Why do many transformations fail? In most cases, it is because of unsolvable human responses associated with change: responses such as fear, ingrained habits, politics, incrementalism, and lack of imagination. These stumbling blocks always arise when we humans face change, but what if we had a way to overcome them?
The book “Leading Transformation” introduces a proven process for creating breakthrough change. Divided into three steps—envisioning the possible, breaking down resistance, and prototyping the future, this process uses tools such as science fiction, cartoons, rap music, artefact trails, and neuro-prototypes to overcome people’s inability to imagine or react to what doesn’t yet exist, override powerful habits and routines that prevent them from changing, and create compelling narratives about the organization’s future and how to get there.
Written by a team of three – a professor of strategy and innovation, a former executive that led transformation programs and a neuroscientist -, the book shows tools used at companies such as Lowe’s, Walmart, Pepsi, IKEA, Google, Microsoft. The primary case study is Lowe’s, a home improvement and hardware store company and this case study acts as a fil rouge across the entire book.
In this post, I summarize the book organizing its method in cards that display the key tools used to start and drive the transformation process. The cards alone, without delving into the case studies, are not enough: I strongly recommend you to read the book and to use these cards as the companion to fix the key ideas. You can buy the book at O´Reilly.com.
What is Transformation?
To succeed, transformation shall start with a strategic narrative.
A strategic narrative is a fictional story, one with a dramatic arc, a protagonist (the user), a dilemma (the customer problem), and a resolution.
- A strategic narrative is fictional but based on data you assemble about consumer needs and technology trends.
- With Lowe’s (the primary case study used in the book), the authors shared these data with a panel of science fiction writers.
- Then, they asked the writers to imagine the near future when Lowe’s would solve a critical customer problem using technology.
- The resulting story gave the leaders a reason to believe in a more attractive future. Converted into a comic book and distributed to the executive team, it helped communicate the enormous opportunity.
The next step at Lowe’s was to build prototypes right away, with the help of uncommon partners — organizations that a company might not normally work with, but which could help it move into new areas.
A NARRATIVE HELPS TO THINK BIGGER: TO SEE THE POSSIBLE FUTURES AND YOUR ROLE THERE.
A New Behavioral Science of Transformation.
Transformation is a process whose essence is to create a bigger vision for the future and then build that future:
- build up the organization’s confidence and capabilities by repeating steps
- until, through many small-t transformations, you can make a big-T transformation.
The essence of the transformation process depends on a set of tools to overcome the common behavioural barriers to transformation. The Transformation Process proposed in the book includes three steps, all of which are based on behavioural science (e.g., psychology and neuroscience).
Envisioning the Future: Using Science Fiction and Strategic Narrative
We all share these limitations, willing or not:
- the human tendency toward narrow thinking (we seldom see the big picture)
- or seeing only incremental improvements to the status quo.
The Leading Transformation framework: three interrelated and iterative step.
1 – The framework begins with a strategic narrative about a possible future.
The narrative’s content and structure
- inspires people,
- dispels disbelief,
- and compels transformation.
In the transformation process, you focus on constructing strategic narratives based on a radical re-envisioning of what is possible. You can use tools like speculative fiction to help us break the bonds of incrementalism and then to create a narrative that truly motivates and inspires those around us.
The resulting story involves a protagonist, a dilemma, and a resolution, all built into a narrative arc that gives us reason to believe.
How to tell the story? Which medium to use? In the book, the example is a comic book written and illustrated by professional science fiction writers. Why? As researches show, the visual format often helps people suspend their critical mind and engage with the emotion of the story.
2 – Breaking Bottlenecks: Using Decision Maps and Archetypes.
The book is all about applying tools rooted in behavioural science, to find better ways to identify and break the bottlenecks. To break these bottlenecks, we begin by asking a simple question:
- what kind of organization do you work in?
- Then we map out the informal and formal decision process by creating a decision bottleneck map.
- Next, you identify the individual archetypes—the primary roles that decision-makers play—and where they sit in the key decision holdups.
3 – Future Key Performance Indicators (fKPIs)
Not only resistance: an issue along a transformation or innovation process is that, when you pioneer into new territory, you rarely see many signposts that you are heading in the right direction. You have few data points to reinforce your confidence that you are on the right track.
HOW TO MEASURE AND SEE THAT YOU ARE ON TRACK
- YOU NEED DATA-DRIVEN INDICATORS you are on course, both to guide your choices and to create confidence among those you lead.
- MOST INDICATORS ARE UNFIT since they are built to assess past performance and so are unreliable indicators of an uncertain future. “I’ve never seen innovation come out of a focus group.” BEGIN WITH THE END IN MIND.
- ARTIFACT TRAIL We start by identifying the end goal, then work backwards to define an artefact trail: the series of small, observable activities and prototypes that can act as small wins to keep enthusiasm high.
- DEFINE fKPIs We then define the future key performance indicators (fKPIs, where the lowercase f represents the function of how you create the future) and the experimental design needed to generate defensible measures of the direction you are going.
TOOL: the experimental design canvas described in the book to choose the fKPIs needed to navigate the future. Then we apply the best tools we can find to generate this fKPIs.
1 – Envisioning the Future. Strategic Narrative and how to create a compelling story.
The Core Dilemma: Incremental Thinking
Biases and incremental thinking hold us back.
A strategic narrative envisioning the possible future is the tool to overcome them.
Biases = stories and patterns that limit our thinking and actions. The biggest is our tendency toward incremental thinking: we neglect the more distant possibilities, even though these may be the most interesting and valuable opportunities available to us.
Research has cidentified four main biases:
The Need: New Tools to Create Grand Visions
Design thinking and lean startup help, but they aren’t designed to overcome the core psychological biases that hold us back.
- Frameworks like design thinking help innovators develop customer empathy,
- and lean startup helps innovators run rapid, rigorous experiments to test critical hypotheses.
These new frameworks are not built to see the distances needed for a grand vision—one that can change your organization or the world.
The Process: How to Create the Future Using Science Fiction and Narrative
BUSINESS STORIES ARE BLOODLESS What we call a story in the business world (including the pyramid technique and the “burning platform” narrative) is often just a chronological series of events. In such a “story” there are no characters, no plot, no conflict, no resolution. Nothing to make you believe. Nothing to inspire change. Truthfully, typical business tales are not real stories.
REAL STORIES ARE A BIT DIFFERENT. They have characters, conflict, plot, and resolution; they start movements and wars. Real stories are our oldest and most powerful tool. But storytelling wasn’t working in big companies. Storytelling is more than a chronological list of events. It should change how you view the world and even help you imagine future worlds.
THE CASE DESCRIBED IN THE BOOK: A SCIENCE-FICTION STORY MADE AS A COMIC BOOK. In the book, the biggest case study involves using science fiction to generate such a story: specifically (the company is Lowe), it was about developing a single story of how immersive reality might help customers envision how to remodel their homes.
THE STORY USED BY THE AUTHORS had emotional power because it described real people trying to solve a meaningful dilemma. The strategic narrative helped the company move from seeing mostly incremental opportunities to envisioning a whole new set of possibilities and then sustaining a commitment to creating those possibilities.
In the case study on which the book is based, the authors used three tools:
Tool: Science Fiction
Why Science Fiction? Science fiction has the special power to help us pull off our blinders and envision other potential futures.
Many people mistakenly see science fiction as the realm of nerds. But science fiction has inspired many of our most notable technologies first. For example, early sci-fi authors inspired technologies such as the submarine (Jules Verne), the cell phone (Gene Roddenberry and other writers of Star Trek), robots (Karel Capek), Taser (Tom Swift adventure series), self-driving cars (Isaac Asimov), earbuds (Ray Bradbury), and atomic power (H. G. Wells).
How to Use Science Fiction
Using your existing data as a foundation, writers can help you see what else might be possible.
Tool: Strategic Narrative.
Translating a vision into a story means to create something with a narrative arc, that is characters, a conflict, and a resolution.
Narrative works because it helps us suspend our disbelief and because it creates emotion, belief, and change.
MOTIVATION, PERSUASION, ALIGNMENT: THE POWER OF STORIES
The transformation process uses stories because they motivate people. But besides motivating people, stories also act, at the neural level, to persuade. They can lead to synchronization between speaker and listener, increasing the likelihood that they see the world the same way (coupling).
How to Use Strategic Narrative
When using narrative, your goal is to develop story arcs containing characters, conflict, and resolution that creates a reason to believe for the listeners.
CAVEAT. DO NOT build the story around your technology or products and services. Your products and services are not the conflicts. They are only a means to resolving the conflict.
Great Stories Are Told through the Eyes of One Person
Stories are told through the lens of one person, their struggles, their lives, and their emotions. Similarly, grand stories are made of specifics, details like the time, the place, the feel, and the smells. Use these details to construct motivating stories.
- Be careful about setting expectations: they can create long-term challenges in fulfilling those expectations, leading to the loss of belief in your efforts.
- No plan survives first contact with reality, so the one thing we can guarantee is that reality will prove different from your vision for it. Thus, build a room in your narrative for pivoting or changing.
- There is a trade-off between believability and expectations: providing more specific details to create a believable plot can lower the audience’s expectations that it will succeed (people see all the hurdles in getting to the end goal), whereas setting overly high expectations can decrease the believability of the story.
- To hit the optimal balance between believability and expectations, match the level of abstraction in your story to the timing of your story. The further in the future your story occurs, the better more abstract stories work, creating commitment rather than critical evaluation.
2 – Breaking Bottlenecks.
The Need: New Tools to Break through Habit and Routines.
The Process: How to Break Bottlenecks Using Decision Maps and Archetypes.
TOOL 3 Functional Archetypes
A functional archetype is a quick way to describe people’s motivation for acting the way they do.
E.g. in a Legal team, you can expect to meet individuals we could describe whose functional role is the caretaker archetype. Caretakers see their role as protecting the organization from threats and preserving the status quo. For caretakers, the robot in stores represented a massive threat. You need to understand the archetypes, to reframe your story and messages in a language individuals could appreciate (resonating with their functional archetypes). With the abovementioned legal department, the language will reflect the value of protection.
Before we dive into functional archetypes, we have to ask, What drives behaviour? Why and how we decide are probably best mapped out as probabilities shaped by complex interactions of genes, history, learning, context, and many other factors.
Whenever you approach a caretaker with a big, risky initiative, the person will, without realizing it, find ways to deflect or reject it. To work with a caretaker, you need to reframe the initiative so that it fulfils the caretaker’s role. Below you find how to use individual archetypes to break down barriers in your organization.
Caveat: A Major Rule—Don’t Tell Everyone. Although we talk about realizing the archetypes of the decision makers who become bottlenecks, we follow one important rule: don’t tell everyone what you are doing.
Tool 4: Bottleneck Breakers
Ultimately, breaking bottlenecks comes down to identifying the functional archetypes of the key decision-makers and then delivering to these people whatever they need to join you in creating transformational change.
4 – Navigating the Unknown
Using Applied Neuroscience and Future Key Performance Indicators (fKPIs).
The Need: Tools to Overcome the Fear of the Unknown.
For individuals and organizations, the challenge of trying to transform—whether it be embracing new technology, strategies, business models, or other changes—is the fear of the unknown. The risk itself isn’t so much the problem, but the uncertainty is: we are afraid primarily because we don’t know the outcome, and less so because of the risk.
The dilemma is that every transformation means going into uncertain territory where there are few signposts to create confidence that you are heading in the right direction.
The strategic narrative can provide the initial confidence to start the transformation and the direction to go, but to succeed, you need to generate reliable, defensible, data-driven KPIs that give you confidence that both you and your organization are heading in the right direction.
The Process: Using Experimental Design and Applied Neuroscience to Create fKPIs to Navigate the Unknown.
In the book, the authors used an artefact trail, which is a series of small steps from concept to grand vision: fast, small, easy-win activities, then the prototypes of increasing fidelity, and, ultimately, an outcome.
In the case study at Lowe´s, the artefact trail created team confidence in how to move forward and critical evidence to sceptics that the Innovation Labs at Lowe’s was making actual progress. After laying out the artefact trail, they defined the experimental design, a well-established set of scientific protocols that they try to make accessible in what today they call the experimental design canvas. The experimental design canvas helps you define the most important measures to guide your choices and convince your sceptics, as well as how to generate the data for those measures.
Because they were exploring a very new space—AR and VR—and they were trying to move quickly, the transformation team at Lowe´s opted for applied neuroscience. This scientific tool can help anyone go beyond what people say they like; you can see what they want.
Tool: Artifact Trail
An artefact trail is a map—a trail—of how to get to the future you envision. By simply mapping out the series of small, tangible steps on the way to the outcome, the artefact trail helps people take action.
But the artefact trail helps you to know which direction you should head, your vector of search, to accompany your vision and gives you insight into the next step you can take today. Although the trail is seldom completely correct and needs updating as you go along, it gives you an idea of what to do today to create the future.
To create an artefact trail from the strategic narrative you developed earlier as the north star, work backwards to map out all the observable, tangible artefacts that can be created along the way to the end goal. In between the tangible artefacts, such as in-market proofs of concept, add the measurable outcomes and small wins that show progress.
Examples include the establishment of the experiment team, commitment of uncommon partners, participation in a major conference, or agreement on a major issue. Tangible artefacts can be crude prototypes, physical objects, or even videos, but they must be observable. They are more than simple “milestones”.
How to Create an Artifact Trail
A working artefact trail will include the small steps that promote learning and confidence in the ultimately larger outcome.
1. Map out all the small steps leading to the ultimate vision.
- Use the narrative as a north star for the endpoint: now, deconstruct the narrative by thinking through the steps required to reach that end state.
- Create as many small, fast steps as possible. You need to show fast, early wins to make the story real and to maintain your confidence and that of others.
- Focus on visible and tangible artefacts that you can start learning from and that is observable to sceptical outsiders. Sometimes, the artefacts may be “pretend-o-types” or virtual prototypes—drawings, renderings, or other visuals to help you learn.
- Don’t get caught in the trap of a long path to building a full, complicated solution before you can show success. You will probably fail if you do.
2. Start prototyping using rigorous experimental design.
- Don’t be afraid to pivot: adapt or change the artefacts or even the story as you learn additional information.
- Don’t change the rigorous experimental design—stick to your principles in conducting good experiments.
Caveats and Alternatives: No Plan Survives First Contact with Reality
Ultimately, the purpose of the artefact trail is to provide you with an initial map so that you can start taking action, speed up your learning, and give the organization confidence that you are making progress.
Along the way, you will be learning, gathering new insights, and even encountering surprises that require you to change. No plan survives first contact with reality. You should expect to pivot. Start small if you can, keeping the initiative under wraps until there is evidence—compelling data about the next direction to take, a market launch if it’s a product, or an organizational scale-up if it’s an initiative. By starting small and quiet, you can pivot more easily and save face doing so.
Adapting the Narrative When Something Big Changes
What should you do if something goes wrong along the artefact trail? It could be something within your domain of influence—a technology goes off the rails, a partner disappears, or customers just don’t like what you are doing. It could also be something outside your control. Perhaps there is a massive change of direction in your organization, or maybe the whole sector changes in some fundamental way (think of the dot-com crash).
Instead, when something goes wrong, you can try one of two tactics.
- First, you can revisit the narrative, building on the past, but evolving it to take advantage of a different valuable future.
- Second, you may try redrawing the connections in your earlier story to new connections that allow you to go in a different direction.
Tool: Experimental Design Canvas
Once you know which direction to go—your artefact trail—and of your initial steps, it’s time to get serious about creating the metrics that can guide your search and create confidence among those around you.
The experiment design canvas will help you design the metrics for success.
The strategic narrative and artefact trail provide the starting points for Phase 1, which is to identify the narrative’s killer assumptions—the big questions that, if proven false, will stop the initiative—that need to be tested. Your goal is not to identify every assumption, but to identify the most important ones.
In phase 2, you turn these assumptions into testable hypotheses.
A hypothesis is a statement that is measurable and needs to be proven or disproven. For example, “If we depict a remodel in AR using a tablet, customers will be 50 per cent more engaged or likely to commit to purchasing.”
The hypothesis gives you something to test and identifies the variables. In our work with Lowe’s, the dependent variable, or outcome, is customer engagement, or the increased likelihood of purchase, and the independent variable—the thing that causes the outcome—is depicting the remodel with the AR tablet.
Besides defining the hypotheses, you will also want to define the variables, or what you measure and how you will measure it (in the example above, we define how we will measure engagement).
In phase 3, you define the experiment the time, location, control conditions, and scope. With the test defined, set up a decision board to help you have honest discussions about what you are learning and what to do next. The board acts more like venture capitalists than like managers. Its goal is to guide you to your best outcome by seriously and honestly looking at the data rather than at the overly optimistic presentations you make when you are just trying to win a budget from a leader.
Generating fKPIs to Guide You through the Future
Among the most promising tools for the experimental design of the future is applied neuroscience. This tool could overcome critical behavioural bottlenecks because it quantifies inherently qualitative reactions. But you can also use other research tools, such as in-depth interviews (e.g., to figure out the organizational nomenclature and understand individual archetypes, as described earlier) and forced-choice experiments.
Tool: Applied Neuroscience
Neuro-prototyping allows you to understand what no users can tell you outright. HUmans have separate systems for wanting and liking, and the deeper, less conscious wanting system seems to predict what we will act on and choose before we know it ourselves.
What Is Applied Neuroscience Exactly?
Applied neuroscience is the application of neuroscience tools and insights to measure and understand human behaviour. Applied neuroscience typically uses a large, stationary fMRI (functional magnetic resonance imaging) or EEG (electroencephalograph) headsets and eye trackers to get a precise understanding of how the human brain reacts to innovations, products, or other initiatives. We typically select four measures to assess what is working:
- Cognitive load: Are people understanding, bored, or overloaded with information?
- Motivation: Are people stimulated to take action, neutral, or actively deterred?
- Emotional arousal: Are people emotionally engaged or disengaged?
- Attention: What are people focusing on? What is the stopping power of an item or information, and how good is it at holding on to attention?
OTHER TOOLS different from neuro-prototyping
Sometimes, qualitative tools like in-depth interviews can go a long way in resolving key issues before you design a rigorous experiment. For another alternative, you may use implicit association tests (IATs) to draw out unconscious reactions when applied neuroscience was out of reach. Associations are heuristics for our minds to make fast judgments about our environment. For example, what do you think about when you see the brand name Volvo?
5 – Leading the Self-Transforming Organization.
Technology was not the reason many organizations failed to transform. Instead, the real challenge was people—helping people believe enough to commit to a future different from the familiar and then persisting through the disillusionment that precedes any change.
Sometimes, the most successful transformations begin small and end big: small-t transformations that could add up to a big-T transformation. In this approach, each small project represents a moment of transformation.
a. Negative Capability
What is negative capability? It is the capability to accept not having the answer immediately but to explore how something may evolve.
b. Inverted Power
Inside established companies, most of the times people dismiss a new idea as impossible unless it comes from the CEO. Many transformations, on the opposite, have started at the lower ranks. Of course, if you start from the bottom, a transformation will take time. You will still need to seek support as high in the organization as possible. But inverted power—the power of leading from the bottom up—works.
Don’t assume that you need to have a massive budget. You could begin with relatively little funding—it costs less than you think for stories, comics, applied neuroscience or other research techniques, and even technology to build. The lower the cost, the lower the expectations for returns and the greater the glory for the results you show.
c. Chaos Pilots: who are they?
Chaos pilots are people who can creatively lead a project through uncertainty. Chaos pilots care more about behaviour change than about climbing the ladder or getting a star on their charts. They are more willing to be the nail that stands out or to ask a challenging question.
d. Accelerator Skill Sets
People with accelerator skill sets can catalyze your project, and they share the same vision that you have: to transform the organization. Sometimes, these skill sets are hardware or software related, but just as often, they just get things done or accelerate communication.
In assessing which accelerator skill sets you to need, the key is to ask yourself what you are good at, what you are missing, and how you can assemble a team that has diverse backgrounds, thought, skill sets, and actions—but shared purpose and vision—so you can move quickly. When we talk about accelerator skill sets, we aren’t just talking about cross-functional teams.
Beneath the cute alliteration, the rule suggests that you will face three problems for which you need three matching capabilities: discovering the customer need (the hustler talks to customers), coding a solution (the hacker codes it), and the go-to-market strategy (the hipster optimizes the user interface to maximize customer acquisition).
Employ a problem/capability structure instead of a product/function structure. Thus, acquiring accelerator skill sets doesn’t mean getting someone great from finance, strategy, and marketing. Instead, it means developing a team that allows you to match quickly problems to capabilities
e. Uncommon Partners
Uncommon partners are the organizations you might not normally work with, but which can help you create radical new futures. Organizations find they need to collaborate with uncommon partners as an ecosystem to co-create the future together. This is an adaptive ecosystem strategy. Uncommon partners help you succeed by providing you with the capabilities you shouldn’t be building yourself, as well as with fresh insights. WIN-WIN You also help uncommon partners succeed by creating new opportunities from which they can prosper.
When working with uncommon partners, you are trying to co-create the future, which entails a great deal more uncertainty. Because you can’t specify outcomes precisely, agreements are typically less formal than in other types of relationships, and they operate under a shared vision and trust more than binding agreement clauses. You need to share the value.
f. Results first.
Intuitively, people inside corporations often want to start by selling a grand vision, raising a huge budget, and then executing on their vision. Sometimes this can work, but it can also be a very dangerous path. It often raises expectations for returns so high that only a perfect storm can yield such returns. It also puts the project under the microscope, to make sure it succeeds, leaving little room for change. Therefore, instead of a vision-first approach, we believe in a results-first approach. Start small, keep it quiet, and accumulate small wins first.
HIGHLY RECOMMENDED: to think of the small-t transformations that can lead to a big-T transformation. As you accumulate results, you can share them more broadly with the organization as part of the transformation journey. But as soon as you do share results you will have to wrestle with the three NO-GO: no to mature metrics, no to money, and no to mature systems.
The three things to say “no” to:
- No to Mature Metrics.
- Using such metrics, like return on investment or sales, almost inevitably sets a project up for disappointment and failure. This does not mean that new projects lack rigour or metrics. Rather, they simply have different metrics.
- Metrics can include the depth of the customer problem and the solution’s capability to deal with it, or cohort metrics like Google’s HEART (happiness, engagement, adoption, retention, and task success)
- If you use applied neuroscience, then prefer to measure the results of quantifiable hypotheses using KPIs tied to neural indicators.
- No to More Money.
- There will come a time to scale, but early on, refuse the money and the offers to scale. Your projects need time to be tested and to mature. There comes a time when you will scale up (after you have truly validated the key assumptions), but until then, don’t allow the excitement to supersede the rigorous testing and maturation process.
- No to Mature Systems.
- Work with your legal department to find an approach suited for transformation projects. For example, when Cisco’s innovation teams wanted to work with uncommon partners, the legal team put together a short, flexible agreement, in plain English, and these simplified agreements sped up the process significantly.
Why Agile, Design Thinking and The Lean Startup are not enough?
This book introduces an approach that is similar, but not equal to the frameworks we know. Its thesis, corroborated by case studies, is that transformation needs more than these methodologies to navigate a world of uncertainty and promotes instead “behavioural innovation”: that is, the application of cognitive sciences (e.g., psychology, applied neuroscience) to study the micro-processes of innovation – including the biases that limit innovation – and the mechanisms to address these biases.
The critical question the book poses (and answers to), is that we have better motivational alternatives to the “burning platform” approach that so many companies try to use for transformation. It also questions if many of our existing frameworks reinforce or counteract the tendency towards incrementalism.
The answer, you might have understood from this post and better get from reading through the book, is human and behavioural. That is something, you might think, we already know. But the framework proposed is robust and appealing because it connects storytelling, behaviours, language and metrics in a system that is simple to set up and repeat.