[INTRODUCTORY ELECTRONIC TONES]
SPEAKER 1: Today, we're
delighted to welcome Mr. Roger
l.
Martin to Google.
Roger is currently a writer
and strategy advisor.
And he's the former Dean and
current Director of the Martin
Prosperity institute and
the Michael Lee-Chin Family
Institute for Corporate
Citizenship at the Rotman
School of Management at
the University of Toronto
in Canada.
Prior to that he was at Monitor
Company, a global consulting
firm, based out of Cambridge,
Massachusetts, for 13 years,
as a director, and
as, ultimately,
Co-Head of the firm.
Mr. Martin is a frequent
contributor to the "Harvard
Business Review," and
was recently placed third
on the "Thinkers 50," a biannual
ranking of the most influential
global business thinkers.
He has published 11 books--
ROGER L. MARTIN: That's right.
SPEAKER 1: --the newest of
which, he is here, today,
to discuss, titled,
"Creating Great Choices:
a Leader's Guide to
Integrative Thinking," which--
this just in, has
been recognized
by 800-CEO-Read as one
of the best business
books in the leadership and
strategy category in 2017.
Please join me in welcoming to
Google, Mr. Roger L. Martin.
[APPLAUSE]
ROGER L. MARTIN: Thank you.
Thank you very much.
SPEAKER 1: Thank
you for joining us.
ROGER L. MARTIN:
It's a pleasure.
SPEAKER 1: So I'd like
to begin by asking you--
so you developed the
theory of integrative
thinking 15 years ago.
How did the idea
come to you, and what
is it, in its simplest form?
ROGER L. MARTIN: Sure.
Well, in its simplest
form, it is the notion
that when you're faced with
an either/or choice, where
it seems like you can only
do one or the other thing,
what I found is that highly,
highly successful leaders take
that as a sign that they
shouldn't choose or compromise.
It's their job,
their leaderly job
to come up with a better answer.
And the way I got interested
in it was I was really
interested-- you mentioned
Monitor Company--
and a bunch of business
school buddies--
myself, a couple of
professors-- thought the world
needed another consulting firm.
And we sort of called
ourselves-- internally,
we're sort of Young
Punks Consulting--
because all the
McKinsey and Bain
and BCG people were
much older than we were.
And I was exploring the
question of why on earth
did clients hire us and for
what particular kinds of things?
And what I found was
that they hired us
for that sort of problem--
was when they were facing kind
of a big either/or choice.
It wasn't like-- we need
to improve our marketing,
or we need a sort of ploy--
we could do this or
we could do that,
and we're a bit flummoxed.
And so I just started
observing how they thought
and how the most
successful of them
thought and came
to this conclusion
that the only thing
I could figure out
that was consistent
across the really highly
successful leaders that I
interviewed was this one thing.
And the tricky thing was I
first looked at what they did.
And what I found is that there
was no commonality in what they
did.
And it was because they had a
completely different context.
So I interviewed all these
highly successful leaders--
you know, Jack Welch and
Michael Dell and Bob Young,
and you know, Issy Sharp,
founder of Four Seasons,
et cetera.
And I couldn't
figure out something
that they did that was
similar, but I realized
it was so context
specific-- and Jack Welch
was an interesting one
for me, because early
on in Jack Welch's
time as CEO of G.E.,
he said to all
businesses, unless you're
really big, unless you're a
number one or two market share,
I'm going to divest you.
And they all thought he was
fooling, because it never
happened in the history of G.E.
And he divested about a third
of the portfolio.
But then later on in
his long tenure as CEO,
he basically told his
businesses the opposite,
which is be small.
He said, do not come to your
strategy review with me,
defining yourself as any
bigger than 15% of your market.
And you could ask why?
So those are, like,
the opposite--
define yourself as small
or define yourself as big.
And the reason, of
course, is early on,
he had the problem of having a
really messy portfolio that he
needed to clean up.
Later on, he was
worried about growth
and was tired of
the jet aircraft
people coming in
and saying, Jack,
we've got 70% market
share already,
there's no growth, there.
He said, yeah, that might be of
building and selling engines,
but if you add in leasing,
sales, repair, trading,
all of that, you've
got a 5% share, shut up
and get back to work.
So because there
wasn't a pattern
of doing something
similar, I started asking,
is there a thinking pattern?
And I started asking him
what are the five hardest
decisions you've ever
made in your life
and came to the conclusion
that what made them successful
was not accepting trade-offs,
just refusing, and saying
there's got to be a better way.
SPEAKER 1: And then
so, 10 years ago, you
wrote the "Opposable Mind."
What was the idea of that book?
ROGER L. MARTIN: It was to
describe that phenomenon
and give examples of
highly successful leaders
who faced what appeared
to everybody else
to be an either/or choice, and
they did something different.
So when related to the world
you're in, Bob Young Co-Founder
of Red Hat, dominant
Linux software,
he faced a challenge of--
there's two things I could do--
free software, which is
what he started in Red
Hat or proprietary software.
And he liked how much money
proprietary software companies,
like Microsoft,
made, but he hated
the fact they wouldn't give
the customer the source code,
so it wasn't modifiable.
He loved the free
software part of it,
which was you give
them the source code,
and they can do whatever
they want with it.
He felt that was kind
of better for the world,
better for his customers.
But he hated the fact that you
couldn't make a buck in it,
because anybody could put
together Linux compilations.
And at that point,
the way you made
a business, in 1995, when
he was making this decision,
was to sell shrink wrapped
discs for $15 by mail order.
So what do you do--
free or proprietary?
That was the choice he faced.
Everybody else chose
free or proprietary.
He said, I don't like that
and came to the conclusion
that out of the proprietary
model, what he loved
was service contracts.
You could make a lot of money on
servicing the corporations that
used your software with
updates and version control
and all of that.
And what he liked about
free was giving them
the source code,
that the clients,
the customers could do
with it what they wished.
He didn't actually like
selling shrink wrapped discs
at $15, mail order.
And so as he thought
about it, he realized,
actually, there could
be a way of getting
the thing I care most
about, about free,
and the thing I care most
about from proprietary,
which was his innovation, which
is just say, here's the deal--
I'm going to make this
the first software that's
downloadable, free
off the internet.
We will get dominant
market share.
We will be the
only Linux company
that big corporations
will trust,
and we'll create a big
service business doing that.
That would be the classic
kind of integrative thinking
kind of choice that I talked
about in the 2007 book.
SPEAKER 1: So you've
expounded the Theory
of Integrative Thinking
in the "Opposable Mind."
What new value does "Creating
Great Choices" bring?
ROGER L. MARTIN: It
explains more how.
So what we got--
I mean, the 2007 one ended
up being a nice bestseller,
and that was all
great, and everybody
said, wow that's, great, that
gives me sort of hope that I
can do something better.
But people struggled with--
well, exactly, Roger,
how do you do that?
And we spent 10 years, after
figuring out what they did,
experimenting with how you could
teach somebody how to do it.
How exactly did
they do it, and how
could somebody, who might not
naturally be great at this
or have experience
in this, could do it.
So the "Creating Great Choices"
is the distillation of 10
years' worth of
experience in the how.
So it's more like
a manual that says,
if you want to do
this thing, if you
buy the premise of
the "Opposable Mind,"
and you want to do this
thing, here's how you do it.
SPEAKER 1: Yeah.
It's very, much a how to
think methodology of thinking.
Why do you think
that's necessary?
ROGER L. MARTIN:
Well, you know, I
probably got smacked on
the head enough times
by my most beloved
academic mentor.
His name is Chris Argyris.
He passed away a
couple of years ago,
after a long,
almost 90-year life.
What he would say to me, when
I worked with him, was Roger,
action upon which
you cannot take--
knowledge upon which you cannot
take action is barely worth
having at all.
And what he said, his criticism
of much managerial advice,
is the moral equivalent to grow
taller, be smarter, whatever.
And everybody is like, I'm
as tall as I can be, I've
been trying as hard as I can.
You know-- think harder-- well,
I'm thinking as hard as I can--
all of that is not helpful.
So I have sort of
a high bar myself
for unless somebody can walk
away and do the thing I've
told them to do, I might
as well not have told them
in the first place.
It's just an irritation.
They'll get their hopes
up and be unable to do it.
And so that was the inspiration.
When people said,
I love this, Roger,
I love the examples you
give, and I love that goal.
How do I do it?
SPEAKER 1: So if we look
at companies, today,
the way they make
decisions, there
are certain best practices.
What, in your
opinion, is lacking?
ROGER L. MARTIN:
Yeah, I think most
of the best practices
in decision-making
are closer to worst practices
than best practices,
to be honest.
I mean, they are--
I think, people, in making
decisions, converge too quickly
on a solution that seems
fine, rather than choosing
a stepping back and
saying, I'm going
to strive for something better.
I think a lot of
decision-making is--
dare I say, here, in
Googleplex, too analytical.
Great decisions are
creative by their nature.
And so I often
see people saying,
well, we've got a
decision to make, let's
crunch all the data in
order to make that decision.
And what's the problem
with crunching data?
From what era is
100% of all data?
From what era?
AUDIENCE: The past.
ROGER L. MARTIN: Yeah, the past.
So can you crunch data
to figure out something
that has never happened before?
Can you?
You know, like, no.
In fact, if you crunch
data from the past,
you will convince yourself
the future will be
an extrapolation of the past.
And I'm not, like, the clever
guy who thought this up, right?
Aristotle is the man, in
the 4th century B.C., who
explained this to the world.
And the world has largely
ignored Aristotle.
So he explained that there
are two parts of the world.
In one part of the world, things
cannot be other than they are,
is what he said.
So if I fall off this chair.
I won't fall up, I'll fall down.
And even if I do that 1
million times, I'll fall down.
That's the part of the world
where things cannot be other
than they are.
And he said, in that
part of the world--
he invented the
scientific method.
It was formalized 2,000
years later in the Scientific
Revolution by Descartes and
Bacon and Newton and Galileo,
but he laid out-- here's how
you use science to demonstrate.
He said the unqualified purpose
of science is to demonstrate
that things cannot be
other than they are.
So he laid that out.
And he said, if you're dealing
with the part of the world
where things cannot be
other than they are,
be scientific and analyze
the hell out of it.
That's rigor.
But he said, there's another
part of the world where things
can be other than they are,
like, consumers have never
ever used one of the devices
that's in everybody's hands,
as of 1998, right?
And now, they can't
live without them.
Well, that's the part of the
world where things can be other
than they are.
And you know, what the
world's first scientists
and the most important
scientists in the history
of the planet said?
In that part of the
world, do not use science.
Do not.
He said, in that
part of the world,
rigor means imagining
possibilities and choosing
the one for which the most
compelling argument can
be made.
The world listened to
Aristotle about science
and then ignored his warning
about the limitations
of science.
So the biggest complaint--
I mean, there are exceptions--
Google, Apple,
Facebook, Amazon--
but the biggest complaint of
Fortune 500 CEOs, now, is--
I can't find enough organic
growth, that's my big problem,
and I'm more worried about
two kids in a garage who
I don't even know exist yet
than I am but my biggest
competitor across the street.
That, in my view,
is not uncorrelated
with, over the last
50 years, management
becoming science and
analysis obsessed.
Because if you're
science obsessed,
and you're crunching data about
the past, it will tell you
a new thing can't
happen and won't happen.
The data shows that it won't.
Then two kids in a garage
go and make it happen,
or two kids in a PhD program
at Stanford make it happen.
And then all the
companies that were
sure it couldn't happen,
because science told them
it couldn't, are wondering, what
the hell just happened, here?
Right, like all advertisers
other than Google or Facebook
are wondering, like, you
know, what happened here?
Their analysis showed
that what's happening here
could not happen.
So that's a bit of
a rant, but that's
my number one problem with
management's decision-making
in the modern world--
it undervalues
imagination and then wonders
why it doesn't come up
with new ideas?
SPEAKER 1: Yeah, I just want to
pursue that tangent, actually.
ROGER L. MARTIN: Sure.
SPEAKER 1: It sounds like you
have a very polymathic way
of thinking about business.
Where does that stem from?
ROGER L. MARTIN: I
mean, I've always
been accused of being a sort
of business philosopher.
So maybe it's just,
I guess I've always
wanted to understand
why business works
and how to understand
aspects about business
that aren't readily understood
or are confusing to people.
So for instance, this one came
out of me trying to answer
the question of why all
these CEOs who I work with--
because I worked with a whole
bunch of big company CEOs--
saying Roger, we're
spending more on innovation
and getting less, I can't figure
this out, what's happening?
And then these
people who don't have
anywhere close to the
resources we have are producing
more innovation than we are.
So I try to figure out
mysteries and give people
better ways of thinking about
the mysteries of business life.
And it turns out, I think, that
to figure those things out,
you typically have to step
outside the strictures
and frameworks that
you've been taught.
So if I tried to solve the
problems of the business people
who I deal with by applying what
I learned at business school--
and I went to a
perfectly good one--
I mean, they're all, lots
of them are good ones,
but I went to Harvard
Business School--
and if I just applied what I
learned at Harvard Business
School to solve
these problems, I
couldn't solve them, lots
of them, most of them.
It's because what
it seems to require
is stepping outside
the strictures,
because often the
strictures in question
created the problem
in the first place.
So I guess, I mean--
it's a good question.
Nobody's asked me that before.
But that would be my
best guess at an answer.
SPEAKER 1: Well, thank you.
So when you were developing
the methodology for the book,
did you come across
any surprises?
Or were there any
sort of aha moments?
ROGER L. MARTIN: Yes.
The biggest surprise, the
knock me over with a feather
surprise, was that
what I figured out
by studying all of
these integrative
solutions is that
none of them came
from the most commonly
used approach to creating
innovation.
What kind of piece of
paper do you start out with
to get a real innovation?
What kind?
A blank one, right?
Get out a blank sheet of
paper, throw out everything
that you know, and
that'll give you the best
chance of an innovation.
It's a cool theory.
Like, it makes a whole lot of
sense-- you're unconstrained,
da da da, all that stuff.
It turns out that in no case
of any highly successful leader
who came up with an integrative
decision that I studied--
doesn't mean they don't exist,
but I couldn't find one--
actually came about their
innovative breakthrough
idea from a blank
sheet of paper.
They came to it by
mining opposing models.
So Bob Young would say, I needed
to have a true understanding
of the free software
model, as it existed
in 1995, and a
real understanding
of the proprietary model
and why it was successful,
to come up with a solution.
And that solution-- as
I say, my definition
of integrative
thinking is-- when
faced with opposing
models, you come up
with a creative
resolution of the tension
in the form of a model that
contains elements of each,
but is superior to both.
And so that-- you could
knock me over with a feather.
Because up till the time when
that became evident to me,
you know, I just
said, hm, interesting,
I was in the camp of--
to free yourself up
and be more innovative,
you take a blank sheet of paper.
Now, instead, what I say is
you have to fall in love,
absolutely fall in love with
the two models, sequentially.
Fall in love with the first
one, and the cool thing
about the first
falling in love is--
what happens when you fall
in love with somebody?
You accentuate all
their good things
and focus entirely
on their good things
and act as if nothing
else in the world exists.
Do we all recognize this?
We've all fallen in love.
OK, so it's cool.
And so I say, do that,
because what matters is mining
each model for the good things.
Forget about the bad things.
Who cares about that?
You don't want any
of them, anyway,
so don't even think about them.
Find good things, and
then forget about it.
And fall in love, again,
with the other model
and figure out what are
the good things, there.
And then figure out a clever
way to put them together.
And in doing this,
what we learned,
just through trial and error,
is to push the models farther
apart to the absolute extremes.
You know, so if you're going
to say, oh, we have a problem--
leadership development
in our company,
should we centralize
it all, right here,
or decentralize it
around the world?
People would be
inclined to say, well
a more centralized or a
less centralized model,
let's look at those two.
No, no, no.
Model one-- every
last single thing
and decision is made centrally.
There is no central training
function, it doesn't exist,
it is completely dispersed.
If you do that, you
have a better chance,
as it turns out, of coming up
with an integrative solution
than more sensible,
kind of sensible models,
somewhere in between.
And the reason is there's
not as many raw materials
in those
compromisey-type models.
Because the enemy of integrative
thinking is compromise,
hate it, ugh, worst thing.
Nobody's happy, everybody
is sort of, like,
medium sad, right?
Nobody's, like, super mad,
and nobody's super happy.
I hate that.
I want deliriousness.
And then it turns out.
So that was another thing
that was a surprising find.
The other thing is
kids can do this.
We had a great
Rotman grad who was
the sort of Academic Vice
Principal of a girls'
school, a girls' high school.
And she said, you
know, we want to try
this integrative thinking
thing with our grade 10 girls.
It was an IB school,
international baccalaureate
school.
So in grade 11 and 12, you
do the two years of the IB.
And so in grade 10, she said,
it would be a good thing
to do for grade 10 girls,
in the spring of grade 10
to be ready for grades 11 or 12.
I said, OK.
You know, I'm game
for anything--
taught them integrative
thinking, co-curricular.
It was outside school
for non-credit.
22 girls, they were
all keen on it.
Gave them a project similar to
the project we gave the MBAs,
and their answers
were every bit as good
as the MBA answers, which that's
sort of-- whoa, wait a minute.
So MBAs have at
least six more years
of formal education--
grade 11, grade 12,
four years of undergrad,
and some of them
already have Master's or
PhDs before showing up,
but a minimum of six.
And they have 4 and 1/2
years of work experience.
So 10 and 1/2 years,
a decade of life
experience, and
they're no better.
So we must we must damage them
in ways we don't understand,
so that they have to recover
to get back to the same level.
But that got me--
which I think is
absolutely the case--
and so we now have
a huge program
that's the apple of my eye.
I think it's the most
important thing we do for K-12,
and we teach integrative
thinking now to five-year-olds.
We teach the content of that
book to kindergarten kids,
and they are great.
So that was fun.
Who'd have thunk it?
But they're great.
They're as good as
graduate students.
SPEAKER 1: So yeah,
it seems like when
we seem to think
that there's only
two options, that's
something that's almost
conditioned rather than--
ROGER L. MARTIN: Yes,
we're conditioned
to say a tough guy
or a tough gal,
when faced with a big
choice like that knuckles
down and makes it.
The kids haven't been
trained that yet.
They sort of say, I don't like
that one or that one much.
You know, and if
we say, well, here
would be a methodology for
getting to a better one.
They're like, give it to
me, let's go, let's do it.
Whereas MBAs, to a much
greater extent, are like--
in theory, that might
be nice, but it's
about making trade-offs.
That's the job, tough job.
The buck stops here.
The interesting thing is all
these super highly successful
leaders basically
said a trade-off
is my signal to not choose.
And Alfred Sloan, the legendary
guy who built General Motors
in the '20s, '30s, '40s--
by far the biggest
company in the world
and the most successful
automotive company
in the world--
he has a great quote, where
he is quoted as saying--
And this is by Peter
Drucker, who studied him--
after a meeting, was,
"gentlemen"-- because they
were all gentlemen then--
"gentlemen, I see that
we've come to agreement
on this important
decision, I suggest
that we terminate the meeting
now and come back only
when we've had time to develop
some constructive debate."
So it made Alfred
Sloan, Jr., very worried
and nervous when all
of his executives
quickly came to a
solution, because he said,
we probably haven't come
up with the best one yet.
And that is easier for kids
to absorb than for adults
to absorb.
SPEAKER 1: Yeah, so the
message is consensus
is actually a bad thing.
And you make an
interesting point
in the book, where you say
that a different idea, even
if it's wrong, still has value.
ROGER L. MARTIN: Yes.
SPEAKER 1: Could you, maybe,
talk a little bit about that?
ROGER L. MARTIN:
Yeah, I mean, what
I try to do now,
in my life, is even
when I think I've
got the right answer,
I say, I've got to try and
come up with a different one,
even if it's bad--
even if it turns out
to be a bad idea--
to see if there's
something I'm missing.
If there's a component that I
could add to my model that is
kind of inconsistent
with my model-- like,
I wouldn't think
of it on my own--
but if I had this other
model, I might think about it.
One of the examples
I use in the book--
it's the Toronto
International Film Festival,
which is now the
most important--
largest dollar volume, more
deals done film festival
than any in the world.
Piers Handling, the
Director of it loved,
loved the fact that it was a
very community-oriented film
festival.
Anybody in Toronto can
go and see the movies
during the film festival.
Just all the movie
theaters open themselves up
to show these shows.
You can buy tickets.
It's very inclusive.
There's no jury that decides
which is the best film.
He loved, loved all of that.
But the only thing
he didn't like
is that they almost
went broke every year.
It was hard to be
sustainable with this model.
And so he looked
at Cannes, which
is the absolute
extreme other model--
totally exclusive,
you can't go to Cannes
unless you are invited,
and it's because you're
a star, a director, a
producer, or the like.
They show 15 or 20
movies, and there's
a jury that decides which is
the best film, which Piers says,
I hate that, it's so elitist,
it stands for exactly everything
that I stand against, et cetera.
But he would be
the first to say,
it's only when I studied
Cannes that I figured out
the secret to making TIFF--
which, when he took over was
the third best film festival
in Canada.
Montreal was better, and
Banff was better-- out
in the mountains, so it is
an irrelevant, little film
festival.
He said the one thing I love
is the sponsorship revenue
that they get from
the global buzz that
comes from having a
prize and having-- who's
going to win the Palme d'Or?
That brings everybody,
all the stars, there,
which brings the media, there.
And they get all this buzz.
And then everybody,
Evian or Crystal,
wants to have a bottle
of their product in front
of every starlet when
they're interviewed,
and it goes global.
So he couldn't, he
would never have
been able to figure
out a clever solution.
A clever solution,
for him, was what's
interesting about the Toronto
International Film Festival
to the industry?
People have to
buy their tickets,
and it's Toronto, which is,
whether you know it or not,
is the most ethnically,
racially diverse city
on the face of the planet
of any consequential size.
50% of people in the
greater Toronto area
have a foreign passport.
America, the highest city in all
of America is New York at 20%.
So it's sort of 2 and 1/2
times more diverse than that.
So what is cool about the
Toronto International Film
Festival audience?
What is it?
Leading global
indicator-- because people
have to buy their
tickets, and they're only
going to buy tickets
to movies that they're
interested in seeing, and
they are like a little bit
of an amalgam of the world.
And so what's the
integrative solution?
People's Choice Award--
how's about this,
we give everybody a
ballot who buys a ticket
and goes to a movie, and they
will decide, not some jury
of elites, what's the best film.
And then that film is
probably going to do well.
And so over the last 10 years,
the average global box office
of the Palme d'Or winner
in Cannes is $16 million.
The average global box office
of a People's Choice Award
winner at TIFF is $200 million.
And in those last 10
years, the TIFF films
have had 69 Oscar nominations,
winning 23 of them--
Cannes, 11 nominations,
winning 1, total,
Oscar in the last decade.
So what he came up
with was something
that made it so that Toronto
is the buzz-producing place,
and all the sponsors
want to be there.
And so it's awash
in money and success
by being even more-- see,
it's not a compromise,
it's not a compromise-- he
made it even more inclusive.
Not only do you get to go to
any movie you want or whatever,
you, with your vote, helped to
be the global arbiter of taste.
And whoever wins, now, the
TIFF award in September
is considered the Oscar
front-runner in the spring.
But he couldn't have
come to that had he not
looked at the extreme model that
he did not want any part of--
not quite any part of, he
wanted one little part of--
but he didn't know
what little part,
until he fell in love with that
and said, how does that work?
So I'd say that to any
anybody here in the room.
If there's that model that you
just, at a visceral level, say,
I hate that model--
that's the opposite
of what I believe in--
take 15 minutes, 20
minutes, a half an hour,
to say, how does it
work, how does it
produce the outcome
it does, what
are the little causal
relationships that
produce that outcome,
is there anything
I can steal from that model?
So I may still hate the model--
Piers still really doesn't
like Cannes at all--
but boy, is he grateful to
Cannes for having given him
an insight that enabled him
to turn TIFF from nothing
to incredibly important.
SPEAKER 1: So I'd like to
go back to the methodology.
ROGER L. MARTIN: Yes.
SPEAKER 1: Could you
walk us through that?
ROGER L. MARTIN: Yeah,
so the methodology
is to first take
the opposing models
and push them to
extreme, then it's
to analyze how
those models work.
And again, this is from
the mouths of babes,
but the way we do it is
lay out how it works.
So the film festival, how
does the film festival
work for the various actors,
the community, the industry,
the festival itself--
and figure out how
it works, what ways
does it produce the
benefits that it does?
And out of the
mouths of babes, one
of the kids we
were working with,
said, well this isn't
a pro-con chart,
this is pro-pro chart, huh?
And so now, it's forever
the pro-pro chart.
And then ask the
question-- and we lay out
three integrative
methodologies to find
an integrative solution.
One we call that the
hidden gem, right,
which is the Bob Young one.
I just want one
thing out of this one
and one thing out of this one.
I'll throw away everything
else, and that's
what will get me a solution.
What we call double down,
which is what Piers did.
How can you take one model
and push down harder on it
to get that one benefit you
want from the other model?
So you keep that whole
model, but take it
to more of an extreme.
So he made it more
inclusive in a way
that got him the
benefit of the other.
And then the third
is something we call
a decomposition, which is--
if you want to use A.G.
Lafley, kind of creating with
colleagues connect
and develop at P&G--
you say, he was faced with
the do we either spend less
on innovation-- because we're
not profitable enough spending
like we are an innovation?
But then that will make
us less innovative.
Do we spend more on innovation
and just say, it will come,
it will be fine.
That's an either/or.
And he says, it feels
like an either/or,
when you think that
it's about innovation.
And he decomposed it
and said, no, no, it's
about invention and
commercialization.
And invention turns out to
have very little scale benefit.
Being bigger doesn't make
you more inventive per dollar
spent.
In fact, there is
more and more data
to suggest that it makes you
less, so something for Google
to think about.
But commercialization is
heavily scale sensitive.
If you're Proctor
and Gamble, you
can get 100% retail
distribution of something
almost immediately.
And you know how to brand
it, and you can market it.
And you get the best advertising
deals in the industry,
because you spend $10
billion in advertising.
So what he said
is, if I decompose
the model into two pieces--
not innovation, but invention
and commercialization--
I can apply one model to
invention and one model
to commercialization.
And the invention model is--
I'm going to
connect and develop.
I'm going to tap into the
whole world of little inventors
and be the best place for
them to sell their invention
or license their invention.
That will double the
pipeline so we'll
have twice as much stuff going
through our commercialization
pipeline, and we'll dramatically
improve our innovation.
So that's the third,
the decomposition.
So we say try each
of these vectors.
Try and find a hidden gem.
Try and find a double down.
Try and find a way to
do a decomposition.
And then the fourth step--
that's the third step--
and the fourth step
is to prototype your idea.
So we really believe
in sort of the design
and thinking-oriented
rapid prototyping,
because you're going to
be trying something new.
And the tricky thing
about new things,
when you have to use
imagination and all you
have is a compelling argument
is they can be wrong.
And so it's better
to prototype them,
and also, that way,
you can improve them
and make them better.
So those would be
the four steps.
Take the models to the
extreme, figure out--
do the pro-pro charts to figure
out how each of them work--
explore the three
pathways to integration,
prototype your best
solution, and go.
And my experience
is you can always
come up with a better
answer than either/or
or just a plain vanilla,
ugh-I hate it, compromise.
SPEAKER 1: So you
consult many Fortune
100 companies and probably
many other companies?
ROGER L. MARTIN: I do.
SPEAKER 1: How is this
methodology received
when you approach them with it?
ROGER L. MARTIN: You know,
it's received pretty well.
I mean, several of
my big clients--
like Dow Jones 30 size clients--
are training people up on this
and saying, this is how we've
got to come up with and get
better answers.
And to a certain
extent, this is how
we've got to deal with bigness.
I mean, there is a challenge
to being big and still
being creative.
And you guys would know it here.
I mean, you know,
you have to, I think,
go to more extreme
lengths to continue
a culture of creativity
as you get bigger.
So a lot of these
big companies are
trying to figure out--
how can we make people,
on a daily basis, be
more, kind of, innovative,
more creative in their work, and
not just hive it off and say,
you guys are going to
just run the machine,
and these few
people, over there,
are going to be creative-- let's
have everybody be creative.
And you're in sales, right?
No?
Sales is a daily,
integrative challenge, right?
You would like to sell them
the most standardized thing
for the highest margin, and they
want the most customized thing
for the lowest margin, right?
It's pretty much like, I
want it to be perfect for me,
and I don't want to
pay much for it, right?
So you've got an innovative
challenge every day.
And you know, mediocre
salesmen, I would think,
either are insistent--
you know, it's
going to be my way
or the highway.
And so a bunch of customers say,
you know, I'll pick highway.
And then you sell to some.
Or you compromise, you
get somewhere on the line
in between those
two things you do.
And the great salespeople
are the ones who say,
here's a way to
get what you need
and to get what we need in
a creative, different way.
So I'd rather have--
if I am a CEO, I'd rather have
my sales force be creative
and bring creativity to their
job every day than to say,
they will be bog
standard, and they'll just
follow some formula, while I
have this small other group
over there doing
all the innovation.
I'd rather have everybody
be innovating every day,
and this is a methodology for
everybody innovating every day.
SPEAKER 1: So it seems to me
that this exercise is rather
a rigorous activity, a
sort of mental exertion.
So how frequently do you use it?
How frequently
ought we to use it?
And is it something
that sort of becomes
more second nature over time?
ROGER L. MARTIN: It does it
does become second nature.
There's no question it
does, but what I say is,
is if you don't have
a hard choice, don't.
Use as the-- it's like nature--
when you feel some pain,
nature's telling you,
stop, right, don't keep doing
that, so do something else--
like, take your finger
off the hot stove.
I would say the same thing here.
When you feel the pain of--
agh, agh, I don't
know which to do,
because I don't like
either, I would love to see,
in everybody's head, a
little red flag go up,
and you say, ah, this is
a time to stop and think
a little bit differently, not
think exactly the way I thought
that has gotten me to this
point of having that conflict.
Otherwise, just don't.
Just go about your daily life.
But I'd love this
little red flag--
oh, that's a trade-off
that I don't like--
could I do better,
could I do a lot better,
what would be the pay-off
to do a lot better?
And then take the
inspiration to do it.
SPEAKER 1: And what about
situations where you have to,
under pressure, very
quickly make a great choice.
Can you apply any of the
theories in this book
to those situations?
ROGER L. MARTIN:
Yeah I think so.
And we have a great
case in the first book,
where it's a multi-billionaire
who had between close of market
on day x-- it was
like a Tuesday--
and open of marketing
on Wednesday
to make a decision that would
have either made him, probably,
a pauper, or it turned out
to make him a billionaire.
So I don't know, that
sounds like a decent amount
of pressure, right, in
not much time, right?
It's between 5
o'clock and 9 o'clock,
and he's got to make it.
And I think the reason
he's a billionaire
is he didn't compromise or
didn't choose either/or.
He came up with a different
answer than anything that
had sort of presented him, or
sort of, people had said gee,
Michael, you've got to
decide, kind of, now, now,
before the market opens.
We have to have a
decision, for sure,
or we'd be, kind of,
completely too late.
So I never believe in thinking
that you should use time
as an excuse.
I think you should
just be realistic.
Michael needed to have
a decision by 9:00
AM on Wednesday morning.
And he used--
I don't think he slept
much that night, right?
So he said, well, these
are 12 important hours,
or less, I better
use them well--
16 hours, I guess.
I better use them
well, and he used them.
So people, I think, in the
world in the business world
let themselves off the
hook way too many times--
oh, management would never allow
that, my boss would be so mad,
you know, I don't have
enough time, we don't
have the resources, blah blah.
It's just like one list of--
long, long list of accepted
managerial excuses.
I just don't accept
any of them--
never have, and
probably, never will.
And I haven't in my own life--
I eat the dog food.
My career is a series of
making integrative choices
rather than accepting the
choices that I'm presented.
SPEAKER 1: You've had a
really interesting career that
spanned several industries
and areas, I guess--
private sector,
academia, now consulting.
I wanted to zero
in on the moments
when you decided
to switch tracks.
ROGER L. MARTIN: Yes.
SPEAKER 1: Was that something
that came to you instinctively,
or was it more of
a rational choice?
ROGER L. MARTIN: Oh, it depends
what you mean by rationality,
I guess.
But the way I made
my big switch,
which was a decision to switch
countries and take a 94% pay
cut, was when the President
of the University of Toronto--
who was on the board of a
company I was consulting to--
decided that I would make a
good Dean of his business school
and proceeded-- he's a very
persuasive guy, Rob Pritchard.
And he persuaded me.
Now, he wasn't dealing with a
completely blank slate on that.
I'd always felt that if
you do well in business,
you should turn your mind to
public service at some point--
public service writ large,
not elected politician.
I mean, public service and
the University of Toronto,
like all Canadian universities,
is a public university.
It's like Berkeley.
And so I thought of
that as public service.
I had been living in the United
States for quite a long time.
I'm a Canadian,
as you can tell--
out, about, all my weird words.
And so it was going to be
public service back in my home
country, because I
believed that Canada needed
one great business school.
It had zero great global
business schools at the time.
I felt it needed
one, and I guess,
I managed to convince
myself, or Rob convinced me,
that maybe we could do that.
And sure enough, we did.
And you know, when I finished
that, 15 years later, I
realized I missed--
I did some consulting along
the way, but not much--
that I missed it.
I love advising
CEOs on strategy.
And so I just said,
I'm done with that.
I'm going to go
down to Halftime.
I'm going to run a research
center, the Martin Prosperity
Institute, that you
talked about before,
where I am trying to work on
this tiny little problem of how
to fix the future of
democratic capitalism, which
is kind of fun, and
then consulting more.
And so there is what I'm
interested in and worried
about-- the future of
democratic capitalism.
I don't like the
way it's headed.
And so let's see
if we can fix that.
And doing a thing I love,
which is helping CEOs
have better strategies.
I've always believed
that us crazy
folks who built Monitor
Company believed
that, if you make
better strategy choices,
you use the world's
raw materials, labor,
and capital better, and you
make the world a better place.
And I still I
still believe that.
If you make bad strategy
choices, you just
waste raw materials, you waste
labor, and you waste capital.
And that's bad.
That's not good for the world.
So I'm sort of
pursuing two loves,
now, which are sort of
public policy about something
I worry about, and
engaging in activities
that I find rewarding, and I
think, useful for the world.
SPEAKER 1: OK, so last question.
And then we're going to
open it up to the audience.
ROGER L. MARTIN: Yeah.
SPEAKER 1: What's
your daily News diet?
And I'm curious if you
allocate any time for people
like Aristotle or
Descartes in your habits?
ROGER L. MARTIN: I think
I have very bad habits.
I don't read much at all, and I
don't spend much time listening
to the news.
So because I think--
so what I do is I immerse
myself in a world I care about--
the world of business--
I try and solve problems
for people in business.
And that gives me all
sorts of raw materials
to write stuff that I think
is generalizably useful.
People say, how do you
write so much, Roger?
You know, even
though you're a Dean,
you wrote all these books,
you've written 11 books,
you've written 25
HBR articles, you've
written hundreds and
hundreds of other articles.
Where do you get
your research ideas?
And for starters, I don't think
of myself as doing research.
I think of myself as doing.
I like to do stuff.
I fix stuff, and then I
try to figure out what I've
learned from fixing that stuff.
And then when I
come up with come up
with a problem in my
mind, then, and only then,
do I read stuff that I've
been told by somebody,
or I've come across, that
I think might be useful.
So I'm, like, reading
voraciously everything
in complexity theory,
right now, because I
think we have a problem in the
economy of thinking that we're
going to produce kind
of normal outcomes,
and everything is going Pareto.
What's changed the economy
to make things go Pareto?
So I've got to read all
the complexity theory
stuff about that.
But I don't read
complexity theory
and say, how could I apply
that complexity theory?
I say, has anybody
thought about it,
from a different field, stuff
that might apply to this field,
right here.
And then I dive.
And then I'm voracious.
Then I have the excuse to
read, and I don't mind reading.
For some reason, I
don't love reading.
I love writing.
I just love, love writing.
And so that gets me
inspired to read.
But I think that's a very--
it seems bad behavior to
me that I don't read more.
SPEAKER 1: Great.
Well, I think we'll take
some audience questions.
I'll repeat the question.
ROGER L. MARTIN: Yeah.
SPEAKER 1: Do you
think machines will
be able to think
integratively in the future,
and are they already doing it?
ROGER L. MARTIN: I
doubt they're doing it,
and it's part because humans
haven't kind of organized
their thinking enough on this.
So I mean, the way
I think about it--
and I wrote a book in 2009 on
this, if you're interested,
called "The Design of Business."
It's kind of-- all
knowledge on the planet
goes through three major stages.
Everything we know now about
the world was once a mystery.
Why do things fall
when we let go of them?
At one point, it was--
because of a love for Mother
Earth or animal spirits
or whatever.
It was a mystery, right?
And then some of the things
we think about enough that we
reduce it to a heuristic.
So an apple falls on
the head of a smart guy,
and he says, ah, there's
a universal force,
I'm going to call gravity,
that pushes everything down.
Then if we study it hard
enough, long enough,
some of those things get
reduced to an algorithm.
If you drop an item anywhere
in the world but America,
it accelerates at 9.8
meters per second squared--
because America is
exceptional, it's
32 feet per second
squared, here.
[LAUGHTER]
And so it's an algorithm.
And once you've got something
to an algorithm, you can,
in the modern era-- this
is what's different about
the modern era than
any era before--
once you've got something in
an algorithm, you can code it,
and you know, shove it
through a digital computer,
and do it perfectly
fast, et cetera.
So for me, the enabler
for machines to do things
is pushing things--
I call that the
knowledge funnel--
down the knowledge funnel.
And I think integrative thinking
is a heuristic, at this point.
It needs to be made more
algorithmic for machines
to be able to do it.
And how far that can go?
I mean, there are
some things that
have allowed themselves
to be reduced to code
more quickly than other things.
We haven't figured
out a bunch of things.
So it's sort of dependent
would be my view.
I somehow think that
the notion that machines
can get ahead of human beings on
the distillation of knowledge,
I'm probably from Missouri on.
But there would be other
people who would disagree
and say, oh yes, they will.
But I'll believe
it when I see it.
SPEAKER 1: How do
you deal with what
seems to be a mutually exclusive
choice where integration
is more difficult?
ROGER L. MARTIN: That's
what this technique is for.
It's for what appears
incommensurable choices.
So I'm not a believer
that the choices
we feel are mutually
exclusive are as mutually
exclusive as we think they are.
They're mutually
exclusive only as long
as we think of
them the way we do.
And one way that causes things
to be mutually exclusive,
in our mind, is abstraction.
We abstract up to
labels that cause
us to believe something-- two
things are mutually exclusive.
Free or proprietary, because
how can you be free proprietary?
It's like, you can't.
Bigger smaller, how can
you be bigger and smaller
at the same time?
You can't.
But it turns out that
those labels often
are abstractions that aren't
helpful to our goal, which
is to get a better
answer than those two.
So what I tell people is
don't live in the abstraction.
The integrative answers
lie below the abstractions
in the mechanisms by which
you get to the abstraction.
SPEAKER 1: Are there areas where
this type of thinking will fall
short?
ROGER L. MARTIN: I mean,
I haven't seen them yet,
but there may be ones.
I mean, I guess in the course
of human endeavors, I think,
like, we've manufactured
the world that we live in.
It's not as unchanging
as people think it is.
And most times when we seem
to have an either/or choice,
it's a function of
believing that it
is and a function of living
in a world of abstraction.
So I haven't seen a domain
where I can say, oh yeah,
in that domain, you
just can't, it's
just there's no there, there.
I mean, there are some domains
that are tougher, right?
You know, wars are
fought on the basis
of absolute religious beliefs.
And people could
say, well, you know,
those are either/ors there.
But they're just
either/ors only as long
as we produce the either/or.
And we produce the
either/or by abstracting up
to things that appear to be
so contradictory nothing could
ever be done.
I just haven't seen ones
where, if the people involved
value a better answer--
not a compromise, a just
plain better answer--
TIFF is more inclusive than
when Piers Handling started,
and more important
and richer and has
bigger buzz than Cannes.
You'd think that's impossible.
How can that be?
Because Cannes is exclusive.
It's a nasty, elitist,
exclusive thing.
Well, get below the label.
SPEAKER 1: All right.
Well, thank you, Roger.
Thank you everyone for coming.
[APPLAUSE]
ROGER L. MARTIN: You're welcome.
It was a pleasure.
Thank you.
[APPLAUSE]
