PODCAST: How to reimagine your company for the exponential age
When it comes to the future of work and the future of organizations, John Hagel, is a true legend. He has spent over 40 years in Silicon Valley as a management consultant, entrepreneur, speaker and author of no less than 7 books. He currently is the leader of the Center for the Edge at Deloitte, occupies leadership roles at the World Economic Forum and the Santa Fe Institute, and serves on the faculty of Singularity University.
I had the honor of interviewing him for the nexxworks Innovation Talks podcast about scalable learning, inefficient efficiency (John loves a paradox), innovating at the edge, the importance of a long term perspective, overcoming fear, his favorite technologies, education and many other subjects. Below are some of the highlights of our conversation, but please listen to our podcast as well. John’s brilliant.
Contrary to many people, John is not afraid that automation is going to steal our jobs. An optimist at heart, he sees this as an opportunity rather than a threat: “Work today, certainly in most large institutions, consists of tightly specified tasks, that are highly standardized and tightly integrated. As machines take over these routine tasks - which are very unfulfilling for human beings in the first place - this is the perfect time to redefine work at a fundamental level. The question to ask here is “what should work be to begin with?”. I believe that it should be redesigned to help companies “to address unseen problems and opportunities to create more value”.
If we want to redefine work, we need to redesign our organizations. A lot of companies, especially the large corporates, are unfit for how the global economy and society have been reshaped by some powerful long-term forces. That’s the Big Shift, as John likes to call it. Technology, for instance, greatly impacted the power and expectations of our customers and, as such, has accelerated markets in an exponential manner. Customers refuse to accept standardized mass market products and want affordable prices and tailoring at the same time. And the latter is a huge problem for companies that have been organized around the scalable efficiency model - tightly specifying, highly standardising and tightly integrating all their activities and thus creating an environment where there is no real opportunity to learn - which only works when everything is standardized.
But – the current pandemic is yet another example of that – we have come to live in a world of exceptions, rather than standards. That may seem uncomfortable and it certainly results in mounting pressure – for organizations, leaders and employees – but above all, John feels that such an environment also creates exponentially expanding opportunity: “We can create much more value with far less resource and far more quickly then would have ever been imaginable 10 or 20 years ago.”
From scalable efficiency to scalable learning
And yet governments, NGOs, schools and all kinds of organizations are still built around this model of scalable efficiency, obsessed with becoming more efficient at scale. “In a rapidly changing and uncertain world, scalable efficiency is actually becoming very inefficient. So we need to move to a different institutional model, which I call scalable learning.”
According to John, the institutions that will thrive in the future are the ones that are driven to learn faster. By learning, he does not mean traditional training programs, but “learning through action by addressing unseen problems and opportunities to create more value”.
Innovating at the edge
Becoming such a scalable learning type of organization will not be achieved with large, top down, big bang initiatives to change everybody in the organization, he explained. That’s the type of transformations that the corporate “immune system and the antibodies” are very good at crushing. “The best way to drive transformation is through scaling at the edge”, said John. “You have to find an innovative part of your institution today that's relatively small and not a significant part of the activity. If you understand the exponential forces that are driving change, that edge has the potential to scale to the point where it will become the new core of your organization, not just the new diversification or growth initiative. Use that effort to drive the transformation as you scale the edge. And when it becomes the core, you've transformed the institution itself.
Zoom Out Zoom In
“One of the methods to better navigate the future”, John advocates, “is the Zoom Out Zoom In approach”, which was inspired by his experience working with some of the most successful tech companies in Silicon Valley. As he describes it himself in his piece “Zoom In Filters for High Impact”:
The first time horizon, the zoom out horizon, is 10-20 years. On that horizon, the two key questions are: What is my relevant market or industry going to look like 10-20 years from now? What are the implications for the kind of company I will need to become in order to be successful?
The second time horizon, the zoom in horizon, is very different – it’s 6-12 months. On this horizon, the key questions are: What are the two or three initiatives I can pursue in the next 6-12 months that will have the greatest impact in enhancing my ability to reach my destination? Do I have a critical mass of resources committed to those initiatives in the next 6-12 months? How will I measure success for these initiatives?
The very early days Microsoft is a company that proved to be highly successful at this Zoom Out Zoom In strategy, John explained. Bill Gates’ Zoom Out approach was basically “the computing industry is moving from centralized mainframes to the desktop and if you want to be a leader in the computer industry, you need to be a leader on the desktop.” Today that may sound underwhelming but in 1970 it was hugely controversial, and we all know how right he turned out to be.
Emotions are just as important as numbers
John concluded our talk with the warning that we should not give in to the sense of fear that comes with the mounting pressure of exponential change: “Unfortunately, one response in our society today is to play to the fear, rather than focusing on what's driving it and how we can overcome it. When was the last time you heard a good news report on a newscast? It's all about the latest crisis and tragedy. But how can we move towards the hope and excitement that can motivate us to overcome this panic? I don't think the fear is ever going to go away. I think there are reasons to be afraid if you're in a world of mounting pressure. That's a natural human reaction. But what emotions can you cultivate that will help you to move forward and harness the opportunities that are available? I feel that this emotional side of the Big Shift is vastly underrated in companies, while it’s just as important as numbers, charts and graphs.”