FORBES | New Era Leadership © How technology is redefining classic notions of leadership.

CREATIVITY IN ENTREPRENEURSHIP
ENTREPRENEURIAL CHALLENGE

Kaplan Jaroslav
Kaplan Research Company
Founder of the Business IQ project

Disclaimer: Translation of the article into English may include minor sentence changes related to the translation update, but not changing the main content of the material.

John Wheeler was without doubt one of the key figures in 20th century physics. He worked alongside Niels Bohr in Denmark, where together they developed the theory of nuclear reactions. He is also credited with coining the term "black hole" to describe regions of space from which nothing (including light) can escape due to strong gravitational attraction. He was also a mentor to many prominent physicists, including Richard Feynman.

What does he have to do with business, you ask? I answer directly with a clear conscience and, in order to bring the reader into the context of this presentation without delay, I suggest conducting a small mental experiment.

Suppose we all suddenly decided to take Wheeler's advice to "break the glass and get out" - to the place where our consumers live and work. And already from this "outside" position to see how the average representative of our target audience will perceive the value of this or that message or product.

Americans figuratively ask "What would you do in my shoes?", roughly meaning "What would you do if you were me?". We are talking here, of course, about the "place" of the average representative of our target audience. What would we see there if we were to "put" ourselves in his "shoes"?

The first thing we would see there is that the point of view of the observer himself is of great importance in whether our message "reaches" him or not.

In quantum physics, it is believed that the observer can influence the results of measurements. In the business world, consumers' evaluation and understanding of the value of products also depends on their chosen point of view and their "world picture".

Back in the 5th century BC, representatives of an ancient Greek philosophical school made an important discovery. They discovered that the laws of culture differ significantly from the laws of nature. Unlike the laws of nature, which were the same in different situations, people's manners and customs, their laws in different societies could differ significantly.

This raised the problem of comparing different rules and customs in order to find out which ones "work" better. Very soon it was discovered that the choice between these different rules depended on the worldview of the members of this particular society, their system of views on life.

Thus, what determined the differences in the customs and traditions, morals and laws of a society depended entirely on the logic that guided its members. In other words, the source of differences in the behavior of people in these societies was DIFFERENT LOGIC.

This example is fully applicable to organizations. Organizations differ from each other (or resemble each other) precisely by the LOGIC that guides their activities. It is this factor that subsequently largely determines the results of such activities.

So, we have already determined that a consumer's worldview will have a strong influence on their assessment of the value of messages and products. And the goal here is to ensure that our message is perceived by them in the way we expect it to be. And that is far from a simple task.

This brings us back to what we might call the "category of meaning", i.e. what content or meaning does the target audience attach to our messages? This is a question of fundamental importance.

Without an answer to this question, we cannot have a full-fledged business development strategy; it is the foundation for all further actions in this area.

"What meaning do consumers put into our messages and products?" is the question to which we must have an answer.

Typically, when people talk about the value of messages or products, they don't "check" what meaning they themselves "put" into it with the meaning that other people put into those same messages and products. The whole phenomenon here is that other people often put very different meanings into it.

We need to think more broadly. Water is inherently wet. You can't understand this characteristic of water by dividing it into oxygen and hydrogen, because neither of these elements has the characteristic of water. It's the same with business: you can't fully understand it by looking at the component parts separately: hiring, sales, PR, marketing, production, etc.

Everything is connected to everything, and an entrepreneur's ability to effectively manage their business is severely limited if they only deal with the problematic parts and don't see the big picture. Most entrepreneurs’ fatal mistakes happen precisely because they ignored these contextual factors.

If the environment in which your consumer interactions take place is clear to you, then you can predict your future to some extent.

For example, choosing a context for a romantic meeting with your wife/husband (fiancé/bride) in a quiet, cozy restaurant with dim lighting. If you are even remotely a little like me, you are unlikely to invite your beloved to a romantic date in a factory shop, construction site, or a cemetery.

Choosing the right context for communication helps give your words and actions the desired meaning. In many cases, the context of communication can help determine much of the content of your message.

For example, knowing that a police patrol pulled over the driver who overtook you five minutes ago at breakneck speed can easily help you anticipate the content of their conversation.

Why do peace talks fail on the battleground?

The context of the battleground does not imply peaceful negotiation, it implies the destruction of the enemy. In Rome, the mortality rate of battle participants during military operations was over 90%. This is why civilian mediators (rather than military generals) emerged to organize meetings between opposing sides far from the epicenter of military events in order to reconcile them.

By neglecting the peculiarities and characteristics of the space (physical or abstract) in which the interaction between the entrepreneur, the product and its consumers takes place, we risk failing in trying to understand the whole big picture of the world from the point of view of a worm that just "stumbled" into one tiny fragment of this picture and has already drawn conclusions about the whole picture.

As a result of this "fragmented" approach, each participant in the interaction speaks his or her own "language of value" , in terms of who has " stuck to what". There is even a joke among business consultants: "Every consultant has to treat his own illnesses in his clients".

It should be noted that any perceived value is relative, i.e. one that depends on external conditions and external influences.

In contrast to this approach, one can cite the notion of "absolute value," i.e., a concept that is true always and everywhere - regardless of conditions, circumstances, order and type of influences, etc. But no such "absolute value" exists in the real world, so we must always bind the value of any message or product to the location.

For example, in the context of desert space, drinking water has a high value for a person, while in the context of a city it has significantly less value. In the context of a disease, a cure for it will have a high value, and in the absence of a disease it will not be an object of interest.

The validity of all these statements do not need to be proven. They are obvious. Planting a Christmas tree on Earth and on Mars are different tasks even though the Christmas tree is "the same" in both cases.

To quickly describe my observations over the years of many different problems and their manifestations in business, I came up with the following metaphor.

Imagine that you have some sort of large aquarium, inside of which lives a cute little goldfish. While inside this tank, it can set its own direction of movement, speed, and depth of immersion.

In this sense, it would seem, you can consider it completely independent, because it makes its own decisions: what water temperature to maintain, what food to eat, with whom to make friends, with whom to fight, what algae to replant on the bottom, what level of oxygen to maintain, etc. But it's not that simple.

The fact is that the aquarium, inside which the fish lives and swims, is a part of some other system that surrounds it from all sides and makes our aquarium move in one direction or another.

The fish, however, does not realize this. It is completely absorbed by what is happening inside and cares little about events outside, which it hardly realizes and has no control over. She does not realize that the outside world has a significant impact on her destiny. For example, if the outside suddenly becomes very cold, the warm water in the aquarium will quickly cool down, and soon it will freeze with the fish inside.

Suppose that one day our goldfish wanted to warm up in the sun at the wall of the aquarium, which faces the window. Said - done, and swam with a certain speed in the chosen direction.

But, unfortunately for our fish, at the same time someone decided to move the aquarium to the opposite, dark end of the room. Can you imagine the surprise of our businesslike and independent fish? It swims towards the warm and gentle stream of sunlight, hoping to warm up and bask in it, but there are some unfamiliar images flickering around, one can feel the excitement of the water, and the sunlight becomes only less.

In the above analogy, the aquarium is a business sphere, inside which our entrepreneur (goldfish) lives and acts, his natural environment with boundaries delineated at the beginning of his activity.

Of course, the fish is sure that inside the aquarium she is a real queen and can do almost anything she wants. However, the idea that there is something else outside rarely comes to mind, and even then in the form of vague and ghostly dreams.

Our goldfish has so few connections with the outside world that it knows almost nothing about it. Her autonomous existence from the environment is not so bad and quite suits her.

The idea that events outside the aquarium can also take part in its life, remains for her too pragmatic mind incredible and mystical. Therefore, the goldfish lives, not understanding why one day in the aquarium is quiet and calm, the water is like a large mirror, smooth and clear, and another day everything suddenly changes dramatically and becomes scary-black.

The legendary director of General Electric, Jack Welch, said, "If the changes outside are faster than the changes inside, the end is near."[1].

The fact that our aquarium inhabitant knows almost nothing about the changes outside, cannot observe and analyze them, is its main problem. With that said, the problem with entrepreneurs is more aptly described by Peter Drucker: "There is nothing more useless than doing productively what you don't need to do at all"[2].

Whether we like it or not, it is the development of technology that in many ways represents the very force that makes the aquarium and its inhabitants move in the opposite direction, taking our goldfish away from its aspirations.

In a world where technological innovation is becoming a key driver of progress, perceptions of leadership are also undergoing radical change.

A new approach known as "New Era Leadership" combines the best practices of classic leadership with the flexibility and focus on customer engagement in today's digital business world.


From classic to innovation
Traditional leadership, based on authority, management and control, has long been the standard in business. It sees the Leader as a figure who sets direction and controls subordinates to achieve set goals. However, in the age of digitalization, this approach already seems outdated. New Era Leadership offers a new paradigm focused on choosing the right development vector, understanding the context of the business and creating long-term relationships with customers. This approach focuses on flexibility, adaptability and rapid response to change.


Why are technologies so important?
Today's technologies are not just changing the face of business, they are also changing the way we interact with consumers, decision-making models, and strategic planning. New Era Leadership recognizes this integration and actively leverages technologies to build more sustainable and innovative business models.


Leadership through awareness (not just control)
One of the key features of New Era Leadership is its emphasis on contextual understanding of the environment in which such activities take place. In today's world of rapid change, understanding the current context and possible future trends becomes a key competency of successful leadership.


Leadership focused on customer interactions
Unlike traditional methods that focus on the internal processes and resource management challenges of an organization, New Era Leadership places the focus of attention "outward" of the organization, primarily on customer interactions. This creates an opportunity to create products that are able to elicit high value perceptions from their customers.


Working for the future
New Era Leadership does not just react to current changes, but also seeks to see future trends. This ability comes from building a knowledge system of the entire field of work. For example, if we know the laws of gravity, we can predict the future of a coffee cup that is accidentally dropped from the table. This idea "working for the future" allows the leaders of the new era to be one step ahead of their competitors and build their long-term development strategies.

Systems Approach: New Era Leadership emphasizes the interrelationships between all elements of the business system rather than the distinctive properties and characteristics of individual objects in and of themselves.

Consumers' perception of the value of products has the property of wholeness and inseparability into parts.

One of my favorite systems science thinkers, Draper Kauffman, uses the following analogy:

"... splitting a cow in half does not give you two smaller cows. You may get many hamburgers, but the essential nature of the 'cow' - a living system capable of, among other things, turning grass into milk - will be lost. This is what we mean when we say that a system is functioning as a "whole". Its behavior depends on its entire structure and not merely on the summation of the behavior of its various parts." (Note: Kauffman, 1980, p. 2).

It is important to realize that systems are defined by their interrelationships and their functionality or potential. In many cases, when you remove one part of a system, it ceases to function, such as if you remove the wheels from a car or remove an important organ from the body.

Interconnectedness is what makes a system work, and one of the best examples of this interactive systems design is nature - it is made up of many individual parts working together to create the dynamic whole that is the planet.

The point that Kauffman emphasizes is that systems need to be dynamic. When you turn off a system, it becomes a dead bunch. This can be applied to human-made systems, such as your cell phone. Without power, the primary function that prompted its creation is now gone, and it becomes a useless bunch of metal. However, as soon as you plug it into a sophisticated communication system, power and functionality are restored.

Systems are made up of interconnected parts that, when put together, create a complex whole. Think of a jigsaw puzzle - the individual pieces may or may not make sense right away, but once they are assembled into a cohesive whole, the whole will be the obvious result of that connection of parts.

Consumer value always has the properties of wholeness, that is, it cannot be reduced to the sum of its constituent parts. A watch is designed to show the time, but no single separate part of the watch will cope with this task, just as no single part of an airplane can fly on its own.

Uncertainty. New Era Leadership includes elements of dealing with uncertainty, because in different situations there may be factors that have a hidden, and not obvious, influence on the area of activity.

In this case, it is not a question of mathematically calculating the probabilities of an event occurring; it is a question of a deeper understanding of the context of the activity. In many ways, this uncertainty for entrepreneurs is in the fact that they often do not know the specific "holistic" meaning of what the target audience "saw" in their messages and products.

The impact of context on a field of endeavor is astounding. You can't miss a punch from a master boxer if you are "lucky" enough to meet him - he will surely knock you down. The impact of context on an entrepreneur's field of endeavor is nothing less.

One of my favorite examples is a study of employee tuition compensation programs. At first glance, compensation should create a desire for employees to learn, grow in competence, and ultimately lead to lower turnover. Does that make sense?

In reality, however, things are not so clear-cut. The main influence on the promotion prospects of employees in the company was the existence of another program - a career management program. If such a program existed, it would have helped to reduce staff turnover, if not, then compensating employees for training, on the contrary, would have helped to increase staff turnover.

It turns out that the same factor (compensation program for training) leads to completely opposite results depending on the presence or absence of another component (career management program).

This is a clear example of how some assumptions will be true for some organizations and false for others. The answer to the question, "Do tuition reimbursement programs help employees manage turnover?" should be, "It depends..." because it is a context-dependent approach.

To briefly summarize this article, New Era Leadership represents a shift from reactive to proactive leadership, where understanding technologies and focusing on optimal customer engagement go hand in hand.

It is important to note that all these analogies do not imply that New Era Leadership is a part of quantum physics, but rather emphasize the general principles of systemic and probabilistic approaches to the study of complex systems.

Jaroslav Kaplan

Author of the book "Business Incognita. How to push the boundaries of entrepreneurial thinking". Expert in the field of sustainable development of organizations and discovering new sources of growth. Developer of the methodology of contextual market research. Member of the International Association of Strategic and Competitive Intellect Professionals SCIP (USA).

Blog: https://www.kaplanresearch.pro/eng

In this light (yet profound) business fable a very magical and sincerely nice goldfish, Goshio, navigates her aquarium and the seas of the Paraquarian world beyond. The heroine's journey is an allegory of the entrepreneurial world (and of life) – based on the author's own research journey to circumnavigate the fascinating World of Entrepreneurship. www.goshio.com

Contact:
E-mail: work@kaplan4research.com
Linkedin: www.linkedin.com/in/jaroslavs-kaplans-11255b