Hot spots are places where we see unusually large amounts of innovative activity. Silicon Valley is the classic hot spot, though it is not the only one. Over time, folks have taken to copying what goes into a hot spot. Here are a few of those elements
- problem solving cultural bias this means developing the expertise to see the world in light of skills and knowledge that unlock opportunity)
- the university is the classic place where we teach this — or are supposed to do so. To make it so, the university must provide a place where credible expertise is built on a regular basis.
- people with problem solving skills need to be rewarded
- places for idea generation (strategic thinking that leads to attempts to try new things and build groups around those trials)
- support to take idea to product or service (support includes community, finance and attention)
- expertise on scaling ideas (taking an idea to a larger market is not easy)
- tracking success and learning from failure
- story lines that strengthen the culture
By and large, we think of strategy in either one or the other terms. We are either talking about how I can achieve something, or we are talking about how we can achieve something.
In fact, the two are inter-related. We do not form a “we” until I am satisfied that becoming part of “we” suite me. And I cannot achieve very much alone, so my individual strategies by and large involve dealing with groups.
And yet, we do not think very systematically about how this interchange works. Advisors and teachers either focus on how to realize your own potential or how to get along. Not how to do both at the same time.
In the old days, this was not all that important. We were by and large, coerced into being in groups. That would include being citizens, employees, and so on. Indeed, in the ancient Greek way of thinking, there was no greater punishment than banishment – being cast out of the group.
But these days, we see the rise of networking and platforms. We join and leave groups more frequently. Groups therefore, have less of a hold on our precious attention.
I think it is time to develop a model for how the two should interact. With a model like this, we can get beyond talking about “labor markets” and start talking about “idea markets” based on shared interests.
Adam Grant is the Wharton professor who argues that kindness works better than toughness. Of course, he is right – for most of the time. There are times when tough clarity is needed. The problem is that we — as humans — tend to believe in it too much.
Adam has a new book out called “Originals” and in it he makes another non-intuitive argument. That is, being self-critical is actually more persuasive than being aggressively persuaded of how right you are.
This makes sense to me. The intensity that we show when we think we are right tends to come out as assertion. And we know that assertion is the least persuasive form of communication. On the other hand, questioning ourselves invites the other people around you to join in and build a storyline.
And strategically, you need to be thinking more about what needs to be true for your idea to work rather than persuaded that it will work no matter what.
I am listening to Bob Sutton and Huggy Rao chat with Dan Pink in his Office Hours podcast. They are talking about their book on scaling and the chit chat produced an idea that fits into our thinking here.
Strategic thinking is about managing for the future. And we hope that the future will be bright – fantastic – amazing. That is our vision. But to get there, we need to live through a countless number of tiny realities. Each of these tiny realities have “ripple effects” into the future.
To better see what ripple effects are occurring around what you do, you need to manage your cognitive load. You cannot be overwhelmed by detail. In that sense, scaling is a subtraction process not an additive one.
This is what focus is all about.
Peter Drucker made this comment long ago(On the Profession of Management, The Theory of the Business)
The root cause of (many business crises) is not that things are being done poorly. It is not even that the wrong things are being done. Indeed, in most cases, the right things are being done – but fruitlessly. What accounts for this apparent paradox? The assumptions on which the organization has been built and is being run no longer fit reality.
When this happens, it is no longer possible to consistently assess what is a meaningful result. Put another way, it becomes impossible to judge what is the minimum necessary in a given situation. When that happens, the organization over- invests in certain things and under-invests in others. It burns up capital rather than efficiently deploy it.
Understanding this is a predicate for understanding what strategic thinking is all about. That we need do no more than the minimum required to win in a given situation. We dare do no more or we exhaust ourselves.
Business strategy is based on the concept of “value added”. If I can add value for a buyer, I may get a sale. It sounds so simple. And yet, it drives huge flows of capital and is behind the enormous work of millions in our global economy.
But here is the weird thing. We really don’t know exactly how to predict what adds value over time. If we did know, there were be far fewer business failures. And because we do not know, we talk about risks in the market.
In the old days, this was simpler. Goods were in relatively scarce supply. Producing more and cheaper goods added value. But goods are scarce only in some places. So in Zimbabwe, a young entrepreneur can do well producing simple things.
So how to measure value added in a setting where goods are not in scarce supply? In this setting, the relative value of goods depends on their connection to a story. If I believe in the need to do something, like climb a mountain, the relative value of mountain climbing gear for me goes up. If I believe in the value of reading a given book, the relative value of that book goes up.
I have identified two elements of value added – belief and implement. The two are interconnected. A stronger belief will lead to a greater need for implements. The best business strategies build stronger beliefs and better implements for the most important ones.
Remember that strategic thinking is what we do when we do not know the right answer. While we cannot know in advance which stories will emerge, we can become more sensitive to how people talk about their beliefs and how they realize them.
Over the past year, I have been working with a partner to develop digital marketing tools. One of the more interesting aspects of this work has been our experience from trying to sell these ideas to folks who are not interested in change. I other words, dealing with zombies.
I am reminded of research that showed only around 30% of the folks in salaried jobs are actually engaged in what they do. That means 70% or so are just there for the paycheck. And that 70% is not going to be thrilled about change. They are more likely to see change as a threat or at least as something that will force them to learn new skills. And often, they will be decision makers in the chain of command or have influence on decision makers.
I suspect that this simple fact has a lot to do with the rate of innovation around us. It is slower than it could be, and slower than it will be when the engagement rate starts going up from 30% — let’s say to 50%
In the meantime, our strategic thinking should take into account that no matter how clever our idea is, it is likely face headwinds from the zombie crowd if it involves a change in how they do stuff.