Copyright
Copyright 2009 Roger Martin
All rights reserved
No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to [email protected], or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.
First eBook Edition: December 2007
ISBN: 978-1-4221-4810-5
This book is dedicated to
Marcel Desautels,
integrative thinking visionary.
Contents
Copyright
Acknowledgments
1 Choices, Conflict, and the Creative Spark
The Problem-Solving Power of Integrative Thinking
2 No Stomach for Second-Best
How Integrative Thinkers Move Beyond Trade-offs
3 Reality, Resistance, and Resolution
How Integrative Thinkers Keep Their Options Open
4 Dancing Through Complexity
Shaping Resolutions by Resisting Simplification
5 Mapping the Mind
How Thought Circulates
6 The Construction Project
Imagining Reality
7 A Leap of the Mind
How Integrative Thinkers Connect the Dots
8 A Wealth of Experience
Using the Past, Inventing the Future
Notes
About the Author
Acknowledgments
I HAVE MANY FRIE NDS AND COLLEAGUES to thank for essential help on this book. First and foremost, I owe a huge intellectual debt of gratitude to my two closest thinking partners, Hilary Austen Johnson and Mihnea Moldoveanu, without whom I would not have been able to write this book.
I met Hilary in 1995 during the research for her dissertation at Stanford University (Hilary Austen Johnson, “Artistry in Practice,” 1998, available in the Stanford University Library) under James March and Elliot Eisner. She introduced me to March’s work in organizational learning and Eisner’s in qualitative research, both of which played instrumental roles in the development of the book. Hilary’s dissertation explored how a person develops artistic knowledge, and her framework underpins the entire second half of this book. In addition, my interview technique for the leaders in the book was influenced by the technique she developed for her dissertation. Finally, the first rudimentary idea behind the model in the first half of the book was sketched out on Hilary’s porch in Santa Cruz, California, in 2001. I strongly recommend reading Hilary’s recent article on artistry (Hilary Austen Johnson, “Artistry for the Strategist,” Journal of Business Strategy [volume 28, issue 4, 2007: 13–21]).
I met Mihnea when he joined the faculty of the Rotman School in the summer of 1999, one year after I came to Rotman as dean, and he has been my primary thinking partner in the faculty ever since. In 2002, he became the academic director of the Desautels Centre for Integrative Thinking, which leads all of our integrative thinking research and teaching. He has introduced me to analytic philosophy and history of science, which has had a profound influence on my thinking. As perhaps the best-read person I know, Mihnea has the ability to connect my thinking to scholarly work I would have otherwise had no chance to discover, such as the writings of American fallibilist philosopher Charles Sanders Peirce, whose thinking features prominently in chapter 6. He has also been instrumental in developing the integrative thinking teaching program at the Rotman School that has enabled us to put our research work into action.
A core group of fellow travelers at the school has been nursing along the integrative thinking agenda and has provided continuous support on the development of the ideas in the book. Suzanne Spragge coteaches all of my integrative thinking courses and has supported the development of the thinking in the book. Jennifer Riel has been my research associate for the book. And Melanie Carr, who is a psychiatrist by training, has helped me think about the emotional challenges to building integrative thinking capacity.
Before I started writing the book in the summer of 2006, Malcolm Gladwell convened a talented group of writers and editors to give me advice. Writers Gladwell (Tipping Point and Blink) and James Surowiecki (The Wisdom of Crowds) and editors Henry Finder (New Yorker) and Bruce Headlam (New York Times) provided invaluable advice on structuring the book, and Bruce came up with the idea that became the eventual title (thank you, Bruce!). Malcolm and Bruce provided valuable follow-up feedback on manuscripts.
A dozen colleagues and friends read the manuscript for me and provided valuable written feedback for which I am hugely grateful. I sincerely thank Joel Baum, Brendan Calder, Petra Cooper, Nancy Lockhart, Terry Martin, Bob McDonald, Sally Osberg, Joe Rotman, David Smith, Lynn Utter, Larry Wasser, and Craig Wynett. My mentor, Rob Prichard, former president of the University of Toronto, gave me important advice on how to better utilize my huge stock of successful leader interviews, and for that I am grateful. A former student, Dave Eden, introduced me to a century-old Science article by Thomas Chamberlin that figured more prominently in the book than Dave ever imagined, I suspect.
My Rotman colleague Steve Arenburg was instrumental in organizing the visits of all the successful leaders to Rotman School. Though they are among the busiest men and women in the world, they all came away feeling that Steve had made their visits a pleasure and time well spent. Bob Fleck of Teamwork Communications expertly filmed the discussions to capture them for posterity. Karen Christensen, our brilliant Rotman Magazine editor, has helped me develop ways to describe integrative thinking in articles in the magazine since 1999.
I took a leave of absence during the summer of 2006 to focus on writing the first full manuscript of the book. I couldn’t have done so without hurting the progress of the Rotman School, had it not been for the presence of the school’s two fantastic vice deans, Jim Fisher and Peter Pauly, and CAO Mary-Ellen Yeomans, who ran the school in my place for the summer. I was slightly chagrined to find that I wasn’t missed at all!
Jeff Kehoe, senior editor at Harvard Business School Press, and I had long talks before starting this book project and he encouraged me to bring this proposal to him. He has been a great publishing partner and has brought to bear the terrific team at HBSP to support the book.
When I turned to finding an editor to help me transform the initial manuscript into a final book, I thought back to my most pleasant collaborations with Harris Collingwood, who was the senior editor at Harvard Business Review who worked with me on my article, “The Virtue Matrix: Calculating the Return on Corporate Responsibility” (Harvard Business Review, March 2002). Harris has made wonderful improvements to everything about the book. Readers can be thankful that Harris makes words disappear without being missed! Someday, I would like to be able to write as well as him.
Last, but certainly not least, I thank my magnificent agent Tina Bennett. Tina represents everything an author would ever want in an agent. When she believes a book should be written, she will let nothing stand in the way of its publication. She supported this project from its inception and made sure it ended up at the right publisher with the requisite amount of attention. She was calm but determined throughout, regardless of how agitated I happened to be at the time. She is a true friend to whom I owe much of my publishing career to date.
I hope that you enjoy this book, and more importantly, that it helps you make the most of your personal potential for greatness. All the people mentioned above have contributed to that possibility, but only you can take the requisite actions. I hope that The Opposable Mind will motivate you to do so; if it does, I will have fulfilled a
labor of love.
C H A P T E R 1
Choices, Conflict, and the Creative Spark
The Problem-Solving Power
of Integrative Thinking
The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. One should, for example, be able to see that things are hopeless yet be determined to make them otherwise.1
—F. Scott Fitzgerald
IT WAS SEPTEMBER 1999, and Michael Lee-Chin had a serious crisis on his hands—the worst crisis of his business career. Lee-Chin had presided over more than ten years of remarkable growth at his beloved money management firm, AIC Limited, but now AIC was under withering attack. Its very survival was in doubt. Things did indeed look hopeless, but Lee-Chin was absolutely determined to make them otherwise.
Integrative Thinking and the Rescue of AIC
Lee-Chin had seen hard times before. The eldest of nine children of biracial parents (both parents were the offspring of Jamaican mothers and Chinese fathers); Lee-Chin was something of an outcast in his hometown of Port Antonio, Jamaica. Other children in the neighborhood teased Michael and his siblings, and he felt, he told me, “betwixt and between,” neither fully Chinese nor fully Jamaican. 2
Proud and entrepreneurial, Michael’s mother and stepfather worked as clerks at the local market, and his mother took on second and third jobs as a bookkeeper and an Avon lady. With the money they managed to save, his parents eventually opened their own market, but money and luxuries were still scarce, and it was inconceivable that their oldest child would one day earn a spot on the Forbes global list of billionaires.3
In 1970, Lee-Chin moved to Canada, where he attended Mc-Master University in Hamilton, Ontario. After graduating, he worked odd jobs, including road engineer and bar bouncer, while he looked for his true calling. With his warm, friendly manner, quick wit, and room-filling presence—he’s six feet, four inches tall—Michael was a natural salesman, and he discovered in himself a passion for investing. In 1983, he borrowed $400,000 to put to work in the stock market, and by 1987 he had earned enough to buy AIC Limited, a tiny investment advisory firm managing a mere $600,000 in investors’ assets.4
An admirer of Warren Buffett, Lee-Chin pursued a strategy at AIC with almost no parallel in the mutual fund business. The typical mutual fund manager holds one hundred to two hundred different stocks at any given time and turns over the entire portfolio every eighteen months or so. But emulating Buffett’s approach of taking long-term stakes in a relative handful of companies, Lee-Chin’s AIC Advantage Fund would hold ten to twenty stocks and hang onto them, as he says, “more or less forever.” Lee-Chin’s “buy, hold, and prosper” philosophy worked brilliantly, and by 1999, assets under management had grown 10,000-fold, to $6 billion.
But in 1999, as we heard so often at the time, everything was different. Investors were clamoring to buy Internet service providers, dot-coms, and switching-gear start-ups, day-trading was suddenly respectable, and a mutual fund with a buy and hold philosophy and a portfolio of financial, manufacturing, and grocery store stocks seemed hopelessly old-fashioned and out of step. Many investors lost faith in AIC’s investing approach, and for the first time in its history, the Advantage Fund was suffering substantial net redemptions—more money was flowing out of the fund than new money was flowing in.
The low point for AIC and Lee-Chin arrived on the morning of September 2, 1999. Lee-Chin opened his newspaper that day to find that one of the most influential business columnists in Canada was trashing AIC’s basic business model and calling on investors to get out while their holdings were still worth something. The article predicted that to raise enough cash to meet the tide of redemptions, AIC would have to sell many of the Advantage Fund holdings. The columnist speculated that the forced asset sales would further depress the price of the stocks held in the fund, which in turn would drive down its returns still further, prompting even more redemptions. The new redemptions would require more stock sales, reinforcing a downward spiral that would continue until there was, for all intents and purposes, no more AIC.5
Lee-Chin remembers that morning well. “I felt awful!” he admitted to me. But despite his distress, he sensed that an opportunity lurked within the crisis that engulfed AIC. The Chinese character for “crisis,” he pointed out to me, combines the characters for “danger” and “opportunity.”
Lee-Chin had to choose, and quickly. Would he sell shares to cover the redemptions, concede that his “buy, hold, and prosper” strategy was fatally flawed, and diversify into the technology stocks that were the flavor of the month? That might save the firm, but at the price of everything he believed in and valued as an investor. Or would he stick to his principles, hold his ground, and risk the firm’s falling into a death spiral that might destroy the business he had built nearly from scratch?
He collected himself, thought hard—but not long—and made his choice. The option he selected was . . . neither. Or rather, both. “The marketplace was expecting that we had to sell,” he told me. “I said, ‘What if we didn’t sell? What if we turned around and bought? Then what?’ We’d turn the assumptions upside down and upset the whole applecart.”
Lee-Chin had little choice but to sell some of the Advantage Fund’s holdings to meet redemptions. But then he took a startling tack. The marketplace expected AIC to use any money left over after meeting redemptions to load up on technology stocks. Lee-Chin would confound those expectations. “Okay,” he decided, “we’re going to identify this one stock, Mackenzie Financial Corporation. We’re just going to put everything we have into purchasing that one stock.” He poured every cent he could pry from AIC’s corporate coffers, and every dollar he could raise from banks, into Mackenzie, one of the fund’s major holdings and a stock he and his staff knew well. “We did everything to buy Mackenzie,” he recalled. “The share price went from $15 to $18 overnight. The rest is history. Mackenzie was sold [in April 2001] for $30 per share. Our unit holders made $400 million, and we made a handsome return.”
His move didn’t just save AIC. It helped AIC become Canada’s largest privately held mutual fund company, in the process making Lee-Chin a billionaire. His wealth has provided him with the wherewithal to buy and turn around the National Commercial Bank Jamaica, Jamaica’s largest bank, and fund philanthropic projects in Jamaica, Canada, and beyond.
The Integrative Thinker’s Advantage
The lessons of AIC’s cash crisis, and Lee-Chin’s response to it, may seem to have limited application to other business dilemmas. But Lee-Chin’s bold counterattack wasn’t just a spur-of-the-moment gamble by a swashbuckling Jamaican entrepreneur, in response to an unrepeatable set of circumstances. The thinking process Lee-Chin followed is, I believe, common to some of the most innovative and successful people in the business world today, whatever their domain or the problems they encounter.
I have spent the past fifteen years, first as a management consultant and then as the dean of a business school, studying leaders who have striking and exemplary success records, trying to discern a shared theme running through their successes. Over the past six years, I have interviewed more than fifty such leaders—some for as long as eight hours—and as I listened, a common theme has emerged with striking clarity. The leaders I have studied share at least one trait, aside from their talent for innovation and long-term business success. They have the predisposition and the capacity to hold two diametrically opposing ideas in their heads. And then, without panicking or simply settling for one alternative or the other, they’re able to produce a synthesis that is superior to either opposing idea. Integrative thinking is my term for this process—or more precisely this discipline of consideration and synthesis—that is the hallmark of exceptional businesses and the people who run them.
As I listened to some of the sharpest minds in business talk about how they thought through the most pressing and perplexing dilemmas of their careers, I searched for a metaphor that c
ould give me deeper insight into the dynamic of their thinking. The skill with which these thinkers held two opposing ideas in fruitful tension reminded me of the way other highly skilled people use their hands. Human beings, it’s well known, are distinguished from nearly every other creature by a physical feature known as the opposable thumb. Thanks to the tension we can create by opposing the thumb and fingers, we can do marvelous things that no other creature can do—write, thread a needle, carve a diamond, paint a picture, guide a catheter up through an artery to unblock it. All those actions would be impossible without the crucial tension between the thumb and fingers.
Evolution provided human beings with a valuable potential advantage. But that potential would have gone to waste if our species had not exploited it by using it in ever more sophisticated ways. When we set out to learn to write or to sew, paint, or golf, we practice using our opposable thumbs, training both the key muscles involved and the brain that controls them. Without exploring the possibilities of opposition, we wouldn’t have developed either its physical properties or the cognition that accompanies and animates it.
Similarly, we were born with an opposable mind we can use to hold two conflicting ideas in constructive tension. We can use that tension to think our way through to a new and superior idea. Were we able to hold only one thought or idea in our heads at a time, we wouldn’t have access to the insights that the opposable mind can produce. And just as we can develop and refine the skill with which we employ our opposable thumbs to perform tasks that once seemed impossible, I’m convinced we can also, with patient practice, develop the ability to use our opposable minds to unlock solutions to problems that seem to resist every effort to solve them. I won’t go so far as to say that every problem will find a resolution as brilliantly elegant and successful as the one that Lee-Chin arrived at. But in our daily lives, we often face problems that appear to admit of two equally unsatisfactory solutions. Using our opposable minds to move past unappetizing alternatives, we can find solutions that once appeared beyond the reach of our imaginations.
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