Happy 6th Birthday Digital Tonto!
Digital Tonto was born just a few weeks before my daughter, so in a sense, they’ve grown up together. Over the years, she’s become vaguely aware of her virtual sibling, enough to know that Mommy is good at doing all the important things while Daddy is good at “making posts.”
Six is a strange age. It’s fairly similar to five, with few conspicuous achievements to distinguish it from a year earlier, but proficiencies deepen. I think that’s true of both my daughter and Digital Tonto. As the site has gained recognition, I’ve gained better access to sources and that’s improved my ability to form insights.
As in previous years, I’m celebrating the occasion by posting my favorite articles over the past year or so. These aren’t necessarily the most popular, but they are the ones that I found myself going back to. I’d also like to thank everyone for all of the enormous support. I appreciate it more than you can know. Looking forward to year number seven!
In 2004, General Stanley McChrystal was chosen to lead Special Forces Command, the most elite warriors in the world. Yet while they were winning every battle in Iraq, they were losing the war. The problem wasn’t that the enemy had capabilities that his organization lacked—or that they had a greater will to fight—but that the battlefield had changed.
What McChrystal realized was that the solution lay not in the individual units, but in how they were connected to each other. So rather than focus on shifting strategies or deploying more resources, he set out to shape the informal networks that would allow his forces to achieve a level of adaptability and interoperability that no one thought possible.
Today, every manager faces similar challenges to McChrystal—seemingly formless threats that can arise anywhere, anytime. As the General says, “It takes a network to defeat a network” and we all must begin to learn how to shape the informal networks within our organizations.
Why are some brands able to be at once both global and local — to successfully seize the energy of grassroots movements and at the same time leverage corporate assets on a massive scale — while others only come off as artificial and pandering?
The truth is that simply adding followers on social media is unlikely to create a community of purpose. To succeed in the social arena, strategies need to be grounded in social dynamics and network science, not conjecture. Marketers need to stop merely “joining the conversation.” To inspire a successful movement, we have to lead it.
We tend to think of strategy as a coolly rational exercise, driven by excel sheets, PowerPoint decks and hard analysis. Yet this view ignores the fact that enterprises are not mere collections of resources and capabilities, but are made up of people who are driven by their own ambitions and aspirations.
That’s why high performing organizations are clear about their mission. It is the mission of an enterprise that attracts talented people, keeps them motivated and focused. It is also what helps coordinate action. If the mission is clear, viable strategies to achieve objectives are much easier to achieve.
The biggest cop-out in business is that “we had a great strategy, but we couldn’t execute it.” Make no mistake, if you couldn’t execute it, it was a stupid strategy to begin with. And probably the chief reason a strategy can’t be executed is that it isn’t aligned with a clear sense of mission.
In the grand story of John du Pont and Foxcatcher, I was no more than a bit player. Still, I trained there for several years in the early 90’s, knew many of the main players and experienced it all unfold. It’s a strange feeling seeing even a small part of your life blown up into a major motion picture.
Strange, and a little frustrating. The truth is always multifaceted and even the most faithful telling cannot capture any narrative in its entirety. The unfortunate reality of what happened at Foxcatcher is that we were all complicit. I still remember hearing about the murder of Dave Schultz with horror tinged with more than a little guilt.
This was a very difficult post for me to write, but I was happy with how it turned out.
It’s become common to hear that American business, driven by activist investors, is obsessed with short-term profits at the expense of long-term prosperity. This, as Harvard’s Clayton Christensen puts, it, is the “capitalist’s dilemma” and in order to secure our future, we must reengineer incentives in order to achieve more desirable outcomes.
It’s a persuasive argument. So persuasive that, in fact, Hillary Clinton has put it at the center of her campaign for the presidency. However, the data doesn’t support it. In fact, American businesses have been investing a historically high rates. The real problem is not private investment, but public investment and that is where we should focus our efforts.
Anyone who has ever managed anything knows how hard it is to get things organized. You can strategize and plan all you want, but inevitably, people get their own ideas about how things should work. Before you know it, instead of a coordinated effort, you have a mess.
At the same time, systems in nature, from the blinking of fireflies to the pacemaker cells in our hearts, are able to synchronize their actions with no central authority at all. More recently, social and political movements such as the Arab Spring and Euromaidan have been able to spring up from nowhere and achieve highly coordinated—and high effective—action.
Fortunately, over the past decade or so network scientists have learned a lot about how these processes work. Small groups, loosely connected, but united by a shared purpose can often outperform even the most powerful institutions.
Tony Soprano ran his crew with an iron hand. Subordinates were kept in line through fear and intimidation. Customers who fell behind in their payments faced harsh penalties and emerging competitive threats were quickly eliminated. When he was advised by Dr. Jennifer Melfi to try a more collaborative approach, he replied, “But then how do I get people to do what I want?”
Most corporate leaders face the same dilemma today. As technology and culture drive decentralization of power and resources, it’s increasingly hard to get people to do what we want. So rather than rely on command and coercion, we need to learn how to inspire people to want what we want.
The 20th century was the age of scale. As organizations became bigger, they could gain greater control of the value chain and drive efficiencies. As they became more efficient, they became more competitive, allowing them to achieve greater scale still. Your success, to a large extent, was a function of your ability to grow.
Yet today, capabilities are no longer determined by what you control, but what you can access and rather than assets managed by centralized organizations, we have ecosystems managed by platforms. So the basic logic of the enterprise has changed. We can no longer prosper by clawing our way to the top of the heap, but must nudge our way to the center of the network.
Management, to a large extent, is a learn on the job type of thing. While there is no shortage of business schools or management books, you are never really prepared to take on responsibility until you actually get out there and do it yourself. To an unfortunate degree, you just have to learn from your own mistakes.
Nevertheless, there are some things I wish someone told me before I began managing people nearly two decades ago. I’m not sure I would have listened, but it would have been nice to have been warned beforehand. These is some of the most important things I would have liked someone to tell me.
We all use models—basic assumptions about the way the world works—because without them we would be unable to function. Imagine having to revisit every established principle every time you had to do something. There would simply be no way of getting anything done. That’s why we establish basic models, best practices and so on.
Yet our models never represent the way the world works completely accurately. They are always off in some way. Usually, these anomalies are small enough to work around, but sometimes we have to accept that a model is no longer valid and needs to be replaced.
That’s hard to do because we not only have to learn a new model, we have to unlearn things that we thought to be true. What’s more, as technology accelerates change, this happens much more frequently than it ever did before. In order to compete in today’s world, we have to master the art of the shift.
One of the most puzzling aspects of the modern world is the way that movements can catch fire and overturn the existing order. Whether it is the Arab Spring transforming entire societies, the LGBT movement changing long held beliefs or the effort to bring down the Confederate flag altering the course of politics, social movements have become a force to contend with.
Yet not always. Many movements rise up, fizzle out and then are quickly forgotten. This post contrasts two movements, Occupy in the United States and Otpor in Serbia, and explains why some movements succeed and others fail. If you want to learn how to create change throughout a society—or even within a single organization—this is one you’ll want to read.
At the height of the financial crisis, the top executives of Ford Motor Company flew to Washington to lobby for a bailout—not for themselves, but for their rivals, GM and Chrysler. If they went down, so would the supply networks and so, eventually, would Ford. Clearly the nature of competition has changed.
Today, we live in age of platforms. You are either an app store or an app developer, meaning that you are either facilitating an ecosystem or contributing to it. Therefore, your ability to compete is increasingly determined by your ability to connect.
Education is always a concern in the United States. While we are a military, economic and technological superpower, our education system is merely mediocre. In the international PISA tests, our kids score in the middle of the pack. Not a tragedy—other high tech nations, such as Israel and Sweden, perform even worse—but not something to be proud of either.
Beyond improving our education system to bolster basic skills, however, we also need to take note of the fact that the world that our children face will be vastly different than ours and they will have to prepare much differently than we did. They will need to build skills for the future, not the past.
So that’s the list for Digital Tonto’s 6th Birthday. If you have a favorite post, let me know in the comments. And thanks for all of your support over the years. It’s really meant a lot to me. As long as you keep reading, I’ll keep writing!