12-112m establishing a mindset for success · november 2012 © the kba consulting group 12-112m...

Copyright. © 2011-12 All rights reserved. No part of this document may be reproduced, transmitted, transcribed, stored in a retrieval system, or translated into any language in any form without the written permission of The KBA Consulting Group Pty Ltd ABN 74 065 438 879

Establishing a Mindset for Success

An innovative approach to achieving and sustaining success as an individual, a team or an organisation

Joan Cameron and Denis Kilroy

November 2012

The KBA Consulting Group Pty Limited Level 3, 650 Chapel Street

South Yarra VIC 3141

Tel: +61 3 9024 8239 Fax: +61 3 9024 8240

www.kba.com.au

November 2012 © The KBA Consulting Group

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Table of Contents

Introduction and Purpose 3

Context: The Economic Challenge for Business Leaders 3

Three Core Capabilities 4

Wealth Creation as a Creative Endeavour 6

Integrating Creative Thinking and Logical Analysis 7

Defining Hybrid Thinking 7

The Hybrid Thinking Process 7

The Whole-‐Brain State 8

Building Blocks for Group Workshops and Individual Development 9 Understanding the Impact of Positive and Negative Thoughts Establishing a Whole-‐Brain State Silent Balance Goal Clarification with Subconscious Mind Activation & Alignment Changing a Limiting Subconscious Belief Sociometric Processes to Consciously Align a Team around a Particular Issue Engaged Feedback Individual Coaching

Potential Workshop Structure 11

Application to Change Management and Goal Realisation 12

A Path Forward 12


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Introduction and Purpose

Every well-‐led commercial organisation wants to get the best out of its people and the best way to do this is to help its people get the best out of themselves. This is particularly true in relation to the current and potential members of its executive leadership team.

The purpose of this document is to demonstrate how business leaders can make use of recent breakthroughs in psychology and neuroscience to help shape their own mindset so as to enhance both their own performance and that of each of the teams they lead. The approach is simple yet powerful. It has significant implications for any organisation seeking to enhance individual and team performance, encourage creativity or nurture better leaders.

Context: The Economic Challenge for Business Leaders

It is helpful to begin by establishing the commercial context. The primary economic objective of the Board and senior executive team of every listed company is to build an organisation that can create wealth for shareholders on an ongoing basis. To do this, they must continually deliver performance that exceeds investor expectations. While this is a significant challenge, it can be met. The key is to have the right capabilities, the right processes and most importantly, the right mindset.

Most business leaders understand this challenge intuitively. However it can also be demonstrated analytically as shown in Figure 1. The value of any listed company can always be expressed as the sum of the capital employed in the business, plus the sum of all the economic profits that will be generated in the future through the effective use of that capital.

The grey shaded planes in Figure 1 constitute a series of annual economic profit outcomes and there is always a bow wave of such outcomes embedded in the share price of every listed company. The blue lines in Figure 1 represent the profile of this bow wave. The associated economic profit outcomes must be delivered in order to justify the current share price and exceeded in order to create wealth.

Figure 1. Shareholder Value as a Bow Wave of Future Economic Profits

Economic Profitability

ROCE - WACC (%)

0.0

1.0

2.0

3.0

4.0

5.0

2010 100

200

300

2015 2020 2025 2030 2035 2040 2045 2050 2055

Growth

The economic impact of capabilities, processes and mindset manifests as an ability to establish and maintain a

longer bow wave than the competition

Capital Invested

($m)

Capabilities, Processes and Mindset Strategy

100

200

300

Trajectory if expectations met


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The shape of the bow wave is determined by the attractiveness of the markets in which the company competes, its competitive position, its strategy and its execution skills. Over time, market forces will tend to erode returns back to economic breakeven and growth back to average economic growth. So establishing the ability to maintain and potentially even extend the length of the bow wave is important.

As is suggested by the structure of the graphic in Figure 1, from a purely economic perspective, there are three fundamental levers through which to enhance the value of a business. These are: enhancing the expected level of economic profitability; enhancing the expected rate of growth in the capital base on which those returns are earned; and increasing the sustainability of current levels of economic profitability and growth (i.e. maintaining or extending the bow wave).

The level of return and growth expected in the current year and over the next few years generally get a lot of attention from the Board and the senior executive team. However maintaining and if possible extending the bow wave by establishing the capabilities and the mindset required to continually develop and implement new and higher value strategies tends to get less attention. This is unfortunate, because it is also significant driver of value.

Three Core Capabilities

If a Board and its executive leadership team is to build an organisation capable of continually delivering performance in excess of expectations, then three core capabilities need to be established. The first is the ability to understand where value is being created, where it is destroyed, and why, under the current strategy. The second is the ability to continually devise new and higher value strategies. Most of these are incremental, and are both developed and implemented at a disaggregated (generally segment) level. The third is to put in place processes and systems that ensure delivery of the performance promised in a plan built around the chosen strategy, while at the same time encouraging the pursuit of even higher value strategies over time. The second capability is particularly important.

Figure 2. Three Core Capabilities

Market Segmentation

Establishing Measurement Principles

Economic Profitability Analysis

Strategic Position Assessment

Current Strategy Valuation

Possibility Thinking

Value Proposition Development

Alternative Strategy Development

Valuation & Strategy Selection

Building Management Commitment

Strategic Planning

Resource Allocation

Target Setting & Budgeting

Reporting & Monitoring

Executive Reward

Value Measurement Capability

Value Creation Capability

Value Management Capability

Understand where value is being created, where it is being destroyed, and why, under the current strategy

Develop and evaluate potentially higher value alternative strategies, and then adopt and commit to a higher value strategy

Put in place business processes and systems to encourage the ongoing pursuit of even higher value strategies over time


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Fundamental to this approach is effective segmentation. By defining segments as groups of customers whose needs are so similar that we can serve them in a way that is value creating for them and cost effective for us, we achieve two important outcomes. The first is to identify opportunities to enhance value arising from an understanding of economic profitably by segment – such as the wine business illustrated in Figure 3 in which a decision was taken to divert high quality fruit used in Label 10 to the much more economically profitable Label 2.

Figure 3. Illustration of Economic Profit by Segment

The second is to set up cycles of customer value and shareholder wealth creation in each needs-‐based customer segment. Such cycles transform segments into platforms for ongoing value uplift in which the primary focus is on customer value creation. If priced appropriately, incremental customer value creation will result in additional revenues. If delivered efficiently, these incremental revenues will translate into incremental economic profits and ultimately into additional value for shareholders.

Figure 4. The Cycle of Customer Value Creation and Shareholder Wealth Creation in Each Segment

Capital Employed (Millions of Dollars)

90 180 270 360 450 540 630 820 810 900 0

12.5

10.0

7.5

5.0

2.5

0

(2.5)

(5.0)

(7.5)

(10.0)

(12.5)

Economic Profitability

ROC - WACC (%)

Label 2

Label 10

Growth Contraction

Customer Value Delivery System that Delivers Value Efficiently to Customers

-

=

Incremental Value for Customers

Incremental Revenue

Customer Value Proposition that Enhances Customer Value

Incremental Economic Cost

Economic Efficiency

Incremental Economic Profit

Incremental Wealth for Shareholders Ongoing Value Uplift

for Shareholders


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Wealth Creation as a Creative Endeavour

It is important to understand and accept that shareholder wealth creation is fundamentally a creative act on the part of the Board, senior executives, management and employees of every company. In most cases it begins with customer value creation. By focusing in the first instance on the objective of enhancing value for customers, ideas can be generated for new customer value propositions that when delivered efficiently, can lead to enormous wealth creation for shareholders.

The creative process through which these ideas emerge and take form has two essential ingredients: imagination and belief. They are equally important. Creativity is as much about believing in new ideas and bringing them into form, as it is about generating the ideas in the first place.

Most corporations employ strategic thinking processes based on sound rational logic, or what some call fact-‐based analysis. This type of thinking relies almost entirely on data, analysis, argument, debate and criticism. It honours scepticism, and demands proof before there is belief. The problem is, as inventors, entrepreneurs, and creative thinkers in science and the arts will attest, if you demand proof before you will believe in something, you will never create anything. You must be prepared to believe before you will see (not the other way around).

If you can imagine something, then in a sense it already exists but only in seed form. Ideas are like new products or services in a very diffuse state. It is belief, together with the emotional commitment that almost always accompanies it, which carries an idea from the mind of an inventor to success in the marketplace.

When backed by a strong belief, an idea gradually becomes less diffuse, gaining in density as it moves firstly to the drawing board, then into a prototype, and ultimately into a commercially viable product or service. Every product or service begins life as a new idea, just as every city building begins life as a concept in the mind of an architect. Ultimately, all wealth creation stems from such ideas.

Before any new idea can be incorporated into the strategy development process, it must be given form -‐ in the same way that an architect must express an idea for a new building as a design concept before a detailed design can be completed and the development process can move forward. Once again, a key ingredient during this formative stage of the creative process is a strong belief in the new idea on the part of those responsible for it.

Once the idea has taken form, it can then be exposed to sound logical analysis to prove to others that it has merit. With each step forward the number of people who believe in the idea increases.

The creative process begins with imagination. It is underpinned by belief and its associated emotional commitment. Passing the test of logical analysis both strengthens belief and builds commitment.


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Integrating Creative Thinking and Logical Analysis

All organisations make use of both creative thinking and logical analysis. However in most cases they are used in isolation, with logical analysis having by far the dominant role. This is unfortunate, because when properly integrated they can both be much more powerful.

Logical analysis has an extremely important role to play in strategy development. However on its own it is not sufficient. Used in isolation, at best it will enable us to predict a future created by someone else.

Creative or intuitive thinking has an absolutely crucial role to play in strategy development. However as is the case with logical analysis, on its own it is not sufficient. While a brilliant idea may emerge from an intuitive insight, in most cases a solid proof based on sound logical analysis will be required before a Board will fund or a team will follow, a strategy developed from such an insight.

Developing new and higher value strategies requires the application of creative thinking and logical analysis – in combination not in isolation. The best strategies are almost always developed from intuitive insights or creative ideas that have been tested and proven with sound, logical analysis. Unlike strategies developed from logical analysis alone, this hybrid form of thinking can lead to breakthroughs that the competition finds difficult to counter.

Defining Hybrid Thinking

Hybrid Thinking is the process by which an idea accessed though an intuitive insight, is first given form as a potential value proposition, then tested in terms of customer value creation potential, and finally developed into an alternative strategy and evaluated in terms of shareholder wealth creation potential. It is a higher order thinking process that incorporates both creative and analytical modes of thought.

Hybrid Thinking has its origins in a thinking process first postulated by Plato. Plato's approach had four elements: imagining, believing, hypothesising, and reasoning. The first two (imagining and believing) are creative in nature. The fourth stage (reasoning) is logical or analytical in nature. The third stage (hypothesising) provides a bridge between the creative and the analytical. 1

The Hybrid Thinking Process

Most strategy development processes involve three main steps: idea generation, strategy formulation and strategy evaluation. Hybrid Thinking is an enhancement of this process. It incorporates the same three elements but employs three distinct types of thinking: intuitive thinking, formative thinking and logical thinking.

Intuitive Thinking. Ideas are always generated intuitively. Either the mind creates an intuitive understanding as a result of information acquired from data or analysis, or we


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simply get an idea. A powerful symbiosis exists between information and intuition. Either information stimulates the mind to produce an idea, or it is used in combination with logical analysis to ground a purely intuitive one.

Formative Thinking. As the idea moves to the formative stage, the mind uses both information and insight to mould the idea into a concept that can be communicated to others and evaluated with sound logical analysis. Often this concept takes the form of a new and innovative customer value proposition.

Logical Thinking. Once the concept has been formulated as a potential value proposition, it can be exposed to logical analysis by being tested in terms of customer value creation potential. If it passes this test, it can then be developed into an alternative strategy and evaluated in terms of shareholder wealth creation potential.

The Whole-‐Brain State

Hybrid Thinking begins with possibilities and ends with a commitment to a chosen path forward – either a strategy that enhances value for both customers and shareholders, or a way to improve performance significantly under the current strategy. In both the possibility thinking stage (imagining), and in the commitment stage (believing), we need the mind in a balanced state with both the left and right hemispheres of the brain activated.

Figure 5. A Psychological Model of the Brain

A number of processes now exist that enable us to balance the hemispheres of the brain so as to achieve a whole-‐brain state. When in this state:

§ In the possibility thinking stage, we can use a prompt such as a paradigm shifting question to stimulate the imagination to produce a series of ideas, and

§ In the commitment stage, we can align our subconscious beliefs with our conscious intent (once we learn how to communicate effectively with our sub-‐conscious mind).

Balthazard and Fannin from Arizona State University have suggested that successful leaders use their minds differently from less effective ones – making greater use of the right

Body Left Side

Body Right Side

Corpus Callosum

Left Hemisphere of Brain Right Hemisphere of Brain

!  Logic / reason !  Words !  Action plan !  Management !  Short-term gain !  Individual effectiveness !  Details !  Order / control !  Tension

!  Emotion / creativity !  Pictures !  Vision / mission !  Leadership !  Long-term goals !  Group / team effectiveness !  Big picture !  Freedom / spontaneity !  Relaxation


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hemisphere2. Figure 6 illustrates the impact on the brain state of an office manager who participated in a separate study undertaken by Fannin. The red connections represent left hemisphere dominated brain activity prior to the establishment of a whole-‐brain state. The combined red and blue connections represent a balanced whole-‐brain state achieved using a simple PER-‐K® process.

Figure 6. The Balanced Whole-‐Brain State

A study reported in 1988 in the International Journal of Neuroscience, by researchers at the Universidad Nacional Autónoma de México, suggested that synchronized brain states significantly influence nonverbal communication, and that people with greater hemispheric integration were more able to influence others in a positive way.3

The takeaways from the research in this field boil down to two important insights:

§ We can use the neuroplasticity that exists while in the whole-‐brain state to align our subconscious beliefs with our conscious intent, and when desired, change self-‐limiting beliefs to self-‐empowering ones.

§ Our positive thoughts, even if not expressed verbally, have a positive impact on others. And the more whole-‐brained we become, the more able we are to do this.

Building Blocks for Group Workshops and Individual Development

There are a number of powerful building blocks that KBA has built around the concepts contained in this document. Eight are summarised below. They can be used either as workshop components, or as the basis for individual working sessions with executives. Their purpose is to help leadership teams and individual executives to re-‐shape their mindsets in a positive way. (A mindset is an established set of attitudes and beliefs that a person or a group holds and which underpins the way they think, react and act in any given situation.)

! "+!

Figure 7: The Whole-Brain State

The person depicted by the independent t-test to the above, experienced profound changes. This woman had been an office manager for over ten years. Her dominant pattern before the PER-K® balance was facilitated, (seen in RED), is left hemispheric. Very logic oriented, her management style was “my way or the highway.” Her approach was demanding and she expected others to do exactly as she commanded. Most of the people that worked for her did as she asked out of fear of reprisal from her or at times, experienced her uncontrollable anger. After the PER-K® balance, the dominant pattern, seen in BLUE, represents access to the emotional/right side of her brain, augmenting the qualities and attributes of her left hemisphere. The result was that her consideration of others was noticeably better, and her interpersonal relationships at home and at the office improved substantially. Her leadership abilities began to flourish and she became well liked. In addition, the office ran smoother, with greater efficiency and productivity. Her shift toward a whole-brain state created a new attitude toward others, fostering a more congenial work environment. The overall shift in the attitude of her employees toward her was supportive, resulting in a more positive feeling about the work place. Due to the space restriction of this paper, it is not possible to provide a comprehensive treatment of this subject or the numerous changes that individuals experienced. However, the volume of data collected, and the unique properties it represents afford us the opportunity to evaluate and continue to understand what the data means, as well as providing intriguing hints as to the nature of its potential. Singularly, the most significant information to come from this research, in 98% of the cases measured, presented statistically significant correlations, demonstrating the difference between baseline measures and the presence of the whole-brain state after the intervention occurred.

Summary

Subconscious belief patterns circumscribe our perception and drive our behaviors. Knowing how changing perception at the subconscious level of the mind can transform a subconscious belief pattern can now be depicted in brainwave energy and the creation of the whole-brain state. Continued research in this area will assist in recognizing and adopting applications that will be beneficial in academics, personal health, professional performance, and virtually every area of human life. Practical applications of changing subconscious belief patterns, utilizing PER-K® belief change processes, have existed for over two decades; today we can measure them and


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Understanding the Impact of Positive and Negative Thoughts – 15-‐20 minutes

This is a group process in which individuals get to experience the effect of their colleagues directing firstly negative and then positive thoughts towards them. It is a great way to learn to appreciate the power of thought using Applied Kinesiology (also known as muscle testing – a reliable form of bio-‐feedback).

Establishing a Whole-‐Brain State – 5-‐15 minutes including explanation

This is an exercise drawn from Brain Gym® in which participants learn how to establish a whole-‐brain state where both hemispheres of the brain are activated and connected. In this state, we are far less susceptible to stress or fear, we are less prone to adopting a negative mindset, we can function more effectively (particularly as leaders), we are better able to adapt to new situations (neuroplasticity) and we are more able to influence others in a positive way. The whole-‐brain state is a state of mind in which we are not only more creative, but more able to solve complex problems. Once established, it can be used to underpin the creative thinking component of a strategic planning workshop. It is also the state we need to be in to align our subconscious beliefs with our conscious intent.

Silent Balance – 5-‐15 minutes per issue

This exercise enables participants to release stress or negativity by creating a whole-‐brain state in relation to a particular situation, experience or challenge. It is done silently and can be applied to any issue, including conflicts or relationship issues at home or at work, and remains completely confidential from the facilitator (and other participants if in a workshop setting). This process is drawn from PER-‐K®.

Goal Clarification with Subconscious Mind Activation & Alignment – 20-‐30 minutes per goal

This process enables a conscious intent or goal to be transformed into one that can be understood by (and embedded in) the subconscious mind. This process is guided using a worksheet and incorporates approaches originally employed in Neurolinguistic Programming (NLP) that have been refined after hundreds of individual sessions.

Changing a Limiting Subconscious Belief – 5-‐20 minutes per goal

Various change process can be employed that make use of the whole-‐brain state to establish a new self-‐empowering belief in the subconscious mind. These are personal processes drawn from PER-‐K®, which can be applied to groups in an effective way.

Sociometric Processes to Consciously Align a Team around a Particular Issue – 15-‐45 minutes per issue

This is a group process where participants place themselves on a line to indicate their level of acceptance of, agreement to, or alignment with, a particular statement, goal, intention or strategy. Movement up and down the line is then facilitated – using a processes like having those more in agreement with the goal make small concessions or changes to the goal so as to get those less “bought-‐in” to agree to come into alignment. Once the goal has been


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refined or agreed, we can use a PER-‐K® process to align the subconscious mind with that goal.

Engaged Feedback – 30-‐45 minutes for a group of 10-‐15

This is a group process in which participants give feedback to each other by making a positive statement acknowledging a particular strength, followed by a respectful request for a change or adjustment in behaviour. Once agreement is reached, desired modes of behaviour can be established within the subconscious mind. This both creates and sustains more effective working relationships.

Individual Coaching

This is an individual process, often facilitated in the days, weeks or months following a group workshop. Its purpose is to establish a trusted advisor or coaching relationship aimed at enhancing individual performance on a range of dimensions. This will often include aligning subconscious beliefs with conscious intentions, as well as the use of processes similar to those described to help individual executives devise effective solutions to their individual, team and organisational challenges.

Potential Workshop Structure

The building blocks described above can be put together in many different ways to structure workshops aimed at achieving stated business objectives. It is important to begin with some education in relation to how to harness the power of the mind. It is also useful to end by making use of the environment established in the workshop to enhance relationships between team members. The example illustrated in Figure 7 is for a workshop aimed at refining and aligning the core values of a Group Leadership Team.

Figure 7. Example of a Potential Workshop Structure

1.  The Creative Process 2.  The Whole Brain State 3.  Utilising the Power of the Subconscious

1.  Articulate Values 2.  Process to determine whether to confirm, refine

or augment values 3.  Surface any additional or “unstated” values 4.  Select a belief statement for each value 5.  Clarify for the subconscious 6.  Balance each belief (using a process like New Direction

Balance or Goal Clarification for the Subconscious) 7.  Agree actions that make the values adopted

more evident in the Group Culture

1.  Engaged feedback process (2 types) 2.  Silent balance to become “whole-brained” in

relation to each colleague

Harnessing the Power of the Mind

Refining and Aligning the Values of the Group

Building Optimal Relationships between Team Members

Education

Primary Objective

Secondary Objective


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Application to Change Management and Goal Realisation

Once an organisation becomes familiar with these processes, they need not be constrained to use in a workshop format, or just by the top-‐team. They are fundamental to KBA’s strategy development process. They can also be used to underpin goal setting and realisation, to improve leadership, and to enhance implementation effectiveness – and in so doing mitigate implementation risk around almost any business initiative, strategy or project.

A particularly powerful application that can be used throughout any organisation, is to enhance the probability of success of a change management initiative by aligning the beliefs of each team member with a particular intent or chosen direction. All that is required is the addition of two simple steps as illustrated in Figure 8.

Figure 8. Process Enhancement Applied to Change Management

A Path Forward

In combination, the processes we have outlined constitute a significant breakthrough. They provide an effective way for companies to get the best out of their people and to enable those people to get the best out of themselves.

Equally importantly, by aligning subconscious beliefs with a conscious intent, they provide a sustainable way for organisations to enhance the likelihood of a successful outcome from almost any business initiative. This enables companies to mitigate implementation risk in a way that was simply not possible in the past.

1 Kilroy, D. (1999) Creating the Future: How Creativity and Innovation Drive Shareholder Wealth, Management Decision, Vol. 37 No. 4, pp. 363-371

2 This is your brain on the job, Wall St Journal, September 20, 2007

3 Fannin, J. and Williams, R., Leading-Edge Neuroscience Reveals Significant Correlations Between Beliefs, the Whole-Brain State, and Psychotherapy, Journal of the Counsellors and Psychotherapists Association of NSW, August 2012.

!  Identify the problem or current situation

!  Define solution or desired result !  Create plan of action !  Execute the plan

!  Identify the problem or current situation

!  Define solution or desired result

!  Clarify beliefs necessary to support desired result

!  Establish those beliefs with the Subconscious Mind

!  Create plan of action

!  Execute the plan

Traditional Change Management Achieving and Sustaining Change

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