AMANDA KERSEY: Welcome to “HBR On Management” case research and conversations with the world’s prime enterprise and administration specialists, hand-selected that can assist you unlock the most effective in these round you. I’m HBR, senior editor and producer Amanda Kersey. On this 2017 “HBR Ideacast” dialog, you’ll hear how leaders transfer past both or choices to toughen decisions. The identical method will help you handle trade-offs in your personal group. You understand, I keep in mind host Curt Nickisch and I having a good time producing this episode. The start nonetheless makes me smile.
LEGO MOVIE THEME SONG
CURT NICKISCH: In case you don’t know that music, it’s the theme music from the Lego film. The animated movie grossed practically a half billion {dollars} in 2014, and it additionally breathed new life into the model. Individuals cherished seeing the little plastic items of their childhood in motion. The hero, Emmett, falls down a gap in the future into the Lego underground
LEGO MOVIE :
LUCY: Prophecy states that you’re an important particular person within the universe. That’s you, proper?
EMMETT: Uhhhhh. Sure, that’s me.
CURT NICKISCH: Behind the scenes, the Lego group went by way of its personal journey. Turns on the market’s a strategic resolution making story behind the blockbuster, and it’s a case that Jennifer Riel and her co-author Roger Martin research of their new ebook, “Creating Nice Selections, a Chief’s Information to Integrative Pondering.” Riel teaches on the College of Toronto’s Rotman College of Administration. She additionally loves films. So in the present day she’s right here to speak about integrative pondering by way of the lens of the movie trade. Jennifer, thanks for coming in and speaking with the HBR Ideacast.
JENNIFER RIEL: It’s my pleasure. Completely happy to be right here.
CURT NICKISCH: So the Lego film, wonderful success, but it surely might have turned out a lot otherwise, proper?
JENNIFER RIEL: Completely. And apparently sufficient, I didn’t know till I had the possibility to speak to Jørgen Vig Knudstorp, who was the CEO of Lego on the time that there had truly been a earlier iteration of a Lego film. They’d truly made a Lego film earlier than the Lego film.
CURT NICKISCH: I didn’t find out about this both.
JENNIFER RIEL: I used to be fascinated. It’s known as “The Adventures of Clutch Powers.” And it had come out of the truth that Lego for a very long time, I imply they make the little plastic bricks that all of us grew up with. It’s been a profitable model for many years, which is type of wonderful for a little bit firm in Europe. They usually had began entering into branded, co-branded leisure. So like Harry Potter Lego video games or Star Wars, Lego video games could be the preferred instance. And so it was inevitable. Somebody was finally going to return and say, let’s do a film about Lego and perhaps let’s have it’s unique, not tied to a different leisure model. And they also did. They created this Adventures of Clutch Powers and so they partnered in a means that the majority corporations would, which was they prioritize the safety of the model. So that they had last log off on the script and on all the filmmakers, and so they made positive that it was true to the model and that it protected the corporate.
And as Jørgen will say, with amusing, it was actually boring and never very profitable, not a really profitable movie, not very profitable for the corporate. So that they have been approached once more from a Hollywood studio saying, let’s actually do that. Let’s actually make the Lego film. They usually have been confronted with what will we do the final time it didn’t work and we prioritized that we must always have artistic management. That was an enormous bone of competition as a result of they acknowledged that a part of the problem is getting actually nice expertise who could be prepared to work on a mission for which the corporate had artistic management. They needed expertise that might create a very nice film to do this. The speculation could be you’ve acquired to provide complete artistic management to that expertise. You’ll not get nice administrators, nice filmmakers in the event that they really feel they’re going to beholden to a company curiosity. They’re uncomfortable sufficient being beholden to the studio, not to mention to an organization. So this query of how will we sort out the seeming commerce off the both or selection between sustaining absolute strict artistic management, however most likely giving up the final word high quality creativity of the movie versus give another person complete artistic management. You’ll most likely get an incredible movie out of it, however that’s an enormous threat to take for the status of the corporate as a result of who is aware of what they’re going to do,
CURT NICKISCH: Meet within the center, the pleased medium.
JENNIFER RIEL: Completely. You may think about all types of compromises in between the place you actually aren’t thrilled with the reply, however you may stay with it. And fairly often leaders body the issue of trade-offs in that means. Michael Porter, the daddy of all technique, tells us technique is making tradeoffs. You may’t be every part to everybody. And that’s true. You completely must make tradeoffs as a frontrunner. What we discovered, Lego is a superb instance of this. Jørgen is a superb instance of this, is that there are some issues for which making the tradeoff is unacceptable. If I make the commerce off, I lose. If I make the commerce off, it’s not going to resolve the issue. And it’s in that state of affairs the place you ask your self, might there be a greater means? May I think about doing one thing both than selecting the both or discovering the hardly acceptable compromise and really search to create a more sensible choice, one thing new that doesn’t exist in the present day that may truly remedy the issue, be nice for the group.
And in Jørgen’s case, he was actually clear, I desire a actually wonderful film, an superior film if you’ll, however I additionally need it to be superior for Lego, proper? I need Lego to be higher off from having engaged on this course of. He regarded on the problem and realized that on artistic management, in the end he did must make the selection that, look, if I need nice expertise, actually nice expertise, not ok expertise, they’re going to must have management of the script of every part that they do of the casting of the movie itself. And yeah, they could give us the fitting to evaluate it, however truly we have to belief them and they should see that we belief them. But when I’m going to do this, I can ask for one thing that I consider goes to make a greater reply. And the factor he requested for was their time earlier than they began engaged on the film.
And he mentioned, what I would love you to do is spend time not with me, however with Lego’s, most dedicated fanatical clients going to the fan conventions. I need you to spend time with children as they play with Lego. I need you to spend time speaking to those tremendous followers and understanding what Lego means to them. Basically, he was discovering a means to assist these filmmakers fall in love with the model the best way {that a} child does. And if he might try this, if he might get them to fall in love with Lego, then they’d defend the model. They might be those who have been devoted to its preservation, and they might create a tremendous film that held Lego at its coronary heart. What’s type of cool concerning the engagement that that they had with the grownup followers particularly? I didn’t know this, however apparently the one factor that’s completely forbidden, even amongst the grownup Lego followers, you’re by no means allowed to make use of glue as a result of the spirit of Lego is constructing, taking it aside and constructing it once more. And in order that perception about followers and the way they really feel about Lego turns into a plot level within the film. They now construct an enormous a part of the narrative round how evil it’s to make use of glue. And this higher reply produces the Lego film.
CURT NICKISCH: What would most corporations have accomplished?
JENNIFER RIEL: What most corporations would’ve accomplished is what Lego did the primary time. Deal with it as an optimization downside. Work out what’s it we wish? We would like a film that protects the model, most likely even prioritize that over the notion of it being a superb film, make their very own pursuits paramount over the curiosity of the viewer and be stunned when the film’s not excellent and it truly makes individuals suppose much less of the model anyway. It’s form of the catch-22, you find yourself producing the outcome that you just have been attempting to keep away from. I believe a number of organizations are likely to both simply make the trade-off or lay out the chances, analyze these prospects endlessly. We hear about these conferences that go on and on and also you get progressively much less enthusiastic about all the solutions as you analyze them. However as you try this, you then begin to say, okay, we will’t simply select one or the opposite.
Let’s construct the Frankenstein possibility, the consensus possibility the place we will all stay with this as an answer. It’s not going to thrill anybody. It’s not going to be nice, however a minimum of nobody’s going to get fired. Once we discuss integrative pondering is this concept of leveraging the stress of opposing concepts, leveraging the disagreement. And it’s not that you just need to keep in disagreement eternally. You in the end create an incredible reply that we will obtain consensus round. However it’s a basic perception that it’s important to undergo the problem or the stress of disagreement to get there.
CURT NICKISCH: I imply, I consider this nearly as just like the “Getting To Sure” ebook, attending to sure, and arising with options in negotiations that find yourself making either side happier than they ever imagined even strolling into the state of affairs. And also you’re saying that that’s type of doable in case you apply integrative pondering to enterprise issues.
JENNIFER RIEL: Yeah, I like the concept of attending to sure and it’s pleasant. Not each downside goes to be properly suited to this mind-set. There are many nice pondering and decision-making instruments. And when you’ve got some that you just love and that work very well for you, preserve utilizing them. We recommend all of those. Give it some thought as being significantly helpful. If you take a look at the issue in entrance of you, you take a look at the chances or the choices which might be laid out, you take a look at the trade-off and also you say, I’m simply not prepared to make that commerce off. I can’t think about making that selection. I want a greater reply. It’s one factor to say, I must do one thing aside from select right here. And it’s one other to really have a technique.
CURT NICKISCH: Arising. We’re going to interrupt down that methodology and discuss by way of the levels of integrative pondering. However first I’m going to speak about one other actual world instance from the films. Within the Nineties, the Toronto Worldwide Movie Competition, TIFF for brief screened just a few hundred films. It was principally for movie lovers, for everybody. It bought a whole lot of tickets, but it surely wasn’t actually worthwhile. And that was the problem going through Piers Dealing with when he turned competition CEO in 1994. Dealing with thought concerning the Cannes Movie Competition as one other mannequin. It’s unique. It’s acquired this juried prize, the Palme d’Or. Cannes will get tons of reports protection, a number of star names, loads of sponsorship cash. Most executives would take a look at TIFF’s problem as an optimization query, proper? The place on the size between neighborhood and exclusivity is the most effective place to be to steadiness ticket gross sales and sponsorship cash. However the brand new CEO requested himself, why even make that trade-off? Is there a method to get the advantages of each, to maintain TIFF simply as inclusive, however make it extra buzzworthy too? That’s the place integrative pondering got here to play. Right here’s Dealing with in 2012.
PIERS HANDLING: We measure the success of our competition towards many elements. It’s the movies we showcase, the viewers response to these movies, the expertise that emerges and the eye the movies appeal to from the trade and the media.
CURT NICKISCH: What dealing with actually found out is that Toronto’s big numerous viewers of movie goers wasn’t a legal responsibility. They have been truly an asset
SLUMDOG MILLIONAIRE: Giving chai for the overseas
CURT NICKISCH: Take “Slumdog Millionaire”. It received the Individuals’s Selection Award after which went on to win eight Oscars.
SLUMDOG MILLIONAIRE: Women and gents, What a participant.
CURT NICKISCH: Two years later, The King’s Speech took the viewers prize.
THE KING’S SPEECH: What was your earliest reminiscence? I’m not right here to debate private issues. Why are you right here then?
As a result of I bloody properly stammer.
CURT NICKISCH: And 4 Academy Awards. Seems TIFF’s viewers is a strong market predictor.
JENNIFER RIEL: It’s now the case that when you’ve got a film you suppose would possibly win an Academy Award, you carry it to Toronto. You see how the viewers responds? A movie like “Crouching Tiger, Hidden Dragon” had come into Toronto with the studio, not fairly positive. I imply, somebody had mentioned to you within the yr 2000, the large hit film of the yr goes to be a Mandarin language movie during which warriors dance on treetops, proper? Not many individuals are going to say American audiences are going to like that. However Toronto audiences did and adored the movie. And they also have been capable of look again at what had been predictive concerning the viewers up to now and say, if we actually elevate this concept of an viewers prize, make it actually central, we consider based mostly on prior proof that it’s extra doubtless to achieve success. However this can be a case the place they made a little bit of an even bigger guess and it was partly as a result of what they have been doing wasn’t working. And generally you simply must be pragmatic. How will we begin doing this and see whether or not it’s going to be extra profitable? And I believe in Pier’s case, he didn’t have a ton to lose by attempting an viewers prize and seeing whether or not it was truly going to supply the end result that he cared about.
CURT NICKISCH: So let’s break this down.
JENNIFER RIEL: Sure.
CURT NICKISCH: How do you do it?
JENNIFER RIEL: It’s a 4 stage course of. Stage one, get clear about what your downside is. You discover an issue you suppose is value fixing, the place you consider the solutions in entrance of you aren’t ok. A few of them fall into the class of everlasting organizational tensions. Variety of organizations I’ve labored with the place construction, they’re like, alright, we have been a totally centralized construction and we have been sluggish to maneuver. So we decentralized, we moved resolution making out into the group and that didn’t work terribly properly for us. We discovered that whereas there have been moments of nice interplay with customers, we have been doing issues in a single a part of the group, very, very completely different than others. We’d misplaced efficiencies. We misplaced economies of scale. And fairly often in organizations they’ll say, properly, centralization didn’t actually work very properly. Decentralization undoubtedly didn’t work very properly. And the pendulum simply swings again to centralization once more.
And it’s the definition of madness at that time. Effectively, if it didn’t work earlier than, it’s most likely not going to work this time both. And so the concept of claiming, in case you’ve been fixing the issue time and again within the group, or in case you really feel an everlasting pressure like centralization and decentralization or standardization and customization or these everlasting tensions are sometimes problematic as a result of the alternatives aren’t ok. We all know we’d like each. We simply can’t determine the how in the first step. What we need to do is take that downside and discover two very opposing methods of fixing it. So we’d dive very deeply into, alright, if we have been completely centralized, what would that seem like? Let’s describe that simply so everyone knows what we’re speaking about. Completely decentralized and pushing them out to extremes. That’s the place essentially the most pressure is. We will’t be completely centralized and completely decentralized on the similar time.
CURT NICKISCH: Proper? Power your self to not discover the steadiness.
JENNIFER RIEL: Precisely.
CURT NICKISCH: Engineers do that proper? Once they check issues, they’re like, what would occur if labor prices go to zero? Like how would you design a warehouse that means or no matter.
JENNIFER RIEL: Completely. And it provokes new pondering. We then attempt to fall in love with every of these fashions, opening your thoughts to understanding what is actually nice about that selection. What does it get us that could be useful in constructing the higher reply? Step two, right here’s the place we truly maintain them intention. Right here’s the place we take a look at them collectively and we primarily push ourselves to see what we see, to note what we discover. The place are they extra related by way of outcomes than we would’ve anticipated? The place are their true distinctions or factors of distinction? A very nice final result from mannequin A that simply doesn’t exist in mannequin B. That is stage three, proper? Generate prospects. What might a greater reply seem like? And in some methods, you simply ask that query, what do I actually worth? And will I think about creating one thing out of the issues that I really worth? And so in the end, you’d need to generate just a few solutions so that you just’re not simply targeted on one. Step 4, how might you strive your new fashions? See how an viewers or a buyer base or a shareholder group reacts, after which proceed to maneuver ahead with that as a chance. So as a substitute of simply saying, we’re accomplished, let’s launch. Are you able to truly check these prototypes as you roll them out?
CURT NICKISCH: At which step do most corporations stumble?
JENNIFER RIEL: So I believe that there are a few locations which might be difficult. Generally there may be an inclination not to do that in any respect, proper? Simply make the commerce off. Generally it’s laborious to fall in love with one of many fashions since you already actually like one. And so it’s vital to carry individuals into the room who will help push your pondering. Generally they’ll get caught on analyzing the fashions by simply treating it as a guidelines. We’ve acquired quarter-hour. What’s related? What’s completely different? What assumptions and form of be a little bit dogmatic and simply push by way of these. A part of that is recognizing that pushing ahead to new concepts doesn’t occur on a right away timeline, proper? Giving your self a little bit of time and room to stroll away from the issue and are available again to it. Definitely in case you’ve acquired a day and that’s all you may spend on it, you may make progress. However finest follow could be convening the group a few occasions to undergo the completely different levels at completely different factors. In occasions you’ve had a while to suppose,
CURT NICKISCH: How have you learnt when in the course of this unfamiliar course of that you just’re heading in the right direction? What are indicators that you just’re succeeding? What are indicators that might let you know, you bought to begin over?
JENNIFER RIEL: I believe they’re largely emotional in stage one. In case you actually are capable of push your self to have real affection for the 2 fashions, get to a spot the place you say, I perceive why somebody would select these. There’s one thing good in it that may be a good signal that it’s working. If you’re analyzing the fashions, in case you really feel a little bit within the weeds of the complexity, you do must dive into the complexity of this with a view to push your self ahead. In case you really feel such as you see one thing new that you just didn’t see earlier than, it won’t be earth shattering. It won’t be world altering, however one thing that I didn’t acknowledge earlier than I began this course of that may push me in a brand new course. After which by way of the chances, is it higher than what I began with? Have I made progress? Have I produced one thing that I believed as a greater job of fixing the issue than the place I started? And as you’re testing, am I truly making this concept higher? Am I studying as I am going? Am I producing a solution that I’m enthusiastic about? A few of it’s managerial judgment. If this have been an algorithm, it wouldn’t truly be all that precious to you. It’s a course of or a technique you can observe that paired with your personal understanding of your corporation, with your personal management acumen lets you sort out issues otherwise.
CURT NICKISCH: Jennifer Riel, thanks a lot for taking us by way of this course of.
JENNIFER RIEL: It’s my pleasure.
AMANDA KERSEY: We’ll be again subsequent Wednesday with one other handpicked dialog from Harvard Enterprise Overview. If this episode helped you share it with your folks and colleagues and observe the present on Apple Podcasts, Spotify, or wherever you take heed to podcasts. And whilst you’re there, take into account leaving us a evaluate and whenever you’re prepared for extra podcasts, articles, case research, books and movies with the world’s prime enterprise and administration specialists, discover all of it at hbr.org. This episode was produced by Curt Nickisch and me, Amanda Kersey The “On Management” workforce consists of Maureen Hoch, Rob Eckhardt, Erica Truxler, Tina, Tobey Mack, Ramsey Khabbaz, Nicole Smith, and Anne Bartholomew. Music by Coma Media. Thanks for listening.