Returning to our earlier example, Charles Merrill’s imaginative ideas were developed in communication with others, particularly researcher Ted Braun, and led to collective actions: research, and efforts to engage and change the ideas of an often recalcitrant company.11 The imaginative process extended beyond the mind of an individual, as Merrill worked to make his and Braun’s vision come alive in the minds and habits of investors, employees, and early adopting customers.
WHAT STOPS BIG COMPANIES FROM BEING IMAGINATIVE
Turning a company or business ecosystem into an imagination machine requires a focus not only on imaginative individuals but also on the entire collective imagination cycle in which individuals are embedded. Looking at the steps in Exhibit 4, we can identify the points at which collective imagination can fail in big companies.
- Size leads to less outside exposure. Imagination is triggered by surprising information—new patterns of data, a question from a different perspective, interesting encounters that don’t fit within one’s current model of the world. We can think of companies as spheres: the greater the radius, the lower the ratio of surface area to volume. Larger companies become miniature societies in themselves, with proportionally more people tethered within the society and fewer connecting with the outside world. When there is less exposure to what is surprising and unpredictable, there is less to feed the imagination.
- The main focus is on averages rather than exceptions (accidents, anomalies, and new analogies). Another bottleneck in perception is the tendency to overlook outliers. This is partly due to reporting: we report in averages—period average sales figures and performance reviews for example—so that people higher up can get an overall picture. This may be an efficient approximation, but it means that anomalies, which may be change signals or sources of inspiration, aren’t often given attention. Leaders might have something to learn from an incidental failed or successful sale, which could prompt their imagination. In terms of personnel, it is often safer to keep someone around who is predictably “pretty good,” rather than people with more erratic profiles who may help prompt the imagination. Organizations tend to reward the predictably average.
- Mental models become stuck. The mental models of a successful organization tend to become uniform (a downside of overemphasizing alignment) and entrenched. For example, an officer in the British army before the Second World War, J.F.C. Fuller, tried to introduce the concept of tank warfare, but because everyone was used to fighting on horseback, the idea was dropped.12 He insightfully imagined what warfare would look like with tanks, but his vision couldn’t be taken up because it didn’t fit with the prevailing way of seeing things. This problem is compounded by a lack of cognitive diversity and a lack of self-awareness of mental models. The inherited mental model is often implicit and treated as common sense or mistaken for objective reality.
- The tyranny of metrics takes over. Companies often focus on executing one business model, and its associated targets and metrics become the main ways of judging success. But the dominance of such metrics can come at the expense of seeing possibilities and dabbling with new models. When there is a standard, clear way to measure and reward success, efforts in any other direction can look like failures or a waste of time. We account for the things that are easily accounted for, at the expense of important things that are not, like imagination.
- Roles become highly specified. In large companies it can make little sense to act outside what you are expected to accomplish. But imagination often works by following up on serendipitous moments, which can lead you far from what you expected you would be doing. The refrigerator, for example, was invented in 1854 by James Harrison, an Australian working as a self-employed printer. He noticed that when he used ether to clean the movable type of the printing press, the metal felt curiously cold afterwards. He realized that the evaporating vapor removed heat from the object, and he set about experimenting (in a cave outside of town, because the experiments were explosive), eventually patenting a “refrigerating machine.”13 It’s a challenge for large companies to give employees this kind of autonomy to explore.
- Social transmission is lacking. Even if individuals are imaginative, there might be problems with the transmission of ideas across a group. One can imagine a company full of people with rich mental models and strong abilities to elaborate imaginatively, but where people don’t work together or collectively consider new questions and ideas. It’s harder to diffuse ideas and have shared conversations across a larger organization. Communication can be impeded by a high bar for proposing new ideas, a fear of failure, a lack of incentives to share, and restrictive reporting and communication protocols. Thus, the company does not make the best use of individual imaginations.
- Imagination is seen as being only mental. Roy Rosin, formerly vice president of innovation at Intuit, noted to the authors that “the best ideas are the ones that have had the most chance to evolve.” A key part of the imaginative process is action taken beyond mere communication: doing research, testing out early-stage efforts, scaling an imaginative idea. Without these efforts to shape or prod the world, there is no feedback and no surprising data to trigger further elaboration. Self-restriction often follows success: Walmart developed its big box retailer model, and then focused on refining it; PayPal went through multiple major pivots but is now exploiting its current, successful model; Twitter (then called Odeo) once gave its employees two weeks to come up with imaginative ideas to transform and save the company but has now settled into its micro-blogging platform.14 Imagination ends up being treated as only a mental act, or a periodic cultural intervention, not a driver of research, speculative experiments, prototyping, or continuous transformation. The less effort we put into acting on imaginative suggestions, the less imagination we stimulate, and the more likely it is we will miss opportunities for innovation and growth
BUILDING AN IMAGINATION MACHINE
How can we build an imagination machine—that is, a business where the imaginations of individuals working together are fully supported by design? We are only just beginning to understand how companies can compete on imagination, but here are some starting points.
Contact with the Unknown
An imaginative company would ensure that its members are regularly exposed to the unfamiliar and unknown, and trained to treasure it. This could involve sending staff on short secondments to very different work environments; the executive team spending time in places where their product is unsuccessful or unknown; and tailoring daily information flows to ensure that people are not simply reading business news or their habitual websites but encountering a variety of imagination-triggering inputs. Such a firm would take the task of delivering personalized, enriching, surprising information to its employees as seriously as it takes any other aspect of the business, because it would know that this feeds the imaginative capacity of the company.
Do you take deliberate steps to expose yourself and your employees to the unfamiliar, to create inspiration and enrich their mental models?
A Focus on Anomalies
The imagination machine would ensure that interesting anomalies are reported alongside averages and expected results. Each executive would perhaps be required to present at least one intriguing, thought-provoking, or befuddling thing they encountered in their domain once a week—whether the outlier is a particular person, an unexpected outcome of an experiment, something a group did on its own initiative, or an unusual observation. This practice would ensure that surprising information is shared rather than pushed aside, with the idea that some of these anomalies would provoke people’s imaginations.
Does your company focus on anomalies or averages?
Explicit Mental Models
A company that takes imagination seriously would be conscious of how mental models are choices rather than inevitabilities. The company would teach employees that the brain’s beliefs about reality are merely shifting probabilities, knowing that the collective capacity to entertain alternative views is aided by this awareness. The company would also articulate and share the core elements of the collective mental model on which the current business model rests. For example, a company might say “our business is based on the belief that people will need physical office supplies (we are 95% confident this will remain true for ten years) and that these will be distributed from factories (we’ve downgraded our confidence about this to 75% over the past few years).” Such self-awareness of assumptions and mental models facilitates the navigation and choice of alternative ones.
How explicit are the shared assumptions that constitute the collective mental model of your business? Are alternative framings of issues, challenges, and facts often discussed and entertained?
Counterfactual as well as Factual Skills
The imaginative company would focus on cultivating the mental skills underpinning imaginative thinking. This would not mean simply hiring people who present themselves as creative or who have experie
nce in creative industries. Rather, it would be about testing for the skills supporting imagination—skills that might show up in unexpected people. Candidates could be tested on contingent thinking (What are five “what if” questions you would ask in this business situation?); on their analogical ability (What analogies would be appropriate in this case? What is this an example of?); on their ability to expand a vague starting point into an interesting proposal; and on the Renaissance-person criterion of the depth and breadth of their worldview—the richness of the mental models they would bring to bear.
Do “what if” questions routinely get shot down with a “that’s not the case” type of response? Does your company assess, hire for, and cultivate counterfactual thinking? How often do you try to think of and learn from analogies?
An imagination machine would also understand and cultivate playfulness: improvised, imaginative exploration. Play involves testing out things that one can easily do but might not have thought to try yet, without much premeditation. Play can be mental (throwing around ideas) and physical (trying things out). Returning to J.F.C. Fuller and the British army, the military might have said “sure, let’s try training with some tanks.” This could be the precursor to a more serious experiment, but nonetheless a useful first step in trying out an idea. A company fostering playfulness would appreciate randomness and messiness as much as order, allowing people to tinker and customize, suggest idiosyncratic ideas in meetings, try out modifications to processes, and be forgiven for trying new things without permission. Allowing low-cost action and feedback is key to supporting the cycle of imagination.
Would you describe your company as playful? What would be different if it was? Is there a balance of messiness and order in your company?
Open Competition of Ideas
An imaginative company would also foster the expression and competition of ideas. This could be done in informal ways, with the CEO regularly soliciting ideas from her team, or more formally in firm-wide competitions. Employees could be asked provoking questions, and prizes could be offered for the most stimulating responses. The strategy team could also share stories and historical examples reminding people just how weird some things (fridges, staplers, printed books, gunpowder, cars) felt when they were completely new but how unexceptional they seem now. Recognizing how odd new things once seemed can help encourage consideration of interesting but unusual and untested ideas.
Are your employees encouraged to generate and propose imaginative ideas? What challenges or opportunities in your company or in the world could be the basis for a competition of ideas from across the firm?
Whether imagination works well is tied to how uniform and rigid our collective worldview is. One reason Polaroid was unable to take advantage of digital cameras is that the company was dominated by chemists. Some employees could imagine the future of digital cameras, but they failed to persuade the leadership.15 Weak cognitive diversity in the executive team limited imagination. Diversity is aided by but not limited to deployment of people with different backgrounds. It can also be achieved by individuals who are able to change vantage points and who have absorbed various worldviews and perspectives over their lives. Cognitive diversity requires people who think in different ways and an environment that supports a competition of ideas.
Does your executive team comprise individuals who think in different ways and are encouraged to do so? Do discussions typically navigate contradictory viewpoints? Do you measure and cultivate cognitive diversity?
Evolving Routines and Models
Over time, the patterns of collective action in a company shape the dominant set of mental habits, roles, and expectations, which can become a self-sustaining system. The imagination machine is able to avoid such entrenchment by allowing routines and models to continuously evolve. Rather than being self-protecting, it becomes a self-tuning company, evolving and refining practices based on data and imagination. This may involve giving up on the vision that processes can or should be completely optimized for efficiency or perfect uniformity. Sometimes it is more important to preempt change, to allow something to change for the sake of freeing up room for subsequent innovations. Even if a routine is good in itself, there is an opportunity cost in allowing paths to become trenches and imagination to become sidelined.
How often have the processes you are part of been reimagined? Is your company set up to evolve its ways of working? How hard is it to change entrenched ways of doing things?
The idea that entrepreneurs imagine new businesses and big companies focus only on managing established ones at scale is falling apart. All companies, large ones included, face increasingly unpredictable environments and the prospect of stagnation or disruption if they do not continuously innovate. Fortunately, business environments are increasingly malleable, offering many new opportunities to create and capture value, if we can first imagine them. As well as competing on efficiency, we must increasingly compete on imagination. We need to get serious about understanding this capacity, how it works individually and collectively, and how to deploy it reliably and powerfully, especially in large businesses that have been successful through one way of doing and seeing things.