What A Caterpillar Can Teach You About Growing Your Business

Master Near Constant Change

 

Many people think that businesses should develop a strategy and stick to it at all costs.

But Sid Mohasseb, serial entrepreneur, investor, venture capitalist, and former the Head of Strategic Innovation for KPMG’s Strategy Practice teaches an entirely different approach: It’s the ability to adjust your strategy, almost constantly, that brings success. The environment is uncertain and changing, and changing with it is vital.

Sid teaches that we must push for more and evolve from one approach to another.

I recently had the opportunity to talk with him about his new book, The Caterpillar’s Edge: Evolve, Evolve Again, and Thrive in Business.

 

Prepare for Constant Flux

Why a caterpillar?

The caterpillar evolves many times over before it becomes a butterfly. It changes form until it turns into a completely different species. The caterpillar teaches us the wisdom of constant and incremental evolution and offers the promise of flying.  To compete, to advance and to win, in our businesses and in our personal lives, we must evolve constantly and purposefully, always.

 

“Things do not change. We change.” -Henry David Thoreau

 

How is the game changing? And how do leaders prepare for the constant flux?

Innovation is constantly approaching from every corner of the world. The speed of change fueled by unprecedented technological advancements and constantly increasing customer expectations are challenging companies to “stay relevant” – competitive advantages are temporary. The game has changed from, “How do I gain an advantage and defend it?” to “How do I change to stay relevant?”

To win in a state of constant flux, leaders must shift their minds and change their actions. First, by realizing their addictions (old assumptions, orthodoxies, biases, etc.). Next, by aligning with uncertainty – no plans can be permanent and no decisions are certain. Leaders must learn to live with probability and a portfolio of related plans – always ready to take the path that offers the most likelihood of success. They should also appreciate the reality of their capabilities and aim to build the future in increments; success cycles must be shorter and capabilities (people & systems) have to be created accordingly. Last, leaders must constantly look for the next advantage and aspire for more “Aha’s.” They should look for and discover the next challenge or opportunity, always; innovate, always (create new value), and evolve, always.

 

“To win in a state of constant flux, leaders must shift their minds and actions.” -Sid Mohasseb

 

How to Embrace Change

Why do we so often refuse to deal with change and uncertainty?caterpillar-cover

The refusal is more natural than intentional. We refuse to deal with change because of our fears of unknown (what is on the other side of change) and comfort with the status quo (comfortable routines we are used to and have served us well in the past). Most people embrace change when they i) realize the severity of the problem they face and ii) gain trust that what they can change to is a better state. We often refuse to change because we believe that the status quo does not present a major danger and/or we don’t trust the alternative paths offered by our leaders.

At business school and later at work, we are trained to look for certainty to plan to and execute against – assuming reduced risk. In our personal lives, we are comfortable living with probability and operating in uncertainly – there is a 40% chance of rain, and we decide, based on our risk tolerance, to take an umbrella or not. In our professional lives, we are expected to be certain and execute with confidence in outcomes. People, on a personal level, can innately adjust to uncertainty. However, they are reluctant operating with uncertainty at work because corporations expect and reward the illusion of certainty.

 

“The only thing that is constant is change.” -Heraclitus

 

3 Categories for Leaders to Plan in a World of Change

How to Create a Culture of Innovation

Create an Innovation Culture

 

How do organizations revolutionize their products and services?

Is it possible to create a culture of innovation?

Is organizational culture linked to innovation and competitive advantage?

 

Soren Kaplan, Ph.D. answers these and other questions in his new book,Invisible Advantage: How to Create a Culture of Innovation. After reading his book, I had the opportunity to ask him some questions about his research in the area of innovation, disruption, and corporate culture. Soren has been recognized as a Thinkers50 Global Thought Leader. He’s a keynote speaker, a consultant, and an author. You may have read his previous book, Leapfrogging.

 

“Competitive advantage is temporary.” -Soren Kaplan

 

What is Missing from Culture Discussions

Organizational culture has been the rage in discussions for quite some time. What have many of these discussions missed?

People have been talking about organizational culture for years. But few discussions on the topic have explicitly linked culture directly to innovation.  Even fewer focus on the integrated set of things that leaders can do that directly create a culture of innovation in a truly systematic way.

It’s one thing to create rewards for example. It’s another to look at how rewards, metrics, processes, and storytelling can all be used together to change culture for the better. The problem is that most leaders do things that both support and contradict a culture of innovation all at the same time, like telling people they want innovation but then not giving people time to innovate.

To many executives, culture has become a complex and mysterious topic.  Business and leaders have lost sight of the fact that organizational culture is actually pretty simple.  Here’s how it works:  Employees have experiences in organizations that are influenced by leaders’ conscious and unconscious decisions and behaviors. Experiences shape assumptions about what is both desirable and undesirable behavior.  Assumptions, in turn, influence and reinforce behavior.  It’s an ongoing cycle. That cycle can be either virtuous or vicious and can lead to innovation or stagnation.

 

Why Culture is a Sustainable Advantage

Share a little about your thinking of culture as a sustainable competitive advantage.

The Invisible AdvantageThe first reality in today’s disruptive world is that competitive advantage is temporary. Products, services, and even business models become commodities over time. If organizations do not continually invent and reinvent their competitive advantage, they risk being disrupted into obsolescence.  Given all the disruption out there, this fact is the no-brainer.

As a result of the commoditization of just about everything, culture becomes the only sustainable competitive advantage. Culture represents the norms and values that drive behavior.  When it’s focused on and reinforces innovation, it becomes the invisible secret sauce that drives employee engagement, business growth, and continuous reinvention.

The bottom line is that the soft stuff is the hardest stuff for competitors to copy.  The goal is to create an “invisible competitive advantage,” something I call your “Invisible Advantage.”

 

“The only defensible competitive advantage is your culture.” -Soren Kaplan

 

In what ways can culture stifle innovation?

Creating a High-Trust Culture for High Performance

 

How to Increase Trust

 

Why is culture so difficult to change?

Why are so many employees disengaged?

What should a leader do when she arrives at a company that is struggling?

 

The founding director of the Center for Neuroeconomics Studies recently wrote a book, Trust Factor: The Science of Creating High-Performance Companies to answer these and other questions. Paul J. Zak, PhD, is also a professor at Claremont Graduate University. He recently answered some of my questions about his extensive research into trust. His book is fascinating and contributes to the body of work on trust and organizational culture.

 

Survey of 200,000 employees: 71% of companies have mediocre to poor cultures.

 

Spot the Signs of a Low-Trust Culture

In one part of the book, you tell a story of walking into an office full of cobwebs, old furniture, and a struggling culture. What are some of the signs of a low-trust culture?

Distrust drains employees’ energy, so people move slow, think slow, and lack a passion for their jobs.  Organizations with low trust also have lower profits, so offices often look out-of-date, even while new employees show up as turnover tends to be high.  We have also shown that people take more sick days when they work at low-trust companies, so one sees empty desks.  All these factors are signs of a low-trust syndrome and a downward cycle of productivity, innovation, and profits.

 

“High-trust companies invest in employee health and productivity.” –Paul J. Zak

 

Why Healthy Cultures are Based on Trust

trust factorWhy is a healthy culture based on trust so vitally important to its success?

Companies are, first and foremost, people. As social creatures, we naturally form teams to accomplish goals together.  Extensive research shows that teams are more effective when they have a clear objective and when team members are trustworthy. Trust reduces the frictions that can arise in teams so getting things done takes less effort and as a result more and better work is done.  By measuring brain activity while people work, we’ve shown that people are more relaxed when they trust their colleagues. They innovate more and shed the stress from work faster than those in low-trust companies.  Creating a culture of trust provides powerful leverage on performance because it harnesses what our brains are designed to do: cooperate with others in teams.  And the neuroscience I’ve done shows how to create a culture of trust in a system so it has the maximum effect on brain and behavior.

 

Workers in high trust organizations are paid an average of $6,450 more.

 

I love the biological explanation of the Golden Rule. Explain the connection between oxytocin and trust.

Answer the Call to Exceptional Leadership

Leading the Unleadable

Taking a management job is not the same as answering the call to exceptional leadership. That’s what Alan Willett’s new book is all about: how to create a culture where people are able to perform in an extraordinary way.

Often new managers think that those following them are unengaged, cynical, or otherwise difficult. And that can be true, but many of these symptoms are a result of the manager not knowing how to lead, how to challenge, how to create team-wide expectations.

Alan Willett offers practical ways for managers to take on these challenges. Alan is the president of Oxseeker, a leadership consultancy with clients ranging from Oracle to NASA. His new book is Leading the Unleadable. I recently asked him about his work on exceptional leadership.

 

“Exceptional leaders have a personal, passionate mission that goes beyond results.” –Alan Willett

 

Set the Right Expectations

There are so many aspects of your book to discuss, but I want to focus on expectations. How important is the leader’s expectations?

It is amazing how even people that seem “defiant” are working to meet the expectations of the leader. When leaders are setting the wrong expectation it will have negative impacts – and the leader can do this without even knowing it.

I have seen many leaders consistently tell their teams that they want the “most aggressive schedule possible.”  Of course the projects with the most aggressive schedule possible are invariably late. Along with being late, there are many negative aspects that can include quality problems and morale issues since team members feel they are failing. Many leaders who set these expectations later ask me, “Why are my teams always late?”

What the leader really wants in these situations is for the team to have the “smartest” plan possible and a commitment that the team can definitively meet or beat that plan. Setting those expectations correctly will get leaders who they really want.

 

“Exceptional leaders are fearless in setting expectations in clear language.” –Alan Willett

 

How a Leader Sets Goals

It seems that you can set the bar too low and not challenge the team or be “so positive” that you demotivate everyone. What’s the best way to set the goal appropriately?

Set clear motivating goals for the team, but also leave out some specifics, leave them a little vague. Then challenge the team to make it more specific and meaningful to them. In doing this the team members almost always grumble about the lack of precision. They then get to work to make the goals better. The team then creates the goals that are that high bar you refer to. Since the team set those specific goals, they are committed to achieving them.

 

“Action is the foundational key to all success.” –Pablo Picasso

 

I have worked this method with leaders over 300 times, and it never fails to inspire the team ownership and commitment. Leaders are often stunned at what the teams can really accomplish.

 

Expect Excellence Every Day

Become the Leader Your Team is Waiting For

Become a Good Authority

What if chasing balance was actually making us unhappy?

What’s the true purpose of work?

 

“Change the game, don’t let the game change you.” -Macklemore

 

Personal and professional growth. We often think they’re different. We live our lives as if the personal and professional are in neat little silos, as if one didn’t affect the other.

I’ve often said that leaders help people with the personal, not just the professional. And sharing a little of the personal may make a big impact in the professional.

The two are interrelated.

And so, when I read Jonathan Raymond’s new work, Good Authority: How to Become the Leader Your Team is Waiting For, I was excited to find a book that explained why this is…and how to use it to become a better leader. Jonathan is the former CEO of EMyth and now the owner of Refound, an advisory firm that offers leadership training and coaching. And I think his take on “good authority” will have you nodding along with what we want from the very best leaders.

 

“When you make peace with authority, you become authority.” –Jim Morrison

 

Own Your Contribution

Contrast good versus bad authority. What are a few attributes you would think of?

I’d say the first attribute is in the willingness to own your role as an authority in the first place. I see too many modern leaders try to abdicate that responsibility, either outright or in subtle ways, and try to be nice at the expense of giving people the boundaries they need to grow. The main attribute of bad authority is when a leader doesn’t own their contribution to a stuck dynamic or problematic situation. For example, a leader who hasn’t provided a reasonable timeline to reach a goal and then blames the team for not delivering on it fast enough. Good authority is the art of owning your contribution, being transparent with your team, and then moving forward in a collaborative way.

 

“Our strengths are not our own until they are freed of the burden of having to heal the past.” –Jonathan Raymond

 

Would you share a little about the concept of “borrowed authority”?

Borrowed authority is the idea that until we investigate the beliefs about authority we inherited from our parents and teachers – not to mention the business culture in general – we’re still borrowing our leadership style from the past instead of discovering the one that genuinely expresses who we are today. In Good Authority, I offer that the opposite of Good Authority isn’t bad authority, it’s borrowed authority. What I mean by that is that most leaders have good intentions, but until we do the work, we’re bogged down by ideas and beliefs about what it means to be the boss that hold us back and create pain and confusion for the employees in our care as a result.

 

“You’re only as young as the last time you changed your mind.” –Timothy O’Leary

 

Make it About Relationships

I want to ask about organizational culture. You say, “Nobody sets out to make their employees overwhelmed, stressed-out, and miserable.” I have to say that I read that and laughed, thinking, “If Jonathan only met one of my bad bosses, he’d think differently!” You’re right, of course, but people are overwhelmed and stressed. What’s are some ways to change a culture into one that is positive, empowered, and driven?

Good Authority CoverThis may sound odd, but the first problem is bad math. One of the things I ask leaders to do is to add up all the time they’re spending (1) doing re-work for a struggling employee, (2) mediating their interpersonal conflicts, (3) answering questions that they should be able to answer themselves, and (4) complaining to their spouse, partner or friends about how frustrated they are. The pivot is incredibly simple and goes against our conditioning, which is why we typically avoid it. The key to create a positive, empowered and driven culture is the exact same thing that will get you out of being overwhelmed and stressed. Repressing what you see and feel leads to emotional, mental, and physical problems, and it keeps that data away from the one person who needs to hear it in order to grow.

There’s an art to talking about work in a way that feels personally relevant to your employee, but it boils down to this: Give them feedback not about tasks and projects but about how they’re showing up as a human being. Make it about relationships, feeling their impact on others, how they avoid taking risks—those are the things that people will immediately see as helping them get better at work and at life at the same time. There’s a whole new type of organizational culture that opens up from that simple shift.

 

Leadership Tip: More Yoda, Less Superman

 

How to Become a Great Listener

What are some techniques you use to help coach someone who has problems with listening? How can we all learn to be better listeners at a deeper level?

Before we talk about the deeper cut, one simple technique that’s often used in mediation applies well in the workplace in general. Have the person you’re trying to help repeat back what they heard before responding. Highlight for them what the gaps are between what was said (and, even more importantly, how it was said) and what they heard and how they interpreted it. There’s a lifetime’s worth of personal growth work there.

 

“We teach best what we most need to learn.” –Richard Bach

 

At a deeper level, and this is something I work on every day, is to re-examine what we think our value is as leaders. That’s a lot of what Good Authority is about: to learn how the highest value we can add to our teams, and in the rest of our lives, is to put our thumb on the side of the scale that’s about creating the space for others to discover that next better version of themselves, as opposed to tending to fill that space ourselves. I love leaders and have so much respect for anyone who throws their heart into a problem with no guarantee of success. The pivot is to see how not everyone works that way, and that to create the organization that can do more than you can on your own, you have to listen for those other voices.

Finally, it comes down to not shooting the messenger. I can’t tell you how many organizations I’ve seen, in fact I’ve never seen one where this isn’t true, where one person becomes a scapegoat for the cultural dysfunction and is moved out (fired or pushed into quitting), and the message they were carrying never sees the full light of day.  It’s a basic rule of group dynamics, but I see CEOs do it all the time, moving out the ‘disgruntled’ employee instead of leaning into the conversation and discovering the most powerful brand ambassador they’ve got.

 

Tip: Focus more on who people are and less on deadlines and tasks.

 

Let Go of the Past

How about letting go of the past? What advice do you give to someone who is letting the past limit their future?

Find a way to get in relationship with it. Meaning, when you notice yourself re-hashing or cycling in an old story, imagine a friend was telling you that story, what would you tell them? It’s a life’s work for sure, but learn to reframe our past in terms of how it made us the person we are today. I heard this phrase again recently that I absolutely love: “The past didn’t happen to us, it happened for us.”  To be clear, I’m not suggesting people try and transcend or gloss over traumatic or otherwise difficult personal experiences, only that we hold a bit of double-vision about them. Let yourself feel whatever there is to feel about whatever it is that you feel it’s holding back. Cry, laugh, roll up the car window on the freeway and let out a yell from the depths of your soul. By giving yourself permission to let it be what it is all the way, only then do you open up the room to see it in a new way. The paradox is that you don’t have to do any additional work to do this. It’s the process of giving yourself permission to feel that brings that higher mind back online, and you can move forward with confidence and a sense of self that might surprise you.

 

“Shake it off.” –Taylor Swift

 

How to Increase Accountability