Meet the MasterMinds: Jerry Wind
Reveals The Power of Impossible Thinking
 Jerry
Wind is the Lauder Professor and Professor of Marketing
at the Wharton School, and a world-renowned author and marketing
expert. He’s the Director for the SEI center for Advanced
Studies in Management and an editor for Wharton School Publishing.
Wind’s twenty books include Convergence
Marketing, Driving Change,
and his latest, The
Power of Impossible Thinking. MCNews asked
Wind how impossible thinking can help us achieve personal
and workplace success.
MCNews: What is impossible thinking?
Wind: The way we think about the world
often limits what we can see and do. For example, the four-minute
mile was considered a natural limit for runners until 1954.
It was unthinkable to go faster. Then UK runner Roger Bannister
shattered this barrier on an Oxford track in May 1954. Within
three years, sixteen other runners had also surpassed this
limit.
There was no fundamental leap in human evolution. What
had changed was their thinking. It was now considered possible.
We see the impact of such impossible thinking in many areas,
from new business models such as FedEx or Starbucks, to
shifts in global politics such as the end of the Cold War,
and achievements in our personal lives. To change our lives
we need to first change our thinking. To do the “impossible,”
we first have to engage in “impossible thinking.”
MCNews: You’ve suggested that mental models
shape our lives. What is a mental model and why is it so
important in our lives and work?
Wind: The reason impossible thinking is
so difficult is that we are usually not aware of our mental
models and the role they play in our lives. We think that
what we see in the world is actually what is there.
Neuroscience research tells us, however, that most of what
we take in through our senses is discarded. Instead, it
is used to evoke an internal model—a mental model—of
reality within ourselves. So, we are not really seeing what
is in front of us. This is dangerous because we can miss
important opportunities or fail to see important threats.
For example, in one behavioral study, subjects approached
an airline ticket counter. The agent began checking them
in and then pretended to drop something behind the counter.
A different agent stood up and finished the transaction.
Many of the subjects did not recognize the switch. Why?
Because they were not seeing the person in front of them.
Instead, they had classified this person as a “ticket
agent” and were interacting with that model.
In another study, subjects were asked to count the number
of times basketball players in white shirts passed a ball
to one another in a video. Many of them got the count right,
but they were so focused on the task that more than half
missed seeing a person in a gorilla suit walk into the center
of the scene. They missed an entire gorilla!
How many times are we so focused on a task at work
or a problem at home that we fail to see something significant
in our environment? This is the power and danger of mental
models. We need to be able to recognize these models and
the role that they play in our lives.
Models serve a useful purpose, however. Most of the time,
we don’t need to develop a relationship with the person
at the ticket counter. Many times it may be more important
to get the count right than to keep track of other things
such as gorillas. But when the environment is changing rapidly,
the blindspots created by our mental models can be much
more dangerous.
MCNews: What techniques can people use to examine
the relevance of their own mental models?
Wind: The first, and biggest challenge,
is to actually become aware of the models and their impact.
Then, you need to cultivate a habit of testing your current
models and looking for alternatives.
For example, inventory was always considered an asset on
the balance sheet. Should it be an asset? Could it be a
liability? By looking at inventory as a liability, Dell
and others have created a radically different approach to
their supply chain design. Instead of large inventories,
they have moved to just-in-time inventory. What other conventional
wisdom could we challenge?
To take another example, corporations in the West are beginning
to wake up to the huge market opportunities in emerging
markets. This represents a significant shift in thinking
from when these markets were seen only as a source of cheap
manufacturing.
To reach these markets, companies have had to completely
rethink their products and marketing, but many have done
it successfully. Banks that used to be interested only in
large loans are now building huge businesses in microloans.
Companies such as Tata in India are working on cars for
the unbelievable price of just over $2,000.
Even with this shift, inner-city markets in the United
States and Europe are still considered unattractive. Companies
think of high crime, low incomes and other problems. But
Michael Porter and the Milken Institute have pointed out
that we can look at these inner-city markets as “domestic
emerging markets.” What happens when we reframe them
in this way? We see new possibilities and fresh approaches
that we might have missed if we looked at them through the
old models. Shifting our thinking opens new opportunities.
To see these opportunities, you need to keep an open mind.
For example, when IBM brought in open-source guru Richard
Stallman to speak to the company’s researchers back
in the 1990s, his radical idea that software should be free
“like air” seemed to be outrageous. It didn’t
appear to have any value in an industry that derived profits
from proprietary software. In fact, it seemed a bit dangerous.
But IBM executives kept an open mind. They ultimately were
able to see the potential of open source to transform their
software business, using free software as a foundation for
fee-based software and services. The recognition of such
a radical idea requires bringing extreme views such as Stallman’s
into the organization and then keeping an open mind to recognize
value. It transformed IBM’s business and the software
industry as Linux and other open-source software have become
a threat to Microsoft’s dominance.
MCNews: If you need to unlearn or dismantle an
existing mental model, what’s the first step?
Wind: The first step is to change your
own thinking. Then you need to change the structures that
support the old mental model and the thinking of others.
The other important thing to understand is that paradigm
shifts are a two-way street.
Many times when we adopt a new and revolutionary way of
thinking about the world, we think that it will eradicate
the old view. We saw this clearly in the dot-com revolution
when people were saying that Wingspan bank would eliminate
the need for physical branches, WebVan and other online
grocers would mean the end of physical supermarkets, Amazon
would eradicate Barnes & Noble and Borders, and—closer
to home for those of us in academia—that distance
learning would bring down the ivy-covered walls of the university.
This didn’t happen. Instead, online channels and
commerce were integrated with offline channels in successful
models such as Tesco’s online and offline retail stores
in Europe. It wasn’t absolute revolution. Instead,
we developed a portfolio of models and we can choose the
one that works best for the specific problem at hand.
This is very important to recognize. When we finally are
able to see the world through the lens of a new model, we
are in danger of forgetting or discarding the old model.
It is like the famous optical illusion where you can see
a vase or two faces. Once you see one or the other, you
become locked into that view. It becomes very hard to be
able to see both pictures, but it can be valuable.
For instance, many people may think that horses are not
much use in an age of automobiles and space travel. But
when U.S. military planners needed to guide missiles in
the rugged mountains of Afghanistan, they used soldiers
on horseback to do so. If they had discarded this model
because it was old, they might have failed to see this solution
to the challenges they faced.
We see this in many other areas. Newtonian physics is still
used even in an age of quantum mechanics. We write handwritten
notes in a time when many people predicted we’d be
living in “paperless offices.” To advance a
new model within an organization, you often need to be an
evangelist, but you also need to recognize that a balanced
portfolio of different models gives you the most flexibility
in addressing the challenges of the future.
MCNews: You say that mental models can be the biggest
barrier to organizational change. What strategies can be
used to change the mental models of an organization?
Wind: Mental models are embedded into
the architecture of organizations. You need to recognize
the impact of these structures. The missile silos and nuclear
stockpiles of the arms race have persisted long after the
end of the Cold War. It is not enough to change your thinking;
you have to dismantle these old structures.
In our organizations, the architecture embodies the assumptions
of our mental models. For example, many companies that were
focused on transactions initially ignored the importance
of customer relationships. When they began recognizing the
value of long-term relationships, this led to the development
of Customer Relationship Management (CRM) software, systems
and structures to follow through on this shift in thinking.
But now companies have seen the high failure rates of CRM
applications and this is leading to another shift in thinking—to
Customer Managed Relationships (CMR). Instead of the company
managing relationships with customers, it gives customers
the tools to manage their own relationships with the company.
This requires a different infrastructure—more customizable
tools and better interfaces to put customers in charge rather
than a focus primarily on internal systems for gathering
and analyzing customer data.
The shift to CRM required a change in architecture and
the shift to CMR requires another shift. The important point
is that changing thinking is just the first step. We then
have to change everything that supported the old way of
thinking.
The other important thing to recognize is that not
everyone in an organization or society will change their
thinking at the same rate. This will lead to “adaptive
disconnects” as some parts of the organization embrace
the new model and others resist it. The organization
needs to focus on boundary spanners and other mechanisms
to bridge these adaptive disconnects.
MCNews: Can the success of a business create resistance
among executives to change their mental models? If so, what
needs to be done to overcome that resistance?
Wind: A successful business is the hardest organization
to change. It becomes trapped in its current models.
There is tremendous resistance to tampering with a proven
formula.
Digital Equipment Corporation (DEC) was one of the most
successful computer firms in the world, yet its success
blinded the organization to fundamental changes in the industry.
IBM was also humbled by the rise of the personal computer.
Companies that are tracking their current customers fail
to see the rise of new technologies and substitutes. They
become victims of their own success, as Clay
Christensen has pointed out.
How do you shake up this complacency? Senior leaders need
to take deliberate actions to challenge the organization
and shift its thinking. They can reframe their business
challenges to create a sense of urgency. For example, General
Electric had a famous mantra that its businesses needed
to be number 1 or 2 in their industries.
It was a very successful model that kept managers focused
on creating winners and ruthlessly weeding out the losers.
But one negative byproduct of this approach was that managers
began defining their industries in such a way that they
had dominant share. This, in turn, led to a lack of growth.
So GE turned this mantra on its head and asked managers
to define their businesses in such as way that they had
only 10 percent share of a larger market. Now, every business
had a 90 percent growth opportunity. This can fundamentally
change the way managers look at the business.
Scenario planning can also shake managers out of their
complacency by making emerging threats more real, as can
the process of “idealized design.” In idealized
design, as described by Russell
Ackoff, the organization imagines that its current business
has been wiped out and starts to design a new one from a
blank slate. It then determines what it needs to do today
to reach this idealized point.
For example, in the early 1950s, the head of Bell Labs
announced to researchers there that the entire phone system
had been destroyed overnight. How would they rebuild it
from scratch? The subsequent discussions led to innovations
such as Touch-Tone phones, caller ID and cordless phones.
MCNews: What do you do to ensure that your own
mental models remain relevant?
Wind: Interacting with diverse groups
of people is key. I’m a founding director of the Wharton
Fellows program, and we have created a lifelong educational
community that, by its design, brings the Fellows and faculty
into contact with some of the most diverse, interesting
thinkers in business and other fields around the world.
In one session, we might be discussing entertainment with
leaders of Fox or a legendary producer; in another, we meet
with Harley-Davidson executives in Japan to find out how
they have run away with the high end of that market; in
another we discuss growth strategies with top executives
from Starbucks and Microsoft in Seattle; and in another
we hear from leaders of the European Union and look at companies
in Prague.
These diverse perspectives help to challenge the thinking
of the senior executives and faculty who are involved. We
see the world from many different perspectives—across
geography, industry, and disciplines—and gain fresh
insights on our work when we return home.
I also have been working on an initiative to promote cross-functional
integration in the MBA program at Wharton. This interaction
with colleagues from different business disciplines has
also challenged the way I approach my own field of marketing
and address business challenges. It has led to a new project
I am working on to begin developing a new theory of the
firm.
On a more personal note, art has always been a great inspiration
for me in shaking up my thinking. Involvement with artists
in diverse schools and exposure to artwork around the world
has brought constant surprises. These artists, both classical
and modern, provide fresh approaches that challenge the
way I view the world.
MCNews: What’s on your reading list these
days?
Wind: As co-editor of Wharton School Publishing,
I have the chance to see a lot of fresh thinking before
it makes it out onto the bookshelves. This has been a great
privilege and adventure. The new book by CK Prahalad, The
Fortune at the Bottom of the Pyramid,
represents a fundamental breakthrough in thinking about
the developing world that has changed the way I think about
these opportunities as well as the way I approach marketing.
We have another new book coming out by my colleague Vijay
Mahajan and Kamini Banga that looks at market strategies
in developing countries more broadly—at every level
of the Pyramid—and they identify many other ways we
need to challenge our Western models for marketing in approaching
these emerging markets, which already account for 86 percent
of the world’s population.
I do still find time to read books that are not on our
own Wharton list. Jeremy Rifkin, who has challenged our
thinking about work, biosciences and other topics, has produced
a provocative treatise on The
European Dream. Even if you disagree with
it, it will change the way you think about Europe and how
you view the “American dream” that has dominated
our thinking for generations.
MCNews: Thanks for being so generous with your
time.
You can write to Jerry Wind at windj@wharton.upenn.edu.
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