Category Archives: Uncategorized

Institutional Innovation – I Have a Dream

Everyone talks about transformation these days, but the term is used so loosely that it’s begun to lose all meaning. I recently wrote a blog post suggesting that the ultimate test of transformation is whether the caterpillar became a butterfly – is it so different that it’s unrecognizable? That’s a useful metaphor, but many have asked me to make it more tangible in the world of institutions.

OK, you asked for it, so watch out! It’s Martin Luther King Day in the US and I can’t think of a better day to declare that I have a dream and to explore that dream in a blog post. My dream is that we will transform all our institutions in ways that can help all of us to achieve more and more of our potential. As I explore this dream, I’m going to refer to a lot of the work we’ve been doing at the Center for the Edge since I’ve been pursuing this dream for a quite a while.

Let me start by clarifying that the transformation I’m focused on isn’t the transformation involved in moving from one business to another (let’s say, moving from being a retailer to becoming a clothing manufacturer). Yes, the business will look very different in terms of the specific activities being performed, but the overall approach to how to be successful in business will not necessarily change. I would prefer to call this diversification rather than transformation. What I’m focused on is the more fundamental transformation that will be required to be successful regardless of what business you’re in.

Also, the transformation I am seeking is not what most companies today describe as “digital transformation.” When you look more closely at these initiatives, they tend to be applying digital technology in ways that can help the company do what it’s always done, just faster and cheaper. As I'll suggest, digital technology can help to drive a much more fundamental transformation but it will first be necessary to challenge all of our cherished assumptions about how to run an institution.

Institutional transformation
For those of you familiar with our work on the Big Shift, we’ve developed a perspective that all our institutions are going to need to go through a fundamental transformation from a scalable efficiency model to a scalable learning model. Scalable efficiency models drive success by tightly specifying every activity that needs to be done, standardizing those activities so they’re done the same efficient way everywhere in the organization and tightly integrating those activities. Scalable learning models, on the other hand, focus on how to motivate people to learn faster, how to foster practices that drive faster learning and how to create environments that amplify the potential for learning.

This institutional transformation is an imperative because the scalable efficiency model is increasingly challenged given the profound changes playing out in our global economy (see our work on return on asset trends for US companies). But it’s also essential because this new model is necessary to effectively target and reap the rewards of the expanding opportunities that the Big Shift provides.

While I'll be talking primarily about corporations in this blog post, I should clarify up front that my view is that all of our institutions – governments, schools, NGO's, etc. – will need to go through this transformation in order to achieve greater impact.

Diving deeper into learning
So, what does scalable learning imply? It implies that everything in the institution will need to change – nothing will remain the same.

Before I dive into that, let me clarify what I mean by scalable learning. I’m focused on learning in the form of creating new knowledge through action and reflection on results – it’s not about sharing existing knowledge or just coming up with new ideas. Much of this new knowledge is tacit knowledge that we have a hard time articulating to ourselves, much less to others. And a key dimension of scaling is the need to go beyond your institutional boundaries and build relationships with a growing number of external participants where everyone can learn faster together.

OK, so what are some of the key dimensions of transformation required to pursue scalable learning? Fasten your safety belts – I’m going to provide a high-level overview of what will be different. I’ll explore this transformation at three broad levels: motivation, practices and environment.

Motivation
More and more pundits are talking about the need for lifelong learning and the need to learn faster, but very few are focused on what is required to motivate people to pursue this with excitement, rather than being stressed by it. This is ultimately the foundational element to the transformation required for scalable learning.

Motivation: Shift from punishment and cash to passion. Sure, cash compensation will still matter – we’ll want to be paid for work well done. But the real motivation that will drive all workers is the passion of the explorer. We’ll move from a focus on extrinsic motivation to intrinsic motivation. Every worker in these institutions will be motivated by a deep passion that will drive them to learn faster and achieve more of their potential.

Aspiration: Shift from target to trajectory. These institutions will be driven to accelerate performance improvement – linear performance improvement will not be enough, they’ll want to accelerate that improvement – forever. People with the passion of the explorer are never satisfied with one-time, or even linear, performance improvement – they’re driven to get better faster.

Performance metrics: Shift from financial results to addressing unmet needs. Sure, financial metrics will still matter, but the metrics that will matter the most will involve the ability to address more effectively the evolving needs of key stakeholders, with a focus on customers. People with the passion of the explorer aren’t driven by financial results – they want to make a difference that’s meaningful to themselves and to others that are impacted by their actions.

Leadership practices
In institutions that are driven by scalable learning, leadership helps to inspire and focus everyone on growing impact that matters.

Strategy: Shift from static to dynamic. These institutions will pursue a zoom out/zoom in approach to strategy, focusing on very large, long-term opportunities that are emerging on a 10-20 year time horizon while also identifying the 2-3 initiatives that can be pursued in the next 6-12 months to accelerate progress towards the longer-term opportunity and amplify the opportunity to learn through action. The goal is to inspire everyone with a very significant opportunity to create much more impact, but also focus on near-term action that can start to demonstrate impact.

Leadership: Shift from answers and orders to questions and invitations. Leaders will focus on framing powerful questions that can inspire everyone in the organization (and outside). They will freely acknowledge that they don’t have the answers and that they’ll need help in finding the answers.

Worker practices
Scalable learning will require a fundamental redefinition of the work to be done and active cultivation of the practices required to accelerate performance improvement.

Work: Shift from routine tasks to addressing unseen problems and opportunities. A key driver for learning is focus work on seeing what hasn’t been seen in terms of opportunities to create more value but also with an emphasis on action – developing approaches to those opportunities and seeking to evolve those approaches to generate more and more impact.

Performance improvement: Shift from process to practice. The key to driving performance improvement in these institutions will be to focus on cultivating a set of practices that can accelerate learning both within individual workgroups and across workgroups.

Internal environment                                                                                                                                                                   For these practices to achieve greater and greater impact, it will be necessary to redesign the entire environment within our institutions to support scalable learning.

Corporate focus: Shift from bundle to one business type. To accelerate learning, companies will need to unbundle. Today they are an unnatural bundle of three very different and often conflicting business types: infrastructure management, product innovation and commercialization, and customer relationship businesses. By choosing to focus on one of these three businesses, shedding the other two and building deep relationships with world class players in the other two business types, companies will be able to focus more effectively on what will be required to accelerate learning and performance improvement.

Organization: Shift from departments and hierarchies to workgroups and networks. The core organizational unit will be small workgroups of 3-15 people who connect with others through scalable networks. These workgroups will often include participants from “outside” the organization and will connect with a growing number of workgroups outside the organization. Organizations will become “creation spaces.”

Operations: Shift from push to pull. Rather than pushing all the right people and resources into the right place at the right time to meet demand forecasts, the focus will be on participating in scalable pull platforms where the right people and resources can be drawn out as needed and where needed.

Work environments: Shift from cost and comfort to accelerating learning. Design thinking and methodologies will be systematically applied to redesign work environments with the primary goal of accelerating learning and performance improvement. The focus will be on redesigning the entire work experience – physical environment, virtual environment and management systems.

Front line management: Shift from control and enforcement to coaching and development. Front line managers will be focused on how to help individuals and workgroups to develop more of their potential and deliver more impact that matters.

Technology: Shift from tasks to learning. With the growth of service oriented architectures and more and more powerful sensor and analytic technologies, these institutions will focus on how to flexibly support workgroups in learning faster in rapidly changing contexts by giving them richer and real-time visibility into the context and richer feedback loops regarding the actions they take to address the context. To the extent that these activities become routine tasks, the technology will take these tasks over and free up the capacity of the workgroups to address unseen problems and opportunities.

External environment
Scalable learning doesn’t just stop at the four walls of the institution. Scaling learning ultimately requires a systematic effort to reach beyond the institution and develop deep, trust-based relationships with an expanding array of third parties so that everyone can learn faster together.

Growth: Shift from make or buy to mobilize. Greater institutional focus will help institutions to tap into a third and much more powerful path to growth: leveraged growth. This form of growth involves connecting with and mobilizing a growing number of third parties to add more value to the customers being served, and then taking a share of the value creation as compensation for the initiative taken.

Ecosystems: Shift from static to dynamic ecosystems. Institutions will be deeply embedded in a number of growing ecosystems, but the focus will be on building relationships with a larger and larger number of participants where everyone learns faster together, rather than simply executing short-term transactions.

Platforms: Shift from aggregation platforms to mobilization and learning platforms. These institutions will participate in a growing range of platforms, but the platforms will be explicitly designed to help mobilize a growing number of participants in sustained interactions designed to produce shared outcomes and, in the process, help all the participants to learn faster from the initiatives being pursued.

The Bottom Line
If we take scalable learning seriously, it will change everything we do in institutions. The caterpillar will indeed become a butterfly, flying off to areas that were never even seen, much less experienced in its previous life.

Why go through the traumatic effort to transform? There are many reasons, shaped by the Big Shift that is transforming the global economy. But the bottom line is that the scalable efficiency model is ultimately a diminishing returns model. The more efficient we become, the longer and harder we have to work to get that next increment of performance improvement. The scalable learning model will allow us for the first time to move from a diminishing returns outcome to an increasing returns outcome – the more participants we bring together and focus on accelerating learning, the more rapidly we will create increasing value.

This transformation will ultimately be a powerful way to achieve two objectives that tend to be in opposition in the scalable efficiency world: the opportunity to achieve more and more of our potential as individuals and the opportunity to achieve more and more of our potential as institutions.

Questions for the New Year

As we enter the New Year, it’s an opportunity to step back and reflect in an increasingly hectic world. In an earlier post, I suggested we need to find time to reflect in a world increasingly dominated by flows – it’s a healthy form of friction that can actually enhance our ability to generate more insight from flows. Embrace the New Year as an invitation to reflect.

One area for reflection is what we are doing to accelerate our learning. We need to explore and understand the implications of the need for lifelong learning, as I suggested here. We live in a world where the learning imperative continues throughout our lives and, if that weren’t enough pressure, we’ll need to learn faster with each passing year as our world changes more rapidly.

Reflect on questions
OK, how do we do that? Well, it all begins with questions. What are your questions? Isn’t this a great time to step back and reflect on what are the big questions that would help us to achieve much greater impact in all parts of our lives? We’re under so much pressure to have answers during the year that we have little time to reflect on the questions that matter.

So, step back and take this opportunity to reflect. I suspect that most of us will find this challenging at the outset. We’re not used to asking questions. And, be careful because, once we start thinking about this, we’re liable to find that there are an infinite number of questions that could be asked in all parts of our lives.

One interesting exercise is to reflect on what parts of our lives are generating the most questions. We often have a greater curiosity about some parts of our lives relative to other parts. Why is that? What is sparking that curiosity? As I’ll suggest below, the answer to this could be revealing.

But, what are the questions that really matter to you? That motivates us to think about where and how we could have impact in our own lives and the lives of those around us. Most importantly, we could reflect on what’s the impact that would be most meaningful to us, both in terms of impact on our lives and impact on the lives of others? What’s the impact that would be most exciting and fulfilling to us?

And, don’t just focus on impact. Reflect also on the approach that would be required to answer these questions and whether engaging in the effort to find an answer would be exciting in itself, independent of the impact that could be achieved. Would the effort itself excite you?

By the way, put aside the questions that you could answer just by going to a search engine and finding someone who already has an answer. Those are the easy questions and you should certainly go to a laptop and find the answers to them. Focus instead on the questions that require you to create new knowledge through action – that’s the most powerful learning in a world that’s so rapidly changing. These are the questions that will cultivate imagination, creativity and emotional and social intelligence.

Find the questions that matter                                                                                                                                                      Be careful now, because we’re approaching the two by two matrix that all consultants love. On one dimension we have the extent to which the impact is meaningful to us and on the other dimension we have the extent to which the effort to find an answer is exciting and fulfilling to us. Guess where you might want to focus? Of course, it’s on the questions that fall into the upper right-hand quadrant – the questions that offer the most meaningful impact for you and the most excitement in terms of the effort required to get to the answer. And, before you lock in on the questions that matter, be sure to reflect on whether there are other questions that haven’t yet occurred to you that might fall into this same quadrant.

And, what if you couldn’t come up with any questions that are truly meaningful or exciting for you? Don’t lose hope. As we’ll see below, it likely means that your curiosity has atrophied and needs more exercise. Carry a notepad with you (or a note app, if you must) and just take a minute to write down any questions you come up with as you go through your days. Make the effort to uncover questions and then make the time to reflect on them on a regular basis. Look for the patterns that will begin to reveal what is drawing your curiosity.

Digging deeper
So, what can this reflection on questions produce for us? It can certainly help us to focus our time and attention in the year ahead on quests that can yield more meaningful impact and a more exciting way to spend our time. (Did you ever notice that quests are stimulated by powerful and exciting questions?)

But, let’s dig deeper. Reflect on the questions that you asked at the outset. How easy was it to come up with these questions? If it was very easy, you have a strong curiosity. If it required more effort, chances are that your curiosity has been suppressed, which isn’t surprising since we work and live in institutions that find questions annoying at best, and dangerous at worst. You’re supposed to have answers, not questions. Questions are a sign of weakness.

We all have the capability for curiosity, but many of us have not had an opportunity to exercise it and, as a result, it’s atrophied. It turns out that curiosity and the related human capabilities of imagination, creativity and emotional and social intelligence are foundational capabilities to drive learning (see more on this here). We need to find opportunities to exercise and cultivate these capabilities and it starts by asking hard but rewarding questions.

Digging even deeper
But, there’s more. It turns out many of us will find it easy to come up with questions in certain areas of our life, but much more challenging in other areas. As I indicated earlier, we often have a strong curiosity in parts of our lives, but not others. That can be revealing.

Those areas of natural curiosity may be important indicators of something that I call the passion of the explorer. If we’re truly serious about lifelong learning, we need to commit to discovering and cultivating the passion of the explorer that lies within all of us, even though for many it’s dormant and still waiting to be discovered. (For more on the passion of the explorer, see here and here.)

Why is this passion of the explorer so important? It turns out it provides us with a powerful and sustaining motivation to cultivate the learning capabilities I mentioned earlier as well as the motivation to achieve increasing impact in the domain of our passion. That motivation will ensure that we will learn faster and faster throughout our lives.

If we find it easy and stimulating to frame lots of questions in some area of our lives, pay attention to that. It could help us to become more aware of the passion of the explorer that we’ve already started to pursue or reveal a passion of the explorer needing to be discovered.

Regardless of how easy it was to come up with the questions, reflect also on those questions in the upper right-hand quadrant of the questions that matter framework that I described above. If you believe those questions could lead to impact that is meaningful to you and that pursuing those questions would be exciting, you may also have uncovered your passion of the explorer. People with this kind of passion are driven to achieve higher and higher levels of impact in their chosen domain – that impact is very meaningful to them – and they are excited by the effort required to achieve that impact. Now, that’s a breakthrough insight for you to build on!

But there’s more
Don’t stop now. As you begin to lock in on the questions that are most meaningful and exciting to you, there’s another level of reflection that could open new possibilities. For each of the motivating questions you’ve identified, ask who else might also be motivated by those questions? It’s actually very rare that you would come up with a question that’s only motivating to you – there are often others who would also be excited by the same question. Who are they? Where are they? Seek them out – they could help you get to a better answer faster and provide you with support and encouragement along the way.

You don’t know anyone like that? Well, then, spread the word about the questions you’re pursuing. Share the questions with your friends and associates and ask for help in finding people who might also be pursuing similar questions. Frame the questions on a blog post or other forms of social media and see who responds with ideas or just an offer to help. Use the power of pull to shape serendipity and discover people you never even knew existed but who share your interest/passion in these questions.

Who knows? Your questions might even help you to frame a powerful personal narrative that will be an inspiring call to action for others to join you on your quest to address a significant opportunity that exists out in the future. By asking for help from others you will start to build deep trust that will further motivate them to collaborate.

So, what’s holding you back?
There are likely a lot of things – lack of time, pressure from others to deliver specified results, atrophied curiosity, the list goes on. But there’s one thing that is increasingly holding more and more of us back. That’s the growing feeling of fear. In a rapidly changing world characterized by mounting performance pressure on all of us, that’s a very understandable emotion. But it’s also a very limiting emotion. An important first step to overcoming that emotion is simply acknowledging its presence. Start with small moves – framing questions – and seek the questions that excite you and will help you to address and overcome that fear. Then find others who can help to reassure and support you as you all move forward together in seeking answers to those questions.

Here's some contrarian advice: forget about resolutions. Resolutions are about finding ways to exercise discipline in pursuit of something. Rather than discipline, find the things that really excite you and cultivate your awareness of the questions that could really make a difference in those areas. Far better and ultimately more rewarding to pursue things because you’re excited by them, rather than because you are forcing yourself to pursue those things. As you become more aware of the excitement and personal importance of these activities, no one will be able to stop you from pursuing them. It’s the questions that can generate that excitement and focus your efforts.

Bottom line
It all starts with questions. Take some time to surface those questions and to reflect on them. You might be surprised by what you discover. It may be the beginning of something truly remarkable and fulfilling. And what better time to begin the journey than our entry into a New Year?

The Pull of Books

The spine beckons
Teasing us with so little,
But pulling us
To pull it off the shelf
And explore what’s inside.
We’re drawn page by page,
Exploring new terrain,
Seeking insight and inspiration,
Drawn by the promise of something
Much bigger than the pages in our hand.
The trees that gave their lives
Are grateful for our attention
And hoping that they can
Make our lives much richer and more satisfying
Here’s hoping that your tree
On Christmas morning
Will add some more spines
To nourish your days ahead.

The Threat and Opportunity of Lifelong Learning

Our conversations and media are increasingly consumed by the topic of the “future of work.” And, within this topic, one of the buzzwords that has emerged and acquired increasing prominence is “lifelong learning.” The message is that, in a more rapidly changing world, we’re all going to have to abandon the traditional notion of going to school to learn and then going into a career to apply the learning we’ve received.

While this is certainly an important message, I’m deeply troubled by the loose way it’s communicated – it rarely questions our traditional view of learning, it rarely addresses the issue of motivation and it doesn’t systematically explore what’s required to support lifelong learning.

What is learning?
When most people talk about lifelong learning, they’re still locked into very conventional views of learning – it’s about training programs and classes. More sophisticated views may explore how snippets of training programs can be delivered on demand electronically to workers in their workplace.

But, here’s the problem – most of these discussions focus on learning in the form of transmitting existing knowledge. In a more rapidly changing world, existing knowledge becomes obsolete at an accelerating rate. The key to success in that kind of world is to focus on a very different form of learning – creating new knowledge through action by addressing unseen problems and opportunities as they emerge in whatever context is relevant (and context becomes increasingly relevant, see my post on the “contextual age”).

What’s the motivation to learn?
Very few people that talk about lifelong learning focus on a key question: what’s the motivation to learn? Learning requires enormous effort and that effort will need to be sustained over a lifetime.

Sure, we can try to motivate people through fear with the message that, if they don’t sustain their learning efforts, they’ll be increasingly marginalized. Good luck with that. They might invest some effort out of fear, but they’ll never invest the level of effort required to truly excel at learning. Lifelong learning becomes a threat and they’ll be reluctant and resentful.

We can try to provide extrinsic motivation in the form of rewards like higher compensation. That may help, but it will be no substitute for powerful intrinsic motivation. What if people engaged in lifelong learning because they were excited by the opportunity and couldn’t wait until the next challenge that would provide an opportunity to learn more? They’re the ones who will learn fastest and sustain that effort throughout their lives.

What would provide that motivation? Well, I’ve written extensively about the growing importance of the passion of the explorer (see, for example here but be aware that I have many blog posts on the topic of passion, as well as this post that provides a taxonomy of passion). Those who have drawn out and cultivated this specific form of passion, are driven to learn faster throughout their lives – and the learning that excites them the most is addressing challenges and opportunities that have never been addressed before. To be clear, this form of passion is very different from the conventional focus on worker engagement that I discuss here.

But, here’s the rub. All of our institutions are built on a model of scalable efficiency and these institutions are deeply ambivalent about, if not openly hostile to, this form of passion. People with this form of passion have a hard time sticking to the script and the process manual – they get bored easily and they’re often deeply frustrated, seeing so much opportunity to get to higher and higher levels of performance and frustrated by the obstacles in their way. That may be why, at best, our research indicates that only about 13% of the US workforce currently has this passion of the explorer. If we’re truly serious about lifelong learning, we need to change that.

What’s required to support lifelong learning?
Here’s a key observation: no matter how smart any one individual is, that person will learn a lot faster as part of small group of people who share a commitment to getting to higher levels of impact and who form deep trust-based relationships through acting together. If we remain narrowly focused on learning in the form of transmitting existing knowledge, we’ll miss that key insight because it is particularly true if we are looking to create new knowledge through action in addressing unseen problems and opportunities.

At an institutional level, this shifts the focus from individuals to tightly knit workgroups who are working together to find ways to increase impact. At an individual level, it suggests that, once you’ve found your passion, you’ll achieve much greater impact once you are able to connect with a small group of others who share your passion. In fact, people who have the passion of the explorer, naturally coalesce into these small groups committed to learning faster together.

Once these groups come together, they’ll benefit by adopting a set of practices that can help them to accelerate learning and performance improvement. Our research on this front can be accessed here.

And these groups will be much more effective at accelerating their learning and performance improvement if they're provided with environments that are explicitly and systematically designed to accelerate learning and performance improvement. We’ve done a lot of research in this area and were unable to find a single company that has attempted this systematic redesign, although we wrote up the impact achieved by companies that had redesigned slices of the work environment here.

The question is: how can we scale the efforts of these tightknit workgroups and amplify their ability to learn faster together? Well, that requires a fundamentally different culture and institutional model, shifting from our current focus on scalable efficiency to a focus on scalable learning, which we’ve written about here. As part of this, we’re going to have redefine what we mean by work. Today it's viewed as a set of tightly specified and highly standardized set of routine tasks. Instead, we need to focus everyone on work that involves addressing unseen problems and opportunities in ways that can create much more value, something that we’ve written about here. It also requires us to adopt a very different organizational model, something that we call “creation spaces” that we’ve written about here and that can ultimately scale learning well beyond the boundaries of any single institution.

In short, if we’re serious about this, it will require a fundamental transformation of all our institutions. And that’s a challenge, given the powerful immune system and antibodies that exist in all our institutions and that are relentless in mobilizing to crush any attempt at fundamental change. Never, ever under-estimate the power of the immune system In that context, we’ve become strong proponents of a particular approach to organizational transformation that we call scaling the edge.

Before I stop, let me also make an obvious point. If we’re serious about lifelong learning and re-framing learning around the creation of new knowledge through action, it will require us to re-think our educational institutions from the ground up. We’ll need to abandon the model suggesting that school addresses only a specific phase in a person’s life and, once they have their degrees or credentials, can move onto other things. Rather than pushing content to students who are viewed as passive recipients, we’ll need to embrace a pull-based model that focuses on creating environments for people to discover and pursue their passions and helps them to connect with others who share these passions. In short, schools will need to evolve to become life-long talent advisors, developing deep trust-based relationships with individuals and small groups, helping them to accelerate learning and performance improvement throughout their lives.

Bottom line
Yes, we all will need to embrace lifelong learning as a prerequisite for sustained success in a world of mounting performance pressure. But, we’re going to need to embrace it as an exciting opportunity rather than as a burden or threat. To do that, we’re going to need to commit to discover and cultivate the passion of the explorer that resides within all of us and to find ways to integrate that passion into our work.

But, we need to avoid the temptation of many who say that lifelong learning is solely the responsibility of the individual who still needs to find ways to fit into our existing institutions. If we’re truly going to harness the power and potential of lifelong learning, we’re going to have to transform all of our institutions to help people to learn faster and accelerate performance improvement.

The rewards will be enormous. If we get this right, we will create environments where we will all be able to achieve far more of our potential and have far more positive impact on the people around us. And, we’ll foster a set of institutions that for the first time are able to deliver increasing returns to their stakeholders.

Gratitude for Spiritset

In my last blog post, I explored the need to expand beyond our current focus on mindset and to appreciate the role that heartset plays in shaping our beliefs, choices and actions. In reflecting on this framing, I’ve come to realize I left out a third element that provides a foundation and context for both mindset and heartset – it’s our spiritset.

What’s that? Well, it’s a made-up word, but I’m looking for symmetry with the word that dominates most of our discussions today – mindset. I’ve already made up the word heartset, so why not keep on going and offer you spiritset as well?

So, what’s spiritset? It’s my attempt to capture the essence of who we are and what ultimately makes us human. Deep within us, we each have a unique identity that struggles for expression and growth. It’s what ultimately defines us and our deepest needs. It shapes both our mindset and heartset.

Since it’s Thanksgiving today in the US, perhaps this is an appropriate time to express our gratitude for the foundation of everything that defines our humanity.

Spiritset is defined by a cascading series of paradoxes.

Individual yet connected

Our spiritset expresses our uniqueness. There’s never been anyone who is the same as we are. We all hunger for that uniqueness to be acknowledged and celebrated by others. At the same time, our spiritset defines how we are all connected to each other. No matter what our differences, we are all united by a spirit that craves connection and can only be fulfilled through connection. And it’s not just connection with other human beings. It’s connection with all other living things and even the earth and the universe. Even the introverts among us want to be connected and a prolonged feeling of isolation can lead to profound unhappiness. This paradox is nicely captured by the Latin expression “e pluribus unum” – out of many, one.

Evolving but stable                                                                                                                                                                     Our spiritset is not a fixed entity. It’s driven to grow and evolve. It wants to become more, much more. Yet, at the same time, it provides an anchor of stability that we can always count on. It defines elements that will never change and that we can hang onto in times of great stress and uncertainty. But it will never be satisfied with stability – we have a powerful need to flourish and achieve more and more of our potential

Risk-taking but protective                                                                                                                                                              In its quest to grow and evolve, our spiritset is not only willing, but eager, to take risks that will help us to achieve more of our potential. But, our spiritset is also very protective – its goal is to thrive but, in order to do that, it must first survive – so it will do everything it can to protect us from any dangers lurking in our environment. Its survival instinct is very strong and has helped us and our ancestors to navigate through some very challenging environments. It provides us with the courage to move forward, even in the most difficult times.

Giving but seeking to receive                                                                                                                                                      Our spiritset drives us to make a difference that matters to others who matter to us. We are deeply fulfilled by a sense that we have contributed something meaningful to others. Yet, at the same time, our spiritset is in a constant quest to find ways to receive from others so that we can achieve more of our own potential. The ultimate goal is a virtuous cycle where the more we receive from others, the more we are able to develop our potential and provide meaningful contributions to others.

Energizing but relaxing                                                                                                                                                               Our spiritset is an incredible source of energy. It inspires and drives us to explore and strive to achieve more of our potential. But at the same time our spiritset provides a source of calmness that relaxes and detaches us in the most trying of times. It’s that extraordinary balancing act that enables us to not only endure but to turn some of our biggest challenges into some of our greatest opportunities. And the amazing thing is that, when our spiritset truly connects with the spiritset of others, our energy is amplified and our relaxation deepens. Our spiritsets are an infinite source of energy when properly cultivated.

Where does spiritset come from?
Many of you who’ve been reading this far, have now concluded that I'm some kind of religious evangelist. After all, isn’t spiritset just another word for soul? Well, for some it is and that may be fine. But I caution you not to be too quick to use this word for several reasons.

First, depending on your religious persuasion, soul may have very different meanings and not capture all the dimensions of spiritset that I’m exploring.

Second, the concept of soul tends to be associated with religion and a belief in God. I’m not suggesting that we need to believe in God, at least as conventionally defined, in order to embrace the reality of our spiritset.

Perhaps our spiritset emerges from energy forces that we don’t yet fully understand, but that are a very real part of our universe. There’s so much of our universe that remains to be explored – perhaps this is just one other dimension inviting our attention. There are many who would describe themselves as spiritual, but not religious, who are exploring this dimension. I definitely fall into this camp.

But perhaps we don’t even have to believe in some mysterious energy force to embrace the concept of spiritset. Perhaps we just have to acknowledge that our physical bodies are extraordinarily complex and evolving systems that we are only beginning to understand. For a long time, we’ve pursued siloed understanding of our bodies, with some focusing on neuroscience, others focused on our cardiovascular systems and yet others focusing on our digestive systems. We’re only now beginning to understand that these are not independent systems but highly connected and interacting, and shaping each other in ways that we had not even imagined. Perhaps there are other dimensions of interaction and interdependence of our physical systems that give rise to the characteristics of the spiritset that I’m describing, without requiring us to look for some mysterious energy force or soul as the source of this spiritset.

Why does this matter?
Many of my business colleagues as they read this are now beginning to wonder if I’ve gone off the deep end and wandered into woo-woo land. Why does any of this matter for business or for the successful operation of any of our institutions?

Well, I believe it not only matters, but will become increasingly central to our individual, institutional and social survival. In more stable times, perhaps we could get away with embracing a rationalist outlook focused just on mindset, especially if we were willing to acknowledge that psychology could help us to understand the role that emotions and our heartset play in driving our choices and actions.

But, as we move deeper into the Big Shift, characterized by mounting performance pressure and an accelerating pace of change, we need to look deeper into ourselves to understand who we really are and what really motivates us. In that kind of world, superficial manipulation of our thoughts and emotions won’t produce the motivation we’ll all require to succeed.

The institutions and leaders who understand the power of our spiritset and the infinite potential that it offers will be the ones to survive and flourish in increasingly challenging times. They’re the ones who will help us to navigate from mounting performance pressure to expanding opportunity by cultivating that spiritset. They will see that spiritset, properly cultivated, provides us with the motivation that leads to accelerating performance improvement, while providing us with the guardrails to flourish rather than flounder. They will see that spiritsets, properly cultivated, can generate the mindsets and heartsets we need to achieve far more of our potential, as individuals and institutions. This isn’t just about our needs as individuals. It’s increasingly about our needs as institutions.

Cultivating spiritsets
Here’s the challenge. While we all have a spiritset that can enable us to flourish, our institutions and our societies have increasingly created environments that ignore, if not deny, the existence of that spiritset. We’re all focused on instilling the right knowledge and skills that can help us to succeed. We are taught that emotions are a distraction, if not deeply harmful, to our quest to succeed. Spiritset is viewed as some kind of mystical fantasy that undermines our ability to succeed in the material world. Success is increasingly defined as the accumulation of material goods.

Spiritsets are certainly not cultivated and nourished in our world driven by scalable efficiency. That doesn’t mean they go away. They live within each of us, struggling for recognition and attention. But they live in the recesses of our being and, for most of us, can only play a limited role in helping us to achieve more of our potential.

But, imagine what we could achieve if we not only acknowledged, but actively sought to cultivate, the spiritsets that reside within all of us. That would provide us with the motivation to achieve more of our potential and to have an increasing impact that matters on others. It would also provide us with an opportunity to connect more deeply with the spiritsets of others so that we could amplify our energy and achieve even more impact together.

By focusing on spiritsets, we would finally encourage everyone to find their passion and pursue their passion in ways that benefit others while helping each of us to achieve more of our potential. I’ve written elsewhere about the imperative to shift from institutional models based on scalable efficiency to ones based on scalable learning.

But here’s the rub, we will never learn fast enough unless we’re motivated to learn faster and the most powerful form of motivation is intrinsic – it comes from what I’ve described as the passion of the explorer. That form of passion is ultimately a manifestation of our spiritset – it emerges from our quest to achieve far more of our potential.

Today, our research suggests that only about 14% of workers in the US have this form of passion in their work. That’s a natural and inevitable consequence of building institutions that fail to recognize the importance of spiritsets.

Scalable learning requires intense motivation which requires passion which requires cultivating our spiritset. It all goes back to spiritset.

The journey to nurture spiritset
So, how do we nurture our spiritset? We need to begin by acknowledging that it exists and that it has extraordinary power. That will motivate us to look within and invest the time and effort required to explore the force that ultimately defines who we are. We need to reflect on what truly drives us and what will enable us to achieve more of our potential. As we do this, we need to seek out others who have embarked on a similar journey. And then we need to work together to shape institutions and communities that actively seek to address the needs of our spiritset, helping all of us to achieve more of our potential. It won’t be easy, because so many of us have lived so long without even acknowledging our spiritset, much less learning about its needs and power, but the rewards will be enormous for us as individuals and as a society.

Bottom line
We’re complex beings, and we need to learn how to embrace that complexity. We’re also capable of achieving infinite potential, but only if we embrace the complexity that makes us human. Let’s resist the temptation to simplify, because that will only limit our potential. Let’s dive deep beneath our mindset and heartset and explore the foundation that ultimately defines who we are. As we move into an exponential world shaped by exponential technology, this will be the key to unleashing our intrinsically human ability to drive exponential performance improvement for ourselves.

I’m writing this in Athens, Greece. I’ve always had deep admiration for those brave early explorers like Aristotle and Socrates who had the curiosity and wisdom to learn more about who we really are. They’ve inspired me to write this. We have yet to discover fully who we really are.

Mindset and Heartset

Is mindset all there is? I recently attended a gathering of senior executives seeking to drive change in their organizations and was struck by how much mindset dominated the conversation. It was all about the assumptions and beliefs of the people in their organizations. They wanted to know what kind of evidence and reasoning would help to change these assumptions and beliefs.

The key assumption in the room was that it was all about the mind. They assumed that our assumptions and beliefs shape what we feel and what we do. In this view of the world, emotions are a distraction, or at best a second order effect, and it’s ultimately all about our mind.

Expanding our view
I would suggest that we’re a lot more complicated than that. Our emotions aren’t just derivative of our assumptions and beliefs. Emotions shape our perceptions, assumptions, thoughts and beliefs as well. If you try to shape assumptions and beliefs without paying attention to the emotions that already exist, good luck.

We need to move beyond mindset and expand our horizons to address our heartset: what are the emotions that filter how we perceive the world, shape what we believe and influence how we act? If we’re really excited about something, do we perceive risks in the same way as someone who is deeply fearful? If we were just deeply hurt emotionally by someone, are we likely to trust that person, even if all the objective data suggests we should? If someone showed us compassion at a time of great need, are we more likely help that person, even if it might mean falling behind on our assigned tasks?

Why are we so focused on mindset?
Our preoccupation with mindset is understandable. It’s a natural outgrowth of engineering and managerial beliefs that shaped the scalable efficiency cultures that dominate all our institutions today. In these cultures, the belief is that if you have the right data and perform the right analytics you can deliver whatever is needed. The key is to break down complex issues into their component parts. Keep it simple. Work is broken down into tightly defined tasks that are highly standardized throughout the institution – all you have to do is to read the manual and deliver what’s expected. Everything has to be predictable – that’s the way to increase efficiency.

The focus on mindset has even deeper roots. If we go back to the Enlightenment from the late 1600’s to the early 1800’s, the key message from the great thinkers of that time was to celebrate the power of the mind and all that it could accomplish. It’s not an accident that this era was also known as the “Age of Reason.” The mind is of course a powerful vehicle for driving amazing insights and accomplishments and should be celebrated. But there’s a risk that we reduce everything to the mind. It’s all about ideas and reason. The body is just a distraction or, at best, something to be nurtured because it holds our mind. Life is so much more complicated than that.

Maybe we should dive into heartset to understand some of the reasons mindset has such a strong hold on us. Perhaps the attachment to mindset is at least in part a result of our fear of failure and desire to project strength. We live in a complex world that’s always evolving, often in unanticipated ways. That can be very scary, especially for the masculine archetype.

I’ve written about the masculine and feminine archetype before. In the masculine archetype, the key is to project strength – you understand the situation and you are in control of the situation. The best way to do this is to simplify things and subject them to rigorous analysis. Avoid messy and difficult to understand things like emotions and relationships – focus instead on reason, numbers and transactions. This becomes even more urgent as the world becomes more connected and complex.

The feminine archetype embraces this complexity – it sees each of us as a very complex being driven by heart and mind and shaped by the hearts and minds around us. It understands that deep and lasting relationships can only emerge if we understand that complexity and seek to nurture its growth, while also understanding that we ultimately cannot control that complexity, either in ourselves or in others.

So, life is complex. I can hear my executive friends saying: OK, but what about change? How do I motivate people to change? Well, I wish I could say that the answer is easy but, as you might expect by now, my answer is that it’s complex.

Embrace our complexity
It starts with the need to move beyond mindset. Numbers and charts alone are not going to drive the change required. Seek to understand the heartset – the fears and hopes that are motivating the actions of those in the organization (and don’t forget those outside the organization that help to shape the heartset of those within the organization). Of course, it’s not just about heartset – we need to explore the complex interplay between mindset and heartset. The real insight will come by exploring the edges between these two domains and understanding the dynamics of how one shapes the other and vice versa. And don’t just look at individuals in isolation, look at them in the context of their networks of relationships and how the mindsets and heartsets of others are shaping their own being.

Feel the fear
OK, that’s very complex. How do we move forward and drive change? Well, the answer is certainly going to differ depending on the context, but there’s a generalization that I think is becoming more and more relevant. More and more of us are being driven by fear – that is becoming a dominant emotion, and it is increasingly shaping our mindset. Many factors are fostering this fear, but one key factor is the mounting performance pressure that is a product of the Big Shift transforming our global economy and society.

The challenge is that most of us live in institutional cultures that actively discourage us from expressing fear. Fear is interpreted as a sign of weakness. We’re supposed to be bold and confident. So, for many of us, those feelings of fear are deeply hidden. We need to look deeply to find the fear. And we need to focus on finding ways to help people overcome their growing fear and nurture feelings of hope and excitement.

Nurture the passion
How do we do that? Based on research that we’ve done at the Center for the Edge, one powerful way to help people make this journey is to help them find and embrace their passion. Passion is a very loosely used word, so let me clarify that we’ve discovered a very specific form of passion – the passion of the explorer – that can be a powerful motivator for learning and change. The challenge is that very few people today have this form of passion with regard to their work – our surveys suggest that only around 12% of workers in the US workforce have this form of passion.

I’ve come to believe that we all have this passion within us, waiting to be discovered and nurtured. Perhaps there’s another dimension to us as humans – perhaps in addition to mindset and heartset, there’s also a spiritset – a unique energy with us that ultimately defines who we are and that calls us to find it and nurture it so that we can achieve more of our potential. But, I digress – I’ll save that exploration for another blog post.

Back to passion. Some of us were fortunate enough to discover this passion within us at an early age, but many of us are still looking for it. Unfortunately, even more of us have given up on the quest, since we’ve fallen prey to the message that this is a fool’s errand, that the key to success is to listen carefully to the boss, and follow directions carefully and reliably. Many of us have also succumbed to growing fear and come to believe that passion is a luxury that we simply can’t afford to pursue – we just need to do what we can to survive for another day.

If we find a way to connect with the passion within each of us, we’ll quickly find that our dominant emotions become hope and excitement – we’re deeply motivated to achieve an increasing impact in the domain defined by our passion. Fear recedes in the face of the opportunity to make more of a difference in an area that’s meaningful to us. This form of passion also motivates us to connect with others who share our passion in order to achieve even more of an impact – and those connections help to amplify our hope and excitement because we’re receiving constant encouragement from others. We no longer feel isolated, but instead deeply connected in our effort to address exciting opportunities.

Craft opportunity based narratives
So, how do we connect with and draw out this passion? That deserves much more exploration (perhaps even a book), but for the moment let me draw attention to the power of narrative. Those who have been following me know that I make an important distinction between stories and narratives, even though most people use these to mean the same thing. I believe narratives are different from stories on two levels. First, they are open-ended, rather than self-contained – there is no resolution yet, but there is some kind of major opportunity or threat out in the future. It’s not clear whether the opportunity or threat will be realized, but the resolution of the narrative hinges on you – your choices and actions will determine how the narrative resolves. Narratives the way I define them are a powerful call to action.

Narratives have enormous emotional appeal. Throughout human history, millions of people have sacrificed their lives in pursuit of a narrative. Opportunity based narratives are particularly powerful in drawing out and nurturing the passion of the explorer because they frame a large and inspiring opportunity that can help build excitement about the ability to make a difference. These narratives also pull together people who share this passion and the collaboration helps to reinforce and amplify this passion.

Avoid manipulation
As we begin to understand and appreciate the importance of emotions in driving the behavior of people in our institutions, we need to avoid the temptation to try to manipulate emotions to achieve our goals. Manipulation may yield short-term results, but it’s rarely sustainable. In fact, it usually backfires – when people realize they are being manipulated, they lose trust and become even more resistant to the agendas being pursued. If the efforts to shape emotions are not driven by an authentic desire to cultivate a new set of emotions, they will fail. Institutional narratives can be powerful but they need to be authentic and lived on a daily basis by those who craft the narratives.

The bottom line
Our institutions have cultivated a very narrow and misleading view of ourselves as people. As change accelerates on a global scale, we’ll find it very challenging to shift from mounting performance pressure to expanding opportunity if we hold onto that narrow view. Until we recognize and address the heartset that shapes our actions, and its complex interactions with our mindset, we’ll find that fear and stress will increase resistance to change. On the other hand, if we can draw out hope and excitement, we’ll find that we’ll be able to learn and change at an accelerating rate. Our heartset can be both the barrier and the enabler of change – it’s up to us which one will prevail.

Ode to Trees

I stand in awe of trees.
They bend with the wind
But they stand their ground.
They stand tall
Yet constantly reach for the sky
Branching in so many directions,
Searching for the sun and stars
While firmly rooted in one place.
They can stand alone,
But they seek out each other
And live longer together.
They appear silent
But they actively communicate
Not only with each other
But with many other living things
In the ground.
Their energy
Comes from connection.
Trees embody
The best of the feminine
And the masculine.
We can learn so much from them.
I dream of living
In a home held
In the warm embrace
Of the branches of a tree.

The Journey Begins

As we return from our summer holidays, this may be a good time to reflect on the journeys that we are on. A key part of my journey has been writing, but all my writing has been non-fiction (at least as far as I know).

Recently, I’ve felt a pull into poetry, something I had never considered. I made a first tentative stab with a short poem that I posted on social media on July 5 and I got such an encouraging response that it motivated me to take the next step.

What journey are you on?

We are all on a journey.
But many of us are following paths
Shaped by others,
Seeking to please
Or get promoted.
Few of us have made the effort
To reflect on our destination
And craft our own.
Pursuing our own destination
will require us
To forge our own path.
Many of us are afraid
To venture off the well-traveled paths
Because we can’t see the full path ahead.
But all we need
Is to begin with the first step
And embrace the experience of moving forward
So that we learn as we go.
Open the door now
And step outside
Beyond your comfort zone
Even though the path
May not yet be clear.
If we dare to explore,
Who knows what wonderful lands
We might discover
And who we might become?

And for those who are interested to see my first poetry venture from a couple of months ago, here it is:
Many of us
are on a journey
to evolve
from human doings to human beings.
But let's not stop there.
Let's claim our true nature as human becomings,
constantly exploring and evolving,
and achieving more of our potential,
for we are truly made
of the earth and the stars.

The Real Value of Labor

It’s Labor Day in the US, so what better day to reflect on how misunderstood workers are?

Truth be told, workers are often viewed as a cost by many institutions. In fact, that’s where they appear on financial statements – they’re a major expense item on the income statement. That view of workers naturally sets up an “us vs. them” and “win/lose” mindset. The institution wins when it can eliminate workers, make them work longer hours for the same pay or pay them less, but the workers lose. That adversarial mentality, in fact, was the genesis of the US labor movement.

Workers as human capital

Ah, but all is not lost, we now have come to view workers as “human capital.” Let’s ignore for the moment that they still appear on the income statement and not on the balance sheet where all other capital resides. Let’s also leave aside the notion of capital as inherently dehumanizing as well as the implication that we “own” human capital, like we own all other forms of capital. What does “human capital” mean?

Well, think about it for a moment. Most “capital” is in the form of physical assets and those assets depreciate, or lose value, over time. Perhaps it’s our implicit recognition that workers age over time and, consistent with our prevalent “ageist” bias, lose value as they age. So, does human capital depreciate over time?

But, wait a minute, some assets don’t depreciate, they are fixed in value – think about many financial assets like cash in the bank (yes, there’s some modest interest that accrues) or accounts receivable. OK, should we think about human capital as having fixed value – a given set of skills and credentials that can deliver fixed value over time?

Workers as learners

I would suggest these views of labor miss the real opportunity for institutions and for workers themselves. We humans have limitless potential that can be cultivated and drawn out over time. Workers have the ability to learn – and we can evolve institutions that can help them learn faster and faster over time, together.

I can hear many executives now saying: but we’re focused on learning, we already have training programs. And, by the way, those training programs cost money and who knows whether the workers will stay with us long enough for us to earn a return on our investment? (Can you see the pattern? There’s a strong tendency to reduce everything, including humans, to financial matters).

Sure, training programs have a role to play in learning. But that’s not the kind of learning I’m talking about. Training programs are about sharing existing knowledge. The most powerful and valuable form of learning in a rapidly changing economy and society is learning in the form of creating new knowledge – seeing problems and opportunities that have never been seen before and coming up with new approaches to address those problems and opportunities in ways that create growing value and impact. That kind of learning occurs day to day on the job, not in some training room.

And there’s another powerful dimension to this form of learning. This form of learning occurs through action that delivers impact, not by sitting in a room reading books. Now, we’ve flipped the conventional economic model of learning. Rather than spending money upfront to train workers and hoping some day to earn a return on that investment, this form of learning requires an immediate return in terms of added value. The learning comes afterward from seeing what actions can actually generate the greatest impact. New value comes first and the learning follows. If we adopt this mindset, labor is now about learning, everywhere and all the time.

Institutional implications

What if we systematically attempted to redesign all of our work environments to foster this kind of learning? But to really reap the benefits of this work environment redesign, we would also need to dig in and fundamentally redefine what we mean by work. Today, most work is defined as tightly specified and highly standardized routine tasks – there’s no room to learn there. That’s why we have training rooms.

As technology takes over more and more of these routine tasks (thank the Lord!), we have an opportunity to redefine work as addressing unseen problems and opportunities that can unleash much more value. That kind of work requires a very different set of practices that need to be cultivated within small workgroups throughout the organization.

But to redefine work, we need to challenge some of the basic mindsets that drive the operation of most of our large institutions around the world. Most of our institutions today are governed by the scalable efficiency mindset – the best way to create value is to become more and more efficient at scale. It’s all about doing things faster and cheaper at scale.

As I’ve written elsewhere, we need to engage in a form of innovation that is not yet on the management agenda, but needs to be. That’s institutional innovation – starting by shifting our mindset from one of scalable efficiency to one of scalable learning. In the scalable learning mindset, the focus shifts to creating more and more value by finding ways to help all workers learn faster together on the job, in their day to day work environment. If we take that seriously, it requires us to rethink all aspects of our existing institutions and find innovative ways of organizing, leading and operating our institutions.

So, this quickly becomes complicated and challenging. It won’t be easy, but the rewards will be significant. In fact, as we’ve shown before, scalable efficiency is producing diminishing returns, as confirmed by the long and sustained erosion of return on assets for all US public companies. This isn’t just an opportunity. It’s an imperative in a world of mounting performance pressure. Those who don’t figure this out and embark on the journey are going to find themselves marginalized.

The opportunity for both workers and institutions

And what’s one of the most awesome aspects of this journey? Instead of holding on to the “win/lose” dynamic that has governed our scalable efficiency institutions, we now have an opportunity to shift to a “win/win” dynamic where workers can achieve more and more of their potential while creating more and more value for the institution. As we begin to see that there is an expanding pie for everyone, we will find greater willingness to share the growth of that pie with all who have contributed to its growth. We will finally have tapped into the true Power of Pull – in our book, we described three levels of pull and the highest form of pull is to achieve, to pull out more and more of the potential that we individually and collectively have within us.

I've framed this opportunity in economic terms because that’s the way to engage leaders of most institutions that are still driven by the scalable efficiency mindset. But the real rewards here are not just economic – they are deeply personal and social. We will find ways to connect with each other in much deeper and more meaningful ways that build trust and inspire us to accomplish so much more together. We as humans all have an innate desire to develop more of our potential and to make a bigger difference in whatever environment we find ourselves in. We all have a desire to build deeper relationships with those around us that can help us all to accomplish more together. It’s so much more than dollars and cents.

The bottom line

Perhaps our future Labor Days will focus on celebrating the fact that we’ve come together to achieve something that none of us could have accomplished on our own and that we’ve all been increasingly rewarded for that effort. And perhaps we’ll celebrate that every day, and not just Labor Day!

Navigating From the Industrial Age to the Contextual Age

In the Industrial Age, scalable efficiency drove value creation. The bargain of the Industrial Age was that, if consumers wanted affordable products and services, we would have to settle for standardized products and services – one size fits all. You can have any color as long as it’s black. It’s a bargain that drove the growth of mass consumer societies in developed and developing economies.

And it shaped the scalable efficiency model that drives virtually all our institutions today – the key to success is to become more and more efficient at scale. Efficiency requires tight specification and standardization of tasks throughout the institution and tightly integrating those tasks into end to end business processes. It is very much supply driven, since the demand was willing to settle for standardized products. The winners would be those who could produce the most cost-efficient products at scale. In a world of standardized products and tasks, context was largely irrelevant, a distraction. Focus on the standardized product and process.

The world is changing

Now, that’s all changing. The forces shaping the Big Shift are progressively undermining standardization and efficiency (as conventionally defined) as drivers of value creation. As consumers, we’re gaining more and more power and we’re less and less willing to settle for standardized products and services – we want offerings that are tailored to our unique and evolving needs. On the supply side, digital technology is making it easier and far more affordable to produce highly personalized products and services. That’s leading to more and more fragmentation in product and services businesses, something that I’ve explored here.

As these forces play out, context is becoming more and more central to value creation. If we don’t pay attention to the circumstances surrounding a person or an event, we’re unlikely to understand how to create the greatest personalized value. Those who are most insightful and adept at understanding context, will be those who create the most value, both for customers and for themselves.

Exploring the many dimensions of context

So, what is context? In my experience, we’re much too simplistic in our framing of context. Context tends to be viewed as a snapshot of the circumstances immediately surrounding an individual or event. If you want to serve the needs of a consumer who is cooking a meal, it helps to understand what meal is being cooked in the moment and what that consumer values in terms of the meal that will be produced. Certainly that helps, but is that all there is?

Context across space. Context is fractal – there’s a never-ending series of broader contexts within which any specific context is embedded. Take the context of the consumer cooking a meal. Who else might be sharing in that meal? What is their broader network of friends and family and how might that shape the way they view this meal? What is the broader community that these friends and family reside in and how is that shaping the meal experience? What region and country does that community reside in?

Context across time. But that’s not all. Context doesn’t just expand across space at any point in time. It also expands across time – both into the past and into the future. We have a much deeper understanding of a person or event if we can situate them in a broader arc of experiences that are playing out over time. It’s especially valuable if we can anticipate how the context might evolve so that we can address needs that haven’t yet surfaced, but will soon become very important. In a more rapidly changing world, we need to understand that context is dynamic – it will evolve rapidly and could fundamentally change in a short time span.

Context as a complex adaptive system. We don’t just need to understand the components of context, we need to understand how those components interact with each other and connect into ever more complex systems and understand how those systems are evolving. In short, we need to understand context as a complex adaptive system.

Context within. A key element of these complex adaptive systems is people. We are complex in isolation but become even more complex in the context of our interactions with others. Our understanding of context will not be complete unless we delve deeply into the psychology of the people who inhabit the context – we need to gain insight into the emotions and perceptions of their context that shape their own behavior. They often don’t see the context in the same way that we might. But we often get consumed by the “objective” elements of context, those things which can be measured and lose sight of the much more qualitative human elements of context.

Context of others. And it’s not just about customer context. As our work becomes more and more tailored to specific problems and opportunities and as we expand our ecosystems to leverage the expertise and capabilities of others in a much more flexible manner, we need to better understand the evolving contexts of everyone in our ecosystems, including the people who work within our institutions.

Context to be shaped. Finally, let me also caution against understanding context only as a passive observer. We in fact have significant opportunity to shape contexts. First we need to understand the context as it exists on its own but, if we truly understand the dynamics that are shaping the context over time, we’re likely to see opportunities to shape that context. In fact, that’s one of the reasons why I‘ve become increasingly interested in the role of opportunity based narratives – as an inspiring call to action, they can motivate people outside our institutions to take action in ways that could significantly alter their contexts.

Welcome to the Contextual Age

In this context, let me return to why I resist describing our current era as the Information Age. Coming from Silicon Valley, I can certainly understand the fascination with the proliferation of data that’s generated by our digital infrastructures. But the data is only valuable if we use it to gain more insight into evolving contexts. My concern is that we can get easily distracted by the data and focus on generating more and more of it, without understanding how to use that data to create value. True to our scalable efficiency institutional models, we’re largely using that data to drive more efficiency in our operations.

What institutions will have the greatest impact in the future? It will be those who shift their focus and learn how to harness that data to generate greater insight into expanding levels of context and to see new opportunities to add value in those contexts. In fact, the ability to generate and access much of the data that’s relevant to context will increasingly depend upon the trust of the participants. One of the best ways to build trust is to show a deep understanding of context and, even better, to deliver more value tailored to that context. We’ll never build deep trust-based relationships with others without a much richer understanding of their context. Those who do not build this trust will find it more and more challenging to access the data in the first place.

That’s why I suggest describing our current era as the Contextual Age. Yes, data and information is a key enabler of value, but it’s the deep understanding of context that will generate the value. It’s the reason we described the previous era as the Industrial Age, rather than the Machine Age. Machines were a key enabler of value but it was the industrial organizational model that generated the economic value from those machines.

Seeing more

So, if we’re in the Contextual Age, what actions should we be taking to generate value? That’s probably the focus of another round of blog posts, but let me just quickly summarize some actions that will help to gain greater insight into context.

Look ahead. Don’t get consumed by snapshots of the relevant contexts. Make an effort to look ahead and understand the forces that are shaping these contexts and what these contexts might look like many years from now. There’s no better way to create value than to anticipate unmet needs.

Look around. Don’t just look at narrowly defined contexts. Expand your horizons to look at the contexts of those contexts and how they might shape the more narrowly defined contexts. Also, explore seemingly unrelated contexts to see what insights they might offer about the contexts you’re addressing.

Look again. We often take context for granted because we’ve seen it before. We need to adopt a beginner’s mindset and explore context as it it’s completely new. We may surprise ourselves and find elements of the context that we never noticed before.

Look within. Seek to gain insight into the emotions and aspirations of the participants in the contexts you’re addressing. Objective contexts matter, but what really shapes value is understanding what motivates participants in these contexts.

Look for impact that matters. As we gain more insight into what motivates participants in the contexts around us, we can begin to understand much more deeply what value really matters to them and how to achieve an impact that will be more meaningful to them.

Look together. Find a diverse group of people to explore contexts with you. Understanding contexts is not a solitary effort, it needs to be a collaborative effort. No matter how observant any one of us is, we’re likely to find that others, especially if they come from different backgrounds and perspectives, are likely to see things that we completely missed. And encourage the group to challenge each other in terms of what they’re seeing – I call it “productive friction.” We’re likely to see a lot more if we look together.

Act and reflect. Don’t just observe. Have a bias towards action so that you can learn more about the contexts by observing how they evolve in response to your actions. And take the time to reflect on what impact your actions had so that you can gain even more insight into the context.

Bottom line

If we take context seriously, that can be a significant driver of learning. In a world that’s more rapidly changing, going exponential, as some might say, learning is an imperative. We expand our horizons and better understand the forces that are shaping the environments within which we operate. To be clear, this isn’t about learning in the form of sharing existing new knowledge; it’s about learning in the form of creating new knowledge. Every context is unique and every context is evolving at an accelerating pace. To truly understand our contexts, we need to pull ourselves out of the classroom and immerse ourselves in the context, take action based on growing understanding of the context, and then learn even more as we reflect on the impact that we’ve achieved.

If we take this seriously and mobilize others to join us in this effort, we might begin to harness scalable learning. The paradox is that scalable learning is much more efficient than scalable efficiency in a rapidly changing world. But it’s far more – it’s a way to unleash increasing returns that come from focusing on delivering more and more meaningful value in the contexts that we’re addressing. Another key dimension of the Big Shift is the shift from scalable efficiency to scalable learning as the rationale for our institutions.