sara whiffen

What's Effectuation Good For?

Companies are always curious as to what their peers are doing.  One of the questions I’m asked most frequently when I talk to managers about Effectuation is “How are other companies using it”? 

These are some examples of how others are applying the Effectual principles in their corporate environments.

A New Product Launch Process

A beverage company used Effectuation to roll out a new soft drink.  While the drink itself was not innovative, they wanted to take an innovative approach to its marketing and launch.  They made a conscious decision to break from their normal marketing launch model.  In its place, they applied Effectual decision-making. 

The primary difference was how they engaged their marketing, sales, and distribution partners in a more co-creative way.   Usually, they would decide at the corporate level which market to roll out to first.  This time, they worked with their partners to seek handraisers.  And in return, they asked them to co-invest in the process.  Their partners contributed sales resources.  They exercised the crazy quilt principle to build a stakeholder network that was mutually vested in the success of the product rather than just executing on orders and agreements. 

The launch was successful and led to a full scale roll out.  After operating this way, it changed how they think of the launch process.  Now, they have incorporated Effectual elements into their early stage innovation efforts, providing them with alternative methods to deal with market uncertainties. 

 Closing a Funding Gap

A national nonprofit organization faced a significant decline in funding.  Every year, they addressed their budget needs as part of a broader strategic planning process.  This year, they applied Effectual thinking to their strategic planning review and it changed their outcomes.

Rather than focus on what was cut from their budget, they looked inward at what resources they did have – their bird in hand.  This assessment uncovered both tangible assets – such as underutilized real estate and technology, as well as intangible assets – such as members and partnerships that were ripe to be built on.

So they took their planning process outwards.  They reached out to members and potential partners to see what it would take for them to increase their investment in the organization.  These dialogues led to several members, groups, and businesses identifying ways in which they would be willing to partner to develop mutually beneficial programs. 

The outcome was that they were not only closed their funding gap, but they surpassed their shortfall and achieved better than expected outcomes because their efforts were buttressed by the partnership of a stronger network. 

Creating a New Revenue Line

A technology services business used Effectuation to develop a product based revenue line. This company grew on the strength of its people and service delivery.  They had an impressive list of corporate clients but were struggling to recruit the talent needed to scale their operations. 

At the same time, they saw gaps in the products they were implementing and additional needs among their clientele.  They put this problem out to their employees and several indicated an interest in prototyping possible technology solutions.  They did this on top of their normal job responsibilities as it was of interest to them. 

The sales team took these product prototypes out to their clients to see if they generated interest.  Not only did they get positive feedback on some of their concepts, but they were able to successfully presell a version.  They partnered with the company on further development and delivered a tech product that they can no repurpose for other organizations.  This will allow them to scale and meet their growth goals.

So What is Effectuation Good For?

Effectuation is not just a process.  It’s also a problem solving method.  Whether you work in a nonprofit or a corporation, there are organizational challenges that could be addressed by applying the entrepreneurial mindset. 

If you see your company in any of these examples, consider how you and your team might apply Effectuation to solve the problems you’re facing. 

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC


Effectuation: When You Can’t Rely on Miracles

Roche Parmaceuticals is a big corporation in many ways.  It appears on the Fortune Global 500, the list of Best Companies to Work For, and Forbes’ list of the Fifty Most Innovative Companies. 

But when it comes to innovation Roche acts less like a corporation and more like an entrepreneur.  Roche’s CEO Severin Schwan was interviewed for the January 2016 edition of the McKinsey Quarterly, “Organizing for Breakthrough Innovation”.  

There are several examples of Effectual thinking, the mindset developed by Dr. Saras Sarasvathy of the University of Virginia’s Darden School of Business, in this interview.  The specific principles and terms of Effectuation aren’t there.  But underneath some very corporate vocabulary lurk the behaviors of expert entrepreneurs.

What Roche is Doing and How it is Rooted in Effectuation

1.      Bottoms Up Innovation with Top Down Allocation

Roche pushes innovation control down to lower levels of the organization.  Resource allocation remains at the top levels to ensure some coordination and consistency worldwide.  But the freedom to create and pursue new ideas rests at the local level. 

Because of local level autonomy, Roche sees some overlap in ideas from time to time.  Recognizing that this signals an inefficiency, there is a conscious cultural decision to absorb this inefficiency for the benefits gained from letting the lower levels innovate with less top-down interference. 

Moreover, Roche goes beyond dismissing the inefficiencies to embrace the notion that duplicate ideas could even serve the benefit of providing backups or collaborations for innovations.  This mindset that similar ideas do not have to be competing with each other, or a waste, is something we see in the Effectual mindset of expert entrepreneurs that allows them to view competitors as potential partners and collaborators.  This often leads to an “increase the pie” mentality that spawns new innovations rather than an “all or nothing” fear based mentality. 

2.      Scale is not an Early Stage Concern

Roche is a huge company in search of big ideas to solve big problems, so of course large-scale breakthroughs are desired.  However, the Effectual mindset prevails in that they are able to successfully hold off on evaluating the scale potential of an idea until it is given its chance to succeed. 

This is often a struggle for large companies that want to see instant results.  If not, they kill the new program or product.  Roche is in it for the long haul and gives new research the chance to take effect, and the scientists the chance to learn, grow, and adapt their treatments before they evaluate the scale potential of the idea. 

3.      Individual Accountability and Skin in the Game

Ideas require champions.  Individuals must commit to the ideas they back and they must get others on board as advocates.  If people aren’t willing to back their innovation and put skin in the game towards advancing them, the idea is not pursued. 

Once an idea is adopted as a corporate priority, one individual is given accountability for the success of that initiative.  And that accountability is pushed to the lowest level possible to give them the greatest amount of hands on control. 

4.      Cultivation of Specific Behaviors

 Three behaviors are observed as essential to their innovation success.

o   Self-initiative

o   Action in the face of ambiguity

o   Openness to outside ideas

These are all fundamental components of Effectual action.  Comfort with taking action in the midst of uncertainty stems from the knowledge that the individual has the opportunity to control the outcomes they are pursuing.  They’re not taking a chance on fate, but entering an arrangement they can influence in their favor.  Coupled with self-initiative, this aligns closely with the Pilot in the Plane Principle of Effectuation. 

Openness to outside ideas is expressed as both openness to diversity as well as openness to the value of partnering with other people, groups, or companies.  This is what opens the door to successful co-creating (i.e. the Crazy Quilt Principle)

5.      Management and Board Alignment

Mr. Schwan talks of going to the Board with long shot ideas.  But he presents those ideas in “digestible” pieces and “doesn’t bet the farm” (i.e. the Affordable Loss Principle).  Married with a strategic focus on the long-term, this enables the Board to back Mr. Schwan’s vision and leadership and creates a supportive management environment for innovation.   

Creating the Cures Instead of Hoping for Them

Roche isn’t the only corporation seeking to solve big problems with innovative solutions.  Effectuation has been proven to be an effective decision making framework in the face of uncertainty.  It’s the mindset that enables successful startups to navigate the early stages and create unforeseen outcomes. 

Mr. Schwan never mentions the word “Effectuation”.  He might not even know that there’s a word to describe this mindset.  But it’s clear by his actions that he values the Effectual process.  And this puts Roche one step closer to creating miracles, not just hoping for them. 

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC

Don’t Cry Me a River

Snow.  Wind.  Lake Michigan.  These are the three main natural elements usually associated with the City of Chicago. 

Until recently, the Chicago River was an afterthoughtIts primary function was as a dumping ground.  One day a year, St. Patrick’s Day, green dye is dumped into it for a festive flare.  The remaining 364 days it was often filled with run off, waste, and sewage.  Coursing through the heart of Chicago’s Loop, the river was used as a conveyance to transport pollution away from the city. 

Now, it is being used as an attraction to draw people into the heart of the Loop.  And the process the City of Chicago is using to enact this change is an Effectual one. 

Here are some of the Effectual principles evident, as defined by Dr. Saras Sarasvathy, of the University of Virginia’s Darden School of Business. 

1.      Pilot in the Plane Principle:  The future is not predetermined; it can be shaped. 

The City of Chicago has embraced this wholeheartedly.  Going back to the early 1900s, they were unwilling to accept the River as it was.  Originally, the River flowed into Lake Michigan.  This proved to be a disadvantage when the waste being dumped into the River by Chicago’s factories and meatpacking plants polluted the city’s drinking water. 

So what did they do?  Instead of changing their business practices, Chicago reversed the flow of the River.  After this switch, the River flowed away from Lake Michigan, outside Chicago, and down the Mississippi to St. Louis.  This kept Chicago’s drinking water clean (much to the dismay of cities further South).

Recently, the City applied the Pilot in the Plane principal in a more environmentally friendly way.  Many of the River’s main polluters are no longer operating along its shores.  Yet the waterway was still used as a waste transport channel. 

Refusing to accept this as the waterway’s destiny, the City identified the River as an opportunity for transformation, renewal and a way to stimulate the economy while improving the overall livability of Chicago. 

2.      Bird in Hand Principle:  Look at everything you have access to as a possible asset. 

Despite its presence in the middle of the Loop, the River was ignored for decades.  Now, the residents and leaders of the City are looking at it with fresh eyes.  They see potential for economic revival, ecological renewal, and a host of public – private partnership opportunities.

The results so far include construction of an expanded Riverwalk, the building of new residences that are designed to accentuate the benefits of being near the river, and the creation of protected marshland to encourage the proliferation of native fish and birds. 

3.      Co-Creation Principle:  Find others who opt in to working with you and are willing to commit resources to create a shared vision. 

The Great Rivers Chicago project has employed co-creation on a massive scale.  Over 6,000 people have contributed their ideas to the project and numerous public and private groups have participated in creating a shared vision for what the Chicago River can become. 

In addition to providing input, the participants are being asked to contribute resources.  Manpower and financial contributions are being aggregated across various stakeholders.  The outcome they are striving for is a comprehensive implementation package to bring the vision to reality in the next couple of decades. 

Building a New Future on the Past

Chicago’s grandiose temple to retail, the Chicago Merchandise Mart, sits alongside the Riverbank.  In front of the Mart Plaza, eight bronze busts are perched atop individual podiums.  Each of these busts memorializes an entrepreneur who contributed to the success of the city – Montgomery Ward, Woolworths, Filene, etc.  Chicago once thrived on the backs of these retail giants. 

Today, the spirit of entrepreneurship remains strong.  Because of Effectual thinking on behalf of the City and its residents, the River that once served primarily to export the waste of the City will welcome the next generation of Effectuators, innovators, and entrepreneurs to live and work along its shores.

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC

It’s Not What You See. It’s How You See It.

Do you see an old lady in this picture?  A young lady?  Both? 

When viewing something, the mind often fills in what it expects to see.   Humans have a tendency to rely on experience and expectation instead of sight alone.  It lets us make decisions faster and process things more quickly.  The downside of this is that there are things that get overlooked.

Innovations can emerge from looking at familiar things in new ways. 

Re-see and Repurpose

Incremental change often goes unnoticed.  If you look at your yard every day, you don’t notice the grass growing.  But go on a two-week vacation.  When you come home, the first thing you notice is how much the grass has grown.

The same applies to the assets around us at work.  We become so accustomed to what’s always been there that we take things for granted, overlook them, or even start viewing things as liabilities that were once considered strengths.

One way to jump start innovation is to consider things from a different perspective.  Can what’s around you be viewed differently?  Can resources be used differently?  Some methods taught by academics include:

·         Adaptation

Transform something that you have into something even more useful in your existing environment.  Are there any modifications or adjustments you can make to things you already have access to which would render them of even more value to you? 

·         Exaptation

Perhaps something that you’ve taken for granted is no longer working as it once was.  It might have evolved into something new, or it might be used in a way that is different from its original intent.  This can spark an innovation if you’re aware of the change.  Discerning whether something you have has undergone an exaptation requires stepping back and looking at it with a fresh set of eyes and without the blinders of past expectations. 

 ·         Connect and Combine

The value of an individual asset might be greatly enhanced by connecting it with another asset you have access to or combining it with the assets of others.  This is an opportunity to look for synergies across multiple platforms or environments. 

An Example:  Rising Tide Car Wash

The D’Eri family is very entrepreneurial.  The father, John, ran his own business and considers himself a tinkerer.  His son, Tom, shares the same interest in building and creating.  Wanting to start his own company, he took an effectual approach.  He started with assessing his Bird in Hand, one of the principles of Effectuation.  The Bird in Hand principle states that expert entrepreneurs usually initiate a new venture based on what they have immediate access to.  This usually involves considering who they are, what they know, who they know, and what they have. 

John and Tom started by looking at the resources available to them.  A novice entrepreneur will often look only at those items they consider to be beneficial.  An expert entrepreneur, however, goes deeper.  They survey their surroundings and consider how anything and everything that can be accessed can be converted into an asset. 

In the case of the D’Eri’s, one resource they had access to is an autistic family member.  Their son / brother, Andrew, is autistic.  They desired to create a business where he could not just work, but thrive and where autism would serve as a competitive advantage. 

Their outcome:  the creation of Rising Tide Car Wash. 

Here are the steps they took to grow Rising Tide from a concept in 2012 to a thriving enterprise today.    

1.      Maximized resources

People with autism often exhibit similar behavioral characteristics, such as attention to detail, enthusiasm for work, and appreciation of routine.  The father / son team considered ventures that benefited from these skills.  One that emerged was car washing.  It’s a very rote process and the use of more sophisticated technology today requires an element of standardization.  It’s also an industry where operational efficiency is a strong driver of profitability, so it seemed to be a good fit. 

2.      Translated strengths into processes

Next, the duo took a regimented approach to operations.  They defined all of the required processes and mapped them out in detail.  This became the bedrock of the business model. 

3.  Invested in training

Instilling the processes into all employees was paramount.  Rising Tide focused its efforts on building the confidence and competence of its workforce through an in-depth onboarding program.  This allowed them to staff a workforce of whom approximately 80% are autistic. 

4.       Marketed the message

An innovation spreads as its embraced by others.  In this case, Rising Tide let its community know of its efforts and results.  They provide good work opportunities for individuals with autism and a fast, quality car wash for patrons.  Many have embraced both the customer and social benefits as Rising Tide has more than tripled its volume in about 4 years.

Look Again – With Effectual Eyes

Are there things in your environment that you’re overlooking? 

Take another look at what you have around you.  Pull out that list of organizational gaps and weaknesses and give it another glance.  Can you convert anything on that list that you’re currently viewing as a negative into an advantage?  Is there something you’ve taken for granted that can be reimagined? 

The innovation you’re looking for might already be in front of you.  Maybe it’s not about looking to acquire what you don’t have, but instead, looking differently at what you do have. 

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC

A Better SWOT

How are you going to grow revenue this year?

September for many managers is the start of the business planning process.  That means making a lot of predictions about the economy, consumer behavior, and competitors. 

Instead of being a truly thoughtful exercise, business planning is often an exercise in busywork. Rather than discern real possibilities for innovation, managers populate forms with minutiae that becomes absorbed in the bureaucratic abyss.  And the discussions can often be a rehashed version of previous years.  The outcomes usually come down to how to lower costs or grow revenue based on the research data available.  It’s a lot of the same old, same old. 

If you’re finding yourself going back to the same approach as always when it comes to business planning, it might be time to consider a different way. 

Effectuation is the process expert entrepreneurs use to grow new ventures.  It can also be used by corporate managers and introduces a new way of thinking to the business planning process.  Instead of relying on data to predict what might happen, it provides a methodology for creating opportunities.  

Companies apply Effectuation by using the Assets to Action™ Model.  

This model has been called “an actionable SWOT”.  It is divided into 5 key parts. 

1.      Commitments

Successful implementation of Effectuation rests on commitments.  Decisions to invest money, time, effort, etc. depend on whether or not one attains commitments.  A commitment is the act of putting skin in the game.  Nothing is done without a commitment attached to it.  The more varied your stakeholders and the deeper the commitments, the more likely your success. 

2.      Inside

Start with an internal audit.  List your strengths.  Then think bigger.  Consider things that you own, things that you can access.  Look at your processes, culture, values, goals, etc.  Write these items on the left.  Whatever you’re willing to commit towards the innovation process, pull into the center “commitments” square.

3.      Downside

Rather than forecast expected return, identify what you’re willing to risk in pursuit of revenue growth.  This has tangible and intangible components.  Of course you’ll want to consider how much money you can spend in pursuit of your ideas.  But you’ll also want to think about the social capital and brand equity you want to expend while experimenting with your ideas. 

4.      Outside

Make a list of people / groups / brands you currently have relationships with.  These are entities that already have a vested interest in your success.  How might you approach them to join in your pursuit of revenue growth?  What could you develop that would be mutually beneficial?  Engage entities at the idea formation stage.  When you get commitments, move these into the center as well.

 5.      Upside

Look at all of the possibilities in the commitment center.  Connect and combine options.  Pull in stakeholders to help with this.  Reach consensus on a go-forward idea that involves stakeholder commitments.  Now choose specific action steps you can take to advance your idea.  These action steps should be concrete and measurable.  Track your outcomes and learnings. 

The results of these action steps serve as validation for your innovation.  They provide real market feedback, instead of guesswork, as to your idea’s acceptance.  And they provide evidence that becomes the basis for a valid business plan.   

An Example

One organization that used this process discovered that they had space that was dormant 20% of the time.  They had a partner they approached to talk about revenue growth and this partner expressed interested in “renting” the space on the off hours.  An agreement was reached to pilot this in a limited way.  Once there was evidence that it was working, they built a business plan leading to the creation of a new joint revenue stream for both organizations.   

Next Steps

You have an opportunity this year.  Why fill out another SWOT that doesn’t lead to action or revenue growth?  When you’re faced with the kick off of another business planning cycle, consider introducing a new approach – the Assets to Action™ Model.   

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC

Obstacles to Asking and How to Overcome Them

Heads you lose.  Tails you lose.  If that’s the bet, do you take it?  No.

For many people, that’s how they look at Asking.  Making an Ask can be a scary prospect.  If you don’t ask, you don’t get.  That’s a losing proposition.  Yet if you do ask, the result could also go poorly.  Another loss. 

How do you manage this?  The answer for many is – avoid asking.  But if you’re trying to bring an innovation into the world, that’s not an option

Instead, try these three steps:

1.      Recognize what’s keeping you from asking.

2.      Learn the tactics to overcome that issue.

3.      Ask, ask, and ask some more.

Over the past five years, Sara Whiffen of Insights Ignited has worked with Dr. Saras Sarasvathy of the University of Virginia’s Darden School of Business to uncover what it is that prevents people from asking.  They have interviewed and surveyed successful askers, unsuccessful askers, and those who avoid asking altogether.  While there is still a lot of analysis to be done, a few key obstacles to asking are already emerging.  

1.      Cultural Bias of the Self Made Myth

American culture is deeply rooted in the idea of being self made – lifting yourself up by your own bootstraps.  The idea that one person can do it all and grow a successful venture without assistance is completely unrealistic.  All innovative ideas require someone to take a chance on them, to opt in to participate.  Asks are necessary to grow ideas.

Tactics for Overcoming

Stories of legends are often written to inspire.  But they can gloss over many of the gritty details.  Take another glance at entrepreneurs you admire.  Look deeper into their stories for how Asks have fueled their success.  As a tool, Asking is amazingly versatile and can be applied in myriad ways.  

2.      Excess Empathy

No one likes to be put on the spot.  To be cold called, feel unprepared, or blindsided.  Everyone has had that experience at some point; feeling time stand still while you search for an appropriate answer to a tough questions. Some people hesitate to make Asks because they identify strongly with that uncomfortable feeling and don’t want to put others in that situation. 

Tactics for Overcoming

If you tend to exhibit a high degree of empathy, go ahead and put yourself in the shoes of the person you’ll be asking, but do so from a positive perspective. Imagine them wanting to help, wanting to build a relationship with you, wanting to connect with your idea and move it forward.  Phrase your Ask in a way that invites them to collaborate with you.  Don’t make demands or leave them feeling as if it is easier to disengage than to form a partnership with you.  

3.      Fear of Rejection

This is the most common explicit fear.  “What if the person I ask says No to my request?”  In that case, you won’t get what you want.  Which would happen anyway if you didn’t ask.  Either way, the outcome is identical.  But by putting your Ask out there, you risk a loss of pride.  Fear of personal rejection can be even stronger than the fear of not getting your request.

Tactics for Overcoming

Separate yourself from the Ask.  A rejection of the request is not a rejection of you personally.  It might not even be a rejection of your idea. 

Why, then, is the person saying No?  For whatever reason they don’t feel that they can commit resources towards your request. 

Studies have shown that most people want to respond to requests in a positive way.  Take comfort in knowing that as awkward as you felt hearing a No, it’s likely the other party felt just as awkward saying No. Successful salespeople and entrepreneurs alike know you will often hear many No’s before you hear a Yes. 

 4.      Fear of Acceptance

You’ve asked.  They’ve said, “Yes”.  Now what?  You have to deliver.  This is when things become real.  Now you’re on the hook to make things happen.  This can also keep people from Asking.

Tactics for Overcoming

Start with asking yourself “Do I really want to do this?”  and “Why?”. Understanding your motivations for entering into this new venture can help you overcome the Fear of Yes.  Keep it front of mind when the panic of delivery creeps in or you feel a crisis of confidence and go back to why this new venture matters to you. 

Also, now is a good time to lean on your co-founder.  Leverage this relationship to ease doubts and improve your ability to follow through on new commitments. 

5.      Fear of Maybe

Sometimes, hearing a “maybe” can be even worse than a “yes” or “no”.  It leaves things in an ambiguous state.  It elicits more questions than when you began and throws the Asker back into wondering what the resolution will be.  Avoiding this uncertainty is enough to keep some from making an Ask in the first place.

Tactics for Overcoming

Try asking in a more open way.  Instead of using “closed” Asks, drive towards a commitment by asking “What would it take to...” or “How could we…”.  These lead to more conversational opportunities and give the person being asked more room to discuss options and possibilities.  As the asker, you get more insights into how they make decisions, their priorities, and considerations.  Even if the discussion results in a “maybe”, you will have more information at your disposal for future interactions. 

Moving Forward with Asking

You can’t be a successful entrepreneur without the Ask.  It’s a necessary component of bringing innovations out of your head and into the world.  If you identify with any of these obstacles to asking, try the tips suggested.  And then Ask away.  Whatever the answer – you can’t lose. 

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC

State of Effectuation 2016

The Arctic Circle was a hotspot for Effectuation this week. The 4th Effectuation Conference was held in BodØ, Norway, June 6 & 7, 2016. Participants included academics and practitioners of Effectuation from all over the world.

Future Research Questions

Dr. Sarasvathy, the “founder” of Effectuation, was there to offer her insights on where the field is going and what she will be focused on for the coming year. A core area of interest for her is understanding what is at the “core” of Effectuation. The current hypothesis is that the Ask is the foundation for effectual competence.

Insights Ignited is partnering with Dr. Sarasvathy to research how Asking varies between novices and expert entrepreneurs and what we can learn from these entrepreneurs to facilitate entrepreneurial expertise in others. We have collaborated with her on data collection and are now in the analysis phase. Check back for more information. We’ll be writing about this in future blogs.

Assets to Action Model

Sara Whiffen, of Insights Ignited, presented our Assets to Action Model for applying Effectuation. It is a simple, tactile way to walk through the effectual process with teams, and a great way to figure out how to respond to a “VUCA” environment – volatile, uncertain, complex, and ambiguous. The outcomes are specific next steps the team can take as well as a tracking tool to monitor progress.

Participants called the Assets to Action Model a “business model canvas for Effectuation” and expressed a desire to apply it with their teams for both venture creation and as a general problem solving methodology to manage uncertainty. They commented favorably on how it engaged the team in broader discussions, ensured goal convergence, and by driving to concrete action steps, took some of the risk out of innovation.

Large Organizations Seeking Effectuation

We also heard from other Effectuation practitioners who are working with Procter & Gamble, BMW, Boehringer Ingleheim, and even the Catholic Church to solve problems using effectual thinking. It’s amazing to see how this method is taking off with organizations around the world. As things become more complex and uncertain, and traditional predictive tools don’t work as well as they used to, organizations are turning to Effectuation to manage their uncertainty.

Effectuation Increases Employee Contributions

Sara Whiffen was also featured on a panel discussing the opportunities and challenges for Effectuation. One of the questions asked was about the “cash value” of Effectuation. The discussion centered on not just venture creation, but broader societal value. Insights Ignited firmly believes that Effectuation increases the ability to control outcomes in an uncertain world by loosening control over individuals. Instead of requiring others to co-opt an existing vision, Effectuation requires that the vision be shaped by others willing to commit to participating in bringing it into the world.

This idea of loosening control to gain greater control is something that the researchers are exploring in more detail. On a societal level, it heightens the dignity of workers by restoring creative freedom and individual contributions even within highly structured company environments. We are working with companies to help them achieve this while at the same time address corporate shareholder and governance needs. The result: more innovative outcomes, stronger working teams, greater problem solving creativity and ownership, and the accompanying financial metrics to support this.

Public Policy Benefits

Applying Effectuation to public policy was also a topic of discussion. Our view is that focusing Effectuation training on a narrow segment of the population limits its effectiveness.  Effectuation is by its nature an exercise among multiple parties. It is not something to be done in isolation. Therefore, training should be open to anyone who is interested. This creates more potential partners as a wider array of people are comfortable interacting in this way, multiplying the cumulative impact.

This was of particular interest to policy makers looking at how immigration is impacting their community and how they can maximize in tandem the opportunities for both newcomers as well as existing members of the community.

For this same reason we encourage companies not to limit Effectuation training to their new product development or innovation teams. While it is possible for these teams to effectively apply Effectuation, the impact is much more powerful when dispersed throughout the organization. We have great examples of how innovation has arrived in some unexpected ways through broader Effectuation exposure.

These were just some of the highlights of 36 hours of Effectuation discussions and non-stop sunlight in the Arctic Circle. Keep checking in. We’ll be writing about these and other specific examples in the weeks to come. And if you have any questions or topics you’d like us to expand on, comment here and let us know.  

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC

Empowering Graduates to Create their Futures

As graduation season comes to a close, numerous websites offer their take on the best commencement speeches of 2016. Whether delivered with nostalgia, comedy, or regret, they offer graduates inspiration for tackling their next steps as they leave scripted curriculum paths for a world perceived by some as full of opportunity and others as riddled with chaos.

I’ve been thinking about some of my graduates, those who I’ve taught Effectuation to, and their stories. When people reflect on Effectuation and how it’s impacted their lives, I often hear them refer to it as “empowering”. I think the Pilot in the Plane principle has a lot to do with this.

Pilot in the Plane Principle

This is the mindset principle. When teaching Effectuation, some teach this principle at the end as the unifying principle. I prefer to start with it.

I find this principle is foundational. It is the belief that the future does not have to be known and predicted. Rather it can be controlled.

Pilot in the Plane Principle says that what you do matters. That success in innovation is not predetermined. It is not limited to those with an MBA. Or a research team. Or a big product development budget. Or who are located in New York City or Silicon Valley or London or Tokyo. While none of those attributes necessarily inhibit entrepreneurial success, they are not a requirement for it either.

Effectuation is a great equalizer. It recognizes that it’s not a single ingredient, but a combination of things, the process of bringing those things together, and the mindset to believe that you can make an impact, that creates new markets.

Effectual Mindset in Action

I am reminded of a young woman who received some Effectuation coaching recently. She didn’t have a particularly nurturing upbringing. During high school her grades were fairly middle of the pack. She didn’t cause trouble and didn’t attract praise. She enjoyed art and wood shop, things that she could make with her own hands. But she pretty much did as she was told, putting up with “the system” until she graduated.

Not particularly academic, she didn’t pursue college. Instead, she opted to go into contracting. Her focus was masonry and tiling. After working for a few years, she began to be recognized for her handiwork. Eventually, the thought of working for herself began to gnaw at her. Not knowing how to go about setting up her own business, she enrolled in a business class at the local community college.

In class, she was asked to speak about the greatest obstacle preventing her from going off on her own. She answered, “I’m a woman. And most people don’t think of asking a woman to do this kind of work”.

Her “market research” was showing that there wasn’t an opportunity for someone like her in this line of work. She could either change who she is, or what she does.

Fortunately, her teacher was instructing her in the effectual method. He challenged her not to accept the future as determined, but to change her mindset to one of “how can I turn this potential obstacle into a benefit?”

The result? She changed her thinking. Instead of focusing on what she couldn’t do, she thought about how she might be able to impact her career outcomes. She reached out to other women she knew in the industry with different skill sets but similar complaints. They discussed possible collaboration opportunities and decided to create a “by women / for women” contracting agency. They began to understand that many women are responsible for overseeing the maintenance work done by contractors during the day. These women might prefer having a female contractor working in the house while they are home alone instead of a male. Also, they began to look at ways they could better communicate with and educate women on issues in their industry.

When asked how she felt after applying Effectuation to her business, she replied, “I now have a big strength. I can do this because what I once perceived as negative societal factors I now see may give me an edge and put me on top of many established businesses”. She is confident and enthusiastic about creating her future. Now, she wrestles with having more ideas and possibilities for growing her business than time to achieve them all.

So to those who are embarking on something new, something unscripted, something unknown, I encourage you to embrace Effectuation. It won’t give you the power to predict the future, but it will give you the confidence and optimism to face it and the tools to create the future as only you can imagine.

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC

Where Design Thinking Falls Short

Who do you call when you’re in need of innovation help? For many companies, the answer is a design thinking expert.

Design thinking first emerged in the 1990s and has grown in popularity. It’s a problem solving approach that gained momentum at Stanford. Now firmly embedded in Silicon Valley, it has had a worldwide impact. The systematic approach appeals to many corporate managers.

But businesses make a mistake when they rely solely on this approach to innovation. In today’s business environment, there are two primary ways in which design thinking falls short.

1. Design thinking is idea focused.

Design thinking starts with a goal in mind. It encourages people to identify problems and then seek the solutions to them. The solutions are often creative and result in an unexpected outcome.

The problem with this is that great ideas don’t always make it to market. In the context of a business, market acceptance is key. And while the solution developed in the design thinking framework might be fantastic, if it’s too expensive to manufacture or lacking in customer acceptance, etc., it might remain just that – a great idea.

2. Design thinking is feedback focused.

Design thinking encourages people to solicit feedback from stakeholders. This is done through both ethnographic observation as well as direct conversations. As more data and opinions are collected, the design thinking team incorporates the feedback into the product / service build. However, despite all of the conversations, the most important one is often missing –that of asking someone to commit to purchasing the new product.

Effectuation addresses these shortcomings in the following ways:

1. Effectuation is assets focused.

Effectuation starts with what you have on hand. Tangible assets, intangibles, excess, slack, waste, anything that is accessible is fair game. This shifts the emphasis away from an acquisitive strategy to one of optimizing existing resources. In today’s budget constrained environment, it’s a much more effective approach for organizations. Rather than focus on building from scratch or buying from others, it begins with leveraging what is already available and building out from there.

2. Effectuation is commitment focused.

Effectuation is based on commitments from participants. Decisions to invest, bring products to market, change course, etc. are based on actual commitments from stakeholders. These commitments can take many forms. They can include letters of intent, prepaid purchase agreements, partner contracts, among others. The primary objective is to attain stakeholder agreement to contribute resources to the venture to ensure its success.

Many of the companies we work with begin their discussions with us by saying “we did lots of customer research where they told us they liked this idea, but when we brought it to market it didn’t sell”. This is because they only solicited feedback. We prevent this by showing them how to use a commitment driven approach when interacting with customers and other stakeholders.

Even innovation has undergone innovations since the 1990s, when design thinking emerged. Add effectuation to your innovation skill set. Whether as a complement to design thinking or as a stand-alone innovation tool, effectuation works.   

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC

Finding Value in Slack Resources

Most people have a love / hate relationship with email. While convenient it can also quickly become overwhelming. It’s been a hallmark of the digital age. And it’s also ripe for innovation. Now there’s Slack. Slack is a communication tool that’s aiming to address the annoyances of email while maintaining its benefits. And it has over 2.5 million people on board as active users.

Stewart Butterfield, the CEO of Slack, saw the time was right for upending traditional email. An MBA, he researched the industry, talked with potential users, got their feedback, and built a business plan to revolutionize the way email is used. After convincing a wealthy investor to fund his new platform, he rolled it out to great fanfare with a huge marketing budget and nationwide launch.

Or did he? Here’s the real creation story for Slack….

Stewart Butterfield, a college graduate with a degree in Philosophy, was very interested in the study of the mind and how people think. He gathered some friends of his and set out to build a new online-video game called “Game Neverending”, a massive multiplayer roleplaying game. Along the way, they built a photo sharing platform which they used among themselves. After a few years, it was clear that the video game was going nowhere, but Stewart was able to extract the photo sharing platform and build it into Flickr.

His interest in online gaming persisted and he gathered a group together a few years later to collaborate on the production of a new game idea called “Glitch”. To facilitate communications between the team members and organize the project, they built a custom communication tool. Glitch also failed. But that communication tool that the team was using was again extracted. It was the origins for Slack.

In “The Slack Generation”, an article that appeared in the May 14th edition of The Economist (, they claim that Mr. Butterfield is “wonderfully unlucky”. I claim that he is Effectual.

Mr. Butterfield experienced two big failures in his quest to create new online games. But each time, he was able to turn the failure into something positive. This is part of the effectual mindset that converts failures into opportunities (the Lemonade Principle of Effectuation). He took remnants of his failed projects and turned them into valuable assets. In fact, he made $35 million on his first failure when Yahoo purchased Flickr in 2005.

The future of Slack remains to be seen. There’s a lot of speculation as to whether it will be acquired or go public. But my guess is that Mr. Butterfield isn’t one of those who are speculating. Instead, he’s effectuating his path to innovation success.  

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC