This digest was created in real-time during the meeting, based on the speaker's presentation(s) and comments from the audience. The content should not be viewed as an official transcript of the meeting, but only as an interpretation by a single individual. Lapses, grammatical errors, and typing mistakes may not have been corrected. Questions about content should be directed to the originator. The digest has been made available for purposes of scholarship, posted on the Coevolving Innovations web site by David Ing.

[Thomas Stewart]

Roger Martin has been dean for 9 years, and has renewed

• Harvard graduate
• Monitor Group
• First book, Responsibility Virus

[Dean and Premier’s Research Chair in Productivity and Competitiveness and Director, AIC Institute for Corporate Citizenship, Rotman School; Author, The Opposable Mind: How Successful Leaders Win Through Integrative Thinking (Harvard Business School Press, Fall 2007); The Responsibility Virus: How Control Freaks, Shrinking Violets – and the Rest of Us – Can Harness the Power of True Partnership(Basic Books, 2002); Co-Author, The Future of MBA – The MBA of the Future (working title for Oxford University Press, Fall 2007)]

[Roger Martin]

Will talk about integrating thinking

• For past 7 years, have been interviewing people who are successful
• Not looking at what they do, because it's related to context, but looking upstream
• Have interviewed business rock stars
• The way these people think, and how they got that way

F. Scott Fitzgerald: hold two opposing ideas in mind, and still function

• Central to integrative thinking
• Importance of models and models clash in the world, for leaders and decision-makers
• We make sense of the world
• We often don't realize that we're making sense of the world with models

Clip:  John Sterman:  modeling process happening unconsciously, and you can't turn it off

• What you're seeing  really isn't there
• Question of which model

Our models become reality

• This matters, because as we model, we complete to completely different views of things, that we confuse with reality
• There are clashing models in business all of the time:  low price, shareholder value, ...
• Perpetual model clash

Model clash leads to fundamental choice:  in the face of clashing models, fear and avoid

• The follow a strategy of crush it, or give it:  resulting in no model clash
• Argue most common, because people think that model clash is bad

Alternative choice to seek out and leverage:

• Enjoy it, get a new insight before proceeding

Example:  Izzy Sharp, built the best luxury hotel chain in the world

• Clash between model of first hotel (Four Season Motor Inn on Jarvis, 125 motels, with intimacy) and second hotel (Four Seasons Conference hotel) across from City Hall, with full amenities

Clip:  Izzy Sharp, which hotel most important?

• Four Seasons London:  instant success, always profitable
• London hotel became model:  mid-sized hotels of exceptional quality
• Purpose to be recognized as the best in every location, where we were
• In 1970s, in every Canadian city with a 5-star hotel
• First to offer free shampoo, 24 hour hotels, etc.
• Listened to customers
• Luxury in the 1970s was architecture and decor, decided to redefine luxury as service

Rather than accepting one or the other, took parts of the both models

• Got price premium by paying attention to things that other competitors didn't
• An environment like a home or an office
• Business travellers missed the facilities of the office, and amenities at home
• Became copied by other hotels who didn't know why

Thus, update of F. Scott Fitzgerald's quote:

• (see slide)

How do they do this, by what process of thinking?

• The make decisions differently from other human beings
• Salience --> causality --> architecture --> resolution

Unhelpful:

• Salience:  limit variables under consideration
• Causality: simplify considerations, e.g. straight line between X and Y
• Architecture: sequential or independent consideration of the piece parts
• Resolution:  trade-offs, making tough choices between two things rather than making choices non-tough

Integrative thinkers:

• Think about more features as salient, considering more factors
• Consider non-linear causality
• Architecture:  Keep the whole in mind, while working in the parts
• Search for creative resolution of tensions, as part of their jobs
• When they don't get to a great choice, they go back to the bottom, and think whether they've got the right variables (salience)

It's not that people aren't decisive, it's to search for creative solutions to tensions

• They need to think more

John Bachman, Edward Jones, second largest broker in the U.S., and one of the best places to think in the company

Clip, John Bachman:

• No vertical integration, prefer outsourcing to simplify lives
• McDonald's could be the best bakery, or best potato company, but they're distributors

McDonald's as salient to him, which isn't salient to his competitors

Non-linear thinking is a trait of Jack Welch, even though he portrays himself as straightfoward

Clip: Jack Welch

• Looking at budget, hear the competitors are tough, etc.
• Negotiating targets
• Build trust: how to get competition, and how to do better than prior year
• Have negotiation, because you get paid on that

Relationship between the nature of competition, and dreaming

Saw this, willing to compensate for more complicated relationship

Clip: Nandan Niekani, CEO, Infosys

• Get the parts, grow a strategy
• Multidimensional view of business

Search for creative resolution of tensions

A.G. Laffee, getting more innovation at lower cost, rather than increasing cost

Clip:  Laffee

• P&G principal scientists angry, thinking that wanted less innovation, no wanted more
• Scientists thought about outsourcing innovation lab, no we want to think about improving people's lives
• Now, see that people are picking up innovation
• Were below average on commercializing, from 15% to 65%
• An "and" versus an "or":  anyone can do "or", but not going to win if doing a trade-off game

Take a bad trade-off, blame himself

Case:  1994 Festival of Festivals

• Piers Handling, on what's salient

Clip: Piers Handling

• Different funding structural
• Stratford would go to philantropics
• Festival of Festival would go to business, they've got a product to sell and want to reach an audience
• Risk of selling, that can reduce by having multiple companies

Causality?

Clip: Piers Handling:

• Audience in the community, not just audience, but also directors
• Canadian film industry
• Some criticism of creating a ghetto
• Care and attention comes through to an audience

Architecture?

Clip:  Piers Handling:

• Larger and larger snowball

Key choices:  two competing models, of jury festivals (Cannes, to get Palme d'Or, buzz) versus an inclusive non-jury festival embracing community (with no buzz)

Clip: Piers Handling

• Toronto 1976, three founders
• Didn't want to follow European model
  • Usually 20 films in competition
  • Jury of international experts
  • Large hullabaloo about films
• Non-competitive festival doesn't have the same profile
  • 10 experts are arbiters of taste, 1 film happy, 19 unhappy
• Non-competitive means more involvement
• Key prize is the audience award
• Designed to be inclusive, for the audience
• Festival for the industry came later

Thus, innovation is from award from the audience, which is inclusive

Fundamental choice:

• Fear and avoid or Seek and leverage?

How to become a more integrative thinker

• Your personal knowledge system
• Three important pieces
• 1.  All of us have a Stance, of what we want to accomplish that guides us to create and use ...
• 2. ... Tools ... which add to 
• 3. ... Experiences ...

e.g. MBA prospects sees executives making decisions, need to go back to school to change stance

Stance, three aspects

• Stance on the world, and my place in the the world
• Can leverage opposing models

Example:  Victoria Hale, first non-profit pharmaceutical company, found cure to African black fever

• Saw model of creating medicines for people who can pay, or public health
• Nothing for third world countries that can't pay

Clip: Victoria Hale

• Why not a not-for-profit sponsored pharma company
• Get through development phase

Stance on existing models, they're constructions, not reality

Clip: Victoria Hale:

• Messier

Stance:  models are there to be opposed, not adhered

Clip:  Victoria Hale

• Some people field oriented and relationship, others technically oriented
• Need them to come together

Different points of view are important

Clip:  Victoria Hale

• Dr. Why not?

Self

Clip: Victoria Hale

• As a scientist, should try it

Believe job is to for individuals to find choices, not make choices

Clip: Victoria Hale

• Looking for pieces to put together

Know when have give selves time to find a solution

Clip: Victoria Hale

• Know when I want to know, give it time

Conventional stance versus an Integrative Stance

• (Summary chart)

[Questions]

Individual integrative thinker, role of emotions?

• There are a lot of emotional attributes, researching it right now (with Melanie)
• People are frightened into left and right side, frightened of complexity, and the need to act immediately
• Confidence and calm come with experience

When model runs into tensions, need to rethink it

• First sketch in Santa Cruz, 6 years ago
• Frontier for the work, now working on the stance
• Interested in the phenomenon of the tools and experience for the future, feedback from people

Mindset, Canadians aren't the type to go forward without compromise?  Don't have a culture of innovation?

• Hope you're totally wrong
• In the competitiveness, it's conventional or stylized, e.g. are we going to be like Americans who are too harse and individualistic, versus are we going to be poor and nice
• Part of the task is making sure that policy makers will think more, stew on it, work on more complicated solutions
• Learning experience on competitiveness:  there isn't just one or two policy-makers, getting to the large number is a problem

Strategy about making trade-offs and choices.  Compromise instead?  How to ensure not a sub-compromise.

• It has a lot to do with the experience
• It's absolutely about making choices, but integrative thinkers see an unreasonable choice and will wait
• Not compromise, it's a better model

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