"…the single most important factor in fostering true game changers [is] the way leaders and organizations handle the discomfort, the disorientation, and the thrill (and pain) of living with uncertainty, finding clarity from ambiguity, and being surprised." Leapfrogging, page 10
Vern Burkhardt (VB): In Leapfrogging you say, "…groundbreaking innovations always deliver: something new, something powerfully effective, and – most important – something unexpected." Why is the power of surprise so important for innovation?
Soren Kaplan: There are two dimensions of the power of surprise when it comes to innovation. When you look at the kinds of breakthrough products, services, and business models which the world appreciates and which adds value to our lives, oftentimes our first experience of them gives us a feeling of surprise. This is one dimension of surprise. Consider the iPad or the first time you went to the Cirque du Soleil. You get a feeling of positive surprise from business breakthroughs. They can be things that entertain us, make us more effective save money, make money, or whatever.
The second dimension of the power of surprise is the notion that in order to create the kind of breakthroughs that add value to the world and positively challenge our assumptions, we need to go through a process where we live with ambiguity and experience uncertainty. We have to open ourselves up to the positive and negative unpredictable events that will inevitably come our way during the process.
VB: Are negative surprises more impactful?
Soren Kaplan: Both positive and negative surprises can affirm our assumptions, but typically it's the negative surprises that challenge our assumptions. They require us to make a bigger shift around how we're thinking about things and what we're doing. Negatives are a bigger challenge to businesses and individuals in terms of what they require us to do to make things work.
VB: Do negative surprises challenge us to make bigger changes?
Soren Kaplan: The negative surprises challenge our mindsets because in business there is an assumption that anything which falls outside of the plan is bad. Anything negative – a negative surprise – is typically seen as bad because it disrupts our plans. On the surface, this makes perfect sense.
But a lot of the stories about breakthroughs in my book demonstrate that it's actually those unpredictable events that give us the insight about our direction needing to be shifted. It's those negative surprises that give us the insight to do something different that allows us to get to the breakthrough.
Not always, but negativity might be a relative term in certain instances.
VB: Negative surprises for us may be positive surprises for others?
Soren Kaplan: It's quite possible. I have some great examples of that.
VB: Are 'business breakthroughs' the key to financial success in our increasingly competitive environment?
Soren Kaplan: Yes, the real challenge is how do you create competitive differentiation while adding value to your customers, to your stakeholders. Breakthroughs challenge assumptions; create new products, services and business models; and add value at the same time. This is the essence of a breakthrough, and it can be a business process as much as a product or service.
VB: Are companies, which are not working toward business breakthroughs, destined for the dustbin?
Soren Kaplan: There is a whole spectrum of different kinds of innovation from incremental to sustaining your core business and to the breakthrough. They're all important. You need all kinds of innovation, but if you don't go after the game changers someone else will and eventually you'll be disrupted.
VB: Would you talk about "leapfrogging our mindsets?"
Soren Kaplan: We don't know what we don't know. If we want to create a breakthrough that surprises the market with something new and valuable, we need to overcome the constraints around our own thinking. We need to overcome our assumptions about the market and about what's possible so we can challenge the status quo. In order to challenge the status quo we have to challenge ourselves.
The whole premise behind leapfrogging mindsets is if we want to leapfrog what's in the market and create differentiation for ourselves it is not a one-time event. Leapfrogging to breakthroughs is a process.
Our limiting mindsets are invisible until we overcome them, which we can do through venturing outside of our comfort zones. There are a number of ways in which we can overcome our limiting mindsets. The whole idea is that we can't see our assumptions until we overcome them so the question is what can we do to challenge our thinking, open ourselves up to the unexpected, and be open to surprises in order to overcome these barriers – our mindsets.
We need to overcome our mindsets if they are getting in the way of our ability to innovate. The paradox is most often we aren't aware of our most fundamental assumptions until we successfully overcome them.
VB: Why is our mindset so important to the process of innovation?
Soren Kaplan: A mindset is a collection of assumptions. Typically what happens is you have an industry, market, or competitors that oftentimes share the same set of assumptions, the same mindset. In order to come up with a breakthrough that challenges the status quo, it's important to challenge our mindsets so we can overcome the set of assumptions that most of us share.
VB: Did your background in Organizational Psychology sensitize you to these insights?
Soren Kaplan: Yes. There are a number of things that came together for me. My Organizational Psychology background gave me the perspective of integrating the individual with the team in an organization. I moved to Paris for a year and got out of my own culture and comfort zone, and I had a number of experiences in this new culture that challenged my own mindset. Plus I was fortunate to have a diversity of other experiences professionally and personally as well. All of those things came together to give me some of the clues, some surprises of my own, and some of the insights that I used to overcome my own mindset in order to come up with the concepts I wrote in my book.
VB: Would you talk about what you call the 'leapfrogging life cycle'?
Soren Kaplan: I wanted to ground some of the higher-level concepts, which can feel a little bit esoteric, in a practical model. The life cycle looks at the different phases that an individual, team, or organization goes through during the process of creating a breakthrough. Bear in mind that the path to breakthroughs is an incredibly complex process with starts and stops, successes and failures in each phase, and phases that can overlap and even repeat themselves. But a simplification helps our understanding.
I map out tools and strategies, using the acronym 'LEAPS', tracks the various phases of the leapfrogging life cycle. 'Listen' is the first phase that involves finding 'Sparks of Surprise'. In this phase we get a sense there is a need, problem, or opportunity. The other phases are 'Engaged Exploration' which involves 'Exploring' outside our comfort zones, 'Act' where we take steps to learn what works and doesn't, 'Persist' where we have to take the surprise out of failure and move through what I call 'The Failure Zone', and 'Market Surprise' where we 'Seize' the fruits of our labor, optimism grows, and bigger wins occur.
VB: Why are some people able to persist through the 'Failure Zone' phase in the leapfrogging life cycle?
Soren Kaplan: As we're going through the process, tackling challenges, and creating a game-changer and market surprise, we will have to live with ambiguity and the fog of uncertainty. We are wired and pre-conditioned to give up, to retrench into certainty and comfort.
In business it can be scary when we experience uncertainty. It can even create fear. There's research that demonstrates that when we experience uncertainty and a feeling of lack of control, our level of fear goes up. When fear goes up, we get increasingly pessimistic about the future. When we get pessimistic about the future we retrench back into tried and true behavior, which basically means risk-aversion and behavior which worked in the past even though it not what is needed for the future. This results in poor decision-making and poor choices.
It's the same dynamic as when the stock market is falling. It's a known dynamic that people sell at the bottom. They sell at the bottom in order to create a sense of certainty for themselves even though it's proven not to be the best choice.
This same dynamic happens when we're innovating, when we have to live with all the uncertainty. We have to move through the depths of uncertainty and ambiguity to find optimism and little successes. We need to persist through the times of uncertainty so we can come out at the other end with success.
VB: What does it mean to find "your own sparks of personal surprise?"
Soren Kaplan: This means putting yourself into situations which push your own boundaries, and that allow you to take steps to challenge yourself, your team, and your organization in order to find new insights about how customers operate, their needs, and what are the opportunities in the market. It's all about doing things which challenge your assumptions and push your boundaries to give you new insights in order for you to find those 'sparks of surprise'. These sparks are the things you didn't expect or anticipate. They give you a new mindset and allow you to shift your thinking to either come up with an idea or shift your idea into a direction that's going to be more promising and fruitful.
Little sparks of surprise can grow into bigger things!
VB: When talking about 'explore', the second step in the leapfrogging process, you advise that it is important to push outside our comfort zones. In what ways do our comfort zones inhibit leapfrogging?
Soren Kaplan: I'll give you an example. There's some research that I found from INSEAD Business School that looked at the differences in thinking styles and decision-making between people that had lived in two or more cultures versus those that didn't. It found was that those who had cross-cultural experiences were more creative and better problem-solvers than those who hadn't had these experiences. The question is why is this?
My view is that the boundaries break down for people who have lived in multiple cultures concerning the right way, the wrong way, absolutes, and the normal way of doing things. They start to see things as more relative and recognize options and alternatives that they might not have seen otherwise. They see connections and patterns they would not otherwise see, and they see more options and possibilities when faced with tough challenges and problems. It's is a simple example of how to break down your boundaries – go and live in another culture. Not everybody can do this but that's the principle behind it all.
Breaking down boundaries when it comes to innovation can entail a lot of different things ranging from getting off your comfortable chair and talking to customers, talking to non-customers, talking to partners, and exploring industries that you aren't in today but could hold promise for future opportunities. It can include the whole field of open innovation and exploring what is happening by way of innovations outside of your boundaries.
One of the great examples is from Kimberly-Clark which gives $15,000 'Huggies MomInspired Grants' to 'Mompreneurs' who are creating their own businesses so that they can build relationships with women who are innovating children's products. They're giving these women money to fund their business, and the only thing they ask in return is to have the rights to buy their business if they decide to sell. Through this program they're doing things to open themselves up to surprises. They don't know what they're going to get when they offer these grants. They're opening their own boundaries to be surprised and use these surprises to drive their innovation programs.
VB: "Contrary to conventional wisdom, robust research, detailed analysis, and overly rational thinking can actually get in the way of identifying big breakthrough opportunities." Does this suggest there is a need for a different type of leader than many MBA programs educate for?
Soren Kaplan: I like this question.
There's often an assumption that if we were to take all the right tools, templates, methodologies, and analytics and put them into the big corporate meat-grinder then the result will be innovation. I suggest that big breakthroughs, which change the game and challenge assumptions, are not as formulaic as those who believe in standard business rules and processes want to believe. There is certainly a set of leadership competencies that can be taught and learned, but they're different from what is been trained for today. Things like balancing data analysis – what the data is telling you – with your intuition and your gut and being able to take steps that combine data with gut, data and intuition, and become open to what Scott Cook of Intuit calls 'savor surprise'. I'm not certain business schools teach people how to savor surprise.
VB: They tend to focus on the need to avoid uncertainty and the unpredictable.
Soren Kaplan: I did a search in Amazon for management books with the word "surprise" in the title. Every single one of them is about how to avoid, minimize, or prevent the phenomenon. We have trained ourselves and reinforced the notion that uncertainty is bad, and surprises, which are the core essence of uncertainty, are the enemy.
What I'm saying is a counter-intuitive idea for business. I've found that the joyous surprise factor is an ingredient to breakthroughs, which is something that most companies proactively ignore and suppress.
VB: How can we train ourselves to be more sensitive to surprises in order to capitalize on them?
Soren Kaplan: There are a couple of dimensions to your question. There's the personal leadership dimension. When you look at what it takes to be open to surprises – the good and bad things – and think of them as opportunities to challenge your own assumptions and learn, it's all about humility. It's about recognizing that we don't have all the answers so we need to listen to anyone and everyone. There's research that shows that many entrepreneurs will take input from anyone and appreciate the value of what they're seeing and experiencing about all things. It's about keeping our own accomplishments in perspective.
Of course, there are practical things that we can do to find surprises and pro-actively experience them. This is what the LEAPS Model [leapfrogging life cycle] goes into regarding "Engaged Exploration'. Exploring means getting outside of our comfort zones and doing all the things in terms of pushing your own boundaries. As I previously mentioned, you do this by living in other cultures, and talking to customers and non-customers. It's done by looking at the negative things that happened to you that might feel like setbacks. If instead of resisting and fighting these negative things, you should try to be open to seeing what they're telling you about your own assumptions, how you need to do things differently, or what opportunities they reveal.
VB: Humility is not a trait commonly associated with being an entrepreneur, is it?
Soren Kaplan: You also don't necessarily need to have humility to be a successful entrepreneur, but I've found that a lot of the stories told by entrepreneurs and my own personal experience indicate that you're better able to respond to the unpredictable things that happen if you've got a sense of humility. This notion of humility is reflected in a lot of the stories about entrepreneurs included in my book.
People who have been writing about it such as Jim Collins in Good to Great and more recently in Great by Choice, talk about humility as a leadership trait. They also talk about luck. Many successful leaders attribute both good and bad luck to their success. So there is a recognition that leaders are not fully in control. There's a dimension of unpredictability in their success stories.
VB: You refer to 'pop-up guideposts'. How are they useful for the leapfrogging process?
Soren Kaplan: The idea behind 'pop-up guideposts' is that unpredictable things will inevitably happen as we're moving to create breakthroughs. Whether these unpredictable things are positive or negative we have an opportunity to interpret their meaning, and by interpreting their meaning they can oftentimes help us revisit our assumptions. If we can revisit our assumptions successfully, then we can modify our plans. If we can then modify our plans, we can do things differently and move closer to creating the kind of innovation that will surprise the market.
An example of this is Intuit and I previously mentioned Quicken. They introduced Quicken to balance checkbooks at home, but kept hearing that small businesses were using this software, which they believed was impossible because small businesses need real accounting software. The leadership team at Intuit ignored this data for over a year. When they decided to look at this 'pop-up guidepost', this surprise, they realized that small businesses were using their software incorrectly because they didn't like accounting. They didn't know how to do real accounting for their businesses. They didn't start their businesses to be accountants, and so they were using the wrong software because it was simple.
Intuit had also assumed that the market for the provision of software was saturated, but they realized that maybe it wasn't. So they revisited their assumptions about why small businesses were using their software, and about the related market opportunity. When they introduced QuickBooks and within 3 months they had captured 70% market share.
VB: This is an incredible success story related to the power of surprise.
Soren Kaplan: Yes. They're the only company I've found which has a value in their corporate culture for what they call "savoring surprise." They experienced it, used it, and continue to embrace it today.
VB: When talking about 'persist', the fourth phase in the leapfrogging life cycle, you say, "Failure results from fear, not failure itself." Why is it important to take heed of this?
Soren Kaplan: There is research which looked at the difference between professional entrepreneurs and professional corporate managers. They found that entrepreneurs get their ideas out as quickly as possible even if not fully baked. They want to get inputs from anyone and everyone who challenges their assumptions so they can quickly revise their plans as well as their products and services. It's all about trial and error, and learning. If you take an entrepreneurial mindset, by failing you're actually testing your assumptions and learning.
On the other hand, when corporate professional managers went after a new opportunity they came up with a one-year vision with goals, an annual plan, and they tried to project everything that will happen. The believed the plan would, or should, go from A to B. With this approach, anything that is unpredictable, which falls outside of this plan, is seen as a failure and is treated as such.
We need a new mental model about what it means to innovate. It's all about taking the smallest steps possible to have the greatest impact on your assumptions and your learning.
VB: 'Market Surprise'. What do you mean by this term?
Soren Kaplan: I found research which shows that when something positively surprises us, the pleasure centers of our brains light up. We then want to experience more of it. We want to understand how it works. What was it? What were the elements that surprised us? What's going on?
Then, more importantly, we want to share our positive surprise with others. The first time we touched an iPad, for example, or experienced something that we felt was a real breakthrough, there was likely a desire to share it with someone else to see their own experience of surprise. If you look at YouTube videos that go viral or the way Apple creates market frenzies by withholding product news and announcements, it's all about surprise.
When I talk about market surprise, it's about introducing something into the market or doing something for those you serve – your customers – which gives them the feeling of positive surprise. They want to understand it, have more, and share.
VB: Are most entrepreneurs you meet grounded optimists'?
Soren Kaplan: It's difficult although perhaps not impossible to be a successful entrepreneur if you are inherently a pessimist.
It's important to look at failure as learning and as progress. There's research showing that if you take any kind of step which you feel is progress, you will get a boost in your optimism.
Entrepreneurs generally have a feeling of progress when they take steps even if they're setbacks. They're going to hold onto their vision of what they want to create, and even a setback is learning and can be used as a stepping-stone to something better.
VB: Entrepreneurs are not merely people with money to invest.
Soren Kaplan: It helps. It definitely helps to have money. It gives you more options and resources, but that's not always what the mindset of an entrepreneur is about.
VB: In Leapfrogging you provide many examples of breakthroughs, and not all are with businesses. Which one is your favorite?
Soren Kaplan: I really like the example of OneWorld Health, the first non-profit pharmaceutical company. The reason is Victoria Hale, its founder, used to be an executive in a pharmaceutical company. Her story is that while in New York City for a conference she got into a taxicab, struck up a conversation with the driver who was of African descent, and told him why she was there. He threw his head back and said, "You people have all the money" referring to the pharmaceutical industry. This was a jarring surprise that challenged her mindset, and she realized that she needed to do something to have a greater impact in the world.
A lot of pharmaceutical companies including her own had on the shelf what is called 'leads', which are early-stage drugs that could potentially address global problems like diarrhea that kill millions of children a year. These leads are not developed because they're not seen as sufficiently profitable. So OneWorld Health created a completely new business model where pharmaceutical companies are able to donate their leads and receive tax deductions – it is a non-profit organization. In turn, OneWorld Health can develop these leads in the countries that most need them, thereby providing an economic benefit to those countries and a health benefit to its citizens who are afflicted with the diseases. They're saving thousands of lives each year through this unique business model, which not only challenges assumptions, but also resulted from the kind of surprise and mindset that I'm talking about in my book.
VB: You quote Victoria Hale as saying she had a "moment of clarity" in the cab.
Soren Kaplan: That's right. I think surprises can challenge and steer us in new directions. Sometimes it involves jarring us into almost instant new sense of clarity. We experience our surprises differently, and this is an example of one which Victoria Hale describes as being a pretty radical shift.
VB: How does one learn to respond to and deliver surprise as a natural part of who we are?
Soren Kaplan: Surprise is a natural part of life, and therefore of business. Life is unpredictable. Things happen that we can't anticipate and we need to respond to those things. Why should it be any different when we're a leader of a company? The first step is to recognize that surprise is an integral part of being in business. This is a big mind shift, which I'm trying to promote.
There are some more tangible things we can do to promote surprise and tell stories about it. When we talk about changing organizational culture, it must be understood that leaders still have a big role even in today's networked society to tell stories about when they personally have and do experience surprises, and how surprises lead to shifts in thinking and new opportunities. Leaders oftentimes don't like to talk about their surprises. It may be seen as a sign that they're not successfully leading or managing. We need to overcome this mindset.
VB: Can we learn to open ourselves up to surprising new possibilities?
Soren Kaplan: I believe we can. It's what I talk about in the book, and there are a lot of great examples already happening in the world. There's the notion of design thinking, which is about being open to new possibilities and seeing things in a different way. There's 'a lot of qualitative market research such as use of ethnographers, use of leadership teams, looking at adjacent and non-adjacent industries for insights, and identifying emerging technologies. There are a lot of things we can do to continue to open ourselves up to surprises and to new possibilities.
VB: Do you have any further advice about the power of surprise in delivering unexpected business breakthroughs?
Soren Kaplan: It's about our personal mindset and cascading it out to our teams and organizations. If we can change ourselves by telling our stories then we can start to have an impact on those we work with and our organizations.
The more we're open to unexpected events and see them as opportunities rather than threats, the more we'll be able to find the kind of breakthroughs which will change the game.
VB: Should we conclude that the more people in organizations who are open to surprises the more successful the organizations would be?
Soren Kaplan: I believe so, but it's also a balancing act.
It's also important to recognize there are certain times when we don't want surprises. If we need to run an efficient and effective manufacturing organization churning out products on a highly predictable basis or run the core business in a certain way, we might not want certain kinds of surprises. We might not want everyone to be looking for surprises and trying to innovate around surprises.
In the grander scheme of things, however, if we don't open ourselves up to surprises at the same time we are running the core business, then we will miss things at a macro level that might have a long-term impact. It's a balancing act and knowing how to do what you need to do today while at the same time not closing yourself off to a range of things which might reveal threats or opportunities.
VB: In your conclusion you say that writing Leapfrogging gave you "an obsession for experiencing surprise." Would you tell us about this obsession?
Soren Kaplan: My family and I went to Paris for a year so I could focus on writing my book. We experienced a lot of things. We put our kids into public school even though they didn't speak French. We travelled around France and other parts of Europe. We experienced a lot of different personal surprises during that year ranging from food to culture to people.
One of the big epiphanies I had was walking into a little café called Caféotheque to work on my book. I didn't realize at the time that of the 35,000 cafés in Paris it was ranked the #1 coffee spot. It was unlike any other café. There were no French waiters with white aprons, outside seating with high cane back chairs, or French food. But the owners had done something that truly changed the game for what it means to be a café in Paris. As I sat in the café I was surprised by how they were running their café. There were a lot of elements that made it a game-changer.
The fact that I had stumbled into this café which was a breakthrough while wanting to write about innovation made me realize that I needed to do some research about surprise. So I then researched surprise. I talked to leaders who I felt had really changed the game so I could understand the back-stories of their more public success stories. I discovered that the whole notion of surprise is an unspoken but critical ingredient to breakthrough innovation. The information about the leaders' personal surprises led me to some bigger research, thinking and theories about uncertainty and surprise.
VB: What has been the response to your book which turns conventional wisdom on its head – that positive and negative surprises have value?
Soren Kaplan: Great question.
Last week my book became a Wall Street Journal best seller, which is always nice. The reviews have been quite positive. I've had a lot of interest from mainstream media ranging from Forbes to CNBC, USA Today, Fast Company, and the American Management Association.
It seems there is a growing recognition that uncertainty and unpredictability is a natural part of business, and that it shouldn't necessarily be resisted but rather it can be tapped into. It's still counter-intuitive for many, but I think my book and some other books are chipping away at some of the mindsets that have been holding us back.
VB: Do you have any plans for another book to further explore your ideas about leapfrogging?
Soren Kaplan: My book just recently came out so I am savoring in the moment and trying to communicate the ideas in Leapfrogging. Even so, I can imagine that in the future this would definitely be a possibility.
VB: You are an Adjunct Professor within the Imagineering Academy at NHTV Breda University of Applied Sciences in The Netherlands. Would you tell us about this program?
Soren Kaplan: The Imagineering Academy in Breda in the Netherlands was started as part of a program focused on the leisure industries, such as hotel and hospitality, because the customer or guest experience is a critical part of those industries. The program grew up around the notion that innovation is moving from a focus on products and going to services, business models and the total customer experience.
Students come from all over the world to participate in a one-year masters program. It's intense. It provides a rich experience with academics, but also there's a practical component in which the students work with an 'application company' where they apply some of the concepts to a project within that company. Students also do an excursion to gain an immersion experience – last year they came to the San Francisco and the Silicon Valley.
I've been a part of the program for the last 5 years.
VB: Does it give you an opportunity to explore ideas with students about leapfrogging?
Soren Kaplan: I get some of my best case examples and new insights from teaching these young international students. I almost feel guilty, as I'm probably learning as much or more than they are.
VB: Isn't that the secret to success?
Soren Kaplan: I think it is! Constant learning.
VB: Is there anything about leapfrogging to breakthroughs we have not discussed that you would like to share with our readers?
Soren Kaplan: I think you've done a great job at asking all the deeper, right questions to dig beneath the surface of my thinking in the book. No, I think you've done a great job.
VB: Your advise about how to harness the power of surprise for business breakthroughs has been highly informative. Thank you, and congratulations on the success of your first of what we hope will be many more books.
Author Soren Kaplan challenges conventional business wisdom that we should avoid surprises at all cost. Instead, he says that both positive and negative surprises have the power to change the game in any endeavor if we open ourselves to these surprises, and learn how to harness unexpected experiences and events.
He advises "…while surprises can become assets when they happen, leapfrogging to breakthroughs is a process, not a one-time event." He describes the leapfrogging life cycle as involving five phases on the path to the breakthrough: Sparks of Surprise, Engaged Exploration, Tangible Focus, Moving through the 'Failure Zone' and finding Persistence to create Market Surprise. He also offers suggestions for things leaders and their teams and organizations "…can do to find insight, direction, and their strength to successfully navigate each phase of the leapfrogging life cycle…"
However, Soren Kaplan advises that most important part of his book is not this life cycle or the tools he provides for leapfrogging. It is that surprise pervades business and life. "We create breakthroughs when we use surprise to shift our mindsets, challenge the status quo, and deliver unexpected solutions that positively surprise others."
One of the many gems of insights Soren Kaplan provides us is that we need to venture outside of our comfort zones if we are to overcome our invisible and limiting mindsets. This will enable us to see the world, other people, and ourselves in new ways, just like happened to the author when he relocated his family to France while he wrote Leapfrogging.
Soren Kaplan's Bio:
Dr. Soren Kaplan is the Managing Principal at InnovationPoint, where he works with organizations including Disney, Visa, Colgate-Palmolive, Medtronic, Philips, PepsiCo, and numerous other global firms. Soren previously led the internal strategy and innovation group at Hewlett-Packard (HP) during the roaring 1990's in Silicon Valley and was a co-founder of iCohere, one of the first web collaboration platforms for online learning and communities of practice. He is an Adjunct Professor within the Imagineering Academy at NHTV Breda University of Applied Sciences in The Netherlands. He holds Master's and Ph.D. degrees in Organizational Psychology and resides in the San Francisco Bay Area with his wife, two daughters, and hypoallergenic cat.