Sunday Email: HMW / Failure

Read time: ~5.00 minutes

Happy Sunday!

Every Sunday I offer strategies for the week ahead and a thought to fuel your action.

We all know the story.

In 1888, George Eastman founded Kodak, revolutionizing the photography industry with the Kodak camera and roll film. They experienced a "Google moment" long before Google existed, becoming so iconic that the phrase “A Kodak Moment” entered everyday vocabulary.

Kodak's dominance in the market was undisputed. Some suggest they captured as much as 90% of all film sales and 85% of camera sales. Success lasted over a century, with nearly 150,000 employees in the late '80s and peak revenues hitting $16 billion in 1996.

But beneath this success, a shift was occurring. 

In 1975, the digital camera was invented. 

Blinded by their longstanding success, Kodak was slow to adapt. The impact became evident in the late '90s and early 2000s. As digital cameras grew popular and the need for film diminished, Kodak's decline began. By 2002, revenues dropped to $13 billion, and losses mounted. By 2003, their workforce was halved, and by 2012, Kodak filed for bankruptcy.

For over 100 years, Kodak dominated. But the last 15 years determined its fate, a fate sealed much earlier due to a lack of innovation.

Many reasons explain why companies struggle to innovate. Often, it's overconfidence in market direction and risk aversion at a large scale. But certain aspects of company culture particularly stifle innovation:

• Lack of Diverse Perspectives: Cultures where teams operate in silos, without cross-department interaction, limit creativity and fresh viewpoints.

• Poor Communication: Without structured internal communication, support for new ideas wanes. Team members may hesitate to share innovative thoughts due to a lack of promotional infrastructure.

• Organizational Structure and Culture: Many companies lack mechanisms to capture new and innovative ideas, focusing instead on immediate needs without considering future possibilities.

• Lack of Safety for Experimentation: Firms often fail to create spaces where failure is an acceptable part of testing new ideas. Instead, cultures tend to penalize rather than applaud risks.

So, how do companies like Kodak build a culture that overcomes these challenges? 

The answer lies in a common brainstorming tool: the "How Might We" mentality. This approach, started by Procter & Gamble, and continued by Google, and Ideo, fosters reduced judgment, encourages ideation, and includes everyone in the organization.

Traditional brainstorming often uses phrases like “How can we do this?” or “How should we do that?” But "can" and "should" imply judgment. "Can" questions capabilities, limiting open-mindedness, while "should" suggests there's a correct solution, hindering out-of-the-box thinking.

The "How Might We" framework changes this dynamic:

• "How" suggests there are solutions out there, instilling creative confidence.

• "Might" acknowledges that some ideas may not work, and that's okay.

• "We" emphasizes teamwork and the value of diverse opinions.

Here's how it works:

Equip each participant with a 4 x 6 sticky note pad and a black dry erase marker. During brainstorming sessions, participants share products or services that inspire them, related to the session's focus. Others jot down ideas on sticky notes, starting with “How might we ___”

The size of the sticky notes and the marker encourages concise, thoughtful ideas. The key is to balance the scope of these ideas – not too broad, yet not too narrow.

Now, you might think this is too abstract for a wealth management firm, or just another meeting to schedule. But it's more about integrating this mindset into daily work, fostering an environment that encourages and values creativity.

Provide team members with the tools (sticky notes and a marker) for their desks or bags. Encourage them to jot down ideas as they arise, then place these notes on a communal wall – no names, just ideas.

Regularly, whether quarterly or monthly, review these ideas. Decide as a team which ones to prototype or implement. Inspiration can come from everyday life – interactions with products and services, or simply observing the world around you.

The key is for leadership to welcome all ideas, avoiding ridicule or dismissal. This openness is crucial.

Will this prevent a "Kodak moment" for your company? There's no guarantee. But it's a step towards safeguarding your achievements, compared to the stagnation of doing nothing. 

Companies that stifle innovation will eventually be surpassed. This approach helps ensure you're always looking forward, not just at what is, but at what could be.

A Thought To Ponder This Week

It's a familiar tale.

An individual encounters business failure, learns from it, and then builds something remarkably successful. 

Milton Hershey's story aligns perfectly with this narrative. His initial candy store ventures in Philadelphia, Chicago, and New York failed due to inexperience and lack of capital, leading to him moving home to his family’s farm. 

His subsequent venture also faced early struggles, but eventually, it flourished and led to what we know as the Hershey Chocolate Company.

What is often overlooked in these narratives are the pain, agony, and mental toll of failure. Success stories make it seem almost a rite of passage. 

However, it's the inner turmoil at failure’s rock bottom and the ensuing clarity that fuels genuine growth – a growth beyond what any book or classroom can teach. 

This newfound clarity stretches an individual to new heights of self-understanding and experience. The fire of ambition burns brighter and is fueled by hard-earned lessons.

Despite recognizing the power of failure, our instinct is to avoid it. Our cognitive biases nudge us towards safer paths, shying away from the discomfort of potential failure.

But if failure holds such transformative potential, why do we resist it? We strive daily to transform the lives of our clients. 

This week, let's ponder this: What is one small, yet possibly uncomfortable step we can take? Something that, even if it fails, offers valuable lessons, but if successful, could be significantly impactful. 

The best is ahead!

-Matt