Exponential: growing your leadership at the same rate as your business

The premise of Azeem Azhar’s new book Exponential: How Accelerating Technology Is Leaving Us Behind and What to Do About It is that whilst technology is developing at an increasing, exponential rate, human society can only ever adapt at a slower, linear pace. In the Exponential Age there’s an ‘exponential gap’ between the power of new technology and humans’ ability to keep up. What does this mean for leaders building modern technology businesses? Could your business grow at a faster pace than you can? Can this ‘exponential leadership gap’ be filled?

I believe it can. It’s hard for humans to fathom exponential change, but it’s not impossible. We live in a complex universe, but our adaptive nature means we’re still surviving and thriving millions of years after we first appeared here on planet earth. Closer to home, my work brings me into daily contact with the leaders of the future: individuals and teams on a mission to bring new models of business, work and leadership to a more diverse world. I’ve noticed big shifts in some leaders as they embark on this journey of business and personal growth. Through Vertical Development they increase their capacity to make sense of the ever-increasing amount of complexity they experience as they scale, helping them navigate the exponential leadership gap effectively.

What gradually happens is not just a linear accretion of more and more that one can look at or think about, but a qualitative shift in the very shape of the window or lens through which one looks at the world.

Robert Kegan, Harvard developmental psychologist

We’ll explore how you can drive the rapid growth of your business, whilst at the same time keeping pace with it. We’ll consider:

  • What exponential growth is and how it impacts the rapid growth of modern technology businesses, including people and teams.
  • Leadership and the linear accretion of knowledge – how traditional horizontal approaches to leadership, which focus on understanding the job to be done and the capabilities required to do it, fall short.
  • Leadership and the exponential accumulation of capacity – how Vertical Development – sensemaking, perspective taking, self-relating and opposable thinking – can help you make sense of the complexity that surrounds you and construct meaning within that complexity.

I hope these new perspectives on leading high-growth technology businesses open up a new way for you to think about your own development. One of the main things you’ll discover is that your growth as a leader has the potential to be as exponential as the growth of your business.

Table of Contents

Understanding exponential growth

Azhar unpacks how rapidly changing technology has led to change occurring at an exponential rate, referring to an increase that compounds consistently overtime. An exponential process is like a savings account with interest. It increases by a fixed percentage, say 2% every year. But next year’s 2% applies not just to your original savings but to your savings plus last year’s interest. Compounding starts slowly but at some point, the curve turns upwards and starts to take off. From this point onwards, the value leaps higher at a dizzying pace.

A linear process is what happens to your age, increasing by a predictable one each year. Many existing business models, and our institutions, are built upon the principle of linear change. Until just a decade ago, most companies assumed the cost of their inputs would remain pretty similar from year-to-year, adjusting for inflation. But in the Exponential Age, the primary input for a company has become its ability to process information, driven by Moore’s Law and rapid technological adoption. In turn, this has led to huge shifts in how companies grow and take market share.

During the Exponential Age, technology driven companies tend to become bigger than was previously thought possible – and traditional companies get left behind. This leads to winner-takes-all markets, in which a few ‘superstar’ companies dominate- with their rivals spiralling into inconsequentiality. An exponential gap emerges – between our existing rules around market power, monopoly, competition and tax, and the newly enormous companies that dominate markets.

Exponential: How Accelerating Technology Is Leaving Us Behind and What to Do About It
See also Increasing Returns and the New World of Business and Arthur’s First Law

Exponential - Azeem Azar

Understanding the exponential leadership gap

The Exponential Age is a function of the complex world we live in. Herein lies an important shift in how we need to think about the type of leadership required to fill ‘the human factor’ in the exponential gap. But it’s tricky because humans aren’t wired for exponential growth.

Azhar talks about cognitive biases, like exponential growth bias, which makes it hard for us to underestimate the future size of something growing at a compounded rate (as the pandemic proved) and anchoring bias which means people’s expectations remain anchored around small figures from early in the growth curve.

There’s a broader consideration here, which Azhar alludes to throughout the book. We live in what complexity scientists call a complex adaptive system. Such systems are characterised by many characteristics that humans really struggle to get their head around. We like to believe that our lives are ordered, predictable and subject to a great deal of control. In reality, our world is much more unpredictable and unknowable than we’re comfortable believing.

All complex adaptive systems share common characteristics, irrespective of whether the complex adaptive system is the economy, the internet, an ant colony or the brain. First of all the system is complex, it contains many diverse and specialized agents, components or parts (>3) in an intricate arrangement, which are the building blocks of the CAS. Second, it is adaptive, it has the capacity to change under influence of feedback or memory (learn from experience) and thus evolve, giving it resilience in the face of perturbation. CAS are usually open systems, in other words a system which continuously interacts with its environment. This permits feedback.

The most important characteristic of CAS is that they show emergence: the whole is more than the sum of the components and the very specific connectivity creates a new property. CAS are self-organizing, that is, the complexity of the system, and thus emergence, increases without an external organizer but by making the components competitive. This results in nonlinear [exponential] behavior: small causes can have large results, also known as the butterfly effect. Thus anything can emerge, depending on the feedback, and if you wait long enough it will happen. The emergence arises once a lever or tipping point has been reached.

Complex Adaptive Systems

It’s frightening to think that complex adaptive systems operate far from equilibrium. In effect, they’re always on the edge of chaos. In the ‘old world’ – before we understood complexity and the technological characteristics of the Exponential Age emerged – things were considered relatively stable, certain, simple and clear. The ‘new world’ is anything but – it’s Volatile, Uncertain, Complex and Ambiguous (VUCA).

We live in a VUCA world now

VUCA was adopted by the US military to describe a post Cold War world. The old world was considered relatively stable, ordered, simple, predictable and linear. The new world is anything but. Although the term was apparently first coined in 1987, the grandfather of technology management, leadership and strategy, Intel’s Andy Grove, was already discussing ‘CUA factor’ (Complex, Uncertain and Ambiguous) in High Output Management, first published in 1983.

An imaginary composite index can be applied to measure an environment’s complexity, uncertainty, and ambiguity, which we’ll call the CUA factor. Cindy, the process engineer, is surrounded by tricky technologies, new and not fully operational equipment, and development engineers and production engineers pulling her in opposite directions. Her working environment, in short, is complex. Bruce, the marketing manager, has asked for permission to hire more people for his grossly understaffed group; his supervisor waffles, and Bruce is left with no idea if he’ll get the go-ahead or what to do if he doesn’t. Bruce’s working environment is uncertain. Mike, whom we will now introduce as an Intel transportation supervisor, had to deal with so many committees, councils, and divisional manufacturing managers that he didn’t know which, if any, end was up. He eventually quit, unable to tolerate the ambiguity of his working environment.

Exponential growth and it’s impact on people and teams

Grove was the co-founder of Gordon Moore (creator of Moore’s Law, discussed earlier) at Intel. If anyone understood the broader implications rapid technological growth across not just products and industries, but also people and teams, it was him.

Another feature of complex adaptive systems, including exponential growth and emergence, is that of network effects – in which the addition of every new member of the network increases the value of the network for everyone. Otherwise known as Metcalfe’s Law, the impact that network effects have had on the growth of many of technology’s superstar companies is well documented.

Such network effects are one reason why many exponential age firms, like Facebook (Meta), PayPal, Microsoft, Google and eBay, are so large and successful. As we’ve seen, these companies were made possible by the exponentially increasing power of computing. But the network effect is what drives them to ever-bigger gains. Most people who use a consumer social network use Facebook (Meta) because that is where everyone else is. Businesses accept Visa or Master Card because they are the platforms with the most buyers on them. This positive feedback loop makes the business better and stronger as it gets bigger.

Exponential: How Accelerating Technology Is Leaving Us Behind and What to Do About It

But as well as helping us understand how network effects influence growth in terms of metrics like customers and revenue, it also helps us understand the growth of people and teams. As shown below, a business with 10 team members is very different from a team with 50 members, which is very different from a team with 150 members (reaching Dunbar’s Number ushers in a whole new world of complexity) and beyond.

Metcalfe's Law

Whilst network effects can create what economists call positive externalities in terms of business growth, they can have serious negative internal ramifications if employee growth is not managed effectively by leadership. When asked by leaders I coach why they feel their ability to manage and lead their business is suddenly getting away from them (recall the earlier definition of exponential growth and how things take off), it’s the visual above that I send them. The capacity for leaders to see and hold the complexity associated with the growth of their businesses from a people and culture perspective is another reason why Vertical Development is so important.

Horizontal development: leadership and the linear accretion of knowledge

In tackling the exponential leadership gap, the problem is that there’s still too much focus on developing leaders for the old world. Leadership is traditionally framed in terms of understanding the job to be done and building the capabilities required to do it. Thinking about leadership in this way is fine for building baseline skills but only facilitates linear growth – it takes a complicated, rather than a complex approach to leadership and business building, as opposed to the other way around.

The job of leadership

Technology leadership literature places a heavy emphasis on the job of a leader: leadership as a set of tasks which, when combined, lead to effective insight and action. Fred Wilson wrote the classic on the subject of CEO responsibilities within a high growth technology business (Lux Capital extended the definition in 5 Core Jobs of a CEO, and NFX too in What Makes a Strong Startup CEO).

A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.

What a CEO does, Fred Wilson

The good news is that all these responsibilities are task focused, bounded and learnable, albeit not necessarily easily or by anyone. To a large extent, someone with the right experience can teach you these leadership essentials: how to set a vision, to run an effective recruitment process and interview effectively, financial control, cashflow and fundraising. Framing the job of leadership like this also helps new leaders focus on what is and isn’t important.

The bad news is that expressing what leadership is in this way is vastly incomplete. There’s a host of additional capabilities and capacities that leaders need to learn and develop (to the extent that they know or possess them in the first place) in order to be able to do their job effectively.

Leadership capabilities

Capability is the ability to execute on a specified set of tasks and course of action in order to achieve a certain outcome or set of outcomes. Capable people have the potential to acquire more specific skills and abilities in order to help them do this. In doing so, their knowledge and skill set increases and they become more capable at achieving required outcomes.

Developing technical skills, behaviours, adding information and knowledge; these are the more day-to-day, practical aspects of managing and leading people. They include things like running effective meetings, delivering training, conducting one-on-ones, giving effective feedback, coaching your team, conducting interviews, investor and Board updates, designing and implementing new organisational design structures etc. This is the type of learning and development that we are used to receiving through school and college, and most traditional talent and leadership development initiatives.

Like the job of leadership, these capabilities are largely task focused, bounded and learnable. The bad news is that expressing what leadership is in this way remains incomplete. That’s because all these interventions help people become more proficient at their job but they expand and enrich leaders only within the context of their current way of making sense of their world and constructing meaning within it. Because we’re hardwired to make sense of the world in a linear fashion, the exponential leadership gap remains as our businesses race away from us.

Vertical Development: leadership and the exponential accumulation of capacity

Developing your capacity for leadership isn’t the same as developing your capability. Advancing your capacity extends your ability to make sense of the complexity that surrounds you and influences the way that you construct meaning within complexity.

Traditional horizontal development, focuses on the acquisition of further knowledge, skills and development of specific personal qualities to become more proficient and experienced in a given aspect of leadership. By contrast, Vertical Development transforms the underlying capacity of the leader to make sense of and respond to situations, working directly on their internal ‘meaning making’, rather than just behaviours or actions. Vertical Development complements horizontal development rather than replacing it – leaders still require the knowledge, skills, competencies and personal qualities to be able to perform effectively at whatever development stage they may be operating. Think of the difference between adding more apps to a leader’s repertoire, and helping them to change their underlying operating system.

Vertical Development: building leadership capabilities for the future

Taking another analogy, Nick Petrie imagines the mind as a cup. Existing leadership advice and development is horizontally focused – pouring new content into the leader, focused on the jobs and capabilities already discussed. For new leaders this is helpful and necessary, but the CEOs and leaders of the future will be the ones who don’t just fill up their cup, but make it bigger, allowing them to think and act in more complex, systemic, and interdependent ways. This is Vertical Development, and it’s what’s needed to really help leaders lead people and build businesses in the Exponential Age.

Vertical Development - Nick Petrie

How can you develop your capacity for leadership?

Equipping leaders with foundational horizontal leadership is an essential part of their early development. But to navigate an exponential, VUCA world requires leaders need to be able to ‘see’ and ‘hold’ the emerging complexity in front of them. In Upgrade: Building your capacity for complexity, Richard Boston and Karen Ellis link VUCA with four leadership capacities that underpin vertical skills.

Sensemaking – Observing, understanding and processing the complexity of a situation e.g. getting your head around all the different interconnected topics, data, issues or causal relationships.

Perspective-shifting – ‘Zooming out’ to benefit from a more realistic and multifaceted understanding of a situation or relationship e.g. understanding the perspectives and agendas of the various stakeholders.

Self-relating – Observing, understanding, regulating and transforming yourself e.g. making sense of your own reactions, thoughts and feelings.

Opposable Thinking – Responding to the dilemmas and conflicting ideas that can create tensions within us and / or between us and other people e.g. working with opposing views.

Sensemaking

Sensemaking is the process by which people give meaning to their collective experiences. It is the process of “structuring the unknown” by “placing stimuli into some kind of framework” that enables us “to comprehend, understand, explain, attribute, extrapolate, and predict”.

The capacity for increased sensemaking is one of the biggest shifts that I see in founders and new leaders as they personally grow. Early on in their journey, I can feel clients in coaching sessions viscerally grappling with existing frameworks, blueprints, playbooks and mental models. It’s like they’re trying to squeeze their reality through them, until The Correct Answer appears (I borrowed this from Cedric Chin, see below). When their reality inevitably doesn’t quite fit, it can lead to confusion and despondence.

As their mental complexity increases they come to realise that building a business is not like building a set of Lego, following the instruction manual to assemble the individual parts provided. Blueprints, playbooks, mental models and suchlike are helpful but they’re just tools in a collective toolbox. No one tool is exactly right for the job, the map is not the territory and all models are wrong, but some are useful.

Reframing the way they make sense of their reality allows them to create a new relationship with it, that recognises the inherent uncertain and complexity in front of them. Instead of being confused, despondent and fearful, they can embrace their unknowable future, with the knowledge that they’ve enhanced their capacity to deal with it (whilst at the same time adding a few more tools to their complexity toolbox).

Initially… we borrow tools and processes for identifying, analysing and solving problems from the people around us – experts, teachers, parents, siblings, colleagues, mentors and so on. We think in a step-by-step way, one task or sub-goal at a time.

As we progress… we begin to create tools and processes of our own, especially in relation to the things that most interest us – whether that’s innovation, sales or accounting processes, manufacturing improvements, capability frameworks, marketing models or something else. We’re also thinking in a way that is more end-goal directed. We’ll take our objectives and map out a whole trajectory for reaching them. However, once we’re underway we can get blindsided when our carefully designed processes and programmes hit an unexpected snag. So we often resort to simply pushing harder, rather than stepping back and seeking an alternative path or altering the destination to better suit evolving conditions.

We start to notice that there are many acceptable (or good enough) ways of reaching a given objective. As a result, we become less attached to the tools and ideas we lovingly crafted. We’re more willing to improve them, discard them or use them interchangeably with other tools to suit the situation in which we find ourselves. We’re not just able to identify different paths to a given objective, we’re also starting to question the objectives themselves… We’re creating alternative ways of reasoning about a situation or issue – rather than just different arguments within the same way of thinking. We also start to compare the usefulness of those different ways of reasoning, and each approach’s fit with our values.

[The next level] is a watershed in our ability to handle complexity. We suddenly develop new ways of thinking about the multiplicity of possible pathways and desired outcomes. We start to develop our own overall models and frameworks for thinking about the situations or professional domains we’ve been mastering. Were able to gather up hugely diverse sets of ideas and influences into a single map of ‘what’s going on around here’, then use that map to choose strategies, drive decisions and establish what is negotiable and what isn’t.

Upgrade: Building your capacity for complexity

More sensemaking resources

In Reality Without Frameworks Cedric Chin explains why frameworks are so compelling to the human mind: “because the mind is a sense-making tool, and sense-making tools abhor not making sense of information. So it shouldn’t be a surprise that frameworks feel like they are the Right Way To Think About Things™.”

Want to be a better tech leader? It’s complex introduces you to Cynefin, a sensemaking tool for leaders.

In World Building, Alex Danco introduces systems thinking as a component of sensemaking in a complex adaptive system: “early in your career, you’ll be typically tasked with accomplishing simpler things that require a single-threaded effort, or aim at one specific obstacle. But as you grow and take on more complex responsibilities, or stake out on your own and try to bring your own ideas into the world, you’re going to quickly learn that the actually hard problems in the world worth working on are system problems. Trying to ship something inside a big company? That’s a system. Trying to build a startup that rearranges the world in an interesting way? That’s a system too”.

Perspective Shifting

Perspective-taking

The ‘same thing’ can look very different to different people, depending on how they are looking at it. That’s because we all see the world through our own lens, hence we make sense of it in different ways. It’s not that one way of seeing world is right and another wrong, it’s just different. Individually, it can be easy to get stuck in a singular, sometimes myopic, way of viewing things. So on a regular basis, we need able to put on a different pair of glasses in order to shift what we are seeing and the way we are seeing it.

Taking multiple perspectives enables people to see a wider range of possibilities, be able to empathize, make deeper connections, and understand the views of others. Even with these benefits, taking multiple perspectives isn’t natural for most people. The brain acts as a filter, keeping from view any ideas or perspectives that might be disconcerting – or that might actually teach us a thing or two. Intentionally taking other people’s perspective stretches the mind and makes it possible to see new options. When someone has the habit of taking multiple perspectives for herself, others begin to sense the openness and begin to offer information that a person with a more closed perspective and affect might never hear. This means that the multiple perspectives begin to be fed from within and from without, and people have greater access to the broader views they need in order to address complex issues.

Changing on the Job: Developing Leaders for a Complex World

Ways to shift your perspective

Listen to learn, rather than to convince“Listening is a key leadership skill no matter how complex the situation is. Listening well gives leaders new information, helps them make better decisions, and builds relationships. Listening is not just an additive skill; It is perhaps the most central of all leadership skills” says Jennifer Garvey Berger, in Coaching for an Increasingly Complex World. She brings this vertical skills to life in this video.

Engage differently, and ask different questions

  • Do you have the right people in the room to get a wide variety of opinions and perspectives? Or are you cosying up to your closer inner circle?
  • Are you talking to the same people? Who have you not spoken to in your business, our outside of it, who you know you should do? From whom could you learn something new?
  • Who have you written off as uninteresting or unmovable? What could you learn by listening to that person rather than trying to tell him something?
  • Which people or parts of your business do you know little about and how could you find out more?
  • Whose perspectives are you most certain about and how could you be wrong?

Taking existing perspectives, seek new ones, and integrate them“There’s a complexity gap between the task demands of most leadership roles and the capacities of the leaders. And so we tried to set in and differentiate that complexity gap across a couple of domains. Like where is it, the complexity? Is it that they don’t understand operationally the complexity of the stuff they’re doing? Or is it the social complexity, the perspective taking complexity? We found a lot of differential between people’s ability to handle the kind of, let’s say, engineering problem solving side of their jobs, and that the struggles emerged in the domains of perspective taking, perspective seeking, and perspective integration” explains Zak Stein in this podcast on the history & dynamics of hierarchical complexity & human development.

Don’t surround yourself with people just like you – it is easier to take the perspective of someone who agrees with you than someone who disagrees with you. Our hardwired, homophilic tendencies narrow our own perspectives, distorting our view of the world and limiting our capacity to make better sense of it. That’s just another reason why building diverse, equal and inclusive teams are so important.

Empathy is not the same thing as perspective taking – perspective-taking is an important skill, but it’s not to be confused with empathy, its emotional cousin, says Dr. Gillian Ku, Professor of Organisational Behaviour at London Business School: “Empathy is about feeling the other person’s feelings. Perspective-taking is a cognitive phenomenon, a thought process.” It’s a process that begins in childhood: we start out with a more egocentric worldview then learn to adjust how we see things to accommodate others’ viewpoints. 

Self-relating

There are these two young fish swimming along and they happen to meet an older fish swimming the other way, who nods at them and says “Morning, boys. How’s the water?” And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes “What the hell is water?”

This is Water, by David Foster Wallace
Subject-Object - Robert Kegan

[Self-relating] summarises our ability to relate directly to aspects of our inner experience – our thoughts, emotional responses, beliefs, gut-feels, historical patterns and habits of mind. These things play out continuously in the internal theatre of our brains and bodies, influencing our actions and decisions whether we are aware of them or not . Capacity for self relating plays a pivotal role when it comes to interpreting and operating in this world. The more we understand the source of our habits, decisions and choices, the less we are at the mercy of unconscious forces and rules of thumb that biases our thinking and can keep us stuck in unhelpful patterns of behaviour, thought and emotional response.

Upgrade: Building your capacity for complexity

Robert Kegan talks about us moving from being Subject to our thoughts (those elements of our knowing or organising that we are identified with, tied to, fused with, or are embedded in), to holding them in a more Object way (having the capacity to reflect, handle, look at, be responsible for, relate, take control of, internalise and assimilate them). Like the two fishes, we are ‘had by’ our beliefs when it is like the water that we swim in.

For example, if I am had by my belief that my venture capital investors know much more about my industry than I do, then I might feel torn when I disagree with a course of action they propose because, deep down, I think they’re making a bad call. Afterall, they’ve been doing this for years, right? However, if I’m able to step back, reflect and notice that I have this belief then I can metaphorically hold it up in front of me and explore it from other angles. I might ask if my investors’ expertise is applicable in this complex situation? Are their own biases, and the things they are Subject to, leading them to be over-confident? What other nuanced criteria might I consider?

Developing capacity for complexity

For many years it was assumed that once you reach adulthood, development ceased. You were now an adult! That was until about forty years ago when developmental psychologists like Kegan and others came along and suggested that some humans (though not all) seemed to undergo qualitative advances in their mental complexity akin to earlier leaps from early childhood to later childhood and from later childhood to adolescence. Kegan and colleagues discovered that as adults develop ‘vertically’ we move through some big shifts, and they were able to identify specific stages that we travel through.

We start with a dependant (or socialized) mindset. We take our cues, sense of worth and identity from others – we are dependent. Then we grow to be independent (or self-authoring). Here we have a sense of our own identity and can assess things against an internal compass and values and paradoxically from this base become more consistent and creative. Beyond this, we then grow to integrate the two and become interdependent – part of something bigger [self-transforming].  The big shift most of us (need to) make is from dependent to independent. It’s not easy, humans are social animals and care deeply about how others perceive us, it’s a good thing but this need to fit in can hold our growth back.

What does Leadership Development and learning to ride have in common?

In An Everyone Culture: Becoming a Deliberately Developmental Organisation, Kegan and his co-author Lisa Lahey show how each of six people in their 30s (the darker dots) below are at a different place in their level of mental complexity, and some could be more complex than a person in their 40s. People move through these evolutions at different speeds, and many of us, if not most of us, get stuck in our evolution and do not reach the most complex peaks.

An Everyone Culture: Becoming a Deliberately Developmental Organization

Kegan and his colleagues had discovered that adults who continue to develop vertically i.e. their ability to handle mental complexity increases, make for better leaders and they mapped out why. For founders and new leaders in scaling technology companies, by far the biggest observable shift is from a Socialised to Self-Authored form of mind. Arguably, this is one of the biggest developmental shifts that any leader can make. Yet it is the one least discussed in an ecosystem focused traditional notions of leadership appropriate for a linear world.

Kegan's stages of mental complexity

Opposable Thinking

In complexity, two alternative things can be true at the same time. The problem is that our brains have evolved to think in more binary terms. Brian Emerson and Kelly Lewis explain the biological basis for this.

From an evolutionary perspective, the brain is masterful at either/or thinking, and it doesn’t like the nebulousness off both/and. From the earliest times, the brain has had to quickly determine if something was safe or dangerous. Seeing things in opposition is hard wired into our brains, which makes it completely logical and understandable that we would have to work harder to hold a both/and mentality.

Navigating Polarities: Using Both/And Thinking to Lead Transformation

Yet in business and leadership we are often faced with both/and situations, otherwise known as paradoxes, polarities, dualities, or wicked problems. Developing the capacity to think in a more integrative way is a core vertical leadership skill. Says Roger Martin.

The leaders I have studied share at least one trait, aside from their talent for innovation and long term business success. They have the predisposition and the capacity to hold two diametrically opposing ideas in their heads. And then, without panicking or simply settling for one alternative or the other, that able to produce a synthesis that is superior to either opposing idea.

The Opposable Mind: How Successful Leaders Win Through Integrative Thinking

He identifies four differences between what he calls conventional and integrative thinkers, which I’ve paraphrased here:

  1. More salient features make for a messier problem. But integrative thinkers don’t mind the mess. In fact, they welcome it because the mess assures them that they haven’t edited out features necessary to the contemplation of the problem as a whole. They welcome complexity because they know the best answers arise from complexity.
  2. They don’t flinch from considering multi directional and non-causal linear relationships simple uni-directional relationships are easier to hold in mind, but they don’t generate more satisfactory resolutions.
  3. They allow complexity to compound as they design their decision’s. The complexity presents a cognitive challenge that integrative thinkers welcome, because they know that complexity brings along in its train an opportunity for a breakthrough resolution.
  4. They always search for creative resolution of tensions, rather than accept unpleasant tradeoffs.

Emerson and Lewis use the double colon :: to emphasise that these are not either/or choices, nor is it a case of choosing one versus the other. The challenge for the leader is to first identify, then balance both poles and find a ‘Third Way’ through.

Niko Canner talks about this specifically in the context of technology leadership.

Duck or rabbit? 100-year-old optical illusion could tell you how creative  you are | The Independent

Anyone who has built a company knows what it’s like to flip back and forth between just knowing that what they’ve pictured in their head really will get realized in the world – and despairing that the latest just-maybe-insurmountable obstacle could derail the venture entirely. In his Philosophical Investigations, Wittgenstein writes about the “duck-rabbit” picture. We can see either animal at any time, but can truly see it as both at once. Similarly, the practice of entrepreneurship has two sides that can be very difficult to experience together:

1. The conviction that the ultimate goal can and will be achieved, inspiring purposeful, decisive action toward that distant future

2. Self-critical assessment that acknowledges what is likely to be required to achieve the goal—the ability to regard with clinical accuracy the immense gap between those requirements and one’s current resources, capabilities and vision

The “Duck-Rabbit” and the Art of Entrepreneurship

It’s easy to think about decisions as either/or choices. But as we develop this vertical skill, we start to be able to recognise the opposing themes that are in play. This capacity takes time to develop, and starts with first recognising the poles that are in play.

Here’s a few that I’ve discussed with my own clients that may resonate:

Lead with confidence :: demonstrate humility
Lead by example :: delegate effectively
Have the answers :: ask the right questions
Support team :: provide freedom
Be decisive :: be inclusive
Create psychological safety :: not please everyone, all the time
Communicate confidently :: listen intently
Manage complexity :: keep things simple
Execute to plan :: learn & iterate

Emerson and Lewis have designed an excellent sensemaking tool to help you do this. I use this with clients, but you can download and experiment with it yourself.

POLARITY NAVIGATOR - Andiron, Llc Trademark Registration

Shifting your leadership mindset for the Exponential Age

Azeem Azhar suggests that the solution to the exponential gap is a shift in mindset. The first shift, he says, is acknowledgement that technology’s shape, direction and and impact are not preordained. Its path is not set. We are the ones who decide what we want from the tools that we build. The second mindset shift involves acceptance.

Recognising that while we can shape it, technology will nonetheless bring rapid, often unexpected dislocations. In the face of these changes, we must avoid the temptation to prevent experimentation, or choke the creative rigour of the market. Chaotic, unpredictable developments can be for the good – it’s our responsibility to channel them when we can and manage their surprises when we can’t.

Exponential: How Accelerating Technology Is Leaving Us Behind and What to Do About It

For leaders crafting this new future, I’m proposing a the third mindset shift relating to the capacity to see and hold the complexity that unfolds in front of them. Whilst the continued accretion of linear horizontal skills is important, it won’t be enough to help leaders navigate the complexity of the Exponential Age, which requires more fundamental vertical shifts in order that they are more able to:

  • Acknowledge their natural human linear biases and increasingly make sense of an exponential world.
  • Expand their worldview by seeking, taking on and integrating the perspectives of others around them particularly their teams, customers and society in general.
  • Increasingly look inwards, to self-relate to their inner experience, their thoughts, emotional responses, beliefs, gut-feels, historical patterns and habits of mind.
  • Engage in opposable thinking by embracing the messiness of complexity, then identifying and integrating the many polarities that surround them.

Appendix

Leaders of high growth technology business are often, but by no means exclusively, younger than their traditional corporate counterparts. Below I explore the relationship between Vertical Development and age.

What’s the relationship between Vertical Development and age?

Since Vertical Development is theorised to unfold over time, one might expect a relationship between vertical stage and age. The evidence here is actually mixed, though it’s limited and, so far as I am aware, existing studies have focused on more traditional, corporate business as opposed to startups and high-growth technology businesses. Consider this from controversial management theorist Elliott Jacquues, discussing his theory of the ‘requisite organisation’ as a kind of large-scale device for measuring human potential, based on the amount of complexity individuals can handle.

What does Dr. Jaques’s theory suggest about New Economy businesses? It suggests that companies led by younger people, who haven’t had time to develop complexity, will be in over their metaphorical heads, unless they happen to be led by geniuses. Indeed, that seems to be one of the key dynamics underlying the “children’s crusade” stock fizzle of 1999-2000.

Elliott Jaques Levels With You, strategy+business (First Quarter 2001 / Issue 22, originally published by Booz & Company)

Young leaders and stages of adult development

Does the age of a leader hold them back? Again, so far as I am aware, there’s no robust research exploring this link, though anecdotally I’d suggest this can be the case. It’s where leadership development is falling short, and it’s where investors are missing a trick by focusing on the technical aspects of business growth and horizontal development generally (though this could also, of course, be a function of the investor/s capacity). As I write in Want to be a better tech leader? It’s complex, startups and high growth technology businesses, and the competitive ecosystem within which they operate, are the epitome of complex adaptive systems. They require a different approach and mindset to business building and leadership.

All that said, age in itself may be less important to development than experience. Significant life events such as job changes, redundancy, becoming a parent, relationship changes or bereavement can alter our perceptions. So to does exposure to certain kinds of complexity or extremes of innovative thinking (a boon for founders and leaders in rapidly growing technology businesses). Incidents that disrupt habitual ways of thinking, challenging our view of the – what Nick Petrie calls ‘heat experiences’ (see Fast Track: How Top Silicon Valley Companies Accelerate Leadership Development) – can create favourable conditions for Vertical Development.

Another anecdotal personal theory relates to the young founder myth (which has been largely dispelled). A recent study that found the mean age for the 1-in-1,000 fastest growing new ventures to be 45 years. This finding held true across “high-technology sectors, entrepreneurial hubs, and successful firm exits”. The basic idea behind this age-success relationship is that people tend to accumulate skills, resources and experience with age but is it also because they have developed further in vertical terms?

Overall, we see that younger founders appear strongly disadvantaged in their tendency to produce the highest-growth companies. That said, there is a hint of some interesting age thresholds and plateaus in the data. Below age 25, founders appear to do badly (or rather, do well extremely rarely), but there is a sharp increase in performance at age 25. Between ages 25 and 35, performance seems fairly flat. However, starting after age 35 we see increased success probabilities, now outpacing the 25-year-olds. Another large surge in performance comes at age 46 and is sustained toward age 60.

Age and High-Growth Entrepreneurship