Before your imagination can be harnessed, it must be ignited. Strengthening your capacity to see, comprehend and interpret surprises will set you on the path.
EVERY IMAGINATIVE EFFORT BEGINS with a mental spark. Financial pioneer Omar Selim’s spark came from an unexpected source: his teenage children. Selim, who was Barclays head of global markets for institutional clients at the time, was preparing for a trip the following day to Johannesburg. At dinner, he and his children talked about work and life, what matters and what doesn’t. “Okay, so you’re going to fly there tomorrow, stay in a five-star hotel, give a speech, which probably nobody really cares about,” they said. “And this is the path you’ve chosen to dedicate your life to?”
As Selim told us, this blunt exchange with his children actually triggered his imagination, throwing everything into question. And this trigger coincided with a situation at work that gave him a lot of time to think. Barclays had sold its investment management arm to BlackRock, with a non-compete agreement, which meant that Selim and his team, who remained at Barclays, were not allowed to do any asset management.
Selim read and thought deeply about sustainability and how finance might be transformed by non-financial data and machine learning. Catalyzed by the conversation with his children, he rethought the institution he wanted to work for, putting together a mental model for a new kind of asset management business. Eventually, he set up Arabesque, the world’s first asset management firm driven by artificial intelligence and environmental, social and governance metrics.
In this article we will share some insights for sparking your own imagination and that of your team, putting your organization on the path to value creation.
What Inspires Imagination?
By taking our frustrations seriously, we prepare our minds to imagine our way out of them.
ACCIDENTS — events or consequences that are incidental or irrelevant to what we are trying to achieve;
ANOMALIES — parts of a situation, story or dataset that are out of the ordinary; and
ANALOGIES — parallels we notice between concepts or experiences, which suggest new possibilities.
However, for any of these types of surprises to impact us, our minds must be prepared. Plenty of things pass us by every day, but to spark imagination we need to notice them (the cognitive aspect) and care about them (the emotional aspect). If Selim had not cared about reforming finance, he wouldn’t have started Arabesque. Equally, if he had not noticed how machine learning was impacting other businesses, he would not have had a stock of mental models to draw on in rethinking how an asset management firm could work. The more we commit to caring and noticing, the more we create the mental context for encountering imagination-provoking surprise.
There are two key manifestations of caring: via aggravations or aspirations. Aggravations or frustrations drive us to change or escape from something, while aspirations drive us to bring something we want or believe in into being. Aggravations and aspirations can enable us to notice things on three levels: by seeing, comprehending and interpreting. Let’s take a closer look at each.
STAGE 1: Seeing
Seeing entails taking in new information. If we don’t do this, we won’t encounter any kind of surprise. If we’re stuck doing only routine things every day, not having interesting conversations or exposing ourselves to new social or geographical environments, we get stuck in ‘informational oblivion’. Following are three actions related to seeing that can help you use your imagination more frequently.
MAKE TIME FOR REFLECTION. Given the amount of pressure they face, business leaders need to work hard to protect time for reflection. Inspiration for imagination often comes when we are reflecting: relaxing, with no pressure from urgent tasks.
It may be no accident that people often get inspired in the bath or shower, because they tend to dampen our fight-or-flight nervous system in favour of the ‘rest-and-digest system’. Omar Selim told us that inspiration often happens for him in this context: “I get most of my ideas while showering in the morning. I feel inspired when the temperature around me is just right; I relax and I’m not bothered by anything.”
In the early days of Merrill Lynch, founder Charles Merrill wrote to his business partner Winthrop Smith about the importance of taking time to reflect: “You and George Hyslop [a partner in the firm] and I should never be so busy that we can’t set aside at least one hour each day to quiet, thoughtful study and discussion of our basic principles, as contrasted with current operations.”
Imagination requires blocks of time with low external demands. Warren Buffett famously schedules time for a ‘haircut’ in his diary, which is actually code for him to sit in a room and reflect. We need time to think about our aspirations and aggravations and follow our curiosity rather than a deadline. Some ways to do this include:
• Taking a few deep breaths in and a few longer breaths out
• Taking time over a meal to rest, mentally digest and reflect
• Listening to or playing music
• Going for a walk without your phone
PAY ATTENTION TO FRUSTRATIONS. If they don’t emotionally overwhelm us, aggravations or frustrations can help us care about what we notice. In 2008, MBA student Shelby Clark was cycling to pick up a Zipcar he had rented. As he told us: “I got stuck in a snowstorm. I was biking through the snow, grumbling the whole way, thinking: ‘Why am I passing all these parked cars, to get to a car? Why can’t I get in that car? Or that car?’”
This was the imagination-triggering event for Clark. A row of unused, parked cars wouldn’t surprise most of us. But driven by his frustration, it stood out for him, prompting him to challenge the existing mental model of private transportation and kicking off counterfactual thinking that led him to found Turo, the world’s first private-car-sharing company.
The idea for genetic testing company 23andMe was also inspired by frustration. Founder Anne Wojcicki had spent 10 years working in healthcare investing. At a conference about insurance reimbursement, she remembers thinking: All these people are here just to figure out how to optimize billing. “I realized, I’m done. At that moment it became clear that the system is never going to change from within.”
This frustration was a potent emotion, but it took a triggering event for Wojcicki to come up with a better alternative. “There was a very specific event where I was at a dinner with a scientist,” she recalled. “We were saying, ‘Theoretically, if you had all the world’s data and genetic information, couldn’t you solve a lot of problems?’ And the conclusion was yes — you could revolutionize healthcare.”
This conversation inspired her to begin imagining a new business, a path that eventually led to a genetic testing company with a multibillion-dollar valuation. By taking our aggravations seriously, we prepare our minds to imagine our way out of frustrations.
ENGAGE WITH OTHERNESS. To engender surprise, you not only have to care, you have to be in a position to notice imagination-provoking things. The most basic way to do this is to get out of the (metaphorical) house and seek the unfamiliar.
As a company grows, more mental space gets taken up with internal requirements: ‘What should I say to the board?’ ‘How should I write this review?’ Like a sphere, the volume of a growing corporation grows faster than the area exposed on the surface. On the inside, familiar processes and scripts come to dominate, shielding us from unexpected and potentially inspiring external interactions.
University of Chicago Sociologist Ronald Burt studied the origins of ideas within companies and found that people who had more exposure to the outside had better ideas. When his study asked inward-facing managers at an electronics company for their ideas, they often produced the “classic lament from bureaucrats: ‘we need people to adhere more consistently to agreed-upon processes.’” In contrast, what might seem to be a routine role produced imaginative thinking: “Better ideas came from the purchasing managers, whose work brought them into contact with other companies.”
Selim of Arabesque described how he tries to break his team’s routines while travelling, to seek encounters that might prompt imagination:
We all fly economy and take public transport in different countries. Not to save money, but to get out there and have some chance encounters — sitting next to a lady on the train in India who is going to talk to you about her kids, or whatever it may be. When I’m visiting a new city, I always try to find a meal for under $10. It takes me to some fascinating places and gets my mind working — dealing with places, people, or ways of doing things that are not what I see every day. This often sparks new thoughts.
STAGE 2: Comprehending
Comprehending demands processing something we see to understand it. We might be exposed to new information, but unless we say, “Wait, that is an interesting anomaly. Let’s think about that,” or “Why do you think we got that accidental result? Isn’t that curious?” then we are not using our brains. If we don’t put in the time or effort to process what we see, we are in ‘computational oblivion’. Following are two ways to enhance your ability to comprehend surprises.
REFLECT ON ACCIDENTS. Accidents are the incidental results of our actions or things we bump into while trying to do something else. These are the surprises that come out of left field, unrelated to the mental model we are working with.
Tim O’Reilly, founder of O’Reilly Media and a leading thinker in Silicon Valley, emphasized to us the importance of being open to what might arrive from outside your mental model: “Think of imagination as a process of letting go of what you know, experiencing life fresh. The world is infinite. We experience only part of what is out there, and then, we attach labels to our experience. But people get stuck on the labels.”
The classic business example of this is the story of Viagra. Originally developed as a heart medication by Pfizer, researchers noticed a side effect in a completely different area of the body. This would have been easy to dismiss as a useless side effect, given that the researchers’ minds were focused on heart conditions. However, they thought about the accident and connected it with an aspiration from a different medical field: addressing erectile problems. They allowed themselves to be led down this unexpected path, and Viagra eventually became one of Pfizer’s most successful products.
INVESTIGATE ANOMALIES. If an accident is something outside the mental model you are working with, an anomaly is a violation of the expectations that a familiar mental model is giving you. It takes effort to notice this dissonance, to realize that the explanations your mental model suggests are misleading or wrong. As philosopher John Armstrong noted to us: “We’re actually quite
slow to notice new pieces of information. We’re invested in the models we currently have — of a company, of another person or of how things work. And that emotional familiarity is something we can be very reluctant to give up.”
One example of successful anomaly investigation comes from a Boston Consulting Group (BCG) project with a U.S. company that makes diagnostic machines for hospitals. The prevailing mental model of this business was to invest in salespeople and save money on technicians. During the project, one executive noticed that the company was selling more machines in Manhattan. This was a crucial moment. It would have been possible to see this but resort to the explanation from the prevailing mental model: The sales team there must be better.
However, the leaders pushed further, and in digging deeper, they discovered an additional anomaly: Manhattan was the only region that assigned on-site technicians. The reason for this was that managers didn’t want engineers wasting paid hours in New York traffic; it was more efficient to appoint on-site engineers.
The surprise in this case came from connecting the two anomalies. As the team noted, “Constant contact with the technician bred close relationships with the users of the equipment, and the service engineers developed an in-depth understanding of customer needs. Technicians had become the company’s most
productive salespeople.”
This surprise kicked off much counterfactual thinking. The leaders imagined a new business model with technicians at the centre. They invested in data gathering from technicians and lines of communication between sales and engineering. It assigned on-site engineers elsewhere. The result was an additional eight points of market share and a boost to its margins of 25 percent. We are used to pattern recognition, but the skill of anomaly (or pattern-break) recognition is just as important in business.
STAGE 3: Interpreting
The deepest stage of noticing, interpreting entails connecting — noticing the ramifications of one piece of information for others. Think of the difference between you and a trained biologist walking through a forest. Where you see simply a leaf, they notice the early appearance of a rare tree at an unusual elevation, implying a changing climate, which has implications for the forest as a whole. Their biological worldview allows them to make more connections. If we can’t draw on a rich conceptual inner world made up of deep and varied worldviews, we are in ‘conceptual oblivion’. Following are two ways to increase your ability to interpret what you see and comprehend.
DRAW ANALOGIES. Drawing analogies entails taking some element you have comprehended in one area and importing it into another. Using analogies can be a powerful trigger for imagination in business. As noted earlier, the inspiration for car-sharing company Turo came when Shelby Clark drew an analogy:
I had just come out of a really amazing meeting at Kiva, a peer-to-peer microfinance lending platform, when I made a mental connection between Kiva and Zipcar. It came together quickly in my head: The limitation of Zipcar was that there weren’t enough cars. Whereas in reality, especially in America, we have a lot of cars. There is no shortage of cars. The problem is that we don’t use them well. So a peer-to-peer marketplace would bring people together and solve that problem.
Venture capitalist Bill Janeway also kick-started his imagination with an analogy during the dot-com bubble burst in the early 2000s. As he said, “I wrote my PhD thesis on the stock market between 1929 and 1931. So in 1999, I had in my mind that stock price chart of RCA between 1926 and ’32 — and if you put that next to the stock price chart of Veritas between 1996 and ’02, they are identical.” He told us that seeing this analogy triggered him to adjust his mental model of what could lie ahead and to anticipate the burst of the dot-com bubble.
To ‘mine’ an analogy, use the following process:
STEP 1: CONNECT. Identify mental models connected to what you are considering. To draw this connection, describe the features of what you are considering in a more general way. For example, say you are looking for analogies around real estate agents. Real estate agents help people choose houses. This is one instance of the general idea of giving guidance. To find interesting connections, ask: Where else does giving guidance occur? Counselling, advice columns, IKEA furniture manuals, teaching, and so on.
STEP 2: SELECT. Choose a concept from a new mental model to import. For example, you might select the concept of emotional understanding from counselling (that counsellors learn the unique psychology of their clients). Or the concept of mentoring from teaching (that teachers relate to their students over time to help them develop).
STEP 3: INJECT. Now explore injecting this foreign concept into the mental model of the original thing. Asking ‘what if ’ questions can help prompt your imagination here. What if real estate agents became like counsellors in terms of understanding the emotions of their clients? What if estate agents became like mentors, helping us develop our homes? Going through this process can offer surprising suggestions that inspire us to start thinking imaginatively, exploring mental models of things that do not yet exist.
LEARN NEW WORLDVIEWS. To increase surprise, you can also learn new worldviews: systems of concepts and mental models that provide different ways of interpreting the world. New worldviews can create surprise when brought up against familiar information. For example, if you hired the manager of a Formula One technical crew for your logistics team, they might make some interesting observations because they notice things through the lens of high-intensity racing.
Janeway argues for the value of humanities-based worldviews, from philosophy, history and literature, to enrich the business mind. By living mentally in alternative worlds — scholastic debates in medieval Europe, the life of an aristocrat in 19th century South America, or philosophical thought experiments — he believes we can see with a deeper understanding, allowing us to notice more patterns and anomalies. As he told us:
We can learn a lot about the emotional elements of financial market behaviour from the humanities. A prime example is Anthony Trollope’s classic novel, The Way We Live Now. It traces an extreme speculative bubble on the London Stock Exchange in the 1870s, promoted by a plausible con man and driven by waves of investors drawn into the fraud until — ultimately and necessarily — the bubble bursts. Our recent history replicates the phenomenon with extraordinary precision, from Enron through Theranos and on to Wirecard.
Janeway reflected on his humanities education: “I think this background has given me a number of really unfair benefits and advantages as an investor: to be able to have useful, speculative conversations, assess unusual ideas, think about alternative futures.”
Our advice: Pick a few new worldviews to immerse yourself in. They could be from different disciplines, like Engineering, Theology or Psychology; from writers with distinctive ways of seeing, like authors of science fiction or heroic novels; or from distant places or times that had ways of interpreting that seem strange to us. The point is to enrich your stock of worldviews to draw upon when observing.
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