"It is all about fear"

At the dawn of the big shift

At the Drucker Forum '23, you spoke about creativity in the midst of chaos. How would you describe the world in which companies and employees and people are currently operating?

I believe we're in the very early stage of what I call the big shift that is transforming the global economy and society. It has many different dimensions to it. In one dimension, it's creating mounting performance pressure on all of us. Competition is intensifying on a global scale, pace of change accelerating, and then extreme disruptive events coming in out of nowhere. The paradox is, at the same time, the big shift is creating exponentially expanding opportunities. We can create far more value with far less resources, far more quickly than would have been imaginable a few decades ago. It's an interesting contrast: more and more pressure, but exponentially expanding opportunity.

I believe we're in the very early stage of what I call the big shift that is transforming the global economy and society.

To what extent does this pose a particular challenge for creativity?

I think it's a significant challenge. It's actually the focus of my most recent book called “The Journey Beyond Fear”. One of the things I'm finding is that around the world, the mounting performance pressure is generating the emotion of fear. More and more people are afraid of the future. Fear has a number of consequences. It shrinks our time horizon, we just focus on today. We can't see anything else. We become much more risk averse. We lose trust in each other. But the key consequence is that creativity gets discouraged. If we're risk averse, we don't want to take any chances. We don't want to be creative but just continue doing what we've always done.

More and more people are afraid of the future. Fear has a number of consequences. It shrinks our time horizon, we just focus on today. We can't see anything else. We become much more risk averse. We lose trust in each other.

My impression is that that people are afraid of the technologies that are on the rise, like generative AI. That they fear climate change. At the same time, they are afraid of the possible answers to those challenges. Sustainable transformation, change of living habits, or, in Germany at least, immigration as answer to the labour shortage. In your mentioned you talk about narratives as an explicit call to action. Do we need a new meta-narrative, a shared image of the future we want to reach? The postmodernist said that there is no meta-narrative anymore ...

First of all, I have a very different definition of narrative than most people do because most people, when they say narrative, they mean stories. We just need a story to live our lives. No, I think stories and narratives are very different. Stories are self-contained. They have a beginning, a middle, and an end to them. The story is about me, the storyteller or it's about some other people. It's not about you. In contrast, for me, a narrative is open-ended. There is no resolution yet. There's some kind of big threat or opportunity in the future, not clear whether it's going to be achieved or not. The resolution of the narrative hinges on you. It's a call to action for the people who are listening to the narrative. They are going to make a difference. Narratives play out at many different levels. I believe we as individuals have a narrative. Companies and organizations can have a narrative and should have a narrative. Same with regions or geographies.

The resolution of the narrative hinges on you. It's a call to action for the people who are listening to the narrative. They are going to make a difference

Increasingly, the narratives that we're living our lives to are threat-based narratives. It's all about the threat. The enemy's coming to get us. We're all going to die. We need to mobilize now and resist. Who's articulating an opportunity-based narrative? I think that, you mentioned a meta-narrative, there's a potential for a very broad narrative that appeals to most, if not all people. Again, it has to be focused on opportunity and call to action to say, "Your choices and your actions are going to determine how this plays out."

To bounce forward

At the moment there's a lot of talk about the resilience of companies. What distinguishes resilient organizations from others? How would you define a resilient organization that can cope with the challenges?

Resilience has become one of the most commonly used words in the business world. I asked the senior leaders that I work with, "What do you mean by resilience?" Without exception, the answer I get is, "We want to bounce back. We want to go back to where we were. That's resilience." I believe, in a rapidly changing world, the big shift world, bouncing back to where you were is a formula for disaster. Because where you were has become obsolete. The key in the big shift world that I'm focusing on is that we need to bounce forward. We need to find ways to evolve and improve ourselves. If we're going through a big shift with transformation, we need to transform ourselves. Not just incremental change, not just minor initiatives on the side, but transformation.

Unless you're producing a butterfly that is totally unrecognizable from what you started with, you're not transforming.

Virtually every large company around the world has a digital transformation program. Yet, when I explore what that program is, they're applying digital technology so that they can do what they've always done. Just faster and cheaper. That's not transformation. That may be helpful, but if you're talking about transformation, the metaphor I use is the metamorphosis of the caterpillar to the butterfly. Unless you're producing a butterfly that is totally unrecognizable from what you started with, you're not transforming. I believe in this big shift world, we have to transform. That's the only way we can bounce forward and really create more and more value in a rapidly changing world.

Is this transformation something we individuals have to go through and then the organizations will transform? Or is it that the organization changes its structures, the way people collaborate etc. and then the transformation will happen? Where do we start?

We start, I believe, with emotions. Unfortunately, at least in the large company world, emotions are considered a distraction. Leave them at home. When you get to work, just do your assigned tasks as assigned reliably and efficiently. I believe if we're really serious about transformation, we have to focus on the emotions because until we recognize and overcome the fear that is increasingly driving our actions both at the top of the organization and down in the ranks, until we address that fear, there will be no transformation. We have to find ways to move people beyond fear so that they can cultivate emotions that will help them to have more impact that's meaningful. And will help them to see the exponentially expanding opportunities that are out there.

We start transformation, I believe, with emotions. Unfortunately, at least in the large company world, emotions are considered a distraction.

Would you say that this openness to emotions and the ability to communicate characterizes innovative companies?

Everybody talks about skill building. Of course we need to train people for new skills. But what's required for creativity is cultivating what I call capabilities. The distinction for me is: skills are useful in a specific context. It's how to operate this machine or how to do this kind of calculation in this process. Capabilities are useful in all environments, in all contexts. There are many capabilities and many of them are deeply connected. I focus on curiosity, collaboration, imagination, creativity, and reflection. All of those together create an environment of very rapid and successful learning. The challenge is that in most organizations today, these capabilities are deeply suspect.

With imagination and creativity, you're going to deviate. You're going to do things differently. Organizations say: No, we need to keep doing what we've been doing.

If you're curious, you're asking too many questions. With imagination and creativity, you're going to deviate. You're going to do things differently. Organizations say: No, we need to keep doing what we've been doing. That's the fear that's ruling our institutions. Until we address that, these capabilities are just going to be marginalized.

We need more curiosity

Is it about trust?  Trust from the managers to the people and from the people to the managers?

I've seen surveys around the world that trust is eroding in all of our institutions and in our leaders. I think everybody nods their head when I talk about those surveys but very few people know what is leading to the erosion of trust. I think a big factor in this is that leaders increasingly are being driven by fear. The focus is on protecting what they already have and just defending themselves versus serving others. Until we overcome the fear, we're going to really restore trust. Fear increases erosion of trust because we can't afford to trust anyone. It's too scary. We just need to rely on ourselves.

What is the task of leadership in a world of excessive demands and fear, and what are the means to fulfill it? 

There's a consistent theme in my work. It's this notion that the priority for leadership is to help people move beyond the emotion of fear, and to see the exponentially expanding opportunities that are increasingly emerging around the world. It's also starting with themselves. It's not just focusing on others to overcome their fear but recognizing that as leaders, they are being driven by fear and they need to overcome the fear. In this context there's an opportunity around – corporate narratives. Leaders framing a really inspiring, exciting opportunity that is meaningful to their customers, not just to the people in the company or to themselves, but to their customers. What's the big untapped opportunity that they could be addressing and what action do they need to take to address? That inspires and excites, not just the customers, but the employees and the partners within the company.

The most successful leaders in the future are going to be those who have the most powerful questions, who will say 'This is a really interesting question. If we could answer this, we could accomplish amazing things. I don't have an answer and I need help.'

The most successful leaders in the future are going to be those who have the most powerful questions, who will say 'This is a really interesting question. If we could answer this, we could accomplish amazing things. I don't have an answer and I need help.' I think that accomplishes many things for the employees. First of all, it says, asking questions is not only good, it's absolutely necessary. Acknowledging you don't have answers is okay and asking for help is necessary. It builds an entirely different culture where creativity can flourish because now you're focused on really exciting questions. You're asking for help. You're coming together to address these questions. It's a big opportunity.

About John Hagel:

John Hagel III has more than 40 years’ experience as a management consultant, author, speaker and entrepreneur. After recently retiring as a partner from Deloitte, he is developing a series of programs to help people navigate through change at many levels. John has founded a new company, Beyond Our Edge, LLC, that works with companies and people who are seeking to anticipate the future and achieve much greater impact.

While at Deloitte, John was the founder and chairman of the Silicon Valley-based Deloitte Center for the Edge, focusing on identifying emerging business opportunities that are not yet on the CEO’s agenda. Before joining Deloitte, John was an independent consultant and writer and prior to that was a principal at McKinsey & Company and a leader of their Strategy Practice as well as the founder of their E-Commerce Practice. John has served as senior vice president of strategy at Atari, Inc., and is the founder of two Silicon Valley startups.