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The Unbearable Lightness of Being
Where the mind is without fear and the head is held high
Where knowledge is free
Where the world has not been broken up into fragments
By narrow domestic walls
Where words come out from the depth of truth
Where tireless striving stretches its arms towards perfection
Where the clear stream of reason has not lost its way
Into the dreary desert sand of dead habit
Where the mind is led forward by thee
Into ever-widening thought and action
Into that heaven of freedom, my Father, let my country awake.
– Rabindranath Tagore
Among the many fundamental debates in philosophy, one of the fundamental debates has been around the concept of free will. The debates have stemmed around two arguments associated with free will.
1) Since future actions are governed by the circumstances of the present and the past, human beings future actions are predetermined on account of the learnings from the past. Hence, the actions that happen are not truly a consequent of free will.
2) The counter-argument is that future actions may not necessarily be determined and governed by the legacy of the present and the past, and hence leaves headroom for the individual to exercise free will.
Now one may wonder what determinism or lack of it has anything to do with the current state of things in an organizational context. How is this relevant? Why are the abstract notions of determinism and free will important enough to be considered in the context of organizational evolution? How does the meaning lend itself to structured institutions like business organizations, if you will, whose sole purpose is to create products and services to meet the market demand.
So we will throw a factual wrinkle in this line of thought. We will introduce now an element of chance. How does chance change the entire dialectic? Simply because chance is an unforeseen and random event that may not be pre-determined; in fact, a chance event may not have a causal trigger. And chance or luck could be meaningful enough to untether an organization and its folks to explore alternative paths. It is how the organization and the people are aligned to take advantage of that random nondeterministic future that could make a huge difference to the long term fate of the organization.
The principle of inductive logic states that what is true for n and n+1 would be true for n+2. The inductive logic creates predictability and hence organizations create pathways to exploit the logical extension of inductive logic. It is the most logical apparatus that exists to advance groups in a stable but robust manner to address the multitude of challenges that that they have to grapple with. After all, the market is governed by animal spirits! But let us think through this very carefully. All competition or collaboration that occurs among groups to address the market demands result in homogenous behavior with general homogeneous outcomes. Simply put, products and services become commoditized. Their variance is not unique and distinctive. However, they could be just be distinctive enough to eke out enough profits in the margins before being absorbed into a bigger whole. At that point, identity is effaced over time. Organizations gravitate to a singularity. Unique value propositions wane over time.
So let us circle back to chance. Chance is our hope to create divergence. Chance is the factoid that cancels out the inductive vector of industrial organization. Chance does not exist … it is not a “waiting for Godot” metaphor around the corner. If it always did, it would have been imputed by the determinists in their inductive world and we would end up with a dystopian homogenous future. Chance happens. And sometimes it has a very short half-life. And if the organization and people are aligned and their mindset is adapted toward embracing and exploiting that fleeting factoid of chance, the consequences could be huge. New models would emerge, new divergent paths would be traduced and society and markets would burst into a garden of colorful ideas in virtual oasis of new markets.
So now to tie this all to free will and to the unbearable lightness of being! It is the existence of chance that creates the opportunity to exercise free will on the part of an individual, but it is the organizations responsibility to allow the individual to unharness themselves from organization inertia. Thus, organizations have to perpetuate an environment wherein employees are afforded some headroom to break away. And I don’t mean break away as in people leaving the organization to do their own gigs; I mean breakaway in thought and action within the boundaries of the organization to be open to element of chance and exploit it. Great organizations do not just encourage the lightness of being … unharnessing the talent but rather – the great organizations are the ones that make the lightness of being unbearable. These individuals are left with nothing but an awareness and openness to chance to create incredible values … far more incredible and awe inspiring and momentous than a more serene state of general business as usual affairs.
Reality Distortion Field: A Powerful Motivator in Organizations!
“The reality distortion field was a confounding mélange of a charismatic rhetorical style, an indomitable will, and an eagerness to bend any fact to fit the purpose at hand. If one line of argument failed to persuade, he would deftly switch to another. Sometimes, he would throw you off balance by suddenly adopting your position as his own, without acknowledging that he ever thought differently. “
– Andy Hertzfield on Steve Jobs’ Reality Distortion Field.
Many of us have heard the word – Reality Distortion Field. The term has been attributed to Steve Jobs who was widely known to have communicated messages to his constituency in a manner such that the reality of the situation was supplanted by him packaging the message so that people would take the bait and pursue paths that would, upon closer investigation, be dissonant from reality. But having been an avid acolyte of Jobs, I would imagine that he himself would be disturbed and unsettled by the label. Since when did the promise of a radiant future constitute a Reality Distortion Field? Since when did the ability of a person to embrace what seemingly is impossible and far-fetched and instill confidence in the troops to achieve it constitute a Reality Distortion Field? Since when did the ability of leadership to share in the wonders of unique and disruptive creations constitute a Reality Distortion Field? Since when did dreams of a better future underpinned with executable actions to achieve it constitute a Reality Distortion Field?
The Reality Distortion Field usage reflects the dissonance between what is and what needs to be. It is a slapstick term which suggests that you are envisioning tectonic dissonance rifts between reality and possibilities and that you are leading the awestruck starry-eyed followers off a potential cliff. Some people have renamed RDF as hype of Bulls*#t. They believe that RDF is extremely bad for organizations because it pushes the people outside the comfort zone of physical and logical constraints and is a recipe for disaster. The argument continues that organizations that are grounded upon the construct of reality and to communicate the same are essential to advance the organization. I beg to differ.
So let me address this on two fronts: RDF label and if we truly accept what RDF means … then my position is that it is the single most important attribute that a strong leader ought to embrace in the organization.
The RDF label:
We all know this to be true: A rose by any other name is still a rose. We just happen to call this rose in this context a RDF. It is presumed to be the ability of a person to cast possibilities in a different light … so much so that the impossibilities are reduced to elements just within the grasp of reality. Now I ask you – What is wrong with that? For a leader to be able to cast their vision within the inimitable grasp of an organization is a huge proxy for the faith of the leader of the people in the organization. If a project realistically would take 3 months but a RDF is cast to get a project done in 15 days – that is a tall order – but think of the consequences if people are “seduced” into the RDF and hence acts upon it. It immediately unfolds new pathways of collaboration, unforeseen discoveries into super-efficient and effective methods, it creates trench camaraderie, it distills focus into singularity points to be executed against, it instills and ignites a passion and an engagement around the new stakes in the ground, people become keepers of one another for a consequential and significant conquest, it brings out the creative energies and the limitless possibilities, once the goal is accomplished, of disruptive innovation in means and ends. Of course, one could also counter-argue a plethora of incidental issues in such cases: employees would burn out under the burden of unrealistic goals, employees are set more for failing than succeeding, it would create a disorderly orientation upon groups working together to meet RDF standards, and if one were to fall short …it would be a last straw that may break the camel’s back. So essentially this speaks to the ordinal magnitude of the RDF schema that is being pushed out by leadership.
RDF and the beneficial impact to an organization:
It is the sine qua non of great leadership to be able to push organizations beyond the boundaries of plain convenience. I have, in my career, been fortunate to have been challenged and on many occasions, forced out of my comfort zone. But in having done so successfully on many occasions, it has also given me the confidence to scale mountains. And that confidence is a perquisite that the organization leadership has to provide on a daily basis. After all, one of the biggest assets that an employee in an organization ought to have is pride and sense of accomplishment to their work. RDF unfolds that possibility.
We hear of disruptive innovations. These are defined as innovations that leapfrog the bounds of technology inertia. How does a company enable that? It is certainly not incremental thinking. It is a vision that marginally lies outside our aggregated horizon of sight. The age today which is a result of path breaking ideas and execution have been a result of those visionaries that have aimed beyond the horizons, instilled faith amongst the line men to align and execute, and made the impossible possible. We ought to thank our stars for having leaders that emit an RDF and lead us off our tenebrous existence in our diurnal professional lives.
There is absolutely no doubt that such leadership would create resistance and fierce antipathy among some. But despite some of the ill effects, the vector that drives great innovations lies in the capacity of the organization to embrace degrees of RDF to hasten and make the organizations competitive, distinctive and powerful.
Medici Effect – Encourage Innovation in the Organization
“Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things. And the reason they were able to do that was that they’ve had more experiences or they have thought more about their experiences than other people.”
– Steve Jobs
What is the Medici Effect?
Frans Johanssen has written a lovely book on the Medici Effect. The term “Medici” relates to the Medici family in Florence that made immense contributions in art, architecture and literature. They were pivotal in catalyzing the Renaissance, and some of the great artists and scientists that we revere today – Donatello, Michelangelo, Leonardo da Vinci, and Galileo were commissioned for their works by the family.
Renaissance was the resurgence of the old Athenian democracy. It merged distinctive areas of humanism, philosophy, sciences, arts and literature into a unified body of knowledge that would advance the cause of human civilization. What the Medici effect speaks to is the outcome that is the result of creating a system that would incorporate what on first glance, may seem distinctive and discrete disciplines, into holistic outcomes and a shared simmering of wisdom that permeated the emergence of new disciplines, thoughts and implementations.
Supporting the organization to harness the power of the Medici Effect
We are past the industrial era, the Progressive era and the Information era. There are no formative lines that truly distinguish one era from another, but our knowledge has progressed along gray lines that have pushed the limits of human knowledge. We are now wallowing in a crucible wherein distinct disciplines have crisscrossed and merged together. The key thesis in the Medici effect is that the intersections of these distinctive disciplines enable the birth of new breakthrough ideas and leapfrog innovation.
So how do we introduce the Medici Effect in organizations?
Some of the key ways to implement the model is really to provide the support infrastructure for
1. Connections: Our brains are naturally wired toward associations. We try to associate a concept with contextual elements around that concept to give the concept more meaning. We learn by connecting concepts and associating them, for the most part, with elements that we are conversant in. However, one can create associations within a narrow parameter, constrained within certain semantic models that we have created. Organizations can hence channelize connections by implementing narrow parameters. On the other hand, connections can be far more free-form. That means that the connector thinks beyond the immediate boundaries of their domain or within certain domains that are “pre-ordained”. In those cases, we create what is commonly known as divergent thinking. In that approach, we cull elements from seemingly different areas but we thread them around some core to generate new approaches, new metaphors, and new models. Ensuring that employees are able to safely reach out to other nodes of possibilities is the primary implementation step to generate the Medici effect.
2. Collaborations: Connecting different streams of thought in different disciplines is a primary and formative step. To advance this further, organization need to be able to provide additional systems wherein people can collaborate among themselves. In fact, the collaboration impact accentuates the final outcome sooner. So enabling connections and collaboration work in sync to create what I would call – the network impact on a marketplace of ideas.
3. Learning Organization: Organizations need to continuously add fuel to the ecosystem. In other words, they need to bring in speakers, encourage and invest in training programs, allow exploration possibilities by developing an internal budget for that purpose and provide some time and degree of freedom for people to mull over ideas. This enables collaboration to be enriched within the context of diverse learning.
4. Encourage Cultural Diversity: Finally, organizations have to invest in cultural diversity. People from different cultures have varied viewpoints and information and view issues from different perspectives and cultures. Given the fact that we are more globalized now, the innate understanding and immersion in cultural experience enhances the Medici effect. It also creates innovation and ground-breaking thoughts within a broader scope of compassion, humanism, social and shared responsibilities.
Implementing systems to encourage the Medici effect will enable organizations to break out from legacy behavior and trammel into unguarded territories. The charter toward unknown but exciting possibilities open the gateway for amazing and awesome ideas that engage the employees and enable them to beat a path to the intersection of new ideas.
Transparency in organizations
“We chose steel and extra wide panels of glass, which is almost like crystal. These are honest materials that create the right sense of strength and clarity between old and new, as well as a sense of transparency in the center of the institution that opens the campus up to the street.”
What is Transparency in the context of the organization?
It is the deliberate attempt by management to architect an organization that encourages open access to information, participation, and decision making, which ultimately creates a higher level of trust among the stakeholders.
The demand for transparency is becoming quite common. The users of goods and services are provoking the transparency question:
- Shareholder demand for increased financial accountability in the corporate world,
- Increased media diligence
- Increased regulatory diligence and requirements
- Increased demand by social interest and environmental groups
- Demands to see and check on compliance based on internal and external policies
- Increased employees’ interest in understanding how senior management decisions impact them, the organization and society
There are 2 big categories that organizations must consider and subsequently address while establishing systems in place to promote transparency.
- External Transparency
- Internal Transparency
External Transparency:
Some of the key elements are that organizations have to make the information accessible while also taking into account the risk of divulging too much information, make the information actionable, enable sharing and collaboration, managing risks, and establishing protocols and channels of communication that is open and democratic.
For example, it is important that employees ought to able to trace the integrity, quality, consistency and validity of the information back to the creator. In an open environment, it also unravels the landscape of risks that an organization maybe deliberately taking or may be carrying unknowingly. It bubbles up inappropriate decisions that can be dwelt on collectively by the management and the employees, and thus risks and inappropriateness are considerably mitigated. The other benefit obviously is that it enables too much overlap wherein people spread across the organizations may be doing the same thing in a similar manner. It affords better shared services platform and also encourages knowledge base and domain expertise that employees can tap into.
Internal Transparency:
Organization has to create the structure to encourage people to be transparent. Generally, people come to work with a mask on. What does that mean? Generally, the employees focus on the job at hand but they may be interested to add value in other ways besides their primary responsibility. In fact, they may want to approach their primary responsibility in an ingenious manner that would help the organization. But the mask or the veil that they don separates their personal interest and passions with the obligations that the job demands. Now how cool would it be if the organization sets up a remarkably safe system wherein the distinction between the employees’ personal interest and the primary obligations of the employee materially dissolve? What I bet you would discover would be higher levels of employee engagement. In addressing internal transparency, what the organization would have done is to have successfully mined and surfaced the personal interests of an employee and laid it out among all participants in a manner that would benefit the organization and the employee and their peers.
Thus, it is important to address both – internal and external transparency. However, implementing transparency ethos is not immune to challenges wherein increased transparency may distort intent, slow processes, increase organizational vulnerabilities, create psychological dissonance among employees or groups, create new factions and sometimes even result in poor decisions. Despite the challenges, the aggregate benefit of increased transparency over time would outweigh the costs. At the end, if the organization continues to formalize transparency, it would also simultaneously create and encourage trust and proper norms and mores that would lay the groundwork for an effective workforce.
Reputation is often an organization’s most valuable asset. It is built over time through a focused commitment and response to members’ wants, needs, and expectations. A commitment to transparency will increasingly become a litmus test used to define an association’s reputation and will be used as a value judgment for participation. By gaining a reputation for value through the disclosure of information, extensive communications with stakeholders, and a solid track record of truth and high disclosure of information, associations will win the respect and involvement of current and future members.
Kanter and Fine use a great analogy of transparency like an ocean sponge. These pore bearing organisms let up to twenty thousand times their volume in water pass through them every day. These sponges can withstand open, constant flow without inhibiting it because they are anchored to the ocean floor. Transparent organizations behave like these sponges: anchored to their mission and still allowing people in and out easily. Transparent organizations actually benefit from the constant flow of people and information.
Plans to implement transparency
Businesses are fighting for trust from their intended audiences. Shel Holtz and John Havens, authors of “Tactical Transparency,” state that the realities associated with doing business in today’s “business environment have emerged as the result of recent trends: Declining trust in business as usual and the increased public scrutiny under which companies find themselves thanks to the evolution of social media.” It is important, now more than ever, for organizations to use tools successfully to be sincerely but prudently transparent in ways that matter to their stakeholders.
“Tactical Transparency” adopted the following definition for transparency:
Transparency is the degree to which an organization shares the following with its stakeholder publics:
▪ Its leaders: The leaders of transparent companies are accessible and are straightforward when talking with members of key audiences.
▪ Its employees: Employees or transparent companies are accessible, can reinforce the public view of the company, and able to help people where appropriate.
▪ Its values: Ethical behavior, fair treatment, and other values are on full display in transparent companies.
▪ Its culture: How a company does things is more important today than what it does. The way things are done is not a secret in transparent companies.
▪ The results of its business practices, both good and bad: Successes, failures, problems, and victories all are communicated by transparent companies.
▪ Its business strategy: Of particular importance to the investment community but also of interest to several other audiences, a company’s strategy is a key basis for investment decisions. Misalignment of a company’s strategy and investors’ expectations usually result in disaster.
Here are some great links around transparency.
http://www.socialmediaexplorer.com/social-media-marketing/what-happens-when-transparency-goes-wrong/
According to J.D. Lasica, cofounder of Ourmedia.org and the Social Media Group, there are three levels of transparency that an organization should consider when trying to achieve tactical transparency.
▪ Operational Transparency: That involves creating or following an ethics code, conflict-of-interest policies, and any other guidelines your organization creates.
▪ Transactional Transparency: This type of strategy provides guidelines and boundaries for employees so they can participate in the conversation in and out of the office. Can they have a personal blog that discusses work-related issues?
▪ Lifestyle Transparency: This is personalized information coming from sites like Facebook and Twitter. These channels require constant transparency and authenticity.
Create an Action Plan around policies and circumstances to promote transparency:
Holtz and Havens outline specific situations where tactical transparency can transform a business, some of which are outlined in this list.
▪ Major Crises
▪ Major change initiatives
▪ Product changes
▪ New regulations that will impact business
▪ Financial matters
▪ Media interaction
▪ Employee interaction with the outside world
▪ Corporate Governance
▪ Whistleblower programs
▪ Monitoring corporate reputation internally and externally
▪ Whistleblower programs
▪ Accessibility of management
Pivots – The Unholy Grail of Employee Engagement !
Most of you today have heard the word “pivot”. It has become a very ubiquitous word – it pretends to be something which it is not. And entrepreneurs and VC’s have found oodles of reasons to justify that word. Some professional CXO’s throw that word around in executive meetings, board meetings, functional meetings … somehow they feel that these are one of the few words that give them gravitas. So “pivot” has become the sexy word – it portrays that the organization and the management is flexible and will iterate around its axis quickly to accommodate new needs … in fact, they would change direction altogether for the good of the company and the customers. After all, agility is everything, isn’t it? And couple that with Lean Startup – the other Valley buzz word … and you have created a very credible persona. (I will deal with the Lean Startup in a later blog and give that its due. As a matter of fact, the concept of “pivot” was introduced by Eric Ries who has also introduced the concept of Lean Startup).
Pivots happen when the company comes out with product that is not the right fit to market. They assess that customers want something different. Tweaking the product to fit the needs of the customer does not constitute a pivot. But if you change the entire product or direction of the company – that would be considered a pivot.
Attached is an interesting link that I came across —
It gives examples of eight entrepreneurs who believe that they have exercised pivot in their business model. But if you read the case studies closely, none of them did. They tweaked and tweaked and tweaked along the way. The refined their model. Scripted.com appears to be the only example that comes closest to the concept of the “pivot” as understood in the Valley.
Some of the common pivots that have been laid out by Eric Ries and Martin Zwilling are as follows 😦http://blog.startupprofessionals.com/2012/01/smart-business-knows-8-ways-to-pivot.html). I have taken the liberty of laying all of these different pivots out that is on Mr. Zwilling’s blog.
- Customer problem pivot. In this scenario, you use essentially the same product to solve a different problem for the same customer segment. Eric says that Starbucks famously did this pivot when they went from selling coffee beans and espresso makers to brewing drinks in-house.
- Market segment pivot. This means you take your existing product and use it to solve a similar problem for a different set of customers. This may be necessary when you find that consumers aren’t buying your product, but enterprises have a similar problem, with money to spend. Sometimes this is more a marketing change than a product change.
- Technology pivot. Engineers always fight to take advantage of what they have built so far. So the most obvious pivot for them is to repurpose the technology platform, to make it solve a more pressing, more marketable, or just a more solvable problem as you learn from customers.
- Product feature pivot. Here especially, you need to pay close attention to what real customers are doing, rather than your projections of what they should do. It can mean to zoom-in and remove features for focus, or zoom-out to add features for a more holistic solution.
- Revenue model pivot. One pivot is to change your focus from a premium price, customized solution, to a low price commoditized solution. Another common variation worth considering is the move from a one-time product sale to monthly subscription or license fees. Another is the famous razor versus blade strategy.
- Sales channel pivot. Startups with complex new products always seem to start with direct sales, and building their own brand. When they find how expensive and time consuming this is, they need to use what they have learned from customers to consider a distribution channel, ecommerce, white-labeling the product, and strategic partners.
- Product versus services pivot. Sometimes products are too different or too complex to be sold effectively to the customer with the problem. Now is the time for bundling support services with the product, education offerings, or simply making your offering a service that happens to deliver a product at the core.
- Major competitor pivot. What do you do when a major new player or competitor jumps into your space? You can charge ahead blindly, or focus on one of the above pivots to build your differentiation and stay alive.
Now please re-read all of the eight different types of “pivot” carefully! And reread again. What do you see? What do you find if you reflect upon these further? None of these are pivots! None! All of the eight items fit better into Porter’s Competition Framework. You are not changing direction. You are not suddenly reimagining a new dawn. You are simply tweaking as you learn more. So the question is – Is the rose by any other name still a rose? The answer is yes! Pivot means changing direction … in fact, so dramatically that the vestiges of the early business models fade away from living memory. And there have been successful pivots in recent business history. But less so … and for those who did, you will likely have not heard of them at all. They have long been discarded in the ash heap of history.
Great companies are established by leaders that have vision. The vision is the aspirational goal of the company. The vision statement reflects the goal in a short and succinct manner. Underlying the vision, they incorporate principles, values, missions, objectives … but they also introduce a corridor of uncertainty. Why? Because the future is rarely a measure or a simple extrapolation of expressed or latent needs of customers in the past. Apple, Microsoft, Oracle, Salesforce, Facebook, Google, Genentech, Virgin Group, Amazon, Southwest Airlines etc. are examples of great companies who have held true to their vision. They have not pivoted. Why? Because the leaders (for the most part- the founders) had a very clear and aspirational vision of the future! They did not subject themselves to sudden pivots driven by the “animal spirits” of the customers. They have understood that deep waters run still, despite the ripples and turbulence on the surface. They have honed and reflected upon consumer behavior and economic trends, and have given significant thought before they pulled up the anchor. They designed and reflected upon the ultimate end before they set sail. And once at sea, and despite the calm and the turbulence, they never lost sight of the aspirational possibilities of finding new lands, new territories, and new cultures. In fact, they can be compared to the great explorers or great writers – search for a theme and embark upon the journey …within and without. They are borne upon consistency of actions toward attainment and relief of their aspirations.
Now we are looking at the millennial generation. Quick turnarounds, fast cash, prepare the company for an acquisition and a sale or what is commonly called the “flip” … everything is super-fast and we are led to believe that this is greatness. Business plans are glibly revised. This hotbed of activity and the millennial agility to pivot toward short-term goal is the new normal — pivot is the concept that one has to be ready for and adopt quickly. I could not disagree more. When I hear pivots … it tells me that the founders have not deliberated upon the long-term goals well. In fact, it tells me that their goals are not aspirational for the most part. They are what we call in microeconomic theory examples of contestable agents in the market of price-takers. They rarely, very rarely create products that endure and stand the test of time!
So now let us relate this to organizations and people. People need stability. People do not seek instability – at least I can speak for a majority of the people. An aspirational vision in a company can completely destabilize a certain market and create tectonic shifts … but people gravitate around the stability of the aspirational vision and execute accordingly. Thus, it is very important for leadership to broadcast and needle this vision into the DNA of the people that are helping the organization execute. With stability ensured, what then happens are the disruptive innovations! This may sound counter-factual! Stability and disruptive innovations! How can these even exist convivially together and be spoken in the same breath! I contend that Innovation occurs when organizations allow creativity upon bedrock of discipline and non-compromising standards. A great writer builds out the theme and let the characters jump out of the pages!
When you have mediocrity in the vision, then the employees have nothing aspirational to engage to. They are pockets sometimes rowing the boat in one direction, and at other times rowing against one another or in a completely direction. Instability is injected into the organization. But they along with their leaders live behind the veil of ignorance – they drink the Red Bull and follow the Pied Piper of Hamelin. So beware of the pivot evangelists!
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