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Journal of the National Research University Higher School of Economics

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SSN 1995-459X print
E-ISSN 2312-9972 online
ISSN 2500-2597 online English

Editor-in-chief
Leonid Gokhberg




ANTICIPATING THE NEXT "BIG THING"

2019-04-18

Interview with Jonathan Linton

Jonathan Linton
 (PhD, MBA, PEng, BESc, BSc) is the Editor-in-Chief of the eminent international journal Technovation, Professor at the University of Sheffield (UK), a member of the Editorial Board of the Foresight and STI Governance, and the Head of the Laboratory for Science and Technology Research at HSE. We talked to Jonathan Linton on the benefits of strategic thinking, scenario planning and common misconceptions that affect decision making.



- Chief editors, like any people who make strategic decisions, should be “like giraffes”. What new concepts, tools, and best practices emerged in strategic management?

I have never seen the suggestion of or like giraffes before. It sounds a bit like a Rorschach test as how one perceives the question can let one view the biases that sit inside. I am quite fond of giraffes. A group of giraffes in South Africa let us embed our car in their herd and travel with them for about 1 kilometer. (I never realized before this event that I had a subconscious desire to be part of a herd of giraffes - so my bucket list grew longer and shorter simultaneously).

I think what you mean is having a long neck (view) to see what is off on the horizon - both good and bad. On the good side, the role of Editor-in-Chief allows you to know what people are working on long before it gets published. In the process, gaps in knowledge and literature become much more apparent. Also, what is effective and not effective in writing and interaction is much more apparent from being exposed to so much of so many people’s work.

What fascinate me as an editor are the authors that disagree so skillfully and gently with the reviewers that the reviewers are perhaps happier than they would be if they had been directly listened to. 

Now on to the actual question - it is at best difficult to come up with anything new in a mature and well-studied field like strategic management. What does occur from time-to-time is somebody who offers a different concept or communicates with such finesse that they engage a community (practice, policy, and academy) differently and allow the community to see their world in a slightly different but very helpful way. 

Having said this, it becomes very difficult to indicate what the new or next ‘big thing’ is. It does speak to the need for thinking and focusing on the process of communication. That is, how to engage and attract people so that reading research is fun as opposed to difficult or mundane.  

 

- What are the “hot issues” in strategy and leadership today?

The issues in strategy and leadership have not changed in decades. Consequently, the hot issues tend to reflect the current environment. In this regard, I would suggest that the focus in on disruption. While navigating change is often an issue. The term ‘change' is often associated with integration and working differently to do things better together. 

However, now we are seeing a great deal of uncertainty and disruption of existing systems. Therefore,  strategic and leadership issues need to focus to a much greater extent on flexibility to withstand disruption, reducing mutual dependence, capabilities in developing and adjusting to new relations, and coexistence (as opposed to partnership). While such a reality is a little depressing, the more one adjusts to such an environment the less hostile this hostile new environment is.    

 

- Innovation is a tool for “rejuvenation” in the long term. At the individual level, this tool is much easier to implement. However, a company consists of many people that possess various thinking types. How does one align these discrepancies so as to make the company rejuvenation process sustainable?

Innovation is a tool for rejuvenation in that if we are not building and growing in some dimensions, we are inevitably decaying. Innovation offers challenges to both the individual and group. The difference is that the individual typically has an easier time seeing herself/himself as innovative since he/she decided which innovation to select and which ones to opt out of. Once we get into a group in which the members have different personal affinity for innovation, it becomes apparent how difficult people can be as they dislike innovations that we are comfortable with (and perhaps the opposite is true also - they like innovations that we are uncomfortable with). The old management sound bite is “you need top management support to succeed.” The reality with innovation or any other change is that a strong determination by any group of participants to undermine anything is often sufficient to ensure failure. (In other words, you need support at the bottom, middle, and top.)

 

- What implicit traps can mislead strategic development at different levels?

I would point you back to the previous answer. Is there a stakeholder group that is strongly opposed to elements of the intended strategic direction? Identifying this trap is not always easy. A difficulty is that many fail to appreciate that if they do not put the appropriate level of consultation and explanation in upfront, many stakeholders will assume that they have been purposely excluded and will react negatively because they either feel threatened or feel it is important to demonstrate their relevance and importance by undermining decisions that in which they have not been included. 
 

- What meta-skills and strategies should one have to manage change in the VUCA world? How does one undergo transformation without losing alignment?

The V U C A world - Volatility, Uncertainty, Complexity and Ambiguity - is another way of describing what we have already discussed. There is increasing interconnectivity in the world resulting in the possibility of sudden and unexpected change throughout the globe as some significant event ripples out across all the other parts of the world. While interconnectivity can tend to make everything more robust and stable, it can have the opposite effect when there is little or no slack in the system and any change can have a tremendous ripple (domino) effect. 

For example, in the later summer of 2003 there was a power outage in the USA - I believe it was a small system failure in Ohio. The ripple effect caused a power failure in the Mid-West and northeastern United States while at the same time it crossed the border and caused a black-out in Quebec and Ontario. 

While integration and globalization has offered many benefits, we have spent relatively little attention on how we might limit contagion effects - that is, how a problem from one place quickly becomes an unanticipated emergency in many other places. There clearly is more that needs to be done to address these challenges. Industries such as aerospace and automotive (in which unexpected failures are very severe) have made great strides in predicting possible risks and designing them out of a product. Other organizations like FEMA in the United States and the Red Cross globally have developed procedures, approaches, and routines to quickly respond to unexpected and unpredicted problems. The effective treatment of an unexpected problem can result in tremendous outcomes. After maliciously contaminated Tylenol caused multiple deaths, most analysts felt that the brand would no longer be viable. However, as the manufacturer reacted quickly and skillfully, the issue was recognized as a global problem that could happen to any product that was consumed. The result is that it is much more difficult for all food and medication to be tampered with and Tylenol is still a leading brand of medication.

While we cannot predict and prepare for all possible problems we can develop skills to be able to rapidly respond to sudden events. The oil companies that had conducted VUCA scenario analysis exercises were ready for unexpected events when the oil price skyrocketed at the start of the Gulf War in Iraq. They understood what a sudden price change would do in their favor and against them. Consequently, they were able to take advantage of the opportunities and manage and minimize the damage (fallout) with the aspects that are less favorable. 

So preparation for a VUCA world involves: (1) Developing skills for staying calm under pressure so that responses are from the head and not the heart. (2) Thinking exercises regarding what are the positive and negative impacts of various unlikely extreme events so that you are at least somewhat prepared if a surprise arises. (While you are unlikely to be have considered the exact event that occurs unexpectedly, if you have been involved in these sorts of exercises, the results are likely to be helpful in making better decisions faster).

 

- Virtuous improvisation with various types of knowledge, competences, and tools is a skill available only to a few. What practices can there be?

Improvisation as a metaphor suggests keeping more things in motion than a person could normally handle. In order to do so, one must find a way of only having your attention and “hands” on any item at the exact, correct time. 

However, in this case, you are applying the concept not to activities but to the use of different types of knowledge, competencies, and skills. I see this as suggesting that you are referring to someone who has: (1) a wide range of skills available, (2) is able to determine when attention is required on a specific item (and at what times that item can be safely overlooked), and (3) finally, what perspective, knowledge, competence, and tools need to apply to a specific item at a given time. In other words, the manner in which you choose to think about and deal with different items will vary over time and situations. 

This is a question that is very relevant to a VUCA environment. It is a concern that is increasingly present, but little work is done to prepare people for making personal or professional decisions in such an environment. In Schools of Management and Economics we are still working with the primary assumption of Ceteris Paribus - all other things being equal - and Equilibrium. In such a case, it is appropriate to assume the future will be like the past. Such a simplifying assumption is convenient and quickly invoked in the applied social sciences. However in the natural sciences, it is recognized that there are three possibilities: non-steady-state, steady-state, and equilibrium. The first two being fairly common, and the last one being rare. Our desire to picture equilibrium as the common condition, when it is in fact rare, is a significant problem for decision making and strategy in the field of Business and Management. 

In terms of practices, there are a variety of practices that deal with understanding the nature of and mitigating the degree of risk and uncertainty. This returns us to the subject of VUCA, road-mapping, and foresight. Hence the examples and answer are the same as for the earlier questions, we have just gotten to the same point from a conceptually different route. It reminds me of the saying All Roads Lead to Rome. That is, VUCA is central and fundamental. Or if one wants to go back to the comparison with natural science terminology, entropy is fundamental - that is there is a tendency for increasing randomness and disorder as energy cannot be transformed from one form to another with perfect efficiency. 

 

- Companies, like people, reach the peak of “health” and “wealth”, and then begin to “age” and eventually die. How can one identify deviations that prevent one from reaching “flourishing” stage? How can one develop so as to successfully reach the “flourishing” stage and escape premature “decay” after its achievement?

To avoid decay and death there is a need to continuously grow. As we reach our limits to growth in certain dimensions, we have to be aware that we are approaching a peak and then focus on growth in another dimension. Otherwise, the amount of effort required for continued growth on the same trajectory overpowers us and we start to give up or come apart.

Through growth along multiple different dimensions, one’s ability on any of the given dimensions is enhanced. This is the result of the interdisciplinary nature of most problems and the convergence that we are seeing across many skills, fields, and technologies.  

Two examples – corporate and human. Chapparal Steel initially focused on R&D to reduce the amount of labor hours required for making a ton of steel. As the labor hours per ton came closer and closer to zero, it was recognized that the cost of improvement was becoming much more expensive per hour of labor saved. A decision was made to change the focus of R&D to reducing the amount of energy to produce a ton of steel. The next change of focus was to optimize the value of by-products. For by-products, one of the discoveries was that slag from steel production could be used as an ingredient for Portland cement. The recognition of an application of this by-product of steel production resulted in slag becoming a product that was sold (to be used to make other products) as opposed to being a waste that was an expense (requiring payment for removal/disposal). 

The human example is that one of the ways in which Alzheimer’s disease can be combatted is working on complex intellectual tasks - such as learning a new language. Growing intellectually can protect against diseases associated with decay. In summary, the act of growth renews people and organizations so that they do not decay and/or die.  

 

- What do cognitive innovations look like today and what role do they play?

When I think of a cognitive innovation, I think of how one thinks about future events differently. I do not see much new in this area and do not expect to see anything new as people have been thinking about the future for a long time. This returns me to one of the earlier themes relating to foresight related activities such as scenario analysis. However, I do see improvement in information processing allowing for better simulation tools and exercises to assist with activities such as scenario analysis. 

 

 - What factors should one have in mind and what actions should one undertake in order to successfully carry out Agile transformations?

For an agile transformation, a number of criteria are key:

1) People dislike change - the more change that is required of individuals, the more difficult it is going to be to succeed with agile transformation. Transformation occurs best when people do not have to adapt their behavior as part of the change. 

2) People will change to reduce risk - where change is required it is most likely to be embraced when the result is reducing risk or discomfort as opposed to the potential of gaining benefit. 

3) Protect against significant problems through redundancy and slack resources.

4) Make postponing decisions as economical as possible - as there are many situations that cannot be predicted in times of transformations, the more one is able to postpone decision making, the better off one is. By postponing decision making the greatest amount if information and hopefully certainty can be obtained and flexibility is maximized.

 

 - What is the best decision you made in the last year?

My best decision was to think about having some positive content in my life each day. At the end of the day - everyday - I should be able to say today I had at least one enjoyable experience and identify it. The experience could be something seemingly minor - enjoying the warmth of the sun on your face or listening to something that makes you feel intellectually and or emotionally satisfied (such as music or comedy). Once you get into this habit, you will find that you have more days with many positive experiences and few days with none. 

This discipline or commitment prevents one from temporarily suspending one’s enjoyment of life due to VUCA or other life challenges. In doing so, you are happier and more robust against emotional or physical problems. 

What is wonderful is some days or weeks one can reflect back and identify all sorts of things that made you feel fulfilled and happy, but also feel like a great deal of work-related activities were accomplished. 

 

- What was your biggest surprise professionally over the past year?

My biggest surprise has been in terms of how Brexit has been handled by a wide range or organizations and individuals. Many seemingly sophisticated organizations have not only failed to prepare themselves for the changes that are associated with Brexit, but have in fact taken on changes (contingencies) that are clearly self-damaging in the face of such a disruptive single event.  

- What influences your inspiration?

My partner influences my inspiration. She and I talk through all sorts of things. It is really helpful to have a sounding board. A good sounding board helps you to “hear” what you are saying and alerts you if to the possibility of bias unknowingly creeping into your thought process. 

 
Interview held by Marina Boykova, executive editor of Foresight and STI Governance

 
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