AMANDA KERSEY: Welcome to “HBR On Management” case research and conversations with the world’s prime enterprise and administration consultants, hand-selected that will help you unlock the very best in these round you. I’m HBR, senior editor and producer Amanda Kersey. On this 2017 “HBR Ideacast” dialog, you’ll hear how leaders transfer past both or choices to toughen decisions. The identical strategy might help you tackle trade-offs in your individual group. You realize, I bear in mind host Curt Nickisch and I having a good time producing this episode. The start nonetheless makes me smile.
LEGO MOVIE THEME SONG
CURT NICKISCH: Should you don’t know that music, it’s the theme music from the Lego film. The animated movie grossed practically a half billion {dollars} in 2014, and it additionally breathed new life into the model. Individuals beloved seeing the little plastic items of their childhood in motion. The hero, Emmett, falls down a gap someday into the Lego underground
LEGO MOVIE :
LUCY: Prophecy states that you’re an important individual within the universe. That’s you, proper?
EMMETT: Uhhhhh. Sure, that’s me.
CURT NICKISCH: Behind the scenes, the Lego group went by means of its personal journey. Turns on the market’s a strategic resolution making story behind the blockbuster, and it’s a case that Jennifer Riel and her co-author Roger Martin research of their new ebook, “Creating Nice Decisions, a Chief’s Information to Integrative Considering.” Riel teaches on the College of Toronto’s Rotman Faculty of Administration. She additionally loves films. So at this time she’s right here to speak about integrative pondering by means of the lens of the movie trade. Jennifer, thanks for coming in and speaking with the HBR Ideacast.
JENNIFER RIEL: It’s my pleasure. Blissful to be right here.
CURT NICKISCH: So the Lego film, wonderful success, however it might have turned out a lot in another way, proper?
JENNIFER RIEL: Completely. And apparently sufficient, I didn’t know till I had the prospect to speak to Jørgen Vig Knudstorp, who was the CEO of Lego on the time that there had truly been a earlier iteration of a Lego film. They’d truly made a Lego film earlier than the Lego film.
CURT NICKISCH: I didn’t learn about this both.
JENNIFER RIEL: I used to be fascinated. It’s referred to as “The Adventures of Clutch Powers.” And it had come out of the truth that Lego for a very long time, I imply they make the little plastic bricks that all of us grew up with. It’s been a profitable model for many years, which is sort of wonderful for somewhat firm in Europe. They usually had began entering into branded, co-branded leisure. So like Harry Potter Lego video games or Star Wars, Lego video games could be the preferred instance. And so it was inevitable. Somebody was finally going to return and say, let’s do a film about Lego and perhaps let’s have or not it’s authentic, not tied to a different leisure model. And they also did. They created this Adventures of Clutch Powers and so they partnered in a manner that the majority corporations would, which was they prioritize the safety of the model. So they’d ultimate log off on the script and on all the filmmakers, and so they made positive that it was true to the model and that it protected the corporate.
And as Jørgen will say, with fun, it was actually boring and never very profitable, not a really profitable movie, not very profitable for the corporate. In order that they had been approached once more from a Hollywood studio saying, let’s actually do that. Let’s actually make the Lego film. They usually had been confronted with what can we do the final time it didn’t work and we prioritized that we should always have inventive management. That was an enormous bone of competition as a result of they acknowledged that a part of the problem is getting actually nice expertise who could be keen to work on a challenge for which the corporate had inventive management. They needed expertise that might create a extremely nice film to try this. The speculation could be you’ve bought to present whole inventive management to that expertise. You’ll not get nice administrators, nice filmmakers in the event that they really feel they’re going to beholden to a company curiosity. They’re uncomfortable sufficient being beholden to the studio, not to mention to an organization. So this query of how can we deal with the seeming commerce off the both or selection between sustaining absolute strict inventive management, however in all probability giving up the last word high quality creativity of the movie versus give another person whole inventive management. You’ll in all probability get an incredible movie out of it, however that’s an enormous threat to take for the status of the corporate as a result of who is aware of what they’re going to do,
CURT NICKISCH: Meet within the center, the joyful medium.
JENNIFER RIEL: Completely. You may think about every kind of compromises in between the place you actually aren’t thrilled with the reply, however you may stay with it. And fairly often leaders body the issue of trade-offs in that manner. Michael Porter, the daddy of all technique, tells us technique is making tradeoffs. You may’t be the whole lot to everybody. And that’s true. You completely should make tradeoffs as a frontrunner. What we discovered, Lego is a superb instance of this. Jørgen is a superb instance of this, is that there are some issues for which making the tradeoff is unacceptable. If I make the commerce off, I lose. If I make the commerce off, it’s not going to unravel the issue. And it’s in that state of affairs the place you ask your self, might there be a greater manner? May I think about doing one thing both than selecting the both or discovering the hardly acceptable compromise and really search to create a more sensible choice, one thing new that doesn’t exist at this time which may truly clear up the issue, be nice for the group.
And in Jørgen’s case, he was actually clear, I desire a actually wonderful film, an superior film if you’ll, however I additionally need it to be superior for Lego, proper? I need Lego to be higher off from having engaged on this course of. He regarded on the problem and realized that on inventive management, finally he did should make the selection that, look, if I need nice expertise, actually nice expertise, not adequate expertise, they’re going to should have management of the script of the whole lot that they do of the casting of the movie itself. And yeah, they could give us the fitting to assessment it, however truly we have to belief them and they should see that we belief them. But when I’m going to try this, I can ask for one thing that I imagine goes to make a greater reply. And the factor he requested for was their time earlier than they began engaged on the film.
And he mentioned, what I would love you to do is spend time not with me, however with Lego’s, most dedicated fanatical prospects going to the fan conventions. I need you to spend time with children as they play with Lego. I need you to spend time speaking to those tremendous followers and understanding what Lego means to them. Primarily, he was discovering a manner to assist these filmmakers fall in love with the model the best way {that a} child does. And if he might do this, if he might get them to fall in love with Lego, then they’d defend the model. They’d be those who had been devoted to its preservation, and they’d create a tremendous film that held Lego at its coronary heart. What’s sort of cool in regards to the engagement that they’d with the grownup followers particularly? I didn’t know this, however apparently the one factor that’s completely forbidden, even amongst the grownup Lego followers, you’re by no means allowed to make use of glue as a result of the spirit of Lego is constructing, taking it aside and constructing it once more. And in order that perception about followers and the way they really feel about Lego turns into a plot level within the film. They now construct an enormous a part of the narrative round how evil it’s to make use of glue. And this higher reply produces the Lego film.
CURT NICKISCH: What would most corporations have carried out?
JENNIFER RIEL: What most corporations would’ve carried out is what Lego did the primary time. Deal with it as an optimization drawback. Determine what’s it we would like? We would like a film that protects the model, in all probability even prioritize that over the notion of it being a great film, make their very own pursuits paramount over the curiosity of the viewer and be shocked when the film’s not excellent and it truly makes folks suppose much less of the model anyway. It’s type of the catch-22, you find yourself producing the outcome that you simply had been attempting to keep away from. I believe a number of organizations are inclined to both simply make the trade-off or lay out the chances, analyze these prospects endlessly. We hear about these conferences that go on and on and also you get progressively much less enthusiastic about all the solutions as you analyze them. However as you do this, you then begin to say, okay, we will’t simply select one or the opposite.
Let’s construct the Frankenstein choice, the consensus choice the place we will all stay with this as an answer. It’s not going to thrill anybody. It’s not going to be nice, however no less than nobody’s going to get fired. Once we discuss integrative pondering is this concept of leveraging the strain of opposing concepts, leveraging the disagreement. And it’s not that you simply need to keep in disagreement without end. You finally create an incredible reply that we will obtain consensus round. However it’s a elementary perception that it’s a must to undergo the problem or the strain of disagreement to get there.
CURT NICKISCH: I imply, I consider this virtually as just like the “Getting To Sure” ebook, attending to sure, and arising with options in negotiations that find yourself making each side happier than they ever imagined even strolling into the state of affairs. And also you’re saying that that’s sort of doable should you apply integrative pondering to enterprise issues.
JENNIFER RIEL: Yeah, I like the thought of attending to sure and it’s pleasant. Not each drawback goes to be effectively suited to this mind-set. There are many nice pondering and decision-making instruments. And you probably have some that you simply love and that work rather well for you, maintain utilizing them. We promote all of those. Give it some thought as being significantly helpful. While you have a look at the issue in entrance of you, you have a look at the chances or the choices which are laid out, you have a look at the trade-off and also you say, I’m simply not keen to make that commerce off. I can’t think about making that selection. I want a greater reply. It’s one factor to say, I must do one thing aside from select right here. And it’s one other to really have a strategy.
CURT NICKISCH: Arising. We’re going to interrupt down that methodology and speak by means of the phases of integrative pondering. However first I’m going to speak about one other actual world instance from the films. Within the Nineteen Nineties, the Toronto Worldwide Movie Pageant, TIFF for brief screened a number of hundred films. It was mainly for movie lovers, for everybody. It offered a variety of tickets, however it wasn’t actually worthwhile. And that was the problem going through Piers Dealing with when he turned pageant CEO in 1994. Dealing with thought in regards to the Cannes Movie Pageant as one other mannequin. It’s unique. It’s bought this juried prize, the Palme d’Or. Cannes will get tons of reports protection, a number of star names, loads of sponsorship cash. Most executives would have a look at TIFF’s problem as an optimization query, proper? The place on the size between group and exclusivity is the very best place to be to steadiness ticket gross sales and sponsorship cash. However the brand new CEO requested himself, why even make that trade-off? Is there a method to get the advantages of each, to maintain TIFF simply as inclusive, however make it extra buzzworthy too? That’s the place integrative pondering got here to play. Right here’s Dealing with in 2012.
PIERS HANDLING: We measure the success of our pageant towards many elements. It’s the movies we showcase, the viewers response to these movies, the expertise that emerges and the eye the movies entice from the trade and the media.
CURT NICKISCH: What dealing with actually found out is that Toronto’s big various viewers of movie goers wasn’t a legal responsibility. They had been truly an asset
SLUMDOG MILLIONAIRE: Giving chai for the overseas
CURT NICKISCH: Take “Slumdog Millionaire”. It gained the Individuals’s Selection Award after which went on to win eight Oscars.
SLUMDOG MILLIONAIRE: Girls and gents, What a participant.
CURT NICKISCH: Two years later, The King’s Speech took the viewers prize.
THE KING’S SPEECH: What was your earliest reminiscence? I’m not right here to debate private issues. Why are you right here then?
As a result of I bloody effectively stammer.
CURT NICKISCH: And 4 Academy Awards. Seems TIFF’s viewers is a robust market predictor.
JENNIFER RIEL: It’s now the case that you probably have a film you suppose would possibly win an Academy Award, you deliver it to Toronto. You see how the viewers responds? A movie like “Crouching Tiger, Hidden Dragon” had come into Toronto with the studio, not fairly positive. I imply, somebody had mentioned to you within the yr 2000, the large hit film of the yr goes to be a Mandarin language movie through which warriors dance on treetops, proper? Not many individuals are going to say American audiences are going to like that. However Toronto audiences did and adored the movie. And they also had been capable of look again at what had been predictive in regards to the viewers prior to now and say, if we actually elevate this concept of an viewers prize, make it actually central, we imagine primarily based on prior proof that it’s extra probably to achieve success. However this can be a case the place they made a little bit of an even bigger wager and it was partly as a result of what they had been doing wasn’t working. And generally you simply should be pragmatic. How can we begin doing this and see whether or not it’s going to be extra profitable? And I believe in Pier’s case, he didn’t have a ton to lose by attempting an viewers prize and seeing whether or not it was truly going to provide the end result that he cared about.
CURT NICKISCH: So let’s break this down.
JENNIFER RIEL: Sure.
CURT NICKISCH: How do you do it?
JENNIFER RIEL: It’s a 4 stage course of. Stage one, get clear about what your drawback is. You discover an issue you suppose is value fixing, the place you imagine the solutions in entrance of you aren’t adequate. A few of them fall into the class of everlasting organizational tensions. Variety of organizations I’ve labored with the place construction, they’re like, alright, we had been a totally centralized construction and we had been sluggish to maneuver. So we decentralized, we moved resolution making out into the group and that didn’t work terribly effectively for us. We discovered that whereas there have been moments of nice interplay with shoppers, we had been doing issues in a single a part of the group, very, very totally different than others. We’d misplaced efficiencies. We misplaced economies of scale. And fairly often in organizations they’ll say, effectively, centralization didn’t actually work very effectively. Decentralization undoubtedly didn’t work very effectively. And the pendulum simply swings again to centralization once more.
And it’s the definition of madness at that time. Properly, if it didn’t work earlier than, it’s in all probability not going to work this time both. And so the thought of claiming, should you’ve been fixing the issue time and again within the group, or should you really feel an everlasting rigidity like centralization and decentralization or standardization and customization or these everlasting tensions are sometimes problematic as a result of the alternatives aren’t adequate. We all know we want each. We simply can’t work out the how in the first step. What we need to do is take that drawback and discover two very opposing methods of fixing it. So we might dive very deeply into, alright, if we had been completely centralized, what would that seem like? Let’s describe that simply so everyone knows what we’re speaking about. Completely decentralized and pushing them out to extremes. That’s the place probably the most rigidity is. We will’t be completely centralized and completely decentralized on the similar time.
CURT NICKISCH: Proper? Pressure your self to not discover the steadiness.
JENNIFER RIEL: Precisely.
CURT NICKISCH: Engineers do that proper? Once they take a look at issues, they’re like, what would occur if labor prices go to zero? Like how would you design a warehouse that manner or no matter.
JENNIFER RIEL: Completely. And it provokes new pondering. We then attempt to fall in love with every of these fashions, opening your thoughts to understanding what is actually nice about that selection. What does it get us that is perhaps useful in constructing the higher reply? Step two, right here’s the place we truly maintain them intention. Right here’s the place we have a look at them collectively and we basically push ourselves to see what we see, to note what we discover. The place are they extra comparable when it comes to outcomes than we would’ve anticipated? The place are their true distinctions or factors of distinction? A very nice final result from mannequin A that simply doesn’t exist in mannequin B. That is stage three, proper? Generate prospects. What might a greater reply seem like? And in some methods, you simply ask that query, what do I actually worth? And will I think about creating one thing out of the issues that I really worth? And so finally, you’d need to generate a number of solutions so that you simply’re not simply targeted on one. Step 4, how might you strive your new fashions? See how an viewers or a buyer base or a shareholder group reacts, after which proceed to maneuver ahead with that as a risk. So as an alternative of simply saying, we’re carried out, let’s launch. Are you able to truly take a look at these prototypes as you roll them out?
CURT NICKISCH: At which step do most corporations stumble?
JENNIFER RIEL: So I believe that there are a few locations which are difficult. Typically there may be an inclination not to do that in any respect, proper? Simply make the commerce off. Typically it’s exhausting to fall in love with one of many fashions since you already actually like one. And so it’s vital to deliver folks into the room who might help push your pondering. Typically they’ll get caught on inspecting the fashions by simply treating it as a guidelines. We’ve bought quarter-hour. What’s comparable? What’s totally different? What assumptions and type of be somewhat dogmatic and simply push by means of these. A part of that is recognizing that pushing ahead to new concepts doesn’t occur on an instantaneous timeline, proper? Giving your self a little bit of time and room to stroll away from the issue and are available again to it. Definitely should you’ve bought a day and that’s all you may spend on it, you may make progress. However finest observe could be convening the group a few instances to undergo the totally different phases at totally different factors. In instances you’ve had a while to suppose,
CURT NICKISCH: How have you learnt when in the midst of this unfamiliar course of that you simply’re heading in the right direction? What are indicators that you simply’re succeeding? What are indicators that might inform you, you bought to begin over?
JENNIFER RIEL: I believe they’re largely emotional in stage one. Should you actually are capable of push your self to have real affection for the 2 fashions, get to a spot the place you say, I perceive why somebody would select these. There’s one thing good in it that could be a good signal that it’s working. While you’re inspecting the fashions, should you really feel somewhat within the weeds of the complexity, you do must dive into the complexity of this with the intention to push your self ahead. Should you really feel such as you see one thing new that you simply didn’t see earlier than, it won’t be earth shattering. It won’t be world altering, however one thing that I didn’t acknowledge earlier than I began this course of which may push me in a brand new course. After which when it comes to the chances, is it higher than what I began with? Have I made progress? Have I produced one thing that I believed as a greater job of fixing the issue than the place I started? And as you’re testing, am I truly making this concept higher? Am I studying as I am going? Am I producing a solution that I’m enthusiastic about? A few of it’s managerial judgment. If this had been an algorithm, it wouldn’t truly be all that helpful to you. It’s a course of or a strategy that you may observe that paired with your individual understanding of your small business, with your individual management acumen lets you deal with issues another way.
CURT NICKISCH: Jennifer Riel, thanks a lot for taking us by means of this course of.
JENNIFER RIEL: It’s my pleasure.
AMANDA KERSEY: We’ll be again subsequent Wednesday with one other handpicked dialog from Harvard Enterprise Evaluation. If this episode helped you share it with your mates and colleagues and observe the present on Apple Podcasts, Spotify, or wherever you take heed to podcasts. And when you’re there, think about leaving us a assessment and whenever you’re prepared for extra podcasts, articles, case research, books and movies with the world’s prime enterprise and administration consultants, discover all of it at hbr.org. This episode was produced by Curt Nickisch and me, Amanda Kersey The “On Management” crew consists of Maureen Hoch, Rob Eckhardt, Erica Truxler, Tina, Tobey Mack, Ramsey Khabbaz, Nicole Smith, and Anne Bartholomew. Music by Coma Media. Thanks for listening.
