024 A Perspective on Strategy

024 A Perspective on Strategy

About this Episode

We talked to Kaihan about the current strategy and innovation landscape, and what companies are doing to meet the trend and wider social expectations of them. Kaihan Krippendorff has made a commitment to helping organizations and individuals thrive in today’s era of fast-paced disruptive technological change.    He began his career with McKinsey & Company before founding the growth strategy and innovation consulting firm Outthinker. His growth strategies and innovations have generated over $2.5B in revenue for many of the world’s most recognizable companies including BNY Mellon, Citibank, L’Oréal, Microsoft, and Viacom. A best-selling author of five books, most recently the Edison Award nominated,  Driving Innovation From Within: A Guide for Internal Entrepreneurs.  

He is a member of the prestigious Thinkers50 radar group – A global selection of the top 30 management thinkers in the world to look out for. Thinkers50 also recognized Kaihan as one of the 8 most influential innovation thought leaders in the world considering him for a Distinguished Achievement Award in Innovation – given to the person in the world that has contributed the most to the world’s understanding of innovation in the past two years. Kaihan is currently ranked the Thinkers360 #1 Global Innovation Thought Leader and the Thinkers360 #1 Global Business Strategy Thought Leader in 2019. 

Kaihan also founded The Outthinker Strategy Network, a community comprised of strategy executives from the world’s top Fortune 500 and private companies that keeps him ahead of the pace of disruption and up to date on trends, threats, and opportunities across industries.   

Amidst his dizzying schedule of keynote speeches, consulting projects, ongoing research and writing, Kaihan still finds time to teach at business schools throughout the US and internationally (including NYU, FIU, and Universidad Americana). Regularly featured in major business media outlets Kaihan is an advisory board member for a blockchain-powered transportation platform, an international food processing/exporting company, and a B-corporation focused on sustainable products and lifestyle.   

He holds degrees from the University of Pennsylvania School of Engineering, Wharton, Columbia, and London Business Schools and a doctorate in strategy. With a mother from Bangladesh and a father from Germany, Kaihan brings a holistic, diverse, and global perspective to everything he does. His work has brought him to 58 countries all over the world. He speaks three languages and has lived or spent significant periods of time in Asia, Africa, Latin America, Europe, and the Pacific. He lives in Greenwich, Conn., with his wife and three children.  

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Episode Transcript

Katherine Ann Byam  0:02  

Welcome, Kaihan, to Where Ideas Launch. 

Kaihan Krippendorff  0:52  

Katherine, thank you so much for having me here. 

Katherine Ann Byam  0:54  

Wonderful to have you here. I discovered your work at the Outthinkers Summit 2020. I was just emerging from the shock and paralysis of facing the pandemic in March. And I found this summit really enlightening. I was wondering if you can share with my listeners more about the summit and whether or not you're carrying it on this year as well? 

Kaihan Krippendorff  1:14  

Yes. We definitely want to carry it on again. We probably won't do it (one year would be in April,) we're probably going to wait a little bit longer, maybe into the summer. But we had never run a summit before. We suddenly discovered that all of my speaking opportunities suddenly disappeared. Right? My calendar was completely empty. I was sitting in my office with my colleagues. And we looked around and said, "Well, okay, so what are we going to do?" And we thought, you know what, there are probably other thought leaders who suddenly have availability, and here's a chance for us to do something right.

There are going to be people hurting, There are going to be nonprofits that are looking to help those people that are hurting. And we have all of these great speakers. And then we have people sitting at home thinking, "look, what am I going to do?" Why don't we combine those three things? And we reached out to the top thought leaders that we knew and said, "Hey, would you be willing to participate in this charity summit, and just give your time for free, volunteer it, and we're gonna raise all the money that will go to charities to help people deal with COVID?" And so it was really kind of a last-minute pivot idea that we've never done it before. And somehow, just through a kind of passion and not sleeping, we pulled it together in the course of a few weeks. That you were part of that? 

Katherine Ann Byam  2:30  

Yeah, it was a great resource. And I think it actually changed my whole thinking. I found that at the right time. I had gone through my own journey of "Oh, my God, I just started a business. And now this." So it was quite a savior for me. And I wanted to take us to another topic and another burning platform beyond the pandemic, which is this topic of sustainability. And we've read that there is an idea that we are burning through resources 1.75 times their rate of natural regeneration. And I wanted to know, from your perspective, what are the implications of this on traditional strategy?

Kaihan Krippendorff  3:07  

You know, I think that there has been a sea of change that has suddenly accelerated in the area of strategy where, since the 1930s, and 40s strategy has been optimized to maximize shareholder value. And companies are realizing. They didn't realize and we've been tracking this trend for about a decade or more that if you only focus on shareholder value, then even if you're after shareholder value creation over the long term, you create resistance for your growth.

You know Walmart has great difficulty less so now, but for a period had really great difficulty just putting down another store because they weren't good for the community - maybe purely out of self interest, so be it. And I don't know what their interest was. But even if it were out of self-interest, they say - if we're going to take a long term perspective, what we need to do is to create a more sustainable strategy -one that doesn't only benefit us, but benefits other stakeholders, a strategy that benefits the community, employees, society, the environment, the world.

That is the ultimate strategy because then you don't have competition if you will. And so, we're starting to see this suddenly accelerate the awareness among consumers and investors are growing investor bases that are of professional investors who are investing in companies who have sustainable strategies. We have big companies turning into public benefit corporations. We have multiple public better portfolio benefit corporations going public. I think in just last year in the US, there were five such companies. I'm on the advisory board. We've invested a little bit into one of the first B corps and that is the only sustainable future. And corporations are a stakeholder that play a role and they need to participate with other stakeholders in society.

Katherine Ann Byam  4:55  

What are your thoughts on ESG and whether or not it changes anything further?

Kaihan Krippendorff  5:02  

I think it is critical. I think that the UN Sustainable Development Goals have shone light on the needs of global imports. What I think ESG needs to elevate to is “to look beyond the purpose, right?” It is one thing for Unilever, Procter and Gamble to say, "one of our goals is to cure hunger to rid the world of hunger." That is great. But you need to inline incentives.

You need to reach further. You need to say, "if that's really my goal, I'm going to no longer pander to investors who are after short term cash flow. I'm going to attract investors who also care about that because they're going to support those initiatives and your business model."I am not going to make money from things that would motivate my company, my people, while I'm here or three generations later from doing something that's inconsistent with that. Like Facebook, they make money from selling advertisements. And they do that by just creating engagement. The easiest way to create engagement is to get people into arguments. So even if they are after something that is more of a conversation, they are financially motivated so we need to look at business models to really live what ESG potential is I would say.

Katherine Ann Byam  6:27  

It's a fascinating topic. And I think it's such a great platform now for a lot of businesses, not just the big ones, but for startups as well to really think about sustainability and the way to design their business models upfront to address these needs even in terms of circular business models. 

Kaihan Krippendorff  6:47  

Yeah. And if I could just add on to that, I think the real opportunity is for the startups and maybe startups within companies as well. But I think that successful businesses came to be - it started off with good, let's go back to 30 years. You created a business because there was an existing need and that someone was fulfilling. And you went in with a better product, you stole market share away from them. That was the Michael Porter market share competitive focus strategic approach.

Then you move to create new needs, right. That's kind of the blue ocean approach, right. But I think what we're moving to is creating profitable solutions to society's needs. And if we look at successful startups, they increasingly are. That's their mindset. There is a problem with water availability, with equality, with hunger and food availability. What is a profitable solution to that?

Katherine Ann Byam  7:50  

Yeah, I want to pivot a little bit into innovation. And for me, it goes very hand in hand. I feel as a strategist, sustainability and innovation are now almost one thing in the world that we live in today, but you argue that employees, more so than entrepreneurs, are society's primary innovators, and I wanted to discuss that. Why is this in you?

Kaihan Krippendorff  8:11  

I did research. I looked at the 30 most transformative innovations for the last 30 years. This is from my most recent book and this is about a vetted list - thousands of submissions, a panel of professors, and they kind of said the big things that are important that have really impacted this side in the last 30 years are the internet, email, MRIs, DNA sequencing, right? These big ones, not the “like” button on Facebook, not even “search” from Google, right? - the big ones.

And then I just backtracked, and I said, "Who conceived of the idea?" and who then developed the bill and who launched it, what I found is that 70% of those innovations were conceived by employees, not entrepreneurs. And if so, what that means is with without employees innovating, you would not have a phone, a mobile phone and internet, you'd not have email, you're not be able to get an MRI, you couldn't get a stent, we'd live in a very, very radically inferior world if it weren't for employees.

Not only possible, but the truth that employees are involved, that doesn't take anything away from entrepreneurism. I want to say entrepreneurs play an important role. But we tell stories about entrepreneurs. You look at lists of most famous business people, most innovative people, it's all a lot of them are entrepreneurs. They happen to be mostly white men which is a whole other issue. But we don't tell the stories about like, you know, Heather at TIA, who came up with a program to get people with autism jobs and get them into society. We don't tell those kinds of stories of the intern entrepreneur. And so one of my missions is to really start shifting our narrative around what innovation is and who the entrepreneur is and celebrating employee entrepreneurs. Sorry, I could talk about this for a long time.

Katherine Ann Byam  10:05  

That's fantastic. Now, I think there's a side of social entrepreneurship as well that these people are kind of unsung heroes. They're doing sort of handcrafting, or they are trying to make a difference in their local communities. I recently watched a show on Amazon called “Living the Change” where they were talking about regenerative agriculture and about these communities that were doing time banking and having their own currency in their small local area and stuff like this. And I was wondering, what are your thoughts on this type of sort of social entrepreneurship and what it means for the wider picture?

Kaihan Krippendorff  10:41  

I think it's critical and huge. And I think it's increasing not only because of the need and the awareness, but also because of the goals of the workforce today. The goal of the workforce for my parents was to get a stable job that gives you a salary that gives you retirement. And now, the goal is to make a difference, even if we make less money. And that doesn't mean you should have to make less money, but I also think that there have been certain strategic concepts that have been introduced.

And one of the things we do is we organize a peer group of Chief Strategy Officers. So I get to spend time with heads of strategy for companies, and we talk about the emerging concepts. And this whole idea from Clayton Christensen of "Jobs to Be Done," I think it opens things up like you can say that the idea of creating a local currency becomes strategically a possibility when you focus on the job to be done by currency as opposed to thinking of working within the existing system. So we're seeing innovators starting to think outside of the bounds of existing categories and framework systems. 

Katherine Ann Byam  11:55  

Yeah. It's really fascinating. And I know we can go on about this for a long time. But my next question for you is "what are the barriers to innovation in firms, let's say outside of Big Tech and Big Pharma? What are the sort of barriers that are holding firms back at the moment?

Kaihan Krippendorff  12:12  

In my book, I laid out seven key barriers. I interviewed 150 people. And you know, I won't go through all seven here. I'm happy to but I would say like the big ones are - first, that companies ask people to innovate, but they don't tell them what the strategy is. So they activate this excitement of innovation. And then these people come up with products that aren't consistent with our products or pricing schemes that aren't consistent, or brands that aren't consistent, and they get rejected, and then people grow disheartened. And then they give up, right? The second big barrier is really around the business model.

And the unique challenge for an internal innovator is that they work within an existing business model. The way that you want to distribute your innovations may not be consistent with the way that your company is currently distributing their products. The culture you want to build around your innovation might be different from the culture that you operate in. And that often appears as evidence or reasons why we have these innovation antibodies that prevent new ideas from growing inside the established companies. But the innovators I interviewed, they view that as part of the problem solving process. How do you redesign the entire business model so that it works inside the company. A heart transplant surgeon won't just take someone's heart and just stick it in your body and get mad at you because it was rejected. Right?

They think carefully about how to remove their rejection. So that's the next skill. And the final thing I would add is just the hierarchical, centrally planned system that dominates most companies. So most companies are organized like centrally planned economies, right? We have one central authority that decides where resources go, where talents go, what you can work on. And we know that that doesn't work in the broader economy. So what we're starting to see is explorations of new organizational models that look more like ecosystems, look more like democracies, look more like communities, look more like platforms, look more like marketplaces. And we're seeing these other forms of human organization coming into the mix. And so but still, most companies are dominated by just one hierarchical top-down organizational framework that restricts creativity and experimentation and therefore, innovation.

Katherine Ann Byam  14:34  

One more question, but how can we take this sort of innovation and advanced learning into the public sector and into how governments operate as well? Because I feel as if there's a big burning platform there also.

Kaihan Krippendorff  14:49  

Yeah. So my mother's from Bangladesh and the economy there is (I don't want to say dominated by) but the NGO sector runs a lot of the services and the activities that shape society there. So I think that that is sort of the exemplar of what's possible when you really have the “for profit-government” cooperation. It has been shown for the long term trend, that the most impactful innovations are coming increasingly through public-private partnerships. And that's been a trend for 20 years.

And so the kind of problems that we need to solve are too big to be solved by just the government or just entrepreneurs or just established companies. What we need to do is we need to bring our solutions together and collaborate together to also have diversity of thoughts, diversity of ideas. It also increases innovation. But just mathematically, there is not enough money to solve the problems that we need to solve if we just look at solutions from just the government, or just nonprofits or just corporations.

Katherine Ann Byam  16:04  

Really interesting and exciting. Why don't you tell our listeners about your latest book so that they can have a check? 

Kaihan Krippendorff  16:10  

Yes. So it's called Driving Innovation from Within: A Guide for Internal Entrepreneurs. It basically lays out a process and a set of tools for you to be a more effective internal innovator. 

Katherine Ann Byam  16:11  

Perfect.Thank you very much for joining us in the showcase. And it's been wonderful to have you, thank you, and thanks for the work that you do.

022 StartUp Ecosystems

022 StartUp Ecosystems

About this Episode

Marija Dimovska is a project management professional with 10+ years experience in NGO and business sectors. She has coordinated projects across cultures, implemented projects in innovation ecosystems working with a focus on technology and youth capacity building.

When she was 14, Marija wanted to know what happened behind the scenes of a Disney theme park, that led to thousands of customers turning up every year to have a good time. She’s always been interested in the behind-the-curtain process and how to streamline operations creatively. She worked in organisations such as the U.S. Peace Corps and has built managerial expertise, while experiencing the power of a diverse team building an intradisciplinary know-how.

“When we bring together the human factor with the with digital tools/ technology we are creating and introducing a formidable instrument in the creative process of driving solutions to local and present-day global challenges!”

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Episode Transcript

Katherine Ann Byam  0:01  

Good morning, Maria, and welcome to the show.

Marija Dimovska 0:50  

Good morning, Katherine. Thank you for having me. And thank you for reaching out and my pleasure to be here with you and share some information in detail about the startup and innovation ecosystem from North Macedonia.

Katherine Ann Byam  1:02  

Tell us a little bit about the key drivers of the Northern Macedonian economy. I mean, I don't think a lot of people know enough about it. So why don't you start with that?

Marija Dimovska  1:11  

Small and medium enterprises play a pivotal role in the economic growth of the Republic of North Macedonia. Actually, they comprise 99.8% of all businesses. And unlike its use in the Western Balkans, the Republic of North Macedonia has a more advantageous climate. And it comes in an advantage point in terms of providing support and developing policies for SMEs, startups included. We have one particular state institution, which is called the Fund of Innovation and Technological Development. They have made this far €76M in investments for startups, particularly for the autumn of 2020. They invested €2.35 M in startups and scale-ups that pertained to different sectors and find themselves in different stages of their growth and development.

Katherine Ann Byam  2:09  

Fascinating startup success stories! Tell us what are the big stories that you have about Northern Macedonia’s work? 

Marija Dimovska  2:18  

Actually, you know, they say that crises such as the bubble crunch from several years ago and the COVID crisis in 2020 are the most fertile ground for innovative ideas and businesses to launch and that stands true for the Macedonian startup ecosystem. We have had a lot of progress noted in a number of startups. Such a startup is AirCare. It's actually an application that signals and attracts air pollution. Air pollution is a concern to communities and to certain cities in Macedonia, particularly the capital of the western region of Macedonia Southern Western part Bitola and Tetovo as well in the north western part of the country.

So the founder has decided to devise an application that will show areas of polluted air. And throughout 2020, before the time that COVID had emerged, he had already launched his application in every single Balkan country. But throughout COVID, he launched it in the United States on the western coast. And in early 2021, he launched it on the Asian continent in the United Arab Emirates and two other Asian countries, India and Turkey. And for 2020, Gorjan, the founder of AirCare was awarded the Young Innovators Award in Europe, which is quite a prestigious award for young entrepreneurs that are developing SDG-focused innovative business ideas and solutions. We have other successful startups. Brainster is in education and technology. Throughout COVID, they actually managed to scale up and set up an office in the EU market. So they opened an office in Vienna back in May 2020. And they're just about to open offices in Slovenia in Ljubljana .

Katherine Ann Byam  4:23  

Well, it sounds like a great success. And how critical will it be to get this ecosystem and startups to support running and positioning North Macedonia around its neighbours as well? How critical is it that your startup community grows?

Marija Dimovska  4:42  

Well, I can tell you that thus far we have actually formed a regional startup Innovation Group where we constantly are in collaboration and we make sure that the communication is unremitting, that there is a flow of data and news among ecosystem representatives from the western Balkan countries.

Back in 2019, I actually have been attending the regional hub where there were representatives from Serbia, Montenegro, Albania, Kosovo, Bosnia, and Herzegovina. We have very good collaborations with the startup ecosystem in Bulgaria. We also signed a Memorandum of collaboration with the Business Innovation Centre, an incubator at Tina, Rana Metropolitan University, which is situated in Albania. And we have good collaboration with a Greek startup ecosystem with OK!Thess. They're a very similar organisation to Startup Macedonia where I work as a project manager, and they focus on the development of startups within the northern part of Greece.

Katherine Ann Byam  5:50  

Fantastic. How can foreign interest get involved in supporting the growth in your country and in the area and the region?

Marija Dimovska  5:59  

For those particular purposes and start-up Macedonia as an umbrella organisation or that connective tissue within the national ecosystem is working on not just the development of the digital ecosystem platform, but also other services. Such a service is the soft-landing option where we basically invite startup-preneurs or people who would like to set up a business and launch it from North Macedonia. And it's very simple, and it's very easy in terms of the ease of doing business.

The World Bank has ranked on its last report, North Macedonia on the 10th position. Because of the digitalization of the administrative and bureaucratic procedures for setting up a business, you can set up a business within 24 hours, and you obtain a working permit and a residence permit within two weeks. Startup Macedonia offers those legal services, in particular to non-Macedonian citizens who would like to obtain all of the permits so that they actually can set up their own satellite office here or open and launch a business from North Macedonia.

Katherine Ann Byam  7:09  

What are the incentives to living in Macedonia? Tell us a bit about the culture and the people?

Marija Dimovska 7:14  

Like all the other Balkan countries, we have had a tumultuous history. But in terms of where we are heading and where we would like the country to further grow and prosper, we're a young democratic country, and we have a low living cost of expenses. Also, lower corporate taxes have a great tech talent pool due to the fact that we have 11 faculties within the state and private universities. The Employment Statistical Office shows that there are 10,000 graduates per annum, and 80% of them are bilingual. When I say bilingual speaking, I'm thinking from the terms of languages spoken in the European Union.

 Most of them have between C1 and C2 English language proficiency. And between B1 and B2 second foreign language proficiency. In Macedonia, the second foreign languages that are most often spoken are German language and French language. We also have three startup cities within the country. Skopje, the capital, is probably the most developed in terms of startup resources and tools. Bitola also has a great tech talent pool.

And that was well, we have three co-working spaces in the capital two in the western part of the country, one in the north western, and another one in Ohrid, which is probably the most renowned city in the country due to archaeological sites and it's a famous tourist attraction. And we have three accelerators and one Science and Technology Park. Out of the three accelerators, one is positioned outside of the capital because we wanted to democratise innovation and make innovation resources available  to young entrepreneurs outside of the Capitol so that we have startups headquartered not just in Skopje, but in the smaller communities of the country as well.

Katherine Ann Byam  9:20  

Fantastic! Tell us about the platform that you've built and how beneficial it has been for getting this community up and running.

Marija Dimovska  9:29  

The platform in itself is actually a technological tool to do precisely that - to democratise the resources and tools for those innovative ideas and transform into SDG-focused businesses. Back in 2018, Startup Macedonia made the research of the ecosystem. We wanted to map out the existing partner organisations. When I say partner organisations, I mean service providers institutions and organisations that offer growth services to startups and young entrepreneurs, and to see the pain points of the startups as well.

 And the analysis showed that there was a mismatch between what the startups were looking for in terms of help and assistance. They struggled with access to finance. They struggled particularly with access to the market. Because we do have a club of founders. that constitutes not startups but more concretely scale-ups - startups that have already are positioned on foreign markets and want to expand on another market. And on the other hand, we had the service providers who offered some kind of help, but it wasn't the exact type of help that the startups were seeking.

So while this data-driven platform, which currently is up and running, (the beta version was launched back in 2019) we launched the 2.0 version throughout COVID. At the end of June, early July 2020, we are automatically matching the startups with the service providers. The most important thing is that startups provided us with the detailed information about their growth stage and the type of services and help and assistance that they're looking for and need so that we can actually make the respective match for the corresponding match.

We have an additional feature that is currently being implemented within the ecosystem platform that's a mentorship network where we are trying to aggregate not solely of domestic mentors that come in the form of experienced entrepreneurs that have already gone through the entrepreneurial journey, but also international ones so that we can provide the scaleups who want to reach another market with the adequate, seasoned entrepreneurial experience. The Macedonian ecosystem is not shy when it comes to having a business idea.

What we lack is basically sociological entrepreneurial support. And this is why the Ministry of Education and Startup Macedonia's as an umbrella organisation has tried to engage governmental representatives and academia so that we explain to them the challenges that there are within the national ecosystem, and also engage academia and governmental representatives in transforming the education and introducing varieties of entrepreneurial courses in secondary level education and university level education, so that we have more experienced emerging talent that will be more mentally ready or emotionally ready for starting a business.

Katherine Ann Byam  13:14  

And does this include the experiential side of it? Because as an entrepreneur myself, I feel as if the experience of doing it beats any kind of book or text or course you can do to learn about it?

Marija Dimovska  13:27  

Yeah, absolutely. In terms of sharing experiences, Startup Macedonia has been quite the focal proponent of different kinds of meetups, even failure sessions, where we invite the entrepreneurs who have failed several business ideas, and they're working now on their fourth or fifth. I've mentioned AirCare earlier. Gorjan is one of the most proactive ones. But if you look at his digital portfolio, you'll see that he's not only working on AirCare.

He has other business ideas, other applications that he has developed like volontiraj.mk, mypet.mk, and akreditator-mk. Some of them are dormant due to COVID. But with AirCare, he has expanded and he has launched it in other cities. So when we share, make sure that those entrepreneurs actually share the experiences of the failure and learn-as-you-go process with aspiring entrepreneurs, it's a lot easier to convey the message that it's okay to fail, which is not just something that goes against the type of Macedonian mentality but I would say European mentality in general. I think that the American model of thinking in try-fail, try-fail is a little bit more DNA-instilled rather than what one finds in the European continent?

Katherine Ann Byam  15:05  

What advice is finally, would you give to a startup getting launched today and this is independent of Macedonia?

Marija Dimovska  15:11  

I would say that they need to be agile and driven by a sense of urgency to adapt to the changing needs, especially those that have been brought about by COVID. And their social capital is probably their greatest currency that they have. The more people they know, the better because you never really know which one of your connections and networks will provide you with either an answer, or they might not have the answer, but they may have a connection that gives you the solution to the challenge that you meet.

And not to give up on your idea because if you give up on your idea, it will fade away. And if it's your idea, and you're passionate about it, only you have the passion and the resilience to make that idea come to fruition.

Katherine Ann Byam  16:10  

Fantastic. Thank you so much for joining us, Maria. Thank you for having me, Katherine. Thanks for listening. This podcast was brought to you today by career sketching with Katherine Ann Byam and the space where ideas launch. Career sketching is leadership development and coaching brand offering personalised career transition and transformation services. This space where ideas launch offers high performance group leadership, coaching and strategy facilitation to businesses and the food and health sectors. To find out more contact Katherine Ann Byam on LinkedIn

019 The Knowledge Delusion

019 The Knowledge Delusion

About this Episode

David Gurteen is a writer, speaker, and conversational facilitator.

The focus of his work is Conversational Leadership – a style of working where we appreciate the power of conversation and take a conversational approach to how we connect, relate, learn, and work with each other.

He is the creator of the Gurteen Knowledge Café – a conversational process to bring a group of people together to learn from each other, build relationships and make a better sense of a rapidly changing, complex, less predictable world. He has facilitated hundreds of Knowledge Cafés and workshops in over 30 countries worldwide over the past 20 years.

He is also the founder of the Gurteen Knowledge Community – a global network of over 20,000 people in 160 countries.

He is currently writing an online blook (a cross between a blog and a book) on Conversational Leadership.

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Episode Transcript

Katherine Ann Byam  0:45  Welcome, David. 

David Gurteen  1:37  

It's a pleasure to be here, Katherine. 

Katherine Ann Byam  1:40  

Wonderful. David, we met in February 2020. Do you remember exactly?

David Gurteen  1:44  

I remember. 

Katherine Ann Byam  1:46  

But this was a knowledge cafe that you were hosting at Regent University and the central topic was about whether or not universities remain relevant to preparing students for work. It was my first knowledge cafe and I loved the format. Please tell our listeners about knowledge cafes and why you created it.

David Gurteen  2:03  

Okay, we've got to go back a few years. We got to go back I guess probably to the turn of the millennium. I used to get involved in a lot of knowledge management conferences and other conferences. I guess throughout my lifetime, a lot of other conferences and workshops. And I was just really concerned that there were very many presentations. They would give a talk in short events. I was particularly concerned about knowledge management conferences because they were about learning, informal learning, about trends as a practice.

When you have a whole series of speakers on stage just talking about the audience, running over time, not giving opportunities for questions, that it was possible to go to a conference for the whole day other than luncheon breaks, not to get to talk to anybody. And I just thought this was crazy. It just didn't seem to make sense that we were still working in that old format. So I wanted to create a process of methods and events that was fundamentally conversational. So I spent quite a long time thinking about that.

And in September 2002, I ran my first circle knowledge cafe at the Strand Palace Hotel in Central London just a few 100 yards from Trafalgar square. And the idea of the cafe is really a very simple one -that's like an evening talk, typically lasts an hour or maybe two. There would still be a speaker, there will still be a topic but the speaker would only get to speak for maybe five minutes, ten minutes at the very most twenty minutes if it is an interesting content, because the whole idea of the cafe was for it to be about conversation, not about the speaker. And so the speaker would speak for a short while, pose a question to the group, and the people would be sitting in small groups of threes or fours, ideally at round tables. Those were not always available.

There would be no host facilitating the conversations at the table. I wanted everybody to maybe not have an equal voice. Because in many circumstances, people don't have an equal voice but an equal opportunity to speak. I didn't want anybody to be in control of the conversation, but I often used to say at the side I want the conversation a little bit like the one you might have done in a pub or in a cafe, a free-flowing conversation. 

Katherine Ann Byam  4:23  

There's a rumor that that's where Adam Smith came up with his best work, right?

David Gurteen  4:26  

A lot of people probably came up with the best work down the pub. People will speak. We'll have a conversation for maybe 15 minutes. Then, I'll simply ask a few people to change tables. And again, the whole essence of the cafe was informality so I didn't want some sort of contrived instructions as to how to move. I'd simply say, for a few people to move tables. You experienced this back at Regent University.

So few people move tables and we continue the conversation, same question, same topic. And we do that, typically three times, typically about 15 minutes, and at the end, we bring people together to have a whole group conversation. In the early days, I used to let them stay wherever they were. They tried to have a whole group conversation with people scattered around the room. And I soon realized that didn't work terribly well because a lot of people that are attached to each other will come to each other.

And I realized that it was not that difficult to tell people just to push the tables to one side, and to form a circle with the chance. And the great thing about that circle is everyone's equal, everyone's on the same level. I'm in the circles I'm hosting in the circle with them. I'm not standing out somewhere at the front of the room. Everyone can see and hear each other. It takes a few minutes to form a circle. And then what I didn't want was like so many workshops, people reporting back, somebody standing up, basically given a summary of what was discussed in their group. I wanted it to be as best they could have a larger group in conversation.

I very lightly facilitate that conversation. And I'm not there to add my voice, or to control the outcome. I'm just there to make sure, really everybody who wants to speak gets to speak. So we have that whole conversation, and we draw to a close because the usual question people say well, "what are the outcomes?" And I simply say the outcome is what people take away in their heads, which is actually no different to a conference. The knowledge cafe isn't the workshop for making decisions or whatever. It's for engaging in conversation, to learn more about a topic and make better sense of the world, to build relationships and a whole load of things that are usually seen as safe. It's not about making decisions but about having interesting conversations. So that's the very essence of the cafe.

Katherine Ann Byam  6:47  

I love this and what I found interesting about this particular cafe that I attended was that the audience were officially authorities right. Most of them were authors. They will actually want those papers or books of great content. so they are actually authorities in the space of education, but they all seem that (maybe that's unfair to say) as if they weren't comfortable with were going, where things were trending in terms of education, and the sort of informal learning that has been cropping up, not just in terms of your cafes, but even social learning online in different formats. So it was quite interesting to see the kind of fear as well, that what they had built no longer stood on strong footing. I don't know if you felt that nervousness.

David Gurteen  7:34  

I've learned not to feel nervous in the cafe. I haven't said in the cafes, it's the conversation that's in charge. Let the conversation take people where the conversation wants to take them. So I'm not necessarily looking for any particular outcome. I think with that particular cafe and lots of cafes, there's a vast range of opinions, and there's a lot of differences.

And it's interesting because people say to me "Well, what happens if things get argumentative, and people start to fight?" And if you noticed, in that particular cafe, at times there was a little bit of tension, but it never gets out of hand, I've never had to become some sort of authority facilitator to keep things under control. There is a little tension but it's not a great deal. And that's good because I want people's ideas to be challenged gently enough that they will stop and listen and not so aggressively when they're gonna get angry and dig their heels in.

So it's about dialogue. It's about learning from each other. It's about listening more than it is talking. And that wasn't a particularly good evening because remember, there were lots of different opinions. It's an interesting group because there were part of the academics there from the university, and then there were a lot of people from outside the university, and we were talking about education but everyone has enjoyed education. That evening did make for some very interesting conversation.

Katherine Ann Byam  9:06  

I think I'm going to take us now to a question I wanted to ask you last but I'm gonna ask it to you now, which is "how do you go about holding space for conversations with people who are diametrically opposed in their ideas and their opinions? We're going to touch on something that happened last week but before we even go there, how would you go about approaching that as a participant?

Unknown Speaker  9:30  

I mean, this is something that I've given a lot of thought over this last year or so. I should've given it a lot of thought over many years. But maybe this last year or so, I've made a little bit of progress in my understanding and my thinking about it because in some ways it's not much about the conversation, it's about people's beliefs and how people form their beliefs.

David Gurteen  9:57  

So we got somebody on the one side, who's hard left and somebody on the other side who's hard right. They have these fixed beliefs and they do battle in conversation. And so the question is, how do people form their beliefs? How do people come to beliefs that by any rational measure, don't make too much sense? And we tend to think human beings are rational creatures. The one thing I learned from experience, but also from other meetings this last year or so is that we're anything but rational creatures; the way we form our beliefs is something I've been looking for and just the nature of knowledge. So this is a bit of a long talk.

Katherine Ann Byam  10:39  

It's fine. 

David Gurteen  10:41  

We'll get there in a minute. I'm sure you believe that the earth circles the sun. I hope you do. Most people do. I think about 24% of Americans believe that the sun circles the earth so it's not everyone. But think about it. You believe it. I believe it. I believe it's counterintuitive. The sun rises in the East; it sets in the West. I said No, no, no. It's all an illusion. The earth is in fact, spinning and the earth is circling the sun.

Surely you say, "Rubbish!" The earth is spinning, I can feel it spinning. It goes against rationality in a way. But we know from our science and from the facts that it is indeed true. So how do we know that the earth circles the sun? If I don't have a degree in physics, I probably couldn't convince you from the basics that the earth circles the sun. If  I can't convince myself of the evidence, I would have difficulty.

We "know" that the earth circles the sun because somebody told us. We read it somewhere as a child. Somebody in authority, maybe a parent, maybe a teacher, somebody who we trust (that is the keyword, "trust") told it to us and we accepted it relatively blindly. And so this is a piece of knowledge that we claim to have, "I know the earth circles the sun." We don't know it at all. We simply trust somebody who thinks they know it. So that's the first little piece of that. Now think of human-made global warming, anthropogenic global warming. I believe it. Do you believe it? 

Absolutely.

Greta Thunberg believes it. I haven't read the scientific papers, I'm sure you haven't and probably Greta hasn't. If we read the scientific papers, could we make sense of  them? Have we read the papers by scientists to hold comfy, comfy beliefs? No. Do we know ourselves in a deeper sense that global warming exists?  No, we don't. Who do we trust? We trust the scientific community. Now, people like to say Donald Trump, and a lot of other people do not trust the scientific community. In fact they positively distrust the scientific community. Some of them probably fear experiments for very good reasons. So our beliefs are not founded on knowing. They're founded on trust. So that's the first one.

Katherine Ann Byam  13:24  

This is the fundamentals of the knowledge delusion

David Gurteen  13:27  

It's the fundamental of knowledge delusion. More people call it knowledge illusion but the more I think about it, it's a delusion rather than an illusion. If you stop and think about this, we know we don't know this stuff. You know it's a delusion. It's not just an illusion. And the other piece to this. So, this is true of our knowledge - most of our knowledge hasn't been gained empirically through experience.

 It's been handed to us, mainly through our education system. So we don't actually know this stuff yet start to look at people who've got these beliefs and how they formed those beliefs. Maybe have those beliefs questioned. [And a lot of the time, if people because of certain erroneous beliefs - maybe nonetheless seek erroneous beliefs and the answer is in a lot of the media] We need to give them better evidence. And our education system needs to educate them better in critical thinking.

That's so often the response, the interest to see what I've been looking at is because this is such a deep problem. I've been looking at it and questioning all of this and looking at the psychological research. The psychological research says, "No, if you give people evidence, and you train them to be better critical thinkers, they double down on their erroneous beliefs. It doesn't work.

 And as a law professor of cognitive psychology at Yale University, Dan Kahan, has done a whole lot of interesting research. But basically, I won't go into the depths of this. It's a little bit complex, but he's basically showing this clearly (politically with all sorts of views,) but the one main study was political beliefs. He's shown how someone's political beliefs will, shall we say, won't corrupt the numerical reasoning ability.

 And he's showing quite clearly that, the more capable somebody is in critical thinking, the more capable they are of cherry-picking the evidence that they need to support that pre-existing belief and building a strong case for it. So if you're on the left, you're going to cherry-pick the information that you want and build your belief. If you're on the right, you're going to cherry-pick different data and create different concepts.

And so, evidence and critical thinking I guess some of the time will work. But for other people, they will just double down on their beliefs. So you start to realize with those two little insights if you're willing to, the way that we form our beliefs or the way we defend our belief. There's a lot of common sense thinking that what we've lived for most of our lives is nonsense.

Katherine Ann Byam  16:20  

It's scary but it's actually evident in many different things, right? We talk about education on this topic and knowledge. But this is also evident in terms of whether you feel like you have more rights to live in a place than another person, or whether you have more privilege and all of this. It also gets into all of those decisions right. I was looking at some research done by a university where they gave two players a roll of the dice to face a team of monopoly. And the guy who won the first roll of the dice would get double the benefit and double the support of the one who lost that roll of the dice.

 And by the end of the game when they played that player who got the advantage at the beginning, he became more arrogant. He became more self-assured. He became stronger in his will and stronger in his imposition on the other player. And by the end of the game, he said that he won because he made better decisions not because he had an advantage. You see even in the game scenario where people know that it's rigged, they still cannot separate themselves from this feeling of "having all this knowledge" that they are somehow better than someone. So, this permeates all our society.

David Gurteen  17:34  

I think it's one of the things that we need to be taught. Somehow we need to come to the realization that we're not rational human beings. We are simply not rational. So for me, going back to your question about difficult conversations. It seems to me that before you can really have a difficult or sometimes impossible conversation across a device, I've got this list up here on my wall to remind me there are a few things that we need to accept. And, I'm not saying these are easy things for everyone to accept.

The first thing is we need to be prepared to question and revise our beliefs. We need to understand what I've just been talking about and be prepared to say, "Okay, maybe, after all, I don't understand this stuff. Maybe some of my beliefs about the world are erroneous." I'm more than happy to have a conversation to learn more or maybe help you talk and to learn more." So that's the first thing. Once you get to that stage, I did a couple of zoom knowledge cafes at the end of last year called "We must not be enemies. We are friends, not enemies." Because once you realize how we formed our beliefs, we shouldn't be fighting over some of our beliefs because quite simply, we got two ignorant people arguing over ignorance.

 And another very difficult pill to swallow, but if we can just suspend our beliefs for a while. Okay, let's talk about it. So we need to stop seeing each other as enemies. Two things we can do in our heads. And then we need to be prepared to actually talk before we disagree. So these are my prerequisites. We need to do it in good faith. So this isn't about trying to convince the other person, either directly or through subterfuge that you're right. It's about agreeing to come together in dialogue to search for, say the truth for want of a better word, for a better answer, for something that we both feel is maybe somewhat different to our polarized beliefs but we can both engage in. If we can do those things, we stand the chance of having a productive conversation.

 The problem is the prerequisites are pretty high hurdles. When it comes to a productive conversation, we need some rules when it comes to conversation. And we need some techniques, we need some guidelines as to how to engage in those conversations. Because if you've got two people with very conflicting beliefs, you can very quickly get into a fight. You need some rules upfront and I've created it with a friend in Canada, a guy called David Creelman in Toronto. We've put together a conversation covenant. It's just a fancy name for the simple set of rules and guidelines that people need to agree to adopt if they come to a difficult conversation.

Katherine Ann Byam  21:07  

I wanted to ask a final question, and it's probably more involved than the previous two that we had. But when we talk about the internet and all of the opportunities it has unlocked. I know that in the academic space, and over time knowledge practitioners as well have been excited by this idea of democratising knowledge, disseminating knowledge at a massive scale.

And now we're in a situation where at times this can be perceived as being counterproductive. So we've seen last week in the US, that a lot of (not that everybody knows what's the truth but) supposed misinformation coming out, invoking people to take certain actions. And then, as a repercussion of those actions censorship comes from social media houses. So what has happened and what can we do to continue to facilitate the conversation because if we shut down the conversation, we're not having it. Are we? So what do we do?

David Gurteen  22:17  

I think it's one of the biggest challenges if not the biggest challenge that we face right now in the world and the last question. We're living in a very complex world. In the last 75 years really, the world has become a far more interconnected complex place than it's ever been. We haven't really kept up with it as human beings. There were a few things that have happened that were not anticipated.

Everyone's heard of so-called filter bubbles and epistemic bubbles, and echo chambers. The filter bubble is where applications like Facebook and Google feed you the stuff that you like. The more it only gives you the stuff that you like, the more you search for stuff that you like, the more it doesn't give you the opposite points of view. So those algorithms are kind of working against you. So that's the circle filter bubble. How to avoid that? The other is the so-called epistemic bubble.

 And this is where we choose our social group, whether it's online or whether it's face-to-face. And when we tend to socialize with people like ourselves, and maybe similar education, similar backgrounds, similar jobs. We tend to have similar political and religious views. So that's a little knowledge bubble, if you will, but we're living in both of those bubbles cutting us out from some aspects of the outside world. We're not seeing everything. And then the other one which is a little bit confusing is the so-called echo chamber that often gets conflated with the concept of the filter bubble.

But if you go back and look at the original use of the word, the filter bubble, also the echo chamber is basically a phenomenon where other people discredit experts. So they cause you to lose your trust in things we believe we've gained from people that we trust. So if you want to change someone's mind if you're actually engaging in a sort of information warfare rather than try to discredit the evidence, discredit the person who's presenting the evidence. So an example of that would be trying to discredit Greta Thunberg to claim that there's a whole lot of money behind trying to influence the world to waste its time trying to make a woman.

So you ridicule her. Trump is pretty good at ridiculing people. He does it brilliantly, so it's "crooked Hillary" and "sleepy Joe Biden" and "Pocahontas." Just by labelling people with a little dog with a word or phrase. He's destroying a degree of trust in people. So this is information warfare. And I think this is the key to what's happened. We haven't realized that the web, Facebook, Twitter, what have you are the potential weapons of information warfare, we thought they were potential forces for good that we can share knowledge where we could connect with people. You can learn more about the world.

 But what we didn't realize was that a lot of people would see them as information weapons, a means of dissemination of false information, and a means of discrediting experts. And when you come to think about it now in the world, (I break the world into three groups) I think there's a large bunch in the middle who want a peaceful world.

This is where this thing goes back from left to right, there's a bunch in the middle, hopefully the majority who wants to see a peaceful world and feel that we can progress through full conversation through peaceful means. You then got a pretty large group on the other side, left or right, we're engaged in information warfare. They're playing by different rules. They're not looking for dialogue, they're looking for debates, they're looking to destroy the enemy through the publication of disinformation.

And then right at the fringes, you've got people who are more interested in what's increasingly called kinetic warfare, traditional warfare, they're the ones that want to go out and burn buildings down and shoot people. I hope these two fringes are really small, but there's a huge number in the middle there who are information warfare warriors. They think they can change the world by defeating their opponents through disinformation. And the problem is, as human beings, we're vulnerable to it.

Katherine Ann Byam  27:06  

I think one of the things I've taken away from history, from reading, from going through the archives of possibly what I learned growing up and what I learned when I became British, for example, and the difference is in the way the story is told, this was an example. That story is actually the most powerful force for any human, right? - the power of the story that was passed down from your ancestors, the power of the story you hear in school, the power of the story that's written in the textbook that's written by someone who wants to emphasize a particular point.

 Even with science, if you have certain people funding that science, that will also influence the story that that science tells. So the power of the story has become abundantly clear. And I guess the question I will take away from the session that we've had and my ongoing look into this topic is how do we create a shared story that we all feel that we can subscribe to? Your thoughts?

David Gurteen  28:09  

That's a good question, and then because we thought so far a lot about the problems and the issues and how do we move forward. I think, unfortunately, there was no silver bullet. And how old is Facebook? I think it was two thousand four - that's sixteen years. And I think there are two and a half billion people on Facebook. With almost 8 billion people in the world. Wow, that's 25%, isn't it?

I'm searching for (I won't say - "the answer"). Well in context, there isn't an answer, there's a response. There's a way forward. There's a direction. And at  the moment, we need to change the direction of our travel. We need to stop seeing (I think fundamentally) we need to stop seeing each other as enemies and start realizing that if we're going to create a better world, we need to be talking more and fighting less, whether it's information warfare or kinetic warfare. We need to be talking more about and understanding each other and reconciling our differences. We probably also need to be thinking about democracy and possibly rethinking democracy.

There's a lot of work going on with this so-called participative democracy where people are more engaged with the political process. Now this bigger part of the problem, both in this country with Brexit and in the States, the war is now between the left and the right. People have lost a lot of faith in democracy. So how do we address that? At the end of the day, it has got to do with conversation. That's the clue. Quite how we do it is another matter. Are you familiar with the concept of oracy? You come across that word, oracy? Not a few people have. Not too surprising. I can't remember, but the word was only invented in the 60s.

 I can't quite remember who invented it. We talk all the time in the education system about literacy and numeracy and how important they are. Numeracy, the ability to manipulate numbers. Literacy is the ability to read and write. We never talked about oracy, the ability to listen and the ability to converse, it's not on the school curriculum. It's just taken for granted that we're gonna pick it up along the way.

Now that there are a few schools actually in London that are teaching oracy.  They are teaching children how to think more practically, how to engage in dialogue, how to engage in debate to have constructive conversations with their fundamental teaching. So I think that's probably part of the answer (but of course, if we start teaching that in schools now) that's not gonna be a bit through for another 10-20 years or so. What can we do with us adults we're pretty much set in their ways. Do you have any ideas? Do you have any other thoughts around this?

Katherine Ann Byam  31:13  

I believe that there is no easy answer to this is one of the reasons we have this conversation. But the idea that I have is to keep putting it at the front of people's minds that they need to think differently from how they have in the past. So I see my role as a speaker, someone creating a podcast or someone, producing content for the Internet as a kind of provocative, as someone who puts new ideas, new proposed ways of thinking in front of other people.

And I've taken up this role, probably because my own story has been so diverse and so mixed, and I've had the ability to learn and appreciate different cultures from my own and have suspended my beliefs in order to learn what I needed to learn to adapt to different cultures, and I see it as my role to this experience to others. This is the only step I think I can take.

David Gurteen  32:10  

And I'm doing something very similar. We've held cafes that are face -to-face whether they are online or through the circle “blook” that I'm writing off the conversation leadership. It's all about trying to influence people who are prepared to be influenced and to start to think a little differently. But I suspect that's not enough. How do we get up and get on the hardlines? I think, you and I here, we're not necessarily pushing left or right agendas.

When we want to bring people together, re-examine their beliefs to lead them to a conversation, to figure out how we can best structure organisations and societies and institutions to create a better world, and not fight. Whether we come out with a left-leaning government or right-leaning government, (and personally I don't care too much), we just want to be, as a society, as a global civilization, we need to be making better sense of the world, and we need to be making better decisions. And that's the challenge we have for the next 10 years at least.

Katherine Ann Byam  32:31  

Do you want to tell everyone about your bolok and how they can find out more about you before we leave the session?

David Gurteen  33:34  

Okay, very simply, five years ago, I started writing an online book on what I called "conversational leadership," I won't go into too much detail there but it's basically about conversations. Oh it's not conversations; it's about leadership. So it's about each and every one of us taking responsibility for creating a better world, to see leadership as a practice rather than position of authority, and how we can help make a better world through conversation.

So that's the essence of the book, I call it a “blook,” because it's online - it's a cross between a blog and a book. I've been updating it literally every day for the last five years, and it's always a work in progress. I'm doing something called "working out loud," and I want people to give me feedback as I write my data to improve it. It's actually quite simple to find it. Just Google conversational leadership and you will find the book.

Go take a look. If you find things in there that you think I could be wrong, you find things in there that you think I could improve on, I'm looking for that feedback that's why I haven't written this as a conventional book. I want to engage with people. So that's fundamentally what it's about.

Katherine Ann Byam  34:50  

Thank you so much, David, for joining us. It's been a lovely conversation, as we would expect, and I hope to have you one time again in the future on our show.

David Gurteen  34:59  

I look forward to that and it's interesting to see how our views have changed, maybe in two years time.

Katherine Ann Byam  35:04  

Thank you, David, thank you very much. Enjoyed it. Thanks for listening.

012 Managing Learning & Change

012 Managing Learning & Change

About this Episode

I met Nicole during a women tech workshop, and later joined her Women in Stem Reimagined Course as a guest Speaker. I interviewed her as part of my courageous career show, and decided to share her advice on my podcast as well.

We talked about:

Dr Nicole Tschierske is a scientist and positive psychology coach who helps women in science and tech use their heads and heart to get seen and noticed in their company. She's an experienced change manager and coach, and we are going to be talking about her experiences and learnings on the change journey.

Nicole lives in Hamburg, Germany, is a food chemist by training and holds a PhD in chemistry next to certifications in coaching, positive psychology, change management and advanced problem-solving.

When she’s not buried in research papers and books on Positive Psychology and Positive Leadership you can find this scientist-turned-coach taking long hikes in the German countryside or mesmerised by Mary Poppins on the screen.

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Episode Transcript

Katherine Ann Byam  0:05  

Welcome, Nicole.

Nicole Tschierske  1:19  

Hi Katherine.

Katherine Ann Byam  1:21  

So you are a food chemist? How does a food chemist find her way into people and change?

Nicole Tschierske  1:27  

Yeah, it takes a crisis. So I was working in product innovation as my first job or the first years of my career in the industry. And then as it is, within those big companies, sometimes there's a merger. Then it takes quite a while to reorganise and resetle things. So what affected me was experiencing change, or the impact of it firsthand, and ending up or being put on hold for quite a few months. And I had hardly anything to do because they were sorting out things and discussing and trying to agree on how to move forward. I like working, not working was really, really horrible.

So that led me to seek out a coach to help me get out of this energy slump. And then within a few sessions, he had me all going up again and pursuing new pathways and so on. And so how did he do this, I want to be able to do that too, for people. And that's when I then started coaching, training, and getting into all this kind of space. And then as luck would have it, the opportunity arose within the company to lead the change management workstream for a big business transformation project. And it's like I have this newfound passion and destined opportunity. I know the team is great. And so I jumped right in.

Katherine Ann Byam  3:03  

Well, that's amazing. And how have you transitioned this change management work? In this time of remote working? How has that worked for you?

Nicole Tschierske  3:15  

So basically, I started in the role before COVID happened. So there was a lot of travelling involved, going places, meeting people doing training in person, having those types of conversation, and this engagement and working with the team in meeting rooms and all that. So the way you would think about project work. And then we couldn't travel anymore.

And what has changed is really the level of intention needs to be a different one. So really, what are we doing? So being really more focused and prepared and being mindful also of what's going on? And being mindful of what we don't see that's going on? So there's a lot more checking in. So the mechanics of it are fairly simple. You just sit on the same chair every day and dial into different types of meetings, but the intentionality needs to be different. But I'm happy to report that the team found a way of working and probably having become so cohesive beforehand, through all this great collaboration.

But this really took it up a notch, so we really stood even closer together. And we're just really very intentional and conscious about how we interact and how we run the project in different phases. So it worked out fine so far.

Katherine Ann Byam  4:56  

No, that's brilliant. And what skills do you consider to be the most important for employees in large organisations, given what's happened with COVID, given the kind of inflection point that we're in right now? What skills do you think are the most important that people should be focusing on now?

Nicole Tschierske  5:14  

So three things for me. And there is no particular order, I find them all equally important. So one is learning - learning not just in the sense of taking part in a training or reading a manual or textbook but actually learning from life and from what's happening. And not just every half a year when you do lessons learned or review or something, but on the go. Having these heartbeat retrospectives every week, asking yourself, what's working? What are we going to change? And then really learning on the fly, so to speak. So that's one. And by that, also always being able to get ready for what's next because we noticed this.

And this kind of prepares you for change properly. Second one is emotional intelligence. And I know sometimes the big buzzword, but really knowing how to stick with data, not drama. And just knowing how to navigate uncertainty, taking a step forward, and taking decisions even though everything is volatile and ambiguous. If we want to use those words. It is just a reality and you need to learn how to cope with this; not only how to cope with it,  but how to still excel in those types of environments and make progress.

 And so that's emotional intelligence. And the third one is relational intelligence. So building relationships, connecting with people and having those. Even now that we are missing being in one room, having almost feeling the social fabric, we have to put so much more effort into creating our relationships and maintaining them because that is what's needed to really be affected and get anything done.

Katherine Ann Byam  7:21  

Yeah, I think you've raised three very interesting points. And on the point about learning, there's an element of experiential learning, I guess, that we need to bring out. But how would you recommend people get into that experiential learning? Because, if I think back, maybe some of the ways that people did this in the past would be to take a gap year, for example. So before you even get into the job, you take a gap year, you tour the world, and you experience different cultures, and that already gives you something new, right? Something experiential, how would you recommend people go about bringing an experiential element into their learning journeys?

Nicole Tschierske  7:59  

One thing is learning from the things that you do every day. It's something that I established with,  let's say you implemented a change, and then you still need to ramp up phase and stabilise it, and really embed it in the ways of working. And so what I then do with those teams that just went through this is go live implementation phase, to really have a monthly learning loop session where we just pause and just reflect on. "Okay, what's really going on? What have we achieved in the past months? What are the gaps that we're having." - so being intentional about learning from the experiences that I make every day in my job. 

But what you mentioned about creating other experiences for ourselves, I'm pretty sure there are a lot more projects going on in everybody's company once they touch your own role. And so maybe there's an opportunity for that, for you there to volunteer. Maybe there's an environmental working group, or diversity and inclusion versus working group or whatever. People create stuff all of the time. So you can find those types of projects that are outside of your role where you can engage.

Katherine Ann Byam  9:21  

What are your best three tips for approaching a transformation? So getting into big scale transformations, what are your best three tips?

Nicole Tschierske  9:30  

Actually thinking about it - it's not so much. The strategy is really how you set yourself up. So one thing is, from a company perspective - allowing the resources to take care of the change management and having a dedicated change manager is very good.  It's a perfect point to start - so you have someone who can operate and orchestrate the whole people's side of change. But having just one person managing change for 500,000 people that are impacted is just not sufficient. So all of your project team members, all of your subject matter experts, all of your line leaders, they all need to play a role within change.

And for those that are heavily involved in driving the project for what I think at least 20%, allowing for them to spend on really just engaging and taking the rest of the organisation with them. That would be a good place to start. So that is one thing -  allowing the resources. The second thing is really integrating change management and project management. You may have two different people doing this but the activities and the tasks need to be in one plan. You cannot have a plan here and the other plan here.

They should be combined in one so nothing falls through the cracks. And the third point is increasing your organization's capacity for change to upskill people, both leaders and frontline employees, to know how to go through change successfully and how to implement it because when you ask something from someone, I'm always a fan of giving them the tools to be able to meet those requirements.

Katherine Ann Byam  11:19  

Absolutely. Really good points and thank you for that. Can you talk about your bigger vision for women in tech? So I know this is an area of passion for you. You know, and you've you've transcended tech, and you've taken your skills to another level in terms of that organisation playing field that you have now. Tell me about your vision for women?

Nicole Tschierske  11:38  

Yeah, so I'm going to cheat a little bit. I'm going to say it's my vision for everyone who is an employee, or who works for a living. I work mainly with women in the STEM fields, because I can relate most to them, because it's my own background. And our brains are sort of wired in the same way.

But really, my vision for workplaces in general is that just people can thrive and have an opportunity to be their best at work and really enjoy going there every day because I don't know how you feel but if we have to work over four decades, we better have some fun doing it. And so that's really important for me and in creating those environments, and showing people how to really step up and be there and seize opportunities, but also providing those opportunities equally for everyone. I just would love to see things going that way.

Katherine Ann Byam  12:39  

I agree with you. This is one of the reasons the show is called the way it's called, right? This idea of transcending work is something that I've fallen in love with simply because it no longer means work? So if you want to bring yourself to doing something that aligns to your purpose, that you feel a more intrinsic joy from rather than the extrinsic rewards that you get. This for me means so much.

And we have a comment from Joe. “Change Management is often seen as the nice to have on projects. What's your approach to companies that take this view? How do you get them onboard and see the benefits of proper change management as part of transformation?” Excellent question.

Nicole Tschierske  13:21  

So Katherine, I know you have an opinion on this as well as you'd like me to go first. So when you speak to companies about this, they always think about finance, finance, and finance. So I always bring it back to - change management can really help you given that the technical solution you provide is the same proper quality. But change management can really help you increase that return on investment or even get this return on investment. Because no perfect system or great process will do you any good if there's no people out there who are willing to use it and use it in the way it was intended.

And so that is one thing, maximising return on investment, and the other bit is really minimising the disruption to the business during the transition phase. So because change creates upheaval wherever you go. Things won't go as smoothly as before, and that's natural, and it's normal. But how can you then accompany and enable the organisation to go through this so it doesn't have customer impact?

Katherine Ann Byam 14:40  

Yes, I agree. I would probably add that the pace of change now is no longer human scale? So it's accelerated beyond our ability to cope naturally with it. And therefore, this is why you need that extra support? You need to bring people along in the journey. And you know, they say that most people are actually aversive to change? They don't want to step into change. And now we are accelerating so many things.

The shift to remote work was supposed to happen three years from now. We've all got pushed into it while being pushed out of walking on the streets and having things that are normal. So you really need to hold people's hands through this journey. So this is part of the process. And without it, you don't have an engaged workforce and what you really want, is the point we spoke about before, is people brought into a greater journey, a greater and bigger picture. What do you hope for a new beginning in 2021? Difficult question. 

Nicole Tschierske  15:52  

2021. Well, I think we all had a really great reality check this year. This year it feels like so much has happened. It could fill a decade. You have the bushfires in Australia in the beginning. Then somehow, COVID hit. Then there were all of the racial injustice topics in the US and all over the world. And we have all of the crazy elections. And I'm not even talking about the U.S., but also Belarus.

And also there are many, many things happening all over the world. And it's just looking around and say, "Man, this is a real reality check," and I hope for many of us a wake up call to pay attention to how we treat each other, how we treat our planet, and to make not a small New Year's resolutions, but actually starting to change the way we live and how we conduct ourselves on this planet, to create a world that can sustain peaceful living for everyone.

Katherine Ann Byam  17:09  

I couldn't agree more. Thank you so much for your thoughts and for your generous sharing, and thanks for joining the show.

Nicole Tschierske  17:16  

Thanks for inviting me, Katherine. I always love talking to you. 

Katherine Ann Byam  17:20  

Alright, see you all next week. Take care. 

009 A Culture for Sustainable Change

009 A Culture for Sustainable Change

About this Episode

discovered Tendayi Viki during a Strategyzer masterclass on building resilient companies.

We talked about:

 Tendayi Viki is an author and corporate innovation expert. As Associate Partner at Strategyzer, he helps companies innovate for the future while managing their core business. He has written three books; Pirates In The Navy, The Corporate Startup and The Lean Product Lifecycle. He previously served as Director of Product Lifecycle at Pearson, where he co-developed an innovation framework that won the Best Innovation Program 2015 at the Corporate Entrepreneur Awards in New York. Tendayi has been shortlisted for the Thinkers50 Innovation Award and was named on the Thinkers50 2018 Radar List for emerging management thinkers to watch. He is also a regular contributor at Forbes. 

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Episode Transcript

Katherine Ann Byam

So my first question for you. 2020, has been a surprising year for us all that has created fertile ground for innovation and disruption. In your experience, what are the characteristics of companies who ride the wave of changes? Well, and those that don't?

Tendayi Viki  1:56  

Yeah, so. So it's been interesting. And there's a lot of conversations going on around what changes that we've seen in companies, right, that are gonna last post-COVID-19. And sometimes I think we're actually asking the wrong question. You know, I think we're failing to make a distinction between two things. We're failing to make a distinction between changes that companies are making to their business models, because they have to because otherwise, they're going to go bust, versus the behaviour, structures, and processes they're actually using to make those changes. And so we're asking whether the changes will last.

But we're not asking whether the new behaviours will act. Yeah. And so and that really speaks to the question that you're asking here, which is, you know, what are the characteristics of companies that ride the wave of change as well. What are the kind of companies that ride the wave of change as well, the companies that have already built the innovation muscle, before the change, or the disruption actually takes place? You know, I mean, I always say this, like, you know, after you've had the heart attack it is too late to start jogging, it's better to actually start developing the muscle before you have to attack. And so what we're finding is that all those companies that had a pre-existing innovation ecosystem, we’re able to quickly leverage spin-up. Startup teams, make small bets, run experiments and tests.

We did that a strategy, though, you know, after the crisis was at testing various, in various different offerings of our programs. Because we already have this practice internally, we're able to do that quickly, versus those companies that are like, Oh, right, well, first, everybody go home. Okay, now we need Legal [teams] to look at whether your computers are compliant, then we need to say that it took them a little much longer time to start thinking about how how how, how they can survive, with the pressure that carried on being on them, a whole lot of these companies figured out something. They built new platforms, new ways of working, and built new business models. But the question is, after the crisis, will they go? Okay, that was fun. Let's get back to what we used to do before? Or will they really deliberately think about developing those innovation muscles now?

Katherine Ann Byam  4:02  

Yeah, it's super interesting how companies are trying now to build a fast digital transformation platform that they can then grow on, and trying to figure out how to manage that implementation as we go. So the next question I wanted to poke into is, in your work, you talk about two main drivers of innovation, which are the external growth factor and transforming the internal systems. So how does the message of sustainability when we think about all that, that COVID has brought about and change in the world and the sort of change and consumer trends as well? How do you feel that sustainability fits into those two levers?

Tendayi Viki  4:44  

Yeah, so it's interesting, right? I mean, in my work, I wouldn't describe them as to lever this such. I would describe them as two goals, right. So if you're an innovation team, or you're thinking about developing an innovation programme, you have two things that you really need to be thinking about right, which is, to what extent is this programme we're launching going to change our company and make our company be able to do innovation on a repeatable basis.

 And so that's what we call the transformation part. Right? So are you building systems? Are you building practices? Are you building toolboxes that people can use on an ongoing basis? Or are you doing innovation, there's just a whole bunch of one-off projects, each one having to negotiate with a company, a new innovation that never happened before. So that's one piece. And then the other piece, which you refer to as growth is, you know, beyond just changing the company, we change the company, so the company can create things of value, right. And so the real way, maybe to actually, I wouldn't call it a third dimension, I will call it relabeling that dimension, right, moving away from calling in growth, because then makes it a single metric sort of focus, but really think about value creation.

And when you start thinking about value creation, then you can think about - Okay, well, are we creating sustainable value? Right? Are we having enough impact? Are we developing business models that are more suitable to the world in the way that is changing? And so, you know, creating that sustainable value becomes, you know, the other dimension. So what we don't want is innovation theatre, right, which is innovation programs that are aimed at either changing the company or creating value, because then it's just wasted, just like, yeah, we had a hackathon. Yeah. You have to really be thinking about exactly what is the point of all the work that you're doing?

Katherine Ann Byam  6:28  

That's really interesting, as well, because I feel as if there is an appetite for pooling lots of ideas. So gathering ideas from customers, gathering ideas from employees, and there's a lot of excitement and buzz around that. Is that innovation theatre?

Tendayi Viki  6:45  

It's not innovation theatre, right. So gathering ideas from, from customers, gathering ideas from employees, and voting up, the best ideas to work on is not innovation theatre in and of itself. It becomes innovation theatre, when you do nothing else, but that. Right? Right. So if you gather the ideas, the question is, then what do you do with them?

Are you able to use some of those ideas to create something of value if you are, then that's not innovation theatre, the idea competition is a stepping stone towards something valuable, or the hackathon is a stepping stone to something valuable. The idea session, when you're doing sticky notes, is a stepping stone towards something valuable. But what happens in most of these situations is like, Whoa, we had a competition. And here's the winner, let's all go home, not next year, whatever, another one. If you start doing it like that, it is definitely innovation theatre, it's the best theatre out there.

Katherine Ann Byam  7:37  

That is quite. The other thing I'd like to touch on on this point is that I also work with a number of female entrepreneurs who are in the sustainability space. So a lot of them create businesses of handmade products or recycled materials and stuff like this. But what's interesting about working with entrepreneurs, as opposed to working with big corporations is that the bottom line is important. Right? It's important for them to be profitable. But it's also important for them to live their purpose and to live their value. So I wonder if this is something that companies also need to be considering how they bring purpose into that mix?

Tendayi Viki  8:11  

Yes, absolutely. I actually think companies need to really be thinking about how they bring purpose because again, beyond just love creating bottom-line growth, people also want to feel like they're making a positive contribution to the world, it kind of gets them up in the morning, and they feel positive about going to work. You know, companies like Unilever, underperform, and are really putting the stake in the ground, like defining themselves as that way become companies that are people who are happy to work for those organisations.

Right. Just a word to the wise for your social entrepreneurship friends, right. I gave a keynote the other day, we're talking about the starving artist, which is people that are so focused on the cause that they forget that they also need to be profitable. And so it's a balance between those two things right, you have to make sure that you've covered both parts of the combination.

Katherine Ann Byam  8:57  

Well said. I couldn't say it better. So my last question to you is going to be about pirates. I love to hear you talk about pirates. So what I'd like you to do is explain to my listeners who are part of a bigger organisation particularly what type of pirates they should be.

Tendayi Viki  9:17  

Alright, Jeff, so Alex Osterwalder, I, you know, I work with them at Strategyzer, but when I'm Associate partner and Alex hates the word pirate to describe innovators, and he says like, you don't want to be a pirate, pirates used to get killed. Right? And so, you know, I'm working on a book of pirates in the Navy and my boss hates the word pirate. But actually, when we were doing the work on the book, we discovered that not all pirates are the same right you don't get like people who just tend to use the words interchangeably pirate, buccaneer, etc. But we discovered that there's a class of pirates called privateers that are very distinct from just the typical pirate because the typical pirate is just a criminal. They're unaffiliated to anything.

They don't have any connection. Anything, they just out there roaming the high seas, doing whatever they want. And of course, that's life, if that's what you want to do. But if you want to do innovation in such large companies, you need to think of yourself more as a privateer, who is also a pirate. But they're a pirate that's actually been commissioned by someone to go out into the world and do work. For example, the British government used to commission people like Francis Drake, to go out and raise Spanish ships.

And then and then bring that back to back to the UK. So what we're saying is simply this, if you're a corporate innovator, it is important that you build a bridge between the innovation work you're doing and the core business with which you work, because there's no chance that any innovation that a corporate innovator works on is going to succeed without support from the leadership inside that organisation.

Katherine Ann Byam  10:43  

That's absolutely true. So thank you very much for sharing your thoughts with us. Any closing words for either the entrepreneurs, who are out there making a big splash in the sustainability space? Or the corporates that want to do more? Any closing words?

Tendayi Viki  10:59  

Yeah, I mean, not a lot, really, I mean, the thing I've been most interested in, in all my work, is authenticity, right? So we just want to make sure that we're doing stuff that creates value rather than stuff that, you know, it's just fake and, and kind of just, you know, like people are just performing innovation theatre, rather than actually doing things that create value. So you cannot, if you're a social entrepreneur, create value. If the business you work on is not sustainably profitable, it will die.

 And then the value we're trying to create dies with it. So you have to focus on both those things. You cannot create value if all you do is events, and speakers, and all these things. If you're a corporate innovator, you also have to be thinking about right, making sure that you're also generating revenue or impact or you know, value. So that's really what we care about. And then the question just becomes, okay, if we're going to be authentic, what are the real true things that we can do in order to do valuable work, and that's really where the conversation needs to move to.

Katherine Ann Byam  11:58  

I love it. Let's take the conversation there. Thank you for joining us on Where Ideas Launch - The Podcast

Tendayi Viki

Thank you. 

Thanks for listening. This podcast is brought to you today by the Dieple Virtual Service Hub. The Dieple Service Hub is a digital transformation strategy service that supports startups needing to optimise their processes and their performance to scale up growth. We also help medium-sized firms and modernising their operations and our services include sustainable strategy, analytics and tech enablement. To find out more contact Katherine Ann Byam on LinkedIn

002 How to build a resilient business

002 How to build a resilient business

About this Episode

Where Ideas Launch was curious to learn what inspires the world's #4 Management Thinker.

We asked Alex these 3 questions:

Dr. Alexander (Alex) Osterwalder is one of the world’s most influential innovation experts, a leading author, entrepreneur and in-demand speaker whose work has changed the way established companies do business and how new ventures get started.

Ranked No. 4 of the top 50 management thinkers worldwide, Osterwalder is known for simplifying the strategy development process and turning complex concepts into digestible visual models.

He invented the Business Model Canvas, Value Proposition Canvas, and Business Portfolio Map – practical tools that are trusted by millions of business practitioners from leading global companies.

Strategyzer, Osterwalder’s company, provides online courses, applications, and technology-enabled services to help organizations effectively and systematically manage strategy, growth and transformation.

 His books include the international bestseller Business Model Generation , Value Proposition Design: How to Create Products and Services Customers Want, Testing Business Ideas and The Invincible Company published in Spring 2020. To learn more about Alex's work you can subscribe to the Strategyzer news letter by clicking here

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Episode Transcript

Innovation expert, Dr. Alex Osterwalder has created and tested tools for simplifying strategy development processes for businesses and emerging business ventures. He works by turning complex concepts into digestible visual models. Examples include Business Model Canvas and Value Proposition Canvas.

He believes that for a company to be truly sustainable, it must be able to solve a problem and create value for society, its stakeholders, and more importantly and ensuring that its employees have an optimal work condition, enjoy their work, and go home happy. There is a need for companies to transform themselves into sustainable models that are crisis-resilient and that is where their work comes in to help companies reinvent themselves through the innovation they incubate and launch at Stragegyzer.

Key points:

Katherine Ann Byam  0:02  

Where Ideas Launch - The Podcast for the Unexpected Innovator. 

We are all incredibly creative, but maybe we’ve forgotten how. I spent my career working with people from more than 150 countries traveling the world and experiencing cultures, and what have I found? Creativity is everywhere. We've got a gargantuan challenge facing us, as we need to redesign a more sustainable planet. This podcast explores modern-day innovation in the age of sustainability. I interviewed some of the most prolific thinkers, creators, and educators on their journey to create sustainable incomes and businesses. My guest tonight will teach you how to be creative, create business models and explore curiosity with the courage to level up in your career. Join me every Wednesday for a new edition of “Where Ideas Launch - The Podcast.” Welcome to our episode. 

Dr. Alexander Osterwalder is one of the world's most influential innovation experts, a leading author, entrepreneur, and in-demand speaker whose work has changed the way established companies do business and how new ventures get started. Alex is known for simplifying the strategy development process and turning complex concepts into digestible visual models. He invented the Business Model Canvas, Value Proposition Canvas, and The Business Portfolio Map - practical tools that are trusted by millions of business practitioners from leading global companies. Strategyzer, an Osterwalder company provides online courses, applications, and technology-enabled services to help organizations effectively and systematically manage strategy, growth, and transformation. His books include the international bestseller “Business Model Generation,” “Value Proposition Design: How to Create Products and Services Customers Want,” “Testing Business Ideas,” and “The Invincible Company” that was published in Spring 2020. So I'm excited to welcome Alexander Osterwalder to “Where Ideas Launch - The Podcast.” 

So, Alex, you were ranked Joint No.4 thinker in the world. Your books are staples in universities and companies across the planet. And you are creating methods that change the trajectory and outcomes of many businesses. I believe that business leaders, especially the influential ones, have a burning unanswered question that propels them forward. Alex, I'd love to know, what's your “why.” What questions get you out of bed every morning with a burning desire to solve them?

Alexander Osterwalder  2:47  

Good question. What gets me out of bed every morning. I just love what I'm doing. You know, making business tools to help people do a better job is something I really enjoy. You know, when we see people and companies who can innovate can't innovate. We ask ourselves. So what's still missing? What's wrong? We don't blame the companies. We don't blame the people. We ask ourselves. And when I say we, it's with my co-author, Yves Pigneur. We ask - what are the tools and processes that are still missing? - or unclear? You know, where could we contribute to help them do a better job, to create change, or to create impact. And then the fun part is once we kind of figure out the challenge, we try to work on it, we play around with different concepts. And then we prototype tools that we test with real business people out there and try to make them better and better. And we're very visual in the work we do. So then we write books around the tools around the topics, and it's just a fun process. And then, of course, it's very gratifying when you see people using the tools, reading the books, and actually making a difference. So that's what gets me up every morning.

Katherine Ann Byam  4:07  

That's fantastic, Alex, we know in our world today, we have a burning platform of sustainability. And I don't just mean the climate. There are many levers of sustainable development, which include education, health care, water, and food for all, as well as general well-being the climate crisis. In your work, what do you currently see as the role of business in solving these problems?

Alexander Osterwalder  4:35  

Interesting question. How do I currently see the role of business in solving these problems? I really think business can make a difference, you know, great companies, they create value in four ways. So number one, they create value for customers. And we shouldn't underestimate that. You know companies create new products, new services, that create value that advances the world. Then, they create value for their organization, for the owners, for the shareholders, and that is very good as value creation. But of course, that's not enough, right? That keeps companies alive. We also, you know, love companies that create value for employees, a really important stakeholder. And don't underestimate the impact, you know, you can have as a leader, or as an owner or CEO of an organization. When you have 10 people, 100 people, 1000 people, 10,000 or 100,000 people, and you create better working conditions. You create a space where people can enjoy their work every day and do their best work. You'll actually create a better world that will have a big impact. You know, happy employees will go home and be happy, and, you know, citizens in their families and happy in society. So that's very important. But then there's the third, the fourth one. And I think that area is extremely important, which is, you know, making a difference in society, having an impact in society. And you know, take the founder of Patagonia, Yvon Chouinard, you know, he didn't settle for just building a company, the vision was to really, you know, have an impact on sustainability. So today, the mission of Patagonia is “we're in business to save our home planet.” So there, you know, they definitely, definitely make a difference, or Paul Polman, who was CEO of Unilever, you know, who reoriented the company, to focus not just on profits, but really on sustainability, and not at the expense of profits, but in harmony with profits. So I think that is very important and impressive. And I think you know, more and more, not just a nice to have, it's something that companies need to do, just to retain their employees and to attract new talent. Because today, you know, a lot of young people are, you know, great talents, they want to work for a company that they can stand behind, it's really making a difference. So creating value for society is something that's incredibly important for organizations. So those are four layers where no company can really make a difference.

Katherine Ann Byam  7:28  

Alex, it's so exciting to hear senior leaders in strategy, recognizing that a happy employee is a happy business. You know,

Alexander Osterwalder  7:36  

We spend a lot of time at work as employees. So those hours there are important in our life. So businesses who create a great work environment will really make a difference. And you know, take founders, like Marc Benioff, founder of Salesforce, he wrote a book on, you know, the power of business as the greatest platform for change, he wrote a book called Trailblazer. And he really makes a case for businesses as a change agent. And I really do believe that you know, when, when we work on innovation and help large companies reinvent themselves, we also have to ask ourselves and strategise? Why are we doing that? What's, what's our “why” and the reason is not just to help them make more money or for us to have great assignments that are interesting and pay well, no, it's also and I think that's the main motivation for myself, it's to help more to create more resilient companies that you know, can survive a crisis. And that means, you know, having more stable workplaces, because when a large company has to layoff 10,000 20,000, or 50,000, people, as has been the case, you know, in some companies with COVID-19, that is very, very painful for the employees, and it's very costly for regions and governments. So innovation is something that can really make a difference, not just financially, it's really something that can create enormous value for society. So that's what gets me excited about innovation, you know, creating value for customers, creating value for businesses, and of course, creating value, you know, for employees to create more stable workplaces and ultimately, some of the great innovations they create value for the society for the environment. So if you take Tesla, its the whole idea of not just building it, you know, electric vehicles, but building a company that is transcending industry boundaries, and, you know, focusing on solar energy in general with rooftop tiles with batteries, in order to fuel the electric vehicles. That's a great, great case of an organization that is making a difference. And there are more and more of those. And that's what's really exciting these days is that you have leaders and businesses that really understand that they can make a difference in the world. And they can be agents of positive change. And that's exciting.

Katherine Ann Byam  10:22  

Alex, thank you so much for that. You shared with us four great ways of creating and sustaining value in organisations, which is “focus on the customer”, “focus on shareholders”, “focus on employees”, “focus on society”. And this is the ingredient, the key ingredient to having a resilient company. Now, I know from your work that innovation is heavily influenced by a company's culture. I attended your Strategyzer masterclass in May.

What do you think are the top three things that companies with a great innovation culture do to sustain that culture and expand their economic lives? I'm very interested in how you have brought this into your work.

Alexander Osterwalder  11:03  

Great question, how about the top three things you do to help companies sustain an innovation culture, we created something that we called the innovation culture scorecard, innovation, readiness. And there, we focus on three areas. And they sound kind of trivial when you mentioned them like that, but I'll give you some examples. So the first area is leadership support, you know, around portfolio allocation, the time that leaders spend on innovation, etc, etc.

Alexander Osterwalder  11:41  

That's where leaders can make a difference, they need to invest in a portfolio of innovation initiatives. And not just one because in innovation, you can't pick the winner. Turns out actually that you'd have to invest in 250 projects in order to create one outlier. So when you're an established company, you need to invest in at least 250 projects to create a big success that can go into the hundreds of millions of dollars. Now, if you're a smaller organisation, that might be three projects to invest in to get one winner. But the ratio is that you can't pick the winner. And in the venture capital world, in the startup world, we know that for ages, because there is no venture capital investor that believes they can pick the winner, they've done this for a long time, and they still can't, so they invest in a portfolio, where one company they invest in, will create the return for the entire portfolio. So we need the same kind of logic in established organisation. So besides the execution business, the execution portfolio, managing the businesses that you have, you need to create a portfolio of innovation projects. So that's, you know, one of the themes in the first area leadership support, and investing in a portfolio and resource allocation. The second area is organisational design. So no company today doesn't have innovation activities. But mostly, it's innovation theatre. That's what Steve Blank, you know, the inventor of the Lean Startup movement, Rita McGrath, from Columbia Business School, myself, we call innovation theatre, it's for the show, there are activities there, but they're not real. So what you really want is to give innovation power, and that's a relatively easy thing to do. You know, so either it's the CEO who spends time on innovation, my favourite example is Bracken Darrell, who spends 40 to 60% of his time on innovation, or you need to have a co-CEO, who fully, you know, focuses on innovation. So a great example there is that Chinese company, ping on in finance and insurance, they transformed themselves to, you know, a company that transcended industry boundaries and became a tech player, when Peter Ma, the founder, said, we're gonna get disrupted, we need to invest in innovation. And he established a co-CEO with Jessica Tan, who focused entirely on innovation. So it wasn't somebody reporting to the CEO, you know, because then you kind of subordinate the innovation activities to the execution activities. No, it was at the same level of power. So it's very, very important that you give innovation power, either by having the CEO focus on innovation that symbolically signals that innovation is important. People will realise that it's not a career suicide to go into innovation, or the alternative is that you install innovation at the same level as the CEO. So both of these options give innovation power and signal to the company that it's very important. And then the third area of innovation culture is actually the easiest one. It's an innovation practice. So you need to establish the right tools and processes in your organisation, but also establish the right skills and experience. Because just like, you know, becoming a world-class manager, that you don't do that overnight. So becoming a world-class innovator, you know, you have to gain experience. I like to compare this to the medical profession, you know, a doctor, let's say, say, a heart surgeon, has to go through medical school, learn, you know, physiology, anatomy, for a very long time, and then become an intern, until you become a heart surgeon takes a lot of time, a lot of practice, the same in business, you have to learn the anatomy and physiology of business, to learn how it works. But you also have to practice because you can't learn business, from reading books, entrepreneurship, from reading books, innovation from reading books, just like you can't become a doctor or surgeon, just by reading books. So there are very strong similarities. So the right talent and experience in innovation is crucial, because it's a completely different profession than management. So those are the three areas you need to invest in leadership support, organisational design and innovation practice. And that's how you will help innovation become sustainable. In your organisation. It's fun, you know, to see with the Strategyzer, how we're getting into companies, and we do these assessments to see how companies are innovating or not, you know, they're performing innovation theatre. And then once you visualise that, the leaders really realise that they need to change, and they need to, you know, perform their innovation activities in a completely different way. So innovation, I think today's growing up is maturing, and companies are really realising that what was good 5-10 years ago is not good enough anymore.

Katherine Ann Byam  17:17  

Alex, thank you so much for joining us on Where Ideas Launch - The Podcast. This session was so informative, so indicative of what makes a company strong and resilient. Thank you for all the work that you do. And we look forward to you joining us again in the future. Thank you, Alex, and thank you to our listeners. 

Thanks for listening. This podcast is brought to you today by the Dieple Virtual Service Hub. The Dieple Service Hub is a digital transformation strategy service that supports startups needing to optimise their processes and their performance to scale up growth. We also help medium-sized firms and modernising their operations and our services include sustainable strategy, analytics, and tech enablement. To find out more contact Katherine Ann Byam on LinkedIn

001 Sustainable Business Trends in Luxury Brands

001 Sustainable Business Trends in Luxury Brands

About this Episode

Where Ideas Launch - The Podcast for the Sustainable Innovator had the pleasure of interviewing Isabelle Chaboud on her insights on how luxury brands are becoming more sustainable.

Isabelle is an inspiration to her students past and present, as she does finance with style and flair. Her articles have been viewed more than 350000 times, a testament to the value she brings.

This podcast explores:

  1. The financial impact of the pandemic on luxury brands bottom line.
  2. The trends in sustainable change and whats driving it.
  3. The upskilling needed by people adversely  impacted by the pandemic.

Isabelle Chaboud is an Associate Professor in the Finance Law and Accounting department of Grenoble Ecole de Management. Since December 2018, she has been Programme Director for the MSc in Fashion Design & Luxury Management and since September 2019, responsible for the MBA Brand & Luxury Management specialisation.

Her main areas of teaching are financial analysis (especially in the luxury sector), auditing and international accounting.She teaches or taught in Grenoble, London, Paris, Berlin, Marrakech, Moscow, Tbilisi (Georgia) and Singapore.

Before joining Grenoble Ecole de Management in 2001, Isabelle worked for 7.5 years for PriceWaterhouseCoopers in Lyon, France where she was a financial audit manager. She had clients in various industries as well as in services. She was part of the European Internal Audit team of PwC and worked in Spain (Madrid) and Portugal (Lisbon).

Isabelle is a French native but lived for more than three years in the United Kingdom, two years in Germany, one year in the United States, one year in Spain.

She graduated from Grenoble Ecole de Management in 1992 and from the International Teachers Program (ITP) delivered by HEC Executive Education, Paris in June 2014. She regularly publishes intellectual contributions in different media. to read her article on this topic, click here.

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Episode Transcript

Katherine Ann Byam  0:15  

I'm really excited to talk with Isabelle today because she was also my professor when I studied for my MBA, in 2016, and she was one of the most transformational leaders I've met in my career. So, thank you for joining us and welcome Isabelle.

Isabelle Chaboud  1:57  

Thank you so much, Katherine. It's really nice to hear. It's my pleasure to see you. This time outside class.

Katherine Ann Byam  2:05  

It's really wonderful to have you. So we're gonna get started by asking you a few questions about your mission so I like to talk to my clients to tell them that we need a mission statement we need something to drives us beyond the job. Tell us about your mission statement.

Isabelle Chaboud  2:25  

Okay, so my mission statement will probably be three keywords, people and sharing, learning, and passion. People have always been for me, probably the most important thing - meeting people, discussing with them, and sharing my own knowledge, not only in my country but internationally, we benefit all the different cultures, and that's something I always look for. I never stop learning I think since I was little, I always try to read, learn new things, and that was something that really matters a lot to me. It's probably why I studied Audit.

I work for eight years at PwC. Every week we had to audit a new client, a new business model, new industries, from chocolate to pharmaceutical to perfume, fashion, carmakers, always different, traveling as well. I think when you're passionate about something, you will always find time even if a day only has 24 hours, you can read more, you are more curious, you necessarily learn more. For me, those are the three most important things from audit to fashion to higher education, those have always been my motto.

Katherine Ann Byam  4:07  

It's so wonderful and refreshing to hear and because I used to be an auditor too and we all know people don't like auditors. So it's interesting for you to share how, how you actually used your experience from audit to develop the career design the career that you have now.

Isabelle Chaboud  4:23  

It's true, yeah, people don't like auditors. Manufacturers don't like to be controlled by auditors. They are afraid that you will tell them, "Uh-on that is not correct," "or it's your fault." But if you implement a good relationship with them, you try to explain what you are doing and that you want to bring added value, maybe to improve some internal controls in place, maybe to improve some efficiency, some aspects, it becomes different, so when you work on the confidence in the relationship, I think it's, it's different.

It's all a matter of personal contacts you have with people. I learned a lot from a methodological point of view, being very structured, organized, dealing with different tasks, it's management project. So that helped me a lot when I moved to higher education because it's managing different courses at the same time different locations. I was teaching in Grenoble, Berlin, London, Singapore, Moscow. Also sometimes may be different subjects with different audiences. So the methodology is the key in sharing the knowledge.

When I was at PwC, I did some training. When we merged with Coopers in 1999,  we became PricewaterhouseCoopers. Someone had to teach the new methodology and I volunteered in France in my office. They were looking for volunteers and I volunteered. I like it and it was really interesting to try to explain this new methodology to managers, partners, and I also train newcomers. So, methodology, training, sharing some knowledge were really the common basis that I used in higher education, financial analysis, and they switch to financial analysis of luxury companies. This is how little by little, I came to fashion.

Isabelle Chaboud  6:30  

You moved from being an auditor, being a professor to being a specialist in luxury brand management. That's really interesting. What's inspired your interest in luxury brand management.

Isabelle Chaboud  6:42  

I think it started when I was little, my mother was making bespoke wedding dresses bridal gowns and I used to see her in her atelier or sewing workshop. Sketching, drawing, meeting clients who were explaining what they were looking for and she was trying to draw the perfect wedding dress for them.

Then, she took me to suppliers to buy this silk with her so I went to the region with her. With such wonderful fabrics and then I could see her teaching sewing. There was always something in my mind that I kept for a long time and I always sort of gave birth, I do something related to numbers very structured and then I can use this to be on a more creative side and more creative industry, and I was interested in this craftsmanship aspect, in fact really understanding what's behind the numbers of these companies and how they are functioning.

Katherine Ann Byam  7:58  

I think that there's always, there's always a bit of your history and your past and your experiences that come to bear you as you grow and develop in your career so it's nice to see how you've connected that experience with your mom to what you're doing today, and I think she must be really proud. All right, so I want to pivot slightly and I want to get into the business of luxury brand management. And I think all my listeners are curious to know-how is the industry doing.

Isabelle Chaboud  8:27  

But the industry has been severely hit as most industries. BCG was expecting some 30% drops, before the beginning of the COVID. And it is confirmed, even more, if I give you a few numbers, talking about the key players who are LVMH, Hermes, Kering, and company Swiss Richemont. I can just give you some insights. For example, LVMH witness a drop of 38% in Q2 2020, which makes the drop of first-half revenue of 2020, by 28% organic, a constant exchange rate. So minus 28% is around 30%.

For Kering, it's minus 30%, first half of 2020, and minus 43.7%, for Q2, which is a huge drop. Hermes also witnessed dropped by 40% for Q2 but cumulated is minus 25% at a constant exchange rate. So, Hermes is the most resilient, out of all the key players. Richemont, the Swiss company which owns Cartier, Van Cleef, and Jaeger-LeCoultre witnessed a 47% drop in their first quarter 2020 sales. Richemont closed their books at the end of March so their first quarter from April to June 2020.

Isabelle Chaboud  10:18  

So Richemont has been severely hit and so they have to find new solutions to cope with the situation. And this gave a boost to digitalization so those who already had online sales, saw quite a lot, mostly in China. They witnessed a huge increase. Hermes, for example with 100% increase in their online sales in China. Chinese consumers or the tech-savvy buy a lot online.

Those who do not have online platforms had to partner with the marketplaces like for example Farfetch to help them, or they had to develop their own platform online at a rapid pace. In order to cope with the loss of business from closed stores.

Katherine Ann Byam  11:21  

I'm also curious to know how they're going to pivot out. Sustainability is beginning to reshape many industries, and I'm sure not the least of which is the luxury brand industry. Tell us about what, how they're dealing with sustainability.

Isabelle Chaboud  11:35  

Yeah, you're absolutely right. It's, it's one of the top priorities. I think now for most players. It comes from the consumer demands actually. Consumers want to know where they purchase the raw materials and in what conditions, how is the production process,, how do they deal with people have when they treat them, gender equality, hygiene and safety, and all those aspects, also the dyeing chemical for example they use and all those elements, so it's affecting the whole supply chain, and up to the end, the way they sell it.

This is why also the circular economy is booming. The demand for second-hand is, is absolutely on the rise. Companies like Vestiaire Collective or Rent the Runway are all seeing a huge increase in their selves because more and more people are mostly millennials are interested in buying secondhand products. So, if you haven't used items or garments that you can resell, you can make money and you can buy also other products, and it can also allow, I would say, other customers who would not be able to afford some luxury product to buy for the first time and some luxury products. I think it's affecting the whole supply chain, from raw materials production, and then selling channel, also omnichannel, and different, different ways of selling not just in stores but also and the new business model of the circular economy.

Katherine Ann Byam  13:26  

Beyond fashion,  it's also having an impact right. there are other initiatives that people are coming up with within the luxury space as well beyond fashion.

Isabelle Chaboud  13:35  

Absolutely. To give you an example, a Startup Ledisi is partnering with different companies to rent between so either business to business or business to consumer. For example, they had a partnership with LC and you can rent a suitcase for just a weekend or for two weeks and I think it's a fantastic idea, imagine you are a student, you live in Paris in a very small place you don't have enough room to store a big suitcase and you want to go to the US and so you can rent a suitcase just for two weeks (of course not right now probably with travel.)

It's a little bit difficult but I think there's a real, real business. People also lots of surveys report show people are more interested in the experience now, more than owning the product. So, this will also allow you to have an experience. I think it's also part of this circular economy and reducing the waste the pollution and giving a longer lifespan also to objects or different items.

Katherine Ann Byam  14:59  

Yeah, it's so interesting, thank you for sharing that. So, this is the last question so I really want to thank you upfront for all that you've given my listeners today. I think the session has been really interesting. But what advice would you give to the ones who are either out of work because of the crisis, or just coming on to the job market, what would you tell them what do you suggest.

Isabelle Chaboud  15:20  

Well, first digitalisation as we said, we spoke about luxury that is going online and maybe a little longer than the businesses but all businesses are online now you can buy cars online. I mean who could have imagined buying a car online before. so I think having some knowledge in digital marketing and the different platforms where you can buy in some marketplaces in luxury.

We have work marketplaces for those who are beginners, which means it's a tripartite relationship between the company producing the goods between the marketplace where you can buy the goods as a final customer. So if the company producing the goods, doesn't have its own platform,  they can use a third party, the marketplace to sell their products. This is the case for Farfetch for example.

And Farfetch is also experiencing a huge, huge increase. You may have heard Amazon is going to launch luxury items. They just announced the first partnership with Oscar dela Renta and this group. And so this is booming in all industries, fashion, luxury carmakers, now you can buy everything online, so I think it's really important to know this. You can find training also for free online.

There are lots of possibilities now, then sustainability, we mentioned that I'm convinced absolutely key there is I think a shift in the mindset of consumers, but also the need for force for the planet and people profit, the planet which we call the triple bottom line is absolutely fundamental so it covers all aspects as I said from the supply chain, the production, and the final distribution, and it impacts the finance as well.

Of course, sustainability really gaining knowledge on that, and circular economy the new business models, don't be afraid of being creative and innovate. I think that's right now really thinking outside the box I think is really, really something important. Being adaptive is very, very important, and having confidence because things are changing, it's difficult, but we need to keep the confidence and try to really believe in these new business models that are coming out and changing faster.

Katherine Ann Byam  17:53  

Thank you so much Isabelle Chabaud. Thank you so much to my listeners, this has been a fantastic day and I hope you've got a lot out of the session.

000 Exploring the Question - What Problems Do You Want to Solve?

000 Exploring the Question - What Problems Do You Want to Solve?

Where Ideas Launch – The Podcast for the Sustainable Innovator

Every one of us can be the change. In fact, everyone of us must. The most important thing we can do is stay in the question.

Where Ideas Launch aims to answer the tough questions of how do we sustain our world, by asking deeper and better questions. It aims to prompt change not by staying in the analysis, but by originating a new genesis.

This podcast:

  1. Challenges the status quo: show you how to speak truth to power, in a way that sparks momentum for change.
  2. Explore creativity from the eyes of educators, business people, entrepreneurs, and artists.
  3. Examines sustainable business models, impact models and other ways to support the UN sustainable development goals.

Join us every week to look at our shared future from a new perspective, so that we understand the questions, that give rise to better ones.

Interested in reviewing your Sustainability Strategy?

Get in touch with me on LinkedIn?