As a leader in your organization, you’re under tremendous stress. Not only do you need to deliver against a “growth strategy” that demands constant increases in revenue and profit, but you also need to cut costs and support employees who are more disengaged and burned out than ever before. If it feels like you’re working harder and running faster than ever to maintain the status quo, then I have good and bad news for you.
Bad news: You’re right.
The feeling of working harder or moving faster simply to stay in the same place is called the Red Queen effect or hypothesis. The hypothesis asserts “that species must constantly adapt, evolve, and proliferate in order to survive while pitted against ever-evolving opposing species.” Its name is inspired by the Red Queen in Lewis Carroll’s Through the Looking Glass, who explains to Alice, “here, you see, it takes all the running you can do, to keep in the same place.”
You probably feel the same need to adapt to survive “while pitted against ever-evolving opposing species” every time you see new technologies, read about another new management framework, or hear news from your competitors. You also understand that your organization needs to grow and often hear that it needs to do so at all costs, so you buckle down, work hard, and pull off quarterly miracles.
Good for you! You’re reward? You get to do it all over again, and faster, this quarter. And, to add insult to injury, all that growth you’re working harder and harder to achieve is a mirage.
75% of companies do not grow.
HBS professor Gary P. Pisano examined the growth rate of 10,897 publicly held US companies between 1976 and 2019. When adjusted for inflation, the top quartile grew 11.8% yearly, but the other 75% showed little to negative growth.
Being in that top quartile was no guarantee of success, as only 15% (3% of the total sample) were able to sustain a growth rate of 0.3%+ for 30 years. In fact, only SEVEN companies—Walmart, UPS, Southwest, Publix, Johnson & Johnson, Danaher, and Berkshire Hathaway—were top-quartile growth companies throughout the thirty years studied.
If you worked at one of those 7 companies, congrats! Your hard work delivered real and repeatable growth. If you worked at any of the other 10,890, I hope they offer great benefits?
We know why.
Every good academic knows you can’t just throw out some data without trying to find a causal link, and Professor Pisano is a good academic
“I have found that while the usual explanations for slow or minimal growth—market forces and technological changes such as disruptive innovation—play a role, many companies’ growth problems are self-inflicted. Specifically, firms approach growth in a highly reactive, opportunistic manner. When market demand is booming, they go on hiring binges, throw resources at developing new capacity, and build out organizational infrastructure without thinking through the implications… In the process of chasing growth, companies can easily destroy the things that made them successful in the first place, such as their capacity for innovation, their agility, their great customer service, or their unique cultures. When demand slows, pressures to maintain historical growth rates can lead to quick-fix solutions such as costly acquisitions or drastic cuts in R&D, other capabilities, and training. The damage caused by these moves only exacerbates the growth problems.”
(Bold text added by me)
Good news: You Can Do Something About It
In fact, as a leader in your organization, you’re among the few who have any prayer of pulling your organization out of the Red Queen’s race and putting it on track to real and sustainable growth. Achieving this incredible success requires you (and your colleagues) to decide three things:
How fast to grow (target rate of growth)
Where to find sources of new demand (direction of growth)
How to assemble the resources required to grow (method of growth)
Together, these three decisions comprise your growth strategy and enable your organization to achieve the “delicate balance” between demand and supply required to sustain profitable growth.
Getting to these decisions isn’t easy, but neither is slaying the Jabberwocky. So, as this brief rest stop in your race comes to an end, who do you choose to be – Alice, who works hard and deals with a bit of nonsense to progress, or the Red Queen, content to work harder to stay in the same place?
I recently listened to a podcast in which the speaker talked about his hike to Machu Picchu. He spoke about the difficulty of the hike and the moments when his confidence wavered. “But ultimately,” he said, “I was so compelled and pulled onward by the opportunity to see such a wonder, that I was able to push through.”
That was not my experience.
Many years ago, I did the same hike (in three days instead of four due to a scheduling error). And at no time did a feel “compelled and pulled onward.” In fact, about halfway through the first day’s hike, I had a complete meltdown in the middle of a beautiful grove of flowering trees. Luckily, I was so far behind the rest of my group that only my guide saw and heard the half-hour, expletive-laden beating of walking sticks against trees as I accused him of leading us to our deaths.
A few hours later, we reached our camp and the sherpas gave me tea and popcorn as they prepared dinner. I don’t know what was in the tea, but I felt much better after a cup and was grateful that a steady supply was offered throughout the next two days.
WHY you start matters
It was not the “opportunity to see such a wonder” that put me on the path. It was FOMO (fear of missing out), knowing that my friends were going on an adventure and not wanting to miss out.
Opportunity or FOMO. One of those is at the start of every journey and steels your mindset for the work ahead. If you see opportunity, you’re optimistic, resilient, and maybe even a bit idealistic. If you’re afraid, you rush through things, missing important signals and only seeing how far behind you are.
Companies do the same thing with innovation. They see a new technology, trend, or framework appear, sense an opportunity to use it to kickstart growth and leapfrog competition, and they start building. Or they see a new business model or competitor gain share and rush to mimic their approach.
WHAT you choose along the way determines how you end
It wasn’t “knowing where my journey was going, and what the journey was all about” that kept me moving forward. It was the knowledge that, unless I planned to join one of the Indigenous communities we passed through, I had to keep going.
No matter how you start, you will face a choice – continue, stay, or turn back – and that choice determines how your journey ends. If you turn back to the old ways because the new ways failed, you’re giving up. If you stay where you are, you’re stuck somewhere between the safety of what you knew and the opportunity ahead. If you keep going, you’ll stay ahead of those you never started, turned back, or stopped AND you’ll achieve the opportunity that “compelled and pulled [you] onward.”
Companies face the same decision moment with innovation. There’s a market downturn, geopolitical uncertainty, or a major global event, so executives shut down anything that’s not mission-critical while they wait out the uncertainty. A new leader takes the helm and wants to put her mark on the organization, so she rejects the old strategies and approaches and institutes her own, ignoring the counsel of others in the organization. A new competitor suddenly finds itself embroiled in controversy or bankruptcy, and executives chuckle and shake their heads because they knew all along that the only way that works is the old way.
What do you choose?
Do you start because you see the opportunity to do better or because you’re afraid of losing out?
When you face the inevitable challenge, do you turn back to “how we’ve always done things,” take up residence where you are because it’s good enough, or do you bravely persevere?
Most importantly, when you face the challenge, do you take a break, talk and listen to the people around you, and have some tea and popcorn before you make your choice?
Purpose. Goal. Mission. You hear these words a lot this time of year. Not because it’s the start of the annual business planning cycle but because it’s graduation season.
Across the country, commencement speakers and wise family members espouse the importance of having a purpose to guide and sustain graduates as they set out on their next adventures.
All the talk of purpose can feel overwhelming, especially as you listen to graduates’ wide-eyed optimism about how they will change the world while stewing in an existential crisis that makes you wonder if you even have a purpose.
You do.
And part of that purpose is finding and creating purpose.
What is “Purpose?’
Purpose hasn’t reached buzzword status, but it’s close, so let’s start with a definition, or three, courtesy of The Britannica Dictionary:
the reason why something is done or used: the aim or intention of something – The purpose of innovation is to create value
the feeling of being determined to do or achieve something – The team worked with purpose
the aim or goal of a person: what a person is trying to do, become, etc. – He knew from a young age that her sole purpose in life was to be an orthodontist
Three different definitions of purpose. Three questions that it’s part of your purpose to ask.
“What’s THE purpose?”
Innovation is all about creating value. Sometimes, to create value, you need to do new things. Sometimes, you need to stop doing things. It’s hard to tell the difference if you don’t ask.
That’s why innovative leaders are curious. You aren’t afraid to ask, “What’s the purpose of this product/process/meeting/decision/(fill in the blank).” You want to know “why something is done or used,” and they know that the best way to figure that out is by asking.
You ask this question at least once a day. When you ask it, you’re genuinely curious about the answer. After all, we’ve all experienced people and cultures that weaponize questions – “Johnny, is that where the scissors go?” or “Why did you think that was a good idea?” – and you reassure people that you’re asking a genuine question, even if they should know that by your tone.
“What’s OUR purpose?”
Innovation is hard. You live in ambiguity and uncertainty. You fail (learn) more often than you succeed. You are told “No” and “Stop” more than “Yes,” “Keep going,” and “Thank You.”
Innovators are courageous. You do the hard work of innovation because you are “determined to do or achieve something.”
You also know that sustaining courage and purpose requires a team.
You aren’t fooled by the myth of the lone genius. After all, Thomas Edison worked with as many as 200 people in his West Orange lab. Heck, even Steve Jobs needed Sir Jony Ive (and a few hundred other people) to bring his vision of “1,000 songs in your pocket” to life.
“What’s MY purpose?”
Innovation takes a long time. Change happens gradually, then suddenly. We chose to preserve what we have, rather than take a risk to get more.
Innovators are committed. You are patient for change, steadfast in the face of resistance, and optimistic when others are afraid because of your “aim or goal…what [you are] trying to do, become, etc.”
Even if you can’t articulate it in a grand statement or simple, pithy soundbite, you have a purpose. As Viktor Frankl wrote, “Those who have a ‘why’ to live, can bear with almost any ‘how’.”
Three Purposes. Three questions
Even if you lack the wide-eyed optimism of a new graduate and feel like you spend most days just muddling through life, because you are here, you have a purpose. So tell me:
When was the last time you were curious and asked, “What’s the purpose of (artifact of the status quo)?”
When was the last time you were courageous and used your feeling of determination to inspire others to join your purpose, overcome obstacles, and get something done?
When was the last time you had to dig deep, rediscover your purpose, and reinforce your commitment so that you could bear and overcome the “how?”
Doing nothing fuels creativity and innovation, but that fuel is wasted if you don’t put it to use. Idleness clears the mind, allowing fresh ideas to emerge, but those ideas must be acted upon to create value.
Why is doing something with that fuel so difficult?
Don’t blame the status quo.
The moment we get thrown back into the topsy-turvy, deadline-driven, politics-navigating, schedule-juggling humdrum of everyday life, we slide back into old habits and routines. The status quo is a well-known foe, so it’s tempting to blame it for our lack of action.
But it’s not stopping us from taking the first step.
We’re stopping ourselves.
Blame one (or more) of these.
Last week, I stumbled upon this image from the Near Future Laboratory, based on a theory from psychologist Mihaly Csikszentmihalyi’s book Flow:
There’s a lot going on here, but four things jumped out at me:
When we don’t have the skills needed to do something challenging, we feel anxiety
When we don’t feel challenged because our skills exceed the task, we feel boredom
When we don’t feel challenged and we don’t have the skills, we feel apathy
When we have the skills and feel challenged, we are in flow
Four different states. Only one of them is positive.
I don’t love those odds.
Yet we live them every day.
Every day, in every activity and interaction, we dance in and through these stages. Anxiety when given a new project and doubt that we have what it takes. Boredom when asked to explain something for the 82nd time to a new colleague and nostalgia for when people stayed in jobs longer or spent time figuring things out for themselves. Sometimes, we get lucky and find ourselves in a Flow State, where our skills perfectly match the challenge, and we lose track of space and time as we explore and create. Sometimes, we are mired in apathy.
Round and round we go.
The same is true when we have a creative or innovative idea. We have creative thoughts, but the challenge seems too great, so we get nervous, doubt our abilities, and never speak up. We have an innovative idea, but we don’t think management will understand, let alone approve it, so we keep it to ourselves.
Anxiety. Boredom. Apathy.
One (or more) of these tells you that your creative thoughts are crazy and your innovative ideas are wild. They tell you that none of them are ready to be presented to your boss with a multi-million-dollar funding request. In fact, none of them should be shared with anyone, lest they think you, not your idea, is crazy.
Then overcome them
I’m not going to tell you not to feel anxiety, boredom, or apathy. I feel all three of those every day.
I am telling you not to get stuck there.
Yes, all the things anxiety, boredom, and apathy tell you about your crazy thoughts and innovative ideas may be true. AND it may also be true that there’s a spark of genius in your crazy thoughts and truly disruptive thinking in your innovative ideas. But you won’t know if you don’t act:
When you feel anxious, ask a friend, mentor, or trusted colleague if the challenge is as big as it seems or if you have the skills to take it on.
When you feel bored, find a new challenge
When you feel apathetic, change everything
Your thoughts and ideas are valuable. Without them, nothing changes, and nothing gets better.
