the first place. What would happen if we were committed to create launchpads for everyone?

If we focus on bridges and launch pads, we begin to see the opportunity that can surface if we come together with the goal of helping each other to achieve more of our potential. There still may be fear (after all, bridges have been known to collapse and rockets have exploded on launchpads), but we’re inspired by the opportunity that awaits on the other side and more willing to overcome the fear and take some risk in order to achieve far more for ourselves and for others.

The bottom line

Images matter. We need to look beyond the images to find out why we picked them in the first place and what kinds of emotions they foster. We also need to challenge ourselves to find images that can motivate us to achieve more of our potential. The story of human progress is the quest to achieve more, not just for ourselves but those who matter to us. If we abandon that quest and give in to fear, we’ll accomplish less and less as we isolate ourselves and settle for bouncing back to what we had in the past.

Small moves, smartly made

Small moves, smartly made, can set big things in motion – that’s the sub-title of my last book, The Power of Pull. It’s been a key theme of my work for decades, but it’s coming back to bite me.

I find that a lot of people have grabbed on to this message to justify incremental actions with limited funding, while holding out the expectation that they will potentially lead to big results. I’ve long been a skeptic of massive top down programs – whether it’s companies, governments or any other institutions. But let me also say that I am deeply skeptical about incrementalism and lots of small moves.

Many people glide over the phrase “smartly made” in the sub-title, but that’s what enables small moves to set big things in motion, rather than just consuming time and effort with minimum results. Let me try to unpack what that means to me.

Unpacking smartly made
“Smartly made” isn’t easy, it’s really, really hard. It’s all about understanding context and dynamics and being relentlessly focused on how to achieve the most impact with the least investment of time and resources.

I’ve developed at much greater length the increasing importance of context in the world that is evolving around us. Understanding context has always been important but, for reasons that I discuss elsewhere, it’s becoming more and more critical for impact given the forces that are re-shaping our global economy and society.

Understanding context has always been challenging, but it’s becoming more challenging on two fronts. It used to be that we could narrowly define context and focus on a small slice of the world around us – whether it’s a specific industry, geographic market or customer segment. In a world shaped by the Big Shift, everything is becoming more and more connected, so those small slices are being deeply shaped by broader forces.

In more stable times, we were also able to take a snapshot of our context at a given point in time and focus on understanding that snapshot. No longer. Our context is rapidly evolving, shaped by the exponential changes of the Big Shift. If we just focus on the snapshot, we’re at serious risk of being blindsided. We need to “zoom out” and anticipate what the context could look like years, and even decades, down the road.

Many of us are overwhelmed by this and shrink our horizons to just focus on small moves that respond to whatever is going on at the moment. While understandable, that’s not being smart. It’s a formula for failure as we spread ourselves more and more thinly across a lot of “small moves” that never get any critical mass of resource or attention. As I’ve discussed elsewhere, rather than reducing risk, portfolios of small moves can often be the highest risk approach of all.

A key part of “smartly made” is investing the time and effort required to look ahead and understand the dynamics of the broader contexts evolving around us. Of course, we can get consumed by that exercise as well.

So, another part of smartly made, is focusing on the context and dynamics that matter. Again, that’s not easy, but a key approach is to focus on identifying “influence points” – those locations that exist in all complex adaptive systems that have a disproportionate impact on the evolution of the broader system. If one can target and occupy one or more of those influence points, one can achieve far greater impact in broader systems than all the other participants, and do it with far less resources than might otherwise be required to achieve impact

Another dimension of “smartly made” is making explicit choices based on this assessment of influence points and evolving context. Rather than just randomly or opportunistically pursuing small moves, the key is to invest the time and effort required to proactively choose the small moves that have the greatest potential for high impact. Don’t just react. Focus and anticipate, and be relentless in finding the most promising ways to achieve great impact with few resources.

Yet another aspect of “smartly made” is to move as quickly as possible to action so that one can begin to learn from the impact achieved. There’s a strong bias to action and to define early milestones that can help the participants to refine their approach to get even more impact.

Finally, and perhaps most challenging, another dimension of “smartly made” is a commitment to rapidly scale impact. The participants are relentless in challenging each other to get more and more impact – these are not just “experiments”, they’re the launch pad for something really, really big and there is a commitment to set really big things in motion and scale them rapidly. The goal is not just linear impact and improvement, but exponential impact driven by accelerating performance impact.

Those of you who have followed our work will likely recognize a close parallel between these various dimensions of “smartly made” and the business practices that we’ve identified as key to accelerating the performance of front line workgroups. Our belief is that everyone, everywhere should be trying to become more focused on the small moves that have the greatest potential to set big things in motion.

Why is this such a big opportunity?
Here’s the point. In the Big Shift world we’re entering it’s possible to create much more value than would have been imaginable a few decades earlier, and to do it with far less resources and much faster than would have been possible a few decades earlier. That’s the expanding opportunity side of the Big Shift – exponential technology development and other, related forces are driving the growth of some businesses and other kinds of institutions at a rate that would have been unimaginable in our industrial era.

But we need to be smart about it. With so much change happening so quickly, we can also get easily distracted and lost in the events that compete for our daily attention. I love paradox – small moves are both necessary and dangerous. The key is whether they’re smartly made.

And the paradox is that there’s not just expanding opportunity. There’s also mounting performance pressure. If we don’t make small moves smartly, we’re likely to face diminishing returns until we’re finally squeezed out of our comfortable seats. So, this isn’t just an opportunity; it’s an imperative.

Bottom line
Rather than focusing on the small moves, we need to focus on the really big things that can be set in motion. We need to invest the time and effort to look ahead and look around in ways that can help us to see those really big opportunities and only then work back to identify the small moves we can make today and pursue aggressively to set those big things in motion. As we find those small moves, we need to be relentless in pursuing them and scaling them. Commitment is key.

So far, I’ve been talking about small moves, smartly made in an institutional setting. But, guess what? The same principles apply in our personal lives. We have an ability to have far greater impact and to achieve far more of our potential than would have ever been possible in the past. But the same principles apply – it can’t just be with random small moves. They need to be smartly made in the context of a deep understanding of the expanding opportunity that we all can address. And (some of you knew this was coming), we’ll be much more successful in setting these big things in motion if we are truly passionate about the opportunity – motivation is ultimately the key.

Feel the Fear

I perceive that fear is becoming pervasive and increasingly intense around the world. When I share this perception with others, I often get the response: “What fear? I don’t know many people who are afraid.”

That’s part of the problem. The fear is often not visible unless we know where and how to look for it. Why is that the case?

Emotions are suspect
As I’ve written elsewhere, our institutions are organized on a scalable efficiency model that views emotions as deeply suspect. In these institutions, it’s all about mindset and heartset is ignored. Emotions are a distraction – the key is to memorize the process manual and execute flawlessly and efficiently. If you express emotions, you’re viewed as weak, especially if you express emotions like fear or anxiety. So, it shouldn’t be a surprise that most of us make a concerted effort to keep the fear we feel deeply hidden, lest anyone else find out.

Fear is often expressed through other emotions
We may not express the emotion of fear itself, but we often express it through other emotions that are less suggestive of weakness.

Anger and hatred. Have you noticed the increasing amount of anger being expressed in populations around the world? Anger is often a manifestation of fear. If you feel you’re being threatened, it’s natural and understandable that you’ll feel anger towards those you believe are threatening you. In a world where emotions in general are viewed as weakness, anger is sometimes viewed as a sign of strength. It shows you’re willing to stand up for yourself.

Rigidity. People who feel fear are often driven to find something that they can tightly hold onto and count on in a world that is perceived as increasingly threatening. That’s a major reason why we’re seeing the growth of fundamentalist religions and political extremism – a growing number of people find these to be a comforting refuge from fear.

Defensiveness. If we feel fear, we are often likely to become more defensive, viewing the slightest slight as an attack and feeling the need to defend ourselves before the situation becomes even more threatening.

Stress. Who doesn’t know people who are experiencing growing stress? Stress is often a by-product of fear, especially if we feel we’re in environments that don’t allow us to express our fear. Now we have to hide our fear as well as deal with the events that are producing the fear.

Boasting and narcissism. If we’re experiencing increasing fear, a natural human reaction is to compensate by focusing the attention of others on what we’ve accomplished. I don’t know about you, but I have a definite sense that many of us use social media to share the amazing places we’ve been and people we’re spending time with in an effort to reassure others that we’re doing really well.

Hopelessness and passivity. As fear gains force, we can often move to feelings of hopelessness and passivity, a feeling that there’s nothing we can do to change things. It’s not about us; it’s just the way the world is. We drop out or, at best, we focus on taking care of those nearest to us.

Loneliness. Loneliness is becoming pervasive in many parts of the world. While many factors can contribute to this feeling, certainly one is an underlying emotion of fear. If we’re living in fear, we’re less likely to connect with others and simply try to fend for ourselves, while feeling isolated and without support.

To be clear, I’m not saying that these emotions are exclusively a manifestation of fear, but they often are. When we encounter these emotions, we just might want to explore beneath them to see if we can find fear.

What’s driving the fear?
So, if I’m right that more and more of us are experiencing growing fear, why is that happening? There are certainly many reasons, but my research suggests that we are in the early stages of a Big Shift that is generating mounting performance pressure on all of us. No matter what our credentials and track record in the past, the pressure is mounting to get even better faster in the future. It’s totally natural that we would feel fear in that kind of world, especially if we were taught that getting the right degrees and pursuing the right jobs would ensure our success.

This mounting performance pressure isn’t just about economic pressure and the ability to earn a living. It takes many different forms, including an accelerating pace of change where things we could rely on in our lives – values, norms, practices, etc. – suddenly are no longer there.

But, it’s not just mounting performance pressure that’s driving the fear. There’s also a growing realization that our institutions are not equipped to help us respond to the mounting performance pressure. In fact, there’s a sense that our institutions are making us even more vulnerable to that growing pressure. That’s one of the key reasons that trust in all our institutions is rapidly eroding globally.

Feeding the fear
If mounting performance pressure isn’t bad enough, we have a growing set of forces that are determined to feed that fear. More and more politicians are resorting to threat-based narratives to mobilize the population: the enemy is coming to get us and we’re under attack, we need to mobilize now and resist. These threat-based narratives amplify and reinforce the fear.

And there’s more. Our mass media (and social media) are increasingly focused on the terrible things that are happening in the world. Wherever there’s an earthquake, a terrorist attack, a wave of crime, an epidemic or some other disaster, we can count on it dominating the media. We have to look long and hard to find any good news. That also feeds our fear.

The negative impact of fear
If we allow fear to dominate our emotions, we’re at risk of unleashing a vicious cycle that can lead to an increasingly dysfunctional world. Fear cultivates a set of cognitive biases. First, we tend to become more risk averse – we emphasize the risk of action and discount the rewards that can come from action. As we become more risk averse, we tend to shrink our time horizons. We only focus on what we can do in the short-term because there’s more risk out in the future. As we shrink our time horizons, we fall into what economists call a “zero-sum” view of the world. If we’re only focused on today, there’s a given set of resources and the only question is who’s going to get them – you or me? It’s a win-lose view of the world. And in that kind of world, trust erodes quickly – you may seem like a really nice person, but I know at the end of the day only one of us is going to get those resources, and I want to be sure it’s me.

And these cognitive biases can unleash a vicious cycle. The less trust we have, the more risk averse we become and the more we shrink our time horizons which further erodes trust, and on and on.

How to see the unseen
So, what can we do about all of this? First, we need to see the fear and recognize how pervasive it is becoming. If the emotion of fear is so deeply hidden, how can we learn to see it? Well, we might start with ourselves. Many of us have become so deeply embedded in scalable efficiency cultures that we’ve become adept at disconnecting from our own emotions. Perhaps some deep inner reflection might reveal that we actually have fears that have been growing over time. If we’re unwilling to see and confront that fear within ourselves, we’re very unlikely to see it in others.

Once we see it within ourselves, it helps to share that recognition with others. In scalable efficiency cultures, there’s very little trust and if you come across as someone who is unwilling to acknowledge your own fears, others are going to be very reluctant to share this emotion with you. On the other hand, expressing vulnerability and acknowledging your fears can help to build trust and open up others to share their emotions with you.

My own experience is that some of the “strongest”, most successful people that I know will, in the privacy of their offices, express great fear when in the company of someone they trust.

Overcome the fear
Seeing the fear is just the beginning. To be clear, I’m not suggesting that the fear is unjustified. Fear is a very natural response to mounting performance pressure. I’m also not suggesting that the fear can be eliminated. What we need to do is to find ways to overcome the fear and cultivate other emotions like hope and excitement that can motivate us to make the changes necessary to address the mounting performance pressure.

Here’s the paradox. The same Big Shift that is producing mounting performance pressure for all of us is also producing expanding opportunity for all of us. But to realize that expanding opportunity, we’re going to have to transform all of our institutions, moving from a scalable efficiency model to a scalable learning model. If we’re driven by fear, we’re unlikely to invest the effort required to drive that transformation.

We need to find ways to focus on that opportunity and to motivate ourselves to come together in ways that can help us overcome our fear and address the challenges that stand in the way of achieving that opportunity.

Bottom line
We live in a world where emotions are suspect, especially emotions of fear. More and more of us are experiencing fear, yet that fear often remains deeply hidden, even from ourselves. We need to acknowledge that fear and commit to finding ways to overcome it. If we remain in denial, we risk being consumed by that fear and missing the growing opportunities that can help all of us to achieve far more of our potential.