The Business of Ecology Building

We have been humming along in this series of posts about “how to do business”. Not as in 20th century business – where the main focus was on efficiency. But as in 21st century business – where the main focus is on innovation. The path we are using is to go from idea to assessing value to selling to ecology building and finally to transcending. We are in the ecology building part of this journey.

If I were walking down the road and found a something of value, like a big hunk of copper, I would probably try to sell it and just take the money. It is not likely that I will find huge hunks of copper lying around again so I would be justified to consider this as a “one off” or “ad hoc” thing. And if I could sell it, the return would be as economists call it a “helicopter drop” of cash.

The key thing about this is that the experience would have no effect on my capacity to think better or to do anything beyond that single transaction. Nor would it affect any institutional arrangements. I would not have to set up a company or hire people or whatever.

I use this example to introduce a basic difference between “change” and “transformation”. Ron Ashkenas discusses this rather well at HBR. Change is about handling finite initiatives that have no effect on an organization or group.  Transformation is something completely different. We go into a transformative process when our underlying assumptions about reality are challenged and we are not sure how it will affect our relationship set. It is about re-invention.

Here is the thing — when I introduce a new idea to a target group I need to ask whether this is something that will just change things or if it is likely to transform relationships.Consider this quote from the above article

It’s been almost 10 years since HBR published John Kotter’s classic article,”Why Transformation Efforts Fail.” And although his suggestions for how to improve the odds have been widely accepted, the success rate of major corporate change programs remains essentially unchanged — it still hovers at 30%.

Ouch! People and firms are much better at dealing with change than transformation. This is easy to understand why. We can visualize how a given set of relationships work to cope with a changed variable. It is much more difficult to cope with processes that force us to give up that certainty.

So you have an idea, and you think you can sell it to a target group. Selling it may result in just a small change among the buyer group. Perhaps switching the type of razor or cleaning liquid that they buy. But to get that product into the market when you are starting from scratch means transforming things.

Here is the think — while there is a lot of talk about how start up culture is now mainstream, research suggests that we are not good at dealing with transformation.

Can we get better? I think so. The first step is to understand that one does not create enormous transformation in one shot. That is like trying to eat the whole elephant in a single sitting. Transformation occurs in fits and starts. So the trick of making it happen is to get those fits ans starts to add up over time.

It works like this. According to Bill Warner, your great idea must be transformed into a series of questions and answers. The first is what is your great”intention”.? Getting this right means addressing the BIG “why am I doing this?” question. What concrete change do I want to produce in the world? Second, what do you believe? What are your assumptions that lead you to think that this change is essential?  Finally, who are your people? Who do you expect to get excited about this change idea?  Finally, what is your “invention” – the actual product?  You need to work really, really, really hard at developing great and simple answers to the above questions. Answers that a 3rd grader would get. Most people I deal with don’t do this hard work and then don’t understand why they can’t get people to listen to their ideas.

After you do this, you are ready to get started with a strategy for developing your idea into a product. Working backwards from the big change, ask what are the necessary and sufficient steps to reach that? For each answer, do the same process again. Ultimately, you will come up with first steps. Congratulations! You have found a focus point for a conversation!

The better you get at this mental work, the stronger your networking skills will become. Instead of talking in generalities, you will speak with precision. You will know what questions to ask and how to frame cooperation. Understanding why people cooperate in this framework provides you with a glimpse of the ecology in which you work.

Ok, now you are ready to start thinking about putting together a business model. Here is a link that may help you get started. Notice that the modeling tool forces you to categorize people into groups and to understand the relationship between those groups. This is a great mapping tool. But don’t build the map until you have done the hard work to create the idea.

What next? Practice saying the answers to the great questions and why next steps are essential. Keep practicing. Test whether people in categories (like potential clients) listen and react. Track this as if you were testing. That is, in fact, what you are doing. Especially important, you are testing the basis for your model – the beliefs and assumptions.

Keep in mind one thing. Human nature is social. Meaning that by our nature, we form groups and we create distinctions between groups. Ecology building means working within tribes. We may need to build new ones or at least challenge how tribes speak by developing a new language. Most important, we need to be sensitive to the barriers that separate us.

That is what makes ecology building work and transformational change possible.

 

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