In our last blog, we shared our perspective on digital transformation. The notion that it’s not about technology or about a disruptive business model; it is about a mindset-shift in leaders’ thinking and it requires thinking differently about your customers, value, strategy, data, leadership, innovation and culture.

We recently interviewed Innovation Labs at Dali Museum and Zappos both of which are fostering original thinking and imaginative problem solving to ‘respin’ the customer proposition. In this 1st interview Nathan Schwagler, Founding Co Director, Innovation Labs at Dali Museum shares his insights and advice for organizations looking to excel in this area.

Audrey McGuckin: Nathan, we love the work you do here in the Innovation Labs at Dali and are intrigued on your views about how you help organizations engage, empower and co-create with their customers?

Nathan Schwagler: There’s no doubt in my mind that customer sentiment, customer pain points and customer aspirations must be intimately understood in order to compete in today’s highly competitive environment. The next question then becomes how to do this. For me, a go-to is the “Job-To-Be-Done” (JTBD) framework, which suggests that people “hire” products and/or services to “do” certain jobs. Think about the products, services, and brands that you love! Take a step back and consider why you love them? What are you hiring them?

We took on this very challenge as a project a few months ago for a local coffee entrepreneur interested in expanding his brand and market reach. Having JTBD tool kits and frameworks in our back pocket helped us design with the end user in mind. The central question is “why do I hire coffee”? I hire coffee to function in the morning (and to avoid brain pain in the afternoon). I also hire coffee because it allows me to socialize with others over a shared beverage experience. I also like to hire coffee because I have an emotional connection to the taste, smell, and warmth that pervades through the walls of my cup. If I understand why I hire coffee, I can then start to understand how to help coffee purveyors create innovative offerings to that market.

Audrey McGuckin: Nathan we always start our work with clients focusing on bringing “insights” to the table. These insights can take a number of forms. Can you share with us how companies can turn data into an asset to generate business value for their strategic ambitions?

Nathan Schwagler: Having data is one thing. Interpreting the data and turning it into powerful insights is another and this is a differentiator. Use your data to drive strategic thinking sessions as an organization. What are you tracking? How? Why? What sort of questions are you asking of your data set? Do you have data scientists on staff?

Marisa Paterson: Nathan, as we think about the pace of innovation, what leadership capabilities do you believe are the most necessary to compete in the digital era?

Nathan Schwagler: What is most necessary is an open-minded leader, who is willing to model creative behavior. It’s insufficient to ask that employees and teams inside of organizations be working constantly toward identifying interesting problems and working to develop novel solutions to these problems if that sort of thinking isn’t being modeled and infused into the culture by senior leadership. I’m a big fan of leaders who are equally interested in exploring the ways in which things might be, as opposed to solely focusing conversations on the ways in which we think things are now.

Marisa Paterson: Nathan as we think about the environment that is necessary for innovation and resilience, how can leaders be supported to fail, learn and adapt quickly to withstand the changes in the external environment?

Nathan Schwagler: I think the trick here is to design feedback loops into the system that facilitate the extraction of learning-value from projects that work well and those that don’t. Anybody working in product or service innovation (especially in tech-driven industries), will tell you that lots of ideas turn out very differently from how you imagined. The best teams are able to quickly analyze and iterate via post-mortem evaluations and formal and informal learning networks inside of the organization. Innovation is a long-game; flash-in-the-pan opportunities will lobby for your attention. If you can empower smart, ambitious, creative individuals to bring new ideas to life and help them to stay grounded by focusing on the first principles of the fundamental business problem you’re trying to solve, then they will have the resilience to fail, learn and adapt. It’s a gift of maniacal focus.

Audrey McGuckin: Nathan as practioners and partners who work with clients, what we find is that most traditional leadership programs fail to deliver on their promise of change. What do you believe is the most effective way to work with leaders on change?

Nathan Schwagler: I think this often boils down to being clear about the change that’s desired. We work for a lot of organizations as a vendor who supplies content and facilitation services for Talent Development and Acceleration programs. What we see regularly is a mismatch and general lack of clarity about what needs to happen to align talent with the strategic business objectives of the organization. They view it as sequential rather than being co-created.

Showing up and offering visible support for the next wave of talented individuals can be very powerful mechanism for energizing change. Another thought to consider here is thinking about opportunities for senior leadership to present desired future states that they would like to see come to fruition inside the organization. If you can harness their thinking and then translate that back into experiential learning challenges, then the program can built around what is required of leaders to be successful in moving towards a future state. Final thought, I’m a big proponent of training transfer models and feedback loops. I think a lot of organizations assemble great content and great people, but unless the design has feedback loops, then there is no way to measure how aligned the program is with the strategic objectives of the business and the degree of change achieved.

Audrey McGuckin: Not all leaders will want to make the change or have the true grit, resilience or constitution. How do you determine the leaders that have the highest chance of success in changing mindset?

Nathan Schwagler: Leaders who are able to hold space for new thinking are worth their weight in gold. They are able to explore uncertainty and tolerate ambiguity whilst also holding the line with the existing business/operation. It’s a delicate balance sometimes because decisions always have to be made around resource allocation, etc., but in an era of constant innovation and change, it’s an important conversation to get comfortable with.

I have to tip my cap to my Co-Director of The Dali Museum Innovation Labs, Dr. Hank Hine. Hank’s day-job is to lead the museum as its Executive Director, but I’ll never forget his brilliant response to my initial inquiry about starting an applied creative thinking services laboratory within the museum. He looked at me, paused, and asked: “I wonder what a pilot program might look like?”. That response was golden. Museum directors, 99 times out of 100 would probably say, “no way, that’s not our business, etc.” but Hank created space for a new idea to germinate and it worked.

Audrey McGuckin: Nathan what about culture. How do you create a culture that builds the mindset that includes using data and relentless questioning to disrupt current business models?

Nathan Schwagler:  One of my favorite strategy questions to ask leaders these days is, “How would you know if you were wrong?”

I think it’s tempting to source data points that support a confirmation bias of what is working, but boy does it ever take courage to go out looking for reasons you might be headed in the wrong direction. Sure, celebrating “rightness” feels great, but it can be intoxicating. Instead, learning to explore ruthlessly for weak signals of potential “wrongness” becomes a commitment that leaders can make that will ripple into the culture of the organization. To do so, you have to create a culture that does not play the ‘blame game’ but invites curiosity and inquiry. Forcing an organization to think broadly about what is not working helps the business to manage the paradox – that the things working well right now will serve as barriers to new thinking.

Simply put, everything that “is” blinds us from what “might” be, and I think that creates existential risk for a business.

Both Marisa Paterson and Audrey McGuckin consult with top CEOs and HR Executives to solve their toughest and most complex talent and leadership challenges.

To connect with Marisa on how she can assist you as an Executive Coach or Leadership Specialist, message her directly at marisapaterson20@gmail.com

To connect with Audrey on how she can assist you, visit our contact page or message her directly at audrey@audreymcguckin.com.