Saturday, September 8, 2018

Bob Morris Interview: Sunnie Giles on the new science of Radical Innovation: Part 2

Editor's note: The first part of this interview can be found here.

Sunnie Giles is a new generation expert on radical innovation who takes the mystery out of what radical innovation is and how to consistently produce it. By combining her unique expertise in advanced neuroscience, complex systems approach, quantum mechanics and business, she has produced a breakthrough program called  Quantum Leadership. Her methodology has helped hundreds of leaders create a culture of radical innovation that establishes a new platform upon which the rest of the industry to build incremental innovations. Her book,  The New Science of Radical Innovation: The Six Competencies Leaders Need to Win in a Complex World , was published by BenBella Books (April 2018).
She observes, “The business environment has changed dramatically, similarly to how the Industrial Revolution changed feudal society, which I call the Digital Revolution. This sea of change demands new leadership competencies in order to be successful, as well as the old skills that made you a successful leader – vision, charisma, technical competencies, and efficiency maximization. We are now in the world of VUCA (volatility, uncertainty, complexity, and ambiguity), which requires speed, decentralization, flexibility, and learning from trial and error, which prepares leaders to catalyze radical innovation.”
* * *
For those who have not as yet read The New Science of Radical Innovation, hopefully your responses to these questions will stimulate their interest and, better yet, encourage them to purchase a copy and read the book ASAP. First, when and why did you decide to write it?
My PhD program at Brigham Young University opened the door for my interest in systemic psychology, systems theory, and neuroscience, which led me to complex adaptive systems theory, which led me to quantum mechanics. I was fascinated to find how these principles also explained the phenomena in people, business, organizations, and so many of life’s puzzles, not just how innovation happens. Then I knew I had to write a book.
As my curiosity grew and my investigative efforts became more intense, I began to see how my diverse background—practicing corporate accounting with my CPA, strategy consulting for Accenture where I learned about and solved the challenges many Fortune 500 companies faced, and various experiences in marketing and systemic psychology—gave me precisely the skill sets that help me see the thin thread that connects all these diverse disciplines. Ironically, my lack of aptitude in math helped me translate the quantum mechanics principles into a language that laypeople can understand—I had to understand the core principles of those concepts and then apply them in everyday situations that others can relate to.
Were there any head-snapping revelations while writing it? Please explain.
I discovered that certain principles apply to govern every living thing, which was an amazing discovery for me. The principles of complex adaptive systems are how nature is governed.
To what extent (if any) does the book in final form differ significantly from what you originally envisioned?
When I first started out, I didn’t know what the main focus should be because I had all these angles I wanted to highlight. It took me a long time to develop a framework that would tie all the concepts together. I am pleased with the final product that ties all these concepts beautifully with a cohesive framework.
What are the defining characteristics of quantum leadershjp?
There is not one single characteristic but a set of traits for self-management, which allows safety for others, upon which foundation facilitating differentiation (diversity of thought), which makes connection more meaningful, which provides resilience for others to learn from profuse trial and error, which catalyzes radical innovation.
To what extent is quantum leadership uniquely appropriate for those competing in a VUCA marketplace? Please explain.
Some of these traits are counterintuitive and just don’t come naturally for many leaders who have grown up in the traditional hierarchy. But a hallmark sign of a Quantum Leader is his/her ability to unlearn old habits and changing their mind when presented with convincing evidence. For example, people are used to the culture that doesn’t tolerate failures but they are an essential ingredient for radical innovation. We need to encourage others to fail fast and safely. Then  we need to glean lessons learned and disseminate the learning throughout the team as soon as possible.
When is speed of execution “a lot more important than perfect execution”? How so?
In today’s complex business environment, where things are changing constantly, speed of execution is a lot more important than perfect execution. While you’re trying to perfect a certain solution / product, the situations might have changed already, which makes your product/ solution irrelevant. Make it good enough, ship it, improve it based on market feedback, rinse and repeat. This approach gets to the solution much faster because of the snowball effect of the learning in the iteration process.
What are the defining characteristics of radical innovation?
Not only one but several, as I have already suggested.
Here’s one of several dozen statements that caught my eye: “In essence, a leader’s job in this VUCA age is to respond constructively to negative complexity outside the organizational boundaries and increase positive complexity inside.”
Any organism with higher internal complexity dominates others species with a lower complexity because higher complexity creates more options for actions. Organizations with higher internal complexity creates more strategic options, which enables them to triumph over others who don’t.
Of all the changes in the basis of competing that have occurred, which do you consider to be most significant?  Why?
Competition based on learning, which I defined as correcting errors in reading signals from the environment and adapting accordingly. Any organization that learns faster than competition will dominate.
What prevents employees from taking action in a timely matter? Please explain.
The traditional hierarchical organizational structure. The speed with which this fast-changing dynamic environment is producing new information has exceeded the speed at which traditional bureaucratic hierarchy can send information up and down through its chain of command. As a result, decoupling of information, power, and responsibility has taken place. Information resides with frontline employees but power and responsibility reside with top managers. Hence, employees cannot take action in a timely fashion, which creates inefficiency and ineffective decision-making, a deadly situation in this fast-changing complex world.
“Variability is the essence of the game, not a voice to be eliminated.” Please explain.
Actually the correct quote is “Variability is the essence of the game, not a noise to be eliminated.” The more complex post — the Digital Revolution business environment — makes the mechanistic efficiency model ineffective. The very premise of Six Sigma—that we can predict, control, and reduce variability—is at odds with the principle of unpredictability and complexity in today’s business world. Organizations can use the very principles that pose significant challenges to their advantage by increasing the speed, interdependence, density of interaction, and variety of input in the organization to improve one’s chances of survival and radical innovation.
In your opinion, by what process should the next competitive advantage be achieved…and then sustained?
The vibrant ecosystem one builds outside the organization is today’s new sustainable competitive advantage. The ecosystem for many hundreds of business partners, suppliers, and other symbiotic relationships that create adjacent possibilities, contribute to, and benefit from the platform is much more difficult to replicate and less vulnerable to competitive attacks. This emergent synergy brings a huge network effect.
With regard to your phrase, “the mind versus the brain,” what’s that all about?
Eugene Wigner, who won the 1963 Nobel Prize in Physics and believed that the quantum theory applied to living systems, said “it is not possible to formulate the laws of quantum mechanics in a fully consistent way without reference to the consciousness . . . It will remain remarkable, in whatever way our future concepts may develop, that the very study of the external world led to the conclusion that the content of the consciousness is an ultimate reality.” Quantum mechanics provides the mathematical foundation for understanding the complex, interdependent, unpredictable behaviors of organizations and humans in them.
Daniel Siegel, a professor of clinical psychiatry of the UCLA Medical School, characterizes the mind as “a self-organizing, emergent process of a complex system that regulates the flow of energy and information” and the brain as “the neural mechanism shaping the flow.”  Our mind is much more than just the sum of one hundred billion neurons in our brains. The interactions among the neurons, and our interactions with the environment and other people, give rise to something much greater than the collection of neurons, and make up our emotions, thoughts, beliefs, hopes, love, dreams, and selves: the essence of what defines each of us. It has an emergent property where the whole is greater than the sum of its parts. Our mind is an organism constantly reshaping itself in response to signals from others with whom we have relationships, whereas our brains are a mechanism that facilitates the process.
What is neuroplasticity and what is its relevance to effective leadership?
We are not a product of our past experiences or upbringing. We can use the epigenetic nature of our brains to harness the power of our minds and consciously choose how we react.  This process changes the neuronal connections in our brains, changing our responses and emotions to that experience.  The recursive nature of interaction between a complex system (such as humans) and an environment means that the environment changes us—but we can change the environment as well.
Although this principle has not been formally tested or accepted by most neuroscientists, we can see how principles of quantum mechanics can inform neuroscience. Neurons firing in our brains give rise to certain conclusions and emotions in our consciousness, coupled with physiological reactions in our body, but we can use our minds to change the firing patterns of our brains. We can change the focus of the mind to actually change the neuronal connections in the brain, which was shaped by our past experiences. We can use the focus of the mind to regulate how our entire nervous systems function, how our bodies react, how we balance our emotions, how we engage in relationship with others, and how we view ourselves. This is a foundational skill for effective leadership.
Of all the competencies of quantum leadership that you discuss in Chapter 4, which seems to be the most difficult to master? Why?
Self-awareness is a hard skill to master because the subconscious nature of our automatic thoughts, which by definition are out of reach from our conscious brain. But once accessed, these programs do not exert as much power because we can use the power of our mind to change the program.
Here’s a two-part question. What is differentiation in a business context? Also, what are the major benefits of having it?
Differentiation is required for meaningful connection, which increases internal complexity of a system. Differentiation is a process of producing variation, separate and distinct from others and from the environment. Applied to leadership, differentiation among the members of an organization is required to form team cohesion, which allows your company to kick-start radical innovation. Implementing differentiation means
•  Establishing permeable yet strong personal boundaries and establishing the same at the team and organization level;
•  Facilitating collective intelligence by drawing on the wisdom of the crowd, a culmination of individual learning from trial and error;
•  Valuing and nurturing each team member’s unique skills and talents and promoting diversity of thoughts; and
•   Allowing team members to self-organize.
Here’s another two-part question. First, what is Nicolas LĂ©onard Sadi Carnot’s second law of thermodynamics? Also, what is its relevance to the development of effective leaders?
Entropy in a closed system increases over time if left unattended, and you always end up with less energy at the end of a physical process than what you started with.   Two conditions are necessary for this law of entropy to work: “left unattended” and “in a closed system.” Being left unattended means no external intervention. Work can reverse the process from decay into order at the local level. Applied to organizations, leaders must (1) create an open system and (2) curate learning interactions with an environment (work) by correctly reading signals from the environment and making necessary adaptations. In other words, learning reverses the process of decay or disorganization, hence the importance of creating a learning organization.
In your opinion, how best to establish and then nourish quantum leadership at all levels and in all areas of the given enterprise?
Start with your sphere of influence. Try these principles and see how your team changes. As you produce noticeable results, teach these principles to other teams and bring them into your fold. This is how you’ll become a companywide leader without a formal title.
Please explain your reference to the CEO as “self-replication enabler: steward of the future.”
One of the hallmark attributes of systems is that they are self-similar, meaning they replicate themselves—which contributes to building the momentum behind self-organized criticality. As a leader, you need to find a way to enable your organization to self-replicate. That’s why setting the right tone with culture is so important. Consistently communicate through actions, words, and stories how you want your culture to be.
Near the conclusion of your brilliant book, you discuss five leadership “mandates” that, in my opinion, are best viewed as leadership competencies that must be sufficient to challenges in what has become a VUCA business world. What is the key takeaway for each?
First,  decision-making:
And I quote: “Decisions must be made at the boundaries of the organization, where it interacts with others in the environment because that’s where information is most current and relevant. Employees will demand more autonomy and self-organization.”
Giles: Developing next-generation leaders who can develop their own teams and replicate the same formulas. This is how you will increase the internal complexity of your organization.
Next, Control and Accountability: Leaders “must build a team that heals itself by curating peer policy. To institute this type of self-policing, leaders must clear all hurdles in the communication by maximizing transparency (e.g.share everything in an all-hands meeting, except things that will put you in jail or devastate your company.)”
Giles: The assumption that humans need to closely supervised and told what to do is the vestiges of the industrial era when humans were just another input in the mass production process. This approach is suboptimal. Peer policy requires democratization of information, with everyone on the same page. So, it is essential for companies to remove any hinderances to complete transparency.
Then, Performance review and feedback: “Instead of annual performance reviews, leaders must provide real-time feedback, focusing on what they want to see more and less of, instead lf good or bad performance.”
Giles: One of the most important skills for leaders in the VUCA age is providing effective performance feedback that facilitates the iterative learning cycle. Feedback should not focus on what your team members are doing well in and how they need to improve. It’s useful to remember the original meaning of positive and negative feedback: it does not connote evaluation of good and bad but rather stability or change. In psychology as well as systems theory, negative feedback loops maintain stability while minimizing change. Giving negative feedback means encouraging them to do less of something to reduce the fluctuations in the output. Positive-feedback loops, in contrast, enhance or amplify changes.
Also, Risk management: “Too much is happening too fast. Have fast failures on a small scale are. “Leadership competencies must include flexibility in thinking, tolerance for ambiguity, and resilience to failures.”
Giles: instead of response manuals to risks, we need to teach develop certain leadership competencies so they can deal with risks as they come: Leadership competencies must include flexibility in thinking, tolerance for ambiguity, and resilience to failures. You can’t possibly anticipate and prescribe how they need to act in a manual when there are countless new variables producing exponential permutations and combinations to respond to.
Finally, Results: “If you have both short-term And long-term goals, you should also have both short-term and long-term incentives and rewards. Consider a five-year rolling average.”
Giles: Organizations are too focused on delivering short-term quarterly results and hence are not holing the leaders accountable for the long-term effects of their decisions, producing suboptimal results for the organization. For example, building an ecosystem that can serve as a platform for other products takes many years, which is required for radical innovation. By the time the results start showing, the original architect is long gone. We need to align the rewards with the timelines of business results we want to see..
To what extent (if any) has the writing of this book changed your perspectives on leadership development?
We need to view people as human beings not human doings. We have been missing this essential ingredient in leadership development. It must be about human development.
In your opinion, how can artificial intelligence be of greatest value to C-level executives in months and years to come? Are there any dos and don’ts for them to keep in mind in mind? Please explain.
Understanding how AI reveals the principles of radical innovation: self-organizing agents, using simple rules, lots of trial and error, diversity of input, using general intelligence (AGI) vs. narrow intelligence, and profuse trial and error. These are the principles behind successful AI and they need to be implemented in leadership development programs.
In your opinion, which of the material you provide in The New Science of Radical Innovation will be most valuable to those now preparing for a career in business or who have only recently embarked on one? Please explain.
Can’t pick just one – you need to understand the framework and the flow of logic so the framework and the individual competencies under each category make sense for you.
To first-time supervisors? Please explain.
Read the book, understand the principles of what makes an effective leader in the VUCA times, take a leadership assessment on my website, start with one thing, get comfortable, and move to the next, and teach others what you’re learning.
To C-level executives? Please explain.
You are the steward of the culture. You need to create a culture that catalyzes innovation. Make meaning for others so they walk away with correct ways of interpreting the signals from the environment. You’re a guardian of simple rules. Select the right ones, mobilize the organization around them, monitor results and change them or introduce new ones when necessary. These are not easy but you need to own them.
To the owner/CEOs of small-to-midsize companies? Please explain.
Try one thing at a time. Don’t get discouraged with your failures. Remember: the road to radical innovation is lit with the lamps of failure.
Thank you for your brilliant insights.






Editor's note: This article was written by Robert Morris and has been published with his permission. Like what you read? Subscribe to the SFRB's free daily email notice so you can be up-to-date on our latest articles. Scroll up this page to the sign-up field on your right. 

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