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Business Officer Magazine

Preparing for the Unpredictable

In a world where things turn upside down at a moment’s notice—says author, speaker, and consultant Frans Johansson—the rational and the spontaneous needn’t collide when you must come up with a creative plan.

By Tadu Yimam

*If you want your institution to become more innovative, hold a bit less tightly to your well-crafted plans, suggests Frans Johansson, the opening general session speaker at the NACUBO 2013 Annual Meeting in Indianapolis, July 13–16. Author of The Medici Effect: Breakthrough Insights at the Intersection of Ideas, Concepts and Culture (Harvard Business Review Press, 2004), Johansson shows how the best ideas and innovations come from collaboration among people with diverse experiences, skills, expertise, perspectives, backgrounds, and cultures.

In his presentations and books—the latest being The Click Moment: Seizing Opportunity in an Unpredictable World (Portfolio Hardcover, 2012)—he builds on the concept of convergence of disciplines at "intersections," where the best chance for innovation lies. Also believing in the idea that success is random—"far more random than we would like to believe"—Johansson thinks there are still a number of specific actions that we, as individuals and organizations, can take to capture this randomness and focus it in our favor.

Experience the Johansson Effect

Frans Johansson will keynote the opening general session on Sunday, July 14, at the NACUBO 2013 Annual Meeting in Indianapolis, July 13–16.

In an interview with Business Officer, Johansson explains more about igniting innovative ideas, and ways his mantras of interdisciplinary intersections and click moments can apply to higher education.

Encouraging Cross-pollination

Raised in Sweden by his African American-Cherokee mother and Swedish father, Johansson is clearly no stranger to diversity. And his wide-open perspective has allowed him to meld a bachelor's degree in environmental science from Brown University with a Harvard MBA; the founding of software and medical device companies; the chief executive role at the strategy consulting firm, the Medici Group—and the study of the science of sport fishing.

He began to hone this ability to jump across and pull together various disciplines while still an undergraduate. In the first week of his senior year, Johansson's earlier idea of starting an interdisciplinary science magazine called Catalyst took hold. "I talked to a couple of people about it," says Johansson, "and they loved it. Things flowed from there. I went to each department and asked for money so we could pilot the publication. They each gave me a few hundred dollars, and we sold an ad or two." Suddenly, Johansson and his ad hoc team had created an interdisciplinary science magazine that is still being published today.

"I learned a couple of things," says Johansson. "The exercise made me realize that I loved the entrepreneurial and interdisciplinary aspects of the project. And that was one of my 'click moments'—a clear, distinct decision point to try something new. I also realized that the only way we were going to be able to publish this magazine was for everyone to be behind it. It was very influential in my thinking. And, ultimately, that idea led to The Medici Effect."

Planning Is Merely Preliminary

Johansson contends that the most effective approach for creating innovative ideas is often the combination of the rational and the spontaneous.

"Chief business officers are the ultimate planners; that's what they do," he notes. "They work on balance sheets; they operate with firm deadlines for financial reporting; much of what they do is tightly scheduled. So, it's tough to bring up the idea that detailed planning is not always the best way to create an environment that supports innovation."

That's in part, explains Johansson, because most people think life has become much less predictable. The uncertainty comes because there's just so much happening. "In higher education," he points out, "you have the competitive aspects of online courses, funding, and grantmaking-along with new laws and regulations and any number of other influences. And, you have changing norms in terms of the way people even think about the value of education. All these things are shifting and changing. Where there are so many long-held beliefs that can really get sideswiped, the value of all that planning and analysis is decreasing."

At the same time, human beings need a rationale to act, says Johansson. "We need a purpose, we need a reason. And, usually, numbers provide that. But, with such unpredictability in play, I think we need to put decisions in two major categories. One is emotional, meaning, 'I don't necessarily care what the numbers say; I want to do this. It just feels right.' And, the other is quantitative-'I need numbers to justify it.' We take these different decision approaches all the time."

Decisions must be made much faster, and people have to try far more things, says Johansson. What a CBO needs to do around numbers is twofold:

Be able to run more quickly. "When I talk to trend and analyst firms, it seems they're becoming outdated-or behind," says Johansson. "It's no longer about what a company needs to do over the next couple of years—but what is required over the next three months. A university financial office that is more agile in that way will be more helpful. So, you don't have to come up with a five-year plan—or, even if you do, you have another way of thinking about how to support the rest of the overall mission."

Another change in the way we think about numbers, says Johansson, is the move from the idea of return on investment to that of 'affordable loss.' "If we tried this and it didn't work," asks Johansson, "how would it hit us? What's the number that we could absorb?"

Overcome institutional inertia. Much of the response to the ideas in The Medici Effect came from the business world, where people are more likely to embrace innovations. For higher education, it's not that straightforward, Johansson says. "If you look at the elite institutions, it may seem that—at last on a short-term basis—they have very little to gain by innovating. If you're Harvard, for example, your brand is centered around the idea that you got it right the first time and you're still getting it right."

MIT is another example Johansson points to. "Innovation is already a big part of what the university is supposed to do. When they decide to try free, open online courses, it fits who they are. The institution has been around for long enough that I can still buy the fact that it is experimenting. This isn't necessarily true for other universities, where leaders are sort of in the middle of trying to figure things out.

"That's because most universities organize around specialization," notes Johansson. "So, if you're trying to find some intersections for innovation, look at the natural organic forces that are trying to pull together people across the discipline. Invest in them. Try to create a structure around them. Make it easy for them to transfer credits across departments, for example."

Play It Backwards

Another technique Johansson favors when delving for new ideas is making reverse assumptions. For example, he says, "You can turn the restaurant business on its head by thinking of ways to reverse the service model. For example, consider a restaurant that has no menus. Instead, you instruct the chef to ask each diner what he'd like the chef to create using ingredients already stocked in the kitchen."

At the higher education institution level, says Johansson, "perhaps you think about a university with no tuition, or a completely different concept of degrees or certification, or ways to bring down the cost of student aid. The usual approach, however, be it of corporations, or institutions, is to think big—that anything significant needs to be very expensive.

"My approach," says Johansson, "is to launch two or three different initiatives and test things on a smaller scale. Our consulting group did this recently at an insurance company, accepting 10 proposed ideas, testing them on a small scale, and then getting behind the ones that had some traction."

Other Off-the-Top Tips

Here are a few other insights from Johansson:

  • Evaluate learning outcomes. How effective is the university in training people for a world in which needed skills for the future are unforeseeable? "The measure," says Johansson, "is in the ability of individuals to become successful; to take what they know and apply it to another field. Understanding how to connect with different cultures, different fields, different industries—that is going to be the single most important skill set of the next 50 years."
  • Mind your metrics. A critical activity higher education leaders should measure is the degree to which they are innovating. Are they testing different approaches? Are they opening up to new ideas and techniques? "While this may not be directly applicable," says Johansson, "some companies establish simple, but distinct metrics that tie into innovation.

"For instance, when Nick Donofrio headed up innovation at IBM, he established the number of patents as a key metric. It didn't matter so much that a patent was successful, because the sheer number of patents proved that the company was testing, trying, attempting, pushing. For Donofrio, it was critical that IBM never be beat in the number of patents that it produced. Period. In academia, a similar metric might relate to how willing a professor, an administrator, a board of directors is to experiment, to embrace something new."

TADU YIMAM is director of online learning at NACUBO.

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