Buck: Welcome back to the show, everyone. Today my guest on Wealth Formula Podcast is Michael Wade, who is a professor of innovation and strategy at IMD and directs IMD’s Global Center for Digital Business Transformation. He also helps individuals and organizations respond to the opportunities and threats of digital disruption. In addition, he is the author of ALIEN Thinking: The Unconventional Path to Breakthrough Ideas. Michael, welcome to Wealth Formula Podcast.
Michael: Thank you, Buck. It’s a great pleasure to be here. Thank you.
Buck: It’s funny because this book, The Unconventional Path to Breakthrough Ideas, is I think the thesis to even start before you begin with the content of the book is an interesting one. And I wonder if you’d comment on that. I’m an entrepreneur. I think that I happen to go to medical school and I happen to do all these things. And I discovered late in life, you know what I really like solving problems, and I’m really good at finding opportunities and all these things. And when people ask me about entrepreneurship, I say to them, I was born this way. It’s not a choice. And your book seems to suggest there might be some choice in development in this.
Michael: Yeah. I mean, I disagree with what you just said. Okay. Based on the evidence, entrepreneurship is a learned behavior that any of your listeners, if you want to be entrepreneurs, they can become entrepreneurs. The barrier is the right attitude, the right training, the right help when you need it, skills and behaviors you pick up along the way. But the science suggests this is not something you’re just born with or you’re not. Right. It’s a learned behavior. And the great entrepreneurs are no different than the rest of us in many ways.
Buck: I’m curious about the science you just mentioned, and again, I’m glad to hear this. And I am not pushing back at all with my own thinking patterns, pretty much just understood that this was something that my dad has the same my dad is an entrepreneur, and I didn’t start out an entrepreneur. I started down this pathway and it ended up veering in that direction. What is that science that you’re talking about? Tell me about the science.
Michael: Well, there’s plenty of Sciences that studies that have looked at entrepreneurs and tried to divine some kind of common themes. Right. Are they taller than the average person or one of the most common factors to look for an entrepreneur? Is our entrepreneurs more risk taking than normal people? Do they take more risks than regular people, right. I mean, you hear these stories about mortgaging the houses and all this, and there’s no data suggest that’s the case. In fact, most successful entrepreneurs are not particularly big risk takers. They bound their risks like a professional gambler. They’ll set up an amount that they’re prepared to lose, and they won’t go on after that. So there’s all kinds of interesting insights that you get when you look at entrepreneurs. They’re very good connectors. Typically, they’re very good at making connections and not falling in love with their ideas too early or too strongly. That’s another common mistake, right. Entrepreneurs stick too long with their ideas, even when giving feedback, to suggest they’re not very good. So they’re kind of flexible. They’re people. They’re not sitting in a basement somewhere just coming up with something they’re testing, and they’re not particularly big risk takers.
Buck: Again, understanding that when I think about the business ideas that I’ve had in the businesses I’ve started over the past decade, a lot of it comes down to having exposure to a lot of different things, a lot of different paradigms, things that are completely unrelated, drawing parallels and seeing inefficiencies. How does an investor say, or an entrepreneur who is looking for an opportunity best position themselves to recognize those new opportunities?
Michael: For a lot of people, that’s just a muscle that they don’t exercise very much. Right. And one of the things we talk about in the book is training yourself in a way to pay attention to the world around you. And after a while, we just don’t do that very well. We sort of look and we see the same things, and after a while, we don’t see them anymore. So the opportunities that you’re talking about, maybe right in front of us, but we don’t see them because we’re no longer paying attention to them. Really strong entrepreneurs are good at this. They question things. And I imagine bucket, you do this too, right? You question things like we just assume this is the way it is. But really, this has to be that way. We talk about in the book of what’s the opposite of deja vu, right. You know, this idea of deja vu when you see something you think, I’ve seen that before, right? I’ve seen that before. The opposite of that is looking at something that you see every day, but seeing it as if you’re seeing it for the first time. And this is kind of a skill that can be fine tuned. And that’s when you see those kind of hidden opportunities.
Buck: When I think about, and I talk about this fair amount, I’ve talked about this fair amount on the show, but I think that a lot of my colleagues who are highly successful professionals, I feel like one of the biggest limiting factors in their own ability to develop that muscle, as you say, is actually previous success and an abundant amount of success in the academic system that constantly perpetuates this cycle of, okay, here’s what we want you to learn. You learn it. You perform without going out of bounds. And when I think about that poor business or with investing, for example, which I’ve been lucky to have a fair amount of success with, there’s a significant danger with that notion of sticking with what is conventional wisdom or what works. Is that fair?
Michael: Absolutely. Yeah, absolutely. We’re prisoners of our assumptions, even if we don’t know what they are. Right. And that’s the worst case. We don’t realize the assumptions that we have and that we follow. And yeah, absolutely. Breaking out of that prison is a very strong step towards innovation, creativity and entrepreneurship. There’s no question about that.
Buck: How do you do that? How do you do that? If you’re making a comfortable living and you feel like you want something, you just know that there’s something else. How do you train yourself to think differently? And maybe that’s what Alien Thinking is all about. Maybe that would be a good time to break down.
Michael: That is what Alien Thinking is all about. And there’s a couple of reasons we chose a kind of a strange title. Right. For a book. But there’s a couple of reasons we chose that title. And one of them is a metaphor itself of an alien. Right. Because the thing about an alien is they’re coming down to Earth and they’re seeing everything with fresh eyes. It’s just what we’re talking about. Right. So how do you see the world with fresh eyes? Well, you imagine what it’s like to be an alien, and that’s what it’s like. You’re suddenly seeing everything afresh. It’s like when you go on holidays in a new place, the smells are a little bit stronger, your hearing is a little bit better. You’re seeing things a little clearer. It’s all new. Your senses are heightened. And this is kind of the idea of how do we become like an alien? Now you look at movies and usually it doesn’t end well for aliens. Not easy to be an alien, right? They often get shot down. And that’s true also of entrepreneurs and innovators. They often get shut down, too. So the book is around not only about how you come up with that great idea, but also how you take that idea and you drive it through into kind of some kind of breakthrough solution. So the other reason we chose Alien, because actually it’s an acronym. And the first letter, each letter in Alien or all the letters in Alien stand for kind of a step that you can follow in order to come up with these great ideas and transform them into breakthrough solutions.
Buck: Don’t keep us in suspense. What are those? Okay, what are those words? Just so we have a general outline.
Michael: I can walk through that. We’ve already kind of talked about this already. Buck is attention, right. It’s paying attention to the world around you. And you ask how to do that. So there’s different tips and tricks that you can use to do that. You can Zoom in right on something. So you’re looking at something a lot more closely than you typically do. Right. So you’re seeing it in a different light. You can Zoom out so you can kind of see the big picture a little more. You can switch focus. This is kind of a trick you can use. Right. You can think, what would the world be like if you were blind or deaf or a child or a foreigner coming in? So you try and force yourself into these different perspectives and try and gain that kind of new insight. So attention is all about getting these new insights and finding these patterns that didn’t exist before. And today, with the digital tools and technologies available to us, this is easier than ever. Right before, if you wanted to study a tribe, you’d have to go and live five years in Papua New Guinea or whatever, like Margaret Mead did. But now you just go to Subreddits, you go to track some Reddit communities or WhatsApp or LinkedIn, and you can find out a lot of insights from a lot of different places. Sensors, IoT. There are all kinds of ways we can pay attention to the world around us now, which is much more than we could in the past.
Buck: What’s L?
Michael: L is an intrigue you don’t like L L is levitation. Levitation is counterintuitive in a way, because it’s stepping back. Right. And what we find and the science supports us pretty strongly is that a brain at rest. So when we say at rest, what I mean is not involved in a heavy cognitive activity. It’s actually working as hard as a brain, which is busy doing something. The problem is, today we just don’t give our brains enough time to disengage, to Levitate, to take time out. Professional athletes, they take time out. Right. How much is it? So it’s forcing ourselves to reflect, to step back, to think and reflect. And when we do that, we give ourselves the kind of the gift of time to do that. We also come up with really interesting ideas. And it shouldn’t be surprising that some of our best ideas we come up with in the shower.
Buck: I was just about to say that.
Michael: Exactly right. You’re busy, but your brain isn’t. So your brain can kind of work away. And all those ideas that you were talking about earlier or in the car or exercising, we just don’t. Especially in a digital world. Copy has made this worse, right? Yeah. We don’t give ourselves we don’t block enough time in our agenda just to think and reflect.
Buck: Okay. I’m going to keep going. I.
Michael: Okay. A, you’re paying attention to the world. I. You’re giving yourself time to reflect. Right. Einstein said that creativity is a residue of time wasted. Right. I is imagination is trying to come up with new ideas, new thoughts, putting strange things together and seeing what comes out of it. And for many of us, we’ve lost the ability to be imaginative. Our imagination is kind of real life has beated out of us. You were talking earlier about people in these jobs, and they’re just nine to five or whatever, and you don’t really have time and space anymore. To me, to be imaginative. And what I said, it’s been beaten out of us. It means it was in us. Right. And we know that because all kids are imaginative, right. I mean, you’re a kid. You have a very active imagination. You’re playful. Right. And we don’t play enough anymore. We’re just so serious. Our lives are so serious. And it’s very difficult to be imaginative. If you’re being serious, we suggest do something goofy. Right. Play don’t feel like you shouldn’t be doing that just because you’re 40 or 50 or whatever. You could still be goofy. And when you’re like that, often, you come up with really creative things.
Michael: Experimentation got a test. Your first idea is not going to be your best idea, no question. I’m sure you found that in your career, too, right? You have a great idea. I changed the world with this. And then you realize, actually but there’s a seed of something in there. So you test and you flex and whatnot. And the way experimentation is done by many people and many organizations is not very effective, to be honest. It’s either like the scientific method, which is very much you try to prove or disprove something. Right. You’re rejecting the null hypothesis. It’s very much extreme. Whereas if you really want to be creative and innovative, experimentation, the goal is to improve, not to prove something. There’s a constant series of tests and retests learning as you go along to try and take that idea and make it something a lot better than it was at the start.
Buck: And I guess and that’s also part of the whole issue of not necessarily being worried that there’s a failure or that it’s not the right idea. That’s one of the things I feel like, keeps people from even starting. It’s the fear. That what’s the point. It’s probably not going to work anyway. And then what’s the last N?
Michael: So I agree with you. The fear of failure is a big hugger for people. They don’t want to start or like you said, they have the good job and they’re just paying off their mortgage and they don’t want to get a lot of risk. So fear of failure, risk aversion is a big issue. But also the opposite is not good either. Right. If you have no fear of failure, you jump into it without really a lot of reflection or a lot of humility or a lot of doubt. Doubt is not a bad thing. It’s your mind telling you, maybe I should think this through. Right. So there’s kind of a sweet spot in the middle. You don’t want to be overconfident either. So it’s a danger of having too little or too much of any of that. Now, the N is an important one, and the N is navigation. This is where you have a great idea. You’ve played with it and tinkered with it. You think it’s ready, and then you go out there and share it, but you don’t do it in a very clever way. Right. So it’s stakeholder management, it’s understanding people’s realities, people’s motivations. It’s politics. We talk in the book about this great story of the guy who invented the digital camera. It’s a well known story. Right. And he worked for Kodak. We know that a guy named Steve Sasson, the blame is often put on Kodak. Right. I mean, they were stupid not listen to this guy. But it also comes out when you actually talk to the guy that he made mistakes, sue and how he was navigating this idea within the company. For example, he sold it internally as filmless photography. Those are the words to use. Filmless photography. Those are not great words to use when you’re pitching the idea to a company that sells film. So they make their money. So a little bit of understanding of the environment to navigate and when the right time to kind of come up to avoid getting shot down is really important. So there are all kinds of ways that you can increase the odds of people buying into your idea. That’s navigation.
Buck: Do you actually do any kind of events for people on this type of thing? Because it just seems like it’s really something you really have to drill down on. Or right now, do you feel like the book is adequate for people to change their mindset?
Michael: We put everything we think you need in the book to get started. Now the book is coming as three of us wrote this book. We’re all professors. We’ve all been teaching innovation for years and years and years. We’ve all been disappointed with a lot of the existing methodologies. We don’t see the real outcome that we hope from design thinking and lead start. I mean, these are all good, but somehow we’d expect with all these methodologies out there to be a lot more innovation and there just isn’t. So we wanted to create something that was just really simple and intuitive. You don’t need post it notes, you don’t need whiteboards, you don’t need a strong, well defined methodology. It’s just there. You just got to understand how to use it. So, yeah, I mean, we run all kinds of workshops and things around it. But everything you need is in the book.
Buck: Yeah. It’s really about a change in perspective, which I think is sometimes really what people need to have. And again, you’re emphasizing the word alien there, which I think is a good one, because even in the investing world, I’ve actually used a metaphor before that obviously not obvious to you. But for my audience, my focus is in real assets, real estate, things like that, tangible assets. And I always say to people, even open your eyes and think, I’ve used this analogy, if you’re an alien, you came down and you’re trying to figure out, okay, you earn your money by doing something and then you’re trying to invest it. What would you do and your natural inclination wouldn’t go directly to stock sponsored mutual funds. Right. It might be something different. So it’s really a matter of perspective and also just changing your perspective on really what you do every day as well, not just your investing per se.
Michael: Right. And I think that what we talk about in the book is for anyone you’re business school professors. But the alien thinking approach is not just for business people either. I mean, it’s for people in any walk of life that want to be more innovative and want to be more creative and want to squeeze more out of the ideas, have more ideas and then get more value out of those ideas.
Buck: Well, this is great stuff here. I appreciate it, Michael. And the book, again is called alien thinking, the unconventional path to break through ideas. And you have now convinced me that entrepreneurship is not a hereditary thing. It might be a curse for some of us who are more tend towards that direction, but it’s probably not just. Jeanette, thank you very much for being on the show. And by the way, the book, you can get anywhere, Amazon or is it specific places?
Michael: Anywhere. Anywhere you buy your book so you can find it there.
Buck: Okay. Fantastic. Is it on Audible?
Michael: It is, yeah. We have an audiobook version for sure.
Buck: Very good, because we got a lot of busy people driving around all the time. So Michael, thank you so much for being on the show again and hope to have you back sometime again in the near future.
Michael: My pleasure, Buck. And best of luck with the podcast.
Buck: We’ll be right back.