When I first started this blog in my Kyiv flat in 2009 I couldn’t imagine that, in scarcely more than a decade, Ukraine would be at war with Russia, much less that it would be winning. If someone had told me back then that Ukraine’s president would be the world’s most admired leader I would’ve thought they were nuts!
Yet that is the nature of human agency. Despite all the calculations of the experts and practitioners, what made the most difference in Ukraine was not the number of tanks or planes, but how people saw themselves. It is why Putin invaded in the first place and why the Ukrainians fight so hard. Identity is a tremendously powerful force.
That’s one of the things that I’ve learned from this blog and, as we move into a new era of AI, it’s something to keep in mind. While there is value in tapping into the hive mind using services like ChatGPT, only we can decide what we think and determine our own intent. That’s a big part of what this blog has been. Here are my favorite posts from the past year.
In February, 1919, the famous philosopher Bertrand Russell received a card from his former student, Ludwig Wittgenstein, who was at that time in an Italian prison camp. “I’ve written a book which will be published as soon as I get home,” he would say in subsequent correspondence. “I think I’ve solved our problems finally.”
The “problems” he spoke of had to do with a foundational crisis in mathematics and logic that defied the efforts of the world’s greatest minds. The book, Tractatus Logico-Philosophicus, was an attempt to engineer a perfectly logical language from first principles. It would become enormously influential, leading to the Vienna Circle and the logical positivist movement of the 1920s.
Yet Wittgenstein would later disown the idea and it was, in the end, found to be unworkable. There are limits to what we can engineer. The world is a messy place. Rules inevitably have exceptions, which is why every system will always crash. That’s why we need to think less like engineers making machines and more like gardeners that grow and nurture ecosystems.
Business leaders have long been fascinated by the military. When Alfred Sloan created the modern corporation at General Motors, he based it on the army. In Wall Street, the antihero Gordon Gecko habitually quoted Sun Tzu. Retired generals like Stanley McChrystal earn huge fees advising CEOs and speaking to corporate conferences.
But what about nonviolent conflict? Research has shown non-violent movements are far more successful than violent uprisings, prevailing against powerful regimes against seemingly insurmountable odds. Yet, apart from a stray Gandhi quote here or Martin Luther King Jr. slide there, these go largely unexamined in the business world.
That’s a mistake. As I explained in Cascades, business leaders can learn a lot from the principles of social and political movements. There is abundant scholarship, going back decades, about why efforts succeed and fail. We know what works and what doesn’t. If you’re serious about being a transformational leader, you need to understand these strategies.
In 2007, our media company in Ukraine completed its IPO and would soon be valued at $100 million. For a rough and tumble organization that, just a few years before, was a relatively small business, it was exhilarating. We had big plans and were eager to execute them. It was a “damn the torpedoes, full speed ahead” moment.
We also had an innovative strategy that we thought was a clear winner—a bet on Ukrainian language media. Although the Russian language was dominant at the time, we thoroughly researched the idea and found that a large part of the market said they preferred Ukrainian. To grab the opportunity, we launched three major brands in a year.
It was a disaster. Although the first launch was cause for concern, we were moving so fast the other two were too far along to stop. Then the 2008 global financial crisis hit and we were soon struggling to stave off bankruptcy. It was a brutal lesson. You can research an idea, but you never really know what you have until you’ve actually tested it in the marketplace.
Chances are, you work in a square-peg business, because that’s the best way to make money. You work diligently to improve the pegs and to get them to where they need to go better, faster and cheaper. It is through quality and consistency that you can best serve your customers, beat your competition and win in the marketplace.
The problem comes when your square-peg business meets a round-hole world. When that happens, following traditional best practices will only result in getting better and better at doing things people care about less and less. Round holes don’t concern themselves how good your square pegs are or how efficiently you can produce them.
Make no mistake. Eventually, every business evenctually finds itself in a round-hole world. That’s why good companies fail. Not because they become stupid and lazy, but because the world changes and they lose relevance. Clearly, in the midst of disruption the only viable strategy is to adapt and shift from a traditional manager mindset to a changemaker mindset.
In 1989, just before the fall of the Berlin Wall, Francis Fukuyama published an essay in the journal The National Interest titled The End of History, which led to a bestselling book. Many took his argument to mean that, with the defeat of communism, US-style liberal democracy had emerged as the only viable way of organizing a society.
He was misunderstood. Fukuyama pointed out that even if we had reached an endpoint in the debate about ideologies, there would still be conflict because of people’s need to express their identity. What many thought to be a justification, was actually a warning to expect people to rebel against an order imposed on them.
If you believe history is on your side, you’re likely to throw caution to the wind, get mixed up in things you shouldn’t and, eventually, you’ll pay a price. That’s the problem with big ideas, their nuance is often lost on those who hear them third or fourth hand and the high-stakes game of broken telephone tends to end badly. We need to approach ideas with more care.
I still remember the bright autumn day in 2014 when I turned off of the main road in Exton, Pennsylvania onto a remote path. I was going to meet Brian J. Robertson, the creator of a hot new “flat” management approach called Holacracy. I was skeptical, because it seemed to be a cumbersome way to go about governance, but I was open to learning about it.
Many companies, most famously Zappos, were enthusiastically adopting it and there was no shortage of hype among the punditry about abolishing hierarchies. Brian, for his part, was gracious and patient with me, explaining how and why everything worked. Still, I had my doubts and remained unconvinced.
Recently, Stanford’s Bob Sutton pointed to Ronnie Lee’sresearch that confirmed my (and his) suspicions. While flatter structures can promote creativity, we need hierarchies to execute well. The truth is that hierarchies form naturally and, rather than trying to ignore that basic fact, we need to design enterprises with hierarchical networks in mind.
On September 17th, 2011, protesters began to stream into Zuccotti Park in Lower Manhattan and the #Occupy movement had begun. “We are the 99%,” they declared and as far as they were concerned, it was time for the reign of the “1%” to end. The protests soon spread like wildfire to 951 cities across 82 countries.
It failed miserably. Today, a decade later, it’s hard to find any real objective that was achieved except some vague assertions about “building awareness” and Bernie Sanders’ two failed presidential campaigns. Taking into the count the billions of dollars worth of resources expended in terms of time and effort, that is abysmal performance.
As I explained in Cascades, there were myriad reasons for #Occupy’s failure. One of the gravest errors, however, was the insistence on ideological purity and the lack of any effort to understand those who had different ideas from their own. If you expect to bring change about, you need to attract, rather than overpower. Empathy is a good place to start.
I’ve always been inspired by ideas. Some, like Aristotle’s logic, shape the world for millennia. Others, like Einstein’s relativity, completely change our conceptions of what is possible. Still others, like mRNA vaccines, seem to emerge at just the right time. Ideas are what have marked humanity’s progress from living in caves to civilizations.
Yet bad ideas can destroy just as completely as good ideas can create. Fascism led Europe to effectively wipe itself out in little more than a decade. Communism relegated hundreds of millions of people to poverty and struggle. Corporate debacles like like Enron, WeWork and Theranos, have shown us that the wrong idea can cost billions.
We need to handle ideas with care, being open enough to new ones so that we don’t miss out on opportunities, but skeptical enough that we don’t get taken in by ones that do harm. What I’ve learned researching innovation and change is that creating, parsing and evaluating ideas is a skill that must be practiced and honed over time. Here are 4 things to keep in mind.
The global activist Srdja Popović once told me that the goal of a revolution should be to become mainstream, to be mundane and ordinary. If you are successful it should be difficult to explain what was won because the previous order seems so unbelievable. That’s what true transformation looks like.
Yet many leaders approach innovation and change as if they were swashbuckling heroes in their own action movie. Companies like Theranos, WeWork and Uber squandered billions of dollars on business models that never made any sense. People post their latest ChatGPT prompts on social media while Elon Musk trolls Twitter.
These days, innovation has become, far too often, solipsistic and self-referential, pursued for the glory of the innovators themselves rather than for the benefit of everyone else and there is increasing evidence the venture-funded entrepreneurship model is crowding out more productive investments. We need to move away from hype and focus on impact.
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