Innovation, Disruption, Transformation And Leadership, With Scott Anthony

J.R. Lowry sits down with Scott Anthony to dive into the world of managing disruptive innovation. Scott, a professor at Dartmouth’s Tuck School of Business and former Managing Partner at Innosight, brings his expertise in navigating the challenges of disruptive change to the discussion. Learn how to turn disruption into opportunity and the strategies that leaders can use to manage innovation in a rapidly changing environment. Whether you’re facing digital transformation or organizational shifts, this episode offers valuable insights.

Check out the full series of “Career Sessions, Career Lessons” podcasts here or visit pathwise.io/podcast/. A full written transcript of this episode is also available at https://pathwise.io/podcast/scott-anthony

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Innovation, Disruption, Transformation And Leadership, With Scott Anthony

Clinical Professor At The Tuck School Of Business At Dartmouth College

My guest is Scott Anthony. Scott is a Clinical Professor at the Tuck School of Business at Dartmouth University, where his research and teaching focus on the adaptive challenges of disruptive change. Scott previously spent more than twenty years at Innosight, a growth strategy consulting firm founded by Harvard Business School Professor Clayton Christensen. He served as Innosight’s elected managing partner from 2012 to 2018.

Scott has also held board roles at public and private companies, giving keynote addresses on six continents, and worked with CEOs at numerous global organizations. Thinkers 50 named him the World’s 9th Most Influential Thinker in 2023 and the World’s Leading Innovative Thinker in 2017. Scott, welcome. Thanks for doing the show with me. I appreciate it.

I’m thrilled to be here.

That’s great. Tell us what you’re up to. What’s keeping you busy?

The Bethlehem Steel Backstory

I completed reading a book about the history of Bethlehem Steel. There’s a backstory for why I read that book, but I’ve been doing some pretty deep research into the history of a whole bunch of disruptive innovations. In this particular case, there’s a very well-known story that Clayton Christensen would tell about the steel mini-mills. I’m looking at the other side of the story, the companies they disrupted which is a fun thing to do.

I was in his first business school class right after Clayton Christensen finished his PhD and the new course Steel. I remember that case well. It was an innovator in the steel industry and managed to push out high-quality products at a price the Bethlehem’s and US Steeles and others couldn’t match.

The big question that Clay looked at in his research is, why was it? Is the technology the new core used? Any of those big companies could have gotten electric arc furnaces and so on. He said it’s the resource allocation process within large organizations that prioritizes today better and tomorrow is different. What I’m saying in this particular stream of research is yes, that’s right and there’s more to the story. The resource allocation process is run by humans. Humans have biases and blind spots and carry legacies with them that make it even harder than Clay described in his research. All the more empathy for organizations dealing with disruptive change because it’s incredibly hard to handle.

We’ll get more into that. You teach about disruption and digital transformation and things like that at Dartmouth.

It’s a relatively new thing. I started teaching about two years ago now at the Tuck School of Business at Dartmouth College. I have a collection of three elective classes that I teach. One is called Leading Disruptive Change, Horizon Scanning, and the newest one is Generative AI and Consultative Decision-Making, which is about full. I think you get the basic point. All of these have a theme around them, which is how do you navigate disruptive change?

You have been at Innosight for a long time before that. How did you find the transition into teaching after being in consulting for many years?

It is exciting and challenging. It’s always fun to do new things. I get a lot of personal energy from doing it. A lot of what I’m teaching are things that I learned in my consulting arc. Challenging is different. The thing that I will sometimes say to my students is I think I’m a pretty good preacher. I can explain the concept and present it very well and get people energized about it. Being a teacher that disappears a little bit and lets the material and orchestrates the discussion where the students leave with an indelible learning. I used to have a lot of work to do to be good at that, but I enjoyed the learning process. It’s been a lot of fun.

It’s different. I was always amazed by the professors that I had in business school teaching the case method. It is a very different thing to teach using the case method than it is to lecture.

I did a training program over at Harvard Business School called Teaching with Cases. I was a student and the thing that struck me was the phrase, “Trust the class.” In the end, you have to ultimately let go and say, “I’m going to present.” We have now a real situation here and you’re going to have a teaching forecast, not a plan because you don’t know exactly where it’s going to go. When it goes off your forecast your plan, that’s good and not bad. I understand all that. I need practice to do it well, but it’s a lot of fun. That’s for sure.

It was always interesting watching that more experienced professors guide the class back to whatever they wanted to make sure got covered and to do it in a very subtle way. I remember also Al Silk was one of my first-year professors. He’s got marketing and he was good at that.

My Technology and Operations Management professor, I remember every single board would be filled. There’ll be these moments where he would say, “Scott, you made a good comment. You said this.” I’m like, “I didn’t even come close to saying that but it sounds like something I might have said it allows you to go in this direction.” He did it so artfully that unless you were paying incredibly careful attention, which no one was, you didn’t even notice it.

They were too busy playing buzzword bingo in all likelihood.

I’ve never done that before.

You have a couple of your books. You have another book coming out.

I hope so. That is the intent. The research I was doing on Bethlehem Steel, I have a book that I’m working on that is tentatively titled Anomalies Wanted: A Brief History of Disruption. It was the publisher that came up with the idea, which I thought was a good one. It is to tell the story of the idea of disruptive innovation. It’s like Clayton Christensen’s famous idea, and to tell it through a series of historical disruptions.

I go way back in time to talk about gunpowder and the printing press and then have more modern stories. The last one is the Apple iPhone with a few fun things in between like Julia Child and Florence Nightingale to explore what exactly disruptive innovation is, how the world of innovation has changed over the course of the last 1,000 or so years, and what it all means. It’s been a ton of fun. I’ve read 31 books now and about 1,000 pages of academic articles. I got a draft manuscript that I have to blow up and reassemble. It’s very different than anything I’ve ever done before. I’ve had a ball doing it.

It’s always fun. I love history. Being able to go back and look at business history and understand what happened at different points in time and being able to make your point through stories. It sounds like that’s what you are largely doing. It resonates with the storytelling piece of communicating business concepts. It’s a powerful way to make sure that people get the message. It sounds like you’re using a series of historical stories to make the point about the before side of disruptive innovation. The people who didn’t necessarily make along with some of the ones who were the disruptors.

They ran a prototype in December of last year. It was interesting to me. I had done the first wave of research and I was starting to say, “Let me now start turning this into words.” I couldn’t figure out what stories I wanted to tell. I had a fortunate thing. I had a webinar that was coming up where I had a bunch of VPs talk about innovation.

I’m like, “I’ll use this as an opportunity. I’ll scrap my plan for the webinar and pick out some of the highlights of the book and try and teach general innovation principles with these stories.” It was rough. I hadn’t told the stories before so the connection didn’t all work. It was too long in some places and too short in others. The feedback was the best feedback I’ve ever received for a webinar. To your point, people like stories and they can connect to them. The world is filled with interesting stories.

The Essence Of Disruptive Innovation

Coming back maybe more to some of the concepts, you’ve done work in this space for many years. You’ve taught about disruption and innovation. Are there a few things that sum up your perspectives on the topic?

There’s a lot in that. I’d say a couple of things. If you look at disruptive innovation as a specific thing, definitions. I define disruptive innovation as one that transforms what exists or creates what doesn’t by making the complicated simple and the expensive affordable. There are classic examples of that like the personal computer or the steel mini-mills that we talked about before.

I mentioned Julia Child very briefly. The idea of take this very complex process of creating great dishes and turning it into something that a layperson could do in their home. Another example of disruptive innovation. That’s the basic definition. What does it all mean? If you’re running the largest established organization, disruption can be a huge threat. It can be a huge opportunity, depending on how you respond to it. That’s one very common theme.

The response to it is incredibly hard. Clay’s first book was called The Innovator’s Dilemma. I spent my professional career trying to rise to the challenge of the dilemma. The basic answer is there’s a technical part to that answer, structure, strategies, choices, resources, allocation, and so on. There’s an adaptive or human part to that answer where you have to deal with loss, struggle, and all sorts of complex issues. You need to do both of those. It’s complicated.

The last thing that I would say is that the idea could be a threat or an opportunity. The response has both the technical and human side. That’s true of many of the challenges facing leaders these days, whether it is thinking about DE&I or sustainability or should we be long-term or short-term oriented or should I do both? It’s an adaptive issue that requires that you think about it through multiple lenses. Disruptions are interesting because it is a specific phenomenon that isn’t at work at all places at all times. Understanding it can help you understand how to respond to any complex system-level change that you have to deal with. There’s a lot that I’m glossing over and going through those points but that’s the basic high point.

It’s hard, particularly for some of the reasons you mentioned, the human element to it. You feel like you’re at the top of your game. You have a product or service that’s doing great and yet, the time may come for you to blow it up and start a version and plus one. For a lot of companies, it’s hard to forego the present. For the future, you use different words to describe that earlier in the conversation. It requires near-term sacrifice. That’s hard for a lot of companies particularly if you get very short-term focused.

There’s a reason why Clay called it a dilemma. He could have even called it a paradox if he wanted to push on that a little bit more. The challenge that you fundamentally face is a leader that’s going through disruptive change. It’s a moment where the right choices look like the wrong choices. The right things to do at that moment look like the wrong thing to do. By the time it’s clear that the right thing to do, it’s too late to do anything about it.

A couple of former Innosight colleagues and I called this the Information Action Paradox a few years ago. By the time the data are clear about what to do, it’s too late to take action based on that data, so you have a paradox. The information that you need. You don’t have what you need to make a decision. It’s a tough and persistent challenge.

Disruptive Innovation: By the time the data are clear about what to do, it’s too late to take action.

Many of the examples are new entrants. Even you talk about Apple and the iPhone. They did not have a phone. They were new entrants in the phone market when they came out with the iPhone. For the companies that aren’t new entrants, there are many examples of companies that rose up and created the next generation of an industry. For an existing player, you’ve studied these companies. What is it that the ones who get this do differently to embed disruption into their corporate DNA?

You provided the answer to the question. You have to embed it within your corporate DNA. This is what we talked about in the book Eat, Sleep, Innovate, where one of the co-authors of that book Paul Cobban speaks from experience. He was the chief data and transformation officer at DBS Bank in Singapore that did this. They said, “How do we create a culture where the habits that drive innovation success that enabled the perpetual creation of disruption are things that happen naturally?”

That example, I was living in Singapore when I first met Paul. We consulted Paul. That’s all very clearly disclosed, but that example showed me that this is possible anywhere. You have a regulated entity within a process-obsessed country like Singapore that has demonstrated the ability to have a 30,000-person company where the dominant gene is not compliance with regulation but entrepreneurial and innovation. If a place like DBS can do it, any organization can do it. Is it easy? No. It’s a lot of hard work to do but it’s a possible thing. I would argue a necessary thing in a world that’s going through as many changes as our world is now.

Disruptive Innovation: True innovation happens when it’s embedded in your corporate DNA.

Another example that comes to mind. We were both at Thinkers 50 in the Fall. Gary Hamel talked about the Chinese appliance company Haier which owns the GE appliance line among other things, which would make it more relevant for an American audience tuning in to this. There you are, a company that’s Chinese-owned.

There’s a very strong culture that you have to deal with. That company was able to create a very entrepreneurial micro-company construct with thousands of these little enterprises that all worked together to create a very different business model than certainly had existed when the old GE appliance businesses, as an example. It’s fascinating that they were able to pull it off at that scale in a manufacturing business with huge capital costs upfront. Pretty amazing.

The most amazing part of what is an amazing story is the addition of GE Appliances into it. If it’s just a somewhat random company in China that has gone and done it within China. You say, “Weird things happen sometimes.” That’s it. When Haier acquired GE Appliance and said, “This idea of creating these micro-enterprises and ecosystems within companies, we’re going to have you do this. We’re going to take a company that had existed for decades and was run in a different way. We’re going to install essentially a new operating system in the company,” and it works. You say, “This is something that we ought to pay attention to.”

I covered that a little bit with Michele Zanini who co-wrote the book on that with Gary, who was one of the McKinsey Mafia that I know from my past.

He lives about 2 miles away from here. Every once in a while, we pass each other while we’re dropping a kid off at some activity in the Brookline, Massachusetts area. Small world.

These companies coming back to the ones who have it in their corporate DNA. Do you think they hired differently or do they take people and embed them in a different culture than the rest of the companies that are out there?

It’s a great question and one certainly that I and a lot of people spend a lot of time thinking about. There’s a story that Paul Cobban from DBS tells that is an interesting story. DBS is starting its transformation journey. Its CEO said, “We can’t be a bank. We have to be a tech company. We have to not think about how we compete against JP Morgan Chase, but we have to compete against Apple and Netflix and companies like that.” They said, “We should go out and study these companies.”

They go and visit Netflix. They grumbled and said, “Netflix, you have this cool culture but your real secret is you hire these young engineers right out of the best West Coast schools. You have talent that we don’t have.” The person on Netflix said, “Let me ask you a question. How old is your average engineer?” DBS said, “Mid-40s.” Netflix said, “Ours are too. Many of the engineers we have are people we hired from organizations like yours. We just get out of their way.”

DBS realized it was not a people problem. It was an institutional problem. It was a systems problem. The people had the capabilities or have the capabilities. They need to have latent talent released, harnessed, and amplified. You see people following different practices and they’re trying to get diverse talent and all the dimensions you can imagine. They try to get people who demonstrated entrepreneurs and all that. That’s a good thing to do, but the bigger lever is to say, how do we take the innate human curiosity that everybody has and find ways to put it to work rather than constraining and containing it?

Given the pressure that public companies have with quarterly earnings and all of that, do you think private firms have an inherited advantage in driving disruption? What have you seen in your own experience?

It’s a question that I answered differently based on my experience living in Asia. I was in Asia for twelve years. In that time living in Singapore, I worked with every type of organization you can imagine, private, public, family, non-family, and government-owned. The problems are the problems. Everybody thinks that somebody else has it easier. The private companies will say, “The public companies get the great benefit of the discipline of public ownership.” The public companies will say, “The private companies can do whatever they want.” Neither is true. This is hard stuff to do.

There’s no outside force that makes it impossible. This is not gravity where if you drop something, it accelerates 9.8 meters per second. These are things that we as humans decide whether we’re going to invest or not invest. As we talked about, we have biases and blind spots that make it hard. Despite that long warm-up, it is a little bit easier in a private company context if you think and act about it in the right way because you have that much more degrees of freedom. Many people in public companies who blame shareholders are finding a scapegoat for their own problems.

Lessons From The Innovator’s Dilemma

Do you feel like it’s been twenty-odd years since The Innovator’s Dilemma came out? A hugely groundbreaking book. I think everybody read it at the time. Do you feel like the world’s incumbents have learned from the lessons of that? Are they still struggling in the same way they were when Clay first published the book back early 2000s?

You mentioned Apple and if you read Walter Isaacson’s biography of Steve Jobs, there’s one book that’s mentioned in it. That’s The Innovator’s Dilemma. You look at what Steve Jobs did and the way to say, “Let’s take our assets at scale and think about new markets that we can go into systematically.” That’s interesting. You look at Microsoft. Microsoft looks like it’s lost in the sea bomber years and very well could have had the story. Now, it has done the cloud. It has done artificial intelligence. Still, lots of things could go wrong.

It’s a company that I think in a pre-Christensen would have probably lost its way and been in irrevocable decline but now has gotten a third act. Take Meta. In another world, Instagram and WhatsApp or things where Mark Zuckerberg says, “These are irrelevant to our business. We have our social media and it’s doing great on a computer.” He seamlessly makes the move to mobile, goes and acquires these organizations early. The Federal Trade Commission has questions about all of this. We’ll see how it all plays out but things that you would not have seen a generation ago. Lots of organizations still struggle with it, but you’re increasingly seeing incumbents figuring out how to take assets of scale and use them as advantages as opposed to disadvantages.

Let’s talk a little bit about transformation and in almost all instances, disruption involves some form of a transformational journey. Most transformations fail or they at least underachieve. Why do you think that is?

I have an answer to this question that came to me after doing something very different. In 2019, when I was 44 years old, I helped to build Innosight. We’d sold Innosight. I’m still very actively employed but it now has a different layer of supervision on top of it. I decide to go back to school. I entered a program in Seattle and Singapore called Executive Master in Change. It was eight-weekend modules over a couple of years, which meant that spanned across the pandemic, which was pretty interesting.

It was all about looking at the human side of change. The specific field is called system psychodynamics. That was the grounding for the program. The thing that the program taught me is why transformation is so hard. That’s because transformation induces discomfort. That is the only way you change. You can only change when you’re going through a period where you’re uncomfortable. You know that. The problem is when you’re going through a big change like a transformation, it’s so much discomfort that at some point, you want to shut down.

Disruptive Innovation: Transformation induces discomfort, and that’s the only way you change.

You want to say, “It’s too much.” You want to find ways to start avoiding the work. That might mean, “Let’s go and find somebody to blame. Let’s go and hire a consulting company to offload the problem. Let’s go and reorganize,” which has never done anything for any company in the history of the world, but let’s do that because we can’t figure out what else to do. You’re avoiding the hard part of the work. That’s why transformation is so hard. The discomfort that comes along with it needs to be very thoughtfully and actively managed. Most leaders don’t do that. They focus on the technical part of the problem, not on the human part of the problem.

The Need For Unlearning And Relearning

Is that in your view what makes it different from other forms of organization changer, or are there other factors too?

I think that’s the main one. The discomfort comes for two reasons. One, you have to unlearn some things that have made you successful in the past and that’s hard. Christensen pointed this out 40 years ago. The hardest people to teach are the smartest and most successful people because you have to unlearn all the knowledge that you have. Second, you have to learn new things. That means you have to go and do things that feel uncomfortable. Maybe even silly.

I watched my seven-year-old kid. He doesn’t care if he looks silly. He goes and tries things. I’m not a seven-year-old kid and I care what I look like even though I know I shouldn’t. I know the growth mindset. I should go and try new things. I know that. I teach my students that. I coach executives to do that but it’s still hard. That’s when I think transformation is up at a level where that unlearning and that foolishness, going backward to go forward is hard for people to deal with.

At the beginning part of the journey, what’s important to get right to mobilize the organization for it?

Going back to John Kotter, you have to have an inspiring vision and all that. I well understand and you have to do it. The thing I would add on top of that is you have to understand this. You have to understand that it’s going to be a very uncomfortable process and you need to create space for it. There’s a great case study of Lego as it’s going through its transformation journey twenty years ago.

One thing that it did was create this vehicle that it called Sparring Session. It’s acknowledging that what we are asking people to do is hard. Let’s create space where they can bend it and fight. No one is going to get hurt. They’re not literally fighting, but it’s what a psychologist will call a holding container for the emotions that you have when you’re going through a change. Whatever form you use, acknowledging upfront that this is going to be a journey that’s going to be hard and we’re going to help you with that journey is an incredibly important and very often overlooked thing.

Communicating During Transformation

Communication is important all the time. What’s particularly important to do more of or do differently in terms of communicating during a transformation?

This is something I learned from Clark Gilbert. A very short backstory. When I joined Innosight, Clark Gilbert was a young professor of entrepreneurship at the Harvard Business School who had done his thesis research under Clay Christensen. I was an advisor at Innosight and we worked with him on a bunch of projects. He then left to take a couple of outside leadership roles. He was the CEO of a media organization. He was the president of the university.

In both cases, he transformed those organizations. He was still acting as an advisor to Innosight. He was the co-author of our 2017 book, Dual Transformation. A lesson from Clark, when he’s transforming his media organization, there are a bunch of legacy assets there. There’s a newspaper and cable broadcasting and so on. His first instinct when he came in was to talk about this bright exciting digital future for the organization.

He starts painting a picture of, “Here’s all the new things we’re going to do.” Most people in the organization are like, “This doesn’t sound good for me. This sounds bad for me. What about me? What about the stuff that I’m doing to put out a newspaper every day?” Clark realized that he had to talk about digital being the future. It also needs to have space in that story for the people who might have been doing something different but still would be doing something important within the legacy core business. Recognizing that communication has to go for the new, for the old in all sorts of different levels of the organization is an important and persistent lesson.

I’m finding in my own experience that as you get further into it, it gets harder. You and I are both runners, so I’ll use the marathon analogy. The middle miles are hard. Tedium and boredom set in. The pain starts to develop. What’s needed when you hit those middle stretches of a transformation to sustain an organization’s energy, patience, and resilience so that they don’t give up or lose hope?

It’s very easy to do that and you would bet if you look at the data that about 2 times out of 3, they are going to give up because that’s the number of transformation efforts that generally fail. If you stick with the running metaphor for a minute, my own running story. I had not run a mile intentionally since I was probably thirteen years old up until 2018. I won’t bore you with the backstory but I decided to start doing some running, then I decided I liked it so I started doing more running.

My brother said, “You’ve done enough. You got to run a race.” There’s this race in Philadelphia where he lives. It was a 10-mile race on Broad Street. He said, “It’s a fun race. It’s mostly downhill. Easy place to start.” I train and I’m ready to do it. I’ve never run that far in my life. As with any trainer, you get close but do not do the full distance. The thing that sustained me in the middle miles was two things. One is the drumbeat of the crowd around you.

You have people who are cheering you on and waiting for you to succeed. They have stuff for you, little treats and drinks. About two-thirds of the way through, my family was there on the side. Unbeknownst to me, I knew they were going to be there but they had written little signs. It was very nice and I didn’t break my run but I went over and gave high fives. I kissed my wife. That moment, when you know you need the most to have something externally that gives you energy. Whether that’s having, in a business context, specific milestones.

Nathan Furr talked about artifact trails when you’re transforming saying, “We know the destination. The things that we will achieve along the way will look like this.” We have a thing that we can celebrate. You need something that’s going to sustain the energy because the real truth is, in the business world, it’s not one marathon. You run the marathon and then you start again or you’re running another one in parallel because research that came out from Bain said this is the reality. It’s not a single-shot transformation you’re doing. It’s a lot of concurrent ones that you’re doing, which makes it even harder. Having the cheering squad for you along the way and lots of water and sports beverages is a key part of making this all work.

Disruptive Innovation: In the middle of transformation, it’s easy to lose hope. Having milestones and small wins is key to keeping momentum.

We went through my day job. A fairly big transformation ever. I joined the company in the middle of it. Probably in the dark days when things were not going particularly well. There was a fear about whether we were going to get it done. We did get it done. It took us another eighteen-plus months and there was the high that people fell certainly as we had that last part probably as you’re approaching the finish line of a long race. Now starting a second one, that will probably be at least as complicated as the first one.

You have to re-rally everybody. I’m sensitive. It’s like I don’t want to go through the deep trough that we went through on the last one. It’s like how to get everybody fired up to go through this one, sequential to the one we finished. That probably takes us another few years to get through and you appreciate that, to your point, you have to get those milestones along the way.

They’re going to be times when people need to be lifted up. I’m hoping we don’t have to do this one with COVID in and out through a lot of the process as well or anything else for that matter. I do think a lot about the middle part of these transformations. That’s where it gets hard to keep people feeling optimistic and looking forward.

A large part of anything in life is knowing the problems you’re going to face. I can say with pretty high degrees of certainty that there’s going to be something that takes you to a dark place. This is the model myth of Joseph Campbell’s The Hero’s Journey. There’s going to be a trough of despair. It happens in every story. When, why, and how will all be different but you know it’s coming. You also know that you can get out of it and you know the things that can help you with it. That’s one of the general pieces of advice I give people in consulting.

I was talking to one of my former Innosight colleagues. I said, “How are you doing?” He said, “We’re working on this four-month project. We’re about two months in. I’m frustrated because I wish we could have had the first month back because now we know what we’re doing.” I said, “So say of people about 100% of consulting projects.” That’s the way it is with complex problems. You have to spend a month mocking around. There’s nothing you can do about it. Don’t feel bad about it. Don’t judge yourself for it. Go forward. The only way out is through.

It also led to a lot of fire drill efforts and the 48 hours leading up to at first progress review where you felt like you at least needed to show something to your client.

It always works out in the end. It’s never perfect but you always figure it out.

In general. I always appreciated the point where we were 48 hours away because, at that point, the fire drill could only last for so long. It’s time-bound. As soon as it became time-bound in a way that felt reasonably near-term, it was easy to put your head down and crank through it until you were there. I talked a little bit about leadership and culture. I thought maybe we could do that in the context of your own role leading Innosight for all those years. You’re a very different consulting firm than the big players like McKinsey, BCG, or Bain. What was it like to be the managing director of a boutique consulting organization?

Hard, fun, and different. Everyone’s stories are their story. It was not planned. We had a group of people who could theoretically be in the role that I was in. In 2011, we elected my then-colleague Matt. He was going to be the person who ran the place. I was very happy doing my stuff in Singapore. A year later, Matt said, “I have this new job I’m taking at a Blackstone-backed company. Who wants to tod?” Nobody did because most people inside consulting companies want to serve clients. They don’t want to do the internal stuff. 

We all look around and we’re all willing to do it. I say, “I live in Singapore. I’m happy in Singapore. I’m willing to do it if you all think it’s the right thing to do, but I’m not leaving Singapore.” We ultimately decided that I was going to do it and I stayed in Singapore. It was six years officially in the role. I was running a largely US-based organization from many thousand miles and 12 or 13 time zones away. I was 37 when I got the job. It’s not with decades of experience behind me. There’s a lot of stuff that I wish I could have had back as I learned through trial and error. There’s plenty of error but it was great fun. We had some amazing successes and ended up in a good place at that thing. That was a bit of the journey.

 How big was the firm when you took it over in terms of people?

It is about 45, plus or minus. It’s somewhere in the mid-40s. We essentially doubled in headcount over the course of the next six years. It’s never a straight line. It went down a little. Our best year up until then was 2011. In 2011, we’re firing on all cylinders. It was too good a year because growth was so big. We started squinting a little bit when we were hiring and said, “We need more people.” We couldn’t train them appropriately and then you know what happens. Quality goes down. You get a bit of a hangover. Our revenues went down in 2012. Some people go. Revenue went down again in 2013.

It’s like, “What are we looking at here? Have we peaked? Is that it?” We had an offer to sell the company to somebody and we thought about it. We said, “No. We think there are better days in front of us. We’re going to set up selling and downsizing. We’re going to hire a search company to find another person to join the team,” and found a great part of the team in Patrick Viguerie, had some good things happen. The next five years took us to the next level. It’s not a pre-ordained outcome. It may very easily could have gone in another direction but that was the direction it went in, which is good.

Leading From Afar

What type of leader did you try to be in the organization? What style did you espouse?

Whether I was or not, you could ask my colleagues. The thing I tried to do is I want to make sure that I’m providing the overall view of what we’re trying to do. We had a pretty big moment in the early part of my time where we essentially went from being an innovation company to a strategy company. That was a big deal, managing through the discussions to get the team aligned behind that and thinking about what it meant.

We had to make sure we did that. We make sure that we set the overall direction and then create the space for great people to do work. Particularly in professional services, you are first and not even first among peers when you’re talking with managing directors or partners. You can’t order them to do anything. You create the space and give them the tools so they can do great work. With the admin side of the business, I had both the upside and downside of being 12 or 13 time zones away from them. I say 12 or 13 because when there’s daylight savings time, it’s 12, and now it’s 13.

The clock didn’t change in Singapore because it’s on the equator. The good thing about that is I could not get in their way because I was asleep when they were working. If it’s a big deal, I’ll look at my email in the morning. I’ll get on the phone and we’ll deal with that. During the day, finance, HR, and staffing do your job and do your job well. It’s getting the right people in there and creating the conditions for them to succeed. Essentially, get out of their way. When correction needs to happen, I’ll then go and do the work required to do it.

How would you describe the culture of the organization?

It’s something I thought about a lot even more so after stepping out of the organization. A lot of culture gets formed in the very early days of the organization. Clay Christensen is the company’s founder and he was an academic. You see a lot of what you would see in an academic institution within Innosight. Some of that can be amazingly positive. We codified our values, and intellectual curiosity is a big value. Transparency, making sure that work is shared with other people and humility. The sorts of things a good academic would do.

That’s powerful. Everything has two sides to it. Too much curiosity can sometimes lead to you exploring when you need to be delivering work. Being too humble can lead to you losing to a consulting company. That’s not humble when you need it. The way I would describe the culture is a little bit imprint of Clay with a focus on client service. It’s like if you take a good academic and also ground them in what it takes to excel at client service, that’s what Innosight looks like.

You drove a ton of growth in your time there from what I understand. I’m curious both financially and geographically, what were the keys to the growth journey in the time that you were at the helm? 

I was talking about this with the person who is in the leadership role within NSA. He said, “If you wind back the clock to 2012 to 2014, where we laid the foundation in the four years ago that came after, were we lucky or good?” I said, “Anytime you ask the question, it is some above.” We had some real good luck behind us. We had pivoted to strategy. The big thing that we were doing was helping people think about what we call a future-backed strategy. Which you pick some point in the future. This is the world we’re going to live in.

We started doing that in 2014 and 2015, which is good timing because it’s the part of a decade where people are like, “I probably ought to be thinking 5 or 6 years out. Round numbers. 2020 is coming soon.” You have a little bit of that. Patrick Viguerie answered a call from a headhunter, which he had never done before. He ended up being a phenomenal fit with the team. There are other people who we’re talking to that we could hire. It could have gone in a very different direction. Why did Innosight open up an office in Europe? Bernard showed up out of nowhere.

He worked at Bain then he left Bain and got a degree in art and then was doing his own design work. He found us randomly and called us up and said, “I think you should be in Europe.” I was like, “Sure, let’s be in Europe.” We thought more than that, but it was total serendipity that led Bernard to show up. We had a couple of things where Clay made some very timely introductions to some very important leaders of large organizations.

That’s the fortune part of it. People also work their tails off. They did amazing work for those large organizations. We push their books out at the right time. We did the work to take advantage of that luck. We created the surface area for that luck to strike by having relationships with people like Clay and others. That’s what was behind it in my view. A great team that worked like crazy and fortune smiled. Some bad luck happened too but generally, we had some good things that happened during that time period.

You would pass up at least one offer to sell a company. You ultimately did decide to sell the company from here on. What drove the decision to sell then?

We had gotten calls roughly every 3 or 4 years from somebody saying, “Are you interested?” We always took the call. You never know. I said, “No.” Either it wasn’t the right fit or it wasn’t financially interesting or whatever. I think it was early 2016 or maybe late 2015, a similar organization to ours, a boutique innovation and strategy consulting company, sold the Capgemini and I had a pretty good relationship with CEO, Pete Malik. I called him up. I said, “Tell me about the deal.” He said, “Let me tell you. It’s a good market right now. You should see what’s out there for you.”

I disclosed exactly how good a market it was, but it’s a good market for them. We might as well do this in a thoughtful structured way. There weren’t that many. Now, there’s always a reboot of things, but a pure-play innovation strategy company. Finally, there’s anything of any scale that’s out there. We said, “Let’s take a look.” We hired a banker and a lawyer. We went through a process. We said, “Our best alternative to a negotiated agreement is to continue to run a business we love. No pressure to do it,” and we met Huron.

It was a great fit. Huron is a reasonably scaled company. It was about $900 million in revenue at the time with real strength in healthcare and education to industries that Clay cared about and a desire to do more in other sectors that want to do more strategy work as well. That was big enough to give us some assets but also would keep us largely autonomous and would let us keep our brand. It was the best of both worlds. We said, “We like the people a lot. Let’s do it.” It’s not perfect with ups and downs. People will tell you about the IT integration debacle in the middle of 2018. There are always things like that, but in the end, if I had to go back in time and do it again, I would do the exact same thing without any hesitation at all.

You teach at Dartmouth. You went to Dartmouth as an undergrad. What did you see yourself doing back then?

If you were to ask that 21-year-old version of me, I would say something in business. I did not have a clear life goal, “This is what I’m going to do when I get out of school.” I studied Economics when I was an undergraduate. My big activity was working on the school newspaper, which I loved. I loved working on the school newspaper. The person who studied Economics didn’t love the economics of going into journalism. The person who was a journalist didn’t love the sole deprivation you would get if you wanted to do something like investment banking or finance. I ended up starting in consulting. It’s like, here’s a place where I can continue to think and learn, not anticipating that would be 22 years of work experience and the teaching after that.

Reflections On Early Career

What did you learn about yourself from your early career years? You were at McKinsey at the beginning.

I was. Two things I learned about the McKinsey experience. It was a good positive experience. Number one, I get bored very easily. I knew that about myself. It reinforced it. One thing that’s good about consulting is it’s a very hard industry in which to get bored because your life resets every three months to a degree. That’s great. It’s less true in consulting now than it was then because now there’s more pressure to specialize in things but then, you go from a strategy project to a bank to an M&A project for an agricultural company.

I did a project for McKinsey Global Institute which is the think tank within McKinsey. It’s different things and I like that. The other thing I learned about myself is I don’t like things that are too big. I like smaller places. I feel like you can have more impact in smaller places, which reasonable people could disagree about. I felt like McKinsey in the ‘90s was too big for me. Now, it’s four times bigger than it was when I left, which is unbelievable. I left it in ‘98. How could it get any bigger? It already serves everybody. You look at it now, I was firm member number 22,047. They have to be certainly in six digits. If not, in seven by now.

I was 16-something, so I was ahead of you by a few years.

I don’t know why I remember that number. It’s one of these things, 22,047 burned in my brain. It’s a number I cannot forget.

Fast forward to now, what does a typical day look like for you if there’s such a thing?

One of the things that I love about my life is there is no typical day. Most of my life is now centered around teaching and talking. A day when I’m teaching is different than a day when I’m not teaching. A day when I’m teaching is to get yourself ready for class. Go and do the class. Go and decompress from class. That’s pretty clear. I’ve learned that there’s a lot of energy required in the room, which I enjoy but that is my day.

When I’m not teaching, it can be anything from what I do now, which is largely doing research. There was mostly a research and some writing day. It can be doing some outside consulting work, which I’m doing with a few independent clients. I was with a student for lunch. A whole set of different things but a mix of things that are internally mind and typing-focused and externally interacting with humans, whether they’re executives at organizations or students or other interesting people out there. Clay would always say that innovation magic happens at intersections and I believe that. I try to make sure I live at as many intersections as I can.

The Power Of Productivity

Is there a time of day that you’re most productive?

There isn’t. I can feel myself when I’m getting ready to be productive. When that happens, it’s chips all in. I can also feel when I’m not ready. It’s not the time. I’m like, “I’m going to do stupid tasks now,” because I can feel it. I try to figure out, “Can I go and engineer this?” I can’t. Some days, it’s morning. It’s nice or very rarely between 1:00 and 2:00. That’s like blood sugar or whatever, but now it’s not predictable to me.

Most people will have a particular time that they find that they’re most productive. I was curious.

I think I am unusual in that because most people do. To me, it’s at the moment when a task is going to create energy for me. If it’s a moment when the task is creating energy for me, the time disappears. Predicting that, I’ve never been able to do it but I know it when I feel it. I know it at that moment, go and take advantage of this time.

That I can relate to. I have points where I start to feel like I can feel flow coming on, like being in the zone and being able to zero in on something and bang it out to the point where you look back and go, “I wrote that or I got that done?” You almost only half remember it. For me, that does happen somewhat at different times of the day, but it’s usually in the morning that I can depend on best.

Sometimes if I am trying to engineer it, I have to change places. I say, “I’m not feeling it here,” if I’m working up at Dartmouth. If I go and work in a common area where there’s noise around me, that might be better than being in my office. If I’m at home, maybe it’s a day for the kitchen versus a day for the office. Changing place is the thing to do or realize that when you think you’re not working you’re often working.

I’m okay with saying, “It’s not here. I’m going to go for a walk.” I’m going to not consciously think about the thing that I’m struggling with knowing that I am unconsciously thinking about it. It’s not like I was doing a time-in-motion study or whatever. Frederick Taylor would say that’s not work. If your work is work of the mind, it 100% is work and important work too.

Taylor also wanted to dumb everything down so that people didn’t have to think when they were working. It’s like the antithesis of the way I feel like the whole knowledge economy is gone.

One of the first organizations he studied I learned was Bethlehem Steel. That essentially threw him out because they thought his prescriptions were ill-advised.

The world has come a long way since those early days of manufacturing. You talk about finding intersections. What other kinds of routines or practices have helped you be successful over the years?

I’m generally somebody who likes doing new things and there’s a degree of curiosity. I’m also good at saying no and putting up boundaries. That was something I learned very early on in McKinsey. Linda Bush was my first engagement manager who helped teach me to determine what your guardrails are. Clay would reinforce to us the importance of saying no, and then stick to them 100% of the time.

When I was at McKinsey, I said, “Do to me what you want during the weekday and even on weekend days but I’m 21 years old. At 5:00 on Friday, I’m going to the bar. That’s what I’m going to do. I’m doing that again at 5:00 on Saturday.” The rest of the time, I don’t care about it, but those are hard and fast rules and I will hold to them. They changed.

Now it’s like, I’m not going to do too many trips. I have four kids at home. There’ll be a limit to how long I will spend away from home. I’ve held that for my entire career even when you have multiple consulting projects. I’d be like, “At any given day, you do what you do in a day.” As I start looking at things on a month or quarter basis, I know where the balance line is. I will say no to things, even things that look like they’re important in the short term. That ability and desire to recognize the benefit of saying no has been a practice that’s helped me.

Embracing The Poetry

It’s something a lot of people struggle with. On that basis, I certainly appreciate that you’ve made time for this. What’s ahead for you other than getting this book done?

That’s a big deal. Getting the book done is a big deal. After that, I have to figure out my next book. I wasn’t supposed to write this book. I had an idea that I proposed to the publisher and said, “I’m teaching this class Leading DisruptiveChange. It’s all about how you deal with the human side of the challenges of disruptive change. Taking what I learned in Innosight and applying it in a real-world setting. There are some very important things to say here about how you lead through high degrees of uncertainty.”

The publisher said, “That sounds like an interesting book, but we’d like you to write this one about the history of disruption.” I’m like, “Darn it. That’s a good book. Let me do that. I’ll keep playing with the ideas in class.” That’s what I got to do next. I have a series of ideas about what it takes to take the either-or that populates our lives and turn them into both ends. How do you have the ability to thrive through radical uncertainty? There’s been a lot of great stuff that’s put out there around this topic, but there’s more to be said about it.

Figuring that out both through continuing to teach. I have a few applied research things that I want to do and work in the field as well. Telling that story after the disruption book, that’s what’s next for me. That pretty much keeps me busy for the next three years. Books take a while to come out in the wild. It’ll be at least a year from now until the book comes out. I’m hoping this is a book with legs because it is story-driven. Not exactly a timely book. I very consciously chose to have all stories be ones that are completed. Nothing that’s like in process. I can pick it up and do whatever I want with it. I hope that all provide lots of fodder for discussion while I work on the next one after that.

Last question. You think back to your 21-year-old self. What do you wish you knew then that you know now about the life of work and careers and all of that?

For the most part, I’ve been very lucky. I’ve been very fortunate. There’s been a lot of good things that have happened. The thing that I’m happiest about is whenever a weird opportunity has come up, I’d go do a year at McKinsey at the think tank. That sent me to London. I met my wife there. Instead of going and taking a high-paying job coming out of Harvard Business School and taking a low-paying job as a researcher for Clay Christensen, that worked out pretty well for me. I went to Singapore. Whatever.

Doing the weird stuff is always been a good thing for me. I think of one thing. I remember when I was working on an early project at McKinsey, Linda Bush, which I mentioned before, was comparing me to other analysts. She said, “Michael is the quant jockey. You’re the poet.” I said, “I don’t want to be a poet. I want to be the quant jockey.” I committed to go and be able to go do sprint and all that.

I viewed it as a criticism or critique. I realized that she was paying me the highest compliment that you could pay somebody within a consulting company. That recognition that there is the humanity behind what happens in business took me two decades too long to figure out. The constant feedback I have gotten from colleagues that I finally sunk in is you move too fast. You have to slow down. You have to create space for other people to come along. You have to recognize that what looks like resistance isn’t that people don’t get it if there’s something in their soul that is bothering them.

Understand them and then you understand what it is standing in the way of success. I think I mostly understand that now but it took me too long to figure that out. Had I embraced the poetry earlier, I would have gotten to where I’m now getting to now faster. The journey they got me to here again, I wouldn’t do. That’s my probably overly long answer to your question.

That’s not an overly long answer. It’s interesting. I remember having a pivotal moment when somebody passed me the quote. “I don’t care what you know until I know that you care.” It was a bit of the same thing you’re describing that the world isn’t a meritocracy despite what we may have heard, respective of our McKinsey days. There is a very strong human element to everything that goes on. If you don’t understand the human element, even the best idea will not work. You have to bring people along for the journey. It took me a long time to understand that as well. I can certainly relate to the answer you gave.

If I can add to my own answer, the other thing to reflect as you say that. Understanding about yourself as well is important. One thing that I grapple with and am working on is one of my greatest strengths, many years of consulting. Any conversation and any situation I can come into and give you the three bullet points summary. Here’s the very fast synthesis of what I say. It’s something your condition to do.

Sometimes, it’s the right answer and sometimes it’s not. Sometimes the right answers say, “That’s interesting.” That’s not something that I do naturally, but I’m learning that sometimes the most interesting things happen when you say, “Let’s pause. Let’s not try to conclude. Let’s sit with it for a little bit.” That’s different.

You let the silence soak in.

I now feel like I can’t talk because you said that. My wife would say that is an area I can continue to work on letting the silence soak in.

On that note, before we get ourselves into trouble talking about spouses, we will close off. Thank you again, Scott, for doing this. I do appreciate it.

J.R., I enjoyed the conversation. Thank you for inviting me.

Good luck with the research and the redrafting or whatever you call blowing up your first draft. I know what happens. Everybody describes the writing process. The first draft is almost the easiest part. After that, it gets progressively harder.

I have a very clear view of what I’m going to do for draft two, whether it’s right. Usually, for me, it’s the third draft where it clicks. I now have 105,000 words of raw material. I have plenty of stuff to shape and some great feedback from friends. That will help.

That’s good. Good luck with it and thank you again.

Thank you.

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Final Thoughts On The Writing Process

It was great catching up with Scott. I want to thank him for joining me to discuss disruption, innovation, transformational change, leadership, culture, and a little bit about his own career journey. If you’re ready to disrupt yourself, visit PathWise.io and become a member. Basic membership is free. You can also sign up on the website for our newsletter. Follow us on LinkedIn, Facebook, YouTube, Instagram, and TikTok. Thanks.

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• Eat, Sleep, Innovate
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About Scott Anthony

Scott Anthony is a clinical professor at the Tuck School of Business at Dartmouth, where his research and teaching focuses on the adaptive challenges of disruptive change. Scott’s next book—his ninth—is slated to be published by Harvard Business Review Press in 2025. The book’s provisional title is Anomalies Wanted: A Brief History of Disruption.

Scott previously spent more than 20 years at Innosight, a growth strategy consultancy founded by Harvard Business School professor Clayton Christensen, serving as Innosight’s elected managing partner from 2012–18, a period when Innosight tripled its revenues and expanded internationally. In 2017 Huron Consulting acquired Innosight for $100 million, and Scott continues to serve as an adviser to Innosight.

He has lived in the United Kingdom (1997–98) and Singapore (2010–22), held board roles at public and private companies, given keynote addresses on six continents, and worked with CEOs at numerous global organizations. Thinkers50 named him the world’s ninth most influential thinker in 2023 and the world’s leading innovative thinker in 2017.