Yogi Berra, the famous NY Yankee catcher once said, “when you come to a fork in the road, take it.” Organizations today stand at a crossroads to sustained performance. One path is familiar, following the lead of financial return and efficiency metrics; it is about keeping “feet on the ground”. The other is tempting yet unfamiliar and intimidating: it marks a journey of learning and discovery; it is about keeping “eyes on the horizon”. To take the fork is not to choose the “right” path, but to recognise that both paths have to be travelled.

Such a dual performance paradigm is paramount precisely because – just like with the time it takes for new technologies to become mainstream – the period over which an operating landscape can be deemed stable is getting shorter and shorter. A shorter strategic horizon calls for fluidity of performance. Uncertainty – in the past a tiny white puff on a clear blue sky – is now a centrally moving and evolving cloud formation. 

Even as instability abounds, far too many organizations remain wary of moving beyond traditional performance toward a wider spectrum, from the short-term results driven by keeping “feet on the ground” to learning and discovery outcomes arising from setting “eyes on the horizon”. Today´s discourse acknowledges uncertainty, yet the actual practice of management has remained stubbornly anchored to the notion of execution. What better evidence than calling top officers “executives”.  What if we called them wayfinders? 

Over the past decade alone novel approaches have expanded performance paradigms and infiltrated the managerial lexicon. The list includes agile´s product development, design thinking´s customer centricity, lean startup´s build, test and learn among others. Some have even had an impact, albeit subtle, toward a promising paradigmatic shift that include elements of discovery, learning and future value into performance conversations. The problem arises when these approaches are treated as something to be executed.

Let’s take the fork. What would a powerful performance framework look like where organizations focus on activities to pursue both short-term results and longer-term learning and discovery outcomes?

A New Performance Playbook 

Let’s recognize performance as a multi-dimensional spectrum. When we speak of performance, we mean different things, each bringing a nuance to bear and different metrics. At one end, the performance spectrum is anchored by “efficiency”, focusing on productive outputs and on the opposing end by “discovery”, focusing on novel insights.

Efficiency metrics represent concrete, well known targets of performance, while discovery metrics need to reflect priorities of learning and new ideas. This foundational step sets the stage for a fuller range of performance outcomes that can be adapted to different contexts and circumstances. A robust performance spectrum needs to accommodate the diversity of strategic initiatives of an organization. 

When speaking of performance, we have an implicit time horizon in mind (e.g. winning the battle vs winning the war). This time horizon is anchored on one end by “short-term” and on the other end by “long-term”, embracing the different time sensitivity of strategic initiatives. These general labels can be refined to reflect specific industry dynamics, and a concrete horizon can be established for each initiative.

Finally, someone performs when following a prescribed set of steps. This third dimension of performance is an activity spectrum that is anchored on one end by “checklist” and on the other end by “curiosity”. Here, familiar routines can be smartly shaped into a list of activity indicators to cover a portfolio of strategic initiatives, while novel and more experimental activities require the creation of bespoke indicators to be refined (into a checklist) over time. This three dimensional approach to building a performance playbook is presented in Figure 1.

A performance playbook can empower managers on a number of levels. First, it provides a robust and nuanced set of performance paradigms to consider where priorities can be explored and debated across a portfolio of strategic initiatives. 

Second, a playbook can leverage established performance measures where appropriate while accommodating the need to craft new performance indicators. This inclusive principle can also be extended to the monitoring and reporting of performance results over the life of an initiative. 

Third, a performance playbook can support a range of decision-making challenges, including dealing with risk and most importantly managing those newer initiatives which are more ambiguous and uncertain. 

Finally, a playbook approach to setting, monitoring and managing organizational performance leverages the judgment of those on the frontline of each strategic initiative, while also providing a robust set of principles and practices to serve as a performance north star for the organization.

Organizational performance must now embrace new norms and habits anchored in a new performance narrative. Organizations must work their way toward a robust performance framework that can handle the complexities of the environment they face. While essential financial and efficiency metrics are here to stay, a performance playbook needs to  develop novel guardrails for learning and discovery critical to sustained performance. In other words, when organizations come to  performance forks in the road, they need to expand their  playbook.

About the Authors:

Joseph Pistrui is co-founder of Kinetic Thinking, Professor of Entrepreneurship & Innovation at IE University in Madrid, and a Senior Research Fellow at the Center for the Future of Organization, Drucker School of Management.

Dimo Dimov is co-founder of Kinetic Thinking, Professor of Entrepreneurship & Innovation at University of Bath in the UK, and author of two books on entrepreneurship.

As legend has it, John Henry was a steel-driving man who defeated a steam-powered drill, before collapsing and dying with a hammer in his hand. The American folktale highlights the historic tug of war between humans and technology, with technology constantly encroaching on the turf of human tasks. First, technology went for our muscles. Now, with the current quandary around artificial intelligence and digital technologies, it is coming for our brains. Are we cornered or is there a safe retreat where we can keep the upper hand? We still have the space of mind, the powerful engine behind our cultural proliferation, driven by imagination, curiosity, and ingenuity. Indeed, human progress is driven by our capacity to imagine new, better worlds and channel our ingenuity towards these aspirations. 

Drucker Forum 2021

This article is one in the “shape the debate” series relating to the 13th Global Peter Drucker Forum, under the theme “The Human Imperative” on November 10 + 17 (digital) and 18 + 19 (in person), 2021.
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The challenge of technologies

Across time and waves of technologies humans have faced, made sense of, and responded to technological advances by creating new things that reshape the world around us. Humans intuitively seek out patterns, learn and assign meaning in order to survive and even thrive. With language and abstract thought, we have been able to expand our intelligence from a biological instinct to an arsenal of artifacts, models, and tools that enable us to engage with an open future. This has opened up new technological frontiers across our evolutionary history. 

Ways of thinking

Since the industrial revolution these creative propensities have manifested themselves into well established professional disciplines that represent distinctive ways of thinking and engaging with the world.  This was spelled out in the “Bermuda Quadrilateral” that distinguished science, engineering, design and art as four unique ways to act upon the world as the creators of new things.¹  Management is notably missing from the creative professions matrix. Indeed, management has largely been a regulative force, focused on the elimination and prevention of mistakes, and the institution of reliability and accountability. 

Cycle of discovery

Equipped with the distinct frames and tools of their respective professions these four groups go about their tasks by following–explicitly or otherwise–a recursive cycle of discovery that is foundational to learning and the creation of new things (Figure 1). Within this cycle thinking is paramount in that it orients the agent in their engagement with the world. This comes down to setting premises (what we take for granted) and commitments (what we would like to change through our actions). In this sense, thinking is about determining what we see and deciding what we do. This gives us a glimpse into a kind of human intelligence that is distinguishable from artificial and other machine intelligence-the capacity to imagine things that do not yet exist and to reshape and form entirely new categories of meaning as gateways to possible new worlds.

The world is an amorphous whole to which we give meaning through the aspirations we have and the projects we pursue. The distinct thinking styles represented in science, engineering, design and art are indicative of the breadth of human intelligence, yet recursivity remains a common mechanism through which these creative professions put the human mind in a creative dance with the world.

Figure 1: Recursive Model of Discovery²

What role should AI play?

Moving for a moment beyond the human dimension, we can consider how artificial intelligence and digital technology can–and should–play a role in these processes of creative discovery.  With the increasing ubiquity of digital devices, sensors and fast payment technologies, we now have the ability to monitor almost any activity with accuracy and speed.

According to a recent Economist article³, a new form of fast-paced “third wave” economics has emerged during the pandemic that involves three notable technology enabled advances. First, it draws upon data that is both abundant and directly relevant to countless real-world problems. Second, those using the data are keen to directly influence decision-making and policy as a result of their work. Finally, this new approach involves scant theory as practitioners favor letting information “speak for itself.” In other words, it is about making our models of the world responsive to the data they bring. This requires flexibility in thinking and the unleashing of our imagination in recognition of the open-ended nature of the future. 

Shaping our  future

With technology we now have the capacity to cycle through actions and outcomes with greater velocity than ever before, generating powerful data driven insights as high-octane fuel to shape human perceptions. This in turn sets the stage for human intelligence to be the direct benefactor of artificial intelligence and machine learning to amplify the imaginative and creative productivity of human sensemaking.

If you get it right, opportunities abound. Yet with AI and machine learning alone, and our minds asleep at the wheel, technology could become the master of our fate and potentially fuel the dystopian futures some fear.  This means we must move from asking the question “if humans had machines …” to “if machines had humans …” as a way to stay on the right track.

We can become who we are

When data and AI are set up to feed into human intelligence, imagination, creativity and the framing of new meaning could be unleashed on an unprecedented scale.  This means that the reimagining of the human-technological interface continues to forge ahead, creating the opportunity to put the human imperative front and center.

The human imperative is to become who we are.

Footnotes:

1) John Maeda´s Bermuda Quadrilateral was based on the work of Rich Gold, as told in the latter´s book The Plentitude: Creativity, Innovation, and Making Stuff, MIT Press, 2007.

2) The Reflective Entrepreneur, D. Dimov, 2017, Routledge Focus https://www.taylorfrancis.com/books/oa-mono/10.4324/9781315228105/reflective-entrepreneur-dimo-dimov

3) The real-time revolution–Enter third-wave economics: How the pandemic reshaped the dismal science, Economist, October 23rd, 2021 edition.

About the Authors:

Joseph Pistrui is co-founder of Kinetic Thinking, Professor of Entrepreneurship & Innovation at IE University in Madrid, and a Strategic Learning Advisor to Emergn.

Dimo Dimov is co-founder of Kinetic Thinking, Professor of Entrepreneurship & Innovation at University of Bath in the UK, and author of two books on entrepreneurship.

This article is one in the “shape the debate” series relating to the 13th Global Peter Drucker Forum, under the theme “The Human Imperative” on November 10 + 17 (digital) and 18 + 19 (in person), 2021.
#DruckerForum

“The end of certainty means the possibility of novelty, of evolution.”
Ilya Prigogine

A critical function of leadership is to ask questions and not settle for answers. This protects uncertainty as a space for curiosity and imagination. When there are too many answers provided and too few questions asked, things stagnate and the atmosphere stifles. Protecting uncertainty is akin to keeping a window open for light and fresh air, maintaining a sense of opportunity and the ambiguity that keeps the spirit of humanity as a search for meaning.

We believe leaders inspiring others to superior performance works best when people pursue opportunities to innovate as a natural part of their daily work, when openness and playfulness become as valued as structure and reason. Yet we have found leaders struggle mightily with this simple premise. They have traditionally seen their role as shutting the window and eliminating all the mistakes. Here´s why!

Drucker Forum 2020

This article is one in the “shape the debate” series relating to the fully digital 12th Global Peter Drucker Forum, under the theme “Leadership Everywhere” on October 28, 29 & 30, 2020.
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The Baggage of Uncertainty

There is a core idea that aggregated things have lower variability than individual components. For example, while individual air molecules behave chaotically, the air in a room can have a stable, ambient temperature as it takes on the aggregate behaviour of all molecules.

The notion of aggregation is central to insurance where the pooling of individual risks creates a more stable aggregate that can be priced. The same idea operates in financial markets where securitization pools debt obligations to create a synthetic reconfiguration into tranches sold to investors with different risk appetites.

In the same way, every innovation project has a large degree of uncertainty that cannot be eliminated: we cannot know all the outcomes of our actions, the consequences of those outcomes, and the meaning of those consequences. This represents an irreducible tension between doing and knowing. We need to know in order to do, but we also need to do in order to know.

Commitment serves as a mechanism for projecting certainty and clarity onto a project´s desired outcomes. Yet it comes with baggage, the humility of not knowing everything. All the uncertainty surrounding what could happen needs to be bagged up and set aside. The more we commit to one particular unfolding of events the heavier the  bag containing the possibility of being wrong.

The Leader´s Role

When commitment and baggage move together, the baggage serves as a constant reminder of the need to focus on learning and to maintain the flexibility to change direction. No certainty is assumed. The illusion of certainty emerges only when the bag of uncertainty is hidden from view or otherwise detached. We argue that leaders must ensure the two always move together, for the future is often hidden in the bag.

However unintentionally, in many organizations the hierarchical relationships of accountability produce a separation between those facing uncertainty and those evaluating performance. Being accountable to someone is about being watched and judged, yet without them considering the uncertainty inherent in deciding what to do next. Practically, the uncertainty of outcomes sits on one side of time, while judgment and evaluation await on the other. Remember, action in the face of uncertainty is about doing before knowing. Judgment, on the other hand, is about knowing after doing.

Unhitched is organizational undoing

This is where something interesting happens in organizations: commitment and its counter-baggage of uncertainty get separated. Unhitched, the commitment slowly rises upwards, ultimately bringing a false sense of certainty to top management. In the meantime, the bag of uncertainty is left behind and settles on the shoulders of the middle managers or frontline staff. No matter how hard they try, they are left holding the bag. In short, as organizations pool frontline commitments they create synthetic certainty at the top at the expense of anxiety and stifled curiosity elsewhere.

Leadership facilitation

Over time, organizations accumulate all this baggage with pent up questions. Leadership is about slicing them open and facilitating meaningful discourse. The leader is a protector of uncertainty as intellectual humility and must be present anywhere innovation is taking place. Unlocking the potential of entrepreneurship is about replacing the quest for certainty with a quest for meaning.

About the Authors:
Joseph Pistrui is Adjunct Professor of Entrepreneurship & Innovation at IE Business School in Madrid, and co-founder of Kinetic Thinking.

Dimo Dimov is Professor of Entrepreneurship & Innovation at Bath University in the UK, and co-founder of Kinetic Thinking.

This article is one in the “shape the debate” series relating to the fully digital 12th Global Peter Drucker Forum, under the theme “Leadership Everywhere” on October 28, 29 & 30, 2020.
#DruckerForum

Ask not what the ecosystem can do for you, but what you can do for the ecosystem.

In the ‘paradox of thrift’, saving money is good for the individual consumer, but if everyone saved money the overall economy stagnates.

There is a paradox of managerial thinking in a networked world: staying in the shell of legacy brings internal comfort; but if everyone did it the ecosystem atrophies.

When it comes to innovating the ecosystem re-draws the boundaries of the organization. The value equation expands to include the social context of the system and your role and place in that system. What is at stake is the very shaping of the value the system creates, offering the rewards of enhanced status and influence.

In the age of ecosystems, there is no free ride in a system defined by its constantly evolving value equation. Even if you are on the right track you can be overtaken by the relentless progress of others. Any company that rises to systemic opportunities must be an entrepreneurial company, which begins with managers who think more entrepreneurially across traditional organizational boundaries. Here are two ways to do just that.

Drucker Forum 2019

This article is one in the “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems” taking place on November 21 & 22, 2019 in Vienna, Austria.
#GPDF19 #ecosystems

Forget Right and Wrong

Entrepreneurial thinking starts with recognizing that right-wrong categories apply only to the past. They need facts. Yet there are no facts in the future. Tomorrow brims with possibilities — it is seldom a replay of yesterday.

“Focus on the future” is an unassuming prescription for overcoming the limitations of legacy thinking. By simply looking ahead to a world not nailed down by facts and supercharged by ever-growing networks, the right-wrong label is always behind you — and it can never catch up with you.

The “kick in the teeth” of rejections and setbacks become signals of what does not work and serve as props for learning. To call such experiences “failures” is to remain locked in the past.

Look for what’s not there

Managers need to look for what’s not there, products or services that will address what Drucker calls incongruities of daily life and leverage evolving values and meaning.

Brian Chesky saw air beds in a world of ample hotels and motels, while James Dyson had a vision of a bagless vacuum in a world of bags.

Entrepreneurial thinking relies on what is possible in the marketplace and prompts us to “imaginate” (an old Scottish word) beyond what there is. Managers must look for what’s not there, empowered by the words of George Bernard Shaw: You see things as they are, and you ask “Why?” But I dream things that never were, and I ask “Why not?”

Being entrepreneurial values doing for the sake of doing. Only action can provoke the world to respond. Invite serendipity by keeping things in motion; remember: the future is shaped not by past facts but possibilities yet to be realized.

About the Authors:

Joseph Pistrui is Adjunct Professor of Entrepreneurship & Innovation at IE Business School in Madrid, and co-founder of Kinetic Thinking.

Dimo Dimov is Professor of Entrepreneurship & Innovation at Bath University in the UK, and co-founder of Kinetic Thinking.

This article is one in the Drucker Forum “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems”, taking place on November 21-22, 2019 in Vienna, Austria #GPDF19 #ecosystems

“First, let’s fire all the managers” said Gary Hamel almost seven years ago in Harvard Business Review. “Think of the countless hours that team leaders, department heads, and vice presidents devote to supervising the work of others.”

Today, we believe that the problem in most organizations isn’t simply that management is inefficient, it’s that the role and purpose of a “manager” haven’t kept pace with what’s needed.

For almost 100 years, management has been associated with the five basic functions outlined by management theorist Henri Fayol: planning, organizing, staffing, directing, and controlling.

These have become the default dimensions of a manager. But they relate to pursuing a fixed target in a stable landscape. Take away the stability of the landscape, and one needs to start thinking about the fluidity of the target. This is what’s happening today, and managers must move away from the friendly confines of these five tasks. To help organizations meet today’s challenges, managers must move from:

Directive to instructive: When robots driven by artificial intelligence (AI) do more tasks like finish construction or help legal professionals more efficiently manage invoices, there will be no need for a supervisor to direct people doing such work. This is already happening in many industries — workers are being replaced with robots, especially for work that is more manual than mental, more repetitive than creative.

What will be needed from managers is to think differently about the future in order to shape the impact AI will have on their industry. This means spending more time exploring the implications of AI, helping others extend their own frontiers of knowledge, and learning through experimentation to develop new practices.

Jack Ma, co-founder of the Alibaba Group in China, recently said, “Everything we teach should be different from machines. If we do not change the way we teach, 30 years from now we will be in trouble.” Ma is referring to education in the broadest sense, but his point is spot on. Learning, not knowledge, will power organizations into the future; and the central champion of learning should be the manager.

Restrictive to expansive: Too many managers micromanage. They don’t delegate or let direct reports make decisions, and they needlessly monitor other people’s work. This tendency restricts employees’ ability to develop their thinking and decision making — exactly what is needed to help organizations remain competitive.

Managers today need to draw out everyone’s best thinking. This means encouraging people to learn about competitors old and new, and to think about the ways in which the marketplace is unfolding.

Exclusive to inclusive: Too many managers believe they are smart enough to make all the decisions without the aid of anyone else. To them, the proverbial buck always stops at their desks. Yet, it has been our experience that when facing new situations, the best managers create leadership circles, or groups of peers from across the firm, to gain more perspective about problems and solutions.

Managers need to be bringing a diverse set of thinking styles to bear on the challenges they face. Truly breakaway thinking gets its spark from the playful experimentation of many people exchanging their views, integrating their experiences, and imagining different futures.

Repetitive to innovative: Managers often encourage predictability — they want things nailed down, systems in place, and existing performance measures high. That way, the operation can be fully justifiable, one that runs the same way year in and out. The problem with this mode is it leads managers to focus only on what they know — on perpetuating the status quo — at the expense of what is possible.

Organizations need managers to think much more about innovating beyond the status quo – and not just in the face of challenges. Idris Mootee, CEO of Idea Couture Inc., could not have said it better: “When a company is expanding, when a manager starts saying ‘our firm is doing great’, or when a business is featured on the cover of a national magazine – that’s when it’s time to start thinking. When companies are under the gun and things are falling apart, it is not hard to find compelling reasons to change. Companies need to learn that their successes should not distract them from innovation. The best time to innovate is all the time.”

Problem solver to challenger: Solving problems is never a substitute for growing a business. Many managers have told us that their number one job is “putting out fires,” fixing the problems that have naturally arisen from operating the business. We don’t think that should be the only job of today’s manager. Rather, the role calls for finding better ways to operate the firm — by challenging people to discover new and better ways to grow, and by reimagining the best of what’s been done before. This requires practicing more reflection — to understand what challenges to pursue, and how one tends to think about and respond to those challenges.

Employer to entrepreneur: Many jobs devolve into trying to please one’s supervisor. The emphasis on customers, competitors, innovations, marketplace trends, and organizational performance morphs too easily into what the manager wants done today — and how he or she wants it done. Anyone who has worked for “a boss” probably knows the feeling.

The job of a manager must be permanently recast from an employer to an entrepreneur. Being entrepreneurial is a mode of thinking, one that can help us see things we normally overlook and do things we normally avoid. Thinking like an entrepreneur simply means to expand your perception and increase your action — both of which are important for finding new gateways for development. And this would make organizations more future facing — more vibrant, alert, playful — and open to the perpetual novelty it brings.

We want managers to become truly human again: to be people who love to learn and love to teach, who liberate and innovate, who include others in the process of thinking imaginatively, and who challenge everyone around them to create a better business and a better world. This will ensure that organizations do more than simply update old ways of doing things with new technology, and find ways to do entirely new things going forward.

About the Author:

Joseph Pistrui is Professor of Entrepreneurial Management at IE Business School in Madrid. He also leads the global Nextsensing Project.

Dimo Dimov is Professor of Entrepreneurship & Innovation at Bath University in the UK, and co-founder of Kinetic Thinking.

Drucker Forum 2018

This article is one in a series related to the 10th Global Peter Drucker Forum, with the theme “Management. The human dimension” taking place on November 29 & 30, 2018 in Vienna, Austria.

This article was first published in Harvard Business Review