Soren Kaplan: An interview by Bob Morris

Soren Kaplan is the author of Leapfrogging and a Managing Principal at InnovationPoint, where he works with organizations including Visa, Colgate-Palmolive, Medtronic, Disney, Philips, PepsiCo, and numerous other global firms.  Soren previously led the internal strategy and innovation group at Hewlett-Packard (HP) during the roaring 1990’s in Silicon Valley and was a co-founder of iCohere, one of the first web collaboration platforms for online learning and communities of practice.  He is an Adjunct Professor within the Imagineering Academy at NHTV Breda University of Applied Sciences in The Netherlands.  He holds Master’s and Ph.D. degrees in Organizational Psychology and resides in the San Francisco Bay Area with his wife, two daughters, and hypo-allergenic cat.

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Morris: Before discussing Leapfrogging, a few general questions. First, who has had the greatest influence on your personal growth? How so?

Kaplan:  Hands down, it’s my wife.  Personal growth is all about looking in the mirror, uncovering your unquestioned assumptions, and gaining empathy for others so you can do things differently.  My wife’s the best at pushing me to do these things!

Morris: Years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.

Kaplan:  My family and I went to Paris for a year so I could focus on writing my book. We experienced a lot of things. We put our kids into public school even though they didn’t speak French. We travelled around France and other parts of Europe. We experienced a lot of different personal surprises during that year ranging from food to culture to people.

One of the big epiphanies I had was walking into a little café called Caféotheque to work on my book. I didn’t realize at the time that of the 35,000 cafés in Paris it was ranked the #1 coffee spot. It was unlike any other café. There were no French waiters with white aprons, outside seating with high cane back chairs, or French food. But the owners had done something that truly changed the game for what it means to be a café in Paris. As I sat in the café I was surprised by how they were running their café. There were a lot of elements which made it a game-changer.

The fact that I had stumbled into this café which was a breakthrough while wanting to write about innovation made me realize that I needed to do some research about surprise. So I then researched surprise. I talked to leaders who I felt had really changed the game so I could understand the back-stories of their more public success stories. I discovered that the whole notion of surprise is an unspoken but critical ingredient to breakthrough innovation. The information about the leaders’ personal surprises led me to some bigger research, thinking and theories about uncertainty and surprise.

Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?

Kaplan:  I studied Organizational Psychology, which is all about how people and teams collaborative and work together.  Early on I was working in marketing, business strategy, and innovation.  I didn’t see the overt connection.  Now I realize that organizations are really just groups of people all trying to work effectively together to make meaningful things happen.  I think my education underlies everything I do.

Morris: What do you know now about business world that you wish you knew when you when to work full-time for the first time? Why?

Kaplan:  Certain areas of business need to be formulaic with detailed processes where you want to minimize uncertainty.  The thing I wished I knew earlier on is that this mindset pervades just about everything in business and leadership, but when you’re going for breakthroughs or charting uncharted territory, relying on a set formula can be your downfall.  It’s about fast learning, iteration and even accepting small failures.

Morris: Of all the companies that you have observed, which – in your opinion – best illustrates how important it is to reconsider assumptions when encountering unexpected developments? Please explain.

Kaplan: There’s often an assumption that if we were to take all the right tools, templates, methodologies, and analytics and put them into the big corporate meat-grinder then the result will be innovation. I suggest that big breakthroughs, which change the game and challenge assumptions, are not as formulaic as those who believe in standard business rules and processes want to believe. There is certainly a set of leadership competencies that can be taught and learned, but they’re different from what is been trained for today. Things like balancing data analysis–what the data is telling you–with your intuition and your gut and being able to take steps that combine data with gut, data and intuition, and become open to what Scott Cook of Intuit calls ‘savor surprise’.

Here’s the example.  In the 1990’s, Intuit introduced a software program called Quicken to balance checkbooks at home. But kept hearing that small businesses were using this software, which they believed was impossible because small businesses need real accounting software. The leadership team at Intuit ignored this data for over a year. When they decided to look at this ‘pop-up guidepost’, this surprise, they realized that small businesses were using their software incorrectly because they didn’t like accounting. They didn’t know how to do real accounting for their businesses. They didn’t start their businesses to be accountants, and so they were using the wrong software because it was simple.

Intuit had also assumed that the market for the provision of software was saturated, but they realized that maybe it wasn’t. So they revisited their assumptions about why small businesses were using their software, and about the related market opportunity. When they introduced QuickBooks and within 3 months they had captured 70% market share.

Because they opened up to surprises, they found a big opportunity that might have otherwise been missed.

Morris:  From which non-business book have you learned the most valuable lessons about business? Please explain.

Kaplan:  The Art of War by Sun Tzu is a true classic and contains various references on how to use “surprises” in business.  I also like the most recent book by Jim Collins and Morten Hansen called Great by Choice which turns conventional thinking on its head by showing that luck (yes, luck!) is a key factor in business success.

Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-Tzu’s Tao Te Ching:

“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”

Kaplan:  I love this quote.  In my first job running innovation programs for Fortune 500 companies, we used to say that “people support what they help create.”  Great leadership is all about catalyzing other people’s leadership!

Morris: And then, from Oscar Wilde: “Be yourself. Everyone else is taken.”

Kaplan:  When living in Paris, I took my kids to the Pere Lachaise Cemetery and we stumbled across Oscar Wilde (his headstone, not him personally).  He was an amazing author and I also love this quote.  To me, this says that we all have our own experiences and we need to embrace them.  If we don’t, no one else will.

Morris: Finally, from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Kaplan:  Exactly.  Strategy is as much about what we shouldn’t do as what we should.

Morris: Here’s a brief excerpt from Paul Schoemaker’s latest book, Brilliant Mistakes: “The key question companies need to address is not ‘Should we make mistakes?’ but rather ‘Which mistakes should we make in order to test our deeply held assumptions?'” Your response?

Kaplan:  I’m a big advocate for smart failures.  In fact, a smart failure isn’t a failure at all but rather an opportunity to test assumptions and learn something new.

Morris: In your opinion, why do so many C-level executives seem to have such a difficult time delegation work to others?

Kaplan:  It’s all about control.  Many people fear uncertainty so they rein everything in they can.

I did a search in Amazon for management books with the word “surprise” in the title when I was writing Leapfrogging. Every single one of them is about how to avoid, minimize, or prevent the phenomenon. We have trained ourselves and reinforced the notion that uncertainty is bad, and surprises, which are the core essence of uncertainty, are the enemy.  The problem is that I also found that how leaders deal with uncertainty and embrace both good and bad surprises is a key success factor in breakthrough innovation.  Delegating work to others is extremely difficult when we’re fearful of experiencing surprise.

Morris: In recent years, there has been criticism, sometimes severe criticism of M.B.A. programs, even those offered by the most prestigious business schools. In your opinion, in which area is there the great need for immediate improvement? Any suggestions?

Kaplan:  Few business schools really help aspiring leaders to learn to live with uncertainty, use ambiguity as a tool, and savor surprises when they happen.  These things are facts of life, and business.  We need to help leaders understand the power of surprise.

There are two dimensions of the power of surprise when it comes to innovation and leadership. When you look at the kinds of breakthrough products, services, and business models which the world appreciates and which adds value to our lives, oftentimes our first experience of them gives us a feeling of surprise. This is one dimension of surprise. Consider the iPad or the first time you went to the Cirque du Soleil. You get a feeling of positive surprise from business breakthroughs. They can be things that entertain us, make us more effective, save money, make money, or whatever.

The second dimension of the power of surprise is the notion that in order to create the kind of breakthroughs that add value to the world and positively challenge our assumptions, we need to go through a process where we live with ambiguity and experience uncertainty. We have to open ourselves up to the positive and negative unpredictable events that will inevitably come our way during the process.

Most business schools are structured around the assumption that if we have all the right tools, templates, methodologies, and analytics and put them into the big corporate meat-grinder then the result will be innovation. I suggest that big breakthroughs, which change the game and challenge assumptions, are not as formulaic as those who believe in standard business rules and processes want to believe. There is certainly a set of leadership competencies that can be taught and learned, but they’re different from what is been trained for today. Things like balancing data analysis–what the data is telling you–with your intuition and your gut and being able to take steps that combine data with gut, data and intuition, and become open seeing and responding to positive and negative surprises. Most business schools are all about eliminating the possibility of surprise.

Morris: Looking ahead (let’s say) 3-5 years, what do you think will be the greatest challenge that CEOs will face? Any advice?

Kaplan: Things will get faster, more uncertain and more competitive.  CEOs will need to help their entire organizations learn to embrace uncertainty and respond quickly to unexpected customer comments, technology developments, competitive moves and other events.

Morris: Now please shift your attention to Leapfrogging. When and why did you decide to write it?

Kaplan: I had worked in the area of business innovation for over 20 years.  I knew deep down we’ve been missing a critical variable, so I wanted to write about the deeper leadership experience and process in creating game changing innovations.  But it wasn’t until I stumbled into that little Parisian café that I realized it was all about the power of surprise.

Morris: Were there any head-snapping revelations while writing it? Please explain.

Kaplan: Surprises are happening all around us all the time.  We just need to know how and where to look!

Morris: To what extent (if any) does the book in final form differ significantly from what you originally envisioned?

Kaplan:  I originally scoped out a book about leadership and innovation, but it was all about new business models in today’s service economy and what leaders need to do to create them.  It was quite analytical in fact, looking back and actually missed a lot of the insights that run counter to how we think about good leadership today – and that are now core to Leapfrogging.

Morris: To what extent (if any) does a “significant leap forward” differ from a “major breakthrough”?

Kaplan:  Breakthroughs can sometimes be limited to ideas, whereas a leap forward suggest really doing something different that has impact or ads value.

Morris: For those who have not as yet read your brilliant book, what is the special significance of an experience you had at “a little café,” Caféotheque?

Kaplan:  Thanks for the brilliant comment!  Without that experience I wouldn’t have experienced surprise myself, and I wouldn’t have uncovered the research and linkages that exist between surprise and breakthroughs and innovation.  Looking back, that experience shifted my mindset which shifted the entire focus of the book.

Morris: Why are surprises “ the most predictable thing in business”?

Kaplan:  If you ask any business leader whether today’s environment is more or less predictable than ten years ago, most will say things are much less certain.  Things happen all the time we can’t anticipate.  And this is especially true when we’re going after game changing innovations and charting new territory.

Morris: In the Introduction, you quote Gary Hamel: “In an age of wrenching change and hyper-competition, the most valuable human capabilities are precisely those that are least manageable.” Presumably you agree.

Kaplan:  Hamel is talking about the importance of the intangible aspects of what makes great employees and leaders.  It’s not necessarily the analytical stuff.  In many respects, the soft stuff if the hard stuff and those who are best able to manage the soft stuff become the most innovative and biggest contributors to success

Morris: Here’s another of several statements of yours that caught my eye: “…some of the most important underlying leadership dynamics and secrets to breakthrough success are systematically hidden, since the very nature of creating business breakthroughs involves experiences that are pervasively considered to reveal weakness – including admitting to being surprised.”

Which “underlying leadership dynamics and secrets to breakthrough success are systematically hidden”? By whom? Why?

Kaplan:  Most leaders don’t like to talk about when they were caught off guard.  They believe it can be seen as a sign of weakness, like they weren’t sufficiently leading or managing.  Even saying this now sounds so self-evident, but it’s so obvious that it’s taken for granted.

When something bad happens like a “negative surprise,” it challenges our mindsets because in business there is an assumption that anything that falls outside of the plan is bad. Anything negative–a negative surprise–is typically seen as bad because it disrupts our plans.  On the surface, this makes perfect sense.

But a lot of the stories about breakthroughs in my book demonstrate that it’s actually those unpredictable events that give us the insight about our direction needing to be shifted. It’s those negative surprises that give us the insight to do something different that allows us to get to the breakthrough.

Leaders have an opportunity to share stories, point to examples, and highlight instances where unpredictable things led to shifts in thinking that led to innovation.  It happens all the time but we’re trained to believe that great leadership is about the big vision, a set of strategies and plans that get you from point A to point B without deviation.

Morris: You assert that surprises “are guideposts to new directions and capabilities.” For example?

Kaplan:  The idea behind ‘pop-up guideposts’ is that unpredictable things will inevitably happen as we’re moving to create breakthroughs. Whether these unpredictable things are positive or negative we have an opportunity to interpret their meaning, and by interpreting their meaning they can oftentimes help us revisit our assumptions. If we can revisit our assumptions successfully, then we can modify our plans. If we can then modify our plans, we can do things differently and move closer to creating the kind of innovation that will surprise the market.

A great example of this in the book is Four Seasons.  In the mid 1990’s, Four Seasons needed to get on the internet, a risky endeavor for luxury brands at the time since the net was all about discounts.  With a focus on the upscale business traveler, Four Seasons launched a website loaded with high quality photos and an 800 number to a special customer service line.  The brand stayed true to its values by focusing on elegance and simplicity.  No clunky online reservations tools using early technology or bargain basement discounts were part of the equation.

Within a few months, Four Seasons executives learned that customers were using the site in unanticipated ways – not by finding a single hotel and making a reservation but by spending a surprising amount of time surfing images of its most luxurious properties.  Four Seasons’ reservations group also reported that large numbers of guests were calling in to discuss vacation options, something that hadn’t happened before.

About the same time, the first-ever Wall Street analyst report comparing hotel websites was issued and Four Seasons ranked #1.  The reason why? “Spending time on the Four Seasons website makes us feel like we are already on vacation,” said the report – somewhat of a shock to a brand focused on the business traveler.  These little surprises confirmed a big opportunity that helped inspire leadership to expand globally as Four Seasons Hotels and Resorts

Morris: To what does the acronym, LEAPS, refer? Also, what is the special significance?

Kaplan:  I wanted to ground some of the higher-level concepts of uncertainty and surprise, which can feel a little bit esoteric, in a practical model. The LEAPS process looks at the different phases that an individual, team, or organization goes through during the process of creating a breakthrough. Bear in mind that the path to breakthroughs is an incredibly complex one with starts and stops, successes and failures in each phase, and phases that can overlap and even repeat themselves. But a simplification helps our understanding.

“Listen” is the first phase which involves finding “Sparks of Surprise.” In this phase we get a sense there is a need, problem, or opportunity. The other phases are ‘Engaged Exploration’ which involves ‘Exploring’ outside our comfort zones, ‘Act’ where we take steps to learn what works and doesn’t, ‘Persist’ where we have to take the surprise out of failure and move through what I call ‘The Failure Zone’, and ‘Market Surprise’ where we ‘Seize’ the fruits of our labor, optimism grows, and bigger wins occur

Morris:  Please explain the title of Chapter 4, “Listen: Start with Yourself, Not the Market.”

Kaplan:  The idea of starting with yourself and not the market is a bit counterintuitive when it comes to innovation.  Most people say to start with customers and their needs and then innovate for them.  But when you look at Apple who created iPods and iTunes because they, themselves, wanted something cool that didn’t exist, you start to realize that the market can’t always tell you what it wants.

Target did the same thing.  Robyn Waters, the person who helped transform Target into “Tar-zjay” told me that they never did market research.  They decided they wanted to lead the market with great design.  No customer ever told them they should partner with Philippe Starck to create amazingly beautiful products.

Morris: How and why can holistic thinking help to reveal some of the best opportunities to leapfrog?

Kaplan:  Holistic thinking is all about stepping back from the data – at least for a while – to see the big picture.  If you’re looking at data trying to find the big opportunity, you’ll never find it.

Morris: Please explain how and why to “go outside to stretch the inside.”

Kaplan: Great question.  Research shows that the problem-solving skills and creativity levels of individuals who have lived in two or more cultures versus those who have never lived abroad.  The findings from the research demonstrate that when individuals are forced to confront competing assumptions and norms through living abroad, the boundaries of their assumptions and related defenses soften.  The concepts of “the right way” versus “the wrong way” break down. Instead of responding to a challenge like a deer in the headlights, they see connections and patterns that most others don’t see and find the most creative opportunities.

Leaders who possess a track record of pushing their own personal boundaries are best equipped for tackling the gray areas.  These individuals stretch their comfort zones by taking on roles spanning different functions, working across diverse industries or living in different cultures.  As a result, they’re most comfortable taking themselves, their teams, and their organizations out of the proverbial corporate comfort zone and into uncharted territory.

Morris: How best to “take the surprise out of failure”? Is it really failure?

Kaplan: There is research on this topic too, which looked at the difference between professional entrepreneurs and professional corporate managers. They found that entrepreneurs get their ideas out as quickly as possible even if not fully baked. They want to get inputs from anyone and everyone which challenge their assumptions so they can quickly revise their plans as well as their products and services. It’s all about trial and error, and learning. If you take an entrepreneurial mindset, by failing you’re actually testing your assumptions and learning.

On the other hand, when corporate professional managers went after a new opportunity they came up with a one-year vision with goals, an annual plan, and they tried to project everything that will happen. The believed the plan would, or should, go from A to B.  With this approach, anything that is unpredictable, which falls outside of this plan, is seen as a failure and is treated as such.

We need a new mental model about what it means to innovate. It’s all about taking the smallest steps possible to have the greatest impact on your assumptions and your learning.  And this is all about going outside to talk to customers, partners, colleagues, friends, family and anyone else who can challenge your assumptions

Morris: Please explain how and why humility “is the door to predictable surprises.” Predictable?

Kaplan:  There are a couple of dimensions to your question. There’s the personal leadership dimension. When you look at what it takes to be open to surprises—the good and bad things–and think of them as opportunities to challenge your own assumptions and learn, it’s all about humility. It’s about recognizing that we don’t have all the answers so we need to listen to anyone and everyone. There’s research which shows that many entrepreneurs will take input from anyone and appreciate the value of what they’re seeing and experiencing about all things. It’s about keeping our own accomplishments in perspective.

Of course, there are practical things that we can do to find surprises and pro-actively experience them. This is what the LEAPS Model [leapfrogging life cycle] goes into regarding “Engaged Exploration’. Exploring means getting outside of our comfort zones and doing all the things in terms of pushing your own boundaries. As I previously mentioned, you do this by living in other cultures, and talking to customers and non-customers. It’s done by looking at the negative things that happened to you which might feel like setbacks. If instead of resisting and fighting these negative things, you should try to be open to seeing what they’re telling you about your own assumptions, how you need to do things differently, or what opportunities they reveal.

Morris: What can motivate us to take full advantage of the surprises that humility reveals?

Kaplan:  You don’t necessarily need to have humility to be financially successful or successful in business.  You also don’t necessarily need to have humility to be a successful entrepreneur, but I’ve found that a lot of the stories told by entrepreneurs and my own personal experience indicate that you’re better able to respond to the unpredictable things that happen if you’ve got a sense of humility. This notion of humility is reflected in a lot of the stories about entrepreneurs included in my book.

Researchers and experts who have been writing about it such as Jim Collins in Good to Great and more recently in Great by Choice, talk about humility as a leadership trait. They also talk about luck. Many successful leaders attribute both good and bad luck to their success. So there is a recognition that leaders are not fully in control. There’s a dimension of unpredictability in their success stories, and when we recognize this as an actual success factor, we’re better able to take full advantage of surprise as a strategic tool for innovation.

Morris: Please explain the title of Chapter 9, “Bring It Home.”

Kaplan:  I wrote this chapter to help summarize the key points about the power of surprise, but also to convey that harnessing the power of surprise is a very personal process.  Each of us has a different predisposition to how we react to uncertainty and surprises.  Each of us has a different level of tolerance.  When I moved my family back from Paris, we had changed as people.  Our mindsets were different.  We literally “brought home” a new way of thinking and of being.  This is what surprises do to you.  I wanted to convey this in the title both literally and figuratively.

Morris: I share your high regard for Charles Handy whom you quote near the end of the book: “We need a new way of thinking about our problems and our future. My suggestion is the management of paradoxes, an idea which is itself a paradox, in that paradox can only be ‘managed’ in the sense of coping with [it].” In your opinion, what are the major challenges in what Handy characterizes as “The Age of Paradox”? How best to cope with them?

Kaplan:  The first step in coping with paradox is to recognize that it exists.  Personal and business breakthroughs are laden with paradoxes, and we’ve discussed some of these.  You need to listen to yourself and also listen to the market.  You need to make decisions with data, but also your gut.  Knowing when you can resolve an issue a problem versus when you must live with a paradox as an ongoing tension in the process is essential.

Morris: I commend you on the sets of “Leapfrogging Tools” that you prove within your lively and eloquent narrative. Which of these tools seems to be most difficult to master? Why?

Kaplan:  Seeing the guideposts that reside within our surprises is more easily done in retrospect.  Being able to use oneself as an instrument to know when we’re have a knee-jerk reaction to having our assumptions challenged or when we stumble upon a positive surprise in real-time isn’t always second nature.  It requires practice and work.

Morris: Let’s say that a CEO has read and then (hopefully) re-read Leapfrogging and is eager to establish and then sustain with his management team a culture within which the power of surprise is harnessed and then leveraged to achieve business breakthroughs. Where to begin?

Kaplan:  Here’s the first simple step.  Promote surprise and tell stories about it. When we talk about changing organizational culture, it must be understood that leaders have a big role to tell stories about when they personally have and do experience surprises, and how surprises lead to shifts in thinking and new opportunities.  Get in touch with our own surprises.  Then, solicit them from the rest of the organization.

Morris: For more than 25 years, it has been my great pleasure as well as privilege to work closely with the owner/CEOs of hundreds of small companies, those with $20-million or less in annual sales. In your opinion, of all the material you provide in Leapfrogging, which do you think will be of greatest value to leaders in small companies? Please explain.

Kaplan:  For any business, especially small businesses, the goal is to deliver something surprisingly unique that distinguishes your offering from the crowd.  Just look at what that little Parisian café did in the midst of Paris’ 35,000 bistros and cafes.  They created a real game-changer that delivers positive surprise.  The first question is how can you create a feeling of positive surprise for your customers.

There are also some great examples of how you can look at how your customers are using products or services incorrectly, modifying them, or even how unexpected customers are applying what you do.  All of these things can reveal surprises that can lead to new opportunities.

Morris: Which question had you hoped to be asked during this interview – but weren’t – and what is your response to it?

Kaplan:  One question that I’m often asked is about bad surprises.  “Aren’t there surprises we don’t want?” people ask me.

I do think it’s important to recognize there are certain times when we don’t want to experience the unexpected. If we need to run an efficient and effective manufacturing organization churning out products on a highly predictable basis or run the core business in a certain way, we might not want certain kinds of surprises. We might not want everyone to be looking for surprises and trying to innovate around surprises.

In the grander scheme of things, however, if we don’t open ourselves up to surprises at the same time we are running the core business, then we will miss things at a macro level that might have a long-term impact. It’s a balancing act and knowing how to do what you need to do today while at the same time not closing yourself off to a range of things which might reveal threats or opportunities.

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Soren cordially invites you to check out the resources at these websites:

Leapfrogging website with various resources and videos:

FastCompany article:  “How To Turn A Nasty Surprise Into The Next Disruptive Idea”


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