Leading Through The Fog: Scott D. Anthony, World’s 7th Most Influential Mgmt Thinker by Thinkers50

In 2021,  Scott D. Anthony, was named the World’s 7th Most Influential Management Thinker by Thinkers50. Today’s turbulent times present unique and persistent challenges. Leaders are in a thick fog. Data to justify a decision comes in when it is too late to decide. Yesterday’s strengths become tomorrow’s weaknesses. Seemingly conflicting demands – purpose/profits, life/work, empowerment/decisiveness, meritocracy/inclusivity—feel paralyzing. When the fog of uncertainty descends, it is natural to want to slow down. The right mindsets, mental models, and approaches can allow leaders to navigate disruptive change, and own the future.

Scott D. Anthony is passionate about helping individuals and organizations thrive in today’s world of never-ending change. He is a Professor at the Tuck School of Business at Dartmouth College, where he teaches a course called “Leading Disruptive Change,” and a Managing Director and Managing Partner Emeritus at Innosight, where he helps leaders design new growth strategies, build innovation capabilities, navigate disruptive innovation, and manage strategic transformation. 

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Transcript

Hi, I'm Leon Goren, president of PEO Leadership, a peer-to-peer leadership advisory firm. We're an amazing community of CEOs, presidents, and senior executives. Ask yourself, are you learning as fast as the world is changing? It's time for Ontario business leaders to band together for counsel and support. It's time for you to tap into the business wisdom of our peer groups and unlock new ways to grow. I want you to come out a better leader and your organization ready for what's next, take the first step at PEO-leadership.com.

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Mr. Scott D. Anthony, in 2021, was named the world's seventh most influential management thinker by Think 50. He's a professor at the Tuck School of Business at Dartmouth College. He's the author of eight books, two of which - Eat, Sleep, Innovate and Dual Transformation - went to New York Times bestsellers. He's an expert on how forward-thinking organizations can navigate disruption and change to win. Ladies and Gentlemen, let's have a big PEO welcome for Scott D. Anthony. 

I stand between you and drinks at the end of the day, and I recognize that. I'm going to keep things moving. We're going to have some fun together. I have a task for you right now: look at the people that you are sitting with. If you don't like them, please move to another table because I will be asking you to do things at your table. If you're sitting by yourself, please find friends in other parts of the room because we are going to be doing some table work as we go through this discussion, and it's not that fun to do it on your own.

So let me bring you to here. Let me tell you just a little bit about my origin story and some of the inspiration for the material we'll be going through today. Again, I'm going to be moving pretty quickly. We're going to have a bunch of different activities. It's going to be interactive. I'm going to bring some of you up on stage. Don't worry, none of you are going to be dancing today. That was just last night. Nothing today, but you will be doing some things as we go through this discussion about leading through the fog.

So let me tell you the story behind that disruptive innovation. So I did my undergraduate studies at Dartmouth College in Hanover, New Hampshire. I'm not sure if any of you have ever been there before. The pictures here are from Dartmouth College a few weeks ago. It's a very small school in the northeast of the United States. It's about 2 hours away from the nearest town. While I was there, I took my studies very seriously, and I was also active in the school newspaper.

Now the town was small, about 5,000 people in school wasn't in session, 10,000 when it was in session. So we had to work pretty hard to find stories to cover in that newspaper. I associated with some of the stories that were told yesterday because one of our big headlines: "Moose Runs Loose in the College Cafeteria." This actually did happen one year. Or how about this one, "Town Considers Adding a Second Stoplight." They did it. It was transformational to the town of Hanover.

Now I was a student from 1992 to 1996. That was a very important time if you're in the newspaper industry. Why? What happened during that time period? What new disruptive technology was introduced? I'm going to be doing a lot of this simple call and response, so just yell it out. The internet. The internet actually traced back to the late 1960s as a way for universities and defense departments to communicate. The Netscape browser, the first tool that allowed the layperson to access what we now call the worldwide web.

There we were, a leadership team at a small organization facing a big disruptive change in our marketplace. We were students; we could do whatever we want, but we didn't. We didn't reinvent; we didn't reimagine; we didn't replicate. Instead, we did what almost every large organization does in the face of disruptive change: we paused. We're a very small newspaper. I explained in a story written in 1995, and we have a lot of competing priorities. When disruption comes, it's very easy to allocate resources to doing what you used to do, not what you should do.

Then when we finally got over that and went on the web, did we reinvent or reimagine? No, we did what most organizations did: create word for word, pixel for pixel replications of that print newspaper online. This is the challenge of disruptive change. I didn't have language for it when I graduated from college, but I did a few years later.

I went after college to go work for a consulting company for a couple of years, went to a startup that blew through a billion dollars. Different story for a different day, and then found myself at business school. My second year, I took an elective class that was taught by Clayton Christensen. Anyone recognize that name? Just show of hands. So I got about 40% of the room here. So if you don't know the name of the person, you might know his ideas. In 1995, he wrote an article, "Disruptive Technology Catching the Wave." In 1997, he wrote a book, "The Innovator's Dilemma," followed by "The Innovator's Solution," "Seeing What's Next," and a range of other books.

The idea of disruptive innovation traces back to Clay and doctoral research. He was my teacher in class. I stuck around after business school for a couple of years to lead his research activities. We co-authored a book together. Then in 2003, I joined a consulting company that he had founded called Innosight, specifically focused on helping large organizations navigate disruptive change. Finally, one of those books that you heard, 2017, "Dual Transformations." I thought we were done. "Dual Transformations" gives our answer to the challenge of disruptive change, and it's all there. It's clear. We know exactly what you need to do in the face of disruptive change.

Yet, yet, 30 years since the first academic article was written, disruptive change has proven to be a remarkably persistent problem. People still struggle with the innovator's dilemma. Why is that? I wondered. 2019, I did something a little strange as a 45-year-old. I went back to school. I enrolled; I was living in Singapore at the time. I lived there from 2010 to 2022. I enrolled in a program at INSEAD in Singapore called Executive Master in Change. This program taught a field called systems psychodynamics that is essentially the intersection of business and psychiatry to try and understand what really goes on inside individual team, group, and organizational dynamics.

I saw then, at the intersection of these two fields, strategy and innovation from Clay and his research, systems psychodynamics, the fundamental challenge that we face inside organizations. We are indeed living in a world of perpetual change. We are indeed living in a world of predictable unpredictability. It's like this dense fog has descended on us. When fog descends, the natural human tendency is to slow down. But we have to figure out a way to speed up even though every single part of us doesn't want to do that.

So what I'm going to talk about during our time together today is how, in essence, you do that. How you can find opportunity in ambiguity, how you can turn threats into opportunities, how you can go and, when that fog descends, rather than slow down, go and speed up.

Let me start by tuning in a little bit to what's going on in all of your worlds. And the way I'd like to do this is with a simple image association activity. We're going to be using the technology we kind of used in the last session, Slido, but we're going to be using it a little bit more interactively, I think. So what I would like you to do is take out your phone or a device or something you can scan the QR code here, or you can just go to www.slido.com. And when you get there, you can use the event code "fog." FOG. I'm going to make this live on the screen here. And the question is, which of these nine images do you associate with today's business environment? Okay, let's talk as a big group. So I'm not going to have Q&A at the end. We're going to integrate it as we go through the discussion. So would love a couple of people to share the image that they picked and what they saw in it. And I will be your mic runner. Gets me some steps. I like that.   

So, a couple of volunteers. What image did you pick, and what did you see in it? Thank you. I like your shoes. Thank you very much. I picked number two, which didn't even score up there, which was the rocket ship. And I look at today's business environment as absolutely brimming with opportunity and cool new things happening, and I mean just a world of growth. That's how I see the world. So that's the environment I swim in. 

Thank you. Disruption creates dilemmas. Disruption also creates opportunities. David:

Number nine. I feel like I am the captain of that ship right now, and it's a lot of fun going up and down and wondering if I'm going to make it to the next wave. 

You know, it's very interesting. I've done this activity all around the globe, and people always see different things. Usually, people will see what David has described here, which is the ship is going up and down. I was with one group once, and they said, "I picked number nine." I said, "Why?" They said because I'm very optimistic. I said, "Okay, tell me more." And they said, "Well, I really believe in sustainability, and in that picture, there's water, there's electricity, there's wind. It is a completely green image. This is our future." So we see what we want to see in these things.

All right. We have gotten warmed up very nicely. You are like most groups. There's a lot of stuff going on in the world. You don't need me to tell you that. That has been a theme of the discussion throughout this conference. What do you do in the face of it? It's incredibly hard. So I'm going to now talk about three particular paradoxical challenges that you face in the fog of predictable unpredictability and talk about specific things that you can do in the face of those paradoxes.

So what I'm going to do is start with a story, and I'm going to use a video clip to explain the story. I'm a little nervous, I have to admit, using this clip here. I've used this clip in many other places, but I've not used it in Canada before, so I'm curious to see how it goes. This clip is from the year 2008, so go back in time to one year before this clip, 2007. What interesting things happened in the world of technology in 2007? So I heard it over here. Begins with an "i" - iPhone. Yeah, so the iPhone was introduced. So Apple enters the industry. Steve Jobs announces, Apple launches the iPhone. Google also goes into the industry - the Android operating system and the Open Handset Alliance. These are two new attackers in the industry. Of course, they're not the market leaders at the time. We know who the market leaders were. 

April 2008, Jim Balsillie goes on TV and gives his view of the world. Let's remember. Some of you might have seen the movie "BlackBerry," so you will recognize this and will remember the story. But let's see how it looked through his eyes in April 2008.

Hey, everybody. Say hello to Mr. Jim Balsillie. Wow. How is it that you have the same one that I have? Shouldn't you have some fancy James Bond version? 

You're living the dream, man. 

That is...doesn't even have a camera. You don't have the camera one. How are things going? 

Things are really good, thanks. Yeah, excellent. 

Did you imagine - I mean, all the things have sort of changed in your life in the last 10 or 15 years. 

A lot less has changed than you would think, really. Very normal life kind of...it's just a whole lot more zeros on everything. 

Yeah, which is great if the decimal points in the right place, you know. 

The great fun is doing what you do every day. So, yeah, I'm not sort of a poster child for not sort of doing anything but what we do every day. So, yeah, I don't really think about it a lot. No, 

I mean, do you get the sense that at this point with what the BlackBerry itself - that device has done for your company that it's a matter of time before other people like the iPhone didn't really do it? I mean, like, do you ever look at it and go, "What are we going to do if this isn't our primary business, growing RIM beyond something like a BlackBerry?" 

No. Roughly die. That'll just be we're a very poorly diversified portfolio. One, it either goes to the moon or it crashes to Earth. So, but it's making it to the moon pretty good. So, sure, totally. Stay with it.

I mean, he was right. It either goes to the moon or it crashes to Earth. He didn't expect the outcome that, of course, happened. Research In Motion stock price down 97% since that video aired. Now, it's very easy Monday morning quarterbacking or equivalent to say this is somebody who got smug and arrogant and dismissive and all that. Let's have some empathy for leaders who have to make decisions through uncertainty. Imagine you're Jim Balsillie. It's April 2008. You're making decisions about the future. What data do you turn to? Why is he smug and dismissive? He's not actually blind at the moment. The iPhone's out there. But what is he looking at to try to determine the threat that the iPhone places? How do you, as a leader, what's on your dashboard? What do you pay attention to?

Market share. The iPhone, when it came out, the movie had this background. The iPhone was not an overnight success. In fact, in the first year, sales were pretty middling. It was a very high-priced device. There was no App Store in the early days. So there were a few people who really loved it. But market share still looked really good in April 2008. What else do you look at? Where do you get data if you're a leader trying to make a decision? Who do you talk to? Talk to your customers. And who were the customers for Blackberry back in 2008? Businesses. So you go to a CTO or CIO. What signal do they give you? Do they say, 'Yes, of course, we're going to switch to an unsafe device that eats up all the bandwidth that exists in the world, or are we going to keep using this amazingly efficient device that you can remotely manage?' They're not going to tell Jim that they want to switch. 

 This is the fundamental challenge you face in the fog of disruptive change. The data can deceive you; your customers will mislead you. The stock price for Research In Motion was up 70% in the last year when that video aired. This is the information action Paradox. There's an inverse relationship between the amount of data that you have and the freedom to act. When a new technology is introduced or developed, you can do whatever you want, but there's no data to justify doing this or doing that. How does the data get created? Because people do stuff. Elon Musk goes and launches another company. You have people that go and get customers. The technology develops. At some point, it is perfectly clear. The Paradox: by the time it's perfectly clear what you need to do, it's too late to do anything about it. So what do you have to do as a leader? You have to act when the data tells you not to. That doesn't mean you ignore data, of course, but you have to find the faint signals. You have to amplify them. You have to learn to sense-make about the change taking place in your industry.

A couple of tips for doing this: First, look for the early warning signs of disruptive change. We talked a little bit this morning about Blockbuster. Went by pretty quickly about the challenges it faced. One of the things that really got our alarm ringing about Blockbuster is the fourth thing you see on the signpost here: business model innovation. When you see customer loyalty declining, it means there's space for someone to come in and do something different. When you see venture capital funding going to a space, you've got the possibility. When you see an entry coming in, you begin to see change happen. But when someone comes in with a fundamentally different business model that lowers the price point at which someone can prosper, that goes right after the main profit driver of the market leader or something that rearchitects R store. Blockbuster made a brand promise to customers. When they walked into a Blockbuster store, what type of movie would that be? It's the name of the company. You would see a blockbuster. This is not selling long-tail content; this is selling all the movies that people wanted to see at the time. Now, challenge: the stores were small. If you were going to promise that those movies were going to be there, and you couldn't have infinite inventory, what would you have to do? You had to make sure the customers would return those movies. And how would you do that? Late fees, late fees, late fees. That's how Blockbuster made all of its money, made all of its profits. When Netflix started, it had the same model. It was DVDs versus videos; it was through the mail, so that was different. But you get one; you hold on to it; you hold on to it for too long; you have to pay late fees. The same damn thing. When Netflix switched to a subscription model, then you say, 'Okay, something is happening here,' because Blockbuster had no hope of responding because it would decimate the business that it knew and loved. So that is a historical example. There are lots of them, and we know them well. 

Would love to get your viewpoint about what is an in-process example. So I'm going to go to my phone here, and I'm going to open up another question. I'm going to make this one live. There it is already. So if you had the slider open on your phone, you should be there automatically or just refresh it. The question for you, and we make a little word clab with this, and I think I'll have it pop up as people type things in: what company looks strong now but will be disrupted by 2028? And I see that you have typed in the name of the Slido code, which is pretty cool, but I don't think that's what is going to be disruptive. All right, so we're beginning to get some things in already. So Google has popped up a couple of times; a lot of people are wondering, as artificial intelligence, which Microsoft has done a very good job of being ahead of on the technology, as that begins to come up, how will that affect Google? On the flip side, OpenAI, a very hyped company that's done some very interesting things, often when you have new technologies come into the market. It's not the first, Google was not the first, second, third, fifth, 10th, 15th search engine. It was the 18th major search engine to enter the market. It was the one that figured out the business model, AdWords and AdSense, that allowed it to prosper. The same thing could be true with OpenAI. Tesla, who put Tesla, who wants to explain why they're skeptical of Elon? A few of you put Tesla. 

See, it's a great question and a great thing to contemplate. So you could hear it on the other side of the room. The response was they got there early, but a lot of the big car manufacturers are getting there now. I am actually quite skeptical of the big car manufacturers because the essence of Tesla's disruption is really a mindset. It's software versus electrical engineering, which is a really hard change for a large organization to make. Tesla also got rid of the dealer network, so it goes direct. Those things are hard. If I was Elon Musk, well, that would be an interesting thought experiment, but if I was running Tesla, the thing that I would be worried about are the Chinese right now. Electric vehicle sales are already 50% of the market in China. BYD is one of the big players. Warren Buffet's an investor in it. You have a huge ecosystem that's growing there. Elon Musk would say, 'I actually don't care because my goal is to drive the advancements of electric vehicles. So if it's not me, that's still a good thing for the world.' But that's a very interesting one to watch. 

 All right, so a lot of organizations that we have to be thinking about that could face some potential troubles. So the first thing you do is you amplify the weak signals. But to do that, you have to have the weak signals. So how do you begin to get a sense that a market is changing? The general guidance that I give people is they ought to follow the advice from the great science fiction writer William Gibson, who once said, 'The future has already arrived; it's just not very evenly distributed.' As a leader, if you want to get signals of industry change, you want to find ways to experience tomorrow today. What does that mean? You go and touch the future now because it's happening, but it's happening at the fringes, at the periphery. Now, when I say that, experience tomorrow today, what does that mean to you? Where do you go, to who do you spend time with? What do you study if you want a glimpse of the future? How do you experience tomorrow today?

Say, go back to your customers. So go to your customers, and if you go to customers, the ones you should go to are the ones who are at extremes. So either the ones who you can never meet, what they're asking for, the ones who really don't like you that much, the ones that are in the highest price and the lowest price, the ones that are in the extreme environments because often those extreme environments are places where people will experiment. Eric Von Hippel from MIT calls this 'lead user innovation,' and that can be a great way to see what might be coming. What else? Where do you go? Who do you spend time with if you want to experience tomorrow today? Next generation, next generation. There are three types of comments a client once taught me. There are really good comments you've got a ready response for, they're really interesting comments where you hope the heavens give you an answer, and there are outstanding comments because the next PowerPoint slide goes and explains exactly what the person said. The next generation, the easiest thing that I do to stay in touch with the future is to spend time with my children. 

There they are, the four Anthony children. Let me go left to right and explain what I'm learning from each of them. First, on the left, my newly 18. He turned 18 yesterday. My 18-year-old son Charlie, he's teaching me about decentralized finance. Back when we lived in Singapore, he was the co-founder of a cryptocurrency company called Espara. The idea Espara was to create a coin that would unify different gaming markets. Now, did I think a bunch of then 16-year-old kids was going to solve this problem? No. Was I very happy that one of Charlie's friends had a very rich father that bankrolled this? Yes. Did I watch very carefully and try and learn alongside Charlie? Absolutely. And it showed me how most people look at crypto as a place to go and speculate and make investments. There are fundamental forces that are going to change finance transactions, contracts, and a range of different things. My 15-year-old daughter Holly, she is a digital artist. She likes to draw cats in this particular style. She has followers on a couple of different social networks, a couple of hundred on each. She takes commissions, one to two US dollars to get a picture drawn. She's earned about $300 US. Now, I will admit, about half of that has come from the Bank of Dad, but half of it has not. And it showed me how the democratization of media is still in its very early days. The distribution and production of content are going to continue to change in very significant ways. My 12-year-old boy Harry, well, he has been my guide to the metaverse for years. This is him a few years ago with his Oculus RI viewer. You'll see him on this or on his iPad going to Fortnite or Roblox or some other virtual world. You can see the line between the physical and virtual that's beginning to blur. My seven-year-old son Teddy, well, I'll be honest, there isn't anything I've really learned from him, but he's super cute. For today's picture, I decided just to fit the theme of the event, I would show him on a vacation we took last summer. That's him with his cousin Luke, the big pig there who won the trip to the Bahamas. That person in the room that is Exuma Island in the Bahamas. You get to see these gigantic pigs that do sorts of things that make kids laugh a lot. I won't tell you what they are, but anyway, there's Teddy. The thing that I do comment on about Teddy is he's got the kind of vibrancy and exuberance that is very natural for you, something that I hope he never loses, something that I try to learn from all the time. Piece of advice, parents: if you have kids, spend time with them. If you don't have kids, find non-creepy ways to spend time with young people because the young people will be the reliable guides to the future. As you're spending time with young people, don't just watch them. Use new technologies. Do it along with them. Experience tomorrow today. Pick it up and play. This is one thing that my students now that I teach at the Tuck School of Business at Dartmouth College have really been struck by. I teach a class called Horizon Scanning. I have students do this. I tell them to go experience an edge technology. The thing that they remark every single time is using is very different than reading about. So they all have read about X, Y, and Z, but actually going and playing with it teaches them things they could not imagine.

So let me do something with all of you. Let me see how you are doing at experiencing tomorrow today. I've got another quick little poll question for you. Let me make this one live, so there's nine technologies that are pictured here. How many of them have you personally experienced? I'm nine for nine. So DNA diagnosis, I did that a few years ago using 23andMe. I learned that I had DNA that was consistent with elite endurance athletes, and I cursed my parents for sending me to math camp when I was young. I rode an autonomous vehicle when I was in Singapore. I watched eSports getting ready for a presentation in New Zealand a few years ago. I've 3D printed myself, which is kind of weird, but there you go. We did immersive VR at a team outing a couple of years ago. I got paid for a speech once with a non-fungible token. I still haven't figured out exactly what to do with that, but I've got it at least. I like plant-based protein. I fly drones over neighbors' houses sometimes. And I'm actually not here; this is a ChatGPT-created presentation. So I have managed to do all nine of them. Let's see how well you all do. Let me make this live. Who is the one percent who has done all nine? Who is the early adopter we should all learn from? I'm going to bring the microphone over to you, sir, if you don't mind. What was the biggest surprise of the nine that you have done? Of the nine, what was the most surprising? Oh, she's faster than me. 

just like to try new things, but I've tried all nine of them. I probably used most of them every day, every day, except the plant-based proteins. I've tried that; it didn't do much for me. T

he NFT crypto example, are you... 

Yeah, I own cryptos. 

Yeah, and do you have any NFTs, or you have cryptos, so like Bitcoin only? Bitcoins? Bitcoin. Okay. And how about AI? What have you done with AI? 

We use it everything in my organization. 

And what's an example use case? 

Just to marketing, we'll get ideas. We use it for spreadsheet. When there's, you know, where the data is not properly formatted, we use it to send individual emails through Zap Piers to our customers. So a lot, a lot of things with that. 

 Huge productivity boost when you do it, and of course, you have to learn how to do it well. The emerging research is sh experts use AI better than non-experts, which is a little interesting because, you know, a lot of the talk is AI levels the playing field, but it actually doesn't. If you know what you're doing, AI pushes you even further.

All right, another pair and share at your table. You now can see that almost everyone in the room here has done at least one of these things. Talk with the person you're sitting next to. If you don't like them, turn in the other direction. If you don't like them, I gave you a chance to leave your table and you didn't. Which one of these was most interesting when you played around with it? So just a couple of minutes talking at your table.

Q&A 

Okay, so I've done the first of three paradoxes. Paradox one, the information act-action paradox. You have to act when the data tells you not to amplify weak signals, experience tomorrow today. 

Paradox number two, the Abilene paradox. No group has ever gotten together and said exactly this: instead of risking anything new, let's play it safe by continuing our slow decline into obsolescence. But that's what organizations do. Anyone who's in the sociology field know what the Abilene paradox is? I usually get one or two in a group of this size. Anyone, people like this cartoon Tom Fishburne illustrated this and another cartoon I've got coming later on. Tom's stuff is great. Market tunist. He used to go to the Harvard Business School. He was the cartoonist for the newspaper. He does stuff like this. You should follow him. Anyone know the Abilene paradox? It's a fun one.

So the Abilene paradox is from a paper from 1973. It describes a challenge in group decision-making. So a family's together in Texas. They're all there saying, "Okay, what should we do on this Saturday afternoon?" And it's like, "I don't know. We can do this. We could do that. Nothing's really catching fire." Then someone says, "I don't know. Maybe we can go to Abilene." Abilene is this dry, dusty town that's about two hours away where there isn't much to do. No one really wants to do it, but there isn't a better idea. So they all kind of sit there, and they're like, "Yeah, I guess maybe we could go to Abilene. Maybe we could do that. Oh, I remember there's a diner there. Oh, we can go to that diner." There, in their heads, they're all thinking, "I don't want to do this, but I don't want to upset the person who has said the thing that they mentioned. Maybe they really want to do it. So I'm going to say yes because I think they really want to do it." So this family all decides to get in their car, drive two hours, and go to a diner. They get there and they realize that individually none of them actually wanted to do this, but the group collectively decided to do something that no individual wanted to do. This happens in organizations all the time.

Don Saul from MIT did a fantastic piece of research looking at the percent of people at various levels in an organization that can name the organization's top three strategic priorities. You go to the front line of an organization a few levels down. Not surprisingly, it's about 10%. We know this is a challenge. Communicating in organizations is hard. Here's the thing that I find interesting. You go to the top team in the organization, the team that is sitting around a table setting the organization's top priorities, and you ask what percent of them can actually just name what the top three are. It's 50%. The people who were there when it happened don't remember it, and they don't actually believe in them. Have you ever been in a meeting like this? A discussion is going. Someone says something that is obviously wrong and stupid. You're about to say something, but you look around. No one else is saying anything. Maybe it wasn't that stupid. Maybe it was right. And if you say something, you might have more work to do. So you sit there silently, and the discussion continues on. This is a real challenge. You can't get a group to align if you don't have honest conversations about things. If you don't hear the voice that doesn't speak, how do you do this? We had a Harvard Business Review article last week that talked about this in the context of a contentious issue right now. What sorts of policies should people have when they return to the office? Three things we suggest you do to hear the voice that doesn't speak. The first is recognize you're going to be having a data-informed dialogue. What does that mean? Well, information action paradox. By the time the data are clear, it's too late. So while you want to bring the best data to the table, it can't be data-driven because that drives you backwards. You're going to have to leave space for not knowing the full answer. Number two, the battles in a discussion should be battles of assumptions, not beliefs. What does that mean? When you get in a discussion and you say, "I think" or "I believe" or "my perspective is," you have immediately personalized it. Someone else says, "Well, my perspective is." Now you've got to fight. One of you is going to win. One of you is going to lose. That can be really hard if you say, "The fundamental assumption I'm making, what would need to be true, is you have split yourself from the point of view. You can have a really fierce battle of those assumptions, but nobody gets hurt. Then finally, you want to make the areas where you disagree very, very visible. Let me show how we do this by running a little demonstration here. The technique that I'm going to use is called "Walk the Line." Left side of the room, right side of the room. Left side of the room, right side of the room. How about table 16? You look like a good table. Can I call you up on stage? The whole table. The whole table. Come on up.

Obviously, your colleagues don't like you very much because that was the most half-hearted round of applause that I've heard in a while. How about a round of applause for table, okay? Okay. So the technique... No, that there will be no dancing. There will be no... There might be some intellectual dancing, but there will be no physical dancing. The technique is called "Walk the Line." It's based on research done in Singapore Management University that shows if you involve physical movement in making decisions, you lead to much better alignment in a group. This is how it works. We will take an issue where there's not clear answers, and we will put a physical piece of tape on the ground. So it might be, "How much do we expect sales to grow next year?" or "What's our target for this new opportunity?" or "Should people come back zero days a week or five days a week to the office?" or whatever. And we'll say, "Come up and stand on the place in the line that represents your own individual view on that topic." We will usually have a CEO and CFO go last or not participate because if they start, then everyone just follows them. But it's a great way to begin to get people's perspectives on an issue. We don't care that much about where they are. Instead, we care about the assumptions they're making that led to their spot in the line. So I'm going to ask you a question that has a little bit of controversy in it and see what you think about it. So over here, 0%. Over here, 100%. That's the line. I want you to place yourself on a line with your estimate of the probability, not the desirability. Let me stress that. The probability of Donald Trump being elected president of the United States next year. 100%. It is dead certain. 0%. It will not happen.

This is a tightly clustered distribution. So then when you go and do that, you say, "Okay, now explain to me why you're standing where you're standing." So it looks like you're at about 50, 50/50. Okay, explain to the group what are the assumptions you're making that led to your spot in the line. Again, this is not desirability. This is the estimation of the probability. 

I think from everything I heard, especially Janice Stein, I kind of think she mentioned there's a lot that can happen. So that kind of changed my view as 50/50. Whereas I think before I came into this, I was probably more leaning to the 75%. 

So you got some new information. You might have been at 75% before. But like a good Bayesian forecaster, where you have a prior and then you adjust based on what you know. Yes, somebody could fall off the stage. A lot of stuff can happen. There's lots of time. So you come down. But you still were pretty high up. Then I guess you're all tied. But so you're trying to hide in the back. But I'm not going to let you hide in the back. What percent and why are you standing there?

 

Based on everything I heard, I mean, originally, I was very much not in a Trump camp when he was actually president. But ever since he stopped being president, a lot of the stuff that he said actually came true. Biden is really literally building a wall right now. And, I mean, he has no other contenders that could really challenge him. Even if he ends up in jail, he will probably win. And that will be like a masterful move of getting himself out of jail. 

Past history suggests very good at getting votes. If you look at the contenders in the Republican nomination, he leads all of them by a wide margin. So the odds of him getting the nomination are pretty high. And then you get into a head-to-head battle against Biden. He's got a very strong base. And okay, let's get one other voice. So, Dawn, let's hear from you as well.

So, my assumption is that he's going to be running against Biden. And given that they're both old, anything can happen. And I think it's who makes the least number of gaffes and whether or not Trump is actually in jail. If he's in jail, I don't think he'll win. If he's not in jail, I think he'll win. I'm 55/45. 

  Okay, so let's give a round of applause to our walk. You know, none of the other people have to speak. You can go sit back down. Thank you. So, again, this discussion is something that's got lots of controversy, lots of emotions laden. And I've done this in places that are conservative-leaning and that are liberal, whatever. And you can have a conversation just like that because the question is, what are the assumptions that are behind your answer? And some people will talk about looking at the current polls. Some people will talk about past history. Some people will say there's currently 18 different lawsuits, and some of those could go this way. Some people will talk about time. Whatever. You now have identified the specific things that you would want to monitor and watch if this is an outcome that really matters to you.
 
Now, if you go look at scale prediction markets, does anyone know what it is today? What the actual prediction markets say what the odds are? I looked this morning. 40%. 40% are the odds. 42% for Biden and then a range of other people. Donald Trump Jr. comes in at 1%. I suppose that father goes to jail, but you want to keep the name going. But anyway, this technique of walking the line, having battles of assumptions, having data-informed discussions helps you hear the voice that doesn't speak. As you do that, one of the recurrent themes that I heard in the discussions today was this idea of pausing, creating space for reflection, creating space to see things. This is a critical thing for you as a leader to do. This was reinforced to me when I was doing something a little bit strange. I mentioned the program at INSEAD. At the program at INSEAD, we had to do three infield practicums. This was practicum number two.

This picture was taken December 2019. Our task was to go to an organization of our choosing and go and watch it for at least 18 hours. Not interfere, not talk to the organization, just be a fly on the wall. Ob observer. Where it got weird is we were supposed to observe not just the organization but observe ourselves being observers, which was pretty meta and pretty strange. So what do you see here? Where am I? So I'm at a restaurant. I heard someone say sushi restaurant. That's not right. But why did you assume it was a sushi restaurant right? The way the plates are set up. So you're noticing the way that the plates are set up. So I'm in a restaurant, that's correct. High end or low end, do you think? Med, medium end? Anyone want to go for high end? What do you see? So you see people working. What do you notice about the people working? I don't see masks. So it's pre-COVID. It's 2019, sorry. I'm going too fast. I don't think you'll be able to keep up with the, but thank you for trying.

So no one's wearing a mask. What else do you say? Yeah, a couple of the che right. So they're young. They're young. So, and how do you know who's a chef? What what do you think the guy with the most pens so the chefs? The chefs are wearing white. The front of house staff are the people in the back wearing colors that are not busy working on tasks. It's a Michelin star restaurant open kitchen to try and show commitment to Quality. The restaurant is burnt ends in Singapore, and you really see when you're there the commitment to Quality. I watched the people preparing the menus; they're printed every day and they had to be placed in the menu in the actual thing that held the menu just right.

The thing that really struck me is how much rich data was there, how people were organized, what people did, the different tasks they had, what they thought about quality that was there sitting in front of me that I never saw when I went to a restaurant. Why is it when I go to a restaurant and I go and focus on my food or focus on the person that I'm with? This changed the way that I approach organizations. When I'm starting to advise a client now, I will tell them I would like to come in and come to some meeting where you're talking about some important topic, and I want to sit there and watch. They said, "Are you going to give us feedback on the topic?" I said no. They said, "Are you going to give us feedback on us?" I said no. I just want to understand your organization more deeply. Earlier this year, I was with a great big Fortune 50 company doing just this.

They were talking about a big innovation initiative and it really was a transformational experience. I got there about 20 minutes before the meeting. The team that was presenting its idea was filled with nervous energy; you could see it. They're running through their slides trying to make sure everything is just so. They're debating where should we sit, said, "Oh well, the CFO usually sits here, so you got to sit here because you got to be in the eyesight of..." and they're all then going and saying, "Okay, we got it, we're set." Light banter begins; they're ready for it. A senior leader walks in the room; it's like a cold wind has blown through everything. Everyone shuts up. That leader opens up their iPad; they're looking through the materials; no one is talking at all. Everybody else files in; the meeting starts, the person gives a six-minute presentation, canned presentation, and the questions start. The CEO asked the first question, the CFO asked the second question, the CMO asked the third question, the most senior business unit leader asked the fourth question. It is a totally scripted performance. There's no room for discussion; there's no room for debate; there's no room for the kind of creative abrasion that can lead to new ideas.

We had people journal before and after the session. People after said one said this was a great meeting, we had clear decisions. Another person said we made no decisions; a third person said I don't know what we were talking about. It was a scripted performance, and the actors all saw it differently. We realized that this organization was haunted by something. When you heard James talk about the different things that can cause inertial forces inside organizations, fully agree with him. We have a name for those inertial forces; they are ghosts. Every organization suffers from them, the invisible things that haunt efforts to change and do new things. This organization had a ghost of the present, an invisible pattern; their meetings were theater. There was not real discussion; there was not real debate. From the outside, it's obvious; inside, it's like the fish swimming through the water that says to the other fish, "How's the water today?" and the fish says, "What water?" The fish does not know the water in which it swims. The thing that your organization does repeatedly you can't see because you're doing it repeatedly; that's one form of ghost that organizations will face. I'll be a little Dickensian to get the other two.

There's also the ghost of the past; this is the past trauma that inhibits your ability to change. Research shows that when an individual goes through a traumatic episode, it literally changes their DNA, so it gets passed on to subsequent generations. The same is true in your organization. If there's a big layoff, if there's a merger that goes the wrong way, if there's a leader who created scar tissue in the organization, even when they're gone, you can still feel their presence. That ghost of the past can make it really hard to do new things. 

Finally, there's the ghost of the future. This is the one I'm seeing more and more frequently in the field. Brené Brown from the University of Houston says the greatest shame trigger is the fear of being made irrelevant. When you're transforming in the face of disruptive change, you're going from one world to another world that can be really exciting; it can be really exhilarating; it can be awfully terrifying. When Jason was talking about the lawyers moving away from the billable hour model, when you base your life and career on following a different approach, you're suddenly going to do something different that can lead to all sorts of natural defense mechanisms. Or think about the world of healthcare. I'm going to illustrate this playing a video clip; this is a little tongue in cheek. The video clip here is from the movie Malice. In this movie, Alec Baldwin is a hotshot surgeon; he is being accused of malpractice. Watch the way that he thinks about his role in the field of medicine.

The question is, do I have a God complex? Dr. Kesler says yes, which makes me wonder if this lawyer has any idea as to the kind of grades one has to receive in college to be accepted at a top medical school. If you have the vaguest clue as to how talented someone has to be to lead a surgical team, I have an MD from Harvard. I am board certified in cardiothoracic medicine and trauma surgery. I have been awarded citations from seven different medical boards in New England, and I am never ever sick at sea. So, I ask you, when someone goes into that chapel and they fall on their knees and they pray to God that their wife doesn't miscarry or that their daughter doesn't bleed to death or that their mother doesn't suffer acute neural trauma from post-operative shock, who do you think they're praying to? Now you go ahead and read your Bible, Dennis, and you go to your church, and with any luck, you might win the annual raffle. But if you're looking for God, he was in operating room number two on November 17th, and he doesn't like to be second-guessed. You ask me if I have a God complex; let me tell you something, I am God, and this sideshow is over." 

Obviously a little over the top, but a really important point. The world of healthcare is changing in a fundamental way, going from treating acute issues to going to prevent and manage disease, helping people manage health in different ways. That means a doctor goes from being the person who orchestrates everything to being part of a team that might involve a nutritionist or a yoga instructor, a whole set of people, religious workers in communities. How does it feel if you're Alec Baldwin going through a change like that? The answer is not very good. These ghosts exist in every organization; you have to find them; you have to find ways to deal with them. Let me give you one last pair and share at your table, talk with the people at your table about ghosts in your organization: ghosts of the past, the traumas you haven't gotten over; ghosts of the present, invisible patterns; ghosts of the future, the identity crisis as you go from where you are today to where you're going to tomorrow. I'll talk about then how you go and bust those ghosts in the third paradox, and we'll call it a session. So two minutes at your table.

Okay, let's come back as a big group. I want to be mindful of the barriers of time and receptions and all that, but maybe one or two good ghosts from the audience who had a good ghost identified at their table. 

So, in the last exercise, I was actually talking about organizational trauma. So, I got two points in one because we kicked this conversation off just talking about the trauma that's taken place and the ghosts that are throughout the organization. I shared that we had an industrial psychologist spending time with our team helping us unpack some of that. Spent time interviewing some associates and just trying to determine what are the ghosts that are haunting us so we can deal with them. 

Fantastic, not fantastic that you're haunted by ghosts, but fantastic that you recognize it and say we need to bring in help to do this. It's not the sort of thing that many leaders will do, but this is real; these things will inhibit your ability to change. If you don't shine a light on them, you'll get frustrated: why aren't we able to do this because you have some of these things. Now, if you borrow a little bit from what James was talking about, the idea of habit change, you can begin to go and address these ghosts. 

The book that I just had, my most recent book, was called Eat Sleep Innovate. Let me explain the title. You eat every day; I hope you sleep every day. I'm willing to bet you don't innovate every day, particularly inside your organization. The main study in that book is about an organization in Singapore called DBS Bank. When I moved to Singapore in 2010, nobody suggested that I bank with DBS; it was the lowest-ranked bank in Singapore, one of four major banks. It had the lowest customer satisfaction score. Fast forward to today; it is the highest-ranked bank, not in Singapore, not in Asia, but in the entire world. It has undergone a cultural transformation, going from a slowly moving bank that biases towards obligatory compliance to a bank that functions in the language of its leader, Piyush Gupta, like a 28,000 person startup. Like all stories, there's a lot of different pieces in it, but one critical component is the smart use of a tool that we call a "beam."

This is the way that we think about habit change. If you're trying to get adults to do new things, you have to fight a battle on two fronts. Front number one, you go after the logical, rational part of your brain where you carefully consider decisions. That's a behavior enabler like a ritual or a checklist. Front number two, your Unconscious where you do things without even thinking about it. These are artifacts and nudges that help to reinforce that ritual so you do new things without being conscious of them. DBS has used beams to defeat its ghosts: ghosts of the past. One big challenge the DBS had was the hangover from the global financial crisis 2007-2008. It left it very conservative with all sorts of constraining policies. It created the Kiasu Committee. Kiasu is a Singaporean sign that basically means fear of missing out. You can bring a process to the Kiasu Committee and sue it, saying this process adds no value. One of the first processes that was brought to it was the need to get a wet physical signature on an everyday approval; the committee got rid of that. It created space to do different things. Ghost of the present, DBS's meetings were wildly inefficient and not collaborative. So, it created a new ritual, "meeting mojo." Every meeting has a meeting owner that makes sure the meeting starts on time, ends on time; everyone participates; a decision is made. They appoint a joyful observer that's watching to make sure people are present that can stop the meeting if or not to say, "All right, everybody, return to the meeting," and then gives visible public feedback to the meeting owner at the end of the meeting. Simple ritual that's had transformational impact; before DBS did this, 40% of people said meetings encourage collaboration; today, that number is 90%.

The Ghost of the future: DBS says Bankers need to learn a lot of new things. Bankers would say, "I don't learn, I earn." That's what a banker does. So make it simple for them to learn. As DBS is going through its change journey, it says, "We have to think differently about our competitive set. We have to be a Gandalf company, which means we compete against Google and Apple and Netflix and Amazon and LinkedIn and Facebook." The D in the middle for DBS. So they have a Gandalf scholarship, a $1000 US (Singapore dollars, about $750 US) that people get to learn about whatever they want. The only requirement is they have to record a video of what they learned and share it with the organization. Reinforced rituals, beings that have allowed DBS to dramatically change its culture. 

Now, these are just a few of the examples that are in the book Eat Sleep Innovate. The slides will be sent around afterwards, so don't worry about capturing this, but there are 101 in the book. Please steal them shamelessly, put them to work in your organization, defeat the ghosts.

The second Paradox, the Abilene Paradox. Groups collectively decide to do what no individual wants to do. You have to listen to the voice that doesn't speak. You have to slow down and have the equinity to make sense of what's going on, to spot things that would otherwise be invisible, and then bust ghosts with beams.

Final Paradox. I kind of wish after listening to Haley's talk, which I thought was just phenomenal, by the way, that I have the wrong sport in this, but I'm not an artist. So this is Tom Fishburne's drawing here. What's going on here? What should number seven be doing? Letting go. Letting go. What is the point of soccer, football depending on where you're from? It's to score a goal. Sometimes you have to lead by letting go.

The Socratic Paradox. I only know Socrates once said that I know nothing. When we're doing new things, leaders don't have the answers. Scott Cook, the founder and still active board member of Intuit, a big financial software company, has said the role of a leader has to fundamentally change. Leaders don't make decisions anymore. Leaders create conditions where experiments can be run because we cannot know what the answer is. We need to let the experiments guide us to the answer. That means we have to go and fly kites. What am I talking about there? Well, let's go back in time about 130 years. People were frustrated. They looked in the sky, birds were flying, people weren't. Now this had been true since the dawn of time, but the machine age was upon us, and we still couldn't crack the problem. So keeping with the theme of paradoxes, you're decisively hedging by flying a kite. You're going and trying something that has lower risk because when it crashes, and they often do, nobody gets hurt. That can actually be an experiment, like going to run a prototype or test market or so on. Or it can be a simple thought experiment. One of my favorites is the pre-mortem. You probably have heard of post-mortems, after-action reviews. Those are really good ways to learn too, but usually, something bad has happened. Usually, you're trying to figure out who to blame. A premortem is before you've done anything. It's a thought experiment. We're excited about this, but what could possibly go wrong? You plan to fail. You try and poke at things, figure out the hidden assumptions you're making. Because before you've done something, it's safe to go and think about it. And if you do it and you experiment the right way and the kite crashes, you say, "Cheers to the failure that just happened." That's what's happening in the picture here. 

This is the Finnish gaming company Supercell. They're working on new games all the time. Sometimes they succeed, they launch, they get out to the Play Store, they get out to the app store or whatever. Everyone gets together, they crack open a beer. That's not what is happening here. Sometimes they admit they're never going to make it. They have a ritual. Everyone gets together, they pop a bottle of champagne, they say, "Cheers to failure." The reward for the failure is bigger than the reward for the success.

Two good things happen with this ritual. Number one, it says that we accept taking risks here. We continue to encourage people to push the frontier. Number two, it makes it clear to everyone that the project is done. There is an invisible enemy to innovation and growth inside almost every organization. It is a plague, the plague of the zombie project, the walking undead, the project that, if you are honest about it, will never materially move the growth needle, but it shuffles and lingers on, taking all of the life out of the organization. Maybe it's a zombie meeting, the recurring meeting that you go to. That, if you ask everyone why was this meeting originally set up, nobody has any idea. Stop the zombie meetings. Put the zombie projects down. Say cheers to failure. And all of a sudden, you realize you have a lot of room for innovation and growth.

The Dao of disruptive change is what I've been walking you through. Act when the data tells you not to. Confront the information-action paradox. Hear the voice that doesn't speak. Go and run those kinds of sessions that I talked about. And take time and pause to get that voice out. Lead by letting go. Trust the experiments. Go and fly kites. Say cheers to failure. Plan to fail. These are things that can help you accelerate through the fog that makes it so hard for us to innovate and grow.

None of this stuff is easy to do. This all requires that you have a fundamental comfort with discomfort. That's one of the reasons why I decided to do something kind of weird and go to this educational program in 2019. I was going on what I now would call a paradox quest, doing something completely against type. You can do the same thing. You don't have to go to school for two years, but you can learn a new language, pick up a new instrument, pick up a new sport, pick up a new skill. Whatever it is, put yourself in a circumstance where you need to have a beginner's mind because being in that circumstance will give you the capabilities and the mindsets that allow you to have that comfort and that calm when chaos surrounds you.

I want to leave by telling you a story. So the whole discussion that Jason had about why that really struck me because I had a moment last year that really helped to crystallize my why. So I was at a big conference in Switzerland. They hadn't been run physically for a few years. So, 600 people are all together. Everyone's really excited to be there. I'm going to the dinner on the first night, and everyone's kind of mingling around talking. I find my table, then someone taps me on the shoulder. It's a woman at the table behind me, very striking. I remember her visually. She's wearing this green dress. She's German. She's got short blonde bob haircut. She says, "Who are you?" I said, "Well, I'm Scott. I teach." And she said, "No, no, no, no. That's not what I asked. Who are you?" I said, "Well, I'm a father of..." She said, "No. Who are you?" I paused. I thought. I collected myself. I said, "I am a consummate optimist that is passionate about spreading ideas." She nodded her head. She turned. She sat down. I never saw her again. I kind of think she was a ghost that was planted there to give me this moment of epiphany, but that is who I am and that is what I believe.

We have a lot of challenges. We've got lots of paradoxes we have to deal with. I gave you more academic ones, but you know you have to figure out short term and long term, work and life. We have to make the planet a better place and we have to live up to our purpose. We have to extract and regenerate. We have to do everything all together at the same time. This can feel incredibly overwhelming. The great gift that we have as a human species is we have the ability to take these things that appear to be intention, find the beauty in them, find the ways to reframe them, find the opportunity in them.

Rain and sun cannot exist at the same time, but when they do, it creates the beauty of a rainbow. I hope these ideas end up being helpful to you as you try to accelerate through the fog that all of us face today. Thank you very much and good luck.