The Power of Provoking

Bestselling author Steve Goldbach explains why, in an increasingly uncertain world, fast action is the best way for companies to learn (and thrive)
By: 
Steve Goldbach
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The essentials

  • Steve Goldbach has co-written two stellar business books that urge leaders out of complacency. In Detonate (2018), the principal and chief strategy officer at Deloitte in New York City showed how many corporate best practices no longer make sense and why they should be (as the book’s title suggests) blown up.
  • Goldbach’s latest book—Provoke—tackles the wait-and-see approach so common in organizations today. Goldbach and co-author Geoff Tuff argue that, rather than play it safe, companies should go on the offence by “provoking” actions in their marketplaces. Far from being risky, such provocations reduce uncertainty, provide real-world feedback and open up new possibilities for growth.
  • “Action, in an uncertain world, is increasingly the best way to learn,” Goldbach and Tuff write. “If you don’t act with purpose, your once-thriving business could suddenly become a ‘wind down’ firm, operating on borrowed time.” In this article for Smith Business Insight, Goldbach explains why it’s time for organizations to “DO SOMETHING!”

I learned the power of provocation at the most improbable of places—a charity poker tournament for my then two-year-old daughter’s pre-school. I’m no Annie Duke (whose business book Thinking in Bets is a great read), but I fancy myself as semi-knowing what I’m doing.

Through a bit of luck and the benefit of this being a charity tournament with mostly inexperienced players, I ended up as one of the final two players left out of 50. And apparently, my opponent was really good. He was the defending champion and was now in a position to nearly repeat. The final table went quickly, so I didn’t get a good read on how he played before we were the final pair.

Because I didn’t know his tendencies, I had to learn quickly. I decided to raise every time I had the “dealer” position—irrespective of my cards. I also played aggressively after the flop (the three community cards that are dealt after the first round of betting) by following up my bets. It turned out my opponent played pretty conservatively, folding to my bets most of the time. I quickly ascertained that he was unlikely to bluff at me, so when he did bet, I assumed that he had a strong hand, and when he chose not to, he didn’t.

I used this information to quickly devise a strategy to whittle his “stack” (his remaining chips) down to a low enough level where he had very little flexibility. Ultimately, I won the grand prize of a gift card to a local restaurant (but the real winners were the kids, of course☺).

I could have employed a more typical poker strategy, mixing up my play. But it would have taken me longer to gain an assessment of my opponent. Of course, had he played more aggressively, I would have been forced to alter my strategy, but I would have still benefited from that information, so long as I didn’t meaningfully weaken my position in the process.

What I learned that night was that you can gather important information—and do so quickly—by provoking a response. This is a very different way of learning than what is typically done by most executive teams. It is this idea that I (and my co-author, Geoff Tuff) wrote about in our new book, Provoke: How Leaders Shape the Future by Overcoming Fatal Human Flaws. As Geoff and I challenged each other in writing the book, we ultimately came to the point of view that “provoking the future” is a far superior way for teams to learn in a fast-moving, uncertain world compared to how organizations traditionally learn. Companies that fail to employ this approach, at scale, risk becoming quickly marginalized.

We have three core reasons for this logic (and welcome debate on our thinking): 1) It’s forward-looking; 2) It is a great way to align an executive team; 3) It gives a voice to the tails of your organization. Let’s take a deeper look at all three:

1. Provoking is forward-looking

Normally when an executive tasks a team to “study” an issue, they implicitly look to the past. Why are they looking to the past? Because the core method of “studying” is to gather a lot of data about the market, customer behaviour, etc. And data, by definition, is about the past, not the future. We can only hypothesize about the future.

This gap between gathering data on the past and hypothesizing about the future tends to create a trap for executive teams. They want “proof” that a hypothesis will work, but they tend to only accept data as proof. Since data is from the past, it’s almost impossible to prove definitively that an idea about the future will work. (Leaders, please don’t ask your teams to perform this impossible task.)

Instead, provoke your marketplace. (Or as my father used to say, “Don’t tell me, show me”.)

Rather than using retrospective data analysis, pick a behaviour that you want to change in the marketplace (e.g., will customers sign up for this offer?) and design a real-world test that will give you insight into whether you can change the trajectory of the future. We called this a “minimally viable move” in our previous book, Detonate, expanding on the minimally viable product (MVP)concept from the world of design.

This is commonly practised in the world of software with beta versions of software, or A|B tests. But there’s absolutely no reason that every business can’t use these techniques. Even asset-intense businesses can use simulation and other forms of prototyping to get the benefits of this thinking. For example, to test the viability of a physical store with no employees, Amazon didn’t conduct a BASES test or conduct a survey. It just opened a handful of stores to see if the non-employee stores worked in the real world. This kind of test gives you much more insight into how people will behave if given a chance to change their behaviour.

2. Provoking creates better alignment

Imagine a management team that is debating a product launch of a cloth diapering service that would compete with disposables potentially on the basis of price or being more environmentally friendly. Because the team can’t agree on their potential target, they also haven’t agreed on a few key aspects of the service experience or target price.

In the team’s last meeting, they discussed and debated the same issues again—agreeing to try and get some more data about the number of families in their target cities who fell into the “price-conscious” and “environmentally-conscious” segments. All the while, their board has been pressuring them to stop burning expense dollars and get revenue in the door. 

Getting more data seems like what most management teams would do. There’s an orthodoxy that if we just have better information, we’ll make better decisions. Unfortunately, there is no singular data point that will yield sufficient data to give us perfect confidence. And when we get in the habit of asking for some information, it tends to breed a desire for more.

Maybe the environmentally-conscious segment is smaller but are they willing to pay more? Maybe the price-conscious segment is large but harder to get to trial? We can be lulled into thinking that we would make the perfect decision if we just had a bit more information. But most likely, it will never be enough. So we are left in a vicious cycle of looking for more and more information. 

Provoking is a better learning method here. Don’t pretend that the next piece of data will solve the debate; instead, design a test that is more comprehensive and based on the real world. In this case, why don’t we just launch two competing versions of the cloth diapering service on a small beta basis in two different but representative cities? In one, we launch the version targeted at the price-conscious customer and the environmentally-conscious in another. Or we could launch both offers in a single city and see which does better. We could even ask some questions of people who buy the service as to what drove them to purchase it. 

This would give us actual data on the totality of customer behaviour—and importantly, it would get us into the market faster. The benefit here is that when the management team can’t agree, they can just agree to do something in the real world that will lead to a solution. In this way, a real-world test is superior in that it has the potential to settle the debate and get the team to action faster. So replace your esoteric debates with real-world tests to create alignment.

3. Provoking gives a voice to the tails of the organization

When Geoff and I wrote Detonate, which was focused on blowing up proverbial best practices to start from first principles because following best practices is a route to mediocrity. One of the frequent questions we’d get was: “How can you drive change from the middle of the organization?” To be candid, our strong belief is that it’s pretty near impossible to drive broad change from the middle. If the C-Suite isn’t supportive, the change effort will eventually die.

But here’s the but . . . the middle can stimulate change by running tests. In this way, all you provocateurs out there who feel as if you’re stuck with nobody to support you can get attention to “radical” ideas that challenge conventional wisdom. All you need to do is figure out a way to run a small-scale test and then share the data with leadership. So, instead of consistently feeling frustrated at leadership’s reticence to change, bring them a small and simple test that doesn’t cost much but might yield some interesting insight.

Hybrid work is a great example that shows a failure to run the test is a key barrier to getting something better. There were plenty of people who voiced their preference to work from home at least some of the time prior to the pandemic. All the technology to do so—Zoom and others—existed. They weren’t invented for the pandemic.

The fact we didn’t have hybrid work at any scale was a failure of creativity to run a test to see if it could work. People insisted it couldn’t work—until they were forced to do it. Now, it seems, the vast majority of office workers prefer to work from home at least some of the time. So, next time you’ve got a wacky idea, even if you’re not confident it will work, it’s always a good idea to run a small-scale test. 

Taking a “provoke the future” approach and replacing data analysis with forward-looking tests is a lot easier if you make one simple change in your mindset. Whenever someone on your team suggests that doing something different is “risky”, you could suggest that it might indeed be true that there is some element of uncertainty to trying something new.

But when it comes to what’s really risky in a business climate that people perceive as moving at a breakneck pace, doing the same thing that we’ve always done is what’s really risky, and trying something new is the prudent, safe thing to do.

 

Steve Goldbach is the principal and chief strategy officer at Deloitte in New York City. He is a graduate of the Commerce program at Smith School of Business.

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