How Constraints Can Boost Your Innovation and Growth
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Episode B-6 Transcript:
This episode is brought to you by Business Advancement Incorporated, enabling successful leaders and companies to accelerate to their next level of growth, on the web at BusinessAdvance.com. And now, here’s Pam and Scott.
Pam Harper: Thanks, Chris. I’m Pam Harper, Founding Partner and CEO of Business Advancement Incorporated. And right across to me as always is my business partner and husband, Scott Harper. Hi, Scott.
Scott Harper: Hi, Pam. As always, it’s great to join you again for another episode of Growth Igniters Radio with Pam Harper and Scott Harper®. As always, our purpose is to spark new insights, inspiration, and immediately useful ideas for visionary leaders — and their companies — to accelerate to their next level of growth and success. So, Pam, this is one of a series of special episodes that we’re featuring the summer.
Pam Harper: That’s right, Scott. From May 17th until August 23rd, we’re featuring some of our most popular book pairing episodes and interviews with best-selling business authors. We’re doing this for 2 reasons:
First, We have many, many more listeners than we had when we first featured some of these episodes. If you’re one of those people, welcome.
Second, There’s so much happening so quickly in the world. One of the things we’ve found especially helpful is to think about what has happened since the last time we read a book or listened to an interview. And it’s always sparked some type of “new” insight or idea.
In fact, that’s exactly what happened for us. During this time, we’re focusing on developing additional offerings for visionary leaders to take themselves and their companies to unprecedented levels of growth and success. These will be available later this summer.
So if you’re not a new listener, we encourage you to listen with “fresh ears.”
Scott Harper: That’s right. So, what trends are you noticing with your customers, partners, competitors, employees, technology, or other things that affect your business and your success? And, what’s a new idea from this episode that could be applied to create value? Maybe it’s a different way of thinking about your market strategy. Perhaps it’s a new way of engaging employees or other stakeholders to collaborate to create new value. Or perhaps it’s something else.
Pam Harper: The point is, when you’re focused on creating new value, it’s important to notice what’s different in the world since the last time you looked. When you do that on a regular basis, it’s much more likely that you’ll discover the new ideas that will get you there.
Scott Harper: And so with that, let’s pick up on this week’s topic, presented as it was originally released. Stay with us…
Pam Harper: As you know Scott, we’ve been speaking about how the environment in which we all work supports us in many ways, but also constrains us as well. It’s quite a paradox. Now, many people speak about constraints as being pretty much all negative, but you and I − we have a different perspective.
Scott Harper: Yeah, we do.
Pam Harper: Constraints can have their good side. And learning to embrace constraints can actually give us a positive edge, right?
Scott Harper: Yeah.
Pam Harper: Another person who very much shares this perspective, and then some is today’s guest, Whitney Johnson. She is the author of Disrupt Yourself: Putting the Power of Disruptive Innovation to Work. Whitney was our guest in episode 41 where we spoke about her book and driving innovation through personal disruption.
Whitney co-founded the boutique investment firm Rose Park Advisors with Clayton Christensen, and was an institutional investor-ranked analyst for eight consecutive years, including at Merrill Lynch. She’s a frequent contributor to the Harvard Business Review and is also author of the 2012 book Dare, Dream, Do. Whitney is widely recognized for her contributions, including being named a future thinker finalist by Management Thinkers50 in 2013, and was one of Fortune’s fifty-five most influential women on Twitter in 2014. Whitney’s also the co-founder of the Forty Over 40 list, recognizing women who are reinventing, disrupting and making an impact. You can see Whitney’s full bio by going to GrowthIgnitersRadio.com, Episode 65. With that, we welcome Whitney back to Growth Igniters Radio.
Whitney Johnson: Thank you. I’m delighted to be here.
Pam Harper: We’re so glad you’re here. This is such an incredible topic. I feel like we’re soul mates a little bit on this, because most people view constraints as negatives. We were fascinated. You have a whole chapter in your book where you talk about this. Can you tell us a little bit about why you believe that constraints can be positives, especially for disruptive innovation?
Whitney Johnson: One of the most daunting things for me ever is when someone says, “Can you write a piece − write about anything you want.” I just think, “Ugh.” I would much rather have an editor give me a topic, any topic no matter how ridiculous, with a word count and a deadline. It’s just so much easier than starting with a blank page. Then I think about Jaws. We all know that movie, and yet some of the iconic scenes in that film came about because the mechanical shark that Steven Spielberg wanted to use, it didn’t work. He’s over budget. He’s behind schedule and he finally decided to film the scene from the shark’s point of view and let the music − and we can all hear that music in our head − and imagination do the rest. The question as I think about these two different examples, for me, albeit rhetorical, is − was Spielberg, and am I, when I write, successful in spite of or because of constraints? My thesis, obviously, is that it’s because of.
Scott Harper: You’ve got a point there. Can you tell us a little bit more about what makes living in a more constrained environment easier to handle?
Whitney Johnson: What’s interesting is that they give us faster feedback. If you think about when you’re trying something new, which is effectively upending your status quo, you want and you actually need lots of feedback to figure out if what you’re doing is working. If you think about skateboarders, they’re some of the quickest learners in the world because they receive this incredibly fast and useful feedback. That’s skateboarders, but it also applies when you’re trying to put a product or an idea out into the marketplace.
Pam Harper: That’s true. Now, just to clarify, when we’re talking about feedback we’re talking about more than what a lot of people think about feedback which is, “Oh Whitney, that’s great.” We’re talking about much, much more than that. Can you go into what you mean by feedback, just to clarify?
Whitney Johnson: Absolutely. In fact, I was thinking about that the other day. That’s actually not feedback; it’s a compliment. At some level they liked it or they didn’t, but it’s not necessarily feedback. What I mean by feedback is I mean it as information; it’s a source of information. A great example for this as I think about is shrinking a space that athletes do sometimes when they’re trying to get their swimmers to swim faster or better they make them swim in a very small space, or when it comes to your products, for example. Vala Afshar − he’s now the chief evangelist at Salesforce, but he was formerly the CMO at Extreme Networks. He built this huge following for himself in social media because he shrank the space and effectively focused on Twitter.
He’s this developer by training. He gets this mandate from his CEO to get onto Twitter and interact with networks outside of the company. He prototypes his ideas in real time in a hundred and forty characters to be exact. Eventually, because of that following by shrinking the space, a publisher approaches him about a book. His presentations on SlideShare have over a million views. In shrinking this space he got this over and over and over again immediately and actionable feedback, helping his company punch above its weight, and now he’s the chief evangelist at salesforce.com.
Scott Harper: Okay, so the constraint of Twitter, of course, is those hundred and forty or so characters. You have to be really good at getting extraordinarily concise; you can’t wander around. It is a challenge to work well within that constraint.
Whitney Johnson: Scott, in addition to the hundred and forty characters, it’s also that you’re getting this immediate feedback, because if you put something out there and no one retweets it or no one responds to you, you know they’re not that interested. But if you put something out there and people retweet, then you know that idea has legs. There’s two elements of the feedback involved.
Pam Harper: Again, it’s really looking at what is happening or not happening. Feedback can take many forms; I believe that people don’t think about feedback as broadly as they need to. Some people say, “This is metrics, but it’s not necessarily feedback.” I want to emphasize that feedback looks like all kinds of things, but it’s really about what’s happening. Would you agree with me?
Whitney Johnson: Absolutely. I think one thing that you said that was interesting is it’s what’s happening or what’s not happening. Silence is a very, very powerful form of feedback. It’s, as you said, an ability to tune in and understand that feedback comes in many forms and functions, if you become aware of it.
Pam Harper: Very quickly, the fast feedback that we’re talking about − how would you say that it enables us to identify our distinctive strengths?
Whitney Johnson: Whenever your resources are really limited, or you’ve got a lack of time or space, you become very bare bones, stripped to the bare. I think about this old home being remodeled, because I like watching Fixer Upper on HGTV, and when you’re really limited, you get very scrappy. In that scrappiness, because you have nothing else, you end up resorting to what you do reflexively well or things that come naturally to you, and so you discover the beautiful hardwood floor that is you, and those are your strengths. You wouldn’t have been able to find them without being forced to make do with what you have, because you would try to find someone else who was expert or try to buy a solution, or try to just have more time to get it done. When you’re just forced into this very small space, you’re like, “Well, I’ve only got what I’ve got,” and that’s whatever you do reflexively well. That’s a strength.
Pam Harper: Absolutely. We’re going to take a quick break, and when we come back, we’ll speak more with Whitney Johnson, author of Disrupt Yourself, about embracing the power of constraints. Stay with us…
Scott Harper: You are listening to Growth Igniters Radio with Pam Harper and Scott Harper, brought to you by Business Advancement Incorporated. On the web at www.BusinessAdvance.com. We enable successful companies to accelerate to their next level of growth and success, and if you like what you’re hearing, spread the good word. Go to GrowthIgnitersRadio.com, select episode 65, and use the share links for Facebook, LinkedIn and Twitter at the top right of the page to tell your social media communities all about us. And while you’re there, sign up for our weekly alert of upcoming episodes so you’ll always be up to date.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper − that’s me − and Scott Harper. Scott and I are talking today with Whitney Johnson, author of the book Disrupt Yourself, about harnessing the power of constraints to succeed in unexpected ways. Whitney, tell us how can people fine you?
Whitney Johnson: They can find me at www.whitneyjohnson.com. They can follow me on Twitter @johnsonwhitney, and/or if you want to sign up for my twice monthly newsletter, you can ping me at firstname.lastname@example.org and just say, “Sign me up.”
Pam Harper: And of course, if you go to GrowthIgnitersRadio.com, select episode 65 and you scroll down under resources, you’ll also get a link to Whitney’s previous episode with us, as well as links to find her this way as well.
Now, let’s get back to our conversation. We were starting to talk about the fact that when you’re really under the gun, when you really have these constraints, it brings out something in you that says, “I’ve got to get down and really get to what I’m good at.” Let’s talk a little more about how constraints help us with problem solving.
Whitney Johnson: Let’s think about this in terms of the math behind the life of complete freedom. The possibilities are incredibly impressive, but the complexity is debilitating. For example, you take a ten-step process with only two options for each step, and this gives you 210, or one thousand twenty-four possibilities. Given enough time, you can work through which path is going to led to the best result. If you take that same ten step process and have three possibilities for each step, this gives you 310, or fifty-nine thousand possibilities. That’s way more daunting. If you have complete freedom and infinite possibilities, the sheer enormity overwhelms; it just crushes you.
Pam Harper: My eyes are going “baah!”
Whitney Johnson: Exactly.
Scott Harper: “Awooga!”
Whitney Johnson: So if you’re willing to move to just one problem at a time, which happens if you impose a constraint, it’s much easier.
Pam Harper: Sure. It narrows it down.
Scott Harper: Speaking as a person trained as a research scientist, one of the things that we really focus on is limiting the variables that you’re testing so that you can understand the feedback you’re getting. Constraint gives you more feedback that’s meaningful that you can interpret.
Whitney Johnson: Exactly.
Scott Harper: Is that how you see it?
Whitney Johnson: That’s a great example. Yeah. If you think about it, this also applies for us as individuals. If you’re trying to navigate a career, Michelle McKenna Doyle, she’s the CIO of the NFL and she didn’t graduate from college and apply to become the CIO. She began her career in accounting, sat for the CPA. She became an auditor. She solved for that problem. Then she has the basic skills. She’s read to try something new. She goes to a former client solving the same problems, but different industry, and is able to become a controller, stacks up the proof points after four years, now she understands strategic planning. She stays in the same role, but she goes to a different company and industry, which is Disney, continues to stack up proof points, eventually becomes a CIO, tests that out in a lot of different industries as a CIO and eventually latter moves into the CIO position of the NFL. As she patiently isolated these variables, like you were just talking about, Scott, she was able to solve this equation of personal disruption.
Scott Harper: Okay, so making multiple leaps one step at a time − that makes sense.
Talking more about constraints, if we want to increase our focus, you’ve written about how adding constraints and embracing constraints can really help us zoom in on something important. Can you tell us a bit more about that?
Whitney Johnson: Sure. A great example of this is all the crashes that happen every year − four hundred and twenty thousand people are injured every year driving in the United States because of distracted drivers − which is why we have laws around texting. When we’re distracted, we can’t focus, and it’s also true when you’re trying to solve problems. You can improve that focus by imposing a constraint. A great example of this is Intuit, which I think I may have talked about on the last podcast, where they wanted to solve the problem of improving India’s lives. They didn’t give them unlimited resources of time and money, they just said, “Three engineers, rural India for three weeks, then figure something out.” As they did that they came up with this amazing service called “Fasal,” which has improved the lives of millions of people and made it possible for a lot more children to go to school because their parent’s bottom line is improved. That’s a great example of giving the engineers something to focus on. That constraint forced them to focus and out of that came a very interesting innovation.
Scott Harper: Going back to the research world, I’ve always thought that the answer you get is very, very much controlled by the question you ask. If you’re asking the right question, you’re more likely to get a good answer. Constraining your questions can really give you the focus to get to a much better answer.
Pam Harper: That’s true. I think what would be interesting is also to take the whole question about constraints from the standpoint of big data. Here we’ve got all this data coming at us…
Scott Harper: Oh my word.
Pam Harper: What would you say about how you would impose constraints based on the fact that we’re out there trying to get more and more and more and more information?
Whitney Johnson: If our premise is that people are successful because of and not in spite of constraints, then I think we have to figure out a way to impose constraints. Go back to this original conversation that we had about writing an essay − pick one question you want to answer, give yourself a time frame within which you’re going to answer that question and a budget that you have allotted to answer that question. Then, by imposing those constraints − a budget and time and scope or focus − you’re going to be able to use that data to get to some sort of meaningful, certainly intermediate, conclusion.
Pam Harper: It’s how you interpret it, and it’s also the framework you use. It’s the constraints that you’re imposing that can only make sense out of that big data.
Whitney Johnson: Right. Otherwise you’re awash in data and you drown in it.
Pam Harper: Too many people are, I think.
Whitney Johnson: Agreed.
Pam Harper: With that, we’re going to take another quick break, and when we come back we’ll talk more with Whitney Johnson author, of Disrupt Yourself, about actionable ways you can put constraints to use for enhancing your own business growth and success. Stay with us…
Scott Harper: You are listening to Growth Igniters Radio with Pam Harper and Scott Harper brought to you by Business Advancement Incorporated on the web at www.BusinessAdvance.com.
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Pam Harper: Oh no!
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Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper and Scott Harper. Over the last two segments, Scott and I have been speaking with Whitney Johnson, author of the book Disrupt Yourself, about the positive potential of constraints for focus, problem solving and innovation, among other things. Whitney, can you tell us again how people can find you?
Whitney Johnson: Yes, absolutely. Thanks for asking. One of the easiest ways to find me is whitneyjohnson.com or you can follow me on Twitter @johnsonwhitney. If you’d like to sign up for my twice monthly newsletter, send me an email at email@example.com and just say, “Sign me up.”
Pam Harper: Again, you can find links and other information about Whitney Johnson at GrowthIgnitersRadio.com, episode 65. Just scroll down under Resources and you’ll see all kinds of things.
Let’s get back to the part of Growth Igniters Radio where we talk about the three immediately useful ideas that we can all start doing right now as soon as we’re done listening − to embrace the power of constraints in this case. What would be the first one, Whitney?
Whitney Johnson: Lets start with money. I think most of us don’t have as much money − just like Steven Spielberg when he was trying to film Jaws − don’t have the money that we need to do what we want to do. There’s a very interesting study − I’m going to recap this study that we talked about earlier and then tell you a story that you haven’t heard before. Entrepreneur Magazine reported on a study done of the five hundred fastest growing companies in the United States, and looking at how those companies had funded their growth.
We all think that companies that are successful are the ones that are getting access to a lot of funding, but in fact that wasn’t the case. Only twenty-eight percent of these companies had access to debt, eighteen percent to equity and only four percent, four percent to venture capitol. That means that at least fifty percent, as many as seventy-two percent of these companies had bootstrapped. They built their businesses with the cash that they were able to generate from the business. Sixty-one percent were profitable within the first year. One of the reasons, I think, that they were successful is that they had to spend, but only when they earned money and learned some valuable lessons could they spend more and then learn some more and then earn. In getting that feedback they knew that if they got that feedback they could earn, and if they didn’t, they couldn’t.
A great example of doing this kind of bootstrapping with money is a company called Pluralsight. It’s this online training library for developers and IT professionals, a more focused version of lynda.com. 2004 Aaron Skonnard and three colleagues, they start the company with twenty thousand dollars. That’s it. They had to grow the business through cash flow. They had to get the business model right. By 2007 they had 2.7 million in revenue. They pivoted from in classroom training to online training in 2008. Demand exploded, and in 2014 they generated sixty million in revenue. They started with twenty thousand. I wonder what would’ve happened if they started with a hundred thousand or two hundred thousand.
Pam Harper: That’s an interesting question. Would you say then that having a budget, giving ourselves maybe a review of our budgets, would be in order here?
Whitney Johnson: Absolutely, because what happens is, when you have a budget, it’s a forcing function. You’re required to make decisions about how you’re going to spend your money. You look for ways to spend your money that are going to give you very quick wins and information. You’re much, much more disciplined, and as a consequence of that discipline, you’re more likely to be successful.
Scott Harper: Of course there’s a balance here because you can go too far and choke things off. You have to create that right balance of enough resource, but not too much so that you get that right focus without choking things to death.
Whitney Johnson: Absolutely. In fact there’s a really interesting study, research done by Adam Grant who we all think is fantastic, which is basically when you’re at the bottom of your learning curve you’re going to be short on something − time, money, expertise, buying. You’ve got to embrace constraints, but you get to this point where if you’re going to continue to move up the curve, you have to impose constraints. That’s where you figure out how to optimize, because as you say Scott, there is a point where if your resources are too scarce … You’ve got to have the boots in order to bootstrap.
Scott Harper: Good point.
Pam Harper: That’s a really good point. Let’s look at a second immediately actionable idea. We’ve started with a budget, just for starters.
Whitney Johnson: Knowledge or expertise. We sometimes think, “Oh, I’ve got to know everything there is to know,” and we don’t. Sometimes not knowing is actually the way to go. CK Woolley − she started a company, a dress business called Shabby Apple. She started it because she got sick. She wanted to do international development. She had to find another career. She goes back and says, “I love fashion. I’m going to try a dress business,” but because she had no understanding of the fashion business, she didn’t know that you hire an expensive wholesaler to represent your clothes. She just set up online, which saved her a lot of cash and potentially unreliable partners. Lack of knowledge helped her there.
Then the only manufacturer who agreed to work with her gave her just two choices of fabric, and because every pleat and seam and button cost money, she kept the designs simple. She was definitely hardworking and smart, but her skirting of the industry protocol really led her become an industry leader in the online fashion dress business more than a decade ago. Now they’ve got revenue well above two million dollars.
Pam Harper: That’s a really inspirational story. Perhaps an immediately useful step off of that would be to revisit the fact that maybe we don’t know everything we need to know, but the real question is, how can we do it anyway? How else can we focus on that outcome and get what we want? I do that a lot.
Scott Harper: Yes you do.
Whitney Johnson: Exactly. It’s a great question. One of the questions I’ll ask people when I’m facilitating sessions with companies is, “If you made a junior member of your team a CEO for a day, what would they be “dumb” enough to think that they could fix?” I put dumb in quotations, right?
Pam Harper: Exactly. You have to not be afraid of the answer of, “I don’t know,” but it has to be, “I’m going to figure it out,” and, “We’re going to do it.” What’s a third area? What’s a third thing people can do?
Whitney Johnson: Time. I think we’ve all had this experience of being in a position where we’ve done things the way we’ve done them, and then we get this extra, added responsibility. All of the sudden we’re very short on time and we can’t do things the way we did it, and we do things differently.
It’s a pedestrian example, but for me it’s a very powerful example. I remember when I first started blogging back in 2007, 2008 I bought some ad space on a blog called Design Mom. I did not have time to blog everyday. I just didn’t. There was no way. I had a full time job. In my lack of time I reached out to people to ask them to guest blog and to tell their stories. My lack of time led to two things happening, not only more content, but more importantly these powerful stories of women, primarily, sharing the stories of their dreams which made the blog infinitely more powerful and interesting and compelling. I think of this lack of time as, “What’s the positive unintended consequence of me being short on time or expertise or money?”
Pam Harper: An excellent question, and the other thing then is the willingness − and this is what I’m hearing − the willingness to say, “You know what? I have to decide what’s core to me,” and then, “How else can I reach out to the people that are in my network or my employees, my staff, so that they’re doing things that will help them grow, that will help all of us grow?” It’s very tempting to jeep more to ourselves than we really should. That’s one of the things that we see with companies that are growing. You start a company and you say, “I have to do everything,” because that’s where maybe you started, but the company now has three thousand employees and you’re still trying to do a lot of the things you needed to do. I can’t tell you how many times I see people who are holding onto things they don’t need to hold onto anymore.
Scott Harper: That time constraint, if we embrace it and really think of what’s important, it helps us become more focused, more effective as well as more efficient.
Pam Harper: Absolutely. Whitney, this has been great. How about a last thought about embracing the power of constraints?
Whitney Johnson: One key takeaway for me is whenever you’ve got a constraint is to ask yourself not, “Why did this happen to me?”, or, “Why is this thing in the way?”, because that’s how we think of it, but, “How did this happen to help me?” I think that’s a really helpful question for me to ask, and to remember that constraints invite us to make and own our choices, which is actually a critical developmental milestone for all of us.
Igor Stravinsky, a twentieth century composer, said, “The more constraints one imposes, the more one frees himself.” For disrupters, constraints are not a check on absolute freedom; they’re a tool of creation. If we can think of it that way, we really can see the power in our constraints.
Pam Harper: Absolutely. Very inspiring. Thank you again for being our guest on Growth Igniters Radio.
Whitney Johnson: Thank you. It’s been a pleasure.
Scott Harper: Absolutely Whitney. Thank you so much. And thanks to you out there for listening to Growth Igniters Radio with Pam Harper and Scott Harper. To check out resources related to today’s conversation, read Whitney’s bio, share on social media, find out about upcoming episodes or open a conversation with us go to GrowthIgnitersRadio.com, and select episode 65.
Pam Harper: Until next time, this is Pam Harper…
Scott Harper: And Scott Harper…
Pam Harper: Wishing you continued success and leaving you with this question to discuss with your team:
Scott Harper: What constraints are we facing that we can actually turn to our advantage, and are there places where adding constraints could actually help us?