Be Passionately Dispassionate: A Key to Unleashing Creativity & Innovation

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Eric "Astro" Teller, co-founder of Google's Moonshot factory, has published a wonderful blog post reflecting back on his experience over the past ten years.   Teller offers some important lessons that he has learned about how to unleash what he calls "radical creativity" in an organization.   My favorite tip is to "cultivate the ability to be passionately dispassionate."   Here's an excerpt:

Cultivate the ability to be passionately dispassionate. While we can’t predict the future, we’re trying to invent it efficiently, to maximize the impact of our effort and resources. So it’s absolutely necessary to be intellectually honest and kill things that are pretty good (even if we love them!) so we can move on to even better opportunities. It’s something we keep trying to get better and faster at, though it’s deeply unnatural. It’s never easy to kill projects. Over the years we’ve had to disband dozens of teams and walk away from hundreds of gorgeous ideas, including a carbon-neutral fuel made from seawater.

Entrepreneurs who are charging passionately toward their vision often need to be coached to pop their heads up regularly and switch their mindset to dispassionately assess their situation. Sometimes people say to us, “You have to keep going at this because no one else will.” But that misses the point. Yes, we want to invest in far-out technologies with huge promise when they’re still so risky no one else will. At some point, though, once we’re satisfied that the technology has been somewhat de-risked, we need to test its commercial viability. If the market is as excited about it as we are, other companies will put money into it too, and we’ll keep going. But if they won’t, then maybe we’ve been kidding ourselves, and we should walk away and redirect our time, resources, and talent to more promising solutions.

Don't Be a Copycat! Benchmark in a Better Way

Learn more about several approaches to benchmarking that can help you learn effectively and build a distinctive strategy, rather than engaging in copycat behavior.

Storytelling to Communicate Data Insights

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Companies are investing a great deal of time and money into data analysis to drive better decision making. Yet, data analysts sometimes find themselves frustrated by their inability to persuade others with regard to a particular conclusion. The bottom line is that we can say that we are fact-based or evidence-based decision makers, but we don't always respond to arguments rooted in data alone. Stories tend to be much more compelling than numbers, statistics, and bullet points. Nancy Duarte makes this point in a short post for Sloan Management Review. She writes:

If it’s your role to communicate data insights and persuade people to change their behavior, you’ll have more influence and promote better decision-making if you emphasize the people behind the numbers. In a story, we root for the hero as he or she maneuvers through roadblocks. To use data to steer your organization in the right direction, you need to tap into the human tale your data can tell.

Duarte argues that four storytelling techniques can be quite effective: 

1. Identify the Hero - Whose actions produce the data being analyzed? Who has the power to improve the situation?
2. Empathize with the Heroes - Speak with them directly. Try to stand in their shoes and understand their point of view.
3. Identify the Adversary - What is the source of conflict in this story? Who or what is standing in the way of our hero?
4. Share Context - Provide the bigger picture.  Put the current data in the context of a lengthier timeline of events.  

The Effect of Board Tenure on Firm Performance

Sterling Huang of Singapore Management University and Gilles Hilary of Georgetown University have published an interesting paper titled, "Zombie Board: Board Tenure and Firm Performance." They found a curvilinear relationship between average board tenure and organizational performance. Not surprisingly, financial results increase as board members gain some experience and learn about the firm and its industry. However, when average board tenure exceeds ten years, firm performance begins to decline. The authors argue that there are diminishing marginal returns associated with learning and experience. At the ten-year mark, the deleterious effects of board entrenchment become more pronounced and began to have a serious negative effect on performance, overwhelming any small amounts of learning that are continuing to take place. 

Lengthy board tenure not only diminishes firm performance, but has an effect on key decisions made by the board. The authors note that, "A level of tenure close to the optimal reduces excess compensation and increases the pay-performance sensitivity." Huang and Hilary also find that CEO entrenchment exacerbates the negative impact of lengthy board tenure. In short, the mix of board and CEO entrenchment can be very bad for organizations. They conclude by stating, "Our results are consistent with the interpretation that directors’ on-the-job learning improves firm value up to a threshold, at which point entrenchment dominates and firm performance suffers."

Entrepreneurs and Salespeople: Are You Overestimating How Much Others Value Your Product?

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Minah Jung, Alice Moon, and Leif Nelson have published a new paper titled, "Overestimating the valuations and preferences of others," in the Journal of Experimental Psychology.   The scholars examine how individuals evaluate the preferences of others.  Specifically, they find that people tend to systematically overestimate how much others will value something.   Here's an excerpt from their paper: 

In social judgments, we are frequently called upon to make predictions about the evaluations of others, such as how much a friend will enjoy a recommended novel, how long a coworker will be willing to wait for useful feedback, or how much a potential buyer will be willing to offer for a used set of golf clubs. The overestimation bias has important implications on real-world economic and social decisions. Furthermore, the paradox we document suggests that someone who perfectly understands others’ enjoyment for a good may nevertheless be imperfect at setting prices, simply because they fail to recognize how people trade off enjoyment against other valuation metrics, such as willlingness-to-pay and willingness-to-wait. This suggests that social and consumer judgments may suffer not only from general overestimation but also from an additional imperfect understanding of how people weigh trade-offs. Many preferences are developed from a complex weighting of positives and negatives, the balance of which produces a summary evaluation for each individual. When judging the preferences of others, however, that complexity may be ignored and the weight of some attributes will seemingly tip the scales in the direction of a simpler, more intense preference.

This research has important implications for entrepreneurs who are trying to determine whether their idea will gain traction in the market.   Are they systematically overvaluing their idea, or overestimating how much people will be willing to pay for the product or service?   We all know that entrepreneurs can fall in love with their own idea, but this research gives us a deeper understanding of precisely why we can't estimate willingness-to-pay properly and accurately.   The same bias, of course, affects salespeople in a wide variety of professions.  Do they really understand the potential buyers' preferences?  Can they accurately assess value from the buyers' perspective?   

The Perception Gap: Leader vs. Team Members

Kat Boogaard has written an interesting post for the Atlassian blog titled, "Attention leaders: there’s something your team isn’t telling you."  She explains the findings from some of the firm's research on leaders and their teams.   In particular, she focuses on the perception gap between the leader and his or her team members.  Here's an excerpt that summarizes the research findings:

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When we asked managers to rate their agreement with statements about their team’s health, they consistently agreed at a higher rate than their individual contributors. For instance:

• 37 percent of managers said their team had quick and easy access to information, but only 20 percent of their individual contributors agreed.
• 45 percent of managers said they receive honest feedback, but just 26 percent of individual contributors felt they like could give that honest feedback.

This inflated view is even worse in the C-suite. C-level executives are two times as likely to say that their team is high performing or has high well-being, while their individual contributors view those aspects as well below average.

How can leaders close this perception gap?  Boogaard has some good recommendations. For instance, she advocates getting out of your office to put your finger on the pulse of the organization, rather than waiting for people to come to you with problems or concerns.   Similarly, she focuses on the importance of promoting psychological safety within your team.   I would add one other important tip for closing this perception gap.  Find a truth teller on your team.   Find a sounding board, or consigliere if you are a fan of the Godfather movies.  Talk to them one-on-one, and use those private conversations to get a sense of whether team members are seeing things the way that you are.  Kathy Eisenhardt's research shows that effective leaders in high-growth firms operating in turbulent environments often have these confidantes who help them in numerous ways as they make tough decisions.  However, the key is to find a truth teller, not a yes-man or yes-woman.  Make sure it's someone who will give it to you straight.  

Evaluating Creative Ideas: Ask Why, not How

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Stanford Professor Justin Berg has conducted some fascinating new research regarding people's self-evaluation of creative ideas. How do they assess the ideas that they generate, and can they spot the best ideas at a very nascent stage of the problem-solving process? Berg finds that individuals are not great at spotting the very best idea. In fact, the idea that they rank second-best at first often tends to be superior to the concept that seemed optimal at initial glance. What's happening? Berg explains his theory of how evaluation goes off track in this Stanford Leadership Insights article:

“People value concreteness too much and abstractness too little in their initial ideas,” Berg says. A concrete idea, he went on, is necessarily more developed, and so it will more readily present its creative virtues. Abstract ideas, meanwhile, can be difficult to see as promising. “The best initial ideas likely won’t seem very creative at the beginning—there may not be enough substance to see their potential originality and usefulness. Their abstractness is a barrier that prevents people from spotting their potential.”

Berg tested this theory by putting people in more abstract states of mind as they assessed their initial ideas. He had them ask “Why is this a good idea?” as opposed to “How is this a good idea?” and then provide answers. This approach was based on prior research showing that focusing on why (versus how) encourages abstract thinking. This simple shift to a more abstract mindset helped people identify their most promising idea at the outset.

This theory definitely resonates with me.   Research has shown the value of "why" questions and abstract thinking.   I think "how" questions often shift people into an "implemental" mindset too quickly, as I wrote about with Derek Pankratz in this article for Deloitte Review.  When we start thinking about how to execute an idea too soon, we can actually select a flawed course of action.  We become vulnerable to certain biases and faulty reasoning.  Perhaps we are also less creative too, as Berg's research suggests.   We move from the abstract to the concrete prematurely in those situations.  We need to think about what we want to do and why we want to do it, before we get too bogged down into the execution-related issues.  Of course, we can't ignore the how while we are making the decision, but the balance of our thinking can't shift too much to the how at those early stages of the creative problem-solving process.