Clay Christensen: Hi, this is Clay Christensen and I want to welcome you to a podcast series we call The Disruptive Voice. In this podcast, we explore the theories that are featured in our course here at HBS, Building and Sustaining a Successful Enterprise. In each episode, we'll talk to alumni of our course and others who are trying to put these theories to use in their lives and in their organizations. It's great fun to hear from them, and I hope that you find these conversations inspiring and useful. If you have an idea about a topic or a speaker that you'd like to hear more about, or if you'd like to comment on our work, please reach out to us here at the school.

Katie Zandbergen: Hello, and welcome to The Disruptive Voice. My name is Katie Zandbergen, and I'm the community manager at The Forum for Growth & Innovation where our work is inspired by the teachings and life of the late Clayton Christensen. Today I'm pleased to welcome Scott Anthony to our now online podcast recording studio. Scott works as a senior partner at Innosight, a strategic innovation consulting firm founded 20 years ago by Clayton Christensen and Mark Johnson that focuses on helping organizations to design and create the future rather than be disrupted by it. Since 2010, Scott has been based in Innosight's Singapore office, leading the firm's expansion into the Asia-Pacific region.

Katie Zandbergen: In his 17 years at Innosight, he's worked with leaders of global companies, governments, nonprofits and startups to build their innovation capabilities, design new growth strategies, navigate disruptive innovation, and to manage strategic transformation. Scott has also written extensively on growth and innovation management, including the Little Black Book of Innovation and Dual Transformation: How to Reposition Today's Business While Creating the Future. The latter being a blueprint for how successful companies can leverage disruptive change to fortify today's business while also creating tomorrow's growth engine.

Katie Zandbergen: Furthermore, he has a new book coming out this fall entitled Eat, Sleep, Innovate: How to Make Creativity an Everyday Habit Inside Your Organization. We will certainly discuss Scott's new book in greater detail but suffice now to say that Eat, Sleep, Innovate shares insights with readers on making innovation a habitual act within a team or organization and also serves as a practical guide for using the power of habit to build a culture of innovation.

Katie Zandbergen: Beyond his many books, Scott is also a prolific contributor to Harvard Business Review and MIT Sloan Management Review. He made the Thinkers50 list of the world's most influential management thinkers, and he won the Thinkers50 Innovation Award. Furthermore, he's often been a featured speaker, not only on podcasts, but also while delivering keynote addresses on news programs, and then a myriad of conferences and meetings around the globe. In short, he is a true innovation expert and we're thrilled to have him with us today. Scott, welcome to The Disruptive Voice.

Scott Anthony: Katie, it is a true pleasure to be here and greetings from Singapore.

Katie Zandbergen: I'd like to start off by asking you about your time at Harvard Business School, where you earned your MBA in 2001 and graduated as a baker scholar. It was at HBS where your path first crossed with Clayton Christensen, and where you decided to stay on for two more years after graduation in order to work with Clay as a senior researcher. We all miss Clay terribly, and I'm sure our listeners would love to hear a bit more about your first impressions of him, along with your early collaboration with him. Can you take us back 20 years to that time when you were sitting as a student in his building and sustaining a successful enterprise course and where things went from there?

Scott Anthony: Absolutely Katie, and I would certainly agree with the sentiment about missing him terribly. The world just is not the same without Clay Christensen in it, and I distinctly remember that the first meeting almost 20 years ago now, it was my second year of my MBA program and I had almost randomly signed up for this class. Now today of course Building and Sustaining a Successful Enterprise, very popular course you got to work hard to get into it. Lots of people take it, et cetera. But my class, class gen one was the pilot year. I read the description. I thought it sounded kind of interesting.

Scott Anthony: I'd vaguely heard of this book, The Innovator's Dilemma. I had vaguely heard the name Clay Christensen, I thought, why not? I'll take the class. And I remember the first day Clay walks in, of course, you're struck by just his size, by how tall he is and his presence in the classroom. But the thing that really caught me is he took out acetates, like actual slides and put them on a projector and started to lecture, and nobody did that. That's just not the way you entered into the space in the MBA program. And you could look around the room, this is just the part of the year where people could choose to not stay in an elective course, and there's some people who are like, what the heck is going on? And there are other people like me who are just leaning forward, because what Clay said just caught me from the very first word, the ideas that he had, the theories that he had, the cases that he taught, I just found it to be a truly transformational experience to take that course.

Scott Anthony: And about midway through Clay said that it looked like he was going to potentially have some funding to hire a researcher next year. So I ended up after taking the course in the fall, I did an independent study with him in the spring and then became what must have been one of the lowest paid graduates of my class to go and spend ultimately two years as part of his research team, and it was just an amazing experience. As you know, those of you who met Clay later in his career in life, and you saw how overwhelmed he was, with all the requests that were coming at him, don't get me wrong, he was still busy then, but he just had a lot more space on his calendar, which meant I really got the very precious opportunity to work side by side with him, and to get just comment after comment on the work that we put together.

Scott Anthony: We did some research work with Cisco Systems that led to a white paper that ultimately formed the backbone of a book that came out in 2004 called Seeing What's Next. I was there when he was writing The Innovator's Solution, so I got to participate very deeply in that as well. And then 2003 I made the jump over to Innosight, which at the time was a very small organization, Mark and Clay had gotten it off the ground. It had gone through the fits and starts that you always go through when you're starting a new business, and there was a handful of people there when I joined that in August 2003, and the rest, as they say, is history. So those are the early days and 17 years later here I am, still fighting the good fight.

Katie Zandbergen: In your opinion, what do you think made Clay such a powerful thinker and teacher? Why did his ideas matter?

Scott Anthony: There really are three things that struck me as unique about the way Clay's brain would work. The first and I remember this is something he was very passionate about. He asked phenomenally good questions. You go back to The Innovator's Dilemma, it isn't why bad companies fail that is uninteresting, it is why good, smart, successful companies fail. That is a really interesting question. And Clay just had this pattern throughout his career of just spotting things. He would call them anomalies, things that just wouldn't seem to make sense and say, well, I wonder why? I wonder what's going on? So the ability to ask really good questions.

Scott Anthony: The second is he was a really good integrative thinker, and what I mean by that is he was able to think at the level of a practitioner, able to think at the level of a theoretician, able to think like an academic, able to think like a CEO and some of this of course, is a function of his own experience where he was a consultant, he was a business leader, he was a scholar. So he had the ability to take all of these different frames and combine them together. Related to that he was also a really good idea collaborator.

Scott Anthony: So he was very humble in how he approached ideas, and he would try to get data from lots of different people and combine it together. So that integrative ability, combined with the ability to get lots of data sources led to some of his breakthrough ideas. And then the third big thing is just his brilliance at communicating, a consummate storyteller, one who could catch you from the very first word that he said. I think it's important for people to know that while he was very gifted, DNA and all that, the reason why he was such a good storyteller is because he worked like crazy.

Scott Anthony: I remember for example, when I was a researcher with him, he was just putting together the pieces of the idea that the world now knows as the Job to Be Done. And of course, his famous story here is the milkshake story. I probably heard that story when I was his researcher, I don't know, like 100 times, and it would come at very strange moments. So there would be a meeting that we were having, someone would ask the question, and Clay said, I'm going to answer that question by telling you this silly little story about milkshakes. And the answer would have nothing to do with the question that was asked, but because it was such an interesting story, that person didn't care. And what it was, was Clay running a low resolution prototype. He was doing a beta test. He was trying to figure out where does he inflect, where does he put the little detail, what do people respond to, what do they not.

Scott Anthony: As is always the case, when people make it look easy, it's because they've worked like crazy and Clay did that as he worked through ideas. So those are some of the things that I observed about what made Clay so special.

Katie Zandbergen: In introducing you today, I briefly mentioned a book that you along with Mark Johnson and Clark Gilbert, published in 2017, entitled Dual Transformation: How to Reposition Today's Business While Creating the Future. I think that the concept of dual transformation is an important one to touch on early in this conversation. As I expect that it will come up again as we turn to related topics. In discussing dual transformation, I've heard you say, disruption doesn't need to be a scary word. If you think and act in the right way, you can deflect disruptive threats and seize disruptive opportunities. But it does require that you as a leader act in fundamentally different ways. Can you elaborate more on this concept of dual transformation and what it means for those who are working hard to steer their organizations in such a way as to best navigate disruptive threats?

Scott Anthony: Yeah, absolutely, and let me tell you a little bit about the idea's origin story because I think it matters. So Clark Gilbert, one of the books co-authors, when I first met him, he was a professor of entrepreneurial management at the Harvard Business School. He had done his doctoral research on how incumbents respond to disruptive change. He specifically focused on the US newspaper industry in Eastman Kodak. After I joined NSA, Clark has always been an advisor to NSA. He and I work together to advise a bunch of US newspaper companies on the ideas that came out of his research and Clay's research and the things we were learning in the field. And we basically told them to do an early version of what became known as dual transformation.

Scott Anthony: People generally ignored us and you saw what happened at the industry. The story got interesting in about 2008 when Clark got a tap on the shoulder and was asked to be the CEO of a media organization. The industry kind of wrung its hands in delight. They said the academic will learn what it's like in real life. When he left that organization a few years later, nobody was laughing, everybody was studying because he took an industry and an organization that was in seemingly nonstop decline, and he turned it back into a growth business and the way he did it was through dual transformation.

Scott Anthony: So dual transformation, the idea is entirely captured in those two words. Transformation, fundamental change in form or substance. So if you've got disruption going on in and around your industry, you can't succeed by doing what you're currently doing better, faster or cheaper, that is insufficient to respond to disruption. You have to fundamentally change who you are and what you're doing as an organization. The organizational equivalent of the caterpillar becoming the butterfly.

Scott Anthony: The dual in the title suggests that it is not a monolithic effort, you're not doing one thing, you're doing two. The first part of the transformation equation is what we call transformation A, this is when you're repositioning today's business to make it more resilient. So in the case of Clark, in his media organization, this is doing all the stuff that you got to do to make sure that your print publications are focused in the right places, your newspaper online sites have the right business model behind them, blah, blah, blah, blah, blah. You're still in the same basic business that you were in before, but you're responding to the disruption in a way that makes it as resilient as possible.

Scott Anthony: If I give another example of transformation A in action, Adobe, the software company started its dual transformation in 2008 when it ran the first experiment of a software delivered version of Photoshop, one of its flagship programs. A few years later it moved its entire software suite online, moving from packaged software to a software as a service model, that was its transformation A. The second part of the transformation equation, not surprisingly, is transformation B. This is when you go and create tomorrow's growth business.

Scott Anthony: In the case of Clark and his media businesses, he created a number of online communities and market spaces that bore resemblance to a traditional media properties, but were very different and had very different business models. For the case of Adobe in 2009, it bought Omniture as the backbone of a strategy to move beyond software to marketing services and related analytics. The process of doing these two changes in parallel, transformation A repositioning today, transformation B creating tomorrow, that's the idea of dual transformation. And when executed well, it can be a phenomenally powerful way to do exactly what you said, deflect the threats, seize the opportunities. Adobe is an example between 2009 and 2019 had its revenue triple and its stock price increased by 29% a year for a decade. And these kind of success stories that there are still a relatively small number of them but they're not just single case examples. We now have a database of about 60 organizations that have successfully done this and reaped the rewards of following a dual transformation strategy.

Katie Zandbergen: Now, here at The Forum for Growth & Innovation, we're used to thinking about disruption through the lenses of Clay's theories, namely as new entrants successfully challenging incumbents through either low end disruption or new market disruption. However, there are also disruptive threats that come from the environment in which a company is operating, what you refer to as big event disruptions, such as the current coronavirus pandemic. Last May you participated in a webcast hosted by Innosight entitled Innovating During Big Event Disruptions. You and your colleague David Duncan, were speaking with reference to the impacts of COVID-19. But the points that you made were certainly relevant for and applicable to future big event disruptions as well.

Katie Zandbergen: You started off that presentation by saying that even in the darkest of times, that there are opportunities for innovation and growth, and that during big event disruptions, it's more important than ever to think about not only the short term, but also to focus on the mid term and longer term time horizons for your organization. What would you say to those who feel that they're struggling to meet the current moment, let alone finding the time and resources to think about the future?

Scott Anthony: Yeah, it's a great question, Katie. And of course, something that leaders all around the world are really grappling with today, as we're still trying to figure out what the world is going to look like as the year progresses, and we get into 2021, and we see things open and see things shut and all that. I think there's three points that I would make. The first point draws on an article that I and my friend Michael Putz had in the March 2020 issue of Sloan Management Review. There was an entire issue devoted to disruption and Clay's research and Clay's influence.

Scott Anthony: The contribution we made was an article titled, How Leaders Delude Themselves About Disruption. And we talked about essentially the lies that leaders tell to themselves that lead to them under estimating the threat and overestimating how difficult it is to respond. And one of the lies that we highlighted is that it is risky to innovate. And therefore, if you're in the middle of a big event or times are tough, you shouldn't do it. Think about that for a second.

Scott Anthony: Think about a big company that tried to innovate and had a spectacular failure. You might be thinking in your mind something like Google Glass or Microsoft Zune, or Amazon and the Fire Phone or something like that. None of those things were good, but none of those things killed the company because when you place a bet on innovation, the worst thing that happens is the bet's wrong, you write it off, the best thing that happens unlimited upside. When you don't invest in innovation, your upside is capped at zero, and your downside has no limit because when you miss a transition, you can put your organization out of business. So what is the risk here? The risk is not innovating.

Scott Anthony: The second key point is people say, okay, I get that. I need to innovate, but where did the resources come from? Well, you mentioned Dave Duncan before. Dave and another one of our colleagues, Alasdair Trotter, and Bernard Kümmerli just put out a paper in June 2020 that described how you can reset your growth and innovation portfolio. And our work repeatedly shows that if you take a hard look at the investments that you have already made an innovation and growth, up to 50% of them can be things that you can safely kill and shut down without impairing your ability to realize whatever your ambition you're trying to do.

Scott Anthony: So this is a key thing that leaders have to do when they're in tough times. They have to push the reset button and make sure that they are focusing their resources on the right place. And the third thing to remember reinforce is something that you said, the research shows very clearly, no matter how dark the times, there is indeed always a silver lining. I talked about the Adobe dual transformation strategy while Shantanu Narayen became the CEO of Adobe at the end of 2007. This is right as the global financial crisis is beginning, and it was through that crisis that he made and his team made the investment decisions that led to that big transformation.

Scott Anthony: There are opportunities to start businesses up in the midst of things like this. There are opportunities for companies that are following the disruptive trajectory to take the next big step in their development. If you can see the right trends and ride on them, there remain tremendous opportunities to innovate and grow.

Katie Zandbergen: You mentioned seeing the right trends and thinking about the underlying forces that are at work in an industry in terms of bringing about change. I'm wondering in the face of a big event, such as the Coronavirus, I've heard you speak about trends being either accelerated or decelerated. Can you speak a bit more about that and what it means in terms of strategy?

Scott Anthony: Yeah, so right as the Coronavirus, right as we got to March 2020, and it became pretty clear that this was going to be something highly material, we stepped back and we said, okay, can we make any sense about what's going on? Innosight, one of the things we regularly do with organizations is we work with top leadership teams to help them imagine what their future environment will look like and then build plans to thrive in that future environment. And as part of that, we always try to look at what are relevant trends that are in process of reshaping industries, contexts, and so on.

Scott Anthony: So we took the database we have of trends, there's about 300 trends in our overall database, and we just did some good solid thinking to say which of these trends would seem to be most affected by the Coronavirus, by COVID-19. And we asked essentially two questions, which if these trends have been catalyzed, that is, they were likely to happen anyway, but they're going to happen faster. They're going to happen deeper than we thought originally, which have been dislocated, where you now at least ask the question, is this still going to have the impact that you think?

Scott Anthony: Then the second question we ask is, is this something that is permanent that we really think this will last or is this something that is just a temporal shift that we think will snap back? So we did that, and we identified three big categories of shifts. The first no surprise is accelerated digital migration. The world has been forced into a mass experimentation about digital technologies, and that has shown people that there are things that they can do very effectively in a virtual environment, telecommuting, and so on. So that's something that you can see very clearly is going to stick. There are some sub components of digital that of course have been dislocated. You look at ride sharing, you look at people sharing rooms like Airbnb and so on, that at least temporarily is going to be knocked backwards and time will tell about the long term impact.

Scott Anthony: The second big thing that we see is deeper healthcare transformation as Clay had researched and written about extensively. Healthcare was in the process of being transformed as caribou from the center to the edges as we had new technology that allowed people to move from treatment to prevention, that was already underway, but of course, it's happening faster. It's happening deeper now. The third area and the one that I think will be the most interesting to watch is what we call socio-economic fragmentation.

Scott Anthony: There are estimates that suggests anywhere between 100 million to a billion people will be pulled back into poverty because of COVID-19. You had this great trend towards having supply chains distributed throughout the globe that has the potential of being reversed. Now, this is an area where I think there remains a lot of uncertainty because it depends on what policymakers do, it depends on epidemiological spreads, it depends on how vaccines and treatment methods are developed. But it is an area that I think everybody needs to be watching. So those are the broad things that we see going on.

Katie Zandbergen: Interesting. You mentioned earlier, the early days of Jobs to Be Done when you were working with Clay at HBS, and I'm wondering how does the theory of Jobs to Be Done factor into discussions of innovating during big event disruptions?

Scott Anthony: It's been one of the most helpful lenses that we have found. I mean, all of the lenses that Clay gifted to the world have been helpful, but Jobs to Be Done is one that we just keep coming back to, and it reminds me actually Katie of just a little vignette from my early days. I remember when I saw the first draft of the book that ultimately became known as The Innovator's Solution. And the title that Clay proposed for the book was something along the lines of get the job done, and the reason why is he said, disruption was the big idea in the dilemma, and I think the idea of the Job to Be Done is the big idea in this book. And I remember him talking about milkshakes, and people don't buy products and services they hire to get jobs done and all that.

Scott Anthony: I said, this is just such a simple idea. There's no way this could be a revolutionary idea. Sometimes youth is wasted on the young. When I was in my mid 20s, it's something I said, and then he wrote the book, Jobs to Be Done was the book, and we've realized now from the 17 years I've spent advising companies on this idea that it is indeed an incredibly powerful idea that brings clarity to very many complex situations. And in the case of a change like this, it's a very helpful guide to answer a foundational question, that is, which of the temporary changes that I observe in the middle of something like this will stick and which will not.

Scott Anthony: This of course, one of the foundational principles of Jobs to Be Done is that jobs don't change. The problems people have don't change. So if you want to understand it, you want to unpack the job a little bit. We know that circumstances matter a lot for jobs. People are now finding themselves in new circumstances. That's leading to them trying new solutions. Some of those they'll find get the job done well, and those will stick. Things like video conferencing or using remote software to do podcasts is something that I expect that we'll see more of.

Scott Anthony: We know that barriers impact the different solutions that customers can choose. Well, we have temporary barriers that have been imposed, and every big event disruption we've studied has lasting ones as well. So if you look back to the September 11, terrorist attacks, obviously airport security change because of it, you're going to see the way healthcare systems are designed change permanently as well, which will change the way that people look at healthcare solutions. Whenever people are choosing which products they'll hire or solutions they'll hire to get a job done, they're thinking about all the different ways in which they assess quality functionally, emotionally and socially.

Scott Anthony: We know that this is something that they don't think about. They've got heuristic shortcuts and so on, but the algorithm's always running. Something like this can rearrange the way that people look at quality, the way they define quality. So something like contactless payments can be something that will really stick because people will keep thinking, can I find a way to pay that is as safe as possible. Then of course, there's the space for the innovators to come and introduce new solutions, and this is one of the most interesting things to watch. As an example, I've got four kids out here in Singapore, we had about two months where all four of them were doing some kind of virtual learning.

Scott Anthony: The youngest is three, the oldest is 14, and I give much credit to the schools to try to make that as good as possible, but the second the schools reopened in Singapore, we were first in line as virtual learning just is not yet good enough and that is the innovator's opportunity. Those who come in and seize that space have an amazing opportunity to drive change that sticks. So again, the Job to Be Done and unpacking it into these different areas is a huge help to think through what temporary changes will stick.

Katie Zandbergen: And beyond having your finger on the pulse of your customers in terms of their Jobs to Be Done, what else do you think strategic innovators should be doing in this moment?

Scott Anthony: Well, I wrote a book 11 years ago now, the book was called The Silver Lining and I called the book The Silver Lining for two reasons. Number one, reinforce what I mentioned before, there are indeed opportunities to innovate and grow no matter how dark the times. The second reason I called it The Silver Lining is the advice that I'm going to go through, the advice that we give to strategic innovators in the midst of bad times. This is really advice that exists in any times.

Scott Anthony: So the silver lining of tough times is it forces innovators to do the things that they should have been doing already, and the easiest way to do this is just to pick off a few of the chapter titles from the book. So one of the chapters is called Prune Prudently. This goes back to the idea I mentioned before that sometimes 40 or 50% of your efforts are focused on projects that will never have real impact. You shouldn't be doing that anyway but you cannot do that when times are tough.

Scott Anthony: We had a chapter called Master Smart Strategic Experiments saying, when resources are tight, you need to be really smart about how you experiment. You need to be scientific, you need to have a good hypothesis, you need to test with as little risk as possible. There are great tools out there to enable people to do this, and you can go and run smart experiments that teach you what you don't know to accelerate the path to innovation success. And then finally, we had a chapter called Share the Innovation Load. The idea is a mistake that people make is they think that innovators are risk seekers, entrepreneurs are risk takers. That's not what innovators and entrepreneurs are.

Scott Anthony: What a good innovator does, what a good entrepreneur does it find a way to smartly share risk. So this is the moment if you're inside a company to embrace open innovation, to work in consortiums, to collaborate. Again, this is something you should have already been doing but now you really have to. The silver lining again, are the downturns and tough times for strategic innovators to do the things that they should be doing in all times.

Katie Zandbergen: Well, I really like the takeaway that you've given to our listeners in terms of innovating during big event disruptions. The message that change and uncertainty also represent opportunity. It's a message of hope, and we all can use a dose of hope during challenging times. Now, I'd like to turn the conversation to your upcoming book, Eat, Sleep, Innovate: How to Make Creativity an Everyday Habit Inside Your Organization, which is co-authored with Paul Cobban, Natalie Painchaud and Andy Parker.

Katie Zandbergen: I've heard you speak about innovation as a system challenge. Saying that companies need to think holistically about how to enable innovation within their organization and then take concrete steps to do so. Your new book which is coming out this October is about using the power of habit to build a culture of innovation, unleashing the energy of an entire organization in order to drive innovation and transformation. I'm wondering, where did the idea for the book first come from, and can you elaborate on the role that company culture plays in driving innovation?

Scott Anthony: Yes, Katie. So this has been a topic that I and many colleagues at Innosight have been puzzling over for quite some time. And for me as an individual, there really have been kind of two click moments that led to the belief that we had something to say on this very important topic. The first goes back to a meeting I had in Singapore, probably about five, maybe six years ago now. It was with a great big global shipping and logistics company, and it was their CEO and top leadership team and he had us come and do a few hours talking about the things that we talk about. And I was talking a lot along with my colleague, Pontus Siren, from the Singapore office here.

Scott Anthony: I was talking a lot about some of the ideas of disruptive change and dual transformation and all that and we were talking a lot about transformation B and setting up a separate org and he caught us off. He said, I get all this. We've already done this. We've got a separate group. We have funded it in the right way. I've read all your books. So I know all this stuff. I studied Christensen's stuff, I get that. And then he said, I have 29,000 other people, what do I do with them? And I thought that's a really good question. I don't have an answer to that.

Scott Anthony: Then the second part has just been watching my kids grow up. So I mentioned the four of them. Charlie's the oldest, he's 14, my daughter Holly is 12, Harry is eight and Teddy is three. And a real puzzle has entered my mind as I've watched them grow up. What good innovators do? There's various ways to describe it but what we assert in the book is that good innovators follow five behaviors. They're curious, they're customer obsessed, they're collaborative, they're adept in ambiguity, and they're empowered. Those are the things that allow you to successfully do something different that creates value, which is how we define innovation broadly.

Scott Anthony: Now the puzzle is when I watch my kids, I do not have to teach them to do that. They're naturally curious, they go and seek to understand things, they collaborate quite easily, they experiment and no one has to tell them to do anything. Now, they're not perfect. They need help in doing some of those things. But those behaviors are natural instincts, but they're unnatural inside many organizations. I think a lot of times people say we got to fix the people, but we don't have to do anything to the people. What we have to do is go and address the systems and structures that are containing and constraining the latent innovation energy that lies within the organization. It's just a very small example of this.

Scott Anthony: You mentioned the co-authors on the book. The first guy Paul, Chief Data and Transformation Officer at DBS Bank, the leading bank here in Southeast Asia, and that bank has fundamentally transformed. 10 years ago, it was a stodgy, slow moving regulated incumbent. Today it's still regulated, but it is nimble, its dexterous, it has really embraced innovation, it's embraced digital, it's won every banking award and is known now as an innovation powerhouse. Do they go and swap out all the people? No. Do they go and hire a bunch of millennials? No. Do they go and buy a hot startup? No. Instead, they said that all 28,000 people in our organization have the capacity to be great innovators.

Scott Anthony: The way Paul describes it, a real click moment for them was a visit they took about five years ago to Netflix. They were visiting Netflix and they just started to complain. They said, oh, Netflix, you haven't so easy. You're located in the West Coast of the US, you're in privileged position. You just hire young engineers from the best schools in the world, and we just don't have that talent base. The person they were talking to said something that really stuck with DBS. First, the person asked them, how old are your engineers? Ours are about 40. And it turned out DBS engineers were about the same age as Netflix's engineers. And then he said, you know what? A lot of the engineers that I have, I hire from people like you. I hire from banks, I just get out of their way. So this all reinforces that the potential is there if we can go and address the culture to create one where the behaviors that drive innovation success come naturally rather than something you've got to force, cajole, or go and push people to go and do.

Katie Zandbergen: Interesting. In the book, you start off with some important definitions, including for the phrase culture of innovation. You write about the definition for this phrase as itself being a barrier, saying that it and I quote, typically is used in such a vague and ambiguous way, and ascribed to so many wildly different situations as to be almost meaningless. This brought to my mind the frustrations that Clay often felt with the overuse and or misuse of the term disruptive innovation. And it's clearly important that listeners understand what you mean when you talk about an organization having a culture of innovation. Can you speak to that now? How do you define it?

Scott Anthony: We spend the entire first chapter of the book going through this, it's some degree of pain. Some might argue it might be pleasure depends depending on your perspective. But to really be able to define it, you have to individually define innovation and culture of I think the world can take care of and then find a way to combine them together. So let me start with innovation. Innovation, we define in the book as something different that creates value. Something is vague to remind us that it isn't just technology. There's lots of ways to innovate.

Scott Anthony: We use different rather than a breakthrough or a leap forward. A lot of disruptive innovations are taking complex things and making them simple. So sometimes what looks worse, we all know can actually be better and creates value reminds us that innovation is different than invention or creativity. Those are inputs, but until you're producing revenues or profits or improve satisfaction, in our eyes, you have not innovated. Then culture, as we think about culture, we borrow from the great work of Edgar Schein who talks about culture not just being the visible things you see when you go to visit an organization what he calls artifacts, but the ways in which people work and the unstated assumptions that lead to them working in particular ways. And we really focus on the middle layer there, the behaviors that people follow, because our belief is artifacts are easy to change, but have no impact. Assumptions have massive impact but are really difficult to change.

Scott Anthony: So the easiest thing to attack are the ways of working the habits, the behaviors people follow. As Richard Pascale once said, it's easier to have somebody act their way into a new way of thinking than to think their way into a new way of acting. So we've got culture, we've got innovation, I talked about the innovation behaviors before. When we combine all of that together that leads to our definition, a culture of innovation, we say is one in which the behaviors that drive innovation success come naturally. So those behaviors or habits, those behaviors are things that people do without thinking about them, because they have disappeared into the unstated assumptions of the organization. That's how we define it.

Katie Zandbergen: As you've mentioned, and also in the book you've written that success requires focusing in on changing people's daily habits through a series of interventions and then ensuring that those habits stick and scale. Can you tell our listeners a bit more about your approach to actually changing people's habits and unleashing the innovators within?

Scott Anthony: Absolutely. One of the early lessons I learned from Clay was this very persistent finding from the innovation literature that breakthroughs, that magic happens at intersections with different mindsets and skills collide together. And that's what we try to do in the book. We say okay, the innovation literature we know we have contributed to, we have devoured it. So that's one component. There's a great set of literature around culture. There's a great set of literature around organization design, and there's a great set of literature around individual habit change. The book, Switch by Chip and Dan Heath, the idea of Thinking, Fast and Slow by Daniel Kahneman and a range of other books. And what we try to do is bring all of those things together. Take principles proven from habit change to shape individual habits, bring it to organizations to help them create cultures that inspire innovation. And the specific tool that we focus on most deeply in the book is I think the best acronym Innosight team has ever come up with. I didn't come up with it. I was part of the team that did it. It is what we Call a BEAN.

Scott Anthony: A BEAN is a behavior enabler, that's the B and the E, an artIfact and a nudge. That's what it takes to drive habit change that sticks and scales. Let me give you an example of this from DBS Bank. So DBS and its CEO Piyush Gupta announced a few years ago that their competitive set is no longer banks, local, regional or global, their competitors are people like Google and Apple and Netflix and Amazon and LinkedIn and Facebook. Those were not accidentally picked companies. If you put a D in between those letters, it forms the word GANDALF, they said we're going to become a GANDALF company. You can imagine all the fun they had with that iconography and so on. And they said, what we have to do is function like a 28,000 person startup.

Scott Anthony: What is a 28,000? Person startup do? They do a whole bunch of things, but one big thing is they're agile and they collaborate. What was stopping DBS from doing this? Well, the place DBS decided to intervene is a very humble starting point, meetings. There are lots of meetings in DBS like there are in almost every organization and the meetings weren't very collaborative. Only 40% of people at the beginning of the story said that the meetings they were having encourage collaboration that would ultimately lead to agility, that would ultimately lead to innovation.

Scott Anthony: Instead of being collaborative, they would start late, they would end later, people would be digitally distracted looking at their phone, there'd be unclear outcomes and everybody kind of felt like their time was wasted. So a few years ago, DBS introduced a BEAN. That BEAN is called MOJO. Every meeting today has a MO, the MO is the meeting owner. The meeting owner calls the meeting to order, makes sure that there are clear starting points and clear ending points, there clear outcomes, and there's equal share of voice that everybody participates. The JO is the joyful observer. They watch the MO. They give them feedback publicly at the end of the meeting, how well they did and if they noticed that people are digitally distracted, whether live or over Zoom or whatever video conference solution they're using, they call timeout.

Scott Anthony: They ask people to put their devices down or even create a physical stack in front of them kind of like a Jenga tower so they can focus on the meeting. This is a great BEAN the behavior enabler or the printed out steps that are described for the MO and the JO. They're very clear roles. There's a checklist for what they do. There's tons of artifacts around it, there are mouse pads, there are things hanging on walls, there are screensavers to remind people of these things, and there's an incredibly powerful nudge, an indirect way to encourage new behavior in the JO sitting in the room watching the MO to reinforce the behavior.

Scott Anthony: There's also gamification, principles, leaderboards, and so on to really make this a ritual that sticks and it works. I mentioned at the beginning, 40% of meetings were deemed to be collaborative, today, that number is close to 90%. More than a half million employee hours had been saved as of 2019, by having meetings that are more effective. Now of course, MOJO isn't enough to transform DBS. In the book, we detail a whole bunch of other BEANs that DBS introduced. There's a whole bunch of other systems and other things they have to do. But that's at least one of the key tools that we think needs to be added to the culture change tool book, the BEAN, the behaviour, enabler, artifact and nudge.

Katie Zandbergen: In the Eat, Sleep, Innovate, you also provide readers with case studies of normal organizations doing extraordinary things. The aforementioned DBS bank being a great example of one such organization. You describe these firms saying these are normal organizations. They look like where most people in the world work, but Eat, Sleep, Innovate will show how they like all organizations are capable of doing extraordinary things. I really like this idea that any organization can be extraordinary if they're able to successfully create a culture of innovation within their firm.

Katie Zandbergen: Now in the second half of the book, you write about tips, tricks and tools, people will need to read the book to fully dive into this helpful toolbox. But can you briefly touch on some of these strategies that you recommend would be innovators follow in order to make creativity an everyday habit within their organization?

Scott Anthony: As you say, there's a whole bunch of them. I won't try to go through four chapters in blindingly fast speed. But let me at least tell you how we structured it, and then I'll just go into one specific example. So the way we structured it is similar to the way that The Little Black Book of Innovation, which came out about 10 years ago, the way it was structured, where it says basically, there are four phases to the innovation journey. There's the phase where you're discovering the opportunity, there's a phase where you're sketching or blueprinting your idea, there's the phase where you're testing and adjusting it, and there's the phase when you're scaling it, and I use the word phase versus steps because it's never perfectly linear. It's a little integrative, it's a little iterative, but there are roughly these four phases.

Scott Anthony: So in the book for each of those phases, we have a selection of relevant BEANs. We've got a case study of an organization that's done some interesting things. We've got the Joint Forces Command from the UK in one section, we've got Microsoft and another, and we've got some tools that leaders can use to help to amplify these things. One of the tools is a pretty simple one. This is in the section about blueprinting ideas. And this borrows some insight from Scott Cook, who is a big friend and fan of the Clayton Christensen community, the founder and still active chairman of Intuit and it comes from a panel discussion that I had the privilege of moderating that had Scott on a couple years ago talking about Intuit's really fantastic transformation over the past decade to really become a company that's got design, thinking and innovation at its core, and I was talking to Scott about what it took to make it happen.

Scott Anthony: Now there's a couple interesting things that he said but the one I really want to focus on is leaders asking good questions. If you really want people to follow new behavior, Scott said, the questions leaders ask are really important. You have to ask questions that insist and evoke the behaviors that we're trying to teach people. So an example of this would be asking people, what experiments are you going to run next week? Now Scott is very precise with this language. That is a very carefully crafted question because you've got the word experiment in it. So it's very clear that he is suggesting that it's good to go and test and learn to get more data about things, and notice he said next week.

Scott Anthony: So he didn't say the test you're going to run next quarter or next year, he said, what are you going to begin doing immediately to learn more about your idea? This is an example of what we in the book called a discovery question. It's open ended, it enables possibility. When you're still in the early stages of innovation discovery questions can help guide innovators to the right spaces. The contrast to discovery questions are things that are more delivery oriented, where you're demanding proof, that can often shut down innovation. What is the job to be done is a classic example of a discovery question. What don't we know, what will we need to believe is another example of what. When we go and run an experiment, what surprised us when something doesn't work? Instead of saying, all right, let's all hang our heads, what are our options? What can we learn from this? What can we do? The regular practice of leaders asking discovery questions can help to enable a culture where behaviors that drive innovation success come naturally as we've discussed a culture of innovation.

Katie Zandbergen: As a last question, Scott, do you have any final advice, thoughts or insights to share with our listeners?

Scott Anthony: Well, that's a dangerous last question to ask as I could go on forever about these things. As you can tell, Clay left quite a mark on me. I've got the high degree of passion for all of these topics, and again, I'm so grateful that I had the chance in my life at various times to call him a teacher and a boss and a co-author and a colleague and mentor and indeed a friend. So this has been a life's journey for me and it's been a journey that I'm thrilled to be on.

Scott Anthony: I guess the last thought Katie, I would leave with, I mentioned before my kids as a source of influence. I will leave with a belief that now has turned into a conviction for me. I've watched these four children grow up in parallel to advising organizations all around the globe on the dilemmas of disruption, and this is the belief that's formed inside of me. I today believe that the world's greatest untapped source of energy is not in the wind, it's not in the water, it's not in the sun, it's inside large, established organizations, because within those large established organizations are people that once we're curious Charlie, that's my 14-year-old, once we're hopeful Holly, that's my 12-year-old, once we're happy Harry, that's my eight-year-old, once we're thoughtful Teddy, that's my three-year-old.

Scott Anthony: My mission as a parent is to make sure that those children never lose their love of learning. My mission as an advisor to organizations around the globe is to help them capture, harness and amplify the latent innovation energy that lies within. Disruption need not be a threat, it can indeed be an opportunity. The innovator's dilemma can be solved. Normal organizations are capable of doing extraordinary things. If we approach the problem with the right mindsets and the right theories, we can all collectively do amazing things. And in today's world, we really need that. We need all the innovation that we can get to survive and thrive for now and for generations to come.

Katie Zandbergen: Well, thank you so much for your insight, Scott, and for joining us on The Disruptive Voice today. I've really enjoyed our conversation.

Scott Anthony: Thank you, Katie. I've enjoyed it as well.

Clay Christensen: Thank you for listening to us at Disruptive Voice. If you like our show and want to learn more, please visit us at our website or leave us a review on iTunes. Until next time, good luck, everybody.