Page 2 – John Hagel

10
May 23
0

Cultivating and Connecting Capabilities

Category:Collaboration,Connections,Edges,Exploration,Growth,Institutional Innovation,Learning,Opportunity,Passion,Transformation

I’ve long been a contrarian regarding our current view of learning in our work environments. I’ve come to believe that it is a growing barrier to progress. If we’re going to prosper and flourish, we need to embrace a very different approach to learning, one that is much more consistent with our humanity.

Skills versus capabilities

When I talk to leaders about learning, their focus is on learning “new” skills. They are concerned that, in a rapidly changing world, many skills are becoming obsolete. If workers are going to continue to be productive, they need to learn “new” skills. These skills aren’t really new, they’re just skills that most workers haven’t yet acquired. They need to be taught the skills.

Here’s where I start to be a contrarian. I challenge our narrow focus on skills and believe we need to expand our focus in learning to include capabilities. What’s the distinction? Skills are very valuable in a specific context – for example, how to operate a machine or how to use certain applications on a computer. Capabilities, in contrast, are valuable in all contexts – examples include curiosity, imagination and creativity. I’ve written extensively about this distinction here (pdf).

Connecting capabilities to support a new form of learning

Of course, some leaders are beginning to pay attention to capabilities, but they tend to approach them in isolation. We’ve all seen creativity workshops or imagination exercises. What’s missing is the need to connect capabilities. While each capability has some value on its own, the real potential comes when capabilities are combined.

Think about it. Curiosity is about exploration, venturing out into areas that have yet to be understood. But curiosity alone has only limited value. We need to cultivate connection and empathy so that we can form deeper and broader relationships with others. Exploring in isolation is much less rewarding than exploration with others. As we explore, we need imagination to come up with new ideas regarding how to create more value from the areas we are exploring. And ideas alone are not that helpful. We need creativity to help us develop and deploy approaches to help us to actually create the value that our imagination suggested we could pursue.

Done right, connecting these capabilities can unleash a virtuous cycle of learning. As we develop and deploy approaches to creating value with our creativity, our curiosity will gain come into play as we explore the impact that we have achieved. We can come together to imagine even more promising approaches and create even more value.

But this learning is very different from the learning that consumes the attention of most leaders today. When leaders talk about learning, they almost without exception are talking about learning in the form of sharing existing knowledge. This learning occurs in training rooms or through online video courses.

While not dismissing that form of learning, I again want to be a contrarian and suggest there’s a very different form of learning that is becoming much more necessary and valuable. It’s learning in the form of creating entirely new knowledge that never existed before. That form of learning occurs in the workplace, pursued by people who come together and take action as they cultivate the capabilities just described and address previously unseen opportunities to create more value.

While most leaders would acknowledge that this form of learning is important, they tend to confine it to small parts of the organization – research departments and/or innovation centers.

Cultivating capabilities

So, if capabilities are so important, how do we cultivate them? Here’s the good news. These capabilities are all innate within us. You don’t believe me? Let’s go to a playground and look at children 5 or 6 years old. Show me one that doesn’t have these capabilities as they play.

Unfortunately, our schools and our work environments have sought to crush these capabilities. We are taught to simply follow detailed instructions, reliably and efficiently, without asking too many questions or deviating from the assigned tasks. This is the key to success in the scalable efficiency institutions that dominate our world today.

Those capabilities may be hidden for many of us, but they are still there, waiting to be drawn out. How can we draw them out? It will be challenging because it will require very different work environments. We need work environments that will cultivate a very specific form of passion – the passion of the explorer (pdf).

The passion of the explorer has three components. People with this passion are committed to, and excited about, achieving more and more impact that is meaningful in a specific domain. When confronted with unexpected challenges, they become excited about the opportunity to achieve even greater impact. Finally, their first instinct when confronted with an unexpected challenge is how to connect with others who can help them get to a better answer faster.

People with this passion are driven to draw out and cultivate the capabilities I discussed earlier. They are excited about the opportunity to learn in the form of creating new knowledge. Curiosity, connection, imagination and creativity are essential for this kind of learning and they deeply value all these capabilities. They understand that these capabilities are deeply connected and should not be viewed in isolation.

But, here’s the problem. Our work environments today are deeply suspicious of people with the passion of the explorer. These people ask too many questions, they take too many risks, and they deviate from the process manual. That’s why, based on my research (pdf), only about 14% of US workers have this form of passion in their work.

Unleashing passion and capabilities

So, how do we change this? It won’t be easy. It will require us to transform the institutional models that shape all large institutions around the world. As I’ve written about here (pdf), the prevailing institutional model is scalable efficiency where the key to success to do things faster and cheaper at scale. This model has driven the growth of large institutions over the past century but, in the Big Shift, the paradox is that scalable efficiency is becoming less and less efficient because it has a hard time dealing with the accelerating pace of change.

We need to make a shift from the institutional model of scalable efficiency to a model of scalable learning. As already discussed, the focus of this new institutional model is on learning in the form of creating new knowledge by mobilizing people throughout an organization to come together and address unseen problems and opportunities to create more value. These models can scale even further by building networks of relationships among people that extend far beyond a single institution.

The scalable learning model focuses on cultivating the capabilities already discussed and recognizes that the passion of the explorer is the most powerful motivator for people to draw out and exercise these capabilities. It encourages everyone to find and pursue their passion of the explorer.

The scalable learning model challenges virtually all the beliefs and practices that prevail in our existing scalable efficiency models. For this reason, it will be very challenging for existing large institutions to make the transition. As I’ve written about here (pdf), the most effective way for large institutions to transition will be to scale the edge, rather than pursuing “big bang” top-down change programs that seek transform the core of the institution.

As challenging as it might be, the transition will be deeply rewarding. At its best, the scalable efficiency model is a diminishing returns model – the more efficient we become, the longer and harder we have to work to achieve the next increment of efficiency. In contrast, the scalable learning model is an increasing returns model where value can grow exponentially as learning expands its horizons and accelerates.

Bottom line

We live in a rapidly changing world where the most valuable and necessary learning for everyone is learning in the form of creating new knowledge. This form of learning requires a combination of uniquely human capabilities – curiosity, connection, imagination and creativity. People who find and pursue the passion of the explorer are powerfully motivated to develop these capabilities. If we all are going to embrace the passion of the explorer, we need to transform our institutions. It won’t be easy, but the rewards will be enormous. Let’s get started.

28
Apr 23
2

What Does Strategy Really Mean?

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

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

What does strategy mean today?

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

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

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

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

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

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

What will strategy need to become?

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

Successful strategies will

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

Anticipating growing unmet needs

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

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

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

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

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

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

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

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

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

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

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

Rapidly evolving approaches to delivering value

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

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

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

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

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

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

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

Bottom line

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

19
Mar 23
0

Escalating Return on Attention

Category:Connections,Emotions,Fear,Future,Learning,Opportunity,Paradox,Potential,Workgroups

Last week, I gave a talk at the South By Southwest conference in Austin where I focused on the increasing importance of return on attention. I believe this is becoming more and more central to success, but that business people are viewing this much too narrowly. There’s a significant untapped opportunity waiting to be addressed.

Paying attention to return on attention

Let me begin by saying that most business people are primarily focused on a very different metric to measure progress – return on sales. While I don’t want to dismiss this, I suggest that it’s too limiting for two reasons.

First, it’s inward looking – it focuses on the financial performance of the company. While that’s certainly important, the financial performance of the company is shaped by events and needs outside the company.

Second, by focusing on financial performance, it draws the attention of management to lagging indicators. It tells them how they have been doing. In a rapidly changing world, we need to be looking ahead, focusing on indicators that will help us to anticipate emerging opportunities.

We need to pay more attention to return on attention. In an increasingly competitive world, customers are gaining more power. Where customers choose to allocate their attention among a growing number of options competing for their attention, will determine who succeeds and who becomes increasingly marginalized.

We need to find ways to measure and monitor return on attention. But the challenge is that return on attention can be viewed at many different levels.

Level 1 of return on attention

When I talk with executives about return on attention, I find that they quickly narrow their focus to their own company. For them, return on attention is how much they have had to spend per unit of attention from their customers and promising prospects.

Once again, they understandably fall back to financial metrics and what they have had to “pay” for the attention of their customers. This is still very focused on the company and lagging indicators – how much have they had to pay in the past.

Level 2 of return on attention

We need to expand our horizons. Rather than focusing on the company, let’s shift our attention to the customers and their return on attention – what value are the customers receiving for the attention they are providing to the company? What’s their return on attention?

And, let’s stay focused on value received, rather than the amount of time and effort that customers have to invest in order to receive the value. The temptation here is to narrowly define value as delivering what the customers want and need today.

The challenge is that what customers want and need today may not be what is ultimately most valuable to them. As I’ve written about in The Journey Beyond Fear, people around the world are increasingly driven by the emotion of fear. In this kind of world, the most effective way to draw attention is to address the fears that are consuming customers – feeding the fear, providing them with defenses against perceived threats and helping them to escape from the fearful world around us (dare I mention metaverse?).

Addressing current needs can help to attract attention with less effort but, if the needs are not sustainable, is this the most promising way to increase return on attention for customers over time? Even more importantly, if the needs that customers perceive today are limiting their potential to create value that is more meaningful to them, are businesses serving the true needs of the customers?

Level 3 of return on attention

This takes us to an even more promising level of return on attention. Rather than just focusing on the current needs of the customers, maybe businesses should look ahead and anticipate emerging needs of customers that can create much more value.

Businesses need to expand their horizons even further. They need to not just focus on the return on attention to the customer today, but the return on attention to the customer over time. They need to ask what can help customers to achieve much more impact and value that is meaningful to them than what they are achieving today. What are the unmet needs of customers that customers themselves might not even be able to articulate today, but that could help them overcome their fear and motivate them to provide more and more attention?

While this requires businesses to look ahead, business executives should realize that the timing could not be better. One of the challenges for businesses today is the significant erosion of trust from their customers. While most customers could probably not articulate what is eroding their trust, a key driver is the growing recognition that companies are focused on serving their own short-term needs, rather than understanding and addressing the evolving needs of their customers to achieve more impact that is meaningful in a more and more challenging world.

Businesses that understand what is driving the erosion of trust and actively seek to increase the return on attention of their customers will find that they will draw and retain the attention of those customers much more effectively than they have in the past.

Level 4 of return on attention

But that’s not all. There’s an even bigger opportunity that remains to be addressed by both customers and the businesses serving them. In a rapidly changing world with mounting performance pressure, all customers have a need to find ways to continue to increase impact that is meaningful to them.

This creates a need for all customers to learn faster about how they can increase impact in areas that matter to them. In this rapidly changing world, this is not about learning in the form of training programs that share existing knowledge, but instead it’s about creating environments and conditions that can help customers to create entirely new knowledge at an accelerating rate – finding ways to create more and more value with less effort.

This kind of learning doesn’t occur in a training room. It occurs out in the real world as customers take action, assess the impact they are achieving, and reflect on what new actions they can take that will yield even more impact. As customers begin to see the need for this and the value it can provide, they will also begin to see that they can learn much faster and more effectively if they come together in small groups where they share a passion about increasing impact (I call them impact groups and have written about them here).

Customers will significantly increase their return on attention if they can participate in these learning environments because they will create much more value for themselves and for others. Businesses that see this emerging need and act aggressively to provide these learning environments will ultimately draw more and more of the attention of more and more customers and create much more value for themselves as well.

We need to see an intriguing paradox. The same long-term forces that are creating mounting performance pressure and a growing need for impact that is meaningful are also creating exponentially expanding opportunity – we can create far more value far more quickly and with far less resources than would have been imaginable a couple of decades ago. Those customers and businesses who see this exponentially expanding opportunity and actively seek to address it will dramatically increase their return on attention.

There’s an untapped business opportunity that I describe as “the trusted advisor” where businesses focus relentlessly on increasing the impact that their customers can achieve. This business opportunity has exponential potential.

Bottom line

In a more and more challenging world, where fear is becoming the dominant emotion, it is understandable why businesses are pursuing more and more short-term financial metrics for impact. But those metrics are increasingly limiting our ability to create value.

If we are going to unleash the exponentially expanding opportunity that is emerging around us, we need to find metrics that will excite and inspire us, and help us to overcome our fear. We need a deep and nuanced understanding of “return on attention” that is focused on the growing impact that our customers can achieve. This will help both our customers and our businesses to move beyond their fear and succeed in ways that will help all of us to flourish.

26
Feb 23
0

Evolving Boards Into Springboards

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

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

What’s the need?

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

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

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

Re-imagining the role of boards

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

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

Catalysts for change

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

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

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

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

From provocation to excitement

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

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

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

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

Bottom line

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

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

18
Jan 23
0

The Untapped Opportunity of Institutional Narratives

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

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

Institutional narratives

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

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

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

Shaping strategies

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

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

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

Connecting

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

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

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

Exploring an example

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

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

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

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

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

Bottom line

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

01
Jan 23
2

The Old Becomes the New

Category:Exploration,Growth,Opportunity,Paradox,Passion,Poem,Potential

As we enter the New Year,

Let’s not become consumed

By the newness.

It’s an opportunity

To look within

And to see

What’s always been there,

Waiting to be discovered

And drawn out.

It’s not new.

It’s been there

From the beginning.

What’s new

Is our willingness to see more of it

And pursue more of it.

And it’s not just within

One of us.

It’s within all of us.

What is it?

It’s our spirit

That wants to make a difference

That is more and more meaningful

To us

And to others.

We’ve all been in touch

With our spirit,

But we’ve only experienced

A small part of it.

There’s so much more

To be discovered

And nurtured.

In this New Year,

Let’s make the effort

To nurture

What is already there,

So that we can all thrive.

23
Dec 22
4

The Present Is a Present

Category:Community,Connections,Growth,Opportunity,Poem,Potential

During this holiday season,

We are showered with gifts.

But gifts are things.

Gifts can distract us

From a present that really matters.

Let’s never forget

That our present

That matters the most

Is the present.

We are so lucky to be in the present.

Without the present,

Nothing matters.

The present has so much to offer.

Yet, we are too often distracted

By what happened in the past

Or what might happen in the future.

We need to spend more time in the present

And savor all that it has to offer us now.

The present can also be shared with others,

Making it much richer for all.

We should also never forget

That the present

Is a time when we can act

And make the present even richer

For us and for others.

If we act with others in the present,

The present can grow

In ways that we never imagined.

The present is a present

That keeps on giving.

Let’s be grateful.

24
Nov 22
0

Reflections on Gratitude

Category:Exploration,Passion,Poem,Potential

On Thanksgiving

We have an opportunity

To reflect on gratitude.

What should we be

Most grateful for?

My advice:

Don’t look outside,

Look within.

We all have a passion within –

The passion of the explorer.

Some of us have found it

And we’re pursuing it.

But most of us

Have not yet found it.

Many of us are not even

Looking for it.

But it’s there,

Waiting to be found

And pursued.

When we find it

And pursue it,

We will make a difference

That grows over time

And that is more and more meaningful

To us,

And to others.

We all seek meaning,

But we need to look within,

In order to manifest it

Outside.

Let’s be grateful

For the passion

That will spawn

Expanding meaning

For all of us.

20
Nov 22
1

The Metapsychology of the Metaverse

Category:Collaboration,Community,Connections,Context,Emotions,Exploration,Fear,Future,Learning,Narratives,Opportunity,Passion,Potential,Uncategorized

The metaverse is consuming conversations about technology these days. But, what is it? And, is it something we should welcome?

What is the metaverse?

I can’t pretend to offer a definitive definition of the metaverse – I certainly haven’t been able to find one. It’s one of my concerns in all this talk about the metaverse – many different definitions seem to be floating around so it’s not clear what we are talking about.

My best guess about what most people mean when they talk about the metaverse is that it is an immersive and persistent three-dimensional virtual realm, shared with many users, that brings together virtually enhanced physical and digital reality. It integrates many different technologies, including augmented reality, the Internet of things, virtual reality, and blockchain. Blockchain provides an opportunity to use cryptocurrencies and NFT’s to create a fully functional virtual economy in the metaverse where you can buy and sell any virtual asset.

The metaverse can have a significant game component, where participants compete to achieve certain goals and win prizes for their efforts. In fact, I would suggest that the video game world is rapidly evolving into the metaverse and may lead the way for other metaverse initiatives. However, the metaverse can be much more than a game.

The term “Metaverse” was first coined by the great science fiction author, Neal Stephenson in his book, Snow Crash, published 30 years ago. If you haven’t read it, I highly recommend it. In this book, Stephenson basically presents the metaverse as a virtual reality-based Internet populated by user-controlled avatars.

So, if this is what the metaverse is, is it good or evil? Well, the answer is – it depends. Like most technology, it’s not good or evil in itself. It all depends on how we use it.

The evil side of the metaverse

In a world that’s increasingly dominated by fear (see my book, The Journey Beyond Fear), there’s a significant risk that the metaverse will evolve in ways that limit our potential as humans, rather than expand it. What do I mean by that?

The metaverse is an artificial world that can provide an escape for those who are finding the real world very scary or limiting. If we’re driven by fear, it can draw us out of the real world and offer us a place to hide. If we’re consumed by boredom, it can provide us with an irresistible opportunity for excitement.

Temporary relief may be OK, but the metaverse can be designed to be addictive. Participants will find themselves spending more and more time in the metaverse, leaving the real world behind. Of course, for many metaverse designers, that’s what they’re seeking – make the metaverse an all-consuming experience.

The good side of the metaverse

While understandable, that misses the real opportunity of the metaverse. The metaverse can become a launchpad for all of us to achieve much more of our potential in the real world, but that will require a very different design of the virtual worlds we’re creating.

It requires a fundamental shift in focus in how to measure success. If the metaverse is designed to be an escape, the measure of success is how much time participants spend in the metaverse. If it’s a launchpad for impact in the real world, the measure of success is how participants are increasing their impact in the real world as a result of participating in the metaverse.

How could the metaverse help participants to increase their impact in the real world? It could begin by embodying the core elements of what I describe as opportunity-based narratives – a really big and inspiring opportunity out in the future and a call to action to address the opportunity. While the metaverse can present the opportunity in the virtual world, it would need to be clear that the opportunity exists in the real world as well, and help to motivate participants to pursue that opportunity there. Similarly, while the metaverse could provide an environment for action to pursue the opportunity in the virtual world, participants would need to understand that the real potential for impact is in the real world.

To help people address these opportunities, the metaverse could provide ways for people who are inspired by these opportunities to come together and discuss approaches that would have the greatest potential for impact in addressing these opportunities. These groups might even become what I call “impact groups.”

But it wouldn’t be just about discussion. In the metaverse, participants would be encouraged to take action. Initially, that action might be in the virtual world of the metaverse where it could be pursued perhaps more quickly and with less risk and more rapid feedback than in the real world. But, once again, participants would need to understand that this is simply a vehicle for learning how to have more impact in pursuing the opportunity in the real world. Designed appropriately, the metaverse could become a powerful learning platform that helps participants to learn faster through action together.

In short, the metaverse could become a vehicle for helping participants to overcome fear and boredom that they may be experiencing in the real world. It could do this by providing participants with the tools and connections that can help them address some very large and inspiring opportunities in the real world. Rather than providing an escape from the real world, the metaverse could motivate participants to return to the real world, excited about the potential to have much greater impact that is meaningful to them. Of course, they would regularly return to the metaverse to connect with more people and find ways to have even greater impact.

Metapsychology

So, why did I include metapsychology in the title of this blog? Of course, one reason was that it blended so well with metaverse. I may be using the term inappropriately, but it struck me that there’s an opportunity to explore the relationship between psychology and the metaverse.

In particular, it highlights the importance of understanding much more deeply how different design approaches to the metaverse could shape or influence the psychology of its participants. It’s also important to explore the relationship between the psychology of participants in the real world and in virtual worlds.

My view of the untapped opportunity is how the metaverse can help more and more people on the journey beyond fear and boredom. It can help to draw out hope and excitement in the real world that will motivate all of us to achieve much more of our potential.

Of course, we need to be careful about manipulation of emotions. From my perspective, manipulation occurs when we create environments or contexts that draw out certain emotions that are not in the best interest of the participants, but serve the interests of those who are creating the environments. In contrast, I am focusing on creating environments that will draw out emotions that we all as human beings have a hunger for – hope and excitement about an opportunity to have more impact in the real world that is meaningful to us and to others.

That’s ultimately where the money is. Many organizations seek to manipulate the emotions of others in order to serve their own interests. That may work in the short-term, but the key to generating long-term revenue and benefit comes from cultivating emotions that help us to achieve more of our potential.

Bottom line.

Like all technology, the metaverse can be used for good or evil. It’s up to us. As an optimist, I see the opportunity for enormous positive impact from the metaverse, but I’m concerned that there are strong incentives for metaverse designers to provide escape vehicles for participants and reduce the potential for positive growth in the real world. Once again, it’s up to us. How can we create more incentives for metaverse designers to provide us with launchpads in addressing very large opportunities in the real world?

11
Oct 22
2

Learning Leaders

Category:Uncategorized

I’ve written extensively about the Big Shift in institutional models. I’m going to focus here on the Big Shift required for leaders of the new institutional models. The Big Shift challenges our most basic assumptions about what we need from our leaders.

Transformation of institutional models

I’ll resist diving into Big Shift that is transforming our global economy and society – I’ve written about some of my research on this here and here. Even though this Big Shift has been playing out for several decades, we’re still in the very early stages of this transformation.

As I’ve discussed in more detail here (pdf), this Big Shift will require a profound transformation of the institutional models that govern all our large institutions around the world today. For the past century, the institutional model that has prevailed is scalable efficiency – the key to success is to do everything faster and cheaper at scale. While this model led to enormous success in the past, it is now producing diminishing returns. Our approach to scalable efficiency is becoming more and more inefficient.

The institutional model that will flourish in the future is a very different one – scalable learning. In this model, the focus is on helping all participants to learn faster in terms of how to deliver more value to all stakeholders. To be clear, learning in this context is not learning in the form of sharing existing knowledge, like in training programs. It’s about learning in the form of creating entirely new knowledge that never existed before. In a rapidly changing world, this is the most valuable and necessary form of learning. In this new institutional model, this form of learning is not confined to research labs or innovation centers – it is the focus and priority of every participant in the institution.

So, what are the implications for leaders? Leaders will need to transform as much as, if not more than, the institutions they lead. Let me outline some of the key dimensions of leadership transformation:

Push to pull

I’ve written a whole book on this one – The Power of Pull. Leaders of today are adept at push approaches – they develop forecasts of demand and then focus on pushing all the right people and resources into the right place at the right time to meet that demand. In a world where forecasts become more and more challenging, leaders need to embrace a pull approach – drawing out the right people and resources whenever and wherever they are needed. In my book, I explore three levels of pull. The most powerful level of pull is the third one – drawing out of each of us more of our potential. Leaders need to focus on how to draw out more of the potential of the people they lead.

Answers to questions

The mark of strong leaders in the past was that they had answers to all the questions. Whatever the question, we could count on the leader to have the answer.

In a more rapidly changing world, we need leaders who have the most powerful and inspiring questions, who will freely admit that they don’t know the answers, and who will ask for help. This sends an important message to the people in their organization: questions are necessary and we all need to ask for help in seeking answers to the questions. This will help to spawn a new culture since scalable efficiency institutions discourage questions and regard asking for help as a sign of weakness.

Pressure to passion

How do today’s leaders motivate performance from their people? It’s all about extrinsic rewards – if you do well, you’ll advance and earn more income but, if you do badly, you’ll lose your job. In a world of mounting performance pressure, the extrinsic motivation is increasingly about the threat of losing your job. This just increases the pressure on everyone and feeds the fear.

Leaders will need to shift their focus from extrinsic motivation to internal motivation. Fear can produce some results in the short-term, but it will lead to increasingly dysfunctional behavior over time. The only way to thrive in a world of mounting performance pressure is to cultivate a very specific form of passion – the passion of the explorer (pdf)– that will generate excitement about new challenges and the opportunity to learn how to address those challenges and create more impact. Leaders will be measured by the amount of passion they are able to generate in the people they lead.

Squeezing to leverage

Today’s leaders focus inward on the organizations they lead. It’s all about what they own and control. Since these resources are fixed, the only way to get more out of them is to squeeze harder. That’s the essence of scalable efficiency – success depends on doing everything faster and cheaper.

Leaders will need to expand their focus, driven by a growing awareness that the connectivity created by digital infrastructures is making it more and more feasible to connect with, and mobilize, resources outside the organization to deliver more value to stakeholders. I’ve described this as leveraged growth. We live in a world where more and more value can be created with fewer resources and much more quickly than ever before. But leaders will need to find ways to motivate third parties to come together under their leadership.

Controlling to shaping

Leadership today is largely about command and control. Leaders operate in hierarchical organizations where the key is to be clear about what needs to be done by whom and when. Process manuals rule the day. The scalable efficiency model is driven by the assumption that all tasks need to be tightly specified and highly standardized so they are done in the same efficient way throughout the organization.

Going forward, leaders will need to pull back and develop the talent to shape their environments. This definitely does not involve tightly specifying all activities. Instead, it involves looking ahead and framing really big, inspiring opportunities that will help to focus and motivate participants to come together and act and address those opportunities. This involves mastering shaping strategies, which I have discussed here. It also involves crafting powerful opportunity-based narratives, which I explore here and in my new book, The Journey Beyond Fear.

Action to reflection

Leaders today are focused on action. As soon as one activity is completed, attention shifts to launching the next activity. The level and pace of activity becomes a key metric for performance.

Of course, action is necessary for impact, but leaders are going to have create more time for reflection. Participants need to step back on a regular basis and reflect on the impact that they have achieved with their actions. What actions produced even more impact than expected? Why? What actions produced less impact than expected? Why? By taking the time to reflect on impact achieved, participants can learn much more quickly about how to evolve actions to achieve even greater impact.

Uniformity to diversity

Leaders today are under increasing pressure to embrace diversity. Unfortunately, for many of them, diversity just means bringing more diverse participants around the table. Once they’re seated at the table, the message to all participants is to follow the leader and strive to be as much like the leader as possible, and the leader tends to be an older, white guy. Questions are discouraged and challenges are viewed as insubordination. Diversity of people is OK as long as we enforce uniformity of behavior and action.

Leaders need to understand that diversity is not just the “right” thing to do, but the necessary thing to do if we are truly committed to scaling and accelerating learning. But, here’s the catch. Scaling and accelerating learning requires us to embrace diversity of behavior and action, not just diversity of participants. Leaders need to foster cultures where unexpected questions are welcome (see above) because they can lead to new insight and where participants are encouraged to challenge each other in a quest to achieve higher and higher levels of impact.

Followers to leaders

The success of leaders today is measured in terms of the number of followers they are able to control. In a world of accelerating change, the success of leaders in the future will be measured in terms of the number of leaders they are able to cultivate and unleash. We are in desperate need of more participants who are excited about crafting new initiatives and mobilizing others to help them achieve greater and greater impact.

Bottom line

I’ve only skimmed the surface here, but hopefully I’ve drawn attention to a transformation challenge that is not yet on the agenda of most leaders. When they talk about transformation today, most leaders focus on the transformation that their organization must make. They rarely address the transformation that they themselves must make. If the leaders do not transform themselves, the participants in their organizations will dig in their heels and resist any efforts to transform the organization because they see that their leaders are not willing to change and will still demand what they have always demanded from their participants. Transformation starts at the top.

There’s no doubt that this is very challenging, but the rewards are significant. Leaders who make this journey will find that they are moving beyond a world of mounting performance pressure and entering a world of exponentially expanding opportunity, not just for themselves, but for all their participants and stakeholders. This could motivate even the most resistant leaders to break the mold.

The leaders of the future will not be those who have the greatest expertise, but instead it will be those who have the greatest motivation to scale and accelerate learning throughout and beyond their organizations.

May 23

0

Cultivating and Connecting Capabilities

Apr 23

2

What Does Strategy Really Mean?

Mar 23

0

Escalating Return on Attention

Feb 23

0

Evolving Boards Into Springboards

Jan 23

0

The Untapped Opportunity of Institutional Narratives

Jan 23

2

The Old Becomes the New

Dec 22

4

The Present Is a Present

Nov 22

0

Reflections on Gratitude

Nov 22

1

The Metapsychology of the Metaverse

Oct 22

2

Learning Leaders

NEW BOOK

Subscribe to Edge Perspectives

Search

Recent Posts