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The Five Obstacles to Growth

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May 12, 2016

In the course of my work helping enterprises design breakthrough solutions to impact and growth, I have found there are five general patterns that help us understand why an enterprise might not experience growth, or if they do, why that growth might not maximize its true potential.

The five inhibitors, may not all apply to an enterprise, and while they suggest a logical sequence, an order I use when thinking about a new venture, these are better thought as inter-related ideas, that together provide answers to five questions that correspond to these statements.

Often, it is likely that one might only be looking at the implications of change in the Context of the enterprise and the opportunities or risks it creates. Or, we might just be exploring the opportunities created by new approaches to Design. However, to truly maximize the impact of any of these interventions, one must invariably look at whether all these issues have been satisfactorily addressed in a systemic way so that they together maximize the opportunity to realize the true potential of the enterprise.

  1. Enterprises do not understand themselves well enough.
    A Living Enterprise, a dynamic co-evolving entity, is the expression of an idea. The idea originates in a cognitive frame that describes its understanding of itself in relation to its context and the systems it serves.

If the enterprise is new, as in the case of a startup or a new venture, it is the idea that expresses the entrepreneur’s vision for what needs to happen in order to change a target system.

If the enterprise has been around for a while, the frame is refined and over a period of time is reinforced by its experiences and learning in the course of its operations.

As its routines get increasingly codified over time and knowledge becomes refined and specialized, the committment to the frame becomes stronger. It is quite natural too, that these frames become invalid, a fact that reflects in sub-optimal or dysfunctional results.

It is in this sense that an organization needs to deeply understand the foundational ideas and frames on which it is designed, and regularly examine their validity, a need that is becoming urgent and more frequent given the acceleration in change we are experiencing now.

Frames inappropriate to a current and/or evolving context are one of the most powerful obstacles to growth. When we find ourselves at such dramatically evolving moment in history, such as the one we are in now, there is an urgent need for something I call a Frameshift.

  1. Enterprises do not understand their Contexts, Capabilities, and most crucially, the Creative Value Ecosystem in which they play a role.
    All value is dynamically co-created by participants in the Creative Value System of which the enterprise is a part. Value is created at the intersection of the Creative Ecosystem with the Context in which it operates and the Capabilities that various particpants bring to the process or can leverage.

A deep understanding of all these three interacting elements is crucial to maximizing value creation. This understanding also needs to be dynamic in order to understand how these things have evolved to the state they are in at the present moment and more importantly, how these will potentially evolve in the immediate and distant future.

Understanding the Creative Ecosystem involves understanding the organizational relationship between the various entities and stakeholders that interact and orchestrate resources and capabilities to co-create value. It is that co-creation which originates in and is aligned with the foundational frame and is the basis for the Enterprise’s Mission.

It is obvious that the Creative Ecosystem is embedded in a Context, all the inter-related entities that lie outside the defined boundaries of the Value Creating Ecosystem but have an influence on the value creating enterprise. The competition within the industry, the economies and societies in which the systems find themselves are all dynamically interlinked and evolving too. Understanding the dynamics of these superordinate systems, the trends and drivers operating now, and the vectors of change that will shape them in future must inform the approaches to growth.

When these have not been systematically examined and understood, they carry within them the potential for surprises and risks, but more importantly latent opportunities which could become the engines for growth.

There is within them a flux which the savvy entrepreneur anticipates and capitalizes on.

  1. Their interventions in the Value Ecosystem, manifested in their Value Propositons and through their Offerings, are incomplete and temporally inflexible.
    The Enterprise brings its vision of the new value creating system into being through its value proposition and offerings.

Without going into much detail about value propositions I want to emphasize that these should stem from the understanding that enterprises are co-creators and participants in the value creating ecosystem. The extent of participation might vary, but the propositions must add to and complement the existing or desired value creation processes and systems, which are dynamic and evolve over time.

The offerings form one of two key interventions an enterprise must execute in order to realize its mission to bring about positive, distinctive and enduring impact.

In additon to its offerings, an enterprise must also, at least in its early stages, before it becomes a viable enterprise, consider the interventions necessary to shift the existing ecosystem or build one ab-initio around its own idea.

It is in that sense that the intervention might not be complete. Further, this latter intervention demonstrates the enterprise’s mastery of Systems Innovation – the ability to navigate and bring about a change in a complex system.

Temporal inflexibility has been addressed in ideas such as agile and adaptive to some extent. However, it also implies linking offerings to changing frames discussed earlier.

  1. They do not design well.
    I am talking about hte process of designing. We have mastered the processes for designing products, services and business models perhaps. The practice of Design Thinking has caught people’s imagination and there is increasing interest in that practice as well.

What then do I mean when i say that Enterprises do not maximize their opportunity when they do not design well?

I think of design differently in this context. Design is that ability to bring multiple lenses and perspectives to any situation, and reconcile the deliberate parallax so created with multiple capabilties, hitherto not leveraged in the traditional practice of design. Some of those capablities are latent within the participants in the ecosystem – we need to learn to see and recognize them. We need to think beyonf designing products and services in the emerging context of cocreating value ecosystems. We need to be creating Design Systems and Architectures that empower and enable particpants in the ecosystem to become those cocreators of value. We need to turn the Value Ecosystem into a coevolving living enterprise – a living engine of value creation.

This perspective is in my opinion the true meaning of design thinking, and we need to do this collaboratively. That is when we design well.

  1. They do not Practice being a true Living Enterprise.
    The Living Enterprise is a dynamic co-evolving entity in my argument as I have made amply clear by now. Practicing being such an enterprise implies that all of these things that we describe here that drive growth and impact are not activities that one undertakes once in a while – they are embodied in practice. It is when and only when we become such practitioners, can we sustainably deliver enduring, positive and distinctive impact and growth.

On Path-dependence and Foresight

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October 31, 2015

In my previous posts I had focused on understanding the nature of value, the ecosystems that create that value with the participation of a multitude of stakeholders, and how these ecosystems and the contexts in which they live are dynamic and co-evolving.

I also touched upon the enterprise as a participant in the ecosystem, though the extent to which it co-creates and is completely integral to the value creation act is a strategic choice, something that it must consider in the evolving world.

Thinking of value ecosystems and the platforms that inform it, one is naturally led to thinking in terms of economies – not just economies of exchange (see Bill Sharpe – Economies of Life), but in the broader sense of all dimensions of value. The core challenge an enterprise that has an intent to make the ecosystem better faces, is to understand the economics of value – ‘what is the currency that makes meaning for all the stakeholders in the system?’.

That understanding then becomes the basis of creating context, content, community and commerce.

In my last post I talked about a continuum of time from the past into the future on which value ecosystems and enterprises find themselves. One of the concepts I find useful in this context is the notion of path-dependence.

Manuel de Landa in his excellent book – A thousand years of non=linear history, opened my eyes to the notion, that the history we are most comfortable with, is mostly a linear narrative. A sequence of events that neatly fit together into a storyline, something we construct to give meaning to our own lives, as much as we do collectively as enterprises and societies.

De Landa vividly explains how that is far from the truth. All histories are replete with chance events, some externally driven, some the result of deliberate choices. (There is much literature on the idea of path-dependence and path-creation other than de Landa).

Out of this complex interplay of forces and actions, and of course the complexity increases the higher up one goes into the systems hierarchy, paths are created that are neither foreordained nor obvious. In the process of creating neat explanations, we often leave out these contingencies, things that could have been different if only some other conditions had been present or we had acted differently.

This realization is extremely crucial from the point of view of how we see the future. Extrapolating our preferred narratives into the future can be very misleading if it ignores path-dependence. The future too just like history will result from a confluence and collision of many drivers and vectors of change, and as much as we are students of history, we must be students of the future in order to act meaningfully now – in order to create the paths that will lead to desired outcomes for all.

Our purpose after all is to make an enduring impact, and we must guide our coevolution along the paths that open up or we actively create.

I will elaborate further in other posts on ideas I believe are relevant to this practice of foresight, but for now, I will mention a couple of key concepts that guide me.

Firstly, the practice of foresight is not some isolated thing one does, but integral to the practice of being that seamlessly integrates histories, the many futures, and the now into one seamless whole.

I like the concept of time horizons – every entity requires time to re-architect itself to be on a different path – the more radically different it is, the more challenging the change and the time it will take to respond. Every enterprise must therefore have a sense of how much into the future it must be able to anticipate if it should be able to respond in a timely fashion when conditions demand so.

Accommodating the future and its many possibilities is fundamentally an architectural challenge, one of knowing possible, plausible and preferred variations that one must accommodate in one’s being.

One response to this need to accommodate variation is agile and lean thinking, and the notion of discovery-driven planning etc., but one can easily be blinded to that many paths that run alongside the one you are on. A foresight practice must inform all these approaches, or one might not realize that a radically different future is coming to birth that might eventually invalidate one’s designs.

Finally, a foresight practice is first and foremost a cognitive practice. It is about opening up one’s mind – traveling into the future like a stranger on an adventure in unknown lands. If all you come back with are familiar stories one might say you have not experienced the future.

That then brings us back to frames – the one we discussed in my previous post. If you carried your frames into explorations of the future, you probably saw only one part of the proverbial elephant. As extensive as the exploration of the outside world is, as deep must be the inquiry into one’s own deeper truths – one’s architecture, in order to develop meaningful foresight.