[music] We're going to start with the question of strategy. Strategy is about intent, strategy is about what an organization wants to do, where it's trying to go, and partly, how it tries to get there. And so, I want to bring you back to an example we looked at which was the General Motors EV-1, car the code name The Impact. And so, through some various things and the story I told was that the compact became, the impact became the compact. In fact, all the cars were crushed. I want to ask why. Was this because someone didn't have a good idea? Because we talked about the individual level about perception, intellection and expression. Doesn't really seem to explain it very well. Was it because of the group process? Maybe there was a group of people who you know, how was a, how would a group have been the, the cause of this, the cause of this thing to be pulled back and junked the way it was? Now, there are some other things. I've read with you all and we all discussed on the forms some of these other questions. Was it a liability issue? Maybe there's some problem with the car and they were afraid to have them out there because people might crash or because they were unsafe. Maybe there's no market for it. Maybe they saw it was only a thousand of them, so why keep them out there if no one else is going to buy them? Maybe there was some secret technology they didn't want other people to have. Infrastructure, maybe a lack of infrastructure. Certainly, there was at the time, the early 90s, difficult to find a place to charge an electric car. Maybe it was a conspiracy. Maybe the people got together and said, oh, let's, let's crash that, let's make that thing not work. Was it too ugly? I mean, that's a possibility as well. Well, one thing I want to offer is that possibly from a strategy perspective, we think about the strategy of an organization, the intent, we might actually be able to get some insight into what happened with the electric car. So, the problem is sometimes in some organizations, what we'll find is our ideas don't fit the strategy of the organization. And, in fact, if they don't fit, what the organization probably should do, this is from, remember, this is from business perspective, what the organization should do is kill the idea. The idea should not happen because if we have a strategy, that is we're trying to achieve alignment, we're trying to achieve strategic fit, and your idea does not fit that, we should not do your idea. Because your idea, if, if our alignment takes us here and your idea is an idea that goes there, we should not do that. Alright, we need to stay aligned. And if you have ideas that go in this direction, they're good ideas for us, if you have ideas that go in this direction, well, at best they're irrelevant and possibly, they're harmful. And so, this question of why wouldn't org, employees of organizations sort of go in that direction? Well, they would, right? If, if you work for your organization, you want your organization to succeed. And so, why would you not push in the same direction as the strategy of the organization? One problem is, sometimes we don't know the strategy. You know, why wouldn't we know the strategy? Do you know the strategy of your organization? This is a question I ask people often and they sort of nod at first, they say, okay, well, tell me. Then, it's much more difficult to tell. And why don't we tell people the strategy? Well, one reason can be because we don't have a strategy. And, in fact, we think we have a strategy and we work on it, but actually there's no strategy there. And if there is a strategy, it's not communicated to us. Another reason, we might not tell people the strategy or why they might not know the strategy is that the strategy may be secret. You know, oh, we have the strategy, but it's a secret strategy. You know, we don't trust our employees because if, if we told them and they might tell our competitors what our strategy is. Well, guess what? They're not going to be able to innovate for you. They're going to be pushing off in the wrong direction if they don't understand that our strategy is to go in this way. And we'll talk about overcoming these, these constraints, but think about it as lack of trust. Another problem is our strategy may be complicated. You may work in an organization, where you say, let's show me the strategy documents and it's like a big row of, of big binders on some shelf somewhere, you know, collecting dust because the thing is so big, it's so complicated, it's difficult to understand. And so, normal employees don't understand what it is. How does that thing, you know, developed up there, relate to me at my job? They have no idea. And so, when they're going to do innovation, they have to say, well, I'm not sure which way to go. So, they're just going to go the way that's comfortable for them. Not the way that's necessarily aligned with where the organization is trying to go. Organization maybe unrealistic, unbelievable, yeah, we're going to take over the world. People say, yeah, right, we have no money, we have no employees, we have no market, we have no, and, and so, when things become unbelievable in that way, it's, it's just as good that you don't have a strategy because people will treat it as if it doesn't exist. And so, these are reasons why people might not know the strategy. Another problem that we have is we have a strategy and it changes, but no one notices that it changes. So, in fact, that we may say, here's the way we're going to go off. We're going to go do this thing. And somehow, something changes in the world that doesn't meet our strategy anymore. You know, the world changes around us. Our competition doesn't behave as the way we predicted. Alright? So, sometimes our competition, we think they're going to go this way, then they go that way. And our strategy has to change. Our strategy may no longer be valid for what has happened before. But we don't update our strategy often enough to be able to address these needs. We have problems where a strategy may require all the resources that we have. That we don't have extra resource to do innovation with because our strategy requires to be a lockstep to make sure the thing is that we do all work. And so, why risk something if our strategy requires us to, in order to stay alive as an organization, to do something when we take these experiments that might take us a different way? And so, the strategy may be to not put organizational resources at risk. And so, this is going to be a problem where we say, well, we you know, even small experiments in organizations may be pushed down, may be declined, maybe not followed up on because of the risk that they create for organizational resources. Also, innovation may be viewed as not strategic. You know, maybe our organization is really about being efficient. And so, anything that is about efficiency is not about innovation. Because first, innovation is about learning. Right? There's going to be some wasted time, some time that we spend in the early part of the learning curve where we're not actually productive, we're not exploiting, we're not producing, we're not doing all of that stuff efficiently. And so, in organization where efficiency is the top value, the most important value, then in fact, ideas, innovations that push towards, I mean, that ultimately lean towards efficiency may, at first, not be approved because they have to go through a stage if inefficiency before they can become more efficient. You also may have this thing, the, the idea where your organization is a fast follower model. It may be that your organization's strategy is to not be efficient. I means, it's not to be the lead in something. Maybe some organizations don't want to be the first one out. Maybe you're much better at copying or doing something, then when someone else has done it, making it better, than you are at being the first organization in there. So, let's think about some of the strategic trade-offs that you have to make. We have these issues of in an organization, people in the organization there have to decide you're making a proposition for change this innovation. And what's the likely reward of that? You know, what we have is risk reward trade-offs. We have to sort of decide if it fails, how much did we spend. If it succeeds, what's the return on the failure. And in some organizations, they're not a very good language. Not a very good set of discussions that take place around these trade-offs and how it is we're going to make these trade-offs on a systematic basis in an organization. Let me say that differently. In some organizations, if you don't have the kind of language that's required to make these kind of, have these discussions inside, to make the decisions on these basis inside, you're not going to have good decision making around it. Someone's going to say, it's too risky, it's too risky. And then, the op, the project will be killed. Even though, risk is a relative term. Even though, we haven't explained, what do we mean by risk? We have another issue of the time investment required that people time, how much people capital. And think, when we think of capital and resources, let's think of financial capital, social capital, all those things that they, we may need those for our strategy. We may need to be able to use that stuff for our strategy. And if it's tied up in some innovation somewhere, innovation that's not yet producing, this can be problematic. So, you have a great idea for your organization. It just requires a lot of investment and maybe your organizational strategy is not to make those kinds of investments at the until the time is there, that you're mature. Also, and some of you noted this on the discussion forums, this idea of, of time horizons. You know, what's a long term payoff, what's the short term payoff? Is there a window of opportunity like, what do we have to think about, in order to know that we're going to get there, that, that the time that we're going to spend working on the innovation is actually worthwhile. That at the end we actually get to something meaningful. So, strategy constraints. So, I've just talked about all of these strategy constraints, and now, what we'd like to think about is how do I overcome those? You know, what are the things I could do in my organization to overcome strategy constraints? Both as a leader, so I may be a leader in the organization, executive or a manager on an organization, but also as a follower, a person inside the organization, what can I do to help our organization overcome these kinds of constraints? Well the first thing to think about is alignment that we need people aligned that the organization strategy is to go in one direction and that people need to understand, that's where we're going, because if they know that's where we're going, then they are able to help, they're able to guide their, you know, their innovative, their creative urges in that direction. So, you may recall, we talked about Sigmund Freud. And how we talked about the ego and, and how people want to create. And, in fact, he said the, the inner drive is, is a drive for creativity. So, people want to create. Why not channel that? Tell them what the strategy is. Because without clarity about the strategy people are going to push their innovation efforts in the wrong direction. So, that's the most important thing. Know the strategy and teach people the strategy if they don't know it. Another one could be to tell the story. So, you have these big binders full of strategy documents. Well, that's not very compelling, it's not very interesting. It doesn't get people excited. Turn into a story. Tell people a story, the story of how it is you compete. A story of where it is you're going to go. There's a great story if you get a chance to see it, I believe it's a, a video that's floating around on the history of Nissan. It's a really good story about how they created these cars, these certain particular cars and how they hit this adversity, and then, how their going to move forward. And inside of Nissan, the story has a lot of power. The story actually tells people what it is they should do, how it is they should do it, when they should be worried and when they shouldn't be worried. And most importantly, what kinds of innovations are meaningful innovations for them. Another thing we need to do is we need to trust the doers. They're people in organizations who do things. And they're competent and, and we need to empower them, we need to give them the trust, give them the ability to get stuff done, new stuff done, because people in your organization, they probably want to help. They wouldn't be working there if they didn't want to help, for the most part. And so, those kind of people, the ones who are actually doing stuff, we need to trust them. We need to help them move along in their change efforts, in their innovation efforts inside the organization. Another thing is to have an understanding of what risks are. What are the different kinds of risks? Initiatives that look good to people in one part of the organization may not look good to people in another part of the organization. What this requires then, is for us to have a shared understanding of what we mean by risk, what we mean by acceptable risk, we need to be able to take other people's perspectives. In the project for you, you in the project track, when I ask you what are the, who are the stakeholders, this is what I'm talking about. The stakeholders may look at the problem differently than you do or look at your potential solution differently and say, wow, that looks really risky. I don't want to do that. And so, we have to understand why they think it would be risky? What do they mean by risky? What do they mean by too risky? What do they mean by not risky enough? And that's the important thing, is understanding and having a language for talking about risk. We're going to talk about some of these things we have to have some exercise to help that in the project on track. Also, there are going to be some hidden stakeholders. And there's some people in organizations, especially in big complicated organizations, that are in a position to say no, but they're not in a position to say yes. That is, they can stop you from moving forward, they can't make you, help you move forward, but they can certainly stop you from moving forward. You need to identify those people early, find them and figure out how they are viewing our innovation. How are they perceiving this thing? How can we then, get in front of them, get before them, in a way that we can actually get the yes before they have the chance to say no? Or, at least get them to withhold their judgment long enough that we can explain to them, here's what we're trying to do, here's why it makes sense to me and here's why I perceive this to have an, an appropriate amount of risk for what we're trying to do in our organization given our strategy. Next, we're going to talk about structural constraints in organizations.
