I wrote a post last month on understanding technological-driven change and innovation through the lens of optimisation and transformation. Both can deliver significant benefits but they are fundamentally different approaches. Optimisation involves first order change. It relates to adaptations within the current system or structure that are designed to improve. It tends back to homeostasis and stability. It largely relies on existing stocks of knowledge. We are evolving our actions to improve results.
Transformation however, is what needs to happen when technology creates entirely new possibilities. This is second-order change that requires a more fundamental change in the system. A significant rethink of models, ways of seeing things, a notable shift to something completely different. It likely requires new thinking, unlearning and relearning, and the unpacking of existing assumptions.
The post seems to have resonated with quite a few people so I thought I’d write a follow up. Because the reality is that teams and organisations often get stuck in optimisation. Or what you might call stuck in ‘business as usual’. A default to first order change or optimisation can perhaps be understood by recognising that it’s a lot easier to implement incremental improvements than it is to reframe completely how we perceive a situation or solution. Optimisation can work more easily within existing governing variables. But transformative ideas may question the governing variables themselves.
Conways Law states that organisations design systems and solutions that typically mirror their communication structure. In other words innovations tend to reflect the social systems or structural silos within the organisation. Companies often design things that are easier for the organisation to make work rather than solutions that genuinely make optimal sense for the customer. Optimisation is easier since it typically fits the existing communication structures.
Similarly researchers Rebecca Henderson and Kim Clark have described how more radical innovation can fundamentally challenge the existing structures and processes in a company, making it harder to get it approved or developed. Transformative ideas are more likely to be questioned or pilloried early on. It’s harder to convince people to break open existing assumptions or even to make them realise that they are working to assumptions at all. Far easier perhaps to do what you did before and find ways to improve that rather than fundamentally question what is well practiced and understood. Make no mistake, there is significant value in optimisation. Yet as author Joshua Gans put it: ‘Disruption describes what happens when firms fail because they keep making the kinds of choices that made them successful.’
So how can leaders and teams ‘break out’ of optimisation and bring in more transformative ideas and new possibilities? Here are some essential behaviours and techniques for doing just that:
Use learning from non-obvious domains to challenge assumptions
Organisations and leadership teams (naturally perhaps) get very focused on what is happening in their sector. On what their competitors are doing. But best practice within your sector will never originate a sector-changing idea. The ‘streetlight effect’ (based on the joke about the drunk man searching for his keys under the streetlight because that’s where the light is) is an observational bias that can lead us to look for answers in the easiest places. But often the most challenging thinking or ideas exist outside of these obvious places. Engineering student Dick Fosbury used his engineering knowledge to work out an entirely new technique for the high jump, and went on to make it famous at the Mexico Olympics in 1968 by winning the Gold medal. The medical team at Great Ormond Street hospital dramatically improved their processes by bringing in the Ferrari Formula One pit crew team to advise them.
Recognise when an evolving environment enables new possibilities
Changing technology often creates subtle but significant changes in the environment which can facilitate entirely new methods or solutions . In the Dick Fosbury example it was the introduction of foam landing pits rather than landing on sand that enabled him to bring in the revolutionary technique of jumping backwards. Without that it would never have happened. In order to do this well the team need to be willing to think big, and to think boldly. They need to be constantly paying attention to how the environment is changing and asking themselves what it is now possible that wasn’t before?
Think possible futures, not just projected or probable futures
Speaking of new possibilities, the futures cone is a well known way of projecting future scenarios but also a useful way to break open ones thinking. Extrapolating out from what’s possible now can formulate a projected future but ignores the fact that technology and the environment for innovation will continue to change. Technology development is not static. This continuing evolution means that teams need instead to consider what is likely to become possible. In his Google Firestarters episode Kevin Kelly gave the example of Brain Eno running an exercise he called ‘Unthinkable’ in which he imagined an outlandish future scenario as a way to stimulate new thinking and ideas. Techniques like backcasting, which involves picturing a desired future state and then working back from there to consider what changes are necessary to connect the future to the present, are useful. Being a future-back leader means being able to visualise what the organisation could be in the future starting from a blank slate and then being able to mobilise what is necessary to bring it to life.
Asking better questions
Constraints can generate different and creative thinking. Adam Morgan, in his Google Firestarters episode, talked about using what he called ‘propelling questions’. This is where you combine an ambitious vision with a constraint of some kind which breaks open your thinking. I loved his story of what happened when Audi entered Le Mans racing for the first time. Instead of challenging the team to build a faster car than all the other teams, the Chief Engineer for Audi asked them how they could win Le Mans if their car could go no faster than anyone else’s. This led to them introducing diesel technology into Le Mans racing for the first time, and the team won the race for three years in a row because this meant that they could have fewer pit stops. They won because they stopped less, not because they went faster.
Leaders can play an important role in helping teams to think differently by asking more challenging questions that can help to reframe a problem. ‘What if…?’ or ‘How might we…?’ questions are great at opening up new thinking. Another point on this – there is clearly a need to challenge assumptions but how many times do teams actually ask themselves ‘what assumptions are we making here?’. Even the most basic of assumptions can derail projects, so breaking a project down into a list of assumptions can help to avoid wasted time and effort, misdirection and back-tracking later in the project.
As Kevin Kelly once said in one of his books:
‘A good question is not concerned with a correct answer. A good question cannot be answered immediately. A good question challenges existing answers.’
Acknowledge the limitations of our knowledge
Having the humility to understand that we can’t know all the answers leads us to ask better, more searching questions but also to make better decisions. It means that we’re less likely to be subject to confirmation bias, or to forge ahead blindly, and more likely to explore, and so more open to different thinking. Remember, a good decision is not automatically one that has a great outcome, but rather one that has a good process. And a key part of that is recognising the limitations of our current knowledge. This give better context to the right kind of approach which can lead to progress.
Pursuing a breakthrough idea may be a big bet, but recognising where understanding is limited helps us to take the right approach. A complex situation which is full of unknowns for example, is more likely to require an emergent, agile, adaptive approach in which we are learning about how to solve a more challenging problem. In this case we may be making a series of smaller bets to make progress, but the important thing is that these bets are ‘safe to fail’ and also that we focus on drawing out and applying the learning that we get from taking these bets, regardless of whether they succeed or fail.
Experimentation
Which brings us to experimentation. It’s easy to simply say ‘we need to experiment more’, but much harder to understand the type of experimentation needed, and how to enable it. Optimisation may well focus on fewer, larger-scale tests which are designed to facilitate incremental improvement. Transformation however, will likely need larger numbers of smaller scale experiments which can help a team to explore new territory, identify potential outlier ideas which can have significant impact. Studies have shown that running more but smaller experiments can increase innovation productivity. This requires leaders to consider how they can enable teams through both tools and mindset. Think big, start small, scale fast.
Curiosity
Its also very easy to say ‘be more curious’. But how can leaders actively support this? Relatively simple things like modelling positive behaviours that empower curiosity really help. When leaders ask a lot of questions so that they can understand something, their team tend to do the same. Creating clear learning goals for the team can enable a direction for exploration. Demonstrating a beginner’s mindset can encourage a team to approach every challenge with a fresh set of eyes. Setting aside dedicated time for learning or experimentation. Changing the environment to shift perspectives (like walking meetings). Enabling a psychologically safe team environment that is characterised by high levels of trust but also healthy debate and disagreement. These are all tangible things that leaders can work on to empower greater curiosity and different thinking.
Belief, and being willing to be misunderstood
Jeff Bezos once talked about the fact that whilst 90% of the innovation at Amazon was incremental, they still make long-term, calculated bets on the future. But if you invent frequently and are willing to fail (safe to fail), then you’ll never get to the point where you have to bet the whole company. You may have to have multiple attempts at a solution until you get it right, but you need to be ‘stubborn on vision, flexible on details’:
‘A big piece of the story we tell ourselves about who we are, is that we are willing to invent. We are willing to think long-term. We start with the customer and work backwards. And, very importantly, we are willing to be misunderstood for long periods of time.’
Without these attributes as part of your culture, he says, you can’t do large scale invention. A not insignificant part of this requires longer-term thinking which is not always easy in an organisation prioritising short-term goals. And making breakthrough ideas happen often requires a certain kind of persistence, passion, vision and bravery. You have to be willing to be misunderstood. To have lots of people question your thinking. To have the resolve to convince lots of stakeholders that this is the right thing to do. Finding and working with likeminded people who understand the opportunity can help build the kind of support and momentum that can help counteract the organisational pressure to drop everything in favour of the next quarterly target.
Be judicious with customer feedback
Testing and learning, and using customer feedback can of course be brilliant at steering a development process and ensuring a team is balancing business and customer value all the way through. But feedback loops should always be combined with visionary thinking. Steve Jobs famously once said that the job at Apple was to figure out what customers are going to want before they do (‘Our task is to read things that are not yet on the page‘). Jeff Bezos (he’s very quotable) put it even better: ‘Design with vision, optimise with feedback‘. This means that in order to bring breakthrough ideas to life we need visionary thinking that is combined with rapid feedback loops and learning that can help understand how we can achieve our moonshot.
These ideas are all the things that I’ve encountered working with many different types of organisation and leadership teams, which have helped them to break out of business-as-usual. But I’m keen to know what I may have missed. What have you found to be most useful in facilitating breakthrough or different thinking in a team? Let me know in the comments.
Photo by Rafael Pol on Unsplash
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