APPENDIX B
Our Origin Stories
The sparks of Leading Transformation were ignited in various places: in the jungles of Costa Rica, during the frozen nights of an isolated Norwegian town north of the Arctic Circle, and inside the sheltering Eucalyptus groves of Stanford campus. Despite these dramatically different starting points by three collaborators, we all sought to answer the same question—how do we create breakthrough change? (We use the term change broadly to apply to a transformational innovation, initiative, strategy, or another change.) And we all converged on the same answer. In our separate quests, we discovered a process that works to envision and capture breakthrough opportunities, meaning we have applied it to transform real organizations, not just the Googles of the world, but also the average, everyday companies. Although nothing is perfect, we believe that the process can help you transform your organization, and even your life, by providing you with the tools to envision and then create your best possible future. Given that we talk about some unconventional new ideas for transformation, such as using science fiction, comic books, and applied neuroscience, we thought that it would be more fun to talk about ourselves using comic books to tell our own origin stories (see Appendix C).
Kyle Nel: How Do We Change Calcified Organizations?
While pursuing his MBA, with a focus on behavioral marketing and management, Kyle first saw and realized that what people say often don’t match up to their actions, not because they lied but because stated intent is just not a great predictor of behavior. After this experience, Kyle firmly believed that people are all much more “predictably irrational” than they would like to admit. He started to notice that transformation occurred when people worked together that normally would not, becoming uncommon partners.
In order to prove this theory, Kyle finished his MBA program and joined the biggest organization of them all—Walmart. He started looking for behavioral data that could unlock the mystery of why people do the things that they do. And by looking at data such as what consumers searched for online, what they bought—and what they never bought more than once—he was able to uncover the power of behavioral data to provide more accurate guidance. He was able to show the potentially significant impact of relatively small levers to start changing the organization. But it wasn’t financial impact that led new tools to be adopted within Walmart, but the story. If one manager heard a colleague’s a story about how a tool saved the day, the manager’s immediate response was, “How do I get it?” And once they obtained the tool, then they started using it. Kyle could see that it was more than just the power of data that persuaded; it was also the power of story that was changing the company.
As Kyle put his ideas about human behavior into practice, he was succeeding at creating smaller transformations that could add up to real change. He saw an opportunity to test out his ideas at even greater scale. While at Walmart he was recruited to join Lowe’s, the home improvement retailer, with a vision of how to change behavior inside and outside of the organization. And eventually, he got his chance—working with science fiction writers to explore probable, possible futures and turning those stories into an innovation strategy, delivered via comic books.
The process itself was still rudimentary, consisting of three primary elements: (1) visionary storytelling through science fiction to create meaningful narratives about possible futures, (2) a tangible artifact trail to create and maintain momentum with small wins, and (3) meaningful data to guide the development journey using neuroprototyping. Later the process would become more sophisticated and take into account, for example, the decision politics and bottlenecks of an organization, and many other tools.
But from that core framework, the process was applied over and over to help Lowe’s begin a transformation, moving from a calcified, risk-averse, hierarchical organization into an adaptive organization capable of moving quickly on new opportunities rather than debating endlessly. The conventional retailer moved to the forefront of technologies like AR, additive manufacturing, robotics, and exosuits. The developments at Lowe’s caused others to reach out—companies like Google, Microsoft, and IKEA, as well as academic, nonprofit, and governmental organizations—asking how they could replicate the process. By then, Kyle’s path had already intersected with those of Thomas and Nathan, and the three began constructing the full, more robust process behind leading transformation.
Thomas Zoëga Ramsøy: Why Do We Do What We Do?
Looking out the café window, Thomas could see a pod of killer whales break through the icy water, barely visible in the dim light of midday Tromsø, a small Norwegian island north of the Arctic Circle. In the distance, the mountains rose like cruel teeth, and above them, the indescribable stage of sky would play host to the northern lights in a few hours. In a strange way, this isolated town at the reach of civilization seemed the perfect place to study that most introspective of subjects—the human mind. In this icy wasteland, stomping through snow so cold it squeaked, Thomas puzzled over what would become a lifelong obsession: how does the mind shape why we do what we do?
Although most of us believe we are rational and infallible, much of the time our thinking is incredibly biased. One extreme example Thomas studied illustrates the extent to which we can be blind to our own bias. Having fallen from a ladder and injured his head, the man, in his forties, seemed perfectly normal on a first encounter. But there was a slight disconnect that was the wedge into something more. He and Thomas could discuss art, philosophy, and everyday life, but he often seemed to be reflecting back what Thomas had already said. Soon Thomas noticed that he would actually mimic Thomas’s every gesture, like a mirror. More worrying, on closer examination, the man was neither capable of initiating planned behaviors or inhibiting impulses. He could explain, in detail, how he would leave Thomas’s office after the session, walk up the corridor to the kiosk, and buy some cigarettes. But he would never actually get up and do it on his own; he would sit there until prompted. He also became hypersexual (toward his wife, who could not even recognize him anymore), hyperoral (cigarettes, candy, etc.), and dysexecutive (among other symptoms, losing any impulse control).
Worst of all, he had lost the ability to understand his own dysfunctions. He still insisted he was perfectly normal. His injury made him completely lacking in empathy, unable to recognize his wife’s tears during joint meetings. The experience imprinted on Thomas just how central the brain is to our unique human nature: our ability to be social, to plan, to adjust our behaviors and choices. And the experience underscored just how biased we can all be, whether we are extremely biased, as in this case, or mildly biased. All of us create a polished narrative that everything is as it is supposed to be—something researchers such as Michael Gazzaniga have coined the narrator of the brain.
If our brains and biases are so powerful and challenging to understand directly, Thomas began to wonder, could we use neuroscience to peer into the inner mechanisms of our minds to better explain why we do what we do and potentially how to change it? After earning a PhD in neurobiology, Thomas went on to cofound the Decision Neuroscience Research Group, formed jointly between Copenhagen Business School and Copenhagen University Hospital. The group, which later became the Center for Decision Neuroscience, was involved in raising more than half a billion Danish kroner (about US$80 million) to take the step that behavioral economics had failed to take: to study the mechanisms that create that bias and, perhaps, how to develop tools to reshape our actions. For example, some of Thomas’s early research led to groundbreaking studies on the incredible neural activity that occurs in the transition from subconscious to conscious thought. The research reveals how frequently we rely on subconscious, but biased, thinking described by Daniel Kahneman in his Thinking, Fast and Slow.
It was a meeting of minds, then, when, one snowy January morning, Kyle and Thomas met for the first time outside a Copenhagen restaurant to discuss the possibility of using neuroscience to overcome the biases that hold us back from effective change. After a hasty, excited meal, the duo retreated to Thomas’s office to frame up a critical challenge: could they use neuroscience to create indicators of how people respond to innovation and change? At first, Thomas was skeptical. There had been so much bad science, particularly in neuromarketing, that he had launched a blog called BrainEthics, attacking the black-box, hand-waving neurobabble being sold to big companies as science. Thomas argued that to tackle the biases that stop transformational change, we didn’t need to understand the brain better; much work had already been done to understand the functioning of the brain. Rather, we needed to develop scientifically valid, quantifiable measures of brain activity (measures based on well-developed neuroscience) and then correlate these observations with actual behaviors.
Thomas began pulling textbooks off the shelf, and as he read chapter after chapter, constructing measures, he began to lay the foundations for neuro-indicators that could do what had never been done before—provide data-based predictors of how innovations might be adopted or rejected by consumers. These indicators, based on openly published and scientifically validated standards, would later become the foundations for applied neuroscience and neuroprototyping—a set of tools that can predict how users respond to innovation and change. As described in the book, these indicators provide signposts in the wilderness of uncertainty that accompanies change, not unlike the wilderness of Tromsø. They show the direction that pathbreaking transformers should take as they pursue innovation and change initiatives.
Nathan Furr: What Are the Theories for a World of Uncertainty?
As Nathan walked down the rocky trough of the deep canyon, dusk began to set in, accentuating the thick rock walls bent like ribbons by an ancient cataclysm that had turned the ancient sea floor upward to meet the sky. Below him, at the mouth of the canyon, the orderly lines of city lights were turning on, yellowed by distance, in the geometric grid of the university, with the business school pinned to the edge of campus. As the sky began to darken, the questions continued to swirl. A young assistant professor, Nathan had been chastised for wasting his time writing books that spoke to management practice. He had been told instead to focus on the academic research that would get him tenure. But as he hiked down the canyon, with the infinity of stars appearing above him, he wondered how he could contain his curiosity at a universe so grand, so full of possibilities. Just as there were so many other stars, how many more questions remained to be asked? How many theories to be discovered?
On the campus below, few remembered that the business school was a recent addition to the edge of campus, just as the management discipline itself was a recent invention. The field of management had been created during the industrial revolution to meet the challenge of coordinating and optimizing the giant corporations created by new technologies. It had taken two centuries between the start of the industrial revolution and the creation of the first MBA program to find the answer, and another century to turn the management discipline into a global machine for training the world’s leaders. Now management appeared as a monolithic institution with all the answers.
But the order hid a growing chaos created by another technological revolution. Just as the steam engine had spawned the first industrial revolution, the transistor had created a different kind of revolution, which had been building over the last few decades. In effect, the microprocessor and then the internet had lowered the barriers to participation for generations of entrepreneurs, creating the most uncertain and dynamic landscape in history. Every year, an estimated fifty million new businesses were forming.1 The rate of invention had increased sixfold since the 1960s.2 The pace of new technology competition increases every year.3 The new ideas, businesses, and technologies created—as ever more people engaged with the creation economy—were changing the landscape at an accelerating pace. Indeed, Nathan’s own children would face a completely different landscape. According to the World Economic Forum, 65 percent of the jobs they might take when they finish their education don’t even exist yet.4
As Nathan neared the bottom of the canyon, he wondered, Do we have the theories we need for this new world of uncertainty? Although classical management worked well to coordinate massive organizations for optimizing the production of known products and activities, were these same tools and theories appropriate for creating this new world?
Some alternative theories had started to emerge. During his PhD studies at Stanford, Nathan had been part of the lean-startup movement, writing one of the first books on the movement. Lean startups rejected the business-planning approach to entrepreneurship, inherited from classical management, in favor of a rapid cycle of hypothesis testing more appropriate for conditions of uncertainty. But while at Stanford, Nathan had also witnessed the founding of the design school. Design thinking, itself a reaction to classical product development paradigms in engineering, emphasized human-centered design over product specifications created in the absence of real user needs. Meanwhile, in the computer science department and in the broader Silicon Valley, agile methodologies had emerged as a reaction to waterfall software design. Agile methods emphasized fast sprints and then reflective cycles of learning instead of Gantt charts defining long software-development timelines. These theories had exploded in popularity in the broader business environment, as substitutes for, or complements to, classical management.
But as practitioners of each domain began to argue about which framework was right, Nathan began to wonder, Should we instead be asking which theories are actually missing? If it had taken three centuries to develop classical management in response to the first industrial revolution, how long would it take to develop the new theories for a world of uncertainty? Are we perhaps only just starting to develop the theories for a world of uncertainty?
Indeed, as the sky blackened with the fall of the night, and as Mars appeared as a tiny orange point above the horizon, Nathan wondered, Would lean startup give us the next SpaceX? Would design thinking give us the next transistor? What other theories might we need for a world of uncertainty and might still need to be discovered?
Reaching the bottom of the canyon, Nathan made a resolution: despite the advice to devote himself exclusively to academic publications, which focus on deep validation that often progresses very slowly, he would also devote some of his time to wild ideas, searching for these new theories, even if they later took decades to prove in traditional academic channels. Already, he envisioned a dozen books he would write, even if no one wanted to publish them. Never mind trying to do things only one way! A world of uncertainty is also a world of possibility. He decided to dedicate himself to exploring these new possibilities, new theories, new questions, and new answers, just as much as his dedication to proving them robustly in the academic world.
Fast-forward a few years. As Kyle and Nathan sat across a café table discussing how to use science fiction to break free of the constraints in our own imagination and to envision valuable new futures, it dawned on Nathan that here was a piece of the puzzle. Although the book that he, Kyle, and Thomas were writing would be about how leaders could use science fiction and applied neuroscience to transform organizations, they were all collectively on the trail of something bigger. Recently, the field of economics had been transformed through the application of psychology to reveal how we actually make decisions. The new discipline was called behavioral economics. Similarly, the field of innovation and transformation was ripe for change. We could apply psychology to the domain of innovation and transformation to finally uncover the unaddressed biases that derail innovation, and by identifying these biases, we could contend with them. Moreover, rather than create a long list of biases without solutions, we could use applied neuroscience to uncover exactly where the problems occur and design tools to overcome them. This new discipline, behavioral innovation and transformation, wouldn’t be the one and only answer to how to live in a world of uncertainty, but it could be one of several new theories. Behavioral innovation and transformation could help us overcome our behavioral bottlenecks to see the future. It could help us reach those stars so distant and discover the many opportunities we just don’t see yet.
The Hero’s Journey: Your Journey
In his classic text, Joseph Campbell describes how our lives follow familiar archetypes, with the hero’s journey being at the center. In the hero’s journey, an individual sets out on a quest and is helped along the way, at just the right moment, by others who are also on their own quest. Together, they help each other each reach their own particular goals.5
This book is the result of our own journeys: the manager who has actually done it, the neuroscientist who could design the tools to overcome our biases, and the academic who could explain why it worked and how to use it. Although we each developed different parts of this book, we see the quest to create breakthrough change as our shared journey. But the book describes not only our journey, but your journey as well, because this book is part of your own quest to create change.