Preface: A Singular Sensation

Preface:

A Singular Sensation

 

Each day I live in a glass room

Unless I break through it with the thrusting

Of my senses and pass through

The splintered walls to the great landscape.

— Mervyn Peake

When I turned 60, an unexpected event occurred that inspired me to write this book. Since the age of 10, I had worn contact lenses to correct for my extreme nearsightedness. But in the last few years, that solution had begun to work less well. After turning 56, I found myself wearing reading glasses a good bit of the time to do my work. I developed glaucoma about the same time and had to use eye drops that left my eyes sore, swollen, and dry. Contact lens wearing became increasingly difficult. By the evening, I would just take out my lenses and read without glasses or contact lenses by pressing the book up against my nose. I was heading back to where I was at age 9 before anyone knew I couldn’t see very well.

When I was 59, I remembered that my mother had promised me as an 11-year-old that someday I wouldn’t have to use anything to correct my vision. I thought I might have glimpsed the fulfillment of her promise a few days later while watching Tiger Woods play golf at a local tournament. The great golfer had had laser surgery to correct his vision a few years earlier. I was impressed to see him staring steely-eyed at the flags while strong winds blinded me with dirt that interfered with my contact lenses.

At my next eye appointment, I asked my delightful ophthalmologist, Dr. Miriam Dougherty, if someone with glaucoma could have laser surgery for vision correction. She said sure and recommended I see one of the top laser surgeons in the country, Dr. Peter Rapoza. I was pleased to hear the news and even happier when Dr. Rapoza’s assistant informed me that the first visit was free to check to see if I was a good candidate for the surgery.

Dr. Rapoza turned out to be a tall, distinguished-looking man who somewhat resembled the actor George Clooney. He obviously liked people and did everything he could to be kind and helpful. You feel comfortable in his presence no matter what he has to tell you. Peter had good news and bad news for me. I could certainly use the laser surgery to improve my vision, but I also had cataracts that were so bad they should be immediately removed. He recommended that I have cataract surgery and later follow up with laser surgery if anything wasn’t visually perfect after the cataracts were gone. He explained that during cataract surgery a new lens is implanted in each eye that corrects distance vision and many people find that solution avoids the need for laser corrections.

I subsequently had both eyes operated on and unexpectedly ended up with the best vision of my life. I could now see 20/20 (or average) at a distance. My near vision improved so much that for most close-up tasks I could see better without reading glasses than with them. It was like being physically reborn in a way … except with improvements. With cataracts everything is dark and yellow. After the surgeries I could see that snow was still white, whereas before the surgeries I had been very concerned about the way pollution had made snow so yellow! In addition, night lights previously blurred everything into a big amorphous halo. Now I could see unlit objects quite clearly with only starlight to help me.

I woke up every day to see everything around me perfectly. That had never happened before in my life.

This astonishing personal experience taught me that progress can occur faster than even optimists realize. In my lifetime, technology improvements had taken me from being a virtually blind person to someone who has almost flawless vision at age 60 without any personal effort.

Let me talk about optimism for a moment. Researchers have observed that optimists often accomplish more than realists and pessimists. Why? Optimists try more things and stick to them longer. The realist or pessimist may stop short of trying or trying again, just at the brink of success. But it’s not enough just to be an optimist. You need to do something based on your optimism. Optimists who never do anything except expect the best results are often referred to as day dreamers. Extreme optimists who think about what’s maybe over the rainbow are often dismissed as crackpots, or worse.

I’m a different kind of optimist: an intensely practical one. I want to see results … and soon. I’m impatient. I do everything fast and wish I could go faster: There is so much that needs to be done that most people ignore. That’s one reason I was so impressed by my experience with cataract surgery; here was practical progress that helped me a lot and happened on its own. Wouldn’t it be great if great improvements in all kinds of areas I care about occurred without my effort? That’s a goal that I’ve been working on for some time. Optimistically, I realized that if I could explain more about how this could become routine you and I would each become beneficiaries of many more improvements without any effort of our own, more people would be inspired and directed to take the actions necessary to create rapid improvements. 

Inspired by this amazing vision improvement, I decided it was time to provide a progress report on the 400 Year Project that I began in September 1995 to demonstrate how the world can make four centuries worth of normal improvements from 2015 to 2035. Adventures of an Optimist is that report and more. 

Copyright © 2007. 2012 by Donald Mitchell.

Introduction: Seeds of an Optimist Idea--the 400 Year Project

Introduction:

Seeds of an Optimistic Idea —

the 400 Year Project

My interest is in the future because I am going to spend the rest of my life there.

— Charles Franklin Kettering

Peter Drucker once advised me to be sure that I always tell people in my books that I want them to stop doing most of what they already do and take up more important and useful activities instead. All of the prior books I’ve coauthored have aimed to shift attention toward working on different, more useful tasks that almost always lead to breakthroughs and then provided how to advice for performing those new tasks.

Adventures of an Optimist doesn’t take that path. Instead, this book has a broader purpose: to show you the benefits of shifting your attention from day-to-day concerns and incremental improvements towards learning how to make breakthroughs in areas with the most potential benefits for you and everyone else.

To show the significance of this attention shift, I describe a vision of a vastly better world that could be created through your efforts and enjoyed in your lifetime by you, your children, and your grandchildren in the book’s background briefing. From there, the book looks at the origins of the 400 year project (to make 400 years worth of normal improvements between 2015 and 2035) in part one. In part two, I share the lessons that have been learned so far through the project. In part three, you’ll see my prescriptions for how the project can be accomplished. In the epilogue, you’ll find a description of how you can play a role in this grand activity.

In Adventures of an Optimist, you’ll find lots to inspire you. Whether you want to experience extraordinary activities on a modest budget, build a billion-dollar business, show people how to lift themselves out of poverty, eliminate harmful pollution in profitable ways, or just increase your daily time with loved ones, this book outlines the pathways to get you there.

Once inspired, you should read and apply the how-to books on making breakthroughs that I’ve already written (which are briefly described in the book) and those how-to books that will come in the future. In those other books, you’ll find the questions and how to information you need to go from being ordinary to performing at extraordinary levels in what’s most important.

As you read each chapter of Adventures of an Optimist, you’ll feel like you are visiting a new country where people think and talk differently. As you respond to that feeling, be sure to realize that these chapters are all connected together much like the countries in continental Europe are part of the same land mass. The connections come from my experience, my perspective, and the 400 year project’s work and plans. So be sure to connect the dots among the chapters to see the overall picture.

Let me start by sharing with you some of how this audacious project came about to help the world to make 400 years worth of improvements from 2015 to 2035. With that perspective, you, too, can gain insights into how to capture breakthroughs normally destined for the 25th century by installing the right, flawless activities today.

                                                                                                

Looking Backward Illuminates the Present and Future

The distinction between past, present and future is only

a stubbornly persistent illusion.

— Albert Einstein

I have always been fascinated with the past. As a youngster, the older a story, myth, or legend was, the better I liked it. By quite a young age, David, Icarus, and Ulysses seemed quite real to me. That interest soon led me into reading histories as well. The battle of Thermopylae (where in 480 BC the Spartan-led Greeks heroically held a narrow mountain pass to block the passage of the Persian army under Xerxes until betrayed by a traitor) seemed as immediate to me as D-Day (the Allied invasion of Normandy in France to establish a Western front against Germany during World War II) did to people who were alive in 1944. By the time I had finished the sixth grade, I had read all of the standard history texts used through the end of high school. Branching out, I also began to read biographies and autobiographies to meet other prominent figures from the past and bring them into my present for consideration.

By the time I finished high school, I knew that I wanted to study history in college. That was a happy choice because Harvard University, where I would be an undergraduate, was unusually well stocked with great historians. Quickly, my tutors there taught me to disregard secondary texts and to focus on original documents written by contemporaries who had participated in or observed the events. Old newspapers, diaries, pamphlets, and written versions of oral histories became my stalking grounds.

From this experience with the raw material of history, I began to form a different impression of how improvements occur than what had been described to me by books and teachers. I had been told that with rare exceptions, making progress was continual and ever upward. In this view, new knowledge was highly sought after by most and quickly appreciated.

By studying day-to-day records of those who first imagined improvements, I found instead that many of the great advances in knowledge were widely ignored or long delayed in implementation. For example, Leonardo da Vinci’s notebooks contained many practical ideas that lay fallow for centuries before the ideas became everyday realities. The Romans knew how to make mortar for their roads that lasted for centuries by mixing in fine pumice emitted from Mount Etna while modern roads made with coarser materials crumble after a few seasons. During the Middle Ages in Europe, much classical learning was all but eradicated. Centuries passed before the Renaissance revived interest in and awareness of this earlier knowledge. The Chinese became insular and lost their command of the seas after having once had the world’s most advanced navy. The highly energetic Japanese similarly rested in suspended animation when it came to most improvements until forcibly exposed to the Industrial Revolution by Admiral Perry’s gunboats. Until recently, modern Egyptians had no more idea of how their ancestors constructed the pyramids than they did how to clone camels.

Questioning thinkers have always tested the opportunity to improve on what was previously known, but those quests were hobbled because access to what had been known earlier was usually quite limited. Expand awareness of the best of earlier knowledge, and you could greatly expand potential to improve — that much seemed obvious. The lack of access is worsened by so much knowledge existing in secret or near-secret conditions. Paradoxically, some advances were once so well established that no one bothered to document them, such as the use of some rare herbs to treat medical problems. In addition, knowledge (or what seemed to pass for knowledge) was expanding much faster than any individual could absorb in more than a limited area. To me, it seemed like there was one hope: Gather up the undeveloped ideas of people like Leonardo da Vinci and get busy working on them. But don’t wait several hundred years to get started. Work on the most promising undeveloped ideas right after they are conceived. That’s the first lesson of how to accelerate improvements.

Looking for Opportunities Discarded by Those with Limited Perspectives

He who refuses to embrace a unique opportunity

loses the prize as surely as if he had failed.

— William James

A second important lesson about accelerating improvements came right after college: Overcome stalls based on rigid mindsets by searching through opportunities discarded by others. My senior tutor in college asked me to join his brother and him in developing a new business: matching rare book buyers with the stock of most rare book sellers by using an IBM 360 mainframe. They quickly sketched out how valuable this service would be for scholars and librarians and explained how computer technology had reached the point where this process could be done at a reasonable cost.

But my tutor and his brother became profoundly unhappy when I demonstrated that you could provide the same service at less than 25 percent of the cost of a computer operation by employing a hand-based system. They quickly abandoned the service idea even though the manual system would have been much more profitable than their idea.

Why? To their way of thinking if such a service didn’t need a computer, then they had no competitive advantage, and there was no benefit to moving forward. To my knowledge, no one ever built a manual system either, probably because it would have been hard to manage and operate. Had someone done so, it could have been a golden opportunity. Why would anyone have tried to duplicate the first manual system? If a manual competitor had arisen, both enterprises would have had to scramble after the same customer base, diluting the size of the opportunity and slashing profits for both. That risk would hardly look attractive to someone looking to start a new business.

As a result of my potential partners’ narrow views, people who wanted to find rare books more easily had to wait several decades before comprehensive rare-book-matching computer systems were offered. Today, you can find almost any used or rare book you want within a few seconds by looking on the Internet to compare the offerings of vendors from all over the world. You can even inspect the material at a distance by looking at scanned pages.

After that experience while in law school, I began to wonder if other valuable business concepts were lying around undeveloped because of some irrational preference by the person who originally had the idea to proceed in an impractical way. Later, I found out that this kind of deferral in developing a new kind of business was a common decision by entrepreneurs because of being closed to alternative operating methods.

Why Going from Concept to Widespread Application

Often Takes Four Centuries

Nothing so needs reforming as other people’s habits.

— Mark Twain

After I joined Heublein as the corporate planner, our CEO once told me I should spend 5 percent of my time adding new knowledge that would be useful to the company. This knowledge searching seemed like a perfect opportunity to study how the past might provide clues for creating future improvements. I found a seminar that addressed how innovative ideas are turned into practical products and services. The seminar also provided a bibliography that helped me track the advent of various kinds of improvements. That seminar and later reading firmed up my understanding of how the concepts behind major new approaches that succeeded were often identified centuries before the approaches went into widespread use. In fact, the lags were quite predictable. The delay between conceiving of the solution and demonstrating a practical way to accomplish that solution often stretched for centuries as well. From the time of a practical demonstration to widespread application could also comprise the better part of a century. Mulling over my history studies, I became convinced that we can selectively mine the best thinking of the past to capture benefits that wouldn’t otherwise be gained for centuries. In essence, we have an enormously valuable knowledge bank filled with partially developed resources that we aren’t using very well.

I also observed that common attitudes frequently got in the way of making much faster use of such valuable knowledge. Delays in developing antibiotics related in part to the dislike most scientists felt for studying natural phenomena like the curious effect of bread mold in killing bacteria and working with other sources of naturally occurring antibiotics. Overconfidence in the reigning so-called knowledge of the day encouraged those who supposedly knew the right answer to try to eliminate the superior knowledge that would replace conventional wisdom, such as when scientists insisted that stomach ulcers were usually caused by stress and worry rather than by infections that could be cured with antibiotics. Few people can stand outside of their current way of thinking to appreciate the potential advantages of the new approach. Why would anyone ever use a telephone to call a neighbor when you could just lean over the fence and have a conversation? In other cases, people were satisfied with the results they were getting. Why would anyone want more? Driving along in a horse and carriage was good enough for mom and dad, why go faster? From thinking about these observations, I concluded that attitudes were a bigger barrier to progress than physical, technical, or financial limits.

Although I had never studied psychology in a classroom, I had read widely in the subject. The behavioral experiments that demonstrated ways that people act against their self-interest and the interests of others particularly fascinated me. But psychology didn’t provide enough answers because so much of its focus was on treating those with abnormal psychology. I became intrigued by the faults inherent in normal psychology and began to take mental note of such faults whenever I observed one.

I began to wonder how such mental hurdles could be overcome. Whenever I saw someone make rapid progress, I would take note of the circumstances. Soon I began to realize that although foot-dragging and denial were common reactions, taking rapid, appropriate action was also a common reaction. I found myself appreciating two new questions: What could account for the differences between harmful and helpful responses? And how could those differences be exploited to accelerate improvements?

A Stitch in Time Saves Eighty-One

You see things; and you say why?

But I dream things that never were; and

I say “why not?”

— George Bernard Shaw

Let me tell you about some perspectives I developed about how mindsets can encourage rapid improvements. Here’s the starting point: Extreme optimists, like me, are naturally drawn to the subject of perfection, the extreme optimist’s ultimate objective.

I had help in learning about extreme optimism. Any disinclination to perfection I had was overcome by having a mother who often found achieving mere aspects of perfection to be unsatisfactory. Here’s an example: I routinely earned straight A’s in junior high and high school for my subject grades. We also received grades in effort and citizenship, which we quickly learned were never seen by anyone but school employees, our parents, and ourselves. Those grades obviously were like writing in the sand in the beach and would eventually disappear. Most students simply ignored these extra marks.

Like many 13-year-old boys, I decided to try a little misbehavior that was sometimes aimed at teachers who annoyed me (such as the man who insisted we memorize over 300 dates and events from World War II). That teacher decided to send home a message. I earned my usual A as a subject matter grade, but I also got a D in effort and a D in citizenship. My mother’s feet didn’t seem to hit the ground for days as she went crazy with anger over her “perfect” son not working hard and misbehaving. I got the message, and the A’s spread across the whole report card after that.

From then, my focus shifted: I began to look for ways to gain perfection by making less effort without anyone noticing. Here’s an example: I had to take a driver’s education class to graduate from high school. My mother insisted that I take typing as well during the same summer school session. (How did she know that I would be typing my own books all these years later?) We had a lot of homework for driver’s education, and most of my friends didn’t want to be bothered doing it. I offered to type up the homework assignments for a fee. In this way, I would get extra typing practice while earning some money. To keep from being found out by the teacher, I wrote my own answers in long hand after typing out the answers for someone else, and I was careful not to repeat any of the material. After typing out long answers (I was paid by the page), it was easy to shorten up the answers for my own homework. I also breezed through typing class because of the extra practice I got at home every night. My budding approach to perfectionism with minimum effort was taking root and provided a firm foundation for my work as a business consultant.

Later, my consulting clients often asked me to check out all of the new trends I could find that might affect their businesses. One day I might be in England talking to a plastic bag manufacturer. The next day might take me to Germany to look at new designs for packages. On such visits, you felt like you were looking clearly into the future. The solutions were often so terrific that there was no way that the current approach would survive. It was exciting and fun.

After having done these kinds of assignments for a time, I found that I began to accumulate perspectives from prior meetings that the person I was interviewing didn’t seem to have. Curious, I began asking my interviewees if they knew about such-and-such that related to their field. Seldom had they heard of the related development. In most cases, they didn’t even bother to note down what I mentioned. I naturally didn’t tie the ideas together for the interviewees in a neat package because my loyalty was to my client. I came to appreciate that while John Donne was convinced that no man was an island spiritually, there were plenty of people deliberately living on isolated islands of knowledge.

Consultants are often described as being like bees. Here’s the description you often hear: Bees (consultants who work with lots of organizations) gather pollen (new information and insights) from one flower (person or organization) and carry the pollen to another flower (person or organization). In the process, bees (consultants) help create new hybrids (combinations of factors that previously didn’t exist). The flowers (people or organizations) would usually not have propagated with each other at that time.

The reality can be a little more complicated than that. Consultants often see ways that a large number of flowers could propagate with one another to create a superior offspring that shares many combined traits. That’s not just a hybrid (which has two parents) but, rather, a whole new species. To create that new plant (superior offering) is more like genetic engineering than it is like pollination. At least that’s the case when consultants are good at thinking about what they’ve learned.

Here’s an example of the thought process consultants might go through to create a new species of business: During the heyday of minicomputers, Digital Equipment Corporation led the market. The company grew over 40 percent a year for many years. That success was built around a simple business model: Use the latest advances in electronics to deliver more speed and functionality at the same price through installing new components in compatible computer hardware that runs on operating software you’ve already developed. Rely on partners to develop useful application software to make good use of the improved hardware. Count on smart customers who are engineers and scientists to make any adjustments that are needed to gain a good result. Offer proprietary hardware and software operating systems so that competitors can’t provide compatible substitutes of your offerings in existing accounts.

If you looked toward the future at that time, it was clear that minicomputer functionality would eventually reside in something like today’s personal computer due to improved, less expensive electronics. That solution wasn’t of interest to Digital Equipment. The company looked upstream instead to the mainframe computer makers and created cheaper versions of mainframes built around its minicomputer base technology. This product offering meant having lots of terminals with limited intelligence tied together by an expensive minicomputer. The trouble with that concept was that the high priced minicomputer could eventually be replaced by a server that cost about the same as a personal computer. Digital Equipment either didn’t seem to see or to be concerned about that likelihood.

Back in the late 1970s, our firm (Mitchell and Company) was asked by another computer maker to study Digital Equipment and design a competitive strategy that the minicomputer maker could not resist. Putting together the trends and the best practices in the computer industry, it was clear that software used by businesses on personal computers operated by inexpensive hub machines (servers) was going to be the big winner. Technology would improve and new uses would swell the number of computers into a vast array. Each personal computer would need operating systems and application programs. The value of using the computer would be tied up in those programs, while the value of the hardware content would eventually approach zero as more and more functionality was inscribed onto a single computer chip. The simpler the hardware platform was to use, the more valuable the software would be. If the same software could work on the machines made by different companies, software makers would earn substantially more. In fact, they could expect to exclude many competitors that way.

As a result, we recommended a business model for the future that was the exact opposite of what Digital Equipment was pursuing. Why? We had been able to verify a future vision of perfection by talking to those who were driving the major trends such as chip manufacturers, software vendors, and computer users. In fact, the business model we described then is very close to the one that Microsoft soon adopted by becoming the outsourced supplier of software for the original IBM PC.

What happened to Digital Equipment? It made several reluctant, unprofitable forays into providing personal computers. As competition from the low-priced IBM personal computer clones began to reduce the market for many minicomputer applications, profits began to disappear at Digital Equipment. The company’s founder was ousted. New management hunkered down to focus on slashing costs and eventually sold the firm to a personal computer maker, Compaq, for the value of maintaining essential services for Digital’s existing customer base. Compaq in turn was acquired by Hewlett-Packard as part of Carly Fiorina’s controversial strategy to diversify away from the profitable personal computer printer market. Carly Fiorina is no longer CEO of Hewlett-Packard, but the company eventually improved its position under new CEO, Mark Hurd. The consequences of Digital’s obsolete business model continue to rebound throughout the computer industry by having opened important doors of opportunities for newer companies.

What happened to our client? They never entered the software business very seriously. After all, they were hardware people. Today Microsoft is worth four times what our client is. Perhaps it would have been worth our client’s while to add some software people back then. But they didn’t do so.

As you can see from this example, a consultant can show the vision of future perfection by combining several trends and best practices, but the clients may not act. Why not? It has to do with those pesky attitudes and behaviors that delay all kinds of innovation. Unlike bees carrying pollen to female flowers, what consultants have to share may be rejected even when the approach is sound.

Boldly Go Where No One Has Gone Before

The future belongs to those who

believe in the beauty of their dreams.

— Eleanor Roosevelt

Another of the big hurdles to making progress is found in the bee analogy: Many people limit themselves to that concept of having a bee bring some pollen from another flower to improve a person or organization with some added attribute. The purpose of such pollen spreading is seen as incorporating that which already exists elsewhere as a way to become the equal of the other person or organization. Think of this as the copycat strategy, a preferred method of competing that most people and organizations favor.

         Here’s how the copycat strategy works: You watch what others are doing, and if it seems to work, you rush out with your own version of what’s working. But usually the results from this strategy are mixed. Why? Almost everyone else is doing the same thing, and cutthroat competition ensues in a market that’s now glutted with capacity and attention. In addition, those who come in later are often seen by customers and suppliers  as less authentic and desirable than the provider who pioneered the offering or approach.

         Wouldn’t it be better to leap well beyond what anyone is doing now? Sure it would, but organizations rarely work on that direction. Why? Leaders often lack a sense of what the leap ahead will be that everyone will want, and the organizations almost always lack the business processes and experience to create such leaps. Copycats, in other words, don’t easily turn into genetic engineers creating new varieties that deliver vast improvements.

         Back in the 1970s, it was popular for companies doing their planning to find a single company that could serve as a model for everything they felt they needed to copy. These companies were called “success models,” and thousands of executives identified such success models and began copying them with even more attention and rigor than before.

         Realizing that this approach would lead to disaster for most companies, I encouraged those executives I worked with to create success models that borrowed excellent elements from many companies in a variety of industries and circumstances. In this way, it was easy for those who liked to use copycat tactics to put together programs that would exceed what competitors would be doing in the immediate future. If you can’t change the cat, at least change what the cat looks at. Clients found this approach worked well for them.

         When Mitchell and Company was first founded in 1977, I spent a lot of time looking around to see where people would have the easiest time improving their performance. From that thinking and research, it became clear that opportunities that provided both the most near- and long-term benefits would be best to focus on. It also became clear that most people emphasized what helped the near term, even if it hurt the long term, and that many long-term focused individuals were willing to virtually destroy the present situation in order to grasp at straws that they hoped would turn into something in the future. From that investigation, I learned that the most attractive opportunities could be found where organizations and offerings were already growing rapidly, their profit margins were expanding, and little added money was needed to pay for the future growth. Unfortunately, that delightful conjunction was almost always mismanaged to the detriment of future performance, regardless of how much potential existed. Why? The organizations usually chose to maximize what they had today, rather than build on their potential in new ways. In essence, they were acting like copycats of their own outdated ways to succeed.

         Having been well trained by my mother to keep seeking higher levels of perfection, I realized that people could accomplish a lot more. One basis for that opinion came from comparing how poorly most organizations did new things compared to how effectively they did the tried-and-true.

         Was it possible to take the tried-and-true for a person and build on that foundation to create incredible effectiveness in what was new and of enormous potential? What results might follow? Consider this: If people can successfully turn their copycat skills towards new targets and break through to higher levels of performance, what other habits might be harnessed for more productive results?

         Trying to harness more habits to achieve breakthroughs seemed worth a try. Here’s why: Even people with few habits often had virtues hidden within their lack of habits. For example, they might be willing to leave others alone. Couple that inertia with partners who would be harmed by receiving interference, and you could accomplish more than more active people would with these same partners. One example of this combination was our work in helping clients find and make successful acquisitions. Our studies showed that purchasing other businesses succeeds best when the acquirer can add lots of immediate and valuable improvements to the newly purchased business or when the acquired operation is left alone to pursue an appropriate improvement path that would be harmed by interference. That latter circumstance most often occurs when the purchased organization is a capable innovator with a great backlog of projects to work on. Such organizations can often be found in the hidden byways of larger operations that are focused in a different direction.

         Eventually we realized that creating perfection would entail doing things that no one seemed to have done before. In the field of acquisitions, perfection might mean both adding great, immediate improvements from the acquirer while stimulating the innovative capability of the purchased organization to a large multiple of the former level.

         How might you do that? Here’s an example: In the early 1980s I had a chance to work on that problem. A market-leading business was languishing in a company where its activities didn’t fit with anything else. The parent company’s top management saw limited potential. As a result, the parent company kept the business starved for the funds required to develop new products and services. But prototype development of new products and services went on anyway in secret within the business. A client of mine had a smaller, somewhat related, business that looked at the success and potential of market-leading business with great envy. I was asked to think about how my client might put the two operations together for the best results.

         I began by looking at what both organizations would do naturally if left alone. My client would run with technology opportunities early and often. My client also knew many other types of markets that the firm would continually explore and develop. But most of the leaders of my client’s business were within three years of retirement, and little had been done to groom successors.

         The market-leading business was very cautious in its marketing and made few mistakes. Its quality was high. Its leaders, about 15 to 20 years younger than the client’s leaders, understood the potential for adding new technology for their business and were capable of doing so.

         I brought the two management teams together to see how their personalities mixed. By observing that they naturally employed mutual respect and courtesy, I suggested that the market-leading business take the top jobs in each function except for the CEO position. The client’s leader in that business would be retiring in two years. I proposed that both leaders share the CEO position until the client’s leader retired, at which time the acquired company’s leader would take sole charge. This joint leadership would help the two organizations get to know one another and coordinate activities between the two groups, which would continue to be in different locations. I recommended that the remaining few young Turks who wanted to build a big new business in the client organization spin out of the combined organization by becoming an independent unit focused on one high-potential opportunity.

         That way of combining the businesses was decidedly unusual. Typically, the executives and managers in the company that paid the price gets all the good jobs somewhat like conquerors in wars grab the spoils from the conquered. In this case, the newly combined operations benefited by greatly accelerating their growth, profitability, and innovation. Later this new unit became the core of the acquiring company. This success showed that you could have your cake and eat it, too, when it comes to spreading strengths and innovation to create a more effective organization for creating breakthroughs! And the results further bolstered the unconscious development within me of an idea that would become the 400 Year Project.

Soar Like a Nonprofit Eagle

An idealist is a man who helps other people to be prosperous.

— Henry Ford

Through my continuing studies into the nature of rapid improvements, I looked at all kinds of organizations. Having been a fan of Peter Drucker’s writing since the early 1970s, I was familiar with his point that nonprofit organizations are often better at innovating breakthroughs than for-profit companies are. Why? Resources are usually so scarce in nonprofits that anyone who feels compelled to provide more benefits has to do a great deal with very little. In addition, nonprofits attract people who are inherently motivated by the organization’s purpose to look for how to do the most. Imagine, for instance, the differences in perspective and motivation you would experience between working for a for-profit waste disposal company and a nonprofit organization aimed at eliminating breast cancer.

         I continually contacted leaders of nonprofit organizations to see what they were doing. Mostly, I found bureaucracies more concerned with their own perpetuation than with making any improvements. For instance, in the early 1970s I worked on a project while with The Boston Consulting Group to find ways to contain health-care costs. One idea that interested the United States Department of Health, Education, and Welfare (HEW) was to simplify billing in hospitals so that the same revenue was generated, but at less expense. In those days, a bill for a three-day hospital stay could run to 67 pages. HEW gave a grant to our consulting firm and our accounting firm partner to put demonstration projects in place to generate shorter bills that would be less expensive to produce. There would be no cost to the organizations that participated in the demonstrations. The grant also provided payments to state hospital associations for their efforts in describing the project as one method for enlisting participants. My colleagues and I trekked across the United States many times to describe the opportunity. The result? No nonprofit hospital in the United States wanted to work on this project. How did we eventually find participants? We began to work with for-profit hospitals. Their leaders cared about cutting costs because they were financially rewarded for earning higher profits.

         From that experience, I learned that breakthrough innovations from nonprofits were easier to spot than breakthrough-innovating nonprofits. Scanning for news stories, I began to find those nonprofits that had soared like eagles to go to a higher level of performance in some particular activity. Then I studied what those organizations had done to succeed and extracted the key lessons from these champions. In every case, I found high levels of personal identification among staff and volunteers with organizational goals to improve the world for others. This identification was just as strong among staff and volunteers as it was among the organization’s founders. Who were such organizations? Many were connected to religious activities such as the emerging Protestant mega-churches that Peter Drucker often advised. The Salvation Army was another group that effectively drew on Christian roots. Secular concerns drove other groups, such as the Girl Scouts under Peter Drucker’s tutee, Frances Hesselbein, to breakthrough excellence. Concerns about eradicating poverty provided the motivation to succeed for the Grameen Bank in Bangladesh, which provides low-cost, small loans to farmers and fledgling entrepreneurs in remarkably effective ways. In addition, employees, volunteers, and beneficiaries found their lives were transformed in positive ways beyond what they could have expected. The enthusiasm became contagious, and rapid growth ensued that did not dilute the motivation. For-profit skills and innovations rapidly invaded the nonprofit organizations through the attention of volunteers and donors. From these observations, I realized that rate of improvement was often related to how strongly people felt about gaining the benefits from making improvements.

Design Future Breakthroughs in Good Company

The way a team plays as a whole determines its success.

You may have the greatest bunch of individual stars in the world,

but if they don’t play together, the club won’t be worth a dime.

— Babe Ruth

Recovering alcoholics have support groups. So do those who abuse drugs. Could being in good company that’s devoted to helping one another improve be an effective way to launch breakthrough thinking and results? That was the question that interested me in 1989 when I cofounded Share Price Growth 100 with Carol Coles. We invited our many stock-price improvements clients to join and many did. Other companies, which hadn’t been clients, were intrigued as well and joined us. Everyone shared a common desire to learn more about stock-price improvement and hoped to accomplish that result by pooling perspectives to advance mutual knowledge through cooperative efforts.

         Over the next ten years, the group achieved astonishing results in revealing what worked, what didn’t work, and how the lessons could be customized to an individual company. To those who were involved, the search for stock-price improvement methods felt as exciting as the project to decode the human genome: Their efforts created an accurate picture of how supply and demand for shares are influenced by what companies do. That picture could be enlarged to describe the individual value genome for any member company: Swift, sustained stock-price growth quickly ensued for those who employed the lessons.

         Impressed with these results, we extended the cooperative experiment to groups of chief executive officers, chief financial officers, and those who headed up individual business units in larger organizations. Motivated by sincere interest in performing better, these groups made breakthrough headway in many of the most intractable problems of the time: reducing the cost of capital below zero; identifying how leaders could spur much more effective innovation at all organizational levels; making productivity improvements measured in thousands of percentage points; and managing the ascent from zero to a billion dollars in annual sales in less time.

         Clearly, there was no limit in sight to this collaborative way of designing and implementing improvements. We could just go on working with executives through such collaborations to create new helpful solution after new helpful solution. That was our plan.

Peter Drucker Asks a Question and Makes an Observation

We always carry out by committee anything in which

any one of us alone would be too reasonable to persist.

— Frank Moore Colby

It was now early 1995. Carol Coles and I had been meeting with Peter Drucker two or three times annually to review what the learning organizations were doing and to get his advice on how to improve. It was exciting to hop on the plane to California from Boston knowing all the great things we had to share with Peter.

         On this occasion, he shifted our focus. He asked a new question: “How many of these new developments are you learning from your members and how many are you developing from your own thoughts?” Considering the last year’s results, we realized that although the members were doing a great job of defining what they wanted to know, we had drained the insights members could provide from their experiences. The new processes, solutions, and breakthroughs were coming from work that Carol and I were doing. We admitted that to Peter.

         He noted that if that were true, these organizations were holding back the innovations that Carol and I could develop and deliver. We agreed to think about his observation. His question was like the emotional impact of being hit by a surprise earthquake. We were reeling with the implications for weeks.

         Nagged by that suggestion, I realized that a totally new approach was needed. Other seeds started to germinate that I had gathered from my observations about the nature of making rapid improvements. Here was the conclusion: The fastest current rate of progress could be replaced by much more rapid improvements when better sharing of knowledge was tied to focusing existing attitudes and habits in more helpful directions.

         Gradually, I began to realize that it is possible to accelerate worldwide improvements by 20 times within the span of only 20 years. That realization was a key ingredient in launching the 400 Year Project. Before the end of 1995, the project to achieve that acceleration goal between 2015 and 2035 was born.

         The rest of this book tells the complete story of how the project was born and flourished, as well as what solutions will enable making 20-times-faster worldwide improvements from 2015 through 2035.

Copyright © 2007. 2012 by Donald Mitchell.

Chapter 1: How I Became a Practical, Unlimited Optimist

Chapter 1

How I Became a

Practical, Unlimited Optimist

If opportunity doesn’t knock, build a door.

— Milton Berle

Lessons for a Nearsighted Optimist

To the small part of ignorance that we arrange and classify

we give the name of knowledge.

— Ambrose Bierce

I was born optimistic. But it wasn’t unfounded optimism: Rather it was optimism based on seeing better ways to proceed. From the earliest age, I could see easy ways to improve on what the adults around me were ignoring. Take choosing a driving route, for instance. Most people simply went the way they had gone before whenever the mood struck them. Plan your route with a map and pick a time when others are not driving, and the same trip can go faster and easier. Once you see the real conditions, be flexible. Don’t sit stalled on the freeway when the access road is wide open. More importantly, I noticed that when you do things effortlessly, your quality of life improves as well. But there was a problem with my optimism; it was limited to improvements that I could effortlessly see.

There was an irony about my ability to see better ways to accomplish things: I actually couldn’t see very well unless something was a few inches from my face. I was legally blind but no one knew it. Here’s a funny example: Whenever our family visited my great grandparents, I wouldn’t put their binoculars down. I wanted to use those wonderfully adjustable lenses nonstop because I could see at a distance so much better with them. I was, however, puzzled, by the way that others always had to readjust the binoculars so much after I used them. What could that be about? Here was an early lesson that something else is going on worth investigating if others take a different approach.

In fourth grade a teacher noticed me squinting close to the blackboard between assignments and taking notes like mad. She sent me down to the nurse’s office where I failed to be able to identify the big E at the top of the eye chart. A quick trip to the optometrist soon left me sporting glasses that seemed a mile thick and with distance vision that still wasn’t very good. I preferred binoculars. My mother promised me, based on her sunny optimism, that I wouldn’t have to wear those awful glasses all of my life. She was sure that something better would come along.

She taught me an important lesson about the value of optimism a year later when she determinedly arranged for me to become one of the first children to wear contact lenses. Each time I put on my contact lenses for the next 50 years, I reexperienced the miracle and joy of being able to see clearly at a distance all the time. That daily recognition that good solutions could transform lives in miraculous ways led me to seek out how to help others who couldn’t yet see the opportunities in front of them.

One day after about a year with contact lenses, my mom told me that someday I wouldn’t have to wear the lenses any more. I couldn’t figure out why she was telling me that. I loved my contact lenses! What could be better?

Learning the Value of Hard Work, Imagination, and Education at Home

Don’t condescend to unskilled labor.

Try it for a half a day first.

— Anonymous

My dad had very little formal education. He was the oldest boy in a large farm family that rented poor quality land, and his dad wanted him working in the fields and the barn rather than sitting in school. Since grandpa was on the school board, he was able to interfere with dad’s education. By the end of fourth grade, dad didn’t attend very often. By the end of eighth grade, he stopped going altogether. As a result, dad couldn’t qualify for very many jobs. Doing simple paperwork was beyond him. Small in size, many people were reluctant to hire him for laboring work as well because they didn’t realize he was exceptionally strong. But finally dad found places where he was accepted.

Dad worked hard to earn a living for us. Five nights a week he loaded and unloaded mail and freight from trucks and trains at the Santa Fe Railway. After eight hours of that work, he immediately went out to mow lawns and perform other gardening tasks during the day. Around sundown, he would take a bath, eat a light dinner, and snooze for a few hours before waking up to do it all over again beginning at midnight. Some nights he would have to take a load of grass clippings and brush to the dump and laboriously pitchfork and shovel the refuse off in total darkness before he could go home to eat dinner. On the weekends, he would have the “luxury” of eight hours of uninterrupted sleep. He lived in a perpetual daze brought about by sleep deprivation.

For a few years, he did even more. Realizing that he had some time available on Saturdays and Sundays when many people didn’t want him to mow their lawns or do other types of gardening, dad got a job delivering furniture for a local store. This upped the hours he worked each week to over 100. He was exhausted all the time.

I was very proud of my dad because no one could keep up with him: I wanted to be just like him. I begged dad to let me work for him in the lawn business … but I insisted on being paid. Otherwise I felt it wasn’t a real job. Dad went along with that because he had always resented the way his father had kept all of his earnings when he lived at home on the farm.

By the time I was three I could take a large basket of grass clippings from a mower and empty it into the back of the truck. At that age I could use hand clippers to clean around sprinklers and push a broom a little, too. I would work for him as much as I could after school and on Saturdays.

As I grew older and larger, I eventually learned to do all of the gardening tasks. He would also take me with him for some furniture deliveries and would pay me to help him even though I was too young to be hired by the furniture store. Dad was often expected to single-handedly carry a refrigerator up six flights of narrow stairs. I would take a little of the weight and steer the top of the refrigerator in the right direction. I was also pressed into tree-cutting duty, even though I was deathly afraid of heights. With my tiny frame, I could go to the very top of the tree, saw off branches, and tie on the ropes we used to pull the tree over after cutting the roots.

While my sister, Anna, and I were growing up, mom stayed at home and drilled us in the need to accomplish as much as possible. We owed it to God and other people to make the most of our talents. I’m sure that one reason she felt that way was because of how hard my dad had to work. But my mom also realized that she had missed out on an education, having stopped going to high school when she was sixteen to work as a waitress at a lunch counter. She was determined that we were going to get an education and make good use of it.

Working with dad provided an education that my mom didn’t know about. He could spot problems a mile off and devise ingenious ways of accomplishing things with virtually no resources. While other tree trimmers employed boot spikes, special belts, extension ladders, cherry pickers, and chain saws, we did it all with hand saws, a rope, and a rickety 6-foot ladder. If that ladder didn’t reach the bottom branches, dad or I would shinny up the trunk until we got to the first branch that would hold our weight. Our safety gear was that the one in the tree would tie a rope around his waist, loop the rope over a strong limb, and drape the other end of the rope to the ground where the other one would hold on tight. We often broke each other’s falls that way, avoiding broken limbs and fingers.

My idolization of dad’s hard work got me into trouble sometimes. When I was about five, our minister came to Sunday supper after church services. Noticing that he seemed to only work from 11 a.m. to noon on Sundays, I helpfully asked him when he was going to get a real job for the rest of the week. My mother never recovered from her embarrassment over that childish query.

Dad and mom had a weakness beyond their limited educations: They couldn’t figure out how to think about spending money to gain some advantage that might be turned into more money. Fortunately, I was fascinated by numbers. While other kids day dreamed, doodled, or drew cartoons when they were bored, I loved to write out geometric progressions. The way that numbers soared as the progressions continued filled me with awe. Compounding was my thing.

Here’s an example of a problem that had my dad confused. It took him almost eight hours a week to take his loads to a dump, pitchfork and shovel the loads out, and go home. Most of the time was spent unloading the evil-smelling remains that had been rotting for days. While at the dump, he would stare with longing at the dump trucks as their drivers dropped off huge loads in only a few seconds. Forty minutes later dad would still be digging away. He often talked about how great it would be to own such a dump truck. But such trucks cost a fortune. Years later, he heard about a company that could install a lift on a half-ton pickup truck. The price for the lift and the installation was about a $1,000 … a fortune for a man who earned less than $10,000 a year. What dad was missing was that the lift would probably last more than 20 years and could be reinstalled into another pickup truck for about $150. The lifetime cost of the lift would probably be about $65 a year including maintenance. That expenditure would save my dad about 250 hours a year of work for which he made no money. I pointed out that if he could find additional paying work that would provide 25 cents an hour of income he would be financially even … and if he could earn $1.25 for one of those weekly hours now spent forking out loads, he could reduce his work week by four hours. He looked at me in amazement; my mother challenged my thinking. I don’t think they ever understood the point, but they could tell I thought it was right. About a week later, we owned a new lift on our pickup. Actually, that lift lasted over 50 years and produced tens of thousands of dollars of added income due to my dad being able to take on high-priced work that required hauling away heavy loads. It was one of the few business investments my parents ever made that had a high return. I still admire that old lift whenever I see it, working like a charm after more than 45 years.

I became a financial guide for our family, on the lookout for financial opportunities. Since the time when I was a child, I located opportunities that earned or saved them most of their net worth such as other labor-saving equipment and a revolutionary paint that eliminated the need to repaint our house every few years. I also encouraged them to buy more houses. Houses in California were sure to go up in value, and they did.

Creating My Own Paths to Success

Improvisation is too good to be left to chance.

— Paul Simon

My childhood experiences made me confident that I could find opportunities where others saw none. And that confidence has always been rewarded. It’s no wonder I’m an optimist!

Here’s an example: Wanting to get married right after college, I felt like it wasn’t right to ask my parents to help pay for graduate school. I believe a married couple should be able to handle their own expenses. But Harvard Law School wouldn’t provide any financial aid unless my parents provided financial statements as though they would be contributing. As a matter of principle, I didn’t want to ask mom and dad to do even that. So I applied to law school with the prospect of a working wife and big bills ahead. Fortunately, the publisher of the university’s alumni magazine was looking for a part-time person to manage the magazine’s circulation and advertising activities. I had been working as the flunky in the circulation department while I was in college and was asked to fill the job. I figured out to the penny how much money I needed to get married and go to graduate school. I also knew how much time I could spare for work from my legal studies. I offered 10 hours of my time per week during the school year at what would be in today’s terms over $200 an hour, plus a large bonus tied to circulation increases. The editor later told me he almost fainted when I made that offer, assuming the publisher would never agree. The publisher quickly accepted. He knew it was a good deal. I would easily save the magazine what I cost through expanded circulation revenues. During that year, the magazine’s readership grew by more than it had in the prior 40 years combined, and our cash balance expanded to its highest level ever. I also helped the editor shift the magazine’s production to a new printer who provided much better quality and service at no increased cost. If I could do something like that for the well-educated leaders of Harvard University, imagine what else might be possible!

A better opportunity soon came along. I had learned a lot about printing and financial analysis from my magazine work. Having heard about my success with Harvard Magazine, the editor of Harvard’s law school alumni publication came to ask for my help. I told her I would be glad to do the same things for her on a part-time basis. I negotiated with the university magazine’s publisher to skip lunches over the summer (when I worked full time) so I could work from 4 to 6 p.m. on Monday through Friday at the law school. Soon, the law school was also making great progress in cutting costs and adding revenue. After that success, the law school’s dean asked to meet with me to see if I would look into the rest of the school’s publications and its messy arrangements for printing study materials and copying professors’ work. His face showed shock when I asked him if he knew that I was one of the school’s law student for he thought that I was a full-time publishing professional with many years of experience. I ended up being hired to work at a vast multiple of the rate paid to the top-ranked students in the school for legal research. But I had to promise to keep my income secret.

My dean became the first of four Harvard Law School deans I served in a professional capacity. On a mostly self-taught basis, I ended up helping design or redesigning almost all of the school’s computer systems and administrative processes, overhauling the fundraising efforts, and improving many areas of operations including the dining hall. Eventually, I began to provide strategic advice about how to gain advantages over other law schools. From this experience, I realized that those who are at the top often have no more idea than those at the bottom that they have great opportunities. The main difference is that those at the top are more likely to be looking for better ways. I could be of help.

I found one of my most influential mentors at that time, Ernie Frawley, the legendary publisher of the Harvard Business Review. He had done an amazing job of building a highly profitable nonprofit business based on subscriptions to non-alumni and sales of article reprints for what had once been a traditional academic publication of interest mostly to professors. Before I made any of my more controversial proposals at Harvard, I would check the ideas out with Ernie. He was always supportive. In fact, he encouraged me to think even bigger.

An Unusual Business Education

In theory there is no difference between theory and practice.

In practice there is.

— Yogi Berra

On his own initiative, Ernie persuaded me to start taking courses in the second year of the Harvard MBA program in marketing while I was a second-year law student. I asked Ernie why I should study second-year marketing. He responded that there was almost no discipline-specific content in the marketing courses, and no one could tell the difference between a first-year and a second-year marketing course. The courses just looked at different case studies. As a result, I would be at no disadvantage over other students in the second year curriculum. I would have preferred taking the first-year version; but in the first year, the marketing course was held on an unscheduled basis that created unavoidable conflicts with regularly scheduled classes elsewhere.

Curious, I complied with Ernie’s suggestion and immediately made a big mistake. Not understanding that the business school and law schools operated with different length classes, I signed up for two courses that met at the same time. And the two schools were a brisk 20 minute walk apart! Gradually, I figured out that I didn’t really have to go to my tax class at the law school. I could just read the materials on my own. The tax code and regulations are pretty straightforward if you can understand bureaucratic language. So I spent my class time on those days south of the Charles River listening to MBA students say the most illogical and foolish things imaginable in class: They always wanted to abandon what was working well in favor of dangerous new directions, such as the student who wanted to drop the brand name for Heinz Ketchup in favor of a new name that no one had heard of before. It was irresistible entertainment. I began to notice that discussing business was a lot of fun while combing over the law was always deadly dull.

For the following semester, I signed up for a class that was the culmination of a marketing MBA: providing a consulting service in marketing for a real business. Wanting to be conservative due to my inexperience in business and limited business education, I picked a magazine-related project. My MBA student teammates were impressed with my experience, so I was asked to help organize our work. Since I knew few of the analytical techniques that MBAs learn, I relied on my teammates teaching me the various methods we could employ before we picked one. It was a great learning experience for all of us.

Three days before the final presentation, our advisor happened to mention that we were expected to deliver a 100-page written report at the presentation. We had planned to write the report later. In a panic, I hired one of my law school secretary friends to type and started writing the report on a legal pad. Another team member was writing the presentation, but he needed to see the written report to do that. I would write for 12 hours at a stretch and snooze for a while on the couch in our shared office while my secretary friend typed. She kept clicking away until she couldn’t see straight and would then return a few hours later. Twice a day the presentation team came to read what she had typed and to ask me questions. We finished with 6 hours remaining before the deadline. After that experience, I felt like I could do anything.

To me, the most amazing part of the course was that our advice turned out to be uncannily accurate, even if that point wasn’t clear until later to anyone but our team. The presentation seemed to go well. Our client was polite and attentive. But after we ended, he asked us over a few beers if we really meant that the magazine would stop growing its circulation in six months. Yes, we meant that. He told us we had missed the boat. He argued that the magazine was serving less than 5 percent of its eventual readership. We explained why we thought that he was wrong, but he was complacent enough not to be offended. Needless to say, the magazine stopped growing six months later.

That client and I bump into each other from time to time, and he’s still puzzled by how we figured out that circulation was about to stop growing. It was actually pretty simple to figure out, and we explained our method to him at the time. We surveyed the people we assumed knew the most about the magazine and looked at the rate whereby they purchased the magazine versus a key competitor’s magazine. We assumed that ratio between the two publications would be a limit on growth potential across the country as awareness expanded. Looking at the ratio, we simply took the current growth rate forward until that limit was reached. It would happen in six months. The publisher simply didn’t realize that others didn’t love his magazine as much as he did.

That kind of short-sightedness is a key reason why many businesses underperform. It was a good lesson to learn at a young age: Optimism pursued solely on faith, rather than good thinking and hard work, could be a disadvantage. But I remained optimistic. I could see what the magazine could have done differently to grow larger… but its leaders weren’t willing to consider those changes. Three owners later, all of the changes were in place. The first set of owners cost themselves a fortune by being stuck in the wrong mind-set. That observation was very interesting to me. Since then, I’ve seen the same pattern repeated hundreds of times. Many people would rather fail with their own approach than look around and shift to a better one. That inclination leaves a lot of opportunity for mentally and emotionally flexible people.

Based on my favorable reaction to these business studies, I decided to join a strategy consulting firm, The Boston Consulting Group, rather than a law firm after graduation. Within a few months, I found myself along with many other young colleagues at a gathering of more than 50 Fortune 500 CEOs at a Cape Cod retreat. All of the CEOs were eager to learn how to recruit top young MBAs to their companies, so we had plenty of chances to get acquainted. It quickly became obvious that these CEOs weren’t very well rounded. They knew at most one functional discipline well and struggled for how to think about trade-offs between doing more in one area versus another area. The CEOs were like drivers who were headed for a new destination with no road signs to help them and only an incomplete map for guidance. Someone who could provide helpful directions would be very valuable to such people. Over the next three years, I had plenty of opportunities to help define new directions for Fortune 400 CEOs and other senior executives. Their lack of perspective continued to surprise me. The big picture was mostly invisible to these executives. Why? My impression is that the CEOs were chosen primarily for their ability to scramble for successful solutions to unexpected problems rather than for their potential to select an improved direction for the organization. These CEOs mostly chose new directions by default, as an unintended consequence of the scrambling solutions they put in place.

In delving through client materials, I learned about another form of optimism that I hadn’t seen before: near-term pessimism combined with long-term, pot-of-gold fantasies. This estimation of the future could be found in requests for funding of acquisitions, capital investments, new programs, or new products. The same way of thinking about the future would also show up in three-year and five-year plans. Immediately, these people said, it was going to be expensive and painful. Later, irresistible progress would follow. Typically, those making these estimates were simply looking at how they might improve their learning and error rates in the future while ignoring that competitors and new entrants might also be making rapid progress. Typically, competitive conditions became even tougher when everyone became more capable. As a result, the actual long-term results often got worse rather than better. This was a recipe for taking expensive painful steps that lead you into a worse place than you already were.

With more experience, I also discovered that organizations (I also did consulting for nonprofits) were filled with problems that they hadn’t been able to solve for many years. Yet hope sprang eternal, and everyone was convinced that the next attempt was sure to succeed even if it were no different than the last attempt. This perspective was like thinking that sending more light brigades of cavalry to charge a well-entrenched enemy during the Crimean War would succeed where the last one had not (Tennyson’s poem, “The Charge of the Light Brigade” commemorates the fatal charge in 1854 during which 247 of 637 British cavalrymen were killed or wounded following a foolish order during the Battle of Balaclava in the Ukraine). In one case, I led the eighth or ninth consulting team in 10 years to look at the same problem. Imagine how much more could get done if problems were solved properly on the first attempt!

One reason for these unresolved problems was the lack of helpful information. The accounting results for problem areas didn’t look so great, but you could study the accounting numbers all you wanted and those numbers wouldn’t give you any clues about what needed to be done. Instead, you had to develop a whole new set of measures; simulate change in a dynamic environment in which customers, beneficiaries, suppliers, and competitors would make adjustments; and identify paths that left you better off regardless of what happened with factors outside of your control. That way of thinking was as incomprehensible to most leaders as an obscure foreign language they had never heard before. The consultant’s major task was to be able to translate those new possibilities into some expression that leaders could grasp and appreciate. Analogies, metaphors, stories, and vivid graphics were important to communicating complex information that others could not internalize from the detail. I was reminded of telling my dad he would have to earn $1.25 for an hour a week to pay for his lift while having four more hours available. Perhaps I should have taken more literature classes.

Practicing What I Had Learned

However much thou art read in theory,

if thou hast no practice thou art ignorant.

— Sa’di

After my consulting stint at The Boston Consulting Group, I was interested in learning more about what it takes to make change from the inside. I also was hoping that an insider would be able to pursue more difficult tasks than consultants usually addressed. The management at Heublein, the Fortune 500 food and beverage company (products included A.1. Sauce, Grey Poupon mustard, Ortega chiles, Kentucky Fried Chicken, Smirnoff vodka, and Inglenook wines), asked me to become their corporate planner back in the days when that was a popular thing for companies to do. Today, organizations prefer to have their leaders learn strategic thinking rather than to rely too much on staff people. I soon found that changing opinions was, if anything, more difficult to do from the inside than it had been as a consultant. But I thought I had an ace up my sleeve.

Everyone at Heublein thought that Professor Peter Drucker, the founder of the management discipline, knew what he was talking about. Having failed to convince our organization to shift its focus from after-tax profit to another financial ratio, I decided to find out what Professor Drucker would have to say.

I attended a public lecture he gave at New York University and had the good fortune to be called on at the end of the talk. I asked him which one measure of corporate performance was the best to use as a goal.

After a lengthy pause, he replied with irritation in his deep, gruff voice, “My dear sir, you obviously know nothing. There is no single measure of corporate performance that is any good. Use them all and try to develop new ones, and each will teach you something you need to know.”

I sat down, much chagrined, but with a profoundly helpful business principle in hand. I was encouraged, however, because I was very good at coming up with new measurements. This approach was right up my alley! Besides, with more measures it might be easier to convince management of the need to make changes. Surely some one of many measures would get each person excited.

Becoming a Student of My Clients

I want to be part of the best team in the world.

— Will Carling

After three years at Heublein, I was tired of the 100 mile commute each way. Contacting my old clients, I was pleased to find that they were all interested in having me work for them at night and on the weekends. With Heublein’s permission, I started offering consulting again. Soon, I had a big enough base of business to start consulting full time, as the head of Mitchell and Company. A month after I did that, Carol Bruckner Coles who had also been a colleague at The Boston Consulting Group, resigned from Heublein to join me. Carol did more of the missionary marketing than I did because there were more prospects near her home in Connecticut than near mine in Boston. Early on, she realized that selling to a lot of people at one time was a better idea than selling to people one-by-one. We launched a series of free seminars in New York, and companies were soon fascinated by our ideas about how corporate performance translated into stock-price improvement, something we had done a lot of work on at Heublein. That interest surprised us because much of our strategic work was of more economic value. This stock-price improvement practice became the backbone of our firm over time. From this enthusiasm for stock-price improvement, I learned that there was untapped potential in areas that I didn’t even consider to be very important because others did.

Wanting to push the boundaries of knowledge, Mitchell and Company did pioneering research in many areas of stock-price improvement. Typically, however, we found that client interest in important new ideas and practices was tepid, at best. Focusing on that lesson, we turned our research model around and began to only research questions that were of interest to clients. In the process we formed a learning organization for executives at major companies, Share Price Growth 100.

Over the course of a decade, we learned that every major existing approach to stock-price improvement other than the one we had been developing was fatally flawed. Why? It turned out that those who wrote the road maps for stock-price improvement hadn’t bothered to do much, if any, research to test the validity of the directions.

Following Peter Drucker’s advice, we began inventing lots of new measurements, employing those measurements in as many ways as we could, cross-checking our conclusions with independent sources of measurements, and adjusting our conclusions to reflect how well the past estimations had worked. One of our first new measurements was to express a company’s stock price in terms of the factors that the company’s shareholders paid the most attention to. We did this by looking at statistical correlations to a company’s historic stock price. Next we interviewed shareholders to find out which of those most highly correlated factors (or similar ones) the investors actually used to make buy and sell decisions. The result was a verified multivariate correlation (an equation describing past stock prices in terms of what investors considered) that reflected those shareholder perceptions and practices. Those verified correlations, in turn, were helpful for anticipating stock-price changes through locating what had happened to companies taking new actions whose shareholders had similar perceptions and practices. In addition, we used anonymously sponsored interviews to test market planned or potential actions to see which steps would elicit the most stock purchasing with the least selling.

We had a big surprise at first: We greatly underestimated how well our advice worked. We weren’t optimistic enough! One of our clients had asked us about taking a subsidiary partially public. After they succeeded with that stock offering, the parent company’s stock went to almost double the level we had predicted. From that observation, we eventually learned that the client had created a bandwagon effect that caused investors to rush forward to create stock-price growth faster than would otherwise have occurred for less well designed and communicated programs. To adjust for that bandwagon factor, we added a fourth set of measurements related to the improved ways of understanding the current and potential liquidity of the stock. Eventually, we developed a service to facilitate creating and sustaining the bandwagon effect and incorporated that learning into our estimations. With that service, we could help companies attract investors who would raise the value of the company while avoiding those who would harm the company’s stock price. Then, the great epiphany occurred for me: With the right direction, people could greatly exceed the highest levels of historical stock-price performance that anyone had achieved. Now that was interesting to think about! Many company leaders were intrigued, too, and identifying and executing strategies to exceed historical stock-price performance became a rewarding part of our company’s strategy consulting practice.

Peter Drucker Points Out a Task

The contribution I make to a client is basically to be very stupid and very dense;

ask simple, fundamental questions;

demand that he be thoughtful with the answers;

and demand that he make decisions on what is important.

— Peter F. Drucker

Share Price Growth 100 had another helpful impact on me. The members asked that we have the work checked by an independent academic to be sure we weren’t making mistakes that we didn’t realize. I was asked to pick the academic. Naturally, I chose Peter Drucker who kindly agreed to begin working with Carol and me in 1992 to improve the Share Price Growth 100 research. That’s when my business education really began because Peter was the only person who could help me see the full potential of what I was doing.

He had three messages for me that he repeatedly stressed over the years we worked together (through 1999, when he began to cut back on his consulting due to his failing health):

1. I had a general methodology that I used to solve all problems.

2. That approach could be used by anyone to solve 80 percent of all problems anyone ever has to face. Thus people could learn one way of solving problems rather than hundreds, creating the potential for lots of breakthrough progress as they became more talented in the new method.

3. If I didn’t share that process with the world, it might not be rediscovered for centuries and that would be a terrible loss. I should publish a book that explained the process so others could use it.

Even on my most optimistic days, it had never occurred to me that I could contribute anything uniquely valuable. Peter had replaced my mother in helping me see the unlimited future we can all create when we follow the right steps (ones you’ll read about beginning in Chapter 4). Since then, I’ve been a new kind of optimist — a practical, but unlimited, one.

What’s the difference between a practical, but limited, optimist and a practical, unlimited one? The practical, unlimited optimist in me creates and uses disciplined ways of asking questions and thinking that extend my vision of what can be done well past the best of what can be observed today.

By learning those questions and ways of thinking, your ability to see opportunity and grasp its benefits will be unlimited as well. That’s my message for you, thanks to Peter Drucker.

Copyright © 2007. 2012 by Donald Mitchell.