How should we prepare for an uncertain future? History shows that imagination is more important than knowledge in safeguarding ourselves. And there are proven steps we can take to prepare.
5-minute read. – 100% written by humans
There’s a quiet sense of bafflement hovering over the world of AI. While tech bosses distract us with the story that they are the only ones who can lead us from doomsday to utopia, study after study suggests that those promised productivity gains remain elusive. Even the green shoots appear to be absent.
AI requires us to reimagine the way we do things
The most coherent explanation is that the ability to capitalize on the potential of the AI technology requires us to be able to reimagine the way we do things. In the words of a recent McKinsey white paper:
“Companies must be open to radical reinvention to find new, significant and sustainable sources of revenue… reinvention is a rethinking of the business itself.”
We saw the same phenomenon at work during the dot.com boom of the 1990s. Too many large corporations simply applied the new technology to their existing supply chains, invariably with disappointing results. Those who fully capitalized on the new technology were those organizations who had the ability to reimagine their businesses.
Technology without the power of imagination
Cutting-edge technology without the power of imagination has led to some of the most notorious missed open goals in history.
Kodak developed the first digital camera but failed to envisage a world where consumers would be prolifically snapping and downloading onto their own devices.
Perhaps with a little more institutional imagination, Blockbuster would not have conceded its market-leading position to the new streaming services and maybe many of the world’s leading retail chains that are now defunct, would not have conceded their positions to a small online book retailer. Arguably it comes down to who has the institutional imagination and who does not.
The power of imagination at work
Imagine conducting market research in the late 1970s and asking people whether they wanted a computer at home. Why would they? Computers were big clunky machines that did boring jobs around the office. This led to most of the leading computer manufacturers at the time concluding that there was no market for a home computer. Lack of imagination led them simply to take the initial market research at face value.
But imagine the computer as an entirely new category—something for games, education, writing, household finances and eventually, communication. In other words, the ubiquitous device that we now take for granted.
The breakthrough came only when a small number of industry leaders were prepared to reimagine entirely what we mean by a computer.
Where are today’s leaders and organizations who will have the imagination to upend the norms that we currently take for granted? Answer that question and you will have a pretty good prediction of who is about to hit pay dirt.
Imagination needs to be institutionalized
The problem with imagination is that most corporations are institutionally bad at it. There is little benefit in having gifted original thinkers in your midst, if the culture alienates and silences them. Imagination must be part of the culture which – counterintuitively – means it needs to be institutionalized.
In 2003, the space shuttle Columbia exploded on re-entering the Earth’s atmosphere, resulting in the death of all seven crew members. The tragedy was caused by a small piece of the insulating foam from the shuttle’s tank breaking off during launch and striking the protective tiles which are there to insulate the shuttle from the extreme heat that’s created as the shuttle returns to Earth.
The Columbia Accident Investigation Board concluded that the problem wasn’t simply the foam strike. It was a failure to imagine the full range of potential consequences. This was because NASA’s organisational culture had stifled diversity of opinion.
The teleconference held by the Mission Management Team was a full six days after the incident and the first time that the team had met since then. The matter of the foam strike wasn’t raised until two thirds of the way into the call and crucially its importance was dismissed. Most damaging was the response of The Chair of the Mission Team.
When the issue was raised the Chair replied: “I really don’t think there is much we can do, so it’s not really a factor during the flight because there is not much we can do about it.”
The response from the person leading the team makes it clear that there is little or no tolerance for differences of opinion. Nobody spoke out or disagreed at the meeting.
In its response NASA’s leadership recognised that simply exhorting its people to speak up wouldn’t be enough. Culture had to change. It put in place practices to institutionalize cognitive diversity.
Teams focusing on technical and safety were given separate chains of authority from those focusing on timing and budget. NASA explicitly says this is intended to ensure decisions benefit from different points of view.
The NASA Engineering and Safety Center (NESC) was set up as an independent review board that NASA says was specifically intended to promote “a diversity of thought.”
Dissenting voices need to be listened to
But cognitive diversity alone doesn’t safeguard against a failure of imagination. The dissenting voice needs to be meaningfully listened to. Too often, a postmortem will discover that there was no shortage of differing perspectives, but the culture quashed them like antibodies working on an alien pathogen.
This is why current NASA rules explicitly say that diverse views should be respected with “no suppression or retribution.”
No shortage of cognitive diversity
The 2008 financial crash was arguably the business world’s most catastrophic failure of imagination. And yet in reality, there was no shortage of cognitive diversity.
One of the dissenting voices was Paul Moore, hired by HBOS – at the time one of the UK’s largest banks – as Head of Risk, to perform precisely this role.
At the time, banks appeared to have designed a way to overcome the laws of financial gravity. New financial instruments such as collateralized debt obligations, CDOs, meant that banks could carry on lending, with apparently negligible risk regardless of the shakiness of their debtors.
But what if these new financial instruments are nowhere near as secure as the models seemed to suggest they are? There was no shortage of people who could imagine how the house of cards might collapse, but if your bosses are making eye-watering sums of money, it’s the last thing they want to hear.
The absence of psychological safety
Moore was hired precisely to be that dissenting voice. But rather than thanking him for his foresight, senior leaders were so hostile to his alternative viewpoint that his position became untenable. Speaking at a Threshold conference shortly after his departure, he told an anecdote in which a senior leader flanked by other senior colleagues, leant across the table and threatened, “Don’t make a f***ing enemy out of me.” Of course, we only have Moore’s word for this but clearly having a devil’s advocate in the absence of psychological safety, does little to boost imagination – or avert catastrophe.
Technology and winners and losers
Every technological revolution in history has resulted in both winners and losers. AI will be no different, with the proviso that this time the ability to reimagine the organization will be paramount. Where imagination works at a corporate level, it’s cultivated as part of the culture.
Threshold’s focus now is on helping organizations to cultivate the two parameters of culture that give rise to institutional imagination: active cognitive diversity (not just new ideas but new ideas combined with intellectual rigor); and active psychological safety (psychological safety combined with accountability).
It would serve us well to remember the words of Albert Einstein: “Imagination is more important than knowledge. For knowledge is limited, whereas imagination embraces the entire world, stimulating progress, giving birth to evolution.”
To find out how we can help leaders in your organisation to be more impactful, influential and persuasive visit www.threshold.co.uk
