The author focuses on effective thinking and superior leadership. It is not efficiency, but synthesis—merging ideas and concepts in new ways—that is the key to creating breakthrough growth. Perception strongly determines what information we retain. Knowledge is more than information because it integrates management leadership skills into what we learn. Our brains are biologically designed to recognize patterns, but superior leadership requires that we suspend some of our tendencies and create new patterns that will generate value for the future.
Karam Sami Al-Yateem, Husameddin S. Al-Madani, and Lisa Song, Editors, Soft Skills
Peter Drucker has influenced more business people than perhaps any single person in history. Drucker died a few years ago at age 95, and today something new is required to translate his excellent philosophy into concrete action. The problem with Drucker—which he acknowledged—and with many other business gurus is that they provide abstract concepts that are very interesting, but the practical steps to implement them are sometimes missing in action. Drucker knew that management was a bundle of principles to be observed, and he compared management to liberal arts, where one follows certain principles rather than a prescription. To do this, one must be able to think effectively. Most prescriptions, Drucker said, are antiquated as soon as they are stated.
The liberal arts are flexible, whereas science is rigid—like an immutable formula, such as in thermodynamics. Art is related to creativity. Creative thinking is related to innovation and perception, as well as to flexibility generation. Innovation, which means implementing creative thinking, is just as important as total quality management in generating incremental growth and breakthrough growth. Both are required in today’s rigorously competitive market.
The Coming of a “Brand” New Age
The new age of innovation is upon us, bringing a new dawn, a renaissance. In the industrial age, design—representing creative thinking in the context of the time—was separated into analytical engineering (problem solving) and creative art as distinct entities. It was a time of reductionism. Today, the distinction is becoming blurred. Think of some of the top products today, the iPod, the Lexus, or Windows Vista. All are a mixture of creative design and exquisite engineering.
Plenty of products are good, but that in itself probably ensures only that they are or will soon be a commodity, with the price determined by the lowest bidder. The result is a price war, in which all parties keep the same market share but generate less and less profit. This is the best of the worst, and none of the parties benefits.
To compete, management must differentiate both internal process—in order to deliver goods faster, more simply, and more cost-effectively—and product line. The key skills required of the best executives are effective thinking, innovation, and creative methodology. Your job is not merely to be excellent, as a number of companies lauded in Peters and Waterman’s best-selling book of the 1980s have since found out the hard way. You must embrace the law of the winning edge, continuously “sharpening your sword” by means of effective thinking.
In the industrial age, reductionist thinking was used to separate, differentiate, and create specialized processes that were treated as distinct units. Efficiency was the code word. In the age of innovation, it is the opposite. Synthesis is used to merge ideas and concepts in new ways, new combinations, to create growth.
What once were simply gas stations have now become full convenience stores, with a wide variety of high-profit items sold to fuel customers and other consumers. Many such outlets feature top-brand fast-food restaurants, transforming these locations into places where one can relax and recuperate on a trip.
Opening Up Your Perception To Create Usable Ideas
Creative thinking in business means generating and designing value where none may previously exist, or generating more value from existing processes. You cannot use analytical tools focused on the past to design value for the future.
However, you can see only what your brain can perceive. As you drive out of the showroom in your new Lexus, it dawns on you that so many others have the same car in the same color. You surely would have seen that before, but you may not have perceived it because your brain was not tuning into that fact. You can perceive only what you pay attention to—or what your mental model allows you to perceive.
Bill Gates took a strong concept—Windows—and kept bringing out new versions, requiring many users to upgrade and thereby keeping the Microsoft treasury finely oiled. Meanwhile, he continued to refine existing products, providing customer support, and generated even more revenue. That is authentic creative logic in action—taking something already there and repacking it into billions of dollars over and over again! It is creating value on different fronts. But this does not just happen, and that is the point. You cannot analyze foresight. You can, however, analyze your ideas in phase two of any thought process. So there is indeed a time and place for conventional thinking.
Creative thinking in business means productive thinking, to produce more output from the same level of input through the system. That is what Toyota learned to do, in order to penetrate the American-dominated car market. Conventional thinking, on the other hand, means reproductive thinking, to reproduce the past by means of analyzing data and to re-present information to your conscious mind by tapping into your tacit memory bank.
The Evolution of Management Processes
Management, it turns out, is an evolutionary process, in which you are formulating—creating—the next step and then figuring out how to overcome the gap for the unique nature of your organization.
Many leaders and managers are running on a treadmill today, “fighting fires” and unable to see the bigger picture. “Firefighting” will merely maintain your baseline, but never enable you to grow. In fact, the baseline will sink, and you, too, will sink like the Titanic. If you want to be effective, then you must exploit opportunities and starve problems. You must be a fire starter as well as a firefighter.
Shigeo Shingo was instrumental in helping to make Toyota a leading company by using very efficient methods such as Just In Time production. The secret, though, was that he abhorred the existing emphasis on efficiency and created instrumental change that instead emphasized effectiveness. In other words, effectiveness first, efficiency second. An eventual result (developed elsewhere) was the Six Sigma system of minimum deviation per million.
Shingo believed that if you solved only the effect of a problem, it would probably return; therefore, you should get to the root of it. One of his key tools was to empower the problem-finder—whether a worker or foreman—in such a way that others, such as managers, were not allowed to intervene, not even to offer suggestions. The success of this creativity-generation method has since been confirmed through 20 years of study by Teresa Amabile of Harvard University.
But does this really work? It requires a big leap of faith from often more-senior authority, but the evidence shows that it does work. The result has been a very motivated, highly effective, very efficient, and profitable global giant, Toyota.
That was Peter Drucker’s message from the beginning—workers are not drones, they are human beings with feelings. Empower them, lead, and you will get your requisite results.
Effective Thinking
Conventional thinking (logic, argument, critical thinking, and rational step-by-step thinking) helps to make you very efficient but will lead to great ineffectiveness in a changing environment. A polar bear is very well adapted to the Arctic, but if the ice cap melts, he probably will drown. Polar bears cannot readapt because they are rigidly fixed by their genes. You and your organization will also perish in a different environment, unless you anticipate and adapt. But unlike the polar bear, you can think in ways that enable you to change perception and adapt.
Why do some of the biggest corporations, with the greatest so-called brainpower coming from Ivy League MBAs and PhDs, sink? The answer is inflexible methodology that seeks merely to be efficient but fails to adapt. Business is a dynamically changing environment. You need to be able to change perspectives and tactical directions often in order to achieve the overall strategy. Strategy is fixed, whereas tactics are flexible. You must not merely win the battle, but win the war. Or you can be sure that your competition will.
Change Management
In business management, there are three dimensions that are all linked—like it or not—and the linkage creates waves, big or small, just as the moon creates high tide and low tide every day:
- Person[s]—skills, motivation, strengths, talent, knowledge, communication, and job
- Organization[s] or departments—many different organs that must be coordinated
- World—economy, politics, societal needs, prices, and trends
There is systems dynamics, and this leads to continuous change. The problem, as studies by Harvard psychologist Howard Gardner and others show, is that it is very hard to change either our minds or others’.
Knowledge Engineering
It is not enough to learn. Knowledge engineering consists of knowledge acquisition, knowledge representation, and knowledge implementation. Knowledge is more than mere information; it is integrating leadership in management skills.
Efficiency is just learning. Effectiveness is learning the right things, but also executing upon your learning as soon as possible. Otherwise, there is little integration.
Action step: Knowing that there will be change, and my job requirements will become obsolete (if I am to grow), what do I have to learn today so that I can lead tomorrow in every area of my life? How am I going to learn it? What is my schedule? How do I balance my time and the larger organization’s time?
Most people know how to think, but do not know how to think effectively. This applies to many from the ranks of junior executives up through managers and leaders. The rags-to-billionaire founder of the Body Shop stores in the UK, Anita Roddick, titled her book Business as Un-usual! She refused to advertise, when she started her business, but very creatively put banana into the shampoo she sold in cheap bottles that she recycled. It proved a phenomenal success. Why didn’t anyone else do this first? Everyone had access to these simple resources. She embodied superior leadership in action.
Engineers, Systems Dynamics, and Thermodynamics
Executive engineers forget that the brain is neither hardware nor software. The brain is “wetware.” This means that it encompasses the synergy of adapting “hardware and software” that self-organizes because of its neural plasticity, which leads to pattern extension by reliance on a neural network of hubs and nodes, like Google/search. But pattern extension means more of the past (i.e., efficiency). We need pattern-creation to generate effective thinking, which is based directly upon one’s unique wetware—this active, nonlinear, dynamic pattern-recognition brain system. Conventional thinking is based upon a passive system, in which a third party rearranges data—word and number manipulation, such as moving chess pieces according to rigid rules. That is weak; yet that is what most people do when they think, and they do not even realize it.
Any system works alongside thermodynamic principles. In the biological brain system, there is negentropy (reversing the second law of thermodynamics that proposes entropy, that physical systems move from order to disorder). Negentropy causes your mind/brain to become neurologically organized and psychologically efficient by the formation of mental models that get extended through patterns being triggered and then associated, which results in your mind/brain becoming parochial and rigid.
You become great at pattern recognition by means of these mental models, but you remain biologically poor at pattern creation. The thermodynamic principles inherent in your brain biology resist change and seek to maintain structural integrity, which makes perfect sense. But it is just this biological pull that needs to be temporarily suspended and overcome, if we are to become pattern creators.
Summary
A set of rules applies to all the concepts discussed above, such as creative logic, perceptual logic, and effective thinking. For example, you cannot authentically be creative, according to studies by Dan and Chip Heath (of the Aspen Institute and Stanford University Business School, respectively), without using a specific and logical framework. Creative-thinking tools are often the complete opposite of anything you have ever learned, such as analysis.
In addition, creative does not merely mean new. Creative means generating value, not merely art appreciation. This may involve using old concepts in new ways. That is effective thinking. When the Jacuzzi brothers engineered a hot tub with jet spray to help arthritis patients, the product failed to sell. Upon later perceiving that they could repackage the value concept for the luxury market, they ended up selling their product for a much higher price and to a larger number of customers, creating brand history in the process. This seemed quite illogical in their original mindset. They had to create the market from nonconsumers.
Old management philosophies and back-to-basics strategies are still relevant. However, you need to proactively perceive and create (generate, produce, and design) value in turbulent times. This creates results-based superior leadership.
The question is whether you get it or not. And if so, what are you going to do about it now?
Action step: Knowing what I do now about (fill in the blank), if I were to start all over again today, what would I do and how would I proceed?
