Sustainability Innovation Quotes

Innovation is not a quick fix. It often requires sustained investment and effort over a long period.

There's a simple, but oft-neglected lesson here: to sustain success, you have to be willing to abandon things that are no longer successful.

People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.

The cow is facing its own existential crisis, as industrial cattle farming is being disrupted by alt proteins and plant-based milks that offer alternatives.

We define Greenaissance as an era of renewal with momentous innovation and investment opportunities aligned across fields with the common objective of sustainable energy transition.

Of the top 10 sources of innovation, employees are the only resource that you can control and access that your competitors cannot. Employees are the one asset you have that can actually be a sustainable competitive advantage.

Many of these technologies are proven, even beyond controlled environments, so their success will be driven by the value proposition, adoption, and ability to scale in the real world.

A major intent is to show that underlying the extraordinary complexity, diversity, and apparent messiness of the world we live in lies a surprising unity and simplicity when viewed through the lens of scale.

While exponential growth is a remarkable manifestation of our extraordinary accomplishments as a species, built into it are the potential seeds of our demise and the portent of big troubles just around the next corner.

The techniques that worked so extraordinarily well when applied to sustaining technologies, however, clearly failed badly when applied to markets or applications that did not yet exist.

Financial health is the lifeblood of any organization. It's the engine that drives growth, innovation, and long-term sustainability. A company's financial performance determines its ability to invest in new products or services, attract and retain top talent, weather economic downturns, and ultimately, fulfill its mission.

We don't think a sustainable society need be stagnant, boring, uniform, or rigid. It need not be, and probably could not be, centrally controlled or authoritarian. It could be a world that has the time, the resources, and the will to correct its mistakes, to innovate, to preserve the fertility of its planetary ecosystems. It could focus on mindfully increasing quality of life rather than on mindlessly expanding material consumption and the physical capital stock.

Competitiveness is far more about doing what customers value than doing what you think you’re good at. And

When commercializing disruptive technologies, they found or developed new markets that valued the attributes of the disruptive products, rather than search for a technological breakthrough so that the disruptive product could compete as a sustaining technology in mainstream markets.

Ultimately, incentive structures and systems drive ESG investing, which can be disingenuous. Structurally, public market investors continue to focus on the incentives which maximize their financial returns, even while taking certain ESG inputs into account in their portfolio allocations. Only by regulating and incentivizing the actual outcomes might investors alter their investment strategies towards new rewards based on ESG outputs.

To make discoveries in science, both small and important, you must be an expert on the topic addressed. To be an expert innovator requires commitment. Commitment to a subject implies sustained hard work.

Research suggests that in over 90 percent of all successful new businesses, historically, the strategy that the founders had deliberately decided to pursue was not the strategy that ultimately led to the business’s success.

Without trust there’s no way that any organization can sustain innovation. Because without trust no one is willing to take the risks that innovation require.

Necessity remains the mother of invention.

We don’t need a handful of people doing zero waste perfectly. We need millions of people doing it imperfectly.

By understanding and embracing Permaculture Economics, boards can help their companies become positive change agents, driving innovation, and creating a more equitable and sustainable world.

The two dominant components that constitute a city, its physical infrastructure and its socioeconomic activity, can both be conceptualized as approximately self-similar fractal-like network structures.

A robust regional food system that benefits eaters and farmers cannot be achieved in a marketplace that is controlled, top to bottom, by a few firms and that rewards only scale, not innovation, quality, or sustainability.

The late maverick economist Kenneth Boulding perhaps best summed it up when testifying before the U.S. Congress, declaring that “anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.

It is all too often forgotten that the whole point of a city is to bring people together, to facilitate interaction, and thereby to create ideas and wealth, to enhance innovative thinking and encourage entrepreneurship and cultural activity by taking advantage of the extraordinary opportunities that the diversity of a great city offers.

Startups exist not just to make stuff, make money, or even serve customers. They exist to learn how to build a sustainable business. This

Nature's cycles of renewal and regeneration inspire innovation and continuous improvement in business.

No low-trust society will ever produce sustained innovation.

Support a few crackpots, heretics, and dreamers, especially if they are wildly optimistic about their ideas.

cost reductions meant survival, but not profitability,

Bell Labs showed how sustained innovation could occur when people with a variety of talents were brought together,

Data for data’s sake, or the mindless gathering of big data, without any conceptual framework for organizing and understanding it, may actually be bad or even dangerous.

Cities are sustained by similar network systems such as roads, railways, and electrical lines that transport people, energy, and resources and whose flow is therefore a manifestation of the metabolism of the city.

Disruptive innovations, in contrast, don’t attempt to bring better products to established customers in existing markets. Rather, they disrupt and redefine that trajectory by introducing products and services that are not as good as currently available products. But disruptive technologies offer other benefits—typically, they are simpler, more convenient, and less expensive products that appeal to new or less-demanding customers.3

Sometimes, we get so caught up in the business of life that we forget to address the root causes of our problems. Taking a step back and confronting those issues can be the key to unlocking a more fulfilling existence!

So in marked contrast to infrastructure, which scales sublinearly with population size, socioeconomic quantities—the very essence of a city—scale superlinearly, thereby manifesting systematic increasing returns to scale.

Knowing and being cognizant of the underlying principles and dynamics, seeing the problem in a broad systemic context, thinking quantitatively and analytically, all need to be integrated with the necessarily dominant focus on detail relevant to the specific problem in order to optimize design and minimize unintended consequences.

Companies should diversify revenue streams to mitigate risk, enhance resilience, tap into new market opportunities, foster innovation, and ensure long-term sustainability and adaptability in a dynamic business environment.

From a scientific perspective the truly revolutionary character of the Industrial Revolution was the dramatic change from an open system where energy is supplied externally by the sun to a closed system where energy is supplied internally by fossil fuel.

Focus is scary—until you realize that it only means turning your back on markets you could never have anyway. Sharp focus on jobs that customers are trying to get done holds the promise of greatly improving the odds of success in new-product development.

weird ideas spark innovation because each helps companies do at least one of three things: (1) increase variance in available knowledge, (2) see old things in new ways, and (3) break from the past. These are the three basic organizing principles for innovative work,

However inventive humans turn out to be, they will never invent their way around the laws of thermodynamics. That fundamental truth is denied by standard infinite-growth theory, which blithely projects productivity gains from technological innovation indefinitely into the future.

Many of the most interesting phenomena that we have touched upon fall into this category, including the occurrence of disasters such as earthquakes, financial market crashes, and forest fires. All of these have fat-tail distributions with many more rare events, such as enormous earthquakes, large market crashes, and raging forest fires, than would have been predicted by assuming that they were random events following a classic Gaussian distribution.

One of the least meaningful and most overused words in the English language is 'sustainability.' For most Americans, it means something like 'pretty much the way I live right now, though maybe with a different car.' A good test of any activity or product described as sustainable is to multiply it by 300 million (the approximate current population of the United States) and then by 9 or 10 billion (the expected population of the world by midcentury) and see if it still seems green. This is not an easy test to pass

So why do almost all cities remain viable, whereas the vast majority of companies and organisms die?

But like all excellent, fulfilling and meaningful relationships, it has also occasionally been frustrating and challenging.

Make sure that slow learners are rewarded—or at least not punished— for expressing their deviant views and acting in odd ways.

Organizations that learn from their failures forgive and remember, they don’t forgive and forget.

Discovery consists of looking at the same thing as everyone else and thinking something different.”23

Galileo was jailed for asserting that the earth was round.5

Engage the whole community with a common purpose to build an innovative and sustainable enterprise.

States is seeking ways to sustain its innovative edge, and when societies around the world are trying to build creative digital-age economies, Jobs

inventiveness, imagination, and sustained innovation. He knew that the best way to create value in the twenty-first century was to connect creativity with technology,

Thus, to avoid collapse a new innovation must be initiated that resets the clock, allowing growth to continue and the impending singularity to be avoided.

Innovation often happens in garages and dorm rooms, but it is sustained by institutions

These toxic residues lead to high turnover and low innovation, creativity, and collaboration. No team can win with these elements corroding their effectiveness long term.

...for design to truly address issues of sustainability necessitates a change in how we define innovation, and move beyond what we can do to what we should do.

This is also, I hope, a book about innovation. At a time when the United States is seeking ways to sustain its innovative edge, and when societies around the world are trying to build creative digital-age economies, Jobs stands as the ultimate icon of inventiveness, imagination, and sustained innovation. He knew that the best way to create value in the twenty-first century was to connect creativity with technology, so he built a company where leaps of the imagination were combined with remarkable feats of engineering. He and his colleagues at Apple were able to think differently: They developed not merely modest product advances based on focus groups, but whole new devices and services that consumers did not yet know they needed.

Predictable marketing requires an understanding of the circumstances in which customers buy or use things. Specifically, customers—people and companies—have “jobs” that arise regularly and need to get done. When customers become aware of a job that they need to get done in their lives, they look around for a product or service that they can “hire” to get the job done.

You are not given respect by default, regardless of your professional position or title. It cannot be measured by the size of your paycheck. Respect is earned and reciprocated through the actions you take!

The mechanisms that have traditionally been suggested for understanding companies can be divided into three broad categories: transaction costs, organizational structure, and competition in the marketplace.

It is an exciting time to be reshaping the dialogue about the environment that brings all political viewpoints to the same table, with common goals for a sustainable future, and catalyzes solutions through innovation.

In 2006 the planet crossed a remarkable historical threshold, with more than half of the world’s population residing in urban centers, compared with just 15 percent a hundred years ago and still only 30 percent by 1950.

We need to understand how the dynamics of innovation, technological advances, urbanization, financial markets, social networks, and population dynamics are interconnected and how their evolving interrelationships fuel growth and societal change—and, as manifestations of human endeavors, how they are all integrated into a holistic interacting systemic framework . . . and whether such a dynamically evolving system is ultimately sustainable.

Consequently, there has been much less time for the market forces that act on companies to reach the kind of meta-stable configuration manifested in the systematic scaling laws obeyed by cities and organisms. As explained

Kensi Gounden Says, Placing innovation into the core of the organization’s thinking changes the conversations, it alters the time horizons, it shifts the whole dynamics of where to go to grow and sustain the organization for the future.

Most of the successful innovators and entrepreneurs in this book had one thing in common: they were product people. They cared about, and deeply understood, the engineering and design. They were not primarily marketers or salesmen or financial types; when such folks took over companies, it was often to the detriment of sustained innovation. “When the sales guys run the company, the product guys don’t matter so much, and a lot of them just turn off,” Jobs said. Larry Page felt the same: “The best leaders are those with the deepest understanding of the engineering and product design.”34 Another lesson of the digital age is as old as Aristotle: “Man is a social animal.” What else could explain CB and ham radios or their successors, such as WhatsApp and Twitter? Almost every digital tool, whether designed for it or not, was commandeered by humans for a social purpose: to create communities, facilitate communication, collaborate on projects, and enable social networking. Even the personal computer, which was originally embraced as a tool for individual creativity, inevitably led to the rise of modems, online services, and eventually Facebook, Flickr, and Foursquare. Machines, by contrast, are not social animals. They don’t join Facebook of their own volition nor seek companionship for its own sake. When Alan Turing asserted that machines would someday behave like humans, his critics countered that they would never be able to show affection or crave intimacy. To indulge Turing, perhaps we could program a machine to feign affection and pretend to seek intimacy, just as humans sometimes do. But Turing, more than almost anyone, would probably know the difference. According to the second part of Aristotle’s quote, the nonsocial nature of computers suggests that they are “either a beast or a god.” Actually, they are neither. Despite all of the proclamations of artificial intelligence engineers and Internet sociologists, digital tools have no personalities, intentions, or desires. They are what we make of them.

We have been living and reliving George Orwell’s Animal Farm allegory since the beginning of civilization. We have played out the win-lose, conquer or be conquered scenario, and now most people understand that this approach to winning is not sustainable, meaningful or fun.

There is always a price to pay when energy is processed; there is no free lunch. Because energy underlies the transformation and operation of literally everything, no system operates without consequences. Indeed, there is a fundamental law of nature that cannot be transgressed, called the Second Law of Thermodynamics, which says that whenever energy is transformed into a useful form, it also produces “useless” energy as a degraded by-product: “unintended consequences” in the form of inaccessible disorganized heat or unusable products are inevitable. There

This is also, I hope, a book about innovation. At a time when the United States is seeking ways to sustain its innovative edge, and when societies around the world are trying to build creative digital-age economies, Jobs stands as the ultimate icon of inventiveness, imagination, and sustained innovation.

Forgiveness is also important because, as a study of surgical errors found, “when a subordinate sees his technical errors are forgiven, he recognizes there is no incentive to hide them. He is less likely, therefore, to compound his problems by attempting to treat problems that are over his head for fear of superordinate reprisal.

The existence of these remarkable regularities strongly suggests that there is a common conceptual framework underlying all of these very different highly complex phenomena and that the dynamics, growth, and organization of animals, plants, human social behavior, cities, and companies are, in fact, subject to similar generic “laws.

To maintain order and structure in an evolving system requires the continual supply and use of energy whose by-product is disorder. That’s why to stay alive we need to continually eat so as to combat the inevitable, destructive forces of entropy production. Entropy kills. Ultimately, we are all subject to the forces of “wear and tear” in its multiple forms. The battle to combat entropy by continually having to supply more energy for growth, innovation, maintenance, and repair, which becomes increasingly more challenging as the system ages, underlies any serious discussion of aging, mortality, resilience, and sustainability, whether for organisms, companies, or societies.

a new breed of designers is developing brand-new techniques under the banner of Lean User Experience (Lean UX). They recognize that the customer archetype is a hypothesis, not a fact. The customer profile should be considered provisional until the strategy has shown via validated learning that we can serve this type of customer in a sustainable way.

The strengths of social interaction and the flows of information exchange are greatest between terminal units (that is, between individuals) and systematically decrease up the hierarchy of group structures from families and other groups to increasingly larger clusters, leading to superlinear scaling, increasing returns, and an accelerating pace of life.

As Einstein’s quote suggests, the framing of the question is an outsized portion of the solution-finding process. And as Clay Christensen told us, when you ask the right question, the answer becomes mechanical. Clearly, we need to be privileging that question-framing process, which has a rhythm of introspection and collaboration, throughout our processes.

The integration of these two kinds of networks, namely, the requirement that socioeconomic interaction represented by space-filling fractal-like social networks must be anchored to the physicality of a city as represented by space-filling fractal-like infrastructural networks, determines the number of interactions an average urban dweller can sustain in a city.

the first businesses in the United States to implement Owen’s 8-hour day was the Ford Motor Company. In 1914, it not only cut the standard workday to eight hours, but it also doubled its workers’ pay in the process. To the shock of many at the time, this resulted in a significant increase in productivity, and Ford’s profit margins doubled within two years of implementation.

With the invention of the city and its powerful combination of economies of scale coupled to innovation and wealth creation came the great divisions of society. Our present social network structures barely existed in their present form until urban communities evolved. Hunter-gatherers were significantly less hierarchical, more egalitarian and community oriented than we are. The struggle and tension between unbridled individual self-enhancement and the care and concern for the less fortunate has been a major thread running throughout human history, especially over the past two hundred years. Nevertheless, it seems that without the motive of self-interest our entrepreneurial free market economy would collapse. The system we have evolved critically relies on people continually wanting new cars and new cell phones, new widgets and gadgets, new clothes and new washing machines, new thrills, new entertainment, and pretty much new everything, even when they already have enough of “everything.” It may not be a pretty picture and it doesn’t work for everyone, but so far, it’s worked remarkably well for most of us, and apparently most of us seem to want it to continue. Whether it can is a topic I’ll return to in the last chapter.

Entrepreneurs are everywhere. You don’t have to work in a garage to be in a startup. The concept of entrepreneurship includes anyone who works within my definition of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty. That means entrepreneurs are everywhere and the Lean Startup approach can work in any size company, even a very large enterprise, in any sector or industry. 2. Entrepreneurship is management. A startup is an institution, not just a product, and so it requires a new kind of management specifically geared to its context of extreme uncertainty. In fact, as I will argue later, I believe “entrepreneur” should be considered a job title in all modern companies that depend on innovation for their future growth. 3. Validated learning. Startups exist not just to make stuff, make money, or even serve customers. They exist to learn how to build a sustainable business. This learning can be validated scientifically by running frequent experiments that allow entrepreneurs to test each element of their vision. 4. Build-Measure-Learn. The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. All successful startup processes should be geared to accelerate that feedback loop. 5. Innovation accounting. To improve entrepreneurial outcomes and hold innovators accountable, we need to focus on the boring stuff: how to measure progress, how to set up milestones, and how to prioritize work. This requires a new kind of accounting designed for startups—and the people who hold them accountable.

I have gathered and analyzed thousands of case studies that I call play histories. I have found that remembering what play is all about and making it part of our daily lives are probably the most important factors in being a fulfilled human being. The ability to play is critical not only to being happy, but also to sustaining social relationships and being a creative, innovative person. If that seems to be a big claim,

Most cross-institutional change processes fail because they miss the starting point: co-sensing across boundaries. We need infrastructures to facilitate this process on a sustained level across systems. And because they don’t yet exist, organized interest groups go out and maximize their special interests against the whole, instead of engaging practitioners in the larger system in a process of sensing and innovating together. As

What promotes the power and pleasure of learning with and through materials? How can an atelier inspire and sustain creative, innovative thinking and learning throughout the school community? What kind of organization and interconnections among materials, spaces, people, and ideas do we need to invent in our North American context for poetic, expressive languages to flourish and to make the teaching and learning experience rich and whole?

The transformation of a business-as-usual culture into one focused on innovation and driven by design involves activities, decisions, and attitudes. Workshops help expose people to design thinking as a new approach. Pilot projects help market the benefits of design thinking within the organization. Leadership focuses the program of change and gives people permission to learn and experiment. Assembling interdisciplinary teams ensures that the effort is broadly based. Dedicated spaces such as the P&G Innovation Gym provide a resource for longer-term thinking and ensure that the effort will be sustained. Measurement of impacts, both quantitative and qualitative, helps make the business case and ensures that resources are appropriately allocated. It may make sense to establish incentives for business units to collaborate in new ways so that younger talent sees innovation as a path to success rather than as a career risk.

certainly influence the future course of cryptocurrencies, which we take up in chapter 14; governments everywhere are facing the question of how to balance regulation with fostering innovation in this space. Nevertheless, one should have little doubt that governments have all the tools necessary to prevent any alternative transaction media from deeply infiltrating the legal economy on a sustained basis, thereby greatly undermining their value relative to the present-day status of cash.

Core competence, as it is used by many managers, is a dangerously inward-looking notion. Competitiveness is far more about doing what customers value than doing what you think you’re good at. And staying competitive as the basis of competition shifts necessarily requires a willingness and ability to learn new things rather than clinging hopefully to the sources of past glory. The challenge for incumbent companies is to rebuild their ships while at sea, rather than dismantling themselves plank by plank while someone else builds a new, faster boat with what they cast overboard as detritus.

The larger and more complex a company becomes, the more important it is for senior managers to train employees at every level, acting autonomously, to make prioritization decisions that are consistent with the strategic direction and the business model of the company. That is why successful senior executives spend so much time articulating clear, consistent values that are broadly understood throughout the organization. Over time, a company’s values must evolve to conform to its cost structure or its income statement, because if the company is to survive, employees must prioritize those things that help the company to make money in the way that it is structured to make money.

It’s time to recognize that a broad, multidisciplinary, multi-institutional, multinational initiative, guided by a broader, more integrated and unified perspective, should be playing a central role in guiding our scientific agenda in addressing this issue and informing policy. We need a broad and more integrated scientific framework that encompasses a quantitative, predictive, mechanistic theory for understanding the relationship between human-engineered systems, both social and physical, and the “natural” environment—a framework I call a grand unified theory of sustainability. It’s time to initiate a massive international Manhattan-style project or Apollo-style program dedicated to addressing global sustainability in an integrated, systemic sense.1

Sustainability is today’s freedom crusade, because the next generation will not live free—will not have the freedom to pursue its economic dreams or to delight in all that nature has to offer—if our approach to the financial world and the natural are not grounded in sustainable values. That lack of sustainability will constrict everything in our lives. It will limit everything we might want to do. Unless we become less dependent on hydrocarbons, and unless we find a balance between the need for markets to be free enough to reward innovation and risk-taking but not so free as to reward recklessness that can destabilize the whole global economy, our lives will be reduced, redacted, and restricted. We will be overwhelmed by all the toxic assets we will produce in the Market and in Mother Nature. It will feel worse than had the Soviet Union won the Cold War, because we and our children will be enslaved by our financial debts and constricted by our ecological debts.

Unfortunately, however, there is another serious catch. Theory dictates that such discoveries must occur at an increasingly accelerating pace; the time between successive innovations must systematically and inextricably get shorter and shorter. For instance, the time between the “Computer Age” and the “Information and Digital Age” was perhaps twenty years, in contrast to the thousands of years between the Stone, Bronze, and Iron ages. If we therefore insist on continuous open-ended growth, not only does the pace of life inevitably quicken, but we must innovate at a faster and faster rate. We are all too familiar with its short-term manifestation in the increasingly faster pace at which new gadgets and models appear. It’s as if we are on a succession of accelerating treadmills and have to jump from one to another at an ever-increasing rate. This is clearly not sustainable, potentially leading to the collapse of the entire urbanized socioeconomic fabric. Innovation and wealth creation that fuel social systems, if left unchecked, potentially sow the seeds of their inevitable collapse. Can this be avoided or are we locked into a fascinating experiment in natural selection that is doomed to fail?

To put it slightly differently, the rate at which we need to process energy to sustain our standard of living remained at just a few hundred watts for hundreds of thousands of years, until about ten thousand years ago when we began to form collective urban communities. This marked the beginning of the Anthropocene, in which our effective metabolic rate began its steady rise to its present level of more than 3,000 watts today. But this is just its average value taken across the entire planet. The rate at which energy is used in developed countries is far higher. In the United States it is almost a factor of four larger, at a whopping 11,000 watts, which is more than one hundred times larger than its “natural” biological value. This amount of power is not a lot smaller than the metabolic rate of a blue whale, which is more than one thousand times larger in mass than we are. Thinking of us as an animal using thirty times more energy than we “should” given our physical size, the effective human population of the planet accordingly operates as if it were much larger than the 7.3 billion people who actually inhabit it. In a very real sense, we are operating as if our population were at least thirty times larger, equivalent to a global population in excess of 200 billion people.

And in 1956, Sir Charles Darwin, grandson of the Charles Darwin, wrote an essay on the forthcoming Age of Leisure in the magazine New Scientist in which he argued: Take it that there are fifty hours a week of possible working time. The technologists, working for fifty hours a week, will be making inventions so the rest of the world need only work twenty-five hours a week. The more leisured members of the community will have to play games for the other twenty-five hours so they may be kept out of mischief. . . . Is the majority of mankind really able to face the choice of leisure enjoyments, or will it not be necessary to provide adults with something like the compulsory games of the schoolboy? They could not have been more wrong. The main challenge they foresaw was how to keep people occupied so that they wouldn’t become bored to death. Instead of giving us more time, “science and compound interest” driven by “technologists working for fifty hours a week” have, in fact, given us less time. The multiplicative compounding of socioeconomic interactivity engendered by urbanization has inevitably led to the contraction of time. Rather than being bored to death, our actual challenge is to avoid anxiety attacks, psychotic breakdowns, heart attacks, and strokes resulting from being accelerated to death.

Continuous growth and the consequent ever-increasing acceleration of the pace of life have profound consequences for the entire planet and, in particular, for cities, socioeconomic life, and the process of global urbanization. Until recent times, the time between major innovations far exceeded the productive life span of a human being. Even in my own lifetime it was unconsciously assumed that one would continue working in the same occupation using the same expertise throughout one’s life. This is no longer true; a typical human being now lives significantly longer than the time between major innovations, especially in developing and developed countries. Nowadays young people entering the workforce can expect to see several major changes during their lifetime that will very likely disrupt the continuity of their careers. This increasingly rapid rate of change induces serious stress on all facets of urban life. This is surely not sustainable, and, if nothing changes, we are heading for a major crash and a potential collapse of the entire socioeconomic fabric. The challenges are clear: Can we return to an analog of a more “ecological” phase from which we evolved and be satisfied with some version of sublinear scaling and its attendant natural limiting, or no-growth, stable configuration? Is this even possible?

SEVEN CHANGE MASTERY SHIFTS • Change Mastery Shift 1: From Problem Focus to Opportunity Focus. Effective leaders tend to perceive and to innovate on the opportunities inherent in change. • Change Mastery Shift 2: From Short-Term Focus to Long-Term Focus. Effective leaders don’t lose sight of their long-term vision in the midst of change. • Change Mastery Shift 3: From Circumstance Focus to Purpose Focus. Effective leaders maintain a clear sense of purpose, value, and meaning to rise above immediate circumstances. • Change Mastery Shift 4: From Control Focus to Agility Focus. Effective leaders understand that control is a management principle that yields a certain degree of results. However, agility, flexibility, and innovation are leadership principles that sustain results over the long haul. • Change Mastery Shift 5: From Self-Focus to Service. Effective leaders buffer their teams and organizations from the stress of change by managing, neutralizing, and/or transcending their own stress. • Change Mastery Shift 6: From Expertise Focus to Listening Focus. Effective leaders stay open and practice authentic listening to stay connected with others and to consider multiple, innovative solutions. • Change Mastery Shift 7: From Doubt Focus to Trust Focus. Effective leaders are more secure in themselves; they possess a sense that they can handle whatever may come their way; their self-awareness and self-trust are bigger than the circumstances of change.

Westerners, not just Lincoln Steffens. It took in the Central Intelligence Agency of the United States. It even took in the Soviet Union’s own leaders, such as Nikita Khrushchev, who famously boasted in a speech to Western diplomats in 1956 that “we will bury you [the West].” As late as 1977, a leading academic textbook by an English economist argued that Soviet-style economies were superior to capitalist ones in terms of economic growth, providing full employment and price stability and even in producing people with altruistic motivation. Poor old Western capitalism did better only at providing political freedom. Indeed, the most widely used university textbook in economics, written by Nobel Prize–winner Paul Samuelson, repeatedly predicted the coming economic dominance of the Soviet Union. In the 1961 edition, Samuelson predicted that Soviet national income would overtake that of the United States possibly by 1984, but probably by 1997. In the 1980 edition there was little change in the analysis, though the two dates were delayed to 2002 and 2012. Though the policies of Stalin and subsequent Soviet leaders could produce rapid economic growth, they could not do so in a sustained way. By the 1970s, economic growth had all but stopped. The most important lesson is that extractive institutions cannot generate sustained technological change for two reasons: the lack of economic incentives and resistance by the elites. In addition, once all the very inefficiently used resources had been reallocated to industry, there were few economic gains to be had by fiat. Then the Soviet system hit a roadblock, with lack of innovation and poor economic incentives preventing any further progress. The only area in which the Soviets did manage to sustain some innovation was through enormous efforts in military and aerospace technology. As a result they managed to put the first dog, Leika, and the first man, Yuri Gagarin, in space. They also left the world the AK-47 as one of their legacies. Gosplan was the supposedly all-powerful planning agency in charge of the central planning of the Soviet economy. One of the benefits of the sequence of five-year plans written and administered by Gosplan was supposed to have been the long time horizon necessary for rational investment and innovation. In reality, what got implemented in Soviet industry had little to do with the five-year plans, which were frequently revised and rewritten or simply ignored. The development of industry took place on the basis of commands by Stalin and the Politburo, who changed their minds frequently and often completely revised their previous decisions. All plans were labeled “draft” or “preliminary.” Only one copy of a plan labeled “final”—that for light industry in 1939—has ever come to light. Stalin himself said in 1937 that “only bureaucrats can think that planning work ends with the creation of the plan. The creation of the plan is just the beginning. The real direction of the plan develops only after the putting together of the plan.” Stalin wanted to maximize his discretion to reward people or groups who were politically loyal, and punish those who were not. As for Gosplan, its main role was to provide Stalin with information so he could better monitor his friends and enemies. It actually tried to avoid making decisions. If you made a decision that turned

Harvard’s Theodore Levitt states the case as well as anyone else: The trouble with much of the advice business gets today about the need to be more vigorously creative is that its advocates often fail to distinguish between creativity and innovation. Creativity is thinking up new things. Innovation is doing new things…. A powerful new idea can kick around unused in a company for years, not because its merits are not recognized, but because nobody has assumed the responsibility for converting it from words into action. Ideas are useless unless used. The proof of their value is only in their implementation. Until then, they are in limbo. If you talk to the people who work for you, you’ll discover that there is no shortage of creativity or creative people in American business. The shortage is of innovators. All too often, people believe that creativity automatically leads to innovation. It doesn’t. Creative people tend to pass the responsibility for getting down to brass tacks to others. They are the bottleneck. They make none of the right kind of effort to help their ideas get a hearing and a try…. The fact that you can put a dozen inexperienced people in a room and conduct a brainstorming session that produces exciting new ideas shows how little relative importance ideas themselves have…. Idea men constantly pepper everybody with proposals and memorandums that are just brief enough to get attention, to intrigue and sustain interest — but too short to include any responsible suggestions for implementation. The scarce people are the ones who have the know-how, energy, daring, and staying power to implement ideas…. Since business is a “get-things-done” institution, creativity without action-oriented follow-through is a barren form of behavior. In a sense, it is irresponsible.

Almost all official statistics and policy documents on wages, income, gross domestic product (GDP), crime, unemployment rates, innovation rates, cost of living indices, morbidity and mortality rates, and poverty rates are compiled by governmental agencies and international bodies worldwide in terms of both total aggregate and per capita metrics. Furthermore, well-known composite indices of urban performance and the quality of life, such as those assembled by the World Economic Forum and magazines like Fortune, Forbes, and The Economist, primarily rely on naive linear combinations of such measures.6 Because we have quantitative scaling curves for many of these urban characteristics and a theoretical framework for their underlying dynamics we can do much better in devising a scientific basis for assessing performance and ranking cities. The ubiquitous use of per capita indicators for ranking and comparing cities is particularly egregious because it implicitly assumes that the baseline, or null hypothesis, for any urban characteristic is that it scales linearly with population size. In other words, it presumes that an idealized city is just the linear sum of the activities of all of its citizens, thereby ignoring its most essential feature and the very point of its existence, namely, that it is a collective emergent agglomeration resulting from nonlinear social and organizational interactions. Cities are quintessentially complex adaptive systems and, as such, are significantly more than just the simple linear sum of their individual components and constituents, whether buildings, roads, people, or money. This is expressed by the superlinear scaling laws whose exponents are 1.15 rather than 1.00. This approximately 15 percent increase in all socioeconomic activity with every doubling of the population size happens almost independently of administrators, politicians, planners, history, geographical location, and culture.

Complex systems are more spontaneous, more disorderly, more alive than that. At the same time, however, their peculiar dynamism is also a far cry from the weirdly unpredictable gyrations known as chaos. In the past two decades, chaos theory has shaken science to its foundations with the realization that very simple dynamical rules can give rise to extraordinarily intricate behavior; witness the endlessly detailed beauty of fractals, or the foaming turbulence of a river. And yet chaos by itself doesn't explain the structure, the coherence, the self-organizing cohesiveness of complex systems. Instead, all these complex systems have somehow acquired the ability to bring order and chaos into a special kind of balance. This balance point—often called the edge of chaos—is were the components of a system never quite lock into place, and yet never quite dissolve into turbulence, either. The edge of chaos is where life has enough stability to sustain itself and enough creativity to deserve the name of life. The edge of chaos is where new ideas and innovative genotypes are forever nibbling away at the edges of the status quo, and where even the most entrenched old guard will eventually be overthrown. The edge of chaos is where centuries of slavery and segregation suddenly give way to the civil rights movement of the 1950s and 1960s; where seventy years of Soviet communism suddenly give way to political turmoil and ferment; where eons of evolutionary stability suddenly give way to wholesale species transformation. The edge of chaos is the constantly shifting battle zone between stagnation and anarchy, the one place where a complex system can be spontaneous, adaptive, and alive. Complexity, adaptation, upheavals at the edge of chaos—these common themes are so striking that a growing number of scientists are convinced that there is more here than just a series of nice analogies. The movement's nerve center is a think tank known as the Santa Fe Institute, which was founded in the mid-1980s and which was originally housed in a rented convent in the midst of

Growth was so rapid that it took in generations of Westerners, not just Lincoln Steffens. It took in the Central Intelligence Agency of the United States. It even took in the Soviet Union’s own leaders, such as Nikita Khrushchev, who famously boasted in a speech to Western diplomats in 1956 that “we will bury you [the West].” As late as 1977, a leading academic textbook by an English economist argued that Soviet-style economies were superior to capitalist ones in terms of economic growth, providing full employment and price stability and even in producing people with altruistic motivation. Poor old Western capitalism did better only at providing political freedom. Indeed, the most widely used university textbook in economics, written by Nobel Prize–winner Paul Samuelson, repeatedly predicted the coming economic dominance of the Soviet Union. In the 1961 edition, Samuelson predicted that Soviet national income would overtake that of the United States possibly by 1984, but probably by 1997. In the 1980 edition there was little change in the analysis, though the two dates were delayed to 2002 and 2012. Though the policies of Stalin and subsequent Soviet leaders could produce rapid economic growth, they could not do so in a sustained way. By the 1970s, economic growth had all but stopped. The most important lesson is that extractive institutions cannot generate sustained technological change for two reasons: the lack of economic incentives and resistance by the elites. In addition, once all the very inefficiently used resources had been reallocated to industry, there were few economic gains to be had by fiat. Then the Soviet system hit a roadblock, with lack of innovation and poor economic incentives preventing any further progress. The only area in which the Soviets did manage to sustain some innovation was through enormous efforts in military and aerospace technology. As a result they managed to put the first dog, Leika, and the first man, Yuri Gagarin, in space. They also left the world the AK-47 as one of their legacies. Gosplan was the supposedly all-powerful planning agency in charge of the central planning of the Soviet economy. One of the benefits of the sequence of five-year plans written and administered by Gosplan was supposed to have been the long time horizon necessary for rational investment and innovation. In reality, what got implemented in Soviet industry had little to do with the five-year plans, which were frequently revised and rewritten or simply ignored. The development of industry took place on the basis of commands by Stalin and the Politburo, who changed their minds frequently and often completely revised their previous decisions. All plans were labeled “draft” or “preliminary.” Only one copy of a plan labeled “final”—that for light industry in 1939—has ever come to light. Stalin himself said in 1937 that “only bureaucrats can think that planning work ends with the creation of the plan. The creation of the plan is just the beginning. The real direction of the plan develops only after the putting together of the plan.” Stalin wanted to maximize his discretion to reward people or groups who were politically loyal, and punish those who were not. As for Gosplan, its main role was to provide Stalin with information so he could better monitor his friends and enemies. It actually tried to avoid making decisions. If you made a decision that turned out badly, you might get shot. Better to avoid all responsibility. An example of what could happen

Performance measure. Throughout this book, the term performance measure refers to an indicator used by management to measure, report, and improve performance. Performance measures are classed as key result indicators, result indicators, performance indicators, or key performance indicators. Critical success factors (CSFs). CSFs are the list of issues or aspects of organizational performance that determine ongoing health, vitality, and wellbeing. Normally there are between five and eight CSFs in any organization. Success factors. A list of 30 or so issues or aspects of organizational performance that management knows are important in order to perform well in any given sector/ industry. Some of these success factors are much more important; these are known as critical success factors. Balanced scorecard. A term first introduced by Kaplan and Norton describing how you need to measure performance in a more holistic way. You need to see an organization’s performance in a number of different perspectives. For the purposes of this book, there are six perspectives in a balanced scorecard (see Exhibit 1.7). Oracles and young guns. In an organization, oracles are those gray-haired individuals who have seen it all before. They are often considered to be slow, ponderous, and, quite frankly, a nuisance by the new management. Often they are retired early or made redundant only to be rehired as contractors at twice their previous salary when management realizes they have lost too much institutional knowledge. Their considered pace is often a reflection that they can see that an exercise is futile because it has failed twice before. The young guns are fearless and precocious leaders of the future who are not afraid to go where angels fear to tread. These staff members have not yet achieved management positions. The mixing of the oracles and young guns during a KPI project benefits both parties and the organization. The young guns learn much and the oracles rediscover their energy being around these live wires. Empowerment. For the purposes of this book, empowerment is an outcome of a process that matches competencies, skills, and motivations with the required level of autonomy and responsibility in the workplace. Senior management team (SMT). The team comprised of the CEO and all direct reports. Better practice. The efficient and effective way management and staff undertake business activities in all key processes: leadership, planning, customers, suppliers, community relations, production and supply of products and services, employee wellbeing, and so forth. Best practice. A commonly misused term, especially because what is best practice for one organization may not be best practice for another, albeit they are in the same sector. Best practice is where better practices, when effectively linked together, lead to sustainable world-class outcomes in quality, customer service, flexibility, timeliness, innovation, cost, and competitiveness. Best-practice organizations commonly use the latest time-saving technologies, always focus on the 80/20, are members of quality management and continuous improvement professional bodies, and utilize benchmarking. Exhibit 1.10 shows the contents of the toolkit used by best-practice organizations to achieve world-class performance. EXHIBIT 1.10 Best-Practice Toolkit Benchmarking. An ongoing, systematic process to search for international better practices, compare against them, and then introduce them, modified where necessary, into your organization. Benchmarking may be focused on products, services, business practices, and processes of recognized leading organizations.