[MUSIC] So why is it that if we know we need to be more responsive to the environment and we need to change our organizations to create value, why don't we just do it? Well, first of all, fear of change is human nature. But, also within organizations there's something at work that's an largely invisible force, and it's called the dominant logic of our organization. It isn't about culture, although dominant logic has an impact on culture, but dominant logic will determine how we approach the world, how we see the world. Its a sort of filter through which we process all the information about what's happening to us and to our organizations. Dominant logic begins, it has its genesis, the first time that we succeed. And it becomes stronger every time we succeed because we're getting rewarded for the way we're doing things and the way we're viewing the world. But sadly, it doesn't evaporate when we start to fail. The idea of dominant logic was first explored by two very smart gentlemen named C. K. Prahalad and Richard Bettis in 1986. There are several levels to the thinking and you can read more about it on the resources on the reading list for this week. But in a nutshell, this theory identifies that the source of dominant logic is within our successes, that when we do things and are rewarded for them by being successful, we begin to absorb the world view that we had at the moment at which we were successful. And that means in our organizations, we begin to build up core competencies around this world view. But we also then begin to regularly seek confirming information for how we think the world works. Well, that's fine as long as the world doesn't change, but the problem is the world changes all the time and it's changing faster every single day. So, we need to check and be aware of our dominant logic. Now, what can happen, and what does happen when we don't continually revisit our assumptions about the world we're creating value in, and for us, the world can kinda pass us by. We can develop mental maps, cultural norms, ways of doing and being that can be amazing and productive, if they're correct. But if they're out of step with what's actually happening in the world, they can be really damaging to our ability to be sustainable or to create value. Now these deeply held assumptions are as I said, often invisible. But they exert a powerful centrifugal force on our organizations. If you look at this next chart, this shows you the difference between assumptions and beliefs. Things you can check or verify, those are our assumptions. We could call them facts, right? Things that you can't check but you feel to be true, you know to be true, you intuitively believe to be true, those are beliefs. The things in the middle are those things which you absolutely are certain are true. But what happens is, we don't check these assumptions. This slide shows the difference between assumptions and beliefs. But what it doesn't show is that we need to constantly be checking with the outside world to make sure that what we believe to be true Is actually true. After all, if it was true yesterday, it has to be true today, right? Well sometimes what got us here isn't gonna get us where we need to go. Here are a couple of examples of dominant industry logic. They look ludicrous today, but at the time, these were considered very sage. You have the late Ken Olson talking about why would anyone ever want a computer in their home? And you have Darryl Zanuck talking about the fact that, nah, television's kind of a, it's a passing phase. Well, now we laugh at these things, but at the time both of these gentlemen were considered to be very, very astute about their industry. They weren't looking past the dominant logic to see how the future might look different. So dominant logic, therefore creates a set of constraints within which we operate, and it's true for our sector as well as for individual organizations. Dominant logic, unexamined, can keep us from diversifying our product lines, and from innovating. If we take a more anthropological view of how we test our assumptions, and by that, I mean we're going to talk a little bit more about it in the next session. But by that, I mean we actually look at the world around us to see what people want, what people need. We might find that we become more aware more quickly of changes in the environment that we could usefully respond to. So here's a dominant logic assumption. High quality music will never be completely portable. And I think we're probably all grateful that Steve Jobs didn't really buy that. So what can we do? Well we can't be assuming that we're all living in the matrix all the time and that nothing is real and that everything is gonna change every second. I mean maybe you can but it would make me crazy. You can't run an organization in that way either. What you need to do is to build into the operations of your organization a regular check of your assumptions. A real examination of the dominant logic. There's a mysterious and very arcane activity that allows us to do this, and it's called market research. I'm not talking about fat reports that sit on somebody's shelf and gather dust. But actually going out into the world around us, talking to people who don't take part in our organizational work, as well as those who do take part. And to look and check our assumptions about how the world actually operates. If we do this, we can recognize our sector and our industry biases. We can recognize our individual biases because we all have them. We can begin to understand that we don't have to do things the way we've always done them. We can increase our knowledge of tomorrow's audiences. And really importantly, we can devote time and resources to research and development, to using this new information to experiment. So it turns out that Socrates really was right, the unexamined life isn't worth living. [MUSIC]
