Edge Perspectives with John Hagel

The Big Shift in Influence

Influence is becoming more and more challenging.  It’s hard enough to attract attention, much less retain it or use that attention to shape the behavior of others. And yet, in a world of scarce resources and mounting pressure, the ability to influence others becomes more and more central to the ability to set big things in motion.

In my last blog post, I talked about the increasing strategic importance of influence points for institutions.  Now, let’s shift focus and talk about the changing nature of influence at the individual level – how do we achieve more influence as individuals?

The old way

In the old days, it was simple and straightforward.  We built influence by having answers. The focus at that point was to master ways of communicating those answers so that we were able to persuade others that our answers were better than anyone else’s. We built influence by demonstrating strength, carefully crafting a presentation of our accomplishments and impact so that those answers we were trying to communicate became a lot more credible because we had a strong track record of being right in the past.  Finally, we built influence by becoming the hub of an ever-expanding network of like-minded people who embraced our answers and helped us to persuade others of the value of our answers.

Those days are increasingly behind us.  Sure, there are still some who are looking for reassurance and security. Those people may still be influenced by this conventional approach. But this is a very static approach to building influence in an increasingly dynamic world. Answers can be helpful but they only have a fixed value. And answers, no matter how good they are, tend to become obsolete at an accelerating rate.  As conditions evolve, those answers that only a little while ago seemed so compelling and helpful now begin to seem stale and worn.

The new way

In an exponential world, answers have rapidly diminishing value. The greatest value in this kind of environment comes from questions, questions that no one had even thought to ask but that help to focus attention and effort on promising but previously ignored areas. Questions invite a different and more powerful form of participation. It’s no longer just about spreading the word and persuading others.  It’s about inviting others to explore a new domain and help to generate new ideas and insights.

Framing the questions

In this context, not all questions are created equal.

• The questions that have the greatest potential to influence are broad ones that create space for many people across many different domains and disciplines to participate.
• They are questions where there’s a lot at stake, where enormous value and wealth can be generated by those who are most successful in generating insight.
• They are also deep ones that call for sustained effort over a long period of time to generate insight. They are the questions that will keep a growing number of people occupied for many, many years.
• But they are also questions that can be tackled without massive investment of funds and years of effort before any insight is generated. The best kinds of questions are ones where early “a-ha” moments can occur so that early participants in the questions can get positive reinforcement for their efforts and yet at the same time realize that there is so much more to be explored. 

Questions like these do many things.  They attract and excite a growing number of people who can see the opportunity for impact.  They spur the imagination since the territory is yet to be explored. They invite experimentation, tinkering, innovation and discussion as people strive to move beyond imagination to test potential approaches.

Vulnerability and trust

But questions do something else that’s absolutely vital for influence – they rapidly build trust with the person posing the questions. The person posing these kinds of questions has just done something very important – s/he has expressed vulnerability.  S/he has acknowledged there’s something really important that s/he doesn’t know and needs help to solve. 

The fact that the person posing the question does this from the outset invites all those who are attracted to the questions to do the same.  It’s OK to admit we don’t know something – in fact, it’s a pre-requisite to make progress.  Expressing this kind of vulnerability early on builds trust and provides a strong foundation for trust-based relationships. Rather than showing strength, the most effective way to build influence may now paradoxically be to show vulnerability.

This is important for a lot of reasons but let’s just focus on one: it enhances our ability to access the tacit knowledge that each participant brings to the question.  Tacit knowledge is the knowledge that exists in our heads and that we have a really hard time expressing to ourselves, much less to anyone else.  If we have trust-based relationships with others, we’re far more willing to make the effort and risk some embarrassment as we try to express this tacit knowledge. And, in new frontiers of exploration, that tacit knowledge is often the most valuable knowledge, containing far more insight than the stuff that’s already expressed in papers and books.

Mobilizing mesh networks

So, questions are really, really valuable in expanding influence. What are other mechanisms to build influence? In the past, as mentioned earlier, we were advised to aggressively build our networks of relationships, becoming a hub in a growing network of people who were persuaded, or at least could be persuaded, by the answers we were seeking to disseminate.

That kind of approach is less productive if we’re focused on new questions rather than answers. If the goal is to effectively explore and discover new insights, we need a different kind of network. We’d want to encourage much more of a mesh network where there’s a rich and complex set of relationships connecting all participants with each other. This kind of network increases the potential of all participants to connect with each other in unexpected and evolving ways as they embark on their exploration. We can become mobilizers, helping to draw in new people and creating environments where people can connect and explore an evolving agenda of questions.

If we insist on remaining the sole channel for all interactions within the network, we’ll soon become overwhelmed by the task. Very quickly, we’ll become a bottleneck to robust exploration of the terrain ahead. We’ll be far more successful in extending our influence if we create environments that encourage all participants to connect with each other and provide the mechanisms to facilitate both systematic search and unplanned serendipity. The most powerful networks would take the form of creation spaces that support the formation of tightly knit teams and then connect these teams in a broader space where they can seek out help from each other.

But what about the influence that comes from having privileged access to knowledge flows? Won’t we undermine that by moving away from hub and spoke networks to mesh networks? Not to worry, by posing the questions that excite and motivate everyone to embark on their exploration, we’ll still have privileged access to the knowledge flows occurring within the network.  Whenever someone comes up with an insight that they think is important, they’ll want to reach out and vet it with us. And if we continue to refine and evolve the questions as new insights become available, participants will continue to connect with us to get the most up to date framing of the questions that matter.

Influence in action – the Santa Fe Institute

OK, now this can all seem pretty abstract. Are there any examples of influence being generated through questions and mesh networks? There are many, but let me point to one that I am personally involved in.  It’s the Santa Fe Institute (SFI).  SFI was founded 30 years ago by a group of leading scientists, notably led by a chemist, George Cowan, and including David Pines, Stirling Colgate, Murray Gell-Mann, Nick Metropolis, Herb Anderson, and Peter A. Carruthers.

They were all very prominent in their fields at the time but what brought them together was a set of questions about potential common themes regarding complex adaptive systems that cut across traditional disciplinary boundaries. They certainly didn’t have any answers, but the questions were exciting.  Were there patterns that could help us to better understand everything from sub-atomic particles to the universe, with the human brain and society thrown in the middle? How do new elements emerge within these systems? How do these systems evolve? What are the elements that make some of these systems more adaptable and resilient than others?

They decided to set up an institute to pursue these questions. But they were careful from the outset to think in terms of catalyzing and growing a network of inquiry.  Yes, they had a few resident researchers but they put much more emphasis on identifying and connecting with people from around the world and from many different disciplines – for example, archaeology, anthropology, biology, chemistry, economics, mathematics, physics, and sociology – who were intrigued by these questions. 

They created programs that helped to connect these people with each other and shared the research that these participants were pursuing. Early findings led to even more questions and SFI has evolved as an orchestrator of inquiry, expanding and evolving its network as the questions evolved. In the process, it has had influence far beyond its core staff, penetrating virtually every academic discipline. The influence also extended out into the business world as businesspeople began to explore how their firms and their markets might demonstrate the behavior of complex adaptive systems. What had begun as a few curious scientists meeting over lunch at Los Alamos has evolved into a highly influential global network of people excited and motivated by a common set of questions.

Bottom line

Influence can be amplified by passion and distributed learning. These in turn can set into motion powerful increasing returns dynamics where, the more people who join in, the faster everyone learns. Traditional approaches to influence are diminishing returns games where we have to work harder and longer to get that next increment of participants to embrace our answers.

By focusing on questions rather than answers, showing vulnerability in the process and helping to connect people together in ever richer mesh networks, we have an opportunity to exercise influence far beyond our initial domains or resources. We can draw out the potential that resides within all of us so that even modest resources can quickly cascade into movements with ever increasing impact.  Small moves, smartly made, can indeed set very big things in motion. 

Resist the temptation to fall back on conventional approaches to influence that were more suited to a linear world. Step out to a promising edge and see what questions surface. Use these questions as a catalyst to pull in others who are excited by the opportunity to pursue these questions. You’ll be surprised at what you can accomplish.

Next steps

Ask the following questions:

• What are the two or three questions that most excite me and that have the potential to excite others?

• What have I done to make others aware of these questions and the potential impact that they might have?

• How could I become even more effective in reaching out to and mobilizing others in exploring these questions?

• Are there ways that I could help to connect these people with each other so that they can increase their own effectiveness in seeking answers?

 

The Big Shift in Business Strategy

Business strategy has evolved dramatically over the past four decades in response to the Big Shift that is re-shaping our global business landscape. We’re on the cusp of yet another shift that will determine who wins and who loses in the years ahead.

We’ve recently been exploring some key elements required to escape from the dark side of technology: passion, institutional innovation and movements shaped by narratives.

Today, we’ll look at the importance of new approaches to strategic advantage. These new approaches offer the potential to learn faster in ways that will be very difficult for others to copy. In a world of mounting performance pressure, this is a powerful advantage.

A brief history

Business strategy emerged in full force in the 1970’s and 1980’s with a strong focus on structural advantage.  The essence of structural advantage was simple: find barriers to entry that will protect a company from competition.  These barriers could take many forms: for example, geographic, economic, technological (patents) or regulatory. This made sense in a push based world: the key was to build walls to prevent others from pushing you out of your leadership position.

But here’s the problem.  The Big Shift is ultimately about the convergence of two powerful forces: digital technology infrastructures and long-term shifts in public policy towards economic liberalization. These two forces together are systematically and significantly reducing barriers to entry and barriers to movement on a global scale. The structural advantages that used to provide safe havens became less and less effective. If you’re an incumbent, welcome to the dark side!

In response to these developments, we saw a first big shift in strategic thinking, one that could be broadly framed as a transition from strategies of position to strategies of movement.  The key thrust was that, if you couldn’t rely on position to protect you, you had to focus on moving faster. Strategy was reduced to execution, hustle and adaptation.  Move more quickly and efficiently than anyone else and you could still stay ahead of the pack.

But this also has a problem.  The dark side of technology offers the trifecta of all challenges:

• increasing competitive intensity,
• accelerating change and
• growing uncertainty, often taking the form of extreme unanticipated events, sometimes known as “Black Swans” (per Nassim Nicholas Taleb). 

In that kind of environment, movement quickly becomes a treadmill that moves faster and faster and, when you least expect it, lurches to a stop and throws you against the wall.

Don’t get me wrong. Execution, hustle and adaptation are all necessary for survival. But movement alone, no matter how efficiently executed, may no longer be enough for us to escape the dark side of technology.  Instead, it may just suck us deeper and deeper into the abyss of the dark side.

So, what is to be done?  Perhaps it’s time to execute yet another shift in business strategy. One that helps us to harness the capabilities of the Big Shift to accomplish things that weren’t even possible before.

What would this new form of strategy look like? John Seely Brown and I started to reflect on this in some earlier writings here and here. But let me offer a brief update and synthesis here.

We now have an opportunity to take strategy to a new level, one that integrates position and movement in a profoundly new and powerful way.

The growing importance of position

Let’s start with position.  What if we expand our thinking about position?  In the past, position was all about protection – how do we build bigger and more secure barriers to hold off the hordes seeking to unseat us?

In the world of the Big Shift, the most valuable positions help us to influence events and achieve greater leverage by mobilizing the resources of others – we’re able to accomplish far more with a lot less. Let’s call these strategic positions “influence points”.  Control is less and less feasible in a turbulent world, but if we play our cards right, we might be able to significantly influence or shape the evolution of the world around us.  Through influence, we can motivate others to invest and act in ways that reinforce and amplify our own efforts.

The Big Shift is creating a much more richly connected world. Platforms of various types are making it easier for us to find and connect with each other on a global scale. Business networks and other kinds of business ecosystems are emerging on top of these platforms to help us move from short-term transactions to long-term relationships. And we’re able to scale these relationships in ways that draw in increasingly diverse participants from across the globe. Connections proliferate, but they don’t expand evenly.  They increasingly exhibit power laws where a few nodes concentrate an extraordinary number of connections and a very large number of nodes have very few connections.

Influence points tend to emerge whenever and wherever relationships begin to concentrate. Think about it.  In a world shaped by knowledge flows, you want to be at the intersection of as many flows as possible. These influence points bring some awesome advantages:

• By having privileged access to flows, you’re in a better position to anticipate what’s going to happen by seeing signals before anyone else does.
• By being in the middle of more flows, you have an opportunity to shape those flows in ways that can strengthen your position and give you important leverage in a world of mounting performance pressure. When you’re in the flow, small moves, smartly made, can indeed set very big things into motion.
• Third, by concentrating information and knowledge flows within a broader system, these influence points drive more rapid learning by offering privileged access to a growing and diverse set of information or knowledge flows.  In a turbulent world, this is perhaps the most significant advantage of all. If my firm or institution can learn faster than anyone else, it will have a significant advantage relative to those who are scrambling to catch up.

OK, now all of this can sound pretty abstract.  Let’s make this a little more concrete. We can explain a lot of the evolution of the personal computer industry by focusing on who established a leadership position in the key influence points of that device – the microprocessor and operating system components. Why were these such important influence points?  Because they shaped the functionality and options for all the developers of all the other components of the device. 

As a result, all the participants in the personal computer ecosystem had a strong motivation to connect with the owners of the leading microprocessor and the leading operating system – they were trying to anticipate how these components would evolve and what the implications might be for their own development efforts. The companies owning these two critical components became a concentration point for knowledge flows as more and more participants reached out to them and shared their own business plans. They had privileged access to knowledge flows that no one else could match.

What are some of the criteria for anticipating where these influence points might emerge? 

• First, they tend to provide significant and sustainable functionality to the broader platform or ecosystem. Again, think about the critical role that the operating system plays in the personal computer – almost all of the activity in the device is governed in one way or another by the functionality of the operating system. 
• Second, the functionality of these influence points tends to evolve rapidly over time – think once again about the evolution of the personal computer operating system. 
• Third, the influence point benefits from network effects that drive consolidation and concentration of participants at the influence point.  Lots of participants vied to provide operating systems for the personal computer but at the end of the day only one or two players remain in this space. 
• Finally, these influence points encourage fragmentation of the rest of the platform or ecosystem.  It’s not an accident that the operating system promoting both fragmentation of device manufacturers and application developers won the battle for the personal computer. This fragmentation of the rest of the system reinforces the advantage of the company occupying the influence point.

Influence points emerge and evolve by harnessing the power of pull. They attract more and more participants through the value they provide. Equally importantly, they pull participants to act by creating positive incentives that shape action.

But is this limited just to technology platforms? I don’t think so. I’ve spent a long time studying the structure and evolution of social networks and business ecosystems.  These systems also tend to develop influence points driven by the dynamics of the interactions and network effects.  As mentioned earlier, social networks and business ecosystems tend to develop power law profiles – a very few participants aggregate the largest number of interactions while there’s a “long tail” of participants with very few interactions.

Often, the organizer of an ecosystem or network becomes a natural aggregator of interactions because the organizer meets the four attributes of an influence point described above.  This isn’t to say that these ecosystems or networks are hub and spoke, where all interactions must pass through a central hub. But often a very large number of the total interactions concentrate at these points, often far more interactions than any other aggregation point.

So, position may once again become a significant source of competitive advantage.  But note that the value of the position has profoundly shifted from one of protection to one of leverage and learning.  Rather than trying to build walls, these positions seek to connect with others in ever richer ways in order to expand influence, leverage and learning.

Integrating movement into position

But position alone will not be sufficient to create lasting strategic advantage.  The key is to develop the capacity to move rapidly to reap the most benefit from influence, leverage and learning. Firms and other institutions need to cultivate the ability to participate in an expanding range of knowledge flows effectively.  They must also find ways to effectively filter through this expanding range of knowledge flows to extract the insights and approaches that have the potential to create the most value. Finally, they also need to quickly turn around and apply these insights and approaches both within their organization and across a broader range of participants in the system. In sum, the winners will be those who master the techniques required for scalable learning.

Ultimately, the true winners of these new strategies will not just be those who find ways to occupy influence points, but those who also are adept at building the only sustainable edge - the capability to learn faster by working effectively with others. By effectively combining position and movement, these players will be able to tap into the power of network effects, attracting more and more participants, drawn by the potential to learn faster.

So, strategies of movement have a prominent role to play but it’s a very different kind of movement.  Now, we’re not just talking about reacting and moving quickly. These are proactive strategies of movement – designed to strengthen influence points by harnessing their learning potential. If done right, it creates a powerful virtuous cycle – more effective learning attracts others and expands influence which in turn increases the potential for further learning.  To borrow a favorite phrase from my colleague, John Seely Brown, we trigger a generative dance between position and movement that takes us to unforeseen levels of impact.

Bottom line

We’re on the cusp of yet another fundamental shift in approaches to business strategy.  In the place of the raging battles that have occurred between advocates of strategies of position and strategies of movement, the Big Shift will reward those who can find effectively integrate new approaches to both position and movement.

In thinking about potential influence points that can focus these strategies, don’t just look at what exists today, but what could exist.  Often, the most powerful influence points are not yet in play but instead could emerge from a deep understanding of the unmet needs of participants and unexploited capabilities of new generations of technology.  If an influence point already exists, it’s likely to be occupied by incumbents that may be difficult to unseat.  It’s likely to be far more effective to identify and target influence points that haven’t yet emerged and to design shaping strategies that will help to coalesce these influence points.

I’m not by any means suggesting that all institutions must occupy influence points to be successful – that clearly would be an impossible task.  The good news is that you don’t need to occupy the influence point itself, but you do need to understand where the influence points are and find ways to connect to them so that you can learn faster as well and participate in the opportunities to expand value creation that come from leverage and learning.

Here are some key questions you should be asking and answering:

 

• Who occupies influence points today within my market or industry?
• What are potential new influence points that might emerge from the fundamental forces reshaping my market or industry?
• Who is working to build and occupy new influence points?
• Have I built robust relationships with these players?

If we shift our strategic focus to this new opportunity, we may indeed be able to craft strategies that help us to escape from the clutches of the dark side of technology.  But we may accomplish far more. We may become the catalysts for those collaboration curves that help us to unleash increasing returns opportunities. These increasing returns may ultimately benefit not only ourselves but many others.

One final thought – what if we applied this strategic notion of influence points and accelerated learning to our individual lives? How could we increase our personal impact?