Emerald Group Publishing Limited
Copyright © 2004, Emerald Group Publishing Limited
Crisis of disruptive imagination
Doug Randallco-leader of Global Business Network's consulting practice (Drandall@gbn.com) and a frequent contributor to Strategy & Leadership. GBN is a Monitor Group company based in Emeryville, California.
Recently, the CEO of a popular ice cream company happily told me that his company had developed several radically different fruit flavors that were sour and tangy instead of sweet. My immediate reaction was: "Why?" He agreed that these new ice cream offerings didn't make his mouth water either, but explained that his firm's customer research discovered hints that the coveted youth market is becoming crazy about sour and tangy fruit flavors. It's refreshing to meet an executive who enthusiastically embraces disruptively imaginative ideas – especially when those ideas challenge his own "tastes" and expectations about what the market will want.
Good ideas, bad leaders
More often I've encountered an unfortunate phenomena when it comes to the reception of imaginative ideas in large, established organizations. Innovative ideas – ones that meet an important unmet need or preference and also challenge the conventional view – encounter either subtle or strong resistance in corporations and government. Usually, these ideas are heard, and then ignored. Because no one will take the effort to put them into the context of a radically different business scenario, they are soon exiled to the great dump of missed opportunities. Other times disruptive ideas are squelched, suppressed, or undermined. And, in a few cases, executives are so determined to kill a disruptive notion that they attack the person who champions the idea.
In corporate and government strategic planning meetings it's common to hear a manager say authoritatively, "that will never work" or "that will never happen". Leaders rarely reprimand managers for making such imperious assertions, even though they suck value out of businesses by stifling creativity and discouraging full consideration of options.
Many veteran observers believe that most established firms are facing a crisis of the imagination. Consultant Michael Treacy says, "A lack of growth is the dirty little secret of today's corporations". I believe that a partial cause of the growth slump is that business leaders miss opportunities because they refuse to try to imagine their business/market/industry evolving differently than their current expectations for its future. And, if they won't consider alternative and radically different scenarios, then they won't prepare their company for the risks that await the unimaginative or the opportunities that flow from being prepared for drastic change.
The crisis of the imagination is not a lack of fresh and imaginative ideas. Instead, our predicament is the instinctive disparagement of potentially disruptive ideas. Instead, business leaders need to champion the exploration of interesting ideas. Unless executives create an environment that appreciates fresh ideas and treats them respectfully, companies will likely miss the weak signals that are harbingers of major change.
Identifying weak signals
Companies that identify weak signals earlier than their competitors gain first-mover advantage in markets, launch better products, and innovate more effectively than those who do not. Identifying these weak signals requires a systematic process and culture. It's never been easy to recognize weak signals without being overwhelmed by information. But leading organizations are learning to systematically search their environment for ideas that could disrupt their business.
To overcome inertia and to combat the preoccupation with the immediate present that prevents companies from exploring the external operating environment and the future, organizations need proven practices for imagining new business conditions. Scenario technology offers a tested method of creating and exploring possible futures. By using a structured scenario thinking process, business leaders can investigate a diversity of perspectives, unleash their imagination, and have a clear process for framing and communicating their thoughts. By doing so, they are able to play out how today's early signs may interact and impact their business in the future.
The first step in getting imaginative ideas embedded in your organization is to agree on a clear process for exploring the unknown. Many business processes are linear – with clear endpoints and deliverables, but the scenario exploration process requires a more fluid and intuitive approach. Nevertheless, the rules of engagement have to be clear, so that everyone involved knows when you're in the imagination phase versus when you're in the decision phase.
The next step is to ensure you have the right people involved. Naturally, line managers, with operational concerns, tend to be more resistant to new ideas than future-oriented leaders, with strategic concerns. Both roles are needed for a functioning organization. The problem is that these two types of executives often don't communicate effectively. The line managers have become successful because they focus on deliverables and results – important in the business, but deadly when it comes to imagination. Strategic thinkers are successful because they have good ideas, often, though they're viewed as irrelevant and academic. The challenge is to get a productive dialogue going between them.
Most future-oriented conversations about the unknown can be effectively grounded in today's happenings. Scenario technology uses available data, projections, and logical imagination to help a firm consider various possible evolutions of its operating environment. Scenarios prepare leaders to identify key indicators of how the future may unfold.
Engaging the imagination is part monitoring, part technique, and part data. Technique: develop a hypothesis about a future and test its logic. Data: conduct traditional market research. To monitor the supply of fresh thinking, track how imaginative ideas germinate, sprout up and mature. Many will be killed at an early stage, appropriately, as new information becomes available. But others will be killed prematurely. There should be a management process for reconsidering them as conditions change, or as assumptions made earlier are proved wrong. Set-up a system to understand what information about the outside world is needed to validate the idea – and track that carefully.
Blueprints for possible futures
There's no simple formula for encouraging imaginative ideas in business, but methodologies like scenario thinking help balance interactivity with efficiency, creativity with practicality, and fluidity with structure. As organizations become more disciplined in how they view ideas, I'm hopeful that creativity will be taken to a new level – both the generation and acceptance of new ideas.
Imagine all the disruptive ideas that are in danger of being killed before they're adequately understood. When will the oil company CEO support a proposal for a plentiful, environmentally friendly, low-cost energy solution? When will the intelligence community promote a workable solution for connecting the information "dots" across agencies? And when will that sour and tangy ice cream finally hit the ice cream shops?
I experienced the disruptive imagination crisis firsthand recently. I had the pleasure of conducting an adventuresome scenario study on climate change for the Department of Defense. For the US Defense Department, Peter Schwartz, Chairman of Global Business Network, and I reviewed a little noticed 1992 report from the National Research Council called "Abrupt Climate Change: Inevitable Surprises", and developed a worst case scenario in order to explore the national security implications. The department of defense asked us, in the light of the NRC study, if abrupt climate change happens sooner and more widely than most scientists expect, what issues are raised for national security? Our report, subtitled, "imagining the unthinkable", was purposefully shocking. It paints a picture of food shortages in Europe, war in Asia, and water shortages around the world. It even describes a nuclear build-up and the potential for a world war.
Weeks after the Pentagon and GBN released the report to Fortune magazine I read an inaccurate headline in the London Observer, "Now the Pentagon tells Bush, climate change will destroy us". The article politicized the climate change study by falsely asserting: (1) that it was a secret and suppressed report; (2) that it was a prediction (rather than a worst case scenario); and (3) that it would humiliate the Bush Administration. It took a few days for the true story to come out in the media – that there is early data that abrupt climate change is an environmental challenge the world should be increasingly prepared for, and that the report was, in fact a "worst case scenario". In fact, the defense department realized that a sudden cooling, drying, and windiness scenario could have vast geo-political implications and should be studied in greater detail today.
As the media firestorm heated up, I realized why it's easier to say, "that will never happen", than to unleash the imagination on the potential problems we face. By exploring a worst case scenario and identifying the implications in a concrete and meaningful way, the study opened up a series of discussions about what capabilities and resources would be required if the scenario unfolded as depicted, what measures could be put in place today, and what additional scientific research is required.