7
Play Is Assessing Information, Taking Risks, and Taking Action
Recently, a great deal of focus in certain sectors of the toy industry has been placed on the need to get preschoolers active as a way of encouraging health and preventing childhood obesity. That’s all very well and good; no one wants to see children being unhealthy. But what boggles the mind is that anyone who has spent any time with a healthy preschooler knows that getting him or her active isn’t the problem. Getting a kid to sit down and be still is more difficult. For our purposes, however, we want to talk about play as an active process of discovery and information-processing. In the adult world, and particularly in business, this shows up as ongoing choices, experimentation, feedback, and new choices based on the feedback. This is a radical simplification of Piaget’s theories of child development and constructivist theory, and I encourage you to delve into that if you’re interested, but for our purposes, it can be boiled down to the bromide that experience is the most effective teacher, and as children begin to accumulate experiences and information, and as their brains and personalities become more developed, they learn to make more sophisticated choices.
Play is an active process, and for children engaged in play, action is a constant. Whether they are building something with LEGOs, running around the backyard, or engaged in solving problems, they are constantly acquiring more information and experience. In the world of kids, the advent of video games and other sedentary activities as well as the decline of the unstructured neighborhood play most Baby Boomers recall has meant that many kids may be less physically active today than they were a generation ago. Nonetheless, we don’t want to confuse physical action with active imagination and decision-making, which is what’s always going on whether it’s expressed physically or mentally.
Play is also very much about embracing risk and uncertainty, and taking an action even when the outcome is not guaranteed. In fact, acting without a known outcome is the very essence of play, and the best teacher there is. Trying something you haven’t done before begins to build a frame of reference for that activity and a wealth of experience that provides you with the subconscious analytical tools (we’ll talk about “intuition” in a bit) that are essential to making good decisions.
In the neighborhood where I grew up, garage roofs were fairly close together—no more than about 3 feet apart. One of the rites of passage in our group of friends was being able to jump from one roof to the other. This is a big deal when you’re 7 or 8, and a bit scary, but once accomplished, it was a huge badge of honor. I can’t recall any kid ever falling, by the way, though we got plenty banged up riding bikes, climbing trees, and doing other activities. Objectively speaking, danger in the roof jump was much greater in our minds than in reality; we were all capable of jumping 3 feet. However, we made the risk and the stakes enormous in our minds, and ultimately overcoming those laid the foundation for taking greater risks.
I never rode a skateboard when I was a kid; it was one of the few things that my parents forbade. However, a few years ago, I was required to learn how to ride one for a TV thing I was doing. It was not a skill easily acquired by this middle-aged man, but I figured I could do it, and I did. I also had the opportunity, for another TV thing, to go off the ski jump training platform in Park City, Utah. This is a long slide—in skis and a wet suit—down an Astroturf-covered ski jump. At the end of the platform, you lift off, jump, and land in a swimming pool, skis and all. I looked ridiculous and did something with an hour’s training that serious ski jumpers don’t do for weeks. But we got the shot.
I bring these up because they are really about the essence of active play: the ongoing assessment of risk juxtaposed against projected or desired result. When I give presentations and I’m asked how I got to do the work I do, after I tell them I made it up (the essence of imaginary play), I always say that there is one sentence that has guided my career: “Sure, I’ll try that.” This is not some cavalier statement; it is based on an ability to assess risk based on my experience and assessment of my capabilities. Assured by the Olympic coaches that even a mediocre skier, which I most certainly am, could get off the jump without injury and get the shot we needed, I decided to go for it. And speaking of skiing, one of the other great lessons I learned about business happened on a ski slope. I was an adult when I finally achieved my wish of learning to ski, but it was terrifying. I had a great young instructor, however, who told me that I’d never get anywhere if I didn’t point my skis down the hill. It was scary and felt like a risk, and I certainly had my spills, but eventually I learned to ski. A close friend of mine who has started and sold several businesses in different industries is fond of paraphrasing famous salesman Zig Ziglar, saying, “Anything worth doing is worth doing poorly until you can do it better.”
Risk is also one of the defining elements of innovation. In business, risk is often defined as venturing into the unknown or something that hasn’t been tried before, and given the investment in being successful, it becomes fraught with all kinds of issues related to return on investment and trying to predict outcomes, sometimes with relatively little information. The result of risk is profit or loss, and that can be scary.
In terms of play, however, the result of risk is always learning, and risk brings with it the absolute guarantee of some level of failure. Without failure, however, there can be no progress. If you’re going to be innovative, there’s no way to do it without failure. If you already knew how to do something, then it wouldn’t be new, right? If you want to learn to play the piano, you can’t skip the stage where you sound just dreadful as you play. There’s no way around it. The risk of sitting down to play and clearing the room as you’re beginning is offset by the vision of being able to play down the road. But you have to take the risk and take the action in order to get there. The question becomes: How much risk can you handle to make progress? It’s an important question to ask because, just as it defines a company, it can also define your career.
Most leading companies fit somewhere toward the center of the high-risk/low-risk continuum. Most people do, too. If you’ve sat with a financial advisor, they’re probably done a risk-assessment profile with you to see how conservative or aggressive they can or should be with your portfolio. For the most part, people tend to fall around the middle of the continuum, and so do companies, though that can vary and contributes to the cyclical nature of business.
Company dynamics can be very much like human dynamics in that when there are threats of any nature and people feel vulnerable, they tend to turn inward, whereas in good times when people are feeling secure, they tend to be outward-focused and looking for new opportunities for expansion. Also, like people, there are risks in going to extremes. Too much inward focus and being careful, and the company will stagnate. Too much risk, and the basic stability of the company is potentially jeopardized.
You can think of it in terms of genetics, and it’s actually quite interesting to do so. A species that’s mutating with every generation isn’t going to survive any more than one that doesn’t evolve at all—or quickly enough—to meet changing conditions. In biology, random mutations are a kind of cellular risk that either help the species adapt to a dynamic world and are passed on to next generations, or disappear. Same thing with companies, with the exception that the risks (or, for the sake of our metaphor, the mutations) are hopefully more strategic than random.
Innovation and Creativity
Taken in this way, innovation and creativity are essential to the evolution of a company and its continued progress over time. Companies and managers that foster creativity and innovation are those that are able to create a culture in which risk and failure are actually encouraged. They create an environment that embraces risk as a learning and discovery process. Like evolution, it’s a long-term effort, however, and as we’ll see in a bit, faces significant headwind, especially in the current market because it is time-consuming and expensive. This can be especially challenging for public companies that need to show results more quickly than the process might allow to not be punished by Wall Street. (The exceptions to this are companies like Amazon that manage to maintain high stock prices even when profits wouldn’t seem to justify them. See Chapter 2 for more on this phenomenon.)
As described, creative play is one of the most active things children do, engaging them mentally, physically, and often, emotionally. The same holds true in companies. Investing in creativity goes to the very essence of play in that something is made up in the imagination and then brought into reality. There are tons of books on creativity, developing your creativity, and so forth. We take a very simple, and hopefully childlike, point of view on this. It’s most analogous to taking a whole box of LEGOs, for instance, dumping it out on the floor, and saying, “Well, now what can we make with this that’s new?” In this case, we’ll let the LEGO pieces represent everything you know about your business, all its various parts and pieces, and then you just dive in and play. I know this probably sounds too simple, but you just have to take everything you know and let it jostle around, and allow yourself to have a steady stream of ideas of the various different ways you could put these pieces together and whether you need new pieces, and allow your new structure to take shape in your imagination and see where it takes you. You don’t need fancy seminars. Really, you need only what that kid with the LEGOs has: clarity of vision and confidence.
These are essential because they’ll guide the active, creative process and keep you on track. A significant part of the process in business, however, is being able to distinguish a good idea from a bad one. For our purposes, we’ll define a good idea as one that could be developed into a viable product or practice and a bad one as one that can’t.
The stark reality is that many of the ideas you’ll come up with—some people estimate 50 percent or more—aren’t going to be viable and should be dropped cold. The process of play is sorting through all those ideas to find the one that you think might be worth investing your time, just as a child goes through a toy store looking at products on the shelf, trying to decide where to invest his or her allowance. I know that probably sounds a bit trite, but it really is the case, and you can’t shortchange the process.
So how do you decide what to move forward with? Well, that’s where the “gut” comes in, at least partially. Yes, you’re going to do all your due diligence and research and statistical analysis, but at the end of the day, people and companies rely a great deal more on their gut—or intuition—than they do on statistics, and that’s not necessarily a bad thing. For instance, if you are considering buying an expensive watch or something else you’d like to have but isn’t essential for survival, you’re going to marshal all the data to support that decision. Conversely, if you decide not to purchase it, your rationales will all support that decision. This is human nature because we want to feel good about the decisions we make. The way we think of it is that you can collect all the data in the world and you can use it to inform your choice and to justify the choice you make, but that moment of choice is something else altogether. One of my very first mentors put it this way, with respect to personal relationships: “You can give someone all the support and information you can up to the point where they have to make a decision. And, if you can, you support them after they make the decision. But you can’t make that decision for them.” In my experience and in talking with many people about the choices they’ve made, this holds true. (Even when a decision is reached by committee, each individual member has to make a choice individually.)
Making those choices can be one of the most exciting things that you do because that moment is the essence of creativity. It’s when you become that kid and say, “Let’s make something.” We’re not the only species that makes things, by the way. Birds make nests, bees make hives, and so forth, but they do that instinctively and automatically. The choice to create something from nothing, however, is distinctly human and unique compared to any other species on the planet, and it’s part of what makes living an adventure.
The Power of the “Gut,” or Intuition
As mentioned, before we go on, I want to take a moment to talk about intuition and its role in the creative process. When I talk to executives who have been successful with projects or businesses, sooner or later the issue of intuition comes up. When I asked the CEO of a major consumer products company why his line in 2014 was so much better than his line in 2013, he said that they had systematically gone through the company and put the best product people in charge, without respect to seniority or longevity with the company. When pressed as to how he and his team knew that these were the best product people, he claimed that a significant component of the decisions was intuitive. Intuition is often hailed as being mystical, a “sixth sense,” something that only rare people in business possess. This may make good headlines and feature stories, but largely it’s hogwash. Intuition is nothing more than the fearless, and subconscious, application of accumulated knowledge to an immediate problem. It does not spring mystically from the ether. It is not “received wisdom” or anything even remotely supernatural. It is a function of experience and brain chemistry. It only becomes mystical when someone tells you they know something, but they can’t tell you how they know it—and they’re right.
Given this example, the senior executives had plenty of information about how individual executives worked, how the products they developed performed, and their knowledge of the market and its opportunities. This all gets filed in the brain under experiences with that individual to be drawn upon when interacting with that individual. Rather than trace each bit of knowledge back to its source, they trust themselves and their experience to be able to know what’s right in a given situation. Although it’s very powerful and a great asset, there’s nothing mysterious about it. My brother, who was always a huge baseball fan, was always able to watch a game on TV and predict what the next play would be. He was amazingly accurate. I certainly couldn’t do that. I can, however, look at a toy line in development and tell you which products have a better chance of success, and more often than not, I’m right. This is not because angels are whispering in my ears; it’s because I have more than 30 years’ experience working hands-on with toys, watching the market, seeing what does well, and studying children, observing their relationship to the culture, and staying up on larger trends in consumer culture, as well. All that information has been packed away over the years. I’m not a neuroscientist, so I don’t know how it works, but I do know that when presented with a new product or concept the mind makes a huge amount of associations almost instantaneously. An ability to access and process a lot of information from your experience is an asset, but it’s neither mystical nor that unusual, as long as you’re willing to trust your own experience and mental process. You can think of it this way: You’re a walking, talking, breathing algorithm. That may make it a little easier to accept for those of you who are driven by data. I’m slightly kidding, of course. The downside of thinking of intuition or the gut as something mystical means that normal, rational people aren’t going to trust it, or trust themselves.
And don’t get me wrong: Just as a doctor would use every technique possible to diagnose a patient, your gut or intuition should only be one tool you use, because it can backfire as well. As Ronald Reagan said, “Trust but verify.” As with the disastrous toy that came to the president of that small toy company in a dream and bombed, despite his gut feeling that little girls everywhere would love it, your intuition is only as good as the data that it’s pulling from—like an algorithm, which is only as good as the variables it considers.
One example of this I often use when I talk about the intuition and algorithms is one that you probably experience every day. Let’s say you’re looking to buy a lamp and you shop online. For the next period of time, every time you go to a site that rents out space to search engine advertising, you’re going to see ads for lamps. That makes sense, unless you bought a lamp on the first day you were looking. Then all those ads are meaningless to you, and you ignore them. The algorithm, however, doesn’t know that you bought a lamp, so it can’t suggest a rug based on your lamp purchase. Because the algorithm can’t collect that information, for many sensible reasons, it is therefore limited.
The human mind, however, is not limited. Watch kids play, particularly when they’re engaged in open-ended, narrative play as with action figures and dolls. They are drawing on all kinds of information that they’ve stored and filtered it through the narrative, and—boom—they’ve got a sometimes incredibly rich story going on. Another way of looking at it is if you’ve ever had the experience of a child saying something that you think of as “out of the blue.” You scratch your head or tell your friends, “I don’t know how she came up with that.” But really it’s very simple: The child’s mind is constantly making connections and identifying relationships, which are unseen by you and which would not occur to you. That’s the wonder of the human brain. Why we don’t trust it more in the context of other data and research always boggles my mind. We tend to dismiss people with a “You just think that” or, “Yes, but that’s just an opinion.” Consider the source. I’ll gladly take the opinion about my gallbladder from someone who’s been practicing medicine for the 30 years, for example.
The great news about developing intuition or gut is that it’s actually easily done, if you’re willing to make the investment of time and study. You do not have to go to an ashram and learn to meditate, which to me only sounds attractive conceptually, so you are in an open space where you can hear the music of the spheres or some such tripe. Rather, developing intuition is about gathering as much information and input as you can in all kinds of forms, and letting your mind do its job. This, by the way, is why the liberal arts are so essential for developing skills that are necessary for business because they allow you to develop, and ultimately draw on, proficiency in all different kinds of disciplines. Indeed, some of the savviest and most successful businesspeople I know did their undergraduate work in the liberal or even fine arts.
At this writing, there are many efforts in the United States to focus primary and secondary education more on skills needed to perform in the current job market. I certainly applaud efforts to teach kids coding, which is one of these efforts, but not because it’s a finite skill. Coding combines both divergent (What all could we do?) and convergent (Here’s what we’ll actually do.) thinking. The flaw with this thinking, however, is that preparing kids for the current job market doesn’t prepare them to adapt when the market changes. Learning Latin, for example, is not a waste of time, though it’s certainly not something used every day. Learning Latin helps kids learn how to learn—to analyze and break something down into its component parts and then put it back together again. When looked at closely in this light, however, the pedagogical benefit of learning coding is very similar to learning Latin. This skill, in turn, becomes part of the knowledge base that can be drawn on in other situations.
You’re not going to dust off Cicero, I know, and you probably won’t sign up for a coding class. But if you want to build your gut or intuitive sense, feed it with as much diverse information as you can. Go to movies and plays. Watch sports. Immerse yourself in the wonderful diversity of culture, and if you can, see it with a child’s eyes when he or she looks at everything as new. And if you’re entering an industry you haven’t worked in before, educate yourself about its history, successes, and failures. Then listen and observe and give your amazing brain the time it needs to make the connections, which, fortunately, isn’t that long. And I don’t want to hear that you’re too old or that if you’d learned Mandarin when you were 2, it would have been possible. I know plenty of people in their 50s and even 60s who have learned new languages, entered new industries, or started businesses. Given the chance, you’ll be amazed at how much your gut or instinct can grow, and you may even have more to say at cocktail parties.
Speaking Of: Let’s Talk About Genius
At some point, every parent thinks little Num-Num is a “genius” and proudly shouts that from the rooftop—or more likely Facebook, which is the contemporary version of that.
And what has the child done to receive such an accolade? Well, probably he or she has done something the parent didn’t think he or she could at that age. Where we see this often these days is in the statement, “My 1-year-old can work the iPad!” Of course the child can. By that age they have the physical coordination to touch the pad and the understanding that if they touch an icon, something will happen. Parents, and especially grandparents, think this is “genius” because the iPad didn’t exist when they were small, so it’s new to them. But it’s not to the baby. They have seen it on a parent’s lap since day one. Of course they’re going to be curious.
I mention this because genius, like intuition, is often misunderstood in today’s world, and certainly in the business world. Calling someone a genius is, on one level, recognizing someone who is extraordinary, but it’s often used as a means of denigrating oneself. I have talked to a lot of people in jobs or in career transition who talk about so-and-so being a genius. Of course, there are many high-profile people who are regularly considered to be geniuses: Steve Jobs, who revolutionized computing, telephony, and music purchasing; Alan Turing, the father of the algorithm and computing science; Jill Barad, who rescued the Barbie brand and drove its exponential growth—and the list goes on and on.
While taking nothing away from any of these people, of whom I and millions of others stand in awe, it may be useful to look at the source of their genius. It was as simple as this: It’s seeing something clearly where others don’t. It’s the ability to see a problem or an opportunity from a different perspective. Think of all the cases where there has been an insoluble problem, and someone comes along and comes up with a solution, after which people think it’s obvious. And that solution really comes from a simple statement, such as “Well, what if we think about it this way?”
Let’s talk about Barad and Barbie for a moment. In the early 1980s, the world was changing, and Barbie was facing all kinds of new challenges from a variety of different toys, yes, but also a changing zeitgeist related to kids of Barbie age, their social world, and their interaction with peers. Barbie play had always been aspirational, as kids projected themselves into the magical world of being a teenager (As seen from a 6-year-old’s perspective; we try not to disappoint them at that age.). Barad re-conceived the relationship between girls and their Barbie dolls in light of how girls were interacting in the culture. The result was that Barbie was not some aspirational icon but rather a peer. Virtually anyone who was a child in 1985 remembers the commercial that did it: “We girls can do anything. Right, Barbie?” What made it work as advertising, however, was not the abstract statement of girl empowerment; it was the “Right, Barbie?” that inextricably tied Barbie to the statement and established her as a peer to the girls who wanted to feel that level of power. Barbie became a focus and a totem onto which girls wanted to project their sense of self as fun and capable—the best possible advertising strategy. Sales skyrocketed, and Barad was hailed as a genius—which she was, especially as we’re defining it. But it’s important to note that it was the willingness to see a legacy brand in a new way that completely revitalized it. It’s also important to note that Barad didn’t do this in a vacuum. She had lots of research and testing to draw on, but it was her leadership, vision, and confidence that propelled the brand forward.
Genius is everywhere in kids. In fact, it’s the very essence of play. But genius is fragile, and it’s very easily socialized out of kids. A kid who thinks of things in a different way may not fit in easily to a group. Adults correct kids who play with a toy in a way other than what was intended. What is free, associative, and open-ended play in kids can be perceived as threatening to parents.
This is the underlying theme of The LEGO Movie, and it really is a must-watch as a way of understanding the power and benefits of play and as a design for living and business. The essential conflict is between a child whose free-flowing imagination admits a full range of possibilities and an order-obsessed adult who wants everything to conform to a rigid design that admits no variation and is literally stuck in place. It’s a wonderful twist by the screenwriters that the villain who wants everything set and unchanging is named Lord Business.
In any business, the potential for genius really is everywhere. All it takes is a willingness to look at things from a different perspective. As we continue to say about play, the imaginative process is one of the most cost-effective practices you can engage in. Welcome new perspectives and new ideas because whether you take them or not, they only make you better.
One other thing about geniuses: They don’t tend to think of themselves in that way. Their insights and ideas come out of their knowledge, how they see the world, and how they approach a challenge. The fact is they simply can’t do it another way. Fostering new ways of thinking is one of the best things you can do for your business. In other words, allow people to play and see what happens.
As with Lord Business, the sense of security and stability may, in fact, be an illusion. Had Barad insisted that Barbie not evolve, it probably would have died out, and if one looks at Barbie’s success over the years, even with occasional dips in sales, the history of that brand is that it has consistently been revived by new ways of thinking about it in the context of a changing world.
Let other people decide whether or not you’re a genius; you just keep playing. That’s the way to move forward.
Stalled: The Pervasive Challenge of Risk Aversion
Just as we said that all you need to be creative is clarity of vision and confidence, the opposite of that is fear and risk aversion. In 2015, risk aversion is a challenge faced by companies at all levels of the economy. It’s understandable. It’s human, and it’s toxic.
Not surprisingly, risk aversion, also known as fear, is the greatest inhibitor in kids’ play as well. In play, at least, we see many kids whose fear of not being successful stops them from trying. We see this in everything from piano lessons to sports to schoolwork. Encouraging kids to take risks—within reason, of course—is critical to their development both in terms of mastery of any given task and self-confidence. The time to learn this is when kids are young and relatively protected from the consequences of their risks as they learn about themselves and their capabilities. Encouraging them to take risks, within reason, and not worry about failing sets the stage for a more fearless future. Unfortunately, we live in a culture today, in the United States at least, where every decision or action a child takes is given tremendous, and largely unwarranted, importance. Kids are guided to the right activities for their school transcripts, for example, by parents who are well-meaning and believe that they’re helping their kids, but who, in fact, are putting so much emphasis on the results that the child is removed from the process. Kids are being put on a track that admits for very little variation.
In 2012, we followed three 11th graders through the college application process because we had been hearing from parents how stressful it was for the kids and the families. This was not any kind of formal study. Rather, we checked in with the young people and their parents at different times of the year. What we found over the course of the year was that virtually everything these young people did was with an eye to how it would affect the college admissions process—from what activities to participate in to sports to trying to determine what community service projects would look best on a transcript. Moreover, any wrong choice—any falling short—was freighted with the fear of not being accepted in college. The pressure on these kids was very high, and no wonder it was stressful. Though our final observations were not scientific, based on subsequent interviews with college-bound students, we concluded they were representative and indicative. The pressure on these young people to achieve college admissions made them risk-averse in that they were unwilling to try anything that could derail their chances, at least for two of them. The most unfortunate part was that they felt the pressure to meet a standard and an outcome over which they ultimately had very little control, and in the process of trying to meet that goal strove to fit into a specific mold rather than discover who they were as individuals. One young woman seemed to feel the pressure less. Partly because she had the confidence to follow her own interests and search for colleges, whether Ivy League or not, that complemented her interests and partly because her parents encouraged her be her own person, she seemed to keep the whole process in perspective. She got into the school she ultimately wanted to get into after she did her own research, by the way, and at this writing is thriving in her sophomore year.
I bring this up because it illustrates a larger issue: From where we sit, risk aversion is becoming a serious problem in our culture, as well as in business. We are teaching it an early age and putting focus on avoiding risk, rather than assessing risk in any situation and plotting a course of action that takes the risk into account. The kid who is afraid that any false move might jeopardize his chances at getting into a good college becomes the kid afraid of not getting into the right graduate school and so forth. Now, you’re always going to see the kid who makes the killer app, who leaves college to create a startup and so forth, but the reason those stories make the news is because they are unusual. Play is a process of sequential discovery, and new action. If we teach kids to play in this way, rather than try to hit a specific target, falling short and, yes, failing, should not be devastating; it should be instructive. My grandmother liked to say, “When the Lord closes a door, he opens a window.” I tend to prefer to think like Indiana Jones who, whenever it looked like it was disaster, always seemed to find a way out. That’s pure play in action.
It’s also the basis for creative entrepreneurship. Talk to virtually any entrepreneur, and he or she will tell you that they made “every possible mistake” getting to where they are. Well, every mistake, perhaps, except one: They never gave up.
In business, risks have more direct consequences, expressed as revenue, career, and so on, but at a certain point, just like pointing one’s skis down the hill, you have to take action if you’re going to get anything done.
I interviewed a recent graduate of the Harvard Business School about the climate of risk aversion she sees around her as she’s trying to establish a startup in business-to-business merchandising. “MBAs make PowerPoints,” she said. “That’s what we do. We make PowerPoints about the PowerPoints we’re going to make because we’re all so risk-averse. We want to build models, and spin out scenarios. That’s what we’re trained to do.” These exercises are about trying to know the unknowable, as we’ve discussed earlier, and really the whole process is about trying to control that which you really can’t control—outcomes of choices and actions. (Cue the nuns singing “How Do You Solve a Problem Like Maria?” here. It’s a nice little reality check that illustrates how much of life is really outside our control.) What you can do is make the choice, take the action, and then respond, as we’ve said previously. Actually, if you think about it, Maria Von Trapp—in life and in the movies—was the antithesis of risk aversion. She responded to each new event as it came up and took action. (You don’t have time to do a PowerPoint if you have to get out of Austria before they close the borders.)
All kidding about The Sound of Music aside, however, like anything in life, risk aversion can be smart. The kid who wasn’t ready to jump between the garage roofs protected himself from injury, for example. The business that doesn’t rush headlong into a new project without a full-scale analysis protects itself from a costly mistake. No person in their right mind is going to take a risk when the preponderance of available evidence suggests that the chances of failure are greater than the chances of success.
At a certain point, though, if risk aversion leads to inaction, the results can be as damaging as a failure because of a missed opportunity—depending on how you look at it.
A mid-sized toy company was dealing with a major retailer, selling them an item that was slowly building sales momentum. Ultimately, it took off and in the last few months of the year, all retailers stocking that item were having a hard time keeping it in stock. The toy company was working feverishly and shipping pretty much round the clock to keep up with demand, which—thanks to some good marketing and a serendipitous and newfound popularity for this type of product—was steadily growing. As always happens in this type of situation, the trick is to be able to keep pace with demand but not over-ship so as to flood the market and kill it. (This happens all the time in the toy industry.) Notwithstanding, every retailer with the exception of one major was taking every piece of merchandise they could get, especially as it became obvious that even with ramping up production to full capacity the toy company would not be able to meet all the demand for product. The sales reps and executives from the company were trying to convince the retailer to take additional product, particularly as his customers were asking for it. However, the buyer refused, saying that they had met their quota for the season and weren’t going to take any more product.
This made no sense to the toy company, and ostensibly makes no sense to anyone on the surface, because we would naturally assume that, with high demand, the opportunity for increased revenue is obvious and in this case virtually guaranteed—that is, until you dig a little deeper and understand what’s truly at stake, which in this case is not increased sales or revenue for the company but the buyer’s performance and bonus.
The way it works is this: A buyer makes a commitment to purchase a certain quantity of product for his department. If that product sells through and achieves its revenue target, the buyer is a hero and receives a bonus and compensation based on the performance of that product against the plan. If the buyer brings in more product, and it sells through and exceeds the plan, then he or she receives a bigger bonus and is considered a huge success. However, here’s where the risk comes in: If the buyer brings in product that doesn’t sell, even by a comparatively small amount, he is penalized for over-ordering. Although this is frustrating to the toy company in question, you can’t blame the buyer. Buying toys has a much greater risk than buying other products because you’re actually putting your business in the hands of the whims of an 8-year-old, which are, as you might imagine, notoriously hard to predict.
The cost to the toy company and retailer in lost sales is potentially significant, though it’s impossible to calculate the cost of inaction, other than to compare incremental sales in other channels and try to calculate what percentage it would be. You could do it, but it probably wouldn’t change anything. In this case, the buyer’s understandable and fully defensible self-interest is where the opportunity is lost. When the risk is too great, action stops, but in this case the action stops because the metrics of success don’t support risk-taking, and in the case of the toy industry, buyers have been burned by irrational exuberance, as it were, because at the end of the day retail buying is far more an art than a science. A buyer who has been burned once, or who has made a bad decision, is going to be more careful.
And lest you think that this is limited to the toy industry, it’s endemic to the entire retail industry in the current market. Why else do we see deep discounts in the last weeks before the Christmas holiday or post-holiday sales—or sales year-round, for that matter? In fact, we have an entire retail structure today that is designed to minimize risk. Sales executives consistently refer to buyers today as “risk managers,” noting that at many retailers the buyer they are dealing with this year was buying in a totally different category six months ago. We hear all the time that buyers today are not merchants, which simply means that they don’t have the in-depth experience of a category over time to know whether something has a good chance of working or not. In other words, they have no intuition and instead are forced to rely on spreadsheets and data that may or may not apply to a given product or product category.
I don’t mean to jump all over retail buyers here. Those I’ve met are great people who earnestly want to succeed and do the best possible job, and quite frankly, more than a few seem to be at sea. If you’re buying a commodity product one day that has a fairly predictable year-over-year performance and are thrown into a fashion business the next that is dependent on completely different consumer purchasing experience, what will you fall back on? You’ll fall back on what you know and what has served you in the past, and in most cases that can be a data set or measurements that may not be appropriate for the challenges at hand.
Though I’ve used retailing as an example, you’ll see this type of disconnect throughout businesses. What I’m talking about are the problems created by institutionalized systems that don’t take into account the variations in different parts of a business.
The net result is that risk aversion kills innovation, certainly among some large companies because they are often so intent on hitting short-term goals in sales or revenue, often to please Wall Street and shareholders. Of course, there are many companies that invest in research and development (pharmaceuticals and chemicals spring to mind), but whether to invest or not in extensive R&D is a tough call for many companies. In the toy industry, though there have been changes in recent years, most companies are looking for others to do the research and development and even the initial sales prior to picking something up and taking it to the next level in terms of production and distribution.
There is still plenty of innovation happening at smaller companies, and it happens because people are passionate about an idea that they are putting into action, and their benchmarks are different. Most importantly, though, their approach to risk is different. The ability to play and see where the ideas take you—to take action within the parameters of a vision or a concept and the market, and without a benchmark that must be hit at all costs—is what can inspire truly play-full innovation.
Picking Your Playmates: Job-Hunting and Hiring
Answer this question as truthfully as you can: When you were in kindergarten, how long did it take you to figure out who you wanted to play with? Ten minutes? A couple of days? Maybe, if you were pushing it, a week?
When you started dating, how long did it take you to figure out if you wanted to go out with someone? Did you ever, as the song from South Pacific goes, “see a stranger across a crowded room” and know you wanted to know them better?
Humans are just naturally attracted to certain other humans for a lot of reasons we don’t understand. Sure, you can sign on to a dating site and fill out a questionnaire, and let an algorithm pick a date for you. You can read about pheromones or the “art of attraction.” There’s even speed dating, which lets you meet a lot of people in a short time to see if something clicks. Or you can just meet people and get a sense that you like them and perhaps you want to see them again. What all of these have in common is that they reinforce that attraction is somewhat subconscious and a decision relatively quickly made.
One of my closest friends and I became friends, at least as I recall, in a very short time. At church school. In first grade. We grew up together and have stayed close our entire lives, all brought about by a few moments of play. Decades later we still enjoy each other’s company and have a lifetime of memories and connection.
I bring this up because as I interview executives about work, I hear more stories about the difficulties and frustrations in identifying good candidates and hiring than any other single topic. Although this is only one part of running a business, it is also probably the best and most visceral indication of why and how the principles of play need to be applied in business today. The freedom to be oneself and draw on all of one’s talents and experience in creating things, whether imaginary or tangible, is the essence of play. In the hiring process, we see what is perhaps the most human element of business—deciding who you want to play with—is being limited to data sets and risk aversion. The problem is, of course, that believing there is an absolutely perfect solution that is empirically demonstrable in such a sloppy and unpredictable area as human behavior is not merely the illusion that you can create a data set to know and predict something with as many unknowable variables as a human being; but that one also shortchanges and short-circuits one’s own confidence and trust. This can start a cycle of doubt and distrust that feeds on itself and is the antithesis of play, which draws on all of what makes us human, both conscious and unconscious. I am in no way suggesting that you throw out data and information because, as discussed earlier, this is part of what feeds our choices—but only partially, because to be most effective, it has to be used in the context of a more comprehensive, creative, and yes, imaginative experience.
Because hiring is such a hot-button issue, it’s a great example of what happens when the play, or human, elements are discarded. I hear tales of woe from both sides of the hiring desk. Applicants are baffled why it takes 13 interviews or more to be considered for a job, only to be turned down. Executives looking to hire say that they need to be sure they’re making the right choice. Nobody wants to make a bad decision because it’s expensive and can reflect poorly on the person making the decision, so the process becomes drawn out and great mountains of paper or megabytes of data are brought in to defend a choice. This is especially true at the higher levels where there are employment contracts, relocation, and other factors coloring the decision. But should it take 10 to 13 months to fill a vice president position? And does anyone calculate the costs related to that? We’re not talking merely about the costs related to lost opportunity in the company of having a major gap in its management team. We’re also talking about the cost to the applicants to take time off and pay for flights for initial interviews if they’re not local, and the stress of waiting to hear, pass up other potential opportunities, and so forth.
Executive recruiter Amber Shockey, who specializes in the legal field, told me in an interview that she believes that the process really should be more like “looking for a friend on the playground.” She says, though, that today the process can become complicated by the availability of too much information. When your pool of potential friends was limited to the other kids in your class, you had to make your choices based on what was available to you. This has been less true since the 1960s, when moving to take a job began to become more commonplace, through today, where the prevailing attitude is “I’ll go where the job is,” which is both the reality and the expectation today.
Shockey says that online services like LinkedIn can complicate the process, certainly for a recruiter, because the client will already have been through 100 profiles by the time she’s called in. Additionally, she says that there is a prevailing belief that the perfect applicant can be identified statistically—that through the sheer force of data, it’s possible to find the exact right person who fits the role. Shockey is not alone in this belief, but when did you ever create a spreadsheet to decide if you wanted to have coffee with someone? And don’t tell me it’s not the same thing; it is. We’re talking about human connection here. Shockey adds that the belief that data can solve the problem can lead to information overload and the loss of the human element that’s essential to any good hiring decision: “Clients want to see that I’ve called 100 people, and how those people replied. If I send them 25 prospective clients, they also want to know how another 25 responded.” Shockey says that level of data is ultimately counter-productive and that the availability of raw information allows people to depend on data to give them the right answer. “It also means that companies believe that due to the plethora of information that’s a few clicks away that they can see every possible candidate out there, so we have to find the best candidate out there,” she says.
Of course, this is impossible in such a human business as hiring, and the volume of data provides a false sense of security that making a hiring decision can be quantified when it cannot. However, “all the left brain stuff has squashed the right brain,” Shockey adds. What this also largely prohibits is a fluid hiring process or an ability to rethink what you want for a position based on applicants who may show up.
When I was involved in an interview process when I was still fairly young, I was interviewed by a marketing agency, and it was going pretty well, though I had the undefined feeling that there wasn’t a great fit for me there, though I couldn’t say why. At one point in my third interview, the person who would be my boss asked, “How hard do you work?”
“I don’t understand the question,” I replied.
“Well, we get here at 7 in the morning and we work till 7 at night” was the response. “Can you do that?”
“So, you’re asking for a quantitative answer to a qualitative question,” I asked. The interview ended pretty quickly thereafter, most likely to the satisfaction of both of us, and I wasn’t offered the job. What I learned in that moment was nothing that can be quantified in data: that there probably wasn’t a good fit between that company’s culture and me. Several years later I had to interact with the company on another project, and my feeling was confirmed. The people I worked with were competent, personable, and good at their jobs, but they were very much convergent thinkers, whereas I tend to be more divergent in my approach. The company and I both dodged a bullet. To put this in terms of play as we’ve been discussing, after a few moments on the playground, we realized that we weren’t going to become best friends and went our separate ways.
This was many years ago, and I was probably more arrogant than was appropriate, but in talking to executives who are searching for vice president positions and above, the desire to quantify a qualitative process is stronger than ever.
Shockey and others say that very often when companies are hiring, they want to find someone who has already done the job they’re looking for—who hits “every bullet on the job description.” The flaws in this should be obvious. You can’t be playful or entertain other possibilities that might be beneficial if you’re tied to a rigid job description. I have a close friend who has been single for several years, and is really eager to get into another relationship. However, she has a list of criteria that the prospective boyfriend has to fill, and if he doesn’t, he’s off the list. Some of these are practical and would be deal-breakers for anyone, such as no felony convictions or drug problems. Others, not so much—such as a sense of style and acceptable models of cars that he drives. I try to point out that she leaves very little room to be surprised by something unexpected this putative mate might bring to the table, or perhaps he drives an inexpensive car out of an approach to life and material possessions that she might find appealing or complementary, but she’ll have none of it. And so, she keeps looking.
A senior executive we interviewed was in the running for the presidency of a privately held company in an industry that had, at most, four or five major players. After going through the initial interviews, getting through the headhunters and the HR people at the company, he finally began meeting the people who could make the hiring decision. Ultimately, the executive was one of three people still in the running for the job. He had been asked to create a strategic plan and a vision for the company for the next five years, which he did—without compensation, by the way. His proposal was full of charts and graphs, category analyses, and projections. It had taken a huge amount of time, and it’s something that a company would have most likely paid a consultant tens of thousands of dollars to do. At the end of this process, the executive was told that he was the best candidate they had seen, but they weren’t making an offer because he hadn’t done this job before and didn’t have direct industry experience. He had worked in related categories and had demonstrated an ability to expand lines and increase revenues, but he didn’t have the one thing that would have made the CEO feel comfortable about hiring him. More than a year later, the job still isn’t filled. Out of all the potential candidates out there, there may be only three or four who have that exact qualification, and they weren’t looking to move.
This is the reality of the job-hunting market today, and it’s not going to change overnight. In addition to scenarios like the previous one, we hear about having to get through a machine before even talking to a person. Optical scanning of resumes is a reality, but it’s not necessarily a detriment. You can learn to create a more scanner-friendly resume (more active words, more words that indicate results, and so forth). You also have to deal with the reality of potentially making lateral moves and/or trying to move up in your company where you already have the relationships and the trust. It is a strategic game, and you owe it to yourself and your career to play it well. (See Chapter 9 for more on this.)
What you can’t replace is the imaginative process. No machine can do that yet, just as no person is going to be everything you want. That’s why you have a team of people to leverage the best of each one. Do you expect your spouse or partner to be everything to you? If you do, then you’re bound to be disappointed because, quite frankly, no one can do that. In a relationship you say, “I love how he treats me, even if he does drop toothpaste in the sink.” There always needs to be a version of that in business as well.
The two best hires I ever made didn’t look right on paper. One, however, was one of the best marketing writers I had ever met, and I realized that she could learn our business easily, but what we needed most of all was a good writer. The other at age 30 was embarking on her third career. She had the basic skills we were looking for, but what she had that was most impressive was that she had demonstrably succeeded spectacularly in every job she’d had. The kind of person who is going to throw themselves passionately into the project was exactly what we needed; the rest could be learned. I’m happy to say that the first is extremely successful and still in the field. The second, after expanding the company in New York and opening an office in LA, because she rightly predicted growing opportunities there, decided she wanted to make documentary films, yet another new career. She’s won several significant awards for her work. Neither of these people might look right on paper, and indeed, I had to fight my bosses to hire both, but I never regretted it, and we were successful and had a lot of fun along the way, even when things were difficult.
As Shockey says, if you’re going to be effective in either hiring or looking for jobs, you can’t allow information to suppress your gut feeling. If one is going to be completely honest, for all the data you collect, the final hiring decision is based on your imagination. You may be more informed about the person, you may be able to have information that allows you to make predictions in which you feel fairly confident, but can you really know? Of course not.
Your final decision is going to be based on how you imagine the person doing in the job. Just as when you accept a job, you imagine how you’ll be in it. But as we continue to say, all reality—like all play—begins in the imagination. It may make you feel better to be able to say you “know,” but really you’re just imagining.
We don’t have a solution, and we know that we’re not going to be able to change entrenched policies and practices, but we do have a question. If you accept that your decision is significantly based on imagination, why not go for it, and imagine something bigger than you would have? At least experiment with taking your fear out of the mix and think of the possibilities. That’s how play works.
Balancing Risk and Action
American naturalist John Burroughs said, “Leap and the net will appear.” This has been appropriated by all kinds of people who use it in different styles of management training to encourage risk-taking. It’s nice if you’re trying to turn your office into a Zen sacred space or something along those lines. The saying also makes a very nice refrigerator magnet or a poster with a kitten or rainbow on it. But any child engaged in active play knows that if you leap without a plan, or a sense of what you’re doing, you may splatter on the sidewalk—and that’s true whether we’re talking literally or metaphorically.
I know that what this saying is really trying to do is encourage people to trust their vision and belief in what they’re doing. I’m definitely all for that. However, there is, or should be, a lot of looking before the leaping. Leaping too soon can undermine a workable idea. Leaping too late can mean a missed opportunity. And there are times when leaping is the only choice, and you have to hope for the best.
A few years ago, I was asked to consult for a woman who had established a company to sell the extract of a rare Andean cactus in Los Angeles. This extract was purported to have miraculous healing powers, which she had plenty of documentation to support. Red flag number one: None of the testimonials were medical, but because the supplement business is largely unregulated, and there were no plans to make medical claims, it could work. She had formed a company, and planned to position the extract as having shamanic powers that would cure the body and the spirit. It was actually a pretty cool story, if you buy that kind of thing, and there is a niche market that does. I have rarely encountered anyone so passionate about a business, but here’s where she leapt too early: The cacti were extremely expensive, and she had driven nearly 300 of them back from Mexico, where she had bought them from a dealer, and had them on the patio of the house she was renting in West Los Angeles. The cacti were small and had to grow, which was the first part of her plan. (I didn’t ask what they cost or how she got them through customs.) Passion, however, collided with practicality. With a large part of her capital tied up in the cacti, which she then had to keep alive, and no plan to be implemented, she was stuck. Meanwhile, the cacti died, as did the business. Clearly, this was someone who was willing to take a risk, but the risk was calculated incorrectly. Knowing when to take a major step back before you leap is an essential tool, and as passionate as you may be, you need to surround yourself with skeptics who will challenge you and keep you focused. Mine was actually the first questioning voice this woman had heard as we tried to structure a business from the various pieces she had. Ultimately, it didn’t work.
In the mid-1980s, game designer Frank Coker created a game called The Next Empire. It was before the Internet, obviously, and, as Frank describes it, there were only two ways for people to play games together. One was the traditional way, which was to get a group of people together in a room to play. The other was a then-popular format, long forgotten now, called Play by Mail (PBM), games that ultimately evolved into Massive Multi-Player Online Games (MMOGs). Coker and his co-developers had invested huge amounts of time in developing the game, the mechanics, how to play, and the computer program that would calculate how players were doing. Each player would get a turn in the mail, which would take about three hours to complete. They would send it in, and the people running the game would put all the turns into the computer, and send back the results and what you needed for the next turn. The object of the game, as with most games of this nature, was to be the last ship left alive.
After nearly a year of development and extensive play testing, the game was two weeks away from production. Manuals (remember, this was the age of paper) were at the printers—and there was a glitch.
“We went through the last play test—a ‘round-the-clock session from Friday to Sunday in a hotel suite—and a point came up that was fundamental to the game play. Almost unbelievably, it was one that hadn’t come up in all the previous development and testing of the game,” Coker told me when I interviewed him. “I was with all the other play testers, and we realized that if we changed this one point, it would be a better game. Changing it at the last minute, though, would be expensive, and there wasn’t time to test this new variation. This is when your instincts and listening to people come into play because given the consensus that we would improve the game if we changed it, we went ahead.”
Coker got the game to the trade show, and out into the market. And, as he says, against all odds and logic, it was named game of the year by one of the leading magazines covering Play by Mail games.
In taking this risk, Coker stresses that he was able to because of everything that had gone before in the development process. It was a crisis point in the project, and he says, “This is when both trusting your own instincts and listening to other people comes into play.”
Creating a climate of intelligent risk is absolutely critical to move business ahead, particularly in the contemporary market. As times to market get shorter and competition gets stiffer and more cutthroat, markets become more narrowly defined and opportunities shorter; an ability to respond to changing dynamics becomes more critical than ever.
One of the most effective ways to do that is to surround yourself with people who will question everything—who will help you play out the story and consider various outcomes. This can be difficult in some work environments (as we’ll discuss when we talk about business cultures), but it’s critical. Coker and others stress the need to surround yourself with people who will challenge you. “I think it’s more valuable for people to tell you what’s wrong with your product than what’s right,” Coker says. “It’s great to get the strokes and feel good about something you’ve done, but it’s more necessary to hear what’s wrong.
“And you can’t argue. You need to take in the criticism and not argue. If people have problem with something, you had better listen. I go around continually during the design and development process and ask people to tell me what doesn’t work, and then we constantly make adjustments. Many times I’m not happy with what doesn’t work, but too bad.”
In his situation, Coker had to take the action even in the face of significant risk. Not to make the change would have made the game less successful, and to wait until he had had the time to test the change would have missed the window. This is a situation where he leapt at the right time. If the net appeared when he leapt, it wasn’t by magic; it was by drawing on the accumulated knowledge of the process and experience. That may be a little less romantic than magic, but it gives better odds of success.
Rethinking Failure
As I hope has become abundantly clear at this point, if we’re going to successfully integrate the principles of play into more effective and innovative business, we have to rethink the concept of failure on a cultural basis. Yes, there are times when failure is bad—a Broadway show loses all its investment, a business crashes and burns, and so forth—but we’re talking about financial failure in that context.
Active failure as a part of developing experience, as Coker describes, however, is a critical part of play. Failure is an inevitable part of the process, and as a culture, we need to understand the role of productive failure in the development process of anything we undertake. We need to reshape the conversation, to focus on what’s learned in the process as a way to get to a result rather than each failure being interpreted as bad because it didn’t get the result on the first try. As noted, what kid really expects that?
However, we live in a culture that permeates business as well, where the emphasis is on the result rather than the process. Too often we teach children that failure is somehow a defect not of action but of character, and this instills risk aversion almost from the cradle.
But if you think about it, more things fail than succeed, as we’ve described. If you’re willing to ask “What if?” you have to be open to the possibility that the answer isn’t what you’re hoping.
Just as we’ve defined what winning is so we know if we’ve done it, we also need to define failing in the same way. Like the kid working on perfecting that skateboard jump, we have to see failure as exciting, informative, and inspiring.