Breakthrough ideas are typically the result of someone who was able to challenge conventional wisdom and think differently. Author Malcolm Gladwell demonstrates this in his newest book, “David and Goliath: Underdogs, Misfits, and the Art of Battling Giants.”
David’s victory over Goliath is widely accepted as a monumental victory for the underdog. David’s tactic of fighting from a distance with his sling changed the playing field.
Every industry has at least one, if not several, powerful companies with massive resources to win most any customer they decide to target. Is it possible that, like Goliath, they all have weaknesses that can be exploited? I believe this to be the case. But how can a smaller, less trained competitor be like David and turn the tables?
Change the field of battle
For years, the major auto companies have had the ability to build new electric vehicles, but they never focused on them because they didn’t believe the market would be large enough. As a result, they tried to modify their current vehicle platforms with hybrid or electric motors.
Yet in only a few short years, Tesla Motors has created a huge brand image and a market valuation that is already half that of Ford Motor Co. — even though Tesla’s current market share is less than 0.1 percent. The market currently values Tesla at $1 million per car, while General Motors Co. is valued at just more than $7,000!
Similar to David, Tesla refused to compete on GM and Ford’s terms and instead focused all its efforts on building the best electric cars available. Although sales are still small, Tesla has sold more electric cars than anyone else — despite its higher price tags.
Large companies sometimes ignore profitable opportunities
Large companies regularly dismiss new products and markets because these opportunities aren’t currently large enough to “move the needle,” or they may threaten to “cannibalize” their very profitable current businesses.
A classic example is Kodak. It didn’t pay attention to the introduction of the digital camera — mostly because early digital cameras weren’t very good. Yet this would not always be the case. Kodak decided to remain focused on its core film and camera business. In 2012, it declared bankruptcy and sold its valuable intellectual property.
Leverage the larger competitor’s assets against them
As successful companies grow, they make significant investments in plants, stores, technology platforms and other tangible and intangible assets. All these investments actually become barriers to change because they can tie a company’s success to certain ways of doing business with certain sets of customers.
In 1992, Fidelity dominated the IRA market. Fidelity and other major industry firms all charged about $22 per year to manage an IRA account. Charles Schwab was much smaller and decided to provide this service for free. Because Fidelity had so many accounts, it would have been very expensive for it to follow suit. As a result, Schwab added $2 billion in assets, and made money managing assets rather than by charging fees.
Similarly, Blockbuster had invested heavily in 3,400 brick-and-mortar stores by the time Netflix launched its DVD-by-mail service at a fixed monthly price. Blockbuster couldn’t create an alternative without cannibalizing its own store sales.
When we think about the large competitors that we all face, it’s difficult to not focus on their size and strength. However, if we view them as David saw Goliath, we can often find ways to topple them.
Paul Witkay is the founder and CEO of the Alliance of Chief Executives. Based in Northern California, the Alliance of CEOs is the most strategically valuable and innovative organization for leaders anywhere. The Alliance strives to provide the creative environments where breakthrough ideas happen. He can be contacted at email@example.com.
Exceptional leaders constantly seek opportunities and ideas that will enable their organizations to achieve their mission and objectives. For years, I have been studying how creativity happens so the Alliance of Chief Executives can be a place where leaders come to challenge their assumptions, generate fresh approaches and breakthrough ideas.
Steve Jobs was quoted as saying, “Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it — they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things. And the reason they were able to do that was that they’ve had more experiences than other people.”
One of my favorite authors is Keith Sawyer, whose newest book, “Zig Zag: The Surprising Path to Greater Creativity,” discusses how neuroscientists have proven that the capacity for creativity lives within each of us.
He believes there are eight specific steps to being more creative, and most innovators will “zig zag” between the various steps. Here’s my take on seven of his steps:
Exceptional creators ask questions no one has thought of before. It’s best to move beyond asking familiar and obvious questions and become an “opportunity finder” not just a “problem solver.”
Creative people are life-long learners, and learning tends to be at the start of most creative journeys. Learning about what came before helps you understand what questions have already been answered.
I’m constantly amazed at how many things are right in front of our eyes each day, but we don’t see them until one day when we are actually looking for them.
We are much more creative when we are relaxed and “at play” rather than grinding out work. The most creative people intentionally schedule activities that enable their minds to relax and wander.
Studies have shown that creative geniuses actually had far more bad ideas than the average person. They simply created so many ideas, however, that a small percentage of them turned out to be blockbusters.
It requires tons of ideas to be truly creative. To achieve successful innovation, you have to kill most of these ideas. Masters of creativity never get too attached to one idea. Scott Adams, the creator of the cartoon “Dilbert,” says, “Creativity is allowing yourself to make mistakes. Art is knowing which ones to keep.”
Like many, my most creative ideas seem to happen in the shower. Nolan Bushnell, founder of Atari, says, “Everyone who’s ever taken a shower has an idea. It’s the person who gets out of the shower, dries off and does something about it who makes the difference.”
Many people seem to go through life in a pattern of getting “an idea” and then focusing on executing that one idea until that doesn’t work so well any more. They then look for a new idea and repeat the cycle.
Creativity, however, is not a trait, property or a gift. It’s a set of behaviors that we need to learn and practice every day. In “Zig Zag,” Sawyer gives us the tools to help us behave in ways that will result in much higher creativity, and the kinds of ideas that can set our organizations and ourselves apart. ●
Paul Witkay is the founder and CEO of the Alliance of Chief Executives. Based in Northern California, the Alliance of CEOs is a strategically valuable and innovative organization for leaders. The organization strives to provide the creative environments where breakthrough ideas happen. Witkay can be contacted at firstname.lastname@example.org. For more information, visit www.allianceofceos.com.
When thinking about innovation, most people immediately think about new products like the next iPhone or electric vehicle. I, however, have always believed that business innovation comes in many different flavors. For example, Dell re-engineered the way we buy computers, Apple revolutionized the way we buy music and Zappos.com provided a service never before seen online.
I recently read “Ten Types of Innovation: The Discipline of Building Breakthroughs” by Larry Keeley and found it to be a great way to think about all the ways we might innovate within our own companies. All companies must continually improve or they will eventually die. According to Keeley, the most powerful strategies typically consist of several of the following types of innovation:
Profit Model — Gillette pioneered one of the classic business model innovations by creating the razor/razor blade system. The company taught consumers that razor blades could be discarded rather than sharpened for reuse.
Network — Network innovations enable companies to focus on their core strengths while leveraging the strengths of partners. Franchisors license their proprietary systems to franchisees to achieve much faster growth than they could do on their own capital.
Structure — Southwest Airlines was able to achieve faster turnarounds, lower maintenance costs and achieve more efficient operations by standardizing its fleet of Boeing 737s. The company’s unique structure resulted in much lower costs than its full-service competitors and increased profits.
Process — Toyota became the leading car company in the 1980s by creating the lean production system, which reduced waste, improved quality and lowered costs.
Product Performance — Before the launch of the iPhone, Corning Glass created Gorilla Glass at the request of Steve Jobs. This tough, scratch-resistant glass is now used in more than a billion devices worldwide.
Product System — Oscar Meyer wanted to do more than just sell cold cuts, so it created Lunchables — a lunch system that includes crackers, meats, cheese and dessert in a single fun package.
Service — Men’s Wearhouse promises free lifetime pressing of any purchased suit, sport coat or slacks at any of its stores, a service that is valued by business travelers who hate ironing.
Channel — Amazon created a closed wireless network that is free for Kindle customers so they can purchase and download e-books in less than 60 seconds.
Brand — Intel created the Intel Inside campaign to increase the perceived value of computers that use Intel processors.
Customer Engagement — Blizzard Entertainment created the most profitable online game in history, World of Warcraft, by designing the game to encourage and provide incentives to players to connect and collaborate, which increases their engagement and loyalty.
According to Keeley, the “heart of innovation is understanding when a broad shift is called for and driving it forward with courage and conviction.” Low-risk innovations improve existing products or systems by providing higher quality, improving speed or creating better service. The next level of innovation is to “change the boundaries” by bringing new products or services to an adjacent market.
The highest level of innovation is the rare occasion when you attempt to radically change an entire industry structure. Keeley says, “Transformational innovations erase the boundaries between once distinct markets and irrevocably change what is expected from competitors and consumers alike.”
So how can you decide which type of innovation will work for you? Opportunities are often discovered when observing how customers are either delighted or disappointed by current offerings. Keeley discusses how most innovation strategies focus on changes in three primary areas: 1) business models 2) platforms 3) customer experience.
The most radical and transformational strategies employ more than just one strategy at a time. It’s the CEO’s responsibility to determine when the opportunity for strategic innovation exists, and whether the organization is capable of making the necessary changes to succeed.
Paul Witkay is the founder and CEO of the Alliance of Chief Executives. The Alliance of CEOs is the most strategically valuable and innovative organization for leaders anywhere. The Alliance strives to provide the creative environments where breakthrough ideas happen. Paul can be reached at
Steve Jobs was credited with inspiring Apple’s trademark advertising campaign challenging each of us to “think differently.” But how does one go about thinking differently? Since founding the Alliance of Chief Executives in 1996, I have passionately studied and experimented with how CEOs can generate breakthrough ideas — which are the most visible examples of thinking differently.
I recently had the opportunity to speak with Marty Neumeier who in 2003 launched a think tank called Neutron to merge design thinking with business management. He’s written three best-sellers, but his newest book, “MetaSkills: Five Talents for the Robotic Age” suggests that we are entering a new age in which the “left-brain” skills of the industrial age, while still very important, will be surpassed by the “right brain” skills of creativity, sensing and learning.
As computing advances have made information immediately and almost totally accessible, Neumeier believes that we must develop the ability to cultivate five “metaskills” if we are to reshape the world.
The ability to draw on human emotion for intuition, aesthetics and empathy is a talent that’s becoming more and more vital. It’s the ability to connect deeply with people through vicarious imagination or “putting yourself in another person’s shoes.”
Integrative thinkers don’t break a problem into separate pieces and work on them one by one. Instead, they see the entire architecture of the problem — how the various parts fit together and how one decision affects another. By resolving the tensions that launched the problem, they can craft a holistic solution, which often requires them to reject the urge for certainty and grapple with the messiness of the paradox.
The No. 1 hazard for innovators is getting stuck in the tar pits of knowledge. Knowledge has a powerful influence over creativity. When we’re stumped or in a hurry to solve a problem, our brains often default to off-the-shelf solutions based upon what everyone knows. The proper approach to invention is not logic but wonderment. Creative thinking begins with phrases such as “I wonder,” “I wish” and “What if?”
Creativity is a messy process, and we arrive at better decisions by making not-so-good decisions and then constantly improving upon them. The best designers believe in failing fast. Their drawings, models and prototypes are not designed to be perfect solutions.
If you’re seeking new information or fresh insights, you need to look beyond your clique, since a clique is a closed system that acts more like a mirror than a window. The antidote to the clique is to open the window and connect with groups outside your own. Put yourself in the way of meeting like-spirited people, not just like-minded people.
So how do normal people like us think differently? Steve Jobs was smart — but not exceptionally smart. However, he learned the trick of divergent thinking. Biographer Walter Isaacson said Steve’s “imaginative leaps were instinctive, unexpected and at times magical. He had the ability to make connections that other people couldn’t see, simply because they couldn’t let go of what they already knew.”
We need to stop seeking only current best practices and challenge our assumptions about our current limits and ask questions about what might be. Howard Schultz once said, “Who wants a dream that’s near-fetched?”
In order to solve the global problems facing us, we must think differently than we have done in the past. No single individual is as smart as all of us, so we must learn from others with different knowledge and skills. By seeing our problems from new perspectives, dreaming big ideas and fast prototyping new solutions, we can make a dent in changing our world.
Paul Witkay is the founder and CEO of the Alliance of Chief Executives. Based in Northern California, the Alliance of Chief Executives is the most strategically valuable and innovative organization for CEOs in the world. Reach him at email@example.com.
I admit it — I’m fascinated by stories of breakthrough ideas that transform people, companies, industries and sometimes the world. Where did these brilliant ideas come from? Is it possible to create conditions from which breakthrough ideas happen more frequently and with greater impact?
To answer these questions, I have read hundreds of books on innovation, creativity, strategy, neuroscience, behavior, group dynamics and leadership. I have interviewed the leaders of some of the most innovative organizations in the world and literally thousands of CEOs in most every industry. Although I still consider myself a student of the innovation process, in my observations I’ve repeatedly found certain factors that contribute to generating more “big ideas” more often.
1) Seek or you won’t find.
The first requirement for finding new ideas is to actually look for them. This sounds basic, but many great ideas are hiding in plain sight until a “genius” is able to see them. Most innovations are simply extensions or combinations of what already exists in one market that are used to create new products, methods or processes in another. Millions of people enjoyed the “Italian coffee barista experience” in Italy before Howard Schultz decided to import it to the U.S. and launch Starbucks. Most great ideas don’t come along simply because we want them to. Instead, it takes tremendous determination and patience to persevere until you’ve found what you’re seeking.
2) Change your routine.
Great ideas don’t typically happen during our normal routines. The brain works most creatively when dealing with surprises. Fresh ideas happen when you’re interacting with people who think differently, in unfamiliar places and cultures, and experiencing new sights, sounds and smells that invigorate the senses. Go out, meet new people, and visit new places.
3) Face new challenges.
Most CEOs are wired to solve problems, and they get great satisfaction in doing so. However, these problems are often solved by applying the knowledge that was gained when solving similar problems in the past. This “best practices” approach fails to produce fresh new ideas, because new ideas occur when the brain is forced to deal with new challenges and situations.
To generate new ideas, it’s best to challenge ourselves with situations we’ve never had to face. Since the Alliance was founded in 1996, we have continued to develop and refine the “Alliance methodology” that forces executives to address a range of unique situations, inspiring new ways of thinking. I have observed that many ideas happen when people think about someone else’s situation and apply this new way of thinking to their own situations.
4) Make use of tools
I recently was asked to mentor a class of MBA students for their final strategic challenge, which was to provide real-world strategic recommendations for an industry-leading company. Asked to apply everything they’d learned in business school, the students had to decide what the company should do to build a long-term, sustainable advantage in its industry. Using tools such as Michael Porter’s industry analysis, SWOT analyses, competitive mapping and value chains to understand the company’s current position, the students came up with a variety of new ideas. Although the “strategy consultants” were just students (albeit very bright ones), the company received some extremely valuable insights from their fresh, unbiased outsider perspectives.
5) Take a break
Just as our bodies need to rest after exercise, our brains must also rest. Great ideas generally don’t happen simply by thinking “harder.” Many ideas happen after sleeping on a problem or taking a vacation. The brain continues to work while we relax and is able to make connections that weren’t identified while under stress. If the big idea you seek just isn’t happening, it’s often best to step away from it for a period and just let your brain take a breather. Come back to the problem later and you might be surprised what happens.
Paul Witkay is the founder & CEO of the Alliance of Chief Executives. Based in Northern California, the Alliance of CEOs is a strategically valuable and innovative organization for CEOs. If you have ideas or observations for generating breakthrough ideas more frequently and more consistently, contact him at firstname.lastname@example.org.
Most of what we hear on the news is how the world is going downhill — and quickly. Economic chaos, terrorist and pandemic threats, political stagnation, budget deficits and global warming are only a few of the issues constantly bombarding us.
Fortunately for me, these doomsayers are in direct contrast to the people I work with every day. It’s my privilege to live in the Bay Area, home to Silicon Valley, and work closely with CEOs who believe that they can make a difference in the world — sometimes even create a whole new future.
I suppose that’s why I find the book “Abundance: The Future is Better than You Think” so inspiring. Written by Peter Diamandis, chairman of the X Prize Foundation and a key figure in the development of the personal spaceflight industry, it describes the forces that are transforming our world and the trends that will enable us to address the most challenging issues facing our planet.
Here are a few of Diamandis’ examples that demonstrate how we can innovatively address the massive challenges facing us:
Dean Kamen, the famous inventor of the Segway, portable infusion pumps and kidney dialysis machines, got interested in water and invented the “Slingshot,” a device that can purify 250 gallons of water per day using the same energy as a hair dryer. The power source is a Stirling engine that can run on most anything (even cow dung) and is designed to operate for five years in remote villages without maintenance. Kamen believes it can reduce costs by 90 percent.
Winston Churchill said it was absurd to grow a whole chicken simply to eat its breast and wings. In the 1990s, NASA developed a way to grow meat from stem cells to feed astronauts on long space flights. Although it will take another decade to perfect the process, cultured meat has the promise to provide the protein we need, eliminate farm animal cruelty and restore the 30 percent of Earth’s surface currently used to raise livestock.
Billions are being invested in developing the capability to produce and distribute clean, renewable, safe and low-cost energy. In addition to exciting developments in solar, biofuels and storage, the potential for next-generation nuclear plants is enormous.
Bill Gates and others have invested in TerraPower, a company that is developing a traveling wave reactor (TWR) described as the “world’s most simplified passive fast breeder reactor.” A TWR can’t melt down and can run safely for 50 years without human intervention.
Learning will be different in the 21st century. With the ability to find information on anything at any time on the Internet, we must develop the ability to ask the right questions. Creativity, critical thinking, collaboration and problem solving skills will be most valued. Although we need to restructure our education systems, the opportunity for personalized learning programs has never been better.
Medical researchers are pushing the cost of diagnosing disease to almost nothing. mChip, developed by scientists at Columbia University, has already demonetized and dematerialized the HIV testing process. Using a microfluidic optical chip smaller than a credit card, a single drop of blood can be read in 15 minutes at a cost of under $1.
The potential to make low cost, simple and accurate diagnoses for a wide range of diseases via mobile devices has enormous ramifications for improving health.
The Arab Spring of 2011 proved the power of today’s communications technologies. One activist reported that they “use Facebook to schedule the protests, Twitter to coordinate, and YouTube to tell the world.”
Freedom is a powerful and irresistible force for change, and technology is making it happen.
Paul Witkay is the founder and CEO of the Alliance of Chief Executives. Based in Northern California, the Alliance of CEOs is a strategically valuable and innovative organization for CEOs. Witkay can be contacted at email@example.com.
Successful CEOs don’t simply accept the hands that they are dealt. They like to write their own futures. They are able to envision how they will achieve their objectives. But how are they able to predict how the world will change? Are they merely lucky?
Peter Micciche, president and CEO of Certain Software, recently recommended the book titled “Flash Foresight” to his fellow Alliance CEOs. Authored by Daniel Burrus, a leading forecaster and corporate strategist, the book discusses a variety of triggers that enable us to separate what we can know about the future from trends that are only temporary. There are “hard” trends that will clearly continue and there are “soft” trends that will not.
Hard trends are based upon measurable, tangible and predictable facts or events, such as the aging of the U.S. population and continued improvement of technology. So to begin to predict the future, Burrus recommends we start with certainty. If we are to create successful companies in the future, it is critical that we get in front of these trends rather than lagging behind. They include:
Dematerialization — You only need to look at your phones, computers and cars to notice that most everything is becoming smaller, lighter and more portable with less environmental impact.
Virtualization — Software has enabled us to simulate most any process. For example, online businesses such as Amazon and eBay have virtualized retail stores and garage sales.
Mobility — Just in the last few years, we have begun to take for granted that we can access almost anyone, anytime from anywhere.
Product intelligence — Through the use of sensors and microprocessors, our tangible products and surroundings are becoming “smart,” including our cars and appliances as well as roadways and buildings.
Networking — The creation of highway, railroad and phone networks enabled the economic advances of the past. The next generation will grow up taking the ability to engage and share with others around the world for granted.
Interactivity — Traditional media such as television, books and newspapers was limited to one-way communications. Increasing interactivity will not only transform entertainment and advertising but also politics as we witnessed in the recent “Arab Spring.”
Globalization — The reason we are globalizing isn’t because our governments think we should, but because technology has made it possible. We want to engage with others around the world to enrich our lives as well as our pocketbooks, and it’s impossible to stop.
Convergence — Technology has enabled products to be merged with other products. Just look at your smart phone and think about how it has eliminated the need for old products such as maps, calculators and restaurant reviews.
So how can we take this knowledge and generate breakthrough ideas? Here are some techniques proposed by Daniel Burrus:
Anticipate — Think ahead about the problems that you will be facing several years from now and address those opportunities proactively rather than reactively.
Transform — Steve Jobs created the personal computer industry, but he transformed the music, animation and cell phone industries. He understood how technology would enable new business models and got ahead of the curve.
Go opposite – The future path of success will almost certainly be a path that no one is on currently. Whichever way your competitors are going, think about going the opposite direction.
Redefine and reinvent — Agriculture is an industry that is challenged by lack of water, arable land and unpredictable weather. Solazyme, a local Bay Area company, is creating a new industry based upon algae that produces food, fuel and chemicals in ways that promise to reinvent those industries.
Take your biggest problem and skip it — Many industries have issues due to legacy systems that have limits. Ask yourself how you might let go of the old stuff and skip into the future.
Paul Witkay is the founder & CEO of the Alliance of Chief Executives. Based in Northern California, the Alliance of CEOs is a strategically valuable and innovative organization for CEOs. Paul can be contacted at firstname.lastname@example.org.
Ever since I began bringing CEOs together in 1996, I’ve been on a quest to learn how CEOs could create more breakthrough ideas more frequently and reliably. I’ve read hundreds of books on strategy, management, leadership, creativity, innovation, group dynamics and even neuroscience to find the best ways to extract the most value from the unbelievably deep pool of wisdom and creativity of our Alliance community.
Recently, I read “Where Good Ideas Come From: The Natural History of Innovation” by Steven Johnson. Johnson does a deep dive into the history of innovation from Darwin to Freud to Google and Apple, identifying seven key patterns that create the most fertile grounds for innovation. The following concepts are consistent with how we design Alliance meeting environments to maximize the creation of great new ideas and further vision to be the most innovative and strategically valuable organization for CEOs on the planet.
- Scientist Stuart Kauffman describes the “adjacent possible” concept, which says although the world is capable of extraordinary change, innovation happens on the edges. The history of life and human culture is a story of gradual but relentless probing of the boundaries, and each new innovation opens up new paths to explore. The best Alliance members push the boundaries to create breakthrough ideas for their fellow members.
- Malcolm Gladwell wrote a great book called “Blink,” which discussed the power of intuition, or the instant hunch. However, Johnson found that world-changing ideas are more often the result of what he calls the “slow hunch.” Slow hunches start with a vague, hard-to-describe sense that an interesting solution to a problem exists. However, these hunches typically linger in the shadows of our minds — sometimes for decades — with additional pieces of information gathering together. Then one day the discovery of a new idea completes the puzzle and blossoms into the aha moment that has incubated for years.
- Serendipity can be described as a happy accident. Serendipitous discoveries typically involve exchanges across different disciplines. One core philosophy of the Alliance has been to fill our private Alliance groups with members who bring diverse experiences from different industries, business models, functional skills and other measures of diversity.
- Berkeley professor Charlan Nemeth investigated the relationship between noise, dissent and creativity in group environments. She found a paradoxical truth about innovation: Good ideas are more likely to emerge in environments that contain noise and error. While we would think that innovation would be more strongly correlated with the values of accuracy, clarity and focus and that good ideas should be correct to have value, noise-free environments are too sterile and predictable to maximize creativity. A few errors in the process of discovery actually helps foster the creation of good ideas.
- Stanford professor Martin Ruef studied the relationship between business innovation and diversity of professions and disciplines. Ruef discovered that the most creative individuals had broad social networks that extended outside of their own organizations and involved people from diverse fields of expertise. Diverse, horizontal social networks were three times more innovative than the standard networks, which include people more similar to ourselves. Long-term familiarity, conformity and convention dampen potential creative sparks, whereas entrepreneurs who build bridges outside their own industries borrow or co-opt new ideas from the outside and put them to use in a new context.
- Psychologist Kevin Dunbar studied research scientists to determine how and when they achieved breakthroughs. What he found is that eureka moments rarely happened when they were thinking on their own but most often during regular meetings with their lab peers. The most productive tool for generating good ideas was a circle of humans at a table. This “liquid network” is not the wisdom of the crowd, but the wisdom of someone in the crowd. It’s not that the network itself is smart. It’s that the individuals get smarter because they’re connected to the network.
Paul Witkay is the founder and CEO of the Alliance of Chief Executives. Based in Northern California, the Alliance of CEOs is the most strategically valuable and innovative organization for CEOs in the world. Paul can be contacted at email@example.com.
Every good CEO must be able to deal with the standard issue CEO requirements such as: vision, leadership, strategic thinking, raising capital, team building and the ability to adapt to constant change while addressing a steady stream of fresh challenges.
Yet as the founder of the Alliance of CEOs, I have often been asked what makes the difference between good, solid CEOs and truly exceptional visionary leaders. I won’t pretend to have all of the answers, but the past 15 years have offered me the opportunity to gain a few insights. So what differentiates the great CEOs from the good ones? It’s the ability to see around corners and envision things that others can’t see.
When faced with business decisions, most of us gather as much data as possible and then make our best decisions based on what the data tells us. However, the “CEO of the decade” — Steve Jobs of Apple — doesn’t rely on customer surveys or market data to decide which new products will amaze and delight their customers. He seems to know what we’ll want before we even want it.
A great CEO is like a chess master who is always thinking several moves ahead of both their organization and their competition. They can feel when the time is right to switch gears. Great CEOs know when their organization must go through major change and transform itself into a different kind of organization to compete successfully in the future. They also know when it’s time to make sense of all of the changes and refocus on execution and growth. It’s been said that Jack Welch, arguably the best CEO of the 20th century, only attempted three company-wide strategic initiatives during his 20-year tenure as the CEO of General Electric.
So how can we mere mortals improve our abilities to see those things that others cannot see?
First, we can identify and challenge all assumptions on a regular basis. What once may have been true will almost always change with time — we just don’t know when. Test the absolute extreme ideas for every strategic decision by asking “what if?” For example:
* What if you gave away your products or services for free and earned revenue in other ways or you decided to raise prices significantly?
* What if you asked your customers to “self-service” or you provided the service way beyond anything anyone else has ever considered?
* What if you simplified or unbundled your products/services to bare bones or you developed an absolutely full solution with complementary products and services?
* What if you focused on only a core segment of customers or you diversified your offerings to try to reach every segment of the market?
* What if you reengineered your entire distribution supply chain from scratch?
* What if you were the dominant player in your industry? What would you do differently?
* What if you were a new entrant in your industry and had the freedom to do everything again for the first time? What could you do that would disrupt the entrenched competitors?
In his best-selling book, “Blink,” Malcolm Gladwell says that “great decision-makers aren’t those who process the most information or spend the most time deliberating, but those who have perfected the art of ‘thin-slicing’ — filtering the very few factors that matter from an overwhelming number of variables.”
Great CEOs look for what’s not there. They don’t feel constrained by historical methods for addressing their most strategic issues and are capable of re-framing most issues in new ways. By challenging our current ways of thinking and examining real-world opportunities and challenges with fresh approaches, we may not actually develop the ability to see around corners, but we will improve our intuition, which is critical in turning a good CEO into a visionary leader.
Paul Witkay is the founder and CEO of the Alliance of Chief Executives. Based in Northern California, the Alliance of CEOs is the most strategically valuable and innovative organization for CEOs in the world. Witkay can be contacted at firstname.lastname@example.org.
Since founding the Alliance of CEOs in 1996, I have searched for the secrets to generating breakthrough ideas on a consistent basis. CEOs constantly seek ideas to improve, but incremental ideas don’t change the course of a company or an industry. I gain the greatest satisfaction when a CEO experiences that “aha moment.”
What is a “breakthrough idea”? Some people think that innovation applies primarily to new products like the iPhone or HDTV. However, I believe CEOs can innovate in virtually every aspect of their businesses. Michael Dell didn’t invent personal computers but gave us a way to buy them directly. Howard Schultz sold us coffee at five times the price by creating a better experience at Starbucks.
What are some other examples? Jim Cook, an Alliance Director, was on the founding team of NetFlix when the idea to deliver DVDs through the mail and not charge late rental charges was considered crazy. Larry Page and Sergey Brin didn’t have a clue how they would make money when they started Google. They simply wanted to help people find information on the Web for free. Herb Kelleher questioned the need for the hub and spoke airline system and created Southwest Airlines, which was profitable when other airlines were going bankrupt.
So what are the keys to finding those breakthrough ideas? There are several:
Diversity. The bestselling book, “The Medici Effect” by Frans Johansson, discusses how breakthrough ideas are generated at the intersection of diverse ideas, concepts and cultures. The Alliance of CEOs intentionally brings together CEOs with experience in different industries, markets, skills, philosophies, education, problem-solving techniques and cultures. CEOs who run very different companies feel free to ask all of the “dumb questions” that create an environment for fresh insights and new ideas. It’s critical to talk to people outside of your own industry — even your customers won’t offer breakthrough ideas. A Harvard Business Review article titled “Bottom-Feeding for Blockbuster Businesses” found that the contrarian approach of looking for “customers that others don’t want” resulted in companies that created new business models, such as Paychex, Schwab, Progressive Insurance and Salesforce.com.
Challenging. Patrick Stahler of Fluidminds says that the only way you can rock an industry is to “challenge the hidden dominant logic of the industry.” He calls it the “unlearning phase.” Every industry works on a set of assumptions that rarely get challenged. Cars are rented by the day and music is sold by the album — or at least they were until ZipCar and iTunes came along. No individual or company can challenge each of their basic assumptions every day — they’d go crazy. However, I recommend that CEOs make sure that their own assumptions are challenged on a regular basis. I have found that more breakthrough ideas are created when CEOs think about other industries and how they would change them “if they were the CEO.” It’s typically easier to see changes that other companies should make and, as a result, you naturally think about how similar ideas might change your own company.
Focus on the big picture. Too many people focus only on problems and trying to fix them. They never find time to ask the biggest questions such as: “What business are we really in?” or “What do our customers really value?” or “What if we started the business today from scratch – would we build the same facilities, hire the same people, provide the same products or services with the same distribution channels, price them the same way, etc.?” Disruptive new companies are not constrained by the infrastructure and processes that burden current industry players. To have a chance, industry players must think like they’re working with a blank slate — what would they do if they were starting today?
Patience. Breakthrough ideas rarely happen overnight. They evolve over time, as someone questions whether there is another way to do things than the way it’s always been done. Questions and ideas often have to ferment awhile until they come together. If the big ideas don’t come immediately, relax. The subconscious mind continues to work on the idea while your conscious mind relaxes. However, keep engaging with people who offer different perspectives than your own.
I hope that all CEOs have the opportunity to experience a breakthrough idea that propels their businesses to the next level. I’d love to hear about your next aha moment.
Paul Witkay is the founder and CEO of the Alliance of Chief Executives. Based in the Northern California, the Alliance of Chief Executives is the most strategically valuable and innovative organization for CEOs. Paul can be contacted at email@example.com.