The Science of Motivation

Extrinsic vs. Intrinsic MotivationWhen leaders want to motivate people in an organization to implement a strategy, it is tempting to use a carrot & stick approach — tie compensation to performance, for example.  Well, it turns out that science has shown over and over again that such extrinsic forms of motivation don’t actually work very well for anything more than straightforward tasks.  As tasks get more complex, intrinsic forms of motivation work better.  Examples of intrinsic motivation include:

  • Autonomy: the personal freedom to act as we see fit to implement a strategy
  • Mastery: the fulfillment that comes from developing a high level of skill in a valued area
  • Purpose: a sense of meaning, value, and making a difference in our work

Leaders who want to get the most from their organizations will need to find ways to build intrinsic motivation qualities like these into their organizational cultures.

In the TED talk below, titled “The Surprising Science of Motivation”, Dan Pink makes the case for leaning toward intrinsic motivation in organizations.  Examples he sites where this has worked extremely well are Google’s 20% time, Results Only Work Environments (ROWE), and Wikipedia.

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Our New Website Launches

Blue Summit Strategy WebsiteWe’ve just finished a complete rewrite and redesign of our website.  In the process, we’ve moved our domain from to, but email addresses will remain the same.  The entire site is now powered by WordPress, which has grown into a full-fledged Content Management System.  It is now much easier to add and update content, or even change the structure of the site.  It is also much easier to optimize the site for search engines.

We updated the visual look and improved the slideshow examples of our work.  The site is now “flash-free”, so animations run quicker and work well on iPhones and iPads.

Almost every page has been rewritten to update the material and refocus our value proposition.  We’ve simplified the service offerings to reflect the latest developments in our work.  There are now 3 levels of depth and rigor in our strategic planning work, ranging from Strategic Visioning, to Strategy Mapping, and finally to the most rigorous, Strategic Decision Analysis.

We’ve focused on the themes that infuse everything we do and differentiate us from typical strategy consultants:

  • Working with large, live visuals to clearly communicate and see the big picture.
  • A collaborative, facilitative approach to designing strategy.
  • Leadership development built into our strategic planning work.
  • A holistic, integral approach to strategy that embraces sustainability.

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Announcing: Global Trends Investment Management

Blue Summit AdvisorsWith a decade of dismal stock market returns and many people losing their savings in Ponzi schemes, investors are understandably losing trust in the markets and their ability to earn worthwhile returns with their investments.

To answer this challenge, I developed the Global Trends investment program. Based on analysis of 38 years of data across more than 30 markets, Global Trends is a quantitative trend following strategy designed to make money in up or down markets. By diversifying across far more markets than just U.S. stocks, trends can always be caught somewhere in the world.

The Global Trends strategy enters long positions in up-trending markets and short positions in down-trending markets. It constantly monitors worldwide markets in stocks, bonds, currencies, metals, energies, and agricultural commodities to find the highest potential trends in the most uncorrelated markets.

Backtests of this strategy over 38 years with actual market data showed an average annual return of 46% with a maximum drawdown of 20%. Performance of real accounts with actual transactions over the past 21 months have seen an annualized return of 82.8%.

More information is available on the Blue Summit Advisors web page, including details about the strategy, market diversification, minimum account sizes, fees, and performance. This program is offered through separately managed accounts.

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Appreciative Inquiry

Appreciative Inquiry Process

Appreciative Inquiry Process

I was recently asked to facilitate a planning process for the Board of Directors and a few other stakeholders of a non-profit service organization. I chose to use a process called Appreciative Inquiry (AI) because I felt it would be a good fit for the culture of the organization. AI is based on the assumption that organizations change in the way they inquire — an organization that inquires into problems or difficult situations will keep finding more of the same, but an organization that tries to appreciate what is best in itself will find more and more of what works well.

AI was adopted from work done by earlier action research theorists and practitioners and further developed by David Cooperrider and Suresh Srivastva in the 1980s. It has been used in a wide variety of businesses, non-profit organizations, educational institutions, communities, local governments, and religious institutions to envision and create change. It is particularly useful for large group, multi-stakeholder situations because it seeks input about the positivity of an organizations past and potential future.

The basic assumptions of AI are:

  • In every society, organization, or group, something works.
  • What we focus on becomes our reality.
  • Reality is created in the moment and there are multiple realities.
  • The act of asking questions of an organization or group influences the group in some way.
  • People have more confidence and comfort to journey to the future (the unknown) when they carry forward parts of the past (the known).
  • If we carry parts of the past forward, they should be what is best about the past.
  • It is important to value differences.
  • The language we use creates our reality.

As you can see, AI is as much a philosophy as it is a process of organizational change. There is a considerable amount of theory and research backing up the principles of AI, largely based on the developing science of Positive Psychology. Some of these principles would be considered rather novel in the mainstream business world. The eight underlying principles of AI are:

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Incredible Videos of Live Graphic Recording

I was just turned on to a set of videos that show the live graphic recording of fascinating lectures in speeded up time — which makes them incredible to watch. There are videos on a variety of topics, each of them just a few minutes long. Check them out at the RSA website.

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Strategy in a Downturn

Strategy in a DownturnCreating and sustaining a good long term strategy for growth isn’t easy even when times are good. But what do you do when things are looking worse than your worst case scenario? Conventional Wall Street wisdom says you should abandon your strategy, cut staff to the bone, and focus on the short term — getting through this quarter. What’s the problem with that approach?

First, studies show that layoffs tend to result in an exodus of valuable employees. Second, making cuts across the board compromises your organization’s competitiveness in the longer run. And third, abandoning your growth strategy will leave you unable to take advantage of the inevitable upturn when it comes.

So, what are we to do? Difficult times require extra effort and creativity devoted to strategy. Your strategy needs to be much more than a plan for growth. It needs to address all the issues that a downturn brings, be robust against a range of possible downturn scenarios, and prepare the organization for growth as the economy recovers. Here is a top 10 list of guidelines to consider:

1. Explicitly address economic scenarios. Look at a wide variety of economic scenarios (demand, growth rates, interest rates, competitors, etc.) and map them out. Determine the likelihood of each scenario occurring. Consider what would happen when multiple scenarios interact. Test out what will happen to your business in each scenario. Finally, devise strategies that will work best in each scenario.

2. Take measures to cut costs and improve efficiency. Take this opportunity to weed out less successful products from your product lines. Cut corporate “luxury” items, like entertainment, travel, and conferences. Be careful not to cut costs that are core to the business and might compromise its competitiveness. And be careful not to over-react to the downturn as well. Rather than cut costs across the board, perform “surgical” cost cutting that removes the expenses that are the least productive.

3. Generate and conserve as much cash as possible. Balance sheet flexibility is critical in an environment like we have today. Prioritize projects and investments for their ability to generate cash in the near term. Extend payment terms where possible. Get accounts receivable up to date. Think about ways to turn assets into cash, such as selling plants or equipment and lease them back.

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Complimentary Strategy Audits

For a limited time, we are offering existing and potential clients a complimentary strategy audit. We will work with you to understand and evaluate:

  • The quality and completeness of your existing vision and strategy
  • The robustness of your existing strategy to various recession scenarios
  • How well you are on track to achieve your desired goals

We then work with you to explore options for filling the gaps to improve your vision and strategy, and be better prepared for whatever this recession has in store.

For more information or to schedule an appointment, contact Konrad at 415-927-8070 or via the Contact Us page.

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Recessions Cause Industry Shakeups

ShakeupsTry as we might, we can never accurately predict the timing or depth of a recession. The best we can hope for is a set of scenarios with probabilities associated with them. As the Nobel laureate Paul Samuelson once said, “Economists have correctly predicted nine of the last five recessions.”

One thing that seems clear about recessions is that they cause significant industry shakeups. Some companies that were leaders in their industry fall from their heights, and others rise to take their places. McKinsey compiled a data set on the last recession (2000-01), and found that nearly 40% of leading U.S. industrial companies toppled from the first quartile in their sectors during that recession. About a third of leading U.S. banks fell as well. During the same period, 15% of companies that had not been industry leaders prior to the recession vaulted into the top quartile during it.

The are many reasons why some companies lose leadership positions during recessions and others gain them, but it generally comes down to smart planning and decision-making. See my article Strategy in a Downturn for best practices companies can use to maintain or grab leadership positions in their industries.

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Creativity in Strategic Planning

An example of ineffective strategy is a dry, one-inch-thick report that people only refer to when they need some market numbers, or a PowerPoint slide deck full of esoteric whiz-bang charts put together by a team of consultants.

Powerful strategy is the living, breathing force behind the actions of an organization.  It is the bridge that connects people from where they are to where they want to be.  It’s bold — definitely not business as usual — because it continually changes how the organization sees itself and transforms it into what you want it to become.

How can we bring this kind of life and boldness into our strategic planning efforts? I propose that creativity is the key to this, and that there are a variety of tools and techniques that are well suited to engaging people and tapping into their creative juices.

Creativity Tools Strategic Planning

Mind Map Brainstorming. The word brainstorming has become an ubiquitous term for creative thinking. The core principle of brainstorming is to suspend judgment during the generation phase of thinking. Analysis, prioritization, and judgment take place after ideas are generated. This frees the mind to make connections and abstractions, shift perspectives, and explore alternatives without the constraints and structure that judgment brings. Unfortunately, typical group brainstorming sessions fail to be productive for a variety of reasons — judgment creeps in, ideas are not tracked, connections are not supported, etc. How can brainstorming be made more effective? I find that facilitated sessions with mind mapping software provide tremendous advantages over typical brainstorming sessions. Ideas can be captured and tracked with total freedom of association. Through powerful yet simple visualization, new ideas and connections are encouraged. At the end of a session, the group has a map of all the ideas generated in the session, which encourages further connections and ideas to develop after the meeting.

Improvisation. If you’ve ever seen an episode of “Whose Line Is It Anyway?”, you know what I mean by improvisation. It’s the practice of acting and reacting, to create in the moment and in response to one’s environment. Techniques of improv are widely trained in the entertainment arts (music, theater, and dance), but it is not well known that it can be a powerful tool in business planning. Its secret lies in suspending judgment and accessing the creativity of the present moment. There is no time to censor or evaluate, only to respond and build. It’s interesting to note that the mental and emotional states needed to practice the art of improvisation are very similar to those of Zen, and many of the same concepts are used in both practices. When people who have a thorough understanding of their disciplines practice improvisation, the result can be the invention of new thought patterns, new structures, or new ways to act. I use improv to help groups develop a more creative vision by asking them to improvise what their organization could be like at some point in the future, and capture their thinking in a tool called a Cover Story Vision. The result can often include nuggets of creative possibility that are fresh and bold.

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Practice of the Month: How Creative is Your Strategic Planning?

Even though most of us would agree that it’s a good thing to bring more creativity into our strategic planning efforts, much of the time very little attention or effort goes into actually making it happen. This month’s practice is about taking stock of your organization’s efforts at bringing creativity into strategic planning. You can do this exercise for your part of the organization, or for the organization as a whole, whichever you choose.

Take some time this month to look at how strategic decisions are made in your organization, and how much real creativity is infused in the process. You may want to use the Creativity Toolbox article to survey what kinds of tools and practices your organization uses on a regular basis.

What creativity practices are you or your organization good at? Which do you use regularly? Which do you think your organization would benefit from using more frequently or with more skill?

Consider taking some steps to bring more creativity into your strategic planning. Decide which tools or practices you want to bring in, and identify resources to help you do that. It could make a big difference in how your organization determines its direction, and ultimately in its long term success. You could even consider making some New Year’s resolutions around this topic!

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