Release date: July 29, 2020
Speaker: Martin Reeves, Chairman of the BCG Henderson Institute
Description: As business environments become more changeable and long-term growth rates decline, companies increasingly need to innovate – across their operations, offerings, and business models. We know the powerful effects of innovation, but what is upstream of innovation? How can we understand and shape the murky mental territory that leads to good ideas: the realm of imagination? How can we harness this uniquely human capacity in an age when more routine cognitive tasks are being substituted by machine learning?
Big businesses often struggle to make use of imagination. They may try to make it a mechanical process and end up with routinization and incrementalism. Or they may treat it like a magical power, celebrated in tales of great innovators, in the hope that good ideas will appear as needed without any special efforts. As companies grow, it becomes harder for them to be imaginative. Larger companies tend to focus on exploiting what they know and what originally gave them scale. Corporate vitality – the capacity for future growth and reinvention – measurably decreases with size.
Of course, we have the imagination of entrepreneurs to help create new products, services, and business models. Yet, the idea that entrepreneurs take the lead in imagining new businesses and big companies can focus only on managing established ones at scale, is falling apart. All companies – large and small, new and old, local and global, in traditional developed markets and in dynamic emerging markets — face increasingly unpredictable environments and the prospect of stagnation or disruption if they do not continuously imagine and innovate.
Fortunately, business environments are increasingly malleable, and offer many yet unrealized opportunities to create and capture value, if we can first imagine them. As well as competing on scale efficiency, we must increasingly compete on imagination. We need to get serious about understanding this capacity, how it works individually and collectively, and how to deploy it reliably and powerfully, especially in large mature businesses that have been successful through one way of doing and seeing things.
Unfortunately, there isn’t a textbook or a playbook of how corporate imagination works or how to systematically enhance and harness it. Drawing on research for a forthcoming book from Harvard Business Press, we will examine:
- What imagination is and what it does
- How imagination works
- The social dimension of imagination
- What stops big companies from being imaginative
- How to build and operate an “imagination machine”
We are excited to partner with the BCG Henderson Institute for this session. Bruce Henderson, for whom the Institute was named, was a founding member of the Strategy Management Society. He was active with the SMS from its very beginning including helping design the first SMS conference in London, England in 1981 alongside early strategic management luminaries Henry Mintzberg, Derek Channon, Igor Ansoff and Dan Schendel. Bruce was on the board of the SMS for many of its early years. He was also an SMS Fellow until his death at 77 in 1992.