Sensemaking Part 2: Insights, humor, conspiracies and thinking outside the box

John Cage was an experimental composer born in 1912. He was a leading figure of the post-war, Avant-garde movement. Like many artists, he constantly challenged his understanding, his own expertise. He questioned the very nature of what music was or what it could be. He said of himself in his book Silence, "I'm trying to check my habits of seeing, to counter them for the sake of greater freshness. I am trying to be unfamiliar with what I'm doing."

In essence, John was tapping into a child’s mindset of imagination and a fascination with the world, where metaphors can be easily be made.

For those of us who try to imagine possible futures, this ability to break free from the prevailing narratives and norms of the world helps us see how things might be, how new associations might form and give us a new perspective to look on the way of things.

In part one of this series, I discussed how children and visionary leaders see the world in similar ways, looking at how children form patterns through associative thinking and metaphor as they play with context to create understanding of the world.

I’ll repeat here what information scientist Don R. Swanson said: “A metaphor is a peremptory invitation to discovery. What is discoverable are the various allusive ties, or common attributes, between the metaphor and the underlying truth to which it points.”

It’s through the allusive ties, the common attributes that we discover new connections and associations. Our insights emerge when these synthesize into a whole picture, an elegant form. This is the process of creativity as well as innovation.

Here, in part two of this series, I’ll dig deeper into breaking the chains that limit our vision, unlearning and finally the importance of aesthetics in synthesizing the whole, in the forming of new insights and visions. This part is less about children’s learning than about how we think and problem solve.

John Cage’s statement in the opening is about becoming unprepared, about unlearning. It’s about setting aside our biases and preconceptions in order to open our minds to possibility, to be able to see the world with new colors in it.

Once we’ve become unprepared, we’re then receptive to recognizing new patterns and having new insights. We’ve learned to open our minds.

Thinking outside the box and insight problem solving

In the 1960s and 1970s, management consultants and business strategists used a popular puzzle to demonstrate the value of non-linear thinking, which led to the overused business cliché “thinking outside the box.”

The nine-dot puzzle featured three rows of three dots. Puzzle solvers were asked to draw four straight lines that would connect all the dots without lifting their pencils. All the possible solutions required drawing past the imaginary square box formed by the nine dots. The solution was referred to as “thinking outside the box,” which took a non-linear process to solve. One had to break from the constraints of the context and framing of the problem to find the solution.[1]

This led to an increasing interest in creativity and associative thinking as part of business strategy over the last 50 years. The best ideas might not be immediately recognizable and can sometimes be discovered by going against convention and common thinking.

Breaking from literalness

Part of the process of solving the nine-dot problem is related to understanding metaphors and drawing associations between things or ideas. It begins with breaking away from the logical connection or long-standing convention that has been formed in our minds about something. In this case, we automatically form the nine dots into a square (box) shape and that frames our approach to solving the problem and it limits us.

So, the first step is to break away from our existing understanding. This is also the case with metaphors and other types of associations. To understand a metaphor, we have to let go of the literal meaning of something. For example, we all understand what the phrase, “It’s raining cats and dogs” means, but we have to set aside the literal meaning of cats and dogs to do so.

Humor, Associations and Literalness

Humor often draws on associative thinking, as we tie two ideas together. Humor can play on multiple meanings of a word or a metaphor. As we make the associative connection, we understand the joke.

Puns play on our associative thinking. For example: “A chicken crossing the road is poultry in motion.” We almost instantly associate the word “poetry” to the phrase, not in place of “poultry” but in addition to it, which makes the phrase funny, which echoes a common phrase we may have heard previously, “Poetry in motion,” which was used to brand poetry displayed on the New York City subway system.

We can actually train ourselves to improve our associative thinking abilities. There are certain problem types that require us to break convention or logic or literalness to understand and solve.

One type of these are called insight problems. Some insight problems list three seemingly unrelated words and the problem solver is asked to find a word that connects them.

For example: pie, crab, sauce[2]

Often, the solution just comes to the problem solver. He can’t identify the process or steps it took to realize the solution. They call this the Aha! Moment (or Eureka! Moment). The solution appears as a light bulb being turned on.

The same thing happens when people see the solution for the nine-dot puzzle for the first time. A new connection and an understanding about meaning is made. Actually, we don’t have to solve the problem ourselves to have the Aha! Moment. It’s a moment when we reorganize our understanding of things, when we discover a new pattern, when an epiphany emerges. Solving the problem or even just being given the solution leads us to that new understanding.

Insights Light up our Brains

Creativity and brain scientists John Kounios and Mark Beeman have used functional Magnetic Resonance Imaging (fMRI) machines to look at the brains of subjects doing insight problems. They found that the temporal lobes of the brain light up significantly more when people are solving insight problems as opposed to using analytical problem-solving skills.

In their book, The Eureka Factor: Aha Moments, Creative Insight, and the Brain, they said the difference for someone in an insightful frame of mind is that "everything is up for consideration." They continued, "Nothing is off the table. Any idea--every idea, no matter the source--is considered a potential solution. That's why both the left and right temporal lobes light up like a Christmas tree when a person adopts an insight mind-set. It's the neural manifestation of openness..."

Aha! Moments also create dopamine in our brains, so an insight creates an actual feeling of pleasure. An insight makes us feel good, and we may even unintentionally express that good feeling aloud, “Aha!”

Synthesis and Aesthetics

The brain seems wired to recognize or create elegant connections and associations and seems to have the ability to differentiate the elegant from the non-elegant. Researchers have discovered that an elegant mathematical formula triggers the same parts of the brain as music in functional magnetic resonance imaging machines (fMRI machines).

As an aside, I’ll mention Albert Einstein. Einstein’s e=mc2 is perhaps the most famous example of an elegant mathematical formula. American philosopher John Dewey said of Einstein: "I suppose anyone who knows Mr. Einstein at present would say that he had quite as genuine and esthetic an experience from his mathematical calculations and their results that would mean nothing to us as he does from playing the violin."

Making sense is about creating an order in the world around us, which depends on creating an elegant narrative about that world.

Narratives are the same as what mathematician Benoit Mandelbrot called "Becauses."

Part of a good narrative is the aesthetic element. Does it seem to fit the facts easily? Does it explain “why” with ease and simplicity? The more it fits the bits of data and information we have about things, the more elegant it will generally be and the more it will stand out for us.

Synthesis Depends on Elegance

American philosopher John Dewey says we experience a childlike sense of innocence in the aesthetic moment. When we synthesize a pattern, we feel the wholeness of it. We experience harmony or kalos. Our awareness is not defined by the rational, by analysis, but by a complete, emotional and intuitive understanding. This is the moment of insight, of having a vision, of recognizing truth. This is sensing.

This can occur on a grand scale (when Einstein had a vision for relativity) or on a small scale (seeing a candy bar wrapper on the floor and dog throw-up nearby).

Art and new creations of any type are often appreciated because they compel us to see the world or ideas in new ways. They can push us to consider a new narrative. Like the insight problems, they get us to form new associations that resonate in a meaningful or significant way and generate aesthetic harmony. And like the insight problems, they can get us to reorganize our understanding of the world.

This speaks to our ability to dream up new ideas and find or realize elegance where it wasn’t recognized before.

We can experiment and create and find new associations and interpretations of the world. We can also do this with problem solving and being drawn to solutions that seem more elegant than other solutions. We are drawn to elegant narratives. Every one of us, to a certain degree, sees the world and universe with a sense of elegance and through a lens that creates an elegant narrative and meaning out of (or within) the chaos and noise of our observations.

How does Synthesis Happen?

It begins with something novel or new, which may appear from just about anywhere. Oftentimes, it's something small or non-consequential on its own, but when taken together with other bits of information, it creates a new pattern, something that stands out in some sort of novel way.

When sensing, we're typically not looking at the whole. We're looking at many small bits of disassociated information. Within that information we recognize patterns, many patterns. When we have an epiphany, usually there's some small bit of new information, a last puzzle piece, that brings everything into alignment.

Until that moment, we don't even know what puzzle pieces will end up being part of the reconfigured pattern, the vision. Remember our brains lighting up like a Christmas tree in Kounios and Beeman's analogy. Our minds are working on the entire puzzle at once and eventually, it comes together all at once. It's not a linear step-by-step process. It's a synthesis of the whole.

The catalyst is often a missing puzzle piece. Some small bit of information gets thrown into the blenders of our brains and emulsifies the mixture into the pattern. So, where can we look for this missing puzzle piece?

We can't know or at least we can't know exactly. There are some likely hiding places that we can routinely check (this topic requires its own article). Sometimes the puzzle piece will be found in one of them and sometimes it will appear from somewhere we had never thought to check. So, we have to be open to gathering information from just about any source.

It’s the range and diversity of experiences that increases our odds more than anything else. If it’s a team, it’ll be the entire breadth of the team’s vast diversity of experiences, not necessarily the depth of talent.

The Santa Fe Institute accidentally stumbled upon this phenomenon when it was created in the 1980s to explore complexity. It found that if you bring together people from across disciplines, physicists or biologists might speak in a way and provide a view that would create a catalyst for an economist to see their problems from a new perspective. And vice versa. They trailblazed the practice of cross-disciplinary thinking and that non-experts can sometimes illuminate the big picture where experts might be blind by tradition and routine to possibility.

Elegant Narratives: A Window to Truth or the Seduction of Falsehoods

Synthesis means understanding, but we should approach simplicity and elegant narratives with some caution.

Well-known author Nassim Taleb reminded us in The Black Swan and some of his other works that elegant narratives can be deceiving. Just like we believed the narrative of the snake to explain the data of the stick (an example in Part 1 of this series), we also have a human tendency to believe any elegant narrative, even narratives that are loosely tied to the facts. Taleb warns us to beware of narratives from expert story tellers (financial advisors, political pundits, economists, sports analysts). Each of them is an expert at laying out an elegant (simplistic) narrative over a complex system, where narratives are to be taken with a heavy grain of salt.

Yet, we want to find simple and elegant explanations for everything, for our business problems, for why some individuals or companies succeed, for why things happened one way or another, for why an industry or job disappeared. We also look for elegance in our search for new patterns.

This is partly why we are attracted to Silver Bullet solutions or why we gravitate toward politicians who speak in overly simplistic ideals (black and white frameworks). Simplicity breeds feel-good harmony. These narratives, like an insight or even a piece of music, make us feel good. We feel the elegance of them, which creates a sense of order and meaning, even if they are disconnected from fact.

Mathematics of Roughness

Benoit Mandelbrot, who was mentioned earlier in this article, was a Jewish mathematician whose family lived in a Warsaw ghetto. During the Depression, his father's business collapsed and his family moved to Paris, taking a padlocked train across Nazi Germany. When Paris fell to the Germans in WWII. Mandelbrot was 14. He fled to Vichy and then Lyon with fake papers about his ancestry.  Following the war, he studied in Paris at Ecole Polytechnique, and later at the California Institute of Technology.

Mandelbrot is considered one of the fathers of Chaos theory and he invented fractal geometry (the mathematics of roughness). We've all seen colorful pieces of fractal artwork based on his theory. Fractals also occur in nature. Picture a snowflake. Or the British coastline from space. Or a cauliflower floret.

He saw simplicity and beauty where others saw chaos and messiness. He relied on visual insight as a means to understand the way of things.

In talking about turbulent markets in his book, The (Mis)Behavior of Markets: A fractal view of risk, ruin and reward, Mandelbrot said people think that if they study and analyze enough of data, they will better be able to predict outcomes. The reason: We believe in the word, "Because." Thus, we think we can predict outcomes. If we know why something happened (cause and effect), we can assess risk and forecast events.

Just like we mistake "uncertainty" for "risk," we also mistake "correlation" for "cause and effect."

The problem, said Mandelbrot, is that causes are usually obscure. "Critical information is often unknown or unknowable."

Despite the information gaps, Mandelbrot says, we have a "human need to find patterns in the patternless."

Conspiracy Theories: The Dark Side of Connecting the Dots

Futurists train themselves to be receptive to possibility, to connect the dots in unusual and new ways.

Conspiracy theories use associative thinking in a similar way, but often toward closing the mind around a particular narrative as opposed to opening the mind. Conspiracy theories aren’t new. They’ve been around a long time, if not since the beginning of complex language.

All of us have an ability to connect the dots in novel ways. It’s part of our imagination and foundational to our creativity. Noam Shpancer, a professor of psychology at Otterbein College in Columbus, Ohio, echoed Mandelbrot.

“(O)ur brain,” said Shpancer, “came to specialize in meaning-making and pattern-finding.”

Yet, there’s a question whether people who tend to believe in conspiracy theories are more susceptible to making loose associations stretch beyond rationality and beyond fact.

The fundamental attribution error (a cognitive bias) suggests we have a tendency to prefer dispositional reasons over situational ones, meaning we’re more likely to want to attribute intent and motive to an event, rather than circumstance and coincidence. This is Mandelbrot’s “Becauses.” We seek meaning in the world, perhaps as a means of psychological stability and we have a want to believe in human intention. It’s partly why CEOs get more credit for success and more blame for failure than they likely deserve.

Shpancer said our brains not only seek patterns in the external world, but also in the interpersonal realm. “We have evolved to speculate the intentions of others,” he wrote in Psychology Today, “and pay particular attention to their perceived hostile intentions, since the cost of missing such intentions is higher than the costs of a ‘false alarm.’”

He adds, “Believing falsely that you’re plotting to kill me will not get me killed. But failing to notice your murderous intents will.”

Shpancer’s point echoes the example of the snake and the stick as a metaphor that I discussed in part 1.

The metaphor occurs because we substitute one thing (a snake) for something else (a stick) in our minds and make that conclusion with almost no analysis or revving up the mind’s engine to do the hard work of decision making, which by the time we’ve made a decision, we’d be dead if it was a snake.

We recognize the pattern of a snake in the few data points we observe in a fraction of a second in the stick. In that split second, we react. It takes a longer amount of time to analyze the data closer and determine that it wasn't a snake after all. Even though that lag may only be a couple seconds, it was the difference between life and death for primitive man.

Our survival has always depended on oversimplifying our observations of the world and interpreting potential danger easily.

These acts of sensing patterns that lead to conspiracy theories also explain the phenomenon of people seeing faces (e.g. Jesus) in everyday artifacts (e.g. tortilla, tree bark, toast). This is call Pareidolia, which is derived from the Greek words para, meaning “something faulty, wrong, instead of,” and the noun eidōlon, meaning “image, form or shape.” People with Pareidolia are essentially interpreting meaning in loosely affiliated associations, seeing enough of a similarity to apply a meaning.

Some people are more inclined toward conspiracy theories. People who are disenfranchised and feel a sense of powerlessness or who feel anxiety or stress are more likely to gravitate toward a conspiracy theory that provides a reason and attributes anthropomorphized blame toward an external group.

Conspiracy thinking, interestingly, works in an opposite way to futurist (or scenarios) thinking, by connecting the dots in a way to close the mind around a particular elegant narrative, as opposed to opening it to broader possibility. In recent years, we’ve seen some politicians incorporate conspiracy theories into their own elegant narratives.

Futurist thinking is about opening the mind, not closing it

We live in an age of big data and machine learning to find meaning that data. The truth is that machine learning, at best, can only expose correlations in data and draw conclusions. It cannot provide actual big-picture insight. That requires perspective and human experience.

Thinking as a futurist is more than just connecting dots; it’s about having a range of diversity of experiences to open yourself and find possible tangible meaning in making connections. It’s also knowing that as we think about the future, we’re not forecasting and predicting outcomes. We’re preparing ourselves for possibilities. We’re opening our minds, not closing them by connecting dots in a certain or prescribed way to fit a particular theory or mindset, as conspiracy theorists might.

Famous Royal Dutch Shell scenario planner Arie de Geus said we’re making memories of possible futures.

The thing about futurist thinking or becoming visionary is that the patterns we recognize and use to explore possibility are highly speculative and uncertain. This is not about data analysis. This is about opening up to possibility. This is about synthesizing the whole as John Dewey noted.

Nonetheless, we can get better at recognizing patterns and exploring possibility. We just need to keep in mind that what we may deem to be the truth in our observations today may not be true tomorrow.

Truth as a Final Thought

I’ll leave this parting thought: Truth has both an absolute wholeness about it and still is transitory, as our perspectives and understanding change. As we look into the future (or assess the forest in front of us), there are many truths and possibilities. Some will come to pass and others will fade and dissipate.

Futurists tend not to become attached to a particular view or vision (to close their minds around it), but to engage in the process of remaining open and even marveling at the possibility within their insights like an artist or child might. John Cage attributed this process to unlearning, to adopting a beginner’s mind, to learning to see the world through a fresh lens. Children, artists and futurists alike look at possibility with openness and curiosity.

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[1] Solution

[2] The answer is apple.

Sensemaking: Curiosity, Learning and the Beginner's Mind

Children, futurists, innovators and visionary leaders jointly share a particular attribute, which is to see the world with wide open eyes and a sense of wonder and curiosity. Even underneath that, they share a disposition of being receptive to how things might be connected, to possibility.

Most of us, as we age, refine our sense of how the world works, how things are connected. As we transition from childhood, our many biases start to develop and those biases increasingly steer how we learn and interpret meaning in the world, as well as how we make decisions. We become subconsciously selective in what information we pay attention to.

Children develop language and understanding by experimenting with context. This process involves play with possibility and imagination. It’s not hard to recognize the exploration going on as a toddler sees the similarities between a hat and a pot and then puts a pot on her head. The imagination runs with possibility because the norms of society and context and meaning haven’t yet been formed.

Much of this starts with associative thinking or recognizing patterns in a non-linear way and forming those associations and connections into a synthesis of the whole, in an elegant and simple picture of what might or could be.

Becoming Uncomfortable

For children, this happens naturally because their context is wide open, leaving them receptive to making interesting and unusual associations. For the futurist, innovator and visionary leader, it’s learning how to let go of his or her conceptions, biases and expertise that have built up over a lifetime.

Or rather, she learns how to set aside those biases and preconceptions intentionally. It’s learning to unlearn, to see the world with fresh eyes. It’s to open the mind to possibility and become receptive to it. This process leads to adopting a beginner’s mind, which in turn establishes a learning mindset.

A child's creative play is often driven by experiments with metaphors.

Some people will automatically assume that because children are so easily able to be receptive that this is just child’s play, that it’s easy.

It’s not easy at all. It’s difficult to recognize our own biases and preconceptions and then choose to step away from ourselves and challenge our own views. We can make it easier by pursuing new experiences that take us out of our routines and normal lives and that make us uncomfortable.

Let’s start by looking at how associative thinking works, how kids create context and understanding through imaginary play and wonderment and how the scientific method narrows our perspective as we age.

What is Associative Thinking?

Generally, associative thinking is a term that we use to talk about non-linear thinking. Cognitive psychologists Amos Tversky and Daniel Kahneman explain that our brains are wired to make decisions on very little information. They called it, "Type 1 thinking," by which we're wired to make associative connections and quick decisions, with little analysis. Kahneman won a Nobel prize in economics for their joint work in decision making and cognitive biases. Unfortunately, Tversky died in 1996 and was unable to share the honor.

Kahneman refers to Type 1 thinking as our lazy mode of thinking or thinking fast. According to Kahneman, this so-called “fast thinking” is our de facto thought system and helps us survive in an unforgiving world. He also explains that the other type of thinking, “thinking slow,” (Type 2 thinking) takes a lot more focus and hard work and is based on making decisions by slow methodical analysis.

Man’s Survival: Metaphor and the Science of Being Wrong

Associative thinking uses a form of metaphor to make quick connections. For example, we may jump at the peripheral sight of a stick and do so repeatedly, as we associate the stick with a snake. This hard wiring has caused us to look stupid and waste energy every time we jump, 99 times out of 100. But the 100th time we jump, when it turns out to be a snake, we’ve avoided being bitten.

The metaphor occurs because we substitute one thing (a snake) for something else (a stick) in our minds and make that conclusion with almost no analysis or revving up the mind’s engine to do the hard work of decision making, which by the time we’ve made a decision, we’d be dead if it was a snake.

A metaphor is inherently a false statement. It is a narrative, which ultimately is a substitute for reality and fact.

We recognize the pattern of a snake in the few data points we observe in a fraction of a second in the stick. In that split second, we react. It takes a longer amount of time to analyze the data closer and determine that it wasn't a snake after all. Even though that lag may only be a couple seconds, it was the difference between life and death for primitive man.

This mode of thinking is a key piece of our survival wiring and isn’t exclusive to humans. Many animals carry this same reflexive-like trait.

Our Limitless Ability to Recognize Patterns

In today’s world, we use this trait without thought to make quick decisions all the time without doing any sort of deeper analysis. This can lead to making bad decisions over and over, and these decisions can make us look just as foolish as when we jumped at the sight of a harmless stick.

The pattern we recognize is a narrative of all the data we gather and the sense we make of it. In the case of the snake and the stick, the narrative is wrong, but we're alive because of it. It’s helped in man’s evolutionary survival.

Associative thinking is an undirected process of recognizing connections and links between things; it's a process of discovering new metaphors and creating new narratives. We begin life with an unharnessed creative ability to make new connections.

We have an almost limitless ability to discover new patterns, to create new metaphors and to create relationships among things to alter our perspective and understanding of the world.

This, of course, can lead to unimaginable innovations and works of human creativity.

As we age, however, we become attached to certain narratives and find it harder to break free.

Metaphors and the Path Toward Discovery

A metaphor is inherently a false statement. It is a narrative, which ultimately is a substitute for reality and fact.

"The appeal of the metaphoric act lies both in its resemblance to the truth and in the presence of error."

Don R. Swanson

This narrative, the metaphor, points us toward an underlying truth and propels us on a creative journey to discover truth.

Don R. Swanson, born in 1924, was an information scientist and a former dean of the University of Chicago Graduate Library School. He received a PhD in theoretical physics at U.C. Berkeley and recognized the idea that the discovery (or innovation) process lies in finding links between distinct areas of knowledge and fields, which he called finding "undiscovered public knowledge."

This method prefaced aspects of complexity theory that draws connections or insights from interdisciplinary thinking, such as between theoretical physics and economics, to approach problems or develop theories from broader and more open perspectives.

Swanson was also interested in the process of metaphor as an exploration toward inquiry and understanding.

Swanson said, "A metaphor is a peremptory invitation to discovery. What is discoverable are the various allusive ties, or common attributes, between the metaphor and the underlying truth to which it points."

The more associations and allusions the metaphor packs into a single word or short phrase or symbol, the stronger its narrative will be. Imagine all the data points connecting the idea of a snake to a stick. Additionally, the quicker we are to grasp all these associations, the stronger the metaphor.

Child’s Play: To Invent is to Understand

"The appeal of the metaphoric act," said Swanson, "lies both in its resemblance to the truth and in the presence of error."

The narratives we use to make sense of the world, the patterns we recognize, are, at the core, just metaphors. They are associations that we link together in and through understanding.

Swiss psychologist Jean Piaget famously said, "To understand is to invent."

Swanson turned Piaget's statement around. He said, "To invent is to understand." To connect associations together is to invent, to go on a conjectural journey toward an underlying truth or understanding.

The narrative we create about the world for ourselves is our invention, but it also provides our understanding. It’s the basis for learning.

As we age, the narrative (fantasy) blends in with reality and we forget that it is a narrative.

A child's creative play is often driven by experiments with metaphors. He picks up a stick and calls it a sword; she puts a pot on her head and calls it a hat; he wears dad’s shoes and calls them moonboots. The child lives through a creative narrative of the world, a fantasy.

“A child is a small scientist who tries out all kinds of ways of using the world,” said Swanson.

The Scientific Method: Growing Up

As we age, our metaphors of the world become refined. We even lose sight of them. The narrative (fantasy) blends in with reality and we forget that it is a narrative. We become fully attached to it. This happens due to the scientific method. Our brains are constantly processing and refining our understanding.

The scientific method is this refining process. We develop hypotheses about the world and against those hypotheses, we compare our observations and subsequently make adjustments to our views. This back and forth process is ongoing and over time, we refine our understanding. The real world clashes with our understanding of it and we discard erroneous ideas (hypotheses) along the way.

As we grow up and even as we continue to age, we reshape our ideas about the world over and over. Our understanding often narrows and becomes more precise and more ingrained. And if it becomes more ingrained, it likely becomes more simplistic. We can become set in our ways and see the world through a fairly narrow lens.

Through this calculus of understanding, we develop what we perhaps think of as an objective perspective on reality. Reality has to hold water for us. At the same time, we should be cognizant that reality is a subjective and fluid state. Objectivity doesn’t exist.

The norms of society are built on agreed-upon realities. But, as science has shown us, we’re continuously revising and honing our belief systems as we develop and test new hypotheses about the world. This refinement as we grow up provides a sense of stability in our understanding of things. But every once in a while, some new bit of information changes our perspective significantly. These might be called Aha! Moments, when the organization of our understanding restructures itself.

Your brain has been trained to think in certain ways and it’s not easy to get it to think differently.

Insights are moments when we are able to break from a previous understanding and arrive at a new understanding. One narrative is destroyed as a new one is created by forming associative links between our thoughts in a new pattern. I won’t delve too deeply into innovation here, but oftentimes, innovation is recognizing a new use for an existing or slightly modified technology to solve a novel problem. For a basic example, a screwdriver is primarily used to drive screws into wood or other materials. But it also can be used to pry something open or as a chisel or even to dig a hole. For an in-depth view on this topic, take a look at W. Brian Arthur’s book, The Nature of Technology.

Just Because Children Can Do It Doesn’t Make It Easy

For futurists, innovators and visionary leaders, this ability to break free from the prevailing narratives and norms of the world leads to a secondary ability to see how things might be and how new associations might form and provide a new perspective to look on the way of things. This is how children play with associations toward creating context and understanding.

When we read articles and books on creativity that suggest we emulate the discovery processes that young children go through, we can easily underestimate the seriousness and challenge of that process.

Looking into the future is a process and commitment to question our assumptions repeatedly.

We might dismiss child’s play as overly simplistic.

It might seem easy to adopt a child’s playfulness and openness to the world. But it’s not necessarily so.

You have a lifetime of biases and beliefs that have built up and made you into the person you are. Your brain has been trained to think in certain ways and it’s not easy to get it to think differently. You have refined your understanding of the world over years and decades.

Looking into the future or becoming visionary is a process and commitment to question our assumptions repeatedly. To open our minds, we have to want to adopt a mindset of change and be open to where it might lead us.

Metaphor and Play: One Futurist’s Experiments and Workshops with Play

I recently talked to futurist Yesim Kunter, who runs workshops on play and creativity for adults in the UK. She used to be a futurist at Hasbro and then built a consulting practice in helping executives and others to learn to experiment with play as a means to see the world and possibility differently, to break closed mindsets.

She takes people from a range of backgrounds and they become equals and leave behind their roles, positions and professional personas in her workshops.

“You want to break their understanding of certain things so that they can actually creatively become more open for the next project,” said Kunter. “We give them a whole day play workshop, starting with really simple things doodling and playing with colors or making up stories, and slowly creating these metaphoric worlds. That’s what I call it, metaphors, where they can actually play and be in a completely unknown territory.”  

She continued: “They look at abstractions and they give meaning to them because for them, everything is new. It’s like they are trying to make meaning and sensemaking and they’re playing for us, but they’re serious. They’re working actually.”

In some ways, we’re returning them to childhood when context and meaning were more open and they have to go through a process of reorienting to the environment.

Too often, we try to appear as if we know everything in our professional lives instead of embracing a position of questioning or of not knowing.

This process of taking someone out of their comfortable offices, stripping away their professional identity and role and putting them into an entirely new situation and environment, where they may feel uncomfortable, does remarkable things in helping a person break from some of the biases and behaviors of their day-to-day lives.

In Kunter’s workshops, this is built around play and experimentation. There are other ways to provide this sort of shock and reorienting of someone’s mindset.

Shedding Our Clothes and Becoming Uncomfortable: Vision Quests, Travel, Volunteering

In the 1970s, vision quests and other rituals drew upon the journey of leaving society behind, going into the woods and experiencing an awakening process. Some authors and books on these ideas and practices became bestsellers, such as Carlos Castenada’s The Teachings of Don Juan. In Star Wars, Luke Skywalker goes on this same journey.

Similarly, Outward Bound became popular for putting teenagers in touch with nature through individual and team building exercises away from the norms of the classroom.

When we travel or move to a new locale, we likewise adopt this open-minded persona to be receptive to possibility and change.

Executives who spend time volunteering at a local homeless shelter or other volunteer activity can leave their status and professional roles behind and adopt a beginner’s mind and learn to see the world from different perspectives. It strips away the positions and roles of the workplace and they are able to reconnect with that person inside themselves, underneath it all.

In all these instances, we’re shedding the clothes we may have been wearing for years.

Breaking Patterns

It’s possible that some people may be more adaptable and have greater neural plasticity in the way their brains work.

For example, people who have a strong sense of empathy are more easily able to step outside of their biases and see the world from other people’s points of view. They are more receptive to the experiences and emotions in other people.

Buddhists train to become detached from the self, to let go of their attachments to the body, to the material world, to their thoughts, to existence.

To consider another perspective, some people go to therapy to unlearn behaviors that have become destructive to them, or to rebuild a perspective on the world after going through grief or loss.

Buddhists train to become detached from the self, to let go of their attachments to the body, to the material world, to their thoughts, to existence. The process of unlearning is not different. It’s about learning to break our attachments to some of our beliefs and biases in order to open our minds to possibility.

Sensemaking with a Beginner’s Mind

All these approaches share a particular method of leaving our professional roles behind and entering a new environment that’s foreign to us, where we are forced to learn again, to engage in new ways and see things from a fresh perspective. And we emerge from that experience changed in some way, with perhaps some muscle memory in being able to adopt a beginner’s mindset when facing a problem or thinking about the possible.

Joseph Campbell might call this a version of the Hero’s Journey, where we engage in a quest and are forced to reckon with our inner selves in order to change (through death and rebirth) and come out the other side to return to the world anew.

If someone asked me how they could become better at sensemaking, I’d suggest they seek out an experience in an environment they’ve never experienced before, where the comfortable clothing of their daily lives will be shed and they can learn to embrace a new perspective. This creates the context for a beginner’s mind, which triggers their learning mindset.

What futurists, innovators, visionaries and children share is this ability to be open, to approach the world as beginners and be unafraid to do so.

Too often, we try to appear as if we know everything in our professional lives instead of embracing a position of questioning or of not knowing. After all, we feel the pressure of our positions. If we are Senior VPs, we feel we should have the answers, that we should know more than the Associate VPs. But perhaps not. Perhaps it’s more important to know how to be flexible and receptive, to experiment as a means to gain new insights.

For myself, I’m eternally curious and ever appreciate what I don’t know and still have an opportunity to learn.

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In Part Two of this series, I’ll dig deeper into how insights happen, how we can improve our ability to draw insights, how to unlearn, how to adapt a child’s perspective of wonder in order to open the mind to possibility, how conspiracy theories work, and why we’re attracted to elegant solutions.

Please leave comments below. Also, if you feel inclined, please follow me and keep an eye out for Part Two of this series or my other articles. Feel free to connect and message me if you have questions or feedback. I primarily talk about innovation, creativity, strategy, scenarios, humanity, values and capitalism.

Tags: #behavioraleconomics #insight #associativethinking #creativity #metaphor #futurism #futurist #learningmindset #beginnersmind #sensemaking

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Discovering the Future: the Art and Science of Being Wrong

Children and visionary leaders share an affinity to see the world with wide open eyes and a sense of wonder. Even underneath that, they share an ability of be receptive to how things might be connected, to possibility.

Most of us, as we age, refine our sense of how the world works, how things are connected. On top of that, as we transition from childhood, our many biases start to develop and those biases increasingly steer how we learn and interpret meaning in the world, as well as how we make decisions.

Children develop language and understanding by experimenting with context. This process involves play with possibility and imagination. It’s not hard to recognize the exploration going on as a child sees the similarities between a hat and a pot and then puts a pot on their head. The imagination runs with possibility because the norms of society and context and meaning haven’t yet been formed.

Much of this starts with associative thinking, or recognizing patterns in a non-linear way and forming those associations and connections into a synthesis of the whole, in an elegant and simple picture of what might be. 

A child's creative play is often driven by experiments with metaphors.

For children, this happens naturally because their context is wide open, leaving them receptive to making interesting and unusual associations. For the visionary leader, it’s learning how to let go of his or her conceptions, biases and expertise that have built up over a lifetime. It’s learning to unlearn, to see the world with fresh eyes. It’s to open the mind to possibility and become receptive to it.

Let’s start by looking at how associative thinking works, how kids create context and understanding through imaginary play and wonderment and how the scientific method narrows our perspective as we age (unless we continuously work to broaden our views and question our assumptions).

What is Associative Thinking?

Generally, associative thinking is a term that we use to talk about non-linear thinking. Amos Tversky and Daniel Kahneman, who won a Nobel prize in economics for work in decision making and cognitive biases, explain that our brains are wired to make associative decisions on very little information. They called it, "Type 1 thinking," by which we're wired to make associative connections and quick decisions, with little analysis.

Kahneman refers to this as our lazy mode of thinking, or thinking fast. According to Kahneman, this so-called “fast thinking” is our de facto thought system and helps us survive in an unforgiving world. He also explains that the other type of thinking, “thinking slow,” (Type 2 thinking) takes a lot more focus and hard work and is based on making decisions by slow methodical analysis.

Man’s Survival: Metaphor and the Science of Being Wrong

Associative thinking uses a form of metaphor to make quick connections. For example, we may jump at the peripheral sight of a stick and do so repeatedly, as we associate the stick with a snake. This hard wiring has caused us to look stupid and waste energy every time we jump, 99 times out of 100. But the 100th time we jump, when it turns out to be a snake, we’ve avoided being bitten.

The metaphor occurs because we substitute one thing (a snake) for something else (a stick) in our minds and make that conclusion with almost no analysis or revving up the mind’s engine to do the hard work of decision making, which by the time we’ve made a decision, we’d be dead if it was a snake.

We recognize the pattern of a snake in the few data points we observe in a fraction of a second in the stick. In that split second, we react. It takes a longer amount of time to analyze the data closer and determine that it wasn't a snake after all. Even though that lag may only be a couple seconds, it was the difference between life and death for primitive man.

This mode of thinking is a key piece of our survival wiring and isn’t exclusive to humans. Many animals carry this same reflexive-like trait and it has led to the survival of their species, as it has for us.

In today’s world, we use this trait without thought to make quick decisions all the time with very little information and without doing any sort of deeper analysis. This can lead to making bad decisions over and over, and these decisions can make us look just as foolish as when we jumped at the sight of a harmless stick.

The pattern we recognize is a narrative of all the data we gather and the sense we make of it. In the case of the snake and the stick, the narrative is wrong, but we're alive because of it. It’s helped in man’s evolutionary survival.

Our Limitless Ability to Recognize Patterns

We developed this tool as a means to survive, but we’ve learned to use it in other ways.

Even though people often spend most of their time making decisions in this lazy mode of thinking, it can be used productively to approach a problem from a new angle or to exercise creativity.

This ability to connect associatively enables us to create great works of art, imagine, explore ideas, try new things and find new connections between unrelated ideas or artifacts in the world. We have an almost limitless ability to discover new patterns, to create new metaphors and to create relationships among things to alter our perspective and understanding of the world.

This, of course, can lead to unimaginable innovations and works of human creativity.

Metaphors, Narratives and Child’s Play

A metaphor is inherently a false statement. It is a narrative, which ultimately is a substitute for reality and fact.

This narrative, the metaphor, points us toward an underlying truth and propels us on a creative journey to discover truth.

"The appeal of the metaphoric act lies both in its resemblance to the truth and in the presence of error."

Don R. Swanson

Don R. Swanson, born in 1924, was an information scientist and a former dean of the University of Chicago Graduate Library School. He received a PhD in theoretical physics at U.C. Berkeley and recognized the idea that the discovery (or innovation) process lies in finding links between distinct areas of knowledge and fields, which he called finding "undiscovered public knowledge."

Swanson said, "A metaphor is a peremptory invitation to discovery. What is discoverable are the various allusive ties, or common attributes, between the metaphor and the underlying truth to which it points."

The more associations and allusions the metaphor packs into a single word or short phrase, the stronger its narrative will be. Imagine all the data points connecting the idea of a snake to a stick. Additionally, the quicker we are to grasp all these associations, the stronger the metaphor.

“To Understand is to Invent”

The narratives we use to make sense of the world, the patterns we recognize, are, at the core, just metaphors. They are associations that we link together in and through understanding.

Swiss psychologist Jean Piaget famously said, "To understand is to invent."

Swanson turned Piaget's statement around. He said, "To invent is to understand." To connect associations together, this process of invention and innovation, is the process of understanding and likewise, is the process of the metaphor.

The narrative we create about the world for ourselves is our invention, our understanding.

As we age, the narrative (fantasy) blends in with reality and we forget that it is a narrative.

A child's creative play is often driven by experiments with metaphors. He picks up a stick and calls it a gun; he puts a pot on his head and calls it a hat; he wears dad’s shoes and calls them moonboots. He lives through a creative narrative of the world, a fantasy.

"The appeal of the metaphoric act," says Swanson, "lies both in its resemblance to the truth and in the presence of error."

The Problem with Growing Up: The Scientific Method

As we age, our metaphors of the world become refined. We even lose sight of them. The narrative (fantasy) blends in with reality and we forget that it is a narrative. We become fully attached to it. This happens due to the scientific method. Our brains are constantly processing and refining our understanding.

The scientific method is this refining process. The real world clashes with our understanding of it and we discard erroneous ideas (various hypotheses) along the way. Through this process, we reshape our ideas about the world over and over again. Our understanding narrows and becomes more precise.

Through this calculus of understanding, we might approach an objective perspective on reality, but we can never achieve full and complete understanding.

Associative thinking is an undirected process of recognizing connections and links between things; it's a process of discovering new metaphors and creating new narratives. We begin life with an unharnessed creative ability to make new connections. As we age, we become attached to certain narratives and find it harder to break free.

Insights are moments when we are able to break free from a previous understanding and arrive at a new understanding. One narrative is destroyed as a new one is created by forming associative links between things in a new pattern.

Visionary Leaders and Children: The Path Toward Discovery

For visionary leaders, this ability to break free from the prevailing narratives and norms of the world gives them an ability to see how things might be and how new associations might form and provide a new perspective to look on the way of things. This is how children play with associations toward creating context and understanding.

These skills aren’t hard to develop. We’re already hardwired to recognize patterns easily. The challenge is acknowledging that we’re often wrong. This is okay if we’re not using them for simplistic forecasting, but instead for exploring possible futures and how transformation might play out. This is the essence of being visionary, of exploring the future.

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HBCUs can increase economic growth and lift minority communities

Economic growth is maximized when it’s not exclusive; when it invites engagement and diversity, when more people participate.

Yet, even in our most innovative cities, we often fail to engage existing racially diverse communities to fuel growth. This is part of a series of essays on the future of capitalism, innovation and humanity.

The more people who bring different perspectives and backgrounds to a problem, the better the solutions will be. Innovation comes from diverse thinkers and the movement of people and ideas and inspiration in an open adaptive system.

Without diversity (and we can see this when neighborhoods are gentrified), we end up with an environment characterized by a sense of uniformity and homogeneity, which decreases the activity of innovation. The exchange of ideas becomes increasingly one dimensional with a greater number of people who have similar backgrounds and ideologies.

Ultimately, an economically segregated society stunts economic growth. It also leads to wealth and racial disparities and other externalities.

A more inclusive economy will grow faster and bigger than any exclusionary economy. We all stand to benefit when a broader base of people participates in an economic expansion.

There are innumerable reasons that have contributed to the exclusion of minority communities from economic opportunity and prosperity, but I’ll address just one in this article.

Education.

The Rise of the American University System

In the late 1950s and early 1960s, California created a higher education system that became the model for the rest of the country and the world.

It began, at least symbolically, with Sputnik I, which was launched by the Soviet Union in 1957. It was the first satellite to circle the Earth and marked the beginning of the Space Race as part of the greater Cold War.

In response, in 1958, Congress passed the $1 billion National Defense Education Act to expand high school education in science, math and foreign languages.

As Baby Boomers were starting to reach college age, the pressure was on to meet the coming demand. If America was going to compete with the USSR or lead the world in scientific accomplishment, it needed a bigger educational funnel and expansive university system.

University of California President Clark Kerr and subsequently California Gov. Pat Brown (Former Gov. Jerry Brown’s father) recognized the importance of the moment.

Kerr and Brown established a master plan for a three-tiered university system: University of California system, California State Colleges (CSC) system and California Community Colleges system. Kerr and Brown’s vision provided a educational path for an unprecedented number of students.

It also became a model for the rest of the country and the world.

California’s economy today, the 5th largest economy in the world (ahead of India and behind Germany), was largely ignited and driven by that vision.

Minority Communities Left Behind

Unfortunately, some 60 years later, minority communities haven’t benefited from the university system as they could.

Compared to white students, black and Hispanic minorities don’t have the same access to college prep courses in K-12 levels, don’t qualify for admittance to universities at the same levels and don't have the same completion rates within universities.

At the K-12 level, according to a study by CLASP, only 57% of black students have access to the full range of math and science courses necessary for college readiness while 81% of Asian-American students and 71% of white students have access to such courses. 

In California, more than 50% of all high school seniors are Hispanic or African-American, but only 6% of African-American and 7% of Hispanic students were eligible for admission into the University of California in a 2008 state review. It’s unclear if those numbers have improved any since then.

Black and Hispanic students who attend college have about a 30% lower completion rate compared to white and Asian students. According to a 2017 study by the National Student Clearinghouse Research Center, Asian and white students had much higher completion rates (63.2 percent and 62.0 percent, respectively) than Hispanic and black students (45.8 percent and 38.0 percent, respectively).

At predominantly black institutions (PBIs), most of which are community colleges, only 15% of black students graduate and 50% drop out after the first year.

The problem is foundational. Many African-American and Hispanic communities have been structurally disenfranchised and don’t have a direct personal connection to the educational system, to its benefits and opportunities.

The problem is also generational, which further slows progress. For example, if the majority of parents in a minority community have not gone to college, that community has fewer role models who can light the path.

The statistics against those communities are daunting and in themselves can discourage individual prospective students before they even have a chance.

Whatever any of us hope to achieve in life, it starts by having the belief that it’s possible and within reach.

Can we say that young people in minority communities have the same beliefs about their potential in life as those in predominantly white communities?

The Legacy of HBCUs

There are 101 Historically Black Colleges and Universities (HBCUs) in the United States. Some of these institutions date back to before the Civil War and provide a profound perspective on the history of black education in America.

Because they are clustered mostly in the South and Southeast, HBCUs are under the radar for many Americans. Spelman, Morehouse and Howard are probably the most well-known. Vice presidential candidate Kamala Harris went to Howard.

HBCUs are in 19 states, the District of Columbia and the U.S. Virgin Islands. According to the United Negro College Fund (UNCF), HBCUs enroll almost 300,000 students, approximately 80 percent of whom are African American, and 70 percent are from low-income families.

This list isn’t representative of all black colleges. To be designated as an HBCU, a college had to be established before 1964, according to the Higher Education Act of 1965. 

In 2008, a new classification was established for Predominantly Black Institutions (PBIs) to provide federal grants to minority-dominant schools. PBIs include colleges and universities that have at least 40% African-American students and at least 50% low income or first-generation degree seeking students. PBIs are largely made up of community and state colleges, but may also include HBCUs.

Similarly, the U.S. Department of Education maintains several lists of accredited minority institutions.

Community colleges provide a great first step toward a four-year education, but they aren’t necessarily inspirational to young people.

Kids want to dream about making a difference in the world, about achieving accomplishments that reflect on their ideas and values. Those dreams are molded largely by the people and community around them. Without examples of success and role models and institutions that can light the way, their aspirations and dreams might not be as ambitious as they could or should be.

HBCUs Offer a Direct Path to the Middle Class

According to UNCF, HBCUs make up only three percent of the country’s colleges and universities, but they enroll 10% of all African American students and produce almost 20% of all African American graduates.

Likewise, UNCF says HBCU graduates can expect to earn an additional $927,000 in their lifetimes, which is 56% more than they could expect to earn without an HBCU degree or certificate.

A 2019 study by the Rutgers Center for Minority Serving Institutions found that HBCUs are a pipeline to the middle class for minority students. Approximately 70% of students at HBCUs reach the middle class or higher by their mid-30s.

Those numbers would likely be higher if HBCUs had anything close to the funding of predominantly white institutions (PWIs).

Funding and endowment levels for HBCUs are abysmally low. According to Yahoo Finance, the total combined endowment for all HBCUs (101 schools) amounted to $2.1 billion. For comparison, the endowment for Harvard University alone is about $35.7 billion. Further, the endowments of more than 50 predominantly white institutions (PWI’s) are individually larger than all HBCU’s combined.

Several technology billionaires recognized the need and recently made large donations. In June of this year, Netflix CEO Reed Hastings and his wife donated $40 million apiece to Spelman College and Morehouse College and $40 million to the United Negro College Fund. Then, in July, Mackenzie Scott (former wife of Jeff Bezos) donated $40 million to Howard University.

HBCUs need funding just to survive. The federal government, UNCF and other donors should do everything possible to help these schools with their mission and help their students succeed.

Most HBCUs are Clustered in the South and Southeast

Few HBCUs are located where the highest paying jobs are, in our financial and technology centers, where the cutting edge of innovation is happening.

Most HBCUs are in the South and East regions of the country: North Carolina has 12. Georgia has 12. Alabama has 15. Texas has 9. Tennessee has 7. Mississippi has 7.

Meanwhile, Pennsylvania has 2. California has 1. New York has none. Washington State has none. Oregon has none. Illinois has none. That’s not to say that these states don’t have good colleges that provide excellent educations to large numbers of minorities. They do.

But they don’t have symbolically black or Hispanic colleges, whose mission is to represent and serve their communities.

There are no HBCUs in Silicon Valley or Seattle or Chicago or New York, which are hotbeds of economic opportunity. Howard University, in Washington, D.C, is likely best positioned to high-paying jobs in the nation’s capital. Likewise, there are several HBCUs located near the expansive high-tech Research Triangle Park in North Carolina. While these, along with Spelman and Morehouse in Atlanta, provide excellent conduits to high paying jobs, it’s not enough.

It’s the big cities that drive innovation and economic growth that need these institutions, to provide visible stimulus to minority communities and more importantly, to young people in those communities, who can aspire to become part of a great African-American or Hispanic university in their own community as they’re growing up.

The influence an African-American or Hispanic university goes well beyond just the students who enroll. It becomes a point of community pride and an inspiration for minorities in pursuing the American Dream. It becomes a symbol for possibility and empowers young people in minority communities to imagine their own potential without limits.

The big cities that are drivers of economic growth need them: San Francisco/Oakland/San Jose, Seattle, New York, Los Angeles, Chicago, Portland, Philadelphia, Boston. Although this is an incomplete list, it's a start. It's where the highest-paying jobs are and where the conduit from minority communities to those high-paying jobs needs to be improved.

Let’s Put HBCUs in our Financial and Technology Centers

We can build new African-American and Hispanic colleges and universities. We can also invite existing HBCUs to establish new campuses in the financial and technology epicenters. Both models provide possibility.

I’ll conclude this piece by challenging the leaders in our technology and financial centers to build black and Hispanic universities where it matters most, where they can stand as both educational institutions and inspirational symbols to those minority communities, and provide a direct conduit into the best job markets in America.

The HBCUs provide a cultural and economic roadmap for minorities to reach the middle class. It’s time we built minority-focused institutions in our financial and technology centers. The impact to the economy, and the benefit to all of us, would be exponential.

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Thank you for reading.

Tags: #BlackLivesMatter #BLM #WealthDisparity #EconomicGrowth #Innovation #Education #Gentrification #Humanity #RoadAhead

Few companies give their core values much thought or try to define what they are, for themselves, for their employees, customers, partners and communities. 

But that's changing. Until recently, values were an afterthought as companies were cautious not to take a position on public issues and risk offending clients. Instead, values were thought of as feel-good marketing, spun into superficial and ever shallow statements of purpose.

Values aren't marketing.

They are foundational to every organization. An organization's values are its DNA, its soul. Those values, whether they are known and articulated (or not), will ultimately guide the organization forward.

Companies and individuals that will thrive over the next decade and beyond will be able to articulate their core values, not only in what they say, but in everything they do, in their very essence. They will understand the relationship between their values and the world around them. They'll recognize the importance of knowing who they are, what they represent and what they want their impact on the world to be.

A Reckoning for Transactional Companies

The companies whose values are transactional will struggle (and many may fail). These companies are managed solely for profit by maximizing revenues using minimum resources. They’re always looking for ways to improve efficiencies and do more with less.

Royal/Dutch Shell scenario planning pioneer Arie de Geus called these “Economic Companies.” He said these “corporate machines” lacked a sense of work community. I’ll add that their practices aren’t sustainable. They aren’t built for longevity. They’re built for short-term shareholder value (stock performance).

The transactional company often willingly chooses to ignore the big picture or the long term or the well-being of anyone or anything outside its core shareholders. It ignores how their products, services and behaviors represent their underlying (and often hidden) values and how they impact the world.

These companies are managed on zero-sum principles that can never provide long-term competitive advantage. The pursuit of doing more with less leads to an arms race with competitors for greater efficiencies and often uninspiring and easily copied product offerings. These are the types of companies that neo-classical economists have in mind in their frictionless theories, which are often merely mathematical and economic expressions of utopian ideals.

Ultimately, transactional companies will never be able to separate themselves from their competitors. The era of transactional-driven companies is facing a reckoning as we're all forced to look in the mirror and recognize society and our economic systems can’t survive like this, with such a heavy focus on the short term.

The Corporate Malpractice of Short-Sightedness

It's wishful thinking (and perhaps even malpractice) for executives and Boards of Directors to try to ride out the coronavirus and the vast Black Lives Matter protests for racial equality with the hope of getting back to normal. It's gone. The world demands change and progress at this moment.

Unfortunately, humans aren't wired to think very well about the abstract (e.g. the future). Evolution made us largely reactive and short sighted. We tend to respond to what's right in front of us. For senior executives, that's typically quarterly earnings, sales projections, liquidity, stock prices and the looming threat of activist shareholders.

This short-sightedness leads to short-termism in the markets, which Al Gore, Paul Polman and other forward thinkers have spent their careers trying to bring to light. Long-term externalities (wealth disparities, climate change, racial and gender inequities, decreasing middle class, systemic sexual harassment) are easily diminished, denied, or ignored because the declines are microscopically incremental (occurring over years and decades) or are called out as anomalies, as isolated incidents.

It's not only easy, but easily rationalized as pragmatic, for executives and Board members to put on blinders and block out what they don't want to see, as they focus on short-term shareholder value.

Increasingly, boards and executives will be held accountable by stakeholders across society for this short-sightedness and willful ignorance.

Why are we so Afraid?

A high-profile executive at Deloitte told me that after the banking crisis of 2008, he found that CEOs weren't interested in thinking about the long-term at all. Instead, they retracted and focused on cost cutting, on control, on appeasing Wall St., on what they thought were survival tactics.

People who are afraid will often entrench against the outside world, lock themselves in, separate. But those actions come at the detriment of our collective humanity and only compound the disruptive impact and impair their own ability to lead their organizations to a better place.

In the 2008 crisis, many executives retreated to their lonely offices and ivory towers instead of coming down to the street to embrace their fellow humans and pursue solutions collectively. It's human nature in a crisis to try to hang on to what we have and build a wall for protection, but it ends up separating us and creating greater division and distrust.

As psychologists will tell us, we fear losing what we have, however meager. We become selfish. This psychology undermines our courage to pursue greater goals and to connect with our purpose, our "why", at the individual and organizational levels.

Executives in 2008 largely missed the chance to turn a disruptive market reckoning into a transformative opportunity, to build a better world, to initiate real change. They failed to rise to the demands of the moment, of society. Despite much rhetoric to the contrary, they sought merely to return the status quo, which meant superficial tweaks instead of honest reflection on their values.

Consequently, they dragged out their own recovery. Unfortunately, until we learn to rise to the moment and help effect change, we'll continue to revisit extreme social and societal shocks that have economic consequences with increasing frequency.

Values and our Raison d'être

Understanding our core values is key to innovation and long-term growth. Companies that aren't in touch with their own values can't see into the future very well, other than to extrapolate a future based exclusively on the past (e.g. straight-line projections), as a form of the status quo. They’re ill-prepared for disruption, whatever form it might take.

They can't visualize possible scenarios outside the status quo (current products, services and business practices) of where they might be and what the world might look like in 10 years, much less 2 years. Thus, they're unable to come to the forefront and lead during times of market or societal disruption.

Companies that have a deeper connection with their values are better positioned to imagine how they might adapt to a world undergoing disruption and transformation. They can project into the future where they might be, not based on product or service offerings, but on what they want their impact to be, what their purpose for being is, their "why."

Empowerment and Inclusion will Expand the Economic Engine

Companies that are connected to their values can also imagine how their industries might be changed for better.

Today, as we all grapple with wealth disparities and the future of capitalism, they can imagine building a world that's more equitable, where workers aren't seen as human capital and as a resource to be squeezed like a lemon for more productivity and greater profit, but as living, breathing people, who have families and who are part of the community, who are loved and respected, who have dreams and aspirations of their own.

They can imagine a world where diversity and raising up the poor, empowering them, is finally recognized as a real driver for economic growth and broad prosperity. They can imagine the betterment of humanity.

True Innovation is about Humanity

Companies have misunderstood innovation all along. Innovation (or what I call aspirational growth) is never tactical, or even strategic. It's foundational.

Real growth always comes from an organization's DNA, its values and its creation myths, that emerge from the "why" question of their existence. Contrary to what many aspiring Silicon Valley entrepreneurs think, innovation isn't about being clever and finding market or operational inefficiencies to “solve” (exploit) with a tech solution. It's about having the gumption to be visionary about impacting humanity. This ability to project forward, to imagine a better future, is what drives aspirational (and in turn, exponential) economic growth.

At the most grounded and aspirational companies, you'll find that the receptionists and other front-line workers will be able to speak easily about the company's values and beliefs, that there's a shared sense of purpose across the organization (a community) that is evident to any outsider.

We have a Choice:

We can continue to limit our potential by focusing on short termism and non-sustainable economics and see societal disparities get worse. In this scenario, we’ll only see an increase in social and economic disruptions as poverty and other detrimental externalities increase.

Or we can choose to focus on building companies and an economy that lifts our humanity, where companies are driven by long-term values and society starts to realize sustainable and exponential, equitable economic growth.

In this time of disruption, change and reckoning, the leaders who will shape the future and drive long-term growth will be those individuals and companies driven by strong core values, a sense of humanity and a deep empathy to connect with diverse customers, employees, partners and communities.

Firms have been moving away from large internal R&D operations and are using incubators and accelerators to develop and scale new products and services much faster.

Success comes more from the speed of these incubators and accelerators than from the initial quality of ideas offered for consideration. By making a small investment to test a large quantity of ideas in the incubation phase, a company reduces its risk when it chooses to make a bigger investment to build out and scale an innovation to bring to market or deliver new value propositions.

An incubator team made up of about 6-10 people (a mix of both intrapreneurs from inside the firm and entrepreneurs from outside) can iterate on up to 50 product ideas in three months, quickly moving from one idea to the next and killing off bad ideas early in the process before the company makes a larger investment to roll out a product.

The innovation team will engage both customers and people across the organization, soliciting rapid, continuous feedback.

The idea is to generate lots of ideas, weed out the bad ideas quickly, refine the business models for the winning ideas, and pass those winning business models onto the accelerator stage to go through a similar process to roll out and scale quickly.

A corporate incubator can derisk investment by building value propositions through the process of engaging the customer and people throughout the firm before a big investment to commercialize is made.

Severin Schwan, CEO of Roche, one of the world’s largest pharmaceuticals, says it’s important to establish stage gates early in the process to minimize investment risk: “Our aim is to find things that will one day be breakthrough innovations,” said Schwan in an interview with McKinsey Quarterly, “and to ‘derisk’ them during the early stage, to the point where they are not big gambles if they get to the late stage.”

At each stage-gate hurdle, the innovation team can:

• Stay the course with the design

• Pivot the design/business model

• Kill the project

When a project is killed or fails during these early stages, it’s a victory for the company. The firm hasn’t lost tens of millions of dollars by investing in an untested product.

Perhaps just as important, the company has learned something about what the customer wants. By killing the project, the organization is able to take what it learned and apply that knowledge toward finding a different value proposition for the customer.

Every step of the innovation process is an opportunity to learn more about the customer and market. This knowledge will help the company ultimately deliver better products and value propositions to the customer. And it will help guide the company’s strategic vision.

Customers are increasingly discerning about the products and services they buy. They want to purchase products made by companies that share their values and that are invested in the betterment of the world.

Customer values are important to the innovation process. In many ways, innovation is about finding the common ground between corporate and customer values.

We can’t guess what the customer wants. Products and services cannot be created in a vacuum. They need to be created with an enlightened understanding of the customer and, even more, with the customer’s direct participation in their development.

The success and popularity of startup methodologies in corporate environments is based on developing rapid feedback loops with customers to guide the innovation process and kill projects early that don’t engage the customer with a wanted value proposition. Lean practices articulate the importance of the customer.

Disruptive innovations may or may not serve a company’s current customers in the long run, but they should be consistent with the company’s core values. A company may shift and create new products and services for new markets, but its core values will provide consistent guiding principles for innovating.

An innovation project should be easily articulated by anyone on the innovation team in terms of the firm’s strategic vision and core values. These are the guiding principles of the project. An executive should be dubious if any member of the innovation team cannot articulate a project in these terms.

Further, innovation isn’t only about product engineers and customers. It’s also about engaging a team across the organization and soliciting regular input from business developers, marketing managers, supply chain managers, accountants, and finance managers.

The value proposition needs to converge these viewpoints into a product or service, or even a better understanding of what the customer wants. If an engineer develops a product the customer wants, but the business development team can’t sell it or the marketing team can’t market it or the accounting department says the support costs are too prohibitive, the product isn’t an innovation. Innovations need to find support across the entire business model and with all the stakeholders who will play a role in its success.

Innovation is the exploration and discovery of value propositions that customers want.

It’s not just about customer and corporate values. Employee values need to align as well. How can CEO’s engage employees around the firm’s values and strategy as well as develop a talent pipeline? Prospective employees are discerning in where they choose to work, seeking out organizations that share their own values. If CEOs can’t find common ground, they won’t be able to grow an engaged, committed workforce and will struggle perpetually with the disconnect between corporate and employee values.