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Wendy Smith and Marianne Lewis, "Both/And Thinking: Embracing Creative Tensions to Solve Your Toughest Problems" (Harvard Business Review Press, 2022)
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- [00:00]
Wendy K. Smith
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- [01:16]
Podcast Host/Announcer
Welcome to the New Books Network.
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Alfred Marcus
Welcome to the New Books Network. I'm Alfred Marcus, and on this program we explore how organizations navigate strategy and ethics in a world of deep uncertainty and competing demands. Today I'm speaking with Wendy K. Smith, professor of management at the University of Delaware and a leading scholar of paradox in organizations. Wende is co author, with Marianne W. Lewis, of both Slash and Thinking Embracing Creative Tensions to Solve your Toughest Problems, published by Harvard Business Review Press. The book argues that instead of choosing between exploration and exploitation, purpose and profit, or global scale and local responsiveness, leaders can learn to work with these tensions as engines of innovation and performance. So let's begin with your intellectual journey. How did you come to focus your research on paradox and the tensions between exploration and exploitation inside organizations? And what led you and Marianne to write this book now for a practitioner audience?
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Wendy K. Smith
Alfred, thank you for having me on this and being in this conversation. And you know, for social scientists, we often say that research is me. Search I wrote a book or I've been studying paradox, in part because I needed to understand my own journey through tensions. For me, it was tensions about my career. Would I be an academic or would I be something else, a leader in the real world? It was also because I had been a consultant before. I went back to get my PhD in the late 1990s, early 2000s, at the time when we saw great businesses fall because of their ethical dilemmas, things like Enron and WorldCom. But we also were amid the rise of what was then the language of the social responsibility movement. And I had a case manager, team manager, project manager that was deeply committed to the idea that businesses could only focus on the pro, on the bottom line. The sort of classic Elton Friedman argument that there was no possibility for businesses to also think about purpose and mission and impact and value for a broader audience. And I was not so sure about that and I wanted to know more. So I went back to grad school to ask the question, what does it take for leaders to hold the bottom line? Profit, financial bottom line. And at the same time think about a broader purpose, mission, goal for strategy and innovation leaders.
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Alfred Marcus
Terms like trade offs and dilemmas are familiar. So how do you define paradox in organizations? And how is it different from simply making tough trade off decisions?
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Wendy K. Smith
Yeah, paradox theory flies in the face of everything that we had known from organizational theory. I want to just put this on a timeline. In the last 25 years, we have introduced, explored expanded paradox theory for strategy and organizational scholars. But we are drawing on an insight that has been core to humanity for 2,500 years, if not more. And that's the insight that the trade off is limited, that the dilemma is limited, meaning that we assume that when things are in conflict, we have to choose between them. That's the trade off and the dilemma. Paradox theory contrasts that or is.
- [05:00]
As the foil of that. The opposite of that says when things are in opposition with one another, if we dig a little deeper and understand a little, with a little more wisdom, we can see that that conflict, that opposition is only one dimension, that there is also interdependence. And so you mentioned explore, exploit, which was my dissertation, my first research project on how leaders can think about the today and the tomorrow in strategy. The dilemma is do you put more resources into today or tomorrow? And how do you make a wise ch around that? In the language of paradox, the question changes to how do we understand what it means to hold the today and tomorrow, the explore and exploit simultaneously?
- [05:46]
Alfred Marcus
You argue that our minds are drawn to either or, and that's what you've said now, especially under pressure to deliver results. Why is it so attractive, the either or paradigm for managers? And in your work, how has it limited firms in their ability to innovate?
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Wendy K. Smith
Here I would go to psychodynamics and bring us right into our emotions of fear and fear and anxiety of uncertainty. And because we don't like uncertainty, we don't like to leave questions open because we don't like to leave Questions open. We want a clear answer that makes sense for us. And so we want to choose between alternatives when we have a choice. And Alfred, I like going back if people want a visceral experience of this. I like bringing us back cognitively, mentally, emotionally, to March 2020, when we had a global pandemic about to occur and we wanted really clear answers to things like, oh, my goodness, should I wash my fruit for three days or 10, you know, three times or 10 times, should I leave my mail and not touch it for three days or ten days? Should I. Should I mask for when I'm. We want to really clear certain answers because the consequences were so fatal. But there wasn't those clear and certain answers we had to live with. The uncertainty paradox invites us to live with more complexity and more uncertainty and hold that open for a more creative decision. But that is uncomfortable.
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Alfred Marcus
Yes. Right. I often talk about hedging. Is hedging part of this too? So that you diversify and you try, you're doing two things simultaneously because, you know, you don't know what's going to happen. It's a way of dealing with uncertainty. Does that make any sense to you?
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Wendy K. Smith
I mean, I would put hedging in the language of experimentation. We talk about it as the language of experimentation and emergence, which is a language of complexity, which is that things emerge. But I think that hedging feels a little bit more strategic and a little bit more. It's like a, you know, there's value in the port, in portfolio thinking so that you can ultimately make a choice. You know, I think that experimentation or complexity theory would say that it's so that you can ultimately, over time, hold these opposing ideas. So let me give you an example. When it comes to explore, exploit, certainly you could say, look, you're hedging until you've made a decision between what product you're going to do, are you going to, you know, what product. So my dissertation was on IBM, and so they were certainly hedging, if that's the language, by investing in their existing product while simultaneously investing in various different innovations that some of which would hit and some of which wouldn't. But the idea of paradox theory is not that the hedging is so you get to the right answer in the end. It's so that you are continually in the language and conversation of holding the today and the tomorrow, because those will continue to pop up, holding both of those simultaneously. That's the difference.
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Alfred Marcus
It actually looks like with leaders that.
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How would you guide them to change the way they ask or the way they frame issues leaders.
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Wendy K. Smith
Yeah, I mean like, let's take this down to practicality. One thing to live in, the abstract of the yin yang and the paradox can get super wonky and super abstract. But let's take this down to practicalities. Here's what I learned very my very first study at IBM. Number one, it had to be a, it's three, I think of it as three things. Number one, it is a long term commitment. Either what you want to call a superordinate goal, a global goal, a bigger picture goal, a greater purpose, but a commitment over time to seeing success. Knowing that that requires within it an ongoing commitment to both being in the today and in the tomorrow at all times. So even if you're going to invest in an innovation that's going to eventually become your existing product, you still have to be investing in new innovation. So a big picture goal, long term that keeps you sort of focused on and holding the opposing ideas. So for example, at IBM I worked with the Database Management Group while they were transitioning into what is now known as cloud computing. They knew that their goal was to be number one in database management. And they knew that that meant that they had to still double down on what was then the databases for back offices with numbers and letters and at the same time had to be working on and developing databases that were much more fuzzy with video and audio and very different kinds of data. And this is in the 2000s. They knew they had to be doing both. And by the way, they knew that going forward they would continually have to be innovating. So this was not an innovate until we've, until we've succeeded. It's an ongoing commitment to innovation and an ongoing commitment to their existing customers. So that's one. The second is that we talk about differentiating. They had to know what their business was like for their existing customers. They had to double down. They had $2 million in investments to existing customers for their back office strategy for databases. They had to continue to invest in that and know what it took to be successful in that. And they had to know what it took to be successful in the innovation and invest in that. And then the third thing that we talk about or that I talk about is that they were at the time I called it in my research study, dynamic decision making. Now we call it tightrope walking. What that meant is that in order to be successful over time, there were moments where they found this like ideal what people think of the both end as a win win where some Investment in money would benefit both their existing product and their innovation. But mostly they were not doing that. What they were doing is making these slight tweaks between shifting their resources between the existing world and the new world, moving back and forth. We call it tightrope walking because you could imagine, and here I'll use the metaphor, a person on a tightrope. They're going forward, they're trying to stay on that tightrope. They're never fully balanced, they're always balancing. And that means that some of their decisions are focused a little. So they're sometimes leaning to the left, sometimes leaning to the right. Some of their decisions are focused more on the existing product and some on the innovation. But they're constantly tweaking, making these micro tweaks so that they don't over invest, for example, in their existing product and not innovate. And I think it's the same thing. I mean this was really a big deal for me when I thought about social responsibility. You know, not every decision, when you are a socially responsible company, some of your decisions, not every decision is going to be focused on purely purpose driven. Some of them have to be focused on profit if you're going to stay as a company. But it's about holding both over time so you can maintain that ongoing shifting balance.
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Alfred Marcus
Yeah, not everything's win, win. How would you judge IBM's trajectory over time?
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You know, it, it, I don't know if it really, it's coming back, but it really had a rough, rough period. So was it successful in doing the balancing or.
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Wendy K. Smith
Yeah, I think we miss, I think strategy likes to, you know, it misses its time horizons.
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Alfred Marcus
So.
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Wendy K. Smith
Meaning that in the early 2000s, IBM was tremendously successful in building up new innovations and it was tremendously successful for a period of time. And their strategy of creating these emerging business opportunities was a huge success. And then they lost it in the transition when it moved from cloud computing into, you know, the next generation AI computing. So I think, you know, will it come back? I don't know, but I think that success, success has to be sort of defined within a period, a time period that makes sense, a time horizon that makes sense. And I think in strategy when we zoom in and zoom out, we sort of lose the story.
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Alfred Marcus
Yeah. The recent book that I'm writing is called Comeback and it talks about firms, I don't talk specifically about IBM, but firms that were once great and that managed to come back at least partially, at least they survived in their company. Like Dell is an example that I.
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Wendy K. Smith
Do and by the way, to your point, what we know is that the hardest thing for companies to overcome for their long term success is their short term success. That we know we again and again that success, that success breeds inertia. Inertia breeds failure. The new quick, you know, like if you think about the big companies, that is the yacht, the new little dinghies running around on the. Or, you know, can move faster and more nimble. So we know that. So overcoming these kinds of setbacks is a huge feat for these large companies.
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Alfred Marcus
Yeah, I think Intel's failure has a lot to do with the takeover of the company by MBAs from engineers who were really subjected to Wall street pressures in a very big way and they were reluctant to invest in the long run.
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Wendy K. Smith
Yeah, and Alfred, as you know, size matters. Size matters. We can't have intimate conversations, intimate interactions. We can't manage change quickly in these humongous large firms.
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Alfred Marcus
What would I mean, like other examples might be like, and I've looked at them in the past, like General Motors, you know, the automobile companies, the oil and petroleum industry, where also they moving more towards.
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Climate change, but then withdrawing from it, doing both at the same time. Do you have any comments on that? I know it's outside the frame of your book, but I'm just curious about how would you think about. About it.
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Wendy K. Smith
How would I think about the transitions?
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Alfred Marcus
Yeah, their transition where they're really doing two things for at once. But then you know, they're, let's say General Motors moving towards electric vehicles, big commitment to it. But then the external environment changes and they withdraw some of that commitment and they're really not becoming dominant in that field in any case, even when they're making this commitment and. And you wonder how well they'll do in the long run given all the changes in that industry.
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Wendy K. Smith
We recently interviewed Lars Feargood, who had been the CEO of Novo Nordisk when they introduced Nozempic and Wegovy. And one of the things that is about Novo Nordisk is that they are governed by a foundation or in partnership with foundation, so that the standard sort of.
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Danish approach it, you know, Carlsberg and you know, Tool all, all Tuberg and all these other Danish companies in which it's not just governed by a board, but there's also a foundation governing them, holding them to a commitment to a set of principles and practices. And what is so obvious or what became so apparent in this conversation is the amount of pressure these humongous companies have by global political demands on what they do. Coming from really varied Stakeholders and the complexity of that and the uncertainty that that introduces into their decision making and their strategic decision making is just intense and immense. And I do not, I don't envy the work of our global leaders of large companies. Again, I want to just say I think size matters because.
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When there's such a large size, we no longer have the ability to make decisions that are most poignant for each of our business lines, most effective for each of our geographies, most unique and distinct. And here I just want to bring in another paradoxical comment from our colleague Roger Martin, who used to be dean at Rotman, who talks about in some of his writings an architectural idea called intimate monumentality. And this is an architecture idea of building large buildings where there are these intimate spaces for gathering. And he's asking the question, what does it mean to have intimate monumentality within our large companies? Because what we are lacking is a decision making where the decision has some impact right more directly on the ground for the products, for the regions, for the people, for that need to be, for the employees that need to be impacted, that are most, most distinct and unique. And so here, you know, I, we have studied, for example, Unilever, when they were led by Paul Pullman, one of the questions they constantly asked was what needs to be global and grounding for a whole company to be able to come together in a unified way? And what needs to be local and distinct and valued, sort of its own domain so that you could make decisions that are more poignant for, you know, for the distinct product, for the distinct region, for the distinct employees along the way. I think that's a profound question we need to ask in our companies.
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Wendy K. Smith
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Fascinating. It's accompanied by his natural ally, Doug.
- [20:31]
Alfred Marcus
Uh, Limu is that guy with the binoculars watching us.
- [20:34]
Wendy K. Smith
Cut the camera. They see us.
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Alfred Marcus
Paradox a liability that large companies have? Is it, is it a liability with large or can you only confront that paradox if you're large and well established?
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Wendy K. Smith
Well, I, I don't think you can only confront it. I think that all we all confront if the Explore exploit paradox is about the ongoing tension between the old and the new, the tradition and the modern, the performing what we've always, always done and the learning something distinct, the operational excellence and the experimental risk. I think we experience that and confront that at every level of analysis. We experience it as individuals, right? We see this in teams, we see this in organization, you know, whatever size organizations. We see this in our societies. You know, we, we've been doing some research also at.
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Organization in Canada called Shorefast. It's a registered charity nonprofit social enterprise in Newfoundland. And they're experiencing this at the community level. Their whole purpose is to redevelop is community redevelopment in Newfoundland in what had been a dying community. And the core question they're asking is from a community level, how do they hold tradition, like 800 year old tradition, but also modernize it so that it's applicable and able to be that the town and that the, the it's Fogo island, the island can be globally and economically viable. And so they're holding it at a community level. So I think that tension exists across levels. We all have to deal with it.
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Alfred Marcus
I totally agree. You talk about separating to connect. So what, what do you mean by that? How, how have you seen companies design their organizations or processes to make that possible?
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Wendy K. Smith
Yeah. So this goes back to asking like what would a leadership team do with their holding paradox? And separate is or differentiate is, you know, and people will often tap into this wisdom when they think about negotiating. If you're negotiating with someone, the best way to find an. An outcome that is expansive, that's integrative, that that expands the pie is first, each side of the negotiation has to be clear of what it needs. The more you can be clear of your interests and your needs and your distinct parts, distinct levels, the more that you can find points of connection. The same is true in holding paradox. If you're a senior team and you're trying to hold the tension between an existing product and an innovation explore and exploit. The more that you know what is at stake stake and what's needed and both in terms of resources and employees and structures and cultures of your existing product. And the more you know about your innovation, the more and the more effectively you can find points of connection. And so that's pull apart, differentiate, separate, understand each one in service of finding connections, synergies, integration, points of connection, universal.
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Alfred Marcus
And particularism paradox in a.
- [24:22]
Wendy K. Smith
You.
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Alfred Marcus
You've st. You. You talked a little bit about IPM and you talked a little bit about Unilever and Paul Pullman. And then I guess another example in the book is legos. How, how could you compare the those three cases and, and what are some of your insights based on a comparison of those? Did any of them navigate this journey better than others? Are there lessons, specific lessons that we can deri. They navigated them that stand out or mistakes they made.
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Wendy K. Smith
But one thing we love about LEGO is that they, I mean and. And Unilever too but certainly LEGO is that they lean directly into the language of paradox. If you go to Lego, they have up on their wall the 11 paradoxes of Lego. They just put it right out there. Maybe it's also because there's something about this Danish culture willing to hold paradox. In fact, recently the Danish king came out and in his New Year's address and said we have to live in the both and we have to hold these competing. So I don't know if there's Something culturally Danish. But LEGO does, they are very clear about that. But, you know, lego's history is that they got there through some real pain, some real problems because. And we often like sort of talk about lego. We talk about three reasons why either or is a problem. And LEGO sort of went through all of this, right? The first reason is that you pick a side between the either or and you go down, you, you get entrenched, you go down, you over, you escalate that side. We call it going down the rabbit hole, right? So this is your classic example of your big company like lego, like Unilever, like IBM, like intel, like General Motors, that had a way of doing things and stayed committed to that way no matter what. And for lego, for years and years and years, they really, they just had this brilliant interlocking brick. They became the toy of the year and they resisted any kind of innovation because they were just doing so well. It to the point that they had five colors. They resisted bringing in green. It took them like six months to decide to add green. Or like my favorite story about them is that they had the, the Star wars folks come to them, the George Lucas team come to them and say, hey, why don't we co brand? No, no, no. They threw them out of their board meeting. We don't do that. We don't coburn. And they stayed so committed until they failed. And this was the early 2000s, and they failed like any company will fail when technology emerges. And at that time in the toy industry, all kinds of technology around, you know, digital video electronics was taking over the toy industry and they failed. And so for lego, and so lots of companies fail at that transition. But for lego, it was even more fascinating. They said, oh no, we're failing. We need to, we need to do something. And so what they did is what we call the second real. We call it a vicious cycle of either or, which is that when you're going down one path and all of a sudden it's failing, you completely overcorrect and move to the opposite side. We talk about it as the wrecking ball because you kill all the good with the bad. And in this case, they said, we're failing. We've got to shift and go, you know, and be innovators. They brought in an innovative CEO and this is when they introduced every kind of innovation possible. So they introduced like this is when LEGO lands and they started getting into theme parks and they, it wasn't just adding green. It was hundreds of colors and hundreds of SKUs and lots of Co branding and lots of innovation. And at that point point, that's when they almost went bankrupt. Because while their revenues went up, they had no discipline. You know, the, the number, their costs went up at such a high rate that they almost failed. So they overcorrected. And that's the second sort of vicious cycle. And I'll just say because. And we can pick this up. The third really pernicious problem of either oring is what we call trench warfare or polarization or the idea that if we pick a side and we get stuck committed to a point of view, what we do when someone else picks another side is that we defend ourselves and reject their point of view. And we get into this polarizing conflict and we become even more separate by holding down our point of view. And we call it trench warfare because the image is that you kind of dig a trench and surround yourself with other people that agree with you. So this is confirmation bias. And then you sort of shoot out at the other side without really listening, knowing, connecting or committing, you know, engaging with them. And you know, we've seen this. So in the case of Lego, this would be the innovators rejecting the sort of brick people who are doing the existing bricks. And the ongoing conflicts that we see between R and D and finance, between sales and R and D, those kind of ongoing conflicts that we see that don't let us get anywhere more creative.
- [29:28]
Alfred Marcus
Are these conflicts in the end actually a way of dealing with the explore, exploit tension because they are represented in organizations by people with different kinds of interests, different ways of behaving?
- [29:43]
Wendy K. Smith
Yeah, I mean I think that that is one way to look at it. Right. Knife. Knife. Or that conflict creates the, brings things out on the table in order to really address what the folks final decision should be. And that's not what the research says because it only, it doesn't bring things out on the table in a.
- [30:02]
In an equitable way. There, you know, this is where psychological safety comes in. Where people feel, you know, where there's power and voice is limited. And some of the most important things that we need to know are, are hidden or not voiced because of power dynamics and because people feel like their careers will be ruined or at least they don't feel comfortable saying things. And what we know from the psychological safety literature, and this is Amy Edmondson's literature and now many more, is that the more that we create the conditions for voice by listening and by inviting in counterintuitive or counter normative expectations or even inviting people in to name potential mistakes or Errors or concerns, the more creative we can be in terms of our outcomes and possibilities, abilities.
- [30:49]
Alfred Marcus
Conflict is in the end destructive and could.
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Wendy K. Smith
Well, I want to be clear, I'm not opposed to conflict. I think the word conflict can be neutral. I think most of the ways we. And tension, I mean, we use tension as a good thing to be creative, as like friction that enables creativity. But that friction or that conflict has to be in service of being able to separate, differentiate, honor both sides. And most of the time, the way we approach, approach conflict is a power driven approach to, for one side to diminish the other. So it depends on how we engage conflict, not conflict in general.
- [31:24]
Alfred Marcus
Would you say that Lego is a more successful. I know I hate the word success, but I'm using it myself. But a more successful example than, for example, Procter and Gamble under Pullman or even the case of, excuse me, Andre, Unilever, Pullman, whoa, I got that wrong. Okay. But.
- [31:49]
Pullman and Unilever and the IBM case, because they never really failed. They always had some kind of cushion so they didn't have to go through the deep crisis that LEGO went through. So maybe the deep crisis really frees you. I mean, it either frees you or at least leads to your demise. I guess it creates a kind of desperation that you have to pull together again. And I don't know if IBM or even Unilever ever really went through that at this point.
- [32:22]
Wendy K. Smith
Yeah, I don't want us to fall into the single root cause trap, which we know is not the case when it comes to evaluating post hoc.
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Alfred Marcus
Right. Post hoc company.
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Wendy K. Smith
Right. So it's partially, you know, partially what we do is that we select on the dependent variable who was, who was over time long term successful and fail. And then we look for the one root cause. And I think that both of those are errors in our thinking that we as strategists try and help our students to be more expansive. Noticing that there's multiple root causes that interact with one another and that selecting on the dependent variable is not the way to understand what, how to, how to inform our behavior going forward.
- [33:02]
Alfred Marcus
Very guilty of that.
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Wendy K. Smith
I think we are. I think that's what we, you know, that's what we in strategy are increasingly teaching our students is to be complex.
- [33:13]
Alfred Marcus
We have perfect wisdom from the point of view of today rather than beforehand as to what will happen.
- [33:21]
Wendy K. Smith
Alfred. I think that this falls into the category of it's hard to think multiple root causes in more complex, you know, configurations and configurational thinking. And that's hard and that's why we are constantly pushing our students to be more complex, because that's the kind of leaders we want.
- [33:38]
Alfred Marcus
Yeah, I mean, you talk a lot about emotions in this whole thing. And, you know, people have to. They get.
- [33:48]
Very scared. To make changes is very scary because the very. Our success is built upon the way we've been doing things for a very long time. So to think about deviating is difficult. Do you want to elaborate a little bit about the issue of emotions in the role that they play?
- [34:10]
Wendy K. Smith
Yeah, sure. And just to contextualize it, a key. So when we wrote both and thinking, you asked why we wrote it. I mean, we wrote it really to bring together research from ourselves and our colleagues over 25 years. And the central framework for both and thinking is what are the buckets or tools that we need in order to hold the complexity of paradox? And we label them A, B, C, D, because we thought that would be easier to remember. Though.
- [34:40]
Importantly, what we say is, look, there's buckets that are about how we individually behave. And so the A stands for assumptions or our mindsets or our cognitions, and the C stands for comfort or our emotions. And we say, look like in order to hold paradox, it's both about our mind and our heart or our, you know, our head and our heart, or our cognition and our emotions. It's both. We can't just look at one of those and then B and D. B stands for boundaries or the structures or the scaffolding that we create, which is the rules and the roles and the processes that we create in order to hold paradox, particularly in our organizations. And D stands for dynamics, which is that if we've got this structure, we also have to create the conditions for emergence and change and not just stability. So D is dynamics and change, and those are the organizational features. So C is the comfort, which you're picking up on. The emotions, which is one of these four buckets that we think is really important. And what we argue and what we find in the research is that people who can hold these paradoxes be able to lean into the dis. Into the. Into the opposing ideas simultaneously and hold them simultaneously, are people who, can we call it, find comfort in the discomfort, which means it's uncomfortable. Like, let's just name that. We're not going to make it easy. And it's not that we're going to sweep away that discomfort. It's that we, as individuals in our lives, as leaders of our organizations, are going to be able to hold that discomfort and move forward a minute close Your eyes exhale, feel your body relax and let go of whatever you're carrying today.
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- [37:46]
Alfred Marcus
I'm going to ask a question. What about, like business schools today, I think stuck in this paradox very, very heavily oriented towards exploitation rather than exploration. Very hard, it seems to me, to explore anything or even experiment even when the experiments are pretty stale and weak. Generally in the future could be pretty bad unless changes are. Do you have any views?
- [38:16]
I just said enough.
- [38:19]
Wendy K. Smith
I mean, often I have three. Three thoughts. Maybe 12. But because I live, I work in the business school. So first of all, my first thought is you could probably extend that beyond business schools to universities. Yes. I think that's like this is the cobbler's son. I've seen this again and again of how hard it is for us to take our own advice. I mean, I remember at the, at the, you know, at the transition into online education and how resistant. I remember sitting In a business, in a meeting of my faculty, talking about an online program and listening to my colleagues say, but, but, but, but we can't teach if we're not in person, but it's not valuable if we don't. And I remember just thinking, like, this is what I study. Like here is all this resistance because we have to do things the way we've always done them. And, you know, so we are most guilty of our own problems. So that's my second thing. And I think my third thing would be to think, you know, I am an optimist at heart amid a very pessimistic and uncertain world. And so here's where I want to just look to and point to maybe the positive deviance. You know, who's like. The question that I'm curious about is maybe on the whole, we in academia, we're under fire. We're teaching the way we've always taught. And if we thought that online education was disrupting us, AI is disrupting us even more. And we have so much to learn from our students, we barely, as faculty, know how to keep up with it. But I, you know, the question to me is, what are the positive deviants in education that we can look to to help us rethink what it means to help the next generation? And if you asked me, and I were to put a stake in the ground to me, a huge piece, and this is where my both ending as a theory comes in line with my both ending as teaching. A piece that we have missed at the university level is helping our students be in conversation with other people that dis that they disagree with politically, that they disagree with in terms of values, helping them to hold that conversation. And we teach them how to hold their values. We teach them how to believe in something. We don't teach them how to hold the complexity of being in conversation with people that are different than them. And I think we have some responsibility to do that.
- [40:42]
Alfred Marcus
That's not easy. I mean, even personally.
- [40:47]
There are lim.
- [40:49]
Sometimes to my ability to talk to people who I completely disagree with. I just, I want to shut them off because it's annoying.
- [40:58]
Wendy K. Smith
This is exactly why we need to teach the next generation to do better.
- [41:01]
Alfred Marcus
Than us, because we don't do it very well.
- [41:04]
Wendy K. Smith
No, we don't. And it's causing problems.
- [41:07]
Alfred Marcus
I mean, I think that you have to listen and you also have to ask more. Why do you hold those points of view? You have to ask rather than tell. It doesn't become an argument. I immediately go into the argument mode, thinking that my superior logic could convince somebody that they are a fool.
- [41:30]
Wendy K. Smith
This is at the heart of both answers. That you could have a different opinion than me and I could respect you even if I don't agree with you. And that maybe there is a better place that we can get to by valuing. Or maybe valuing is the wrong word. By accepting and acknowledging that if we bring together our different values, our different perspectives, we can come to somewhere better and more creative. That's the heart of both. And look, it's all good if both and helps us and paradox helps us to innovate in our companies and helps our strategy. But it's so much more important if it helps us move forward as a society and doesn't get us. We've got big problems in the world and what we are spending our time doing is pointing our fingers at each other for those big problems rather than working together for solutions.
- [42:17]
Alfred Marcus
Paradox thinking is a lot like Hegelian thinking. You know, thesis, antithesis. But in Hegel there's always synthesis. But I think in the real world there's no necessarily. At some point in time there might be temporary synthesize or synthesis, but it's not permanent.
- [42:38]
Wendy K. Smith
But I think you're pointing to. I mean, I don't want to get super wonky, but there's the big discussion in paradox theory, and we address it briefly in the book, about the differences between a paradox and a dialectic.
- [42:51]
But they're also entwined with each other. And so here's the main difference, and you're pointing exactly to it, which is that Hegelian dialectics, which is what you're pointing to, is like thesis and antithesis come up with a synthesis. And that synthesis bears a new. Is a new thesis to a new antithesis, so that it's ongoing. And paradox theory would say yes, but the underlying thesis and antithesis never go away. That's the under. Like the heart of paradox is to say, look, if you are in these tensions, let's assume that they are just part of life. That it's not if we're going to face these tensions, it's how. And so we're always going to have a tension between the self and the other. And it's going to take different forms and have different experiences. We're always going to have a tension between the old and the new, the today and the tomorrow, the, the.
- [43:40]
Alfred Marcus
The.
- [43:41]
Wendy K. Smith
The universal and the particular. There's always that tension doesn't go away. That's the heart of paradox theory. We just have to learn how to hold it in different ways and it's going to come up and, and sort of be. It's going to be salient or it's going to be we're going to experience that tension as a diff in a different sort of clothing. But underlying it there will always be that tension between self and other and love and hate and today and tomorrow and that these are, these are permanent in our world.
- [44:08]
Alfred Marcus
I mean I think when I was young I thought there were solutions to problems and I think that being in a management school, I think what management is about is managing problems rather than solving it because they're never really ultimately solved. I said it's like a balloon, you know, you press it one way and it pops out somewhere else. The I'm becoming a little bit reflective here.
- [44:32]
Wendy K. Smith
Yeah, I think I would be more nuanced than that. I think the underlying paradox is never solved. We talk about it, it's not resolved. So there will always be that tension, you know, and that comes out in some way in the moment you have to solve the issue that comes up. So for example, this is what this is my ahad, IBM, they had to, they had issues or dilemmas or trade offs. This is where it gets wonky, right? How dilemmas fit into paradoxes. They had to solve the trade off of were they going to put more of their engineers, they had a certain number of engineers, they were trying to expand that number but were they going to allocate more of them to addressing the existing customers needs or to developing this new thing? And they had to allocate those, those engineers like that was the dilemma or trade off of how to do so. But they did so in the context of knowing that they were holding this bigger paradoxical commitment or this bigger commitment to the paradoxical tension of the today and the tomorrow and wanting to keep both alive over time.
- [45:31]
Alfred Marcus
A lot of from a strategic point of view comes down to investment decisions and investing given uncertainty.
- [45:42]
But then I think there's the need to obtain feedback and readjust.
- [45:48]
After you make these decisions. And how.
- [45:53]
Can you really turn back some of your decisions once you've made those commitments? And how easy does that become?
- [46:00]
Wendy K. Smith
Yeah, I remember when I was a grad student and someone said well look, this is just portfolio management and it's about net present value. So figure out your net present value of your future into your present and then just make your decision based on what's going to give you the bigger return. That has a couple of problems to it. First of all, the number one problem is that if you're going to constantly be doing this. Well, oftentimes the bigger return is going to be what you're constantly doing for today. And you know, that might be the case for right now, but that doesn't, that's short term thinking, not long term thinking. So you, because you can't always figure out what your net present value is of the future because you just don't know. It's, it's so you just don't know. So that's the first problem is that it's, it's short termism that comes into that. And the second problem is, is that it assumes a stability of what the today is going to be and it doesn't assume any change along the way. So it's short termism, it's stabilism, it's myopia. And so I think that's where you've got to like that's where the invitation is, is to be more, I keep saying the word complex, but complex in the nature of taking, you know, thinking long termism and putting yourself in 10 years into the future, being dynamic. To your point about, you know, experimenting and changing and shifting and learning along the way, it's about also a portfolio. To your point about hedging, I would call that experimenting and you know, but constantly doing that, not just as a one time shot, as an ongoing practice. So I think it's shifting all of those.
- [47:27]
Alfred Marcus
Paradox provides resilience and survival.
- [47:31]
I'd agree, I'd agree. Okay, you did bring up AI. We can't have a discussion.
- [47:40]
Without mentioning it. So does this change anything in terms of this issue of how to manage paradox? Or does it, I mean, can you use AI, for example, to create scenarios, multiple scenarios and plug in various actions you can take and see how it affects the scenarios.
- [48:08]
A lot of these think tanks used to do that and they would come up with a hundred thousand possibilities.
- [48:13]
Wendy K. Smith
Yes, I think as we know, AI is responsive to our prompts.
- [48:19]
Alfred Marcus
Yeah, absolutely.
- [48:21]
Wendy K. Smith
And then it builds into its assumptions on and it learns our assumptions and our biases. So one of our, so if we are using AI, one of our challenges is finding the responsible way to challenge the bias, to understand and challenge our biases. First of all, I think that where it is valuable is that it is hard for people to see their own both ands. It's much easier for us to see other people's both ands because of what we were saying earlier. We get defensive about our own points of view that we're stuck in. Right. So emotionally we get committed to A point of view we get stuck and so inviting. Let me, let me just take a step back. The invitation of both and is to stop and change the question from should I do A or B to how can I accommodate A and B simultaneously? That's hard because we might get committed to a point of view or a particular way of doing things. So when I teach executives and I do executive workshops around the world now and when I do that, I ask them to think about their own dilemmas or tensions or trade offs or challenges. We look at how we tend to frame those as an either or. We look at what both and can offer as an alternative and then we go back to their challenges and say what would it look like for you to ask a both and people really get it if we did a case study of a both and and how it could change the creative outcomes. But then when we ask people to go back to their own tension and apply both and people get really resistant. So what I've learned over the years is to stop having them apply both and to their own challenges, but to pair up and have someone else offer some both and thinking to their challenge because someone else can be more creative. I think that someone else could be AI if we ask AI, here's the tension I have. Need a couple of both and possibilities.
- [50:17]
Alfred Marcus
And see, that's very interesting. Yeah. You can become a participant in our own in these discussions. We have.
- [50:25]
Wendy K. Smith
Absolutely. And it could be anything from, you know, I'm feeling this trade off between a work commitment and something that I want to do for my family or I'm feeling this trade off between a career option I have right now and a career option that I, you know, a possibility or I'm feeling this dilemma of how to strategize my technology company in terms of introducing AI and if we give it the either or question and ask it to give us 10 options for a both and it will expand our thinking of possibilities.
- [50:58]
Alfred Marcus
A lot of this is about imagination in the sense the ability to go beyond conventional ways of thinking and imagine something entirely due to things to think more deeply. But in the end what we're trying to get towards is win win as opposed to win lose. But it's not always possible. In the end, there are some trade offs that have to be made. But maybe what you're suggesting, the trade offs have to be made with an understanding of what we've just done and an ability to be flexible about it if it in some ways.
- [51:35]
Wendy K. Smith
Yeah. And yes, I, I love that insight because this is exactly what Came up for me when I studied IBM back in 1999, 2000. And this is exactly what we mean by tightrope walking. And the important insight here is to notice that the decisions that we make, and this is what I noticed at IBM are not just one off decisions about how do I allocate my. But we have to see them again, zoom out and see them within a bigger pool portfolio over time of multiple decisions that the leadership team is making. It's like game theory. Are you going to cooperate or compete? We often think of game theory and we stop at one game. But if you think about game theory across multiple games, across multiple times, there's learning, there's change, there's development. You could cooperate and compete because sometimes you cooperate and sometimes you compete. It's the same thing with, with decision making. And paradox is that holding the paradox there might be that great win win where both things happen simultaneously. By the way, we call that outcome the mule because the mule, the creative integration that outcome with a mule is the oldest biologically bred by humans hybrid animal where it's stronger than a, you know, stronger than a horse, smarter than a donkey. You bring the horse and donkey together, you get the mule and there are mules. So we, you know, if you point to there is like Albert Einstein, the theory of relativity. That is a theory, that is a win win that comes together when he asked the question how can an object be at rest and in motion at the same time? That's what spurred the theory of relativity to emerge in the world. That's a mule, that's a win win. Quantum theory is like that. And your point is that oftentimes you have to make these trade offs in the moment. You know, work life is an example. I, it's very, it's very rare that you get to have a moment where you are both doing work. And you know, it's like bring your kids to work day or something. But you're making these sort of micro trade offs between work and life. And this is what we call tightrope walking because it's these micro trade offs. Sometimes it's more work and sometimes you're home with your family for dinner. But if you over trade for example on it's all work, you burn out. And if you over trade on it's all life, you get fired. So you don't want to overextend to either side. You need some guardrails that keep you on the tightrope. But that's the tightrope metaphor is you are making decisions in Service of over time holding both a little bit like.
- [54:11]
Alfred Marcus
Aristotle's golden mean, a little bit like.
- [54:14]
Wendy K. Smith
I think that the golden mean is a little bit more of a targeted. You're trying to get.
- [54:20]
Alfred Marcus
So yes, it's a target.
- [54:22]
Wendy K. Smith
You're trying to hold these competing in service of more creative outcomes along the.
- [54:26]
Alfred Marcus
Way, you're moving back and forth more. And the golden means you're hitting the. The arrow hits the target precisely, which is a different metaphor. This has been a great conversation. I want to start to bring it to an end. But the last question is.
- [54:45]
What are you working on now? What are the important.
- [54:48]
Additional questions that we should be asking right now, both as researchers and with regard to practice?
- [54:55]
Wendy K. Smith
I'm finding two things really compelling. The first thing that I'm finding really compelling in my research is asking the question, what does it take for us to be more expansive to hold this Both and. And to not get stuck in our thinking? I think that both and is going. Is not, as I said earlier, both important. Important for our organizations and creativity. It's also super important for us as individuals and our potential for connection. And it's also super important for our society. So what does it take for us as human beings not to go, you know, in a world that has so much complexity, it's leading us to be more and more narrow and more and more limited and more. We want to like, hide under a rock and hold our point of view and hide. How do we. How do we hold that expansion? That's one question I'm asking. And the other is if we're going to hold that expansion, how can we. To your point about how hard it is to connect with people that are different than us, be more expansive by trying to at least honor that those differences are possibilities and we can hold those possibilities. Those are the two compelling questions that I think are societally really important right now.
- [55:59]
Alfred Marcus
Is that what you're working on right now or what are your. That's the main projects in which you're involved? Is there anything I haven't asked or that we haven't covered that you'd like to get at?
- [56:11]
Wendy K. Smith
I love your questions. I think your questions are so provocative. So I'm gonna just. I mean, there's so much more. I would say people should read the book.
- [56:19]
Alfred Marcus
It's a very, very good book and it's a very important way of thinking. I think it's made huge contributions. Certainly has influenced me. So we probably should bring this to an end. Thank you for this discussion of both anthinking and its implications for strategy and innovation. The book is both and Embracing creative tensions to solve your toughest problems. From Harvard Business Review Press for listeners, I'm Alfred Marcus for the New Books Network, where we explore how strategy and ethics intersect in shaping organizations and society. Thank you for listening. If you have comments or want to suggest books for future episodes, email me@amarcusmn.edu.