Chapter 4
The Benchmarking Mindset: When Following the Herd Leads Nowhere
Einstein once said that those who walk alone find unexplored places. Yet organizations consistently fall into the trap of benchmarking - obsessively studying and imitating competitors rather than forging distinctive paths.
When Mark Burnett created the Eco-Challenge and later Survivor, he triggered a wave of reality TV imitators, demonstrating how industries often exhibit herd behavior. This pattern repeats across sectors - companies conduct competitive analysis, focus on addressing weaknesses relative to competitors, and ultimately become more alike rather than distinctive.
While benchmarking can improve operations - as when Cincinnati Children's Hospital rose from the 20th to 95th percentile in cystic fibrosis care by studying top performers - it often leads to strategic homogenization. As Gary Hamel notes, "Strategies converge because success recipes get lavishly imitated."
Youngme Moon argues that differentiation comes from becoming "more lopsided rather than well-rounded" - amplifying strengths instead of imitating competitors. Stihl exemplifies this approach by maintaining in-house manufacturing and refusing to sell through big box stores, preserving quality and service despite industry trends. Building competitive advantage requires making tradeoffs, as Steve Jobs noted: "I'm actually as proud of many of the things we haven't done as the things we have done."
The airline industry demonstrates the perils of strategy convergence, with rampant bankruptcies and poor profitability. Companies often fail at imitation because they cherry-pick elements of a successful business model without understanding the integrated system that creates competitive advantage, as seen with unsuccessful attempts to copy IKEA's comprehensive approach.
Dave Grohl's musical journey illustrates how to learn from others while developing a distinctive voice. Learning guitar through Beatles sheet music, he used their songs as his musical education. Both Grohl and Kurt Cobain drew inspiration from the Beatles while developing their own distinctive sounds with Nirvana. Throughout his career, Grohl recognized that mere imitation wouldn't work - he couldn't perfectly replicate Ringo's drum techniques, noting "Whenever I try to do it, I look like I'm putting out a fire with a jacket!"
Humans often experience fixation when problem-solving, becoming attached to specific mental sets based on past solutions. Early aircraft inventors demonstrated this by fixating on birds' flapping wings, while the Wright brothers broke free of this constraint. Abraham Luchins' water-jar experiments dramatically illustrated how fixation works: participants who learned one solution method stubbornly applied it to new problems even when simpler approaches existed.
Organizations can combat fixation by seeking inspiration from outside their industry. Reebok demonstrated this when creating their famous Pump technology in response to Nike's Air Jordan success. Rather than imitating Nike's compressed gas system, Reebok engineer Paul Litchfield assembled a team including designers with healthcare experience. They found analogous medical products that inspired innovation: an inflatable splint concept led to enhanced ankle support, IV fluid bag design suggested an inflatable bladder in the heel, and blood pressure monitor mechanisms inspired the pumping system.
Planet Fitness provides another example of breaking from industry norms. They deliberately offer pizza, bagels, and candy to members while limiting free weights and discouraging hardcore bodybuilders. Their famous "lunk alarm" signals who isn't welcome as clearly as who is. What makes their approach truly innovative is how they define their competition - not other gyms but "Chili's and Uno's and movie theaters" - the leisure activities people choose instead of working out.
Chapter 5
The Prediction Mindset: Our Obsession with Forecasting the Unforecastable
We're obsessed with forecasting despite overwhelming evidence that experts are terrible at it. From Jim Cramer's stock picks to Hollywood box office predictions, our desire to see the future persists despite repeated failures.
Hollywood exemplifies our forecasting failures. Despite massive budgets and star power, studios regularly produce spectacular flops like Ben Affleck's $74 million "Gigli" that earned just $7 million. Meanwhile, rejected scripts become blockbusters, as with "Raiders of the Lost Ark" and "Star Wars," which every major studio except one passed on. As screenwriter William Goldman famously declared, "Nobody knows anything" about what will succeed at the box office.
Philip Tetlock's landmark 21-year study of 284 experts revealed that "the average expert did about as well as random guessing" at predicting future events. In his later Good Judgment Project, Tetlock discovered a tiny subset of "superforecasters" who consistently outperformed experts despite lacking specialized knowledge. Their success stemmed not from superior intelligence but from different thinking habits: they remained open-minded, gathered diverse information, questioned sources, treated beliefs as testable hypotheses rather than truths, and willingly updated their conclusions as facts changed.
Our obsession with prediction persists because humans have a fundamental need for certainty and control. We're so desperate for control that we create illusions of it where none exists. Ellen Langer's experiments demonstrated this "illusion of control" by showing how simple involvement with a purely chance-based game made participants irrationally confident about predicting unpredictable outcomes.
The corporate obsession with prediction directly impedes creativity through arbitrary revenue targets for new initiatives. Many executives will only fund projects that "move the needle" - often requiring $50 million or more in sales - because of unreasonable growth expectations. For a $20 billion company, a 10% growth target means generating $2 billion in new revenue annually - doubling company size every seven years.
Disney's experience under Michael Eisner illustrates the dangers of prediction-driven growth targets. After taking over in 1984, Eisner established an ambitious 20% annual growth target. Initially successful, he revitalized theme parks and oversaw animation hits. By 1994, Disney had grown from $1.66 billion to over $10 billion in revenue. Despite setbacks, Eisner recommitted to the 20% growth goal, declaring he wouldn't "be the guy who breaks that streak."
This unsustainable target ultimately damaged Disney. When animation faltered and organic growth slowed, Eisner turned to problematic acquisitions. While Disney's stock outperformed the market during Eisner's first decade, it underperformed significantly after the Capital Cities/ABC acquisition until his departure.
When executives demand innovations that "move the needle," they wrongly assume creators can distinguish blockbusters from niche products during early development. This expectation creates an impossible dilemma: if innovators estimate sales prudently, their ideas won't receive funding for being too small; if they project aggressively, they risk overpromising and underdelivering.
The pharmaceutical industry illustrates how difficult accurate forecasting truly is. McKinsey researchers examining 260 drug launches found that over 60% of analyst forecasts missed actual peak revenues by more than 40%. Corporate forecasts typically miss first-year sales by 80%, with profit projections even less accurate.
Many creative ideas need time to flourish, starting as small niche concepts before finding mainstream appeal. Trader Joe's exemplifies this principle. If pitched today - a grocery store without promotions, coupons, loyalty cards, advertising, national brands, self-checkout, or stable product selection - most investors would pass. Yet Trader Joe's has become America's most beloved supermarket, consistently ranking first in customer satisfaction and sales per square foot.
This success didn't happen overnight. Joe Coulombe opened the first store in 1967 and spent years experimenting - trying and abandoning music albums and pantyhose, gradually shifting to private labels in 1972, and repositioning to target health-conscious, educated consumers. The company opened just one store annually for decades, taking 22 years to reach 30 locations and $150 million in revenue.
Chapter 6
The Structural Mindset: Why Reorganization Rarely Delivers Innovation
Leaders often obsess over organizational structure, believing the right arrangement of boxes and lines will unleash innovation. As journalist Charlton Ogburn Jr. noted, we tend to meet any new situation with reorganization, creating "the illusion of progress at a mere cost of confusion, inefficiency and demoralization."
Zappos exemplifies both the promise and perils of structural experimentation. Known for its exceptional customer service and quirky culture, Zappos empowers employees to please customers without scripts or time limits - one customer service call famously lasted over 10 hours. In 2012, CEO Tony Hsieh embraced Holacracy, a system abolishing traditional hierarchies. By 2015, he eliminated "people managers" entirely. The transition proved disastrous - nearly one-third of employees departed, and Zappos tumbled from #6 to #86 on Fortune's "Best Companies to Work For" list before falling off completely.
Many leaders decry hierarchy as stifling creativity, advocating for flatter structures. However, research suggests well-designed hierarchies can actually promote learning and innovation by keeping teams aligned during disagreements. Studies comparing hierarchical versus egalitarian groups found that teams with clear pecking orders outperformed those with all high-status members, particularly on tasks requiring coordination. NBA teams with pronounced hierarchies won more games due to better coordination and cooperation.
Business leaders obsessively seek perfect organizational structures, with many CEOs restructuring early in their tenure. They redraw organization charts, centralize or decentralize authority, and add or remove management layers - all in hopes of unleashing creativity. Yet studies show only 16-33% of reorganizations deliver improved results. Leaders keep reorganizing because it's easier to redraw boxes and arrows than address deeper issues.
Google's Project Aristotle studied what makes teams exceptional, examining 180 teams across the company. They found that how people interact matters more than who is on the team, with psychological safety being by far the most important factor. Amy Edmondson defines psychological safety as the "shared belief held by members of a team that the team is safe for interpersonal risk taking." When people feel safe speaking up, sharing ideas, admitting mistakes, and asking questions, learning flourishes and team performance increases.
Pixar's "brain trust" process exemplifies effective team norms. This fluid group of storytelling experts reviews films in development, offering feedback that transforms them "from suck to not-suck," as Ed Catmull puts it. The brain trust operates by four key rules: no one can override the director; it's peer-to-peer collaboration, not management review; participants have a vested interest in each other's success; and everyone commits to giving and taking honest feedback without defensiveness.
The Eagle project at Data General demonstrates how work design trumps organizational charts in fostering creativity. These young engineers accomplished the seemingly impossible task of designing a next-generation computer in record time, motivated not by money but by "opportunity, responsibility, and visibility." They worked on a meaningful project with significant customer impact, enjoyed substantial autonomy, and utilized diverse skills that evolved as challenges emerged.
Hackman and Oldham's work-design model identifies five key attributes that foster intrinsic motivation: skill variety, task identity (seeing a project from start to finish), task significance (meaningful impact), autonomy, and feedback. When these elements are present, people find their work meaningful, develop responsibility for outcomes, and produce higher-quality, more creative results.
Chapter 7
The Focus Mindset: Why Creative Breakthroughs Need Both Concentration and Distance
Creative breakthroughs often require both intense concentration and psychological distance. Artists like U2, the Rolling Stones, and Bob Dylan have secluded themselves to create groundbreaking work, reflecting Picasso's belief that "without great solitude no serious work can be done." Many organizations try to replicate this approach through off-site retreats and innovation hubs, hoping to accelerate creative work by giving teams dedicated space free from distractions.
In 2009, Google's Jake Knapp developed the "design sprint" concept, requiring teams to clear their calendars for a full week, leave electronic devices behind, and focus entirely on one challenge. His methodology included a structured five-day process using design thinking: defining the problem, consulting experts, developing solutions, building prototypes, and testing with users. This approach has since been adopted by companies including Facebook, Airbnb, Microsoft, and Uber.
Research consistently shows that multitasking severely impairs performance. Studies by Gloria Mark found workers switch activities every three minutes and take 23 minutes to return to their original task after interruptions. Even self-proclaimed "heavy media multitaskers" consistently underperform more focused counterparts in cognitive tests.
Yet creative breakthroughs often require periods of both intense focus and deliberate distance. J.R.R. Tolkien worked on The Lord of the Rings for 17 years, alternating between intense writing and lengthy breaks to sketch characters, construct maps, and work on other projects. Similarly, Mark Twain abandoned Huckleberry Finn for seven years after writing 400 pages, returning to complete it with renewed energy after a Mississippi steamboat journey. Modern research confirms these instincts - creativity benefits from toggling between focus and unfocus.
Achieving psychological distance from a problem enhances creativity by promoting more abstract thinking. Research by Evan Polman and Kyle Emich demonstrated this effect when they gave students a prison escape puzzle: only 48% solved it when imagining themselves trapped, while 66% succeeded when imagining helping someone else escape.
Social distance - solving problems on behalf of others rather than ourselves - helps us think more abstractly and creatively. Leaders can create social distance through role-playing exercises, as Kevin Dougherty did at Sun Life Financial by assigning executives to play roles outside their expertise during a strategic retreat.
Physical and cultural distance similarly enhances creative problem-solving. In one study, participants who believed they were solving puzzles for a university 2,000 miles away performed better than those solving for a nearby institution. Travel disrupts routines and stimulates the brain by immersing people in different perspectives. The Beatles' 1968 trip to Rishikesh, India produced extraordinary creative output - they wrote approximately thirty songs during their stay, many of which appeared on the White Album and Abbey Road.
Imagining ourselves in the distant future can also boost creativity for abstract tasks. Research by Jens Forster found that participants who visualized themselves one year in the future generated more creative solutions than those thinking about tomorrow.
The best creative thinkers toggle between intense focus and deliberate unfocus. U2's work on "The Unforgettable Fire" exemplifies this pattern - they secluded themselves at Slane Castle for focused creation but continued refining their work afterward at Windmill Lane Studios.
Chapter 8
The Naysayer Mindset: Harnessing Constructive Dissent Without Killing Ideas
In 1973, Israel was caught unprepared by a surprise attack despite numerous warning signs. Israeli intelligence officials had firmly believed Egypt wouldn't attack without air superiority, dismissing contradictory evidence. Following this intelligence failure, Israel established a devil's advocate office within their military intelligence to challenge assumptions and prevent groupthink.
Many business leaders have adopted similar techniques to enhance creative and critical thinking. Genentech executive Kimball Hall assigns team members to play different roles, including one focused on finding weaknesses in proposals. MTV founder Bob Pittman routinely asks "What did the dissenter say?" when presented with recommendations. At Google, Jake Knapp deliberately includes "troublemakers" in design sprint teams, believing their dissenting views push everyone to do better work.
Research confirms the efficacy of this approach, with studies showing teams using devil's advocacy techniques make higher quality decisions by surfacing assumptions, uncovering risks, and evaluating alternatives more thoroughly. Devil's advocates also help teams overcome shared information bias, enabling better integration of unique knowledge distributed among team members.
However, some view devil's advocates as "idea wreckers" who stifle creativity. IDEO's Tom Kelley calls them "the biggest innovation killer in America today," noting how they torch fledgling concepts while sidestepping responsibility by prefacing attacks with "Let me just play devil's advocate..." Critics who constantly find fault without offering solutions induce self-censorship, as team members withhold ideas to avoid public demolition.
When the same person constantly plays devil's advocate, they risk becoming ineffective, like Federal Reserve Board member Henry Wallich, whose 27 dissenting votes against inflation were eventually tuned out by colleagues. To avoid this, leaders should rotate the devil's advocate role among team members. Research also suggests appointing two devil's advocates rather than one. Solomon Asch's conformity experiments showed that a lone dissenter often succumbs to majority pressure, but with a supportive partner, resistance to conformity increases significantly.
Timing matters when playing devil's advocate. Drawing from improv comedy's "yes, and" principle, organizations should consider withholding critique during early ideation stages. At IDEO, they practice "deferring judgment" during initial idea generation to create psychological safety and prevent self-censorship. Google's Jake Knapp recommends having people generate ideas individually first - "work alone together" - before sharing with colleagues.
The manner in which dissent is expressed dramatically affects its impact. Counterproductive devil's advocates find fault with every proposal, make definitive pronouncements rather than asking questions, tear apart ideas without offering alternatives, focus exclusively on downside risks, treat debates as zero-sum games, and often damage relationships through strident repetition of their arguments. In contrast, effective devil's advocates engage in active listening, ask thoughtful questions like "How might we make this work?", seek to understand others' perspectives, and admit gaps in their own knowledge.
While many successful people advise ignoring naysayers, the challenge for leaders is distinguishing between unhelpful critics and constructive devil's advocates. Former IBM CEO Lou Gerstner described the toxic environment he inherited as a "culture of no" where "no one would say yes, but everyone could say no." The best leaders encourage people to create rather than merely criticize, while still valuing helpful dissent.
Chapter 9
Leader as Teacher: Nurturing Curiosity to Unleash Creativity
Maria Montessori believed the first task of a teacher is "to stimulate life, leaving it then free to develop, to unfold." This principle applies equally to leadership. Jennifer Doudna's journey from curious child exploring Hawaii's "sleeping grass" to Nobel Prize-winning scientist illustrates how early experiences of wondering "how does that work?" can lay the foundation for groundbreaking discovery.
Curiosity fundamentally activates our brains in ways that enhance learning. Neuroscientist Matthias Gruber's research shows that curiosity not only improves memory for information we're interested in but also enhances recall of unrelated material encountered during periods of heightened curiosity. Brain imaging reveals that curiosity activates dopamine pathways and the hippocampus, putting "the brain in a state in which you are more likely to learn and retain information."
Leaders can nurture curiosity by encouraging questions rather than immediately providing answers. Canadian teacher Patti Firth creates "wonder walls" where students post questions beginning with "I wonder..." about new topics. When she stopped answering her students' questions immediately, she discovered "they started learning faster" as they eagerly sought answers themselves. For leaders, prematurely offering answers creates three problems: it suggests decisions are predetermined, constrains the range of possible solutions, and discourages dissenting views.
Research by Xiaodong Lin-Siegler demonstrates that students learn more effectively when they understand scientists' struggles. In a study of 400+ high school students, those who read about famous scientists' failures or personal hardships showed higher science grades than peers who only read heroic success stories. Similarly, leaders should share their own failure stories to create psychological safety. Sara Blakely, Spanx founder, recalls how her father celebrated her failures as a child, high-fiving her when she tried something new but failed.
Maxine Clark, founder of Build-A-Bear Workshop, credits her first-grade teacher Mrs. Grace with nurturing her curiosity through an unusual approach: awarding a coveted red pencil to students who made "the best mistake of the week." As CEO, Clark instituted her own Red Pencil Award for employees who questioned existing practices, experimented with new ideas, and learned from their mistakes.
Empathy plays a crucial role in nurturing creativity. David Glahe, a second-grade teacher in a low-income district, visits students' homes before each school year to understand their circumstances and interests. Similarly, Hilton CEO Chris Nassetta requires his executives to spend a week annually working frontline hotel jobs to better understand employees' challenges and hear their ideas.
Great teachers set high expectations while expressing genuine confidence in students' abilities. Research by David Yeager demonstrates this power: when middle-school students received teacher feedback with the added note "I'm giving you these comments because I have very high expectations and I know that you can reach them," they revised their essays at significantly higher rates and produced better work than peers who received generic feedback.
Leaders can introduce novelty by providing employees with new experiences: travel to unfamiliar regions, exposure to different cultures, reading broadly outside their specialties, or challenging assignments in different functional areas. Neuroscientists Nico Bunzeck and Emrah Duzel have shown that the brain's substantia nigra/ventral tegmental area responds more vigorously to novel stimuli than familiar ones, enhancing exploration and learning.
The most meaningful reward for leaders, like teachers, comes from witnessing the accomplishments of those they guide. While solving problems ourselves feels exhilarating, enabling others to achieve creative breakthroughs provides deeper satisfaction. Leaders must recognize their duty to enable exploration, experimentation, learning, and creation throughout their organizations. The leader's role isn't having all the answers but nourishing curiosity, dismantling barriers, and transforming mindsets that impede creativity. When leaders clear the path, people naturally race toward new directions and discoveries.
