HANNAH BATES: Welcome to HBR On Technique, case research and conversations with the world’s high enterprise and administration consultants, hand-selected that will help you unlock new methods of doing enterprise. Think about you’re making an attempt to resolve an issue, however none of your choices are all that nice. You could possibly stroll away. OR you would possibly have the ability to use an concept like “integrative pondering” to determine learn how to take the very best of your insufficient choices and negotiate a compromise. At this time, we convey you a dialog about strategic downside fixing with Jennifer Riel, who teaches on the Rotman College of Administration in Toronto AND is the World Director of Technique at IDEO, the worldwide design firm. You’ll learn the way leaders within the movie business used integrative pondering to steadiness model security with creativity behind the scenes of The LEGO Film. And also you’ll learn to apply integrative pondering to your enterprise issues, utilizing a four-step course of.  This episode initially aired on HBR IdeaCast in September 2017. Right here it’s.

CURT NICKISCH: Welcome to the HBR IdeaCast, from Harvard Enterprise Overview. I’m Curt Nickisch in for Sarah Inexperienced Carmichael.

[Theme music from The LEGO Movie]

For those who don’t know that music, it’s the theme track from The LEGO Film. The animated movie grossed almost a half billion {dollars} in 2014. It additionally breathed new life into the model. Folks cherished seeing the little plastic items of their childhood in motion. The hero is a development employee who falls down a gap someday, into the LEGO underground.

[Sound from The Lego Movie]

Behind the scenes, The LEGO Group went by way of its personal journey. Seems, there’s a strategic decision-making story behind the blockbuster. And it’s a case that Jennifer Riel and her co-author, Roger Martin, examine of their new e book, Creating Nice Decisions: A Chief’s Information to Integrative Pondering. Riel teaches on the College of Toronto’s Rotman College of Administration. She additionally loves motion pictures. So at this time, she’s right here to speak about integrative pondering by way of the lens of the movie business. Jennifer, Thanks for coming in and speaking with the HBR IdeaCast.

JENNIFER RIEL: My pleasure. Completely satisfied to be right here.

CURT NICKISCH: The LEGO Film—wonderful success—nevertheless it may have turned out a lot otherwise, proper?

JENNIFER RIEL: Completely. And fascinating sufficient I didn’t know till I had the possibility to speak to Jorgen Vig Knudstorp, who was the CEO of LEGO on the time, that there had really been a earlier iteration of a LEGO film that really made a LEGO film earlier than the LEGO film.

CURT NICKISCH: I didn’t learn about this both.

JENNIFER RIEL: I used to be fascinated It’s referred to as The Adventures of Clutch Powers. And it had come out of the truth that LEGO for a very long time—I imply, they make the little plastic bricks that all of us grew up with. It’s been a profitable model for many years—simply sort of wonderful for a little bit firm in Europe. They usually had began stepping into branded—co-branded—entertainments just like the Harry Potter LEGO video games or Star Wars LEGO video games could be the most well-liked instance. And so, it was inevitable somebody was ultimately going to come back and say, Let’s do a film about LEGO, and possibly let’s have it’s authentic, not tied to a different leisure model, and they also did. They created this The Adventures of Clutch Powers. They usually partnered in a means that the majority corporations would, which was, they prioritized the safety of the model. So, they’d closing sign-off on the script, after which the entire filmmakers. They usually made certain that it was true to the model and that it protected the corporate. And as Jorgen say with fun, it was actually boring and never very profitable, not a really profitable movie, not very profitable for the corporate. So, they had been approached once more, from a Hollywood studio saying, Let’s actually do that; let’s actually make the LEGO film. They usually had been confronted with, What will we do? The final time it didn’t work, proper? And we prioritized that we must always have artistic management. That was an enormous bone of competition as a result of they acknowledged that a part of the problem is getting actually nice expertise who could be prepared to work on our mission for which the corporate had artistic management. They needed expertise that might create a very nice film. To try this, the speculation could be you’ve received to present whole artistic management to that expertise. You’ll not get nice administrators nice filmmakers in the event that they really feel they’re going to beholden to company pursuits like they’re uncomfortable sufficient being beholden to the studio, not to mention to an organization. So, this query of, How will we deal with that the seeming tradeoff, the either-or alternative between sustaining absolute, strict artistic management however in all probability giving up the last word high quality, creativity of the movie; versus give another person whole artistic management—you’re in all probability going to get an excellent movie out of it, however that’s an enormous danger to take for the repute of the corporate, as a result of who is aware of what they’re going to do.

CURT NICKISCH: Meet within the center. The joyful medium.

JENNIFER RIEL: Completely. You may think about all types of compromises in between the place you actually aren’t thrilled with the reply however you may reside with it. And fairly often, leaders body the issue of tradeoffs in that means. Michael Porter, the daddy of all technique, tells us technique is making tradeoffs. You may’t be all the pieces to everybody, and that’s true. You completely must make tradeoffs as a frontrunner. What we discovered—LEGO is a superb instance of this; Jorgen is a superb instance of this—is that there are some issues for which making that tradeoff is unacceptable. If I make the tradeoff, I lose. If I make the commerce off, it’s not going to resolve the issue. And it’s in that state of affairs the place you ask your self, Might there be a greater means? Might I think about doing one thing both than selecting the either-or, or discovering the hardly acceptable compromise, and truly search to create a more sensible choice, one thing new that doesn’t exist at this time, which may really remedy the issue, be nice for the group. And in Jorgen’s case, he was actually clear: I desire a actually wonderful film, an superior film, if you’ll. However I additionally needed to be superior for LEGO, proper? I would like LEGO to be higher off from having engaged on this course of. He seemed on the problem and realized that on artistic management, in the end, he did must make that alternative that, Look, if I would like nice expertise—actually nice expertise, not ok expertise—they’re going to must have management of the script, of all the pieces that they do, of the casting, of the movie itself; and, yeah, they could give us the suitable to evaluation it. However really, we have to belief them, and they should see that we belief them. But when I’m going to do this, I can ask for one thing that I imagine goes to make a greater reply. And the factor he requested for was their time earlier than they began engaged on the film. And he stated, What I would love you to do is spend time not with me however with LEGO’s most dedicated, fanatical prospects. Going to the fan conventions. I would like you to spend time with youngsters as they play with LEGO. I would like you to spend time speaking to those tremendous followers and understanding what LEGO means to them. Primarily, he was discovering a means to assist these filmmakers fall in love with the model the best way {that a} child does. And if he may try this, if he may get them to fall in love with LEGO, then they might defend the model. They’d be those who had been devoted to its preservation, and they might create an incredible film that held LEGO at its coronary heart. What’s sort of cool concerning the engagement that they’d, with the grownup followers particularly—I didn’t know this—however apparently the one factor that’s completely forbidden, even amongst the grownup LEGO followers: you’re by no means allowed to make use of glue. As a result of the spirit of LEGO is taking it aside and constructing it once more. And in order that perception about followers and the way they really feel about LEGO turns into a plot level within the film. They now construct an enormous a part of the narrative round how evil it’s to make use of glue. And this higher reply produces the LEGO film.

CURT NICKISCH: So, what would most corporations have finished?

JENNIFER RIEL: What most corporations would have finished is what LEGO did the primary time. Deal with it as an optimization downside. Determine, you realize, what does it we would like? We would like a film that protects the model. Most likely even prioritize that over the notion of it being a very good film—make their very own curiosity paramount over the curiosity of the viewer. And be stunned when the film’s not superb. And it really makes individuals assume much less of the model anyway. It’s kind of the catch 22. You find yourself producing the end result that you just had been making an attempt to keep away from. I believe a number of organizations are inclined to both simply make the tradeoff or lay out the chances, analyze these prospects endlessly, proper. We hear about these conferences that go on and on, and also you get progressively much less enthusiastic about the entire solutions as you analyze them. However as you try this, you can begin to say, OK, we are able to’t simply select one or the opposite; let’s construct the Frankenstein choice, the consensus choice right here, the place we are able to all reside with this as an answer. It’s not going to thrill anybody; it’s not going to be nice; however a minimum of nobody goes to get fired. Once we speak about built-in pondering is this concept of leveraging the strain of opposing concepts leveraging that disagreement. And it’s not that you just need to keep in disagreement eternally; you in the end need to create an excellent reply that we are able to obtain consensus round. Nevertheless it’s a elementary perception that you must undergo the problem or the strain of disagreement to get there.

CURT NICKISCH: I imply, I consider this virtually as just like the “attending to sure” e book. It’s kind of like, “attending to sure, and”— arising with options in negotiations which can be artistic, that find yourself making either side happier than they ever imagined, even, like, strolling into the state of affairs. You’re saying that that’s sort of doable with in the event you play an integrative pondering to enterprise issues.

JENNIFER RIEL: I like the thought of “attending to sure.” That’s pleasant. Not each downside goes to be nicely suited to this mind-set. There are many nice pondering and decision-making instruments, and if in case you have one thing that you just love and that work rather well for you, preserve utilizing them. We promote all of those. Give it some thought as being notably helpful if you have a look at the issue in entrance of you, you have a look at the chances are the choices which can be laid out. You have a look at the tradeoff and also you say, I’m simply not prepared to make that tradeoff. I simply I can’t think about making that alternative. I would like a greater reply. So, it’s one factor to say, I must do one thing apart from select right here; and it’s one other to truly have a strategy.

CURT NICKISCH: Developing, we’re going to interrupt down that methodology, speaking by way of the levels of integrative pondering. However first, let’s have a look at one other real-world instance—from the films. Within the Nineties, the Toronto Worldwide Movie Competition, TIFF for brief, screened a couple of hundred motion pictures. It was for movie lovers, for everybody actually, and offered a whole lot of tickets, nevertheless it wasn’t worthwhile. That was the problem dealing with Piers Dealing with he grew to become competition CEO in 1994. Dealing with thought of the Cannes Movie Competition as one other mannequin. It’s unique, with a juried prize, the Palme d’Or. Cannes will get information protection, star names, and a ton of sponsorship cash. Most executives would have a look at TIFF’s problem as an optimization query: the place on the dimensions between neighborhood and exclusivity is the very best place to steadiness between ticket gross sales and sponsorship cash? However the brand new CEO requested himself: why even make the trade-off? Is there a method to get the advantages of each? Preserve TIFF simply as inclusive, however make it extra buzzworthy, too? Integrative pondering. Right here’s Dealing with in 2012.

PIERS HANDLING: We measure the success of our competition towards many components. It’s the movies we showcase, the viewers response to these movies, the expertise that emerges, and the eye the movies appeal to from the business and the media.

CURT NICKISCH: What Dealing with discovered is that Toronto’s large, various viewers of film-goers wasn’t a legal responsibility – they had been an asset. Take Slumdog Millionaire. It received the Folks’s Alternative Award—after which eight Oscars.

[Sound from Slumdog Millionaire]

Two years later, The King’s Speech took the viewers prize—and 4 Academy Awards.

[Sound from The King’s Speech]

Seems –TIFF’s viewers was a robust market predictor.

JENNIFER RIEL: It’s now the case that if in case you have a film you assume would possibly win an Academy Award, you convey it to Toronto. You see how the viewers responds.

So, as an illustration, Crouching Tiger Hidden Dragon had are available in to Toronto with the studio not fairly certain. I imply, if somebody had stated to you, within the yr 2000, the large hit film of the yr goes to be a Mandarin-language movie wherein warriors dance on treetops, proper, not many individuals are going to say, American audiences are going to like that. However Toronto audiences did—and adored the movie. And so, they had been in a position to look again at what had been predicted concerning the viewers previously and say, If we actually elevate this concept of an viewers prize, make it actually central, we imagine, primarily based on prior proof, that it’s extra seemingly to achieve success. However this can be a case the place they made a little bit of a much bigger wager, and it was partly as a result of what they had been doing wasn’t working. And typically you must be pragmatic: how will we begin doing this? and see whether or not it’s going to be extra profitable. I believe in Pier’s case, you don’t have a ton to lose by making an attempt an viewers prize and seeing whether or not it was really going to provide the result that he cared about.

CURT NICKISCH: So, let’s break this down. How do you do it?

JENNIFER RIEL: It’s a four-stage course of. Stage 1, get clear about what your downside is. You discover the issue you assume is price fixing the place you imagine the solutions in entrance of you aren’t ok. And a few of them fall into the class of inside organizational tensions. Numerous organizations I’ve labored with the place construction: we had been fully centralized construction, and we had been sluggish to maneuver, so we de-centralized, moved determination making out into the group. That didn’t work terribly nicely for us. We discovered that you realize whereas there have been moments of nice interplay with customers we had been doing issues in a single a part of the group very, very totally different than others. We’d misplaced effectivity and misplaced economies of scale, and fairly often in organizations, they’ll say, Properly, centralization didn’t actually work very nicely. Decentralization undoubtedly didn’t work very nicely. And the pendulum simply swings again to centralization once more, and it’s the definition of madness at that time. Properly if it didn’t work earlier than it’s in all probability not going to work this time both. And so, the thought of claiming, you realize, in the event you’ve been fixing the issue time and again within the group, or in the event you really feel an inside rigidity like centralization and decentralization or standardization and customization or—these inside tensions are sometimes problematic as a result of the alternatives aren’t ok. Proper. We all know we’d like each. We simply can’t determine the how. And so, we would like to have the ability to assist you determine the how. In the 1st step, what we need to do is take that downside and discover two very opposing methods of fixing it. So, we might dive very deeply into, All proper, if we had been completely centralized, what would that seem like? Let’s describe that simply so everyone knows what we’re speaking about. Completely decentralized—pushing them out to extremes, as a result of that’s the place essentially the most rigidity is. We are able to’t be completely centralized and completely decentralized on the similar time.

CURT NICKISCH: Proper. Power your self to not discover the steadiness.

JENNIFER RIEL: Precisely.

CURT NICKISCH: Engineers do that proper after they check issues: they’re like, What would occur if labor prices go to zero? Like, How would you design a warehouse that means? or no matter.

JENNIFER RIEL: Completely. And it provokes new pondering. We then attempt to fall in love with every of these fashions. Opening your thoughts to understanding what is really nice about that alternative; what does it get us that is perhaps useful in constructing the higher reply. Step two, right here’s the place we really maintain them in rigidity, proper? Right here’s the place we’ll have a look at them collectively and we basically push ourselves to see what we see, to note what we discover: The place are they extra related by way of outcomes that we’d have anticipated? The place are their true distinctions or factors of distinction? A very nice end result from mannequin a that simply doesn’t exist in mannequin B. That is stage three, proper? Generate prospects: what may a greater reply seem like? And in some methods, you simply ask that query: What do I actually worth, and will I think about creating one thing out of the issues that I actually worth? And so in the end, you’d need to generate a couple of solutions so that you just’re not simply targeted on one. Step 4, how may you strive your new fashions, see how an viewers or a buyer base or a shareholder group reacts, after which proceed to maneuver ahead with that as a chance? So, as an alternative of simply saying, We’re finished; let’s launch, are you able to really check these prototypes as you roll them out?

CURT NICKISCH: At which step do most corporations stumble?

JENNIFER RIEL: So, I believe that there are a few locations which can be difficult. Typically there may be an inclination not to do that in any respect—simply make the tradeoff. Typically it’s laborious to fall in love with one of many fashions since you already actually like one. And so, it’s necessary to convey individuals into the room who will help push your pondering on that. Typically they’ll get caught on analyzing the fashions by simply treating it as a guidelines: We’ve received quarter-hour. What’s related? What’s totally different? What assumptions? And, kind of, be a little bit dogmatic and simply push by way of these. A part of that is recognizing that pushing ahead to new concepts doesn’t occur on a right away timeline, proper? Giving your self a little bit of time and room to stroll away from the issue and are available again to it. Definitely, in the event you’ve received a day, and that’s all you may spend on it, you can also make progress. However finest follow could be convening the group a few instances to undergo the totally different levels at totally different time limits so that you’ve had a while to assume.

CURT NICKISCH: How are you aware when, you realize, in the midst of this, like, unfamiliar course of, that you just’re heading in the right direction? What are the indicators that you just’re succeeding? What are indicators that might inform you you’ve received to begin over?

JENNIFER RIEL: So, I believe they’re largely emotional. In stage one, in the event you actually are in a position to push your self to have real affection for the 2 fashions, get to a spot the place you say, I perceive why somebody would use these; there’s one thing good in it. That could be a good signal that it’s working. Once you’re analyzing the fashions, in the event you really feel a little bit within the weeds of the complexity, you do must dive into the complexity of this so as to push your self ahead; in the event you really feel such as you see one thing new that you just didn’t see earlier than—it may not be earth shattering; it may not be world altering—however one thing that I didn’t acknowledge earlier than I began this course of which may push me in a brand new path. After which by way of the chances, Is it higher than what I began with? Have I made progress? Have I produced one thing that I believed was a greater job of fixing the issue than the place I started? And as you’re testing, Am I really making this concept higher? Am I studying as I’m going. Am I producing a solution that I’m enthusiastic about? A few of it’s managerial judgment, proper. If this had been an algorithm it wouldn’t really be all that priceless to you. It’s a course of or a strategy that you could observe that, paired with your individual understanding of what you are promoting, with your individual management acumen, allows you to deal with issues differently.

CURT NICKISCH: Jennifer Riel, thanks a lot for taking us by way of this course of.

JENNIFER RIEL: It’s my pleasure.

HANNAH BATES: That was Jennifer Riel – in dialog with Curt Nickisch on the HBR IdeaCast. Riel is adjunct professor and government in residence on the Rotman College of Administration on the College of Toronto. For those who favored this episode, try HBR IdeaCast wherever you get your podcasts. We’ll be again subsequent Wednesday with one other hand-picked dialog about enterprise technique from the Harvard Enterprise Overview. For those who discovered this episode useful, share it with your mates and colleagues, and observe our present on Apple Podcasts, Spotify, or wherever you get your podcasts. When you’re there, make sure to go away us a evaluation. We’re a manufacturing of the Harvard Enterprise Overview – if you’d like extra articles, case research, books, and movies like this, make sure to subscribe to HBR at HBR.org. This episode was produced by Anne Saini, Ian Fox, and me, Hannah Bates. Particular due to Maureen Hoch, Adi Ignatius, Karen Participant, Ramsey Khabbaz, Nicole Smith, Anne Bartholomew, and also you – our listener. See you subsequent week.