Free the Radicals

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Free The Radicals

A friend recently sent me a link to a Chicago Ideas presentation by Alexa Clay, Leadership Lessons from King Pins, Hackers, Gangsters and Misfits. I highly recommend it.

Ms. Clay’s talk deals with leadership lessons from black market innovators, those entrepreneurs who drive the underground economy. The link to her talk was timely in that I had just read an article about inmates who have been escaping from the Federal penitentiary in Atlanta, buying goods and RETURNING to prison, bringing back liquor, cigarettes, cellphones and other merchandise to sell to their fellow inmates. Talk about dedicated entrepreneurs!

But her talk also resonated in that it aligns with something I have been thinking about a lot lately. What is the value to be gained from listening to the radicals, the misfits, the mavericks in established mainstream organizations? Most businesses have them to one degree or another. And they are more often than not overlooked, ignored, perhaps denigrated. That’s assuming they last long enough even to be noticed. (Remember Peter Gibbons in Office Space?)

One of the points in the presentation is that we need to talk to people who make us uncomfortable, people with radically different experiences and ideas.

I remember a piece in Fast Company from a decade and a half ago by Keith Hammonds, “Practical Radicals” (Practical Radicals). There is a great quote from the article:

“You know the sort: They operate deep within big companies, well beneath the cultural radar, and are practically invisible to the top brass. They are part of their organization, yet somehow apart as well, professional irritants who are tolerated more than embraced. They survive and persist: Employing many different styles and strategies, typically waging small battles rather than epic wars, they work slowly to change the rules.”

There is a tendency in organizations, especially bigger ones, and most pronounced in those that are highly bureaucratic, to expect everyone to conform to a standard code of behavior, thinking, image and persona. But it is this same mindset that leads to groupthink and a lack of innovation.

Some time ago I worked with members of a large government organization tasked with adopting best practices common to its private industry counterparts. I was impressed by the number of individuals in the organization, radicals in their own way, who were highly entrepreneurial, had innovative ideas to share, but were frustrated by a bureaucracy that largely ignored them.

We need to listen to the radicals in our organizations; the mavericks, the nonconformists, those whose ideas fly in the face of “business as usual”. They should feel empowered to share their ideas and perspectives. For they just may hold in their hands, or in their heads, the next great breakthrough innovation that could make all the difference in the world. We should not ignore them just because they’re different, because they don’t conform to “the norm”.

I would be delighted to hear your perspective on these issues as well as examples of radicals in organizations who have made a difference. Please drop me a line and share your thoughts.

Mike Cobb

For Want of Wonder

Gilbert Keith Chesterton, better known as G.K., once said: “We are perishing from want of wonder, not from want of wonders.”

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I think about this quote a lot. And when I think about it, it is in multiple contexts. I think about it theologically, as G.K. no doubt intended. But I also think about it in the context of the role that innate curiosity plays in driving creativity and innovation.

On its face, the quote can be a perplexing one, with double entendre and the interplay of “wonder” and “wonders”, not surprising from the man some called the “prince of paradox”.

But I believe there is a straightforward interpretation that should resonate in the programmed, information-saturated world in which we live and work today.

The quote raises all sorts of questions in my mind. Are we, by nature, a curious people? Or are we satisfied with the ordinary, with the status quo? Does the inundation of technology, information, protocols and programs work in favor of, or against, our curiosity?

I remember, as a kid, that I was constantly taking things apart to see how they worked … disassembling the toaster, the radio, taking the tubes out of the back of the TV (yes, TVs had tubes when I was a kid), usually to my parents’ chagrin. Some readers who are old enough will remember Crystal radio kits … I had one. All of these activities fed an insatiable curiosity, a desire to understand the world around us, with its many wonders.

The world is, indeed, filled with wonders, with curiosities. There is so much we don’t understand.
Curiosity, the desire to understand new things, “how things tick”, the wonders around us, is what drives creativity and innovation.

To paraphrase G.K. Chesterton, it will be our lack of innate curiosity, not the lack of curiosities around us, that will be our undoing.

For it is our curiosity that will drive us to push against the frontiers of knowledge and understanding, to create new things, to innovate. To push us beyond the ordinary, the status quo. To grow. Are you just going through the motions? Overwhelmed by information overload?? Is the day-to-day “stuff” and incessant noise getting in the way?? Maybe it’s time to slow down and force ourselves to take in the wonders around us, to look at things through an insatiably curious lens.

It will make a difference. Not only in the way we see things. But it just might lead to a breakthrough idea that would otherwise have eluded us.

Entrepreneurism and Free Markets

My professional life (if you don’t count selling Christmas cards door-to-door when I was a kid and, for a very short while, the most amazing and the last pair of scissors one would ever need to buy) began when I got out of graduate school. I made the transition from school straight into the corporate world as a dutiful and ambitious employee.

After a short stint as a bench scientist in the chemical industry, I moved into product development, heading up a group responsible for taking new products to market, most notably into the automotive industry.  Working for a couple of Fortune 500 companies did not help me learn about what it meant to be an entrepreneur.

It was several years later when the realization hit that I needed something different, that a part of me was yearning to “do my own thing”.  That was when I learned in stark, living color what the word entrepreneur really meant. I left the corporate life and started two businesses in succession. The first one was successful by most standards and was rewarding to me, both personally and financially. The other one tanked, largely due to serious undercapitalization and a rapidly changing market that we simply did not have the agility to respond to. Over the years, I started, led and grew several businesses, but it was these first two that really taught me the most about what it means to be an entrepreneur, about risk and reward.

Entrepreneurism, at its essence, is about balancing risk and reward. It’s about mitigating risk and enhancing reward through innovation and value creation. It’s about committing to practice much of what Adam Smith set forth, on a macro scale, in The Wealth of Nations. An entrepreneur must be able to leverage competition (which, after all, is the source of much risk but also drives innovation) to deliver value to the marketplace, the essence of marginal productivity.

But what happens when external constructs are created that militate against entrepreneurism and compromise the concept of marginal productivity? What are the effects, short- and long-term, on innovation and value creation?

Such external constructs can take many forms. On the risk side, external mechanisms that separate the assumption of risk from the reaping of rewards, that shift risk from the decision-maker to others, are not entrepreneurial. Modern day examples include bank bailouts and credit default swaps.

On the reward side, policies that enable, or in some cases encourage, rent-seeking, resulting in rewards without value creation, erode the concept of entrepreneurism. Rewards that are generated at the expense of others without adding value are not entrepreneurial and, at the end of the day, probably result in a net negative overall.

My strong bias is that over the years, the concept of entrepreneurism has been eroded by the creation of these external constructs that make it more difficult to realize rewards by creating intrinsic value balanced against true risk mitigation.

And, to further complicate matters, we live in an increasingly complex world. Complexity and lack of transparency in the marketplace further erode the concept of marginal productivity and entrepreneurism, running counter to what we learned, or should have learned, from Adam Smith. For example, how many buyers and traders of highly complex financial instruments really understand them? And if the buyers and sellers of a product fundamentally don’t understand it and, more importantly, don’t understand the underlying risk in the transaction, do such transactions contribute to, or ultimately erode, the concept of efficient markets, marginal productivity and entrepreneurism?

These are admittedly provocative positions. And you might not agree with my premise. The intent here is not to be provocative but, rather, to stimulate conversation that may ultimately shed light on the issues and, if you happen to agree with the premise, perhaps help us better understand how to deal with them in the future, for the sake of entrepreneurism. I would love to hear from you.

Lavish Perks Revisited

I recently read a report, “How Millennials Want to Work and Live”, published earlier this year by the Gallup organization[1]. The findings, resulting from extensive research, identified six changes that leaders must make to effectively lead those members of the workforce born in the eighties and early nineties.

While several noteworthy insights are contained in the report, some of which I will address at another time, one finding jumped out at me. It has to do with seemingly frivolous workplace perks provided by companies these days, what Gallup refers to as “bells and whistles.”

I touched on this a few weeks ago in an article entitled “Why Google hands out such lavish perks—It’s not just for the team”. That article cited numerous examples of companies, from Google and Spotify to Clorox and Gap, that realize the value of these perks in providing an environment that fosters creativity and innovation. In other words, there is strategic substance and purpose behind the “bells and whistles.”

The Gallup findings suggest that millennials are actually turned off by such perks. On the surface this may seem contradictory to my view of their importance to forward-thinking companies. However, upon digging deeper, you will find that what millennials are seemingly objecting to is not the perks themselves, but the way they are presented and valued by leadership. When they are provided simply as a means of creating job satisfaction, they will indeed come across as frivolous and condescending. The report emphasizes strongly that millennials want a sense of purpose, mission and a laser-beam focus on personal development. In this context, perks, be they ping pong tables, abundant food or musical instruments, will ring hollow if their reason for being is merely workplace happiness. This is, as pointed out by Gallup, a leadership mistake.

On the other hand, if these perks are an integral part of an overarching purpose-driven strategy of stimulating creativity and innovation, which is also directly related to personal development, it is my contention that they will be embraced.

It is incumbent on leaders to understand the difference. At the end of the day, it’s not the perks themselves that are the issue but, rather, why they exist and how their value is communicated to the workforce.

[1] “How Millennials Want to Work and Live”, Gallup Inc., 2016

Why Google hands out such lavish perks—It’s not just for the team.

Visit any Google campus, from Mountain View, California to Dublin, Ireland, and you will be struck by the efforts the company has made to create a fun, spirited, sensory rich environment. Replete with ski gondolas in Zurich, a sidewalk café in Istanbul, vegetable gardens, even nap pods. Lego Play Stations and Tinker Toys. And plenty of free food and snacks, including M&Ms.

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And Google is not alone. At Spotify’s New York offices, team members are provided with musical instruments and Marshall amps, gourmet snacks, ping-pong tables, crayons and colored markers. They even have a house band and encourage frequent extemporaneous jam sessions.

While such things may at first seem like frivolous assaults to our business-minded sensibilities, they are in fact highly effective in fostering creativity and innovation. And it isn’t just high-tech companies that understand this. Even the likes of Clorox and Gap have embraced similar concepts to stimulate creativity in the workplace.

Bernie Dunlap, the former president of Wofford College, once said “What we need, if we are to be creative, is an innocent eye.”

This quote reminded me of the seminal work of Eric Berne, the father of Transactional Analysis. His “Parent-Adult-Child” (P-A-C) ego-state theories of human interaction are still, six decades later, used across a broad spectrum of applications. Not only in clinical psychology and interpersonal relations, but as they are refined and further developed, they are bringing new organizational and leadership dynamics in business.

In highly authoritative, hierarchical, “command and control” organizations, the prevalent interactions are Parent-Child, whereby a vested voice of authority exercises control over a subordinate. The predominant themes are telling, ordering, controlling, derived from what are sometimes referred to as “taught” concepts traced back to our experiences from early childhood. In the early 20th century, many companies used this, especially as servicemen returning from active duty in the military expected their commands to be followed explicitly.

In highly effective organizations, the most prevalent day-to-day business interactions are Adult-Adult, whereby decisions are made collaboratively through logical, fact-based reasoning, derived from what are referred to as “thought” concepts. This is the root of organizational empowerment.

However, highly innovative organizations understand the power of the “Child” ego state in nurturing creativity. It is when we are in this state that we are most imaginative and inspired.  This is the wellspring from which free-flowing, unrestrained and original ideas germinate, ultimately resulting in innovative new technologies, cutting-edge products and market disruptions. Successful innovative companies create environments that nurture interactions among these highly creative ego states.

This is precisely what Bernie Dunlap meant when he referred to the roots of creativity lying in an “innocent eye.”

So what is the best organizational dynamic for highly successful, innovative businesses?

It is an environment where day-to-day decisions and actions occur through Adult-Adult interactions AND where opportunities are created for meaningful Child-Child interactions to spur new ideas and innovation.

The dynamic that is clearly not appropriate for successful organizations is Parent-Child. Unfortunately, either this fact is lost on the majority of today’s business leaders or, more commonly, it is acknowledged but not committed to practice. Old habits and paradigms are hard to change.

Here are a few questions that should run through every CEO’s mind.   In the spirit of Eric Berne and the principles of Transactional Analysis, how does my organization stack up? Is my organization’s leadership style more Parent-Child, or are its members empowered to make collaborative decisions through Adult-Adult interactions? Is a nurturing and safe environment provided for creative ideation from the Child ego state?  How can I lead my team in applying these principles to enhance the effectiveness and success of our company?

In 1964 Eric Berne published Games People Play: The Psychology of Human Relationships. His intent in writing the book was to convey the concepts of Transactional Analysis in a way that the layperson could understand and commit to practice. This groundbreaking bestseller is as applicable today as it was fifty years ago. It’s a good place to start if you haven’t read it and would like to learn more.

What David Bowie Said About Innovation

The world lost a legend last week.  And whether you liked his particular genre of music or not, there’s no doubt that David Robert Jones, aka David Bowie, relentlessly extended the boundaries of his craft and was a true innovator. He was masterful at taking seemingly disparate ideas from many sources and synthesizing them into a unique art form.

I have known his work for years but was not aware until his death that one of his quotes captures the essence of what I have worked hard to convey to clients throughout my career.

“If you feel safe in the area you’re working in, you’re not working in the right area. Always go a little further into the water than you feel you’re capable of being in. Go a little bit out of your depth. And when you don’t feel that your feet are quite touching the bottom, you’re just about in the right place to do something exciting.”

We’ve been told the importance of getting out of our comfort zones. That’s where true change occurs. That’s where “something exciting” happens.  Yet, so many of us stay in familiar places and expect drastic changes.

The struggles begin when we endeavor to commit such a fundamental concept to practice. One of the reasons is that we cannot see how far beyond the boundaries of our comfort zone that we dare stray.   An inordinate fear of risk can overwhelm and keep us in the same rut as yesterday.  What is an acceptable balance between comfort and risk?

I am reminded of a cartoon that you have undoubtedly seen:

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While I understand the message it is intended to convey, I struggle with this image. My issue is that, while it “feels good,” it does not address the fundamental problem of balancing comfort and risk.  How can one move from the comfort zone and not stray into an area of risk that cannot be controlled?  The message becomes mixed. Magic happens “out there” but how do I get there in practice?

David Bowie addressed the issue eloquently when he said “when you don’t feel that your feet are quite touching the bottom, you’re just about in the right place.”

Where we should live, I believe, is right outside the boundary of our comfort zone, pulling and pushing it ever so further outward and expanding it in the process. That’s “just about the right place” to effect change, to do exciting things, without undue, uncontrolled risk. And as this happens, we will find that we are going progressively further and further “out of our depth”, expanding boundaries and achieving greatness.

Risk and Innovation

T.S. Eliot once said, “”Only those who will risk going too far can possibly find out how far it is possible to go.”

Innovation is about pushing boundaries. It’s about venturing from the world of the known to the world of the unknown. It’s about uncertainty. It’s about risk-taking.

Many CEOs like the concept of innovation and will go out of their way to talk about it. But they often fall short of committing their words to action because innovation is risky. Most innovative ideas fail, and rather than risk failure, business leaders would prefer to keep doing what they’ve been doing. There’s comfort in the status quo, especially when the company’s in a profitable stage.

Early-stage ventures, more often than not, must innovate to survive. But as these companies grow and progress through the business life cycle, their focus changes from innovation to protecting what they have by avoiding risk. This is a sure formula for ultimate extinction. If you’re not changing you’re dying. We have been unable to find a single company that survived by standing still.

Perhaps the most compelling lesson of risk aversion can be taken from the story of Kodak. When George Eastman founded the company in 1888, he was taking a big chance on something no one knew would work, let alone be a huge commercial success. He was brash. He was bold. He was innovative. He took a big risk but it paid off.

For decades, Kodak was on the cutting edge of innovation. Few companies can make that claim. And while Kodak is primarily known for pioneering film photography and home movie making, we must not forget that the company literally invented digital photography. In the mid-seventies, a Kodak electrical engineer named Steve Sasson pushed the boundaries far beyond the company’s core technology and developed a system to capture an image and display it without the use of film. It is worth noting that Sasson was in his early twenties at the time. It took twenty years for Kodak to refine the technology and take it to market, with the launch of the DC40 in 1995. This was years before most others got into the game. But Kodak never leveraged its early market position and was soon overtaken by new entrants.

In 1962, the company employed 75,000 people and by that time had exceeded $1 billion in sales. By 2012 the company was bankrupt. So what happened? In a nutshell, Kodak failed to continue to innovate and take risks, while others did. Its rivals continued to innovate, with such things as enhanced megapixel resolution, face and smile detection, red eye fixes and consumer appealing camera designs. Kodak found itself always trying to catch up, no longer a technology leader but a late adopter.

The root of Kodak’s failure to capitalize on its early momentum in digital photography lies in the fact that it went to great lengths not to cannibalize its core business. Kodak’s leaders were dependent on the rich profits from their bread and butter 35mm film business and worked hard not to endanger them. In short, they sacrificed innovation for the status quo, unwilling to accept that the days of film were numbered. And as a result Kodak was out-innovated and ultimately defeated by its rivals.

It took one hundred years for Kodak to go from cutting-edge innovation to Fortune 100 success to bankruptcy. One wonders where the likes of Apple, Google and Tesla will be in a century. The answer lies in their relentless commitment to continual innovation and risk taking. Constantly changing. Not accepting the status quo as a given. Not protecting what they have at the expense of where they can go. And never standing still .