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The book in a nutshell
Every cloud has a silver lining. When life gives you lemons, make lemonade. Constraints are assumed to be a bad thing, but in reality they can often be the grist that creates the pearl. Rather than being a restrictor, they lead to bolder, more innovative solutions.
Every person and every organisation faces constraints. With a more positive attitude and use of techniques you can leverage these constraints for competitive advantage.
The authors recommend a six step process:
Step 1: Victim, Neutraliser & Transformer
Step 2: Break path dependence
Step 3: Ask propelling questions
Step 4: Can-if
Step 5: Creating abundance
Step 6: Activating emotions
Introduction
A constraint is a limitation imposed by outside circumstances or by ourselves that materially affects our ability to do something. The authors prefer the definition. ‘A limitation or defining parameter, often the stimulus to find a better way of doing something.’
We should view constraints not as a restrictor but rather a stimulus for increased creativity and positive change. Many managerial systems focus on either managing out or removing constraint from a system. This book however advocates embracing the constraint.
There are three types of constraint:
-Foundation – A limit in one of the key success factors of a category – e.g. Zappo’s online shoe retailer where customers can’t try on the shoes in store. To overcome this constraint they offered free return shipping.
– Resource – Raw materials, time, money and people/talent etc – e.g. Southwest airline who had only three planes but four routes to serve. To overcome this they revolutionised the industry by developing a turnaround time of just 10 minutes when it was one hour.
– Method – Where have to do something in a certain way e.g. Aravind eye hospital in India used the principles from fast food to overcome the log jam in eye surgery.
The two solid fuel engines that power the space shuttle are 4 feet 8.5 inches wide as that is the width of the railway tracks needed to carry them from Utah to Florida. 4 feet 8.5 inches is the size of the roads first built by the Romans. Thus one of the most advanced pieces of technology is constrained by a convention set up 2000 years ago.
Mick Jagger’s unique dance came about from years of performing on tiny stages in small clubs.
Google’s home page is simple because Larry Page was not adept at coding.
Simcha Blass from Netafim (Israel) noticed that one tree had grown taller than others planted at the same time. A burst pipe meant water constantly dripped near the tree. Tests helped him discover that drip irrigation not only leads to increased growth of crops by 20% but also used 50% less water.
Super-Mario characterisation came about due to the poor pixelation on eight-bit technology.
Twitter’s constrained 140 character limit has driven its popularity.
The book suggests a stepwise approach to turn constraint into abundance by a three part, six step process:
Part 1 – Mindset
Step 1: Victim, Neutraliser & Transformer
Step 2: Break path dependence
Part 2 – Method
Step 3: Ask propelling questions
Step 4: Can-if
Step 5: Creating abundance
Part 3 – Motivation
Step 6: Activating emotions
Step 1: Victim, Neutraliser & Transformer
How you perceive a constraint will affect your ability to deal with it.
There are three kinds of mindsets that influence how you approach a constraint:
-Victim – Sees the constraint as a limiting problem so will lower their ambition.
– Neutraliser – Sees the constraint as a roadblock on the way to their ambition. They will find a way around it without compromising their goal.
– Transformer – Sees the constraint as an opportunity to improve their goal.
Different constraints at different times trigger different reactions. Often people go through all three.
In 1980’s Dan Wieden was briefed by Phil Knight at Nike that he do not want any advertising that looked, felt or smelt like advertising. Wieden stuck a photo of Finnish Olympic runner Lasse Viren above his desk and thought what would he say to him that would not make him laugh? Since then the culture inside the agency is to ‘walk in stupid each day’ (so not driven by past convention).
Marissa Mayer (ex Google) knew the importance of self imposed constraints: “We need constraints in order to fuel passion and insight”. Her team was restricted in size (625Gb) and teams of just three people with just one day to create a prototype.
To help get into the right mainframe, the authors pose a few questions to challenge yourself with. What if you increase the level of the constraint (e.g. from 12 months to 6 months; from 20% increase to 100% increase….). Then answer the following questions:
1) Do you believe it is possible? (Mindset)
2) Do you know how to do it? (Method)
3) How much do you really want it? (Motivation)
As regards mindset, it’s useful to think of past times where you (or others) have beaten the odds. Be aware of your surrounding culture (be it your organisation or personal circles) as these groups can unconsciously influence you positively or negatively. Are you surrounded by ‘Can-do’ people or ‘Can-not’ people?
When Yves Behar first presented the idea of providing a laptop per child for $100, he was constantly confronted by nay-sayers.
Sir David Ogilvy once said, “Thank goodness of the freedom of a tight brief”. It’s the very constraint that creates creativity not hampers it.
Psychologists found that when a fence was erected in a playground, the children used more of the space than before.
Jerry Seinfeld imposed self constraint (of no sex or swearing) to raise his own comic creativity.
Step 2: Break path dependence
We get locked into doing things certain ways without even thinking why. This blocks creativity. Constraint forces us to challenge these.
Sydow, Schreyogg and Koch suggested organisations go through three stages of path dependence:
Stage 1: Broad range of approaches used – Left up to managerial discretion
Stage 2: Adoption of ‘best practice’ – One recommended approach. Some degree of flexibility
Stage 3: Locked in – No room for flexibility. Often by this stage it becomes unconscious and never challenged.
Thus we tend to approach problems in the same way. We look at the same data, we ask similar questions, judge things on the same old criteria, involve similar partners, look at past solutions, and end up making the same decisions. No wonder we rarely unlock those intransigent problems! Even with completely new situations we tend to use old patterns (Einstein once said, “We can’t solve problems by using the same kind of thinking we used when we created them” – Ed).
Historic reporting structures and language can lock us in (e.g. US government still report employment in terms of ‘non-farm payroll’. Also a department called ‘optics’ will assume all answers must lie in optics). Daniel Kahnemen talks about how the naming of something makes the invisible become visible.
There are three types of ‘lock in’:
– Cognitive – Personal limiting mainframes
– Cultural – Collective limiting mind-frames and
– Procedural
People outside an industry are free of the locked-in mindset. This allows them to see new revolutionary solutions that the current incumbents are blind to.
Moore’s law is as much a mindset as it is about the physics. Because people believe the story, they make it happen.
Reverse innovation – rather than taking a product developed in an advanced market, creative innovation can come from working in more naive, developing markets who are able to think differently and so open up new possibilities cf the cheap car was developed in India.
Dr Louise Waters is the CEO of Leadership Public Schools in San Francisco. She noticed that kids from deprived backgrounds were 4-5 years behind in education standards by the time they reached high school. Rather than be constrained by this, she set an ambitious target that all her pupils would reach the standards by high school age (yet with no extra funding). This led to different approaches such as tailored learning for each child, and getting instant feedback on learning via a revolutionary piece of technology.
When Nike developed their Flyknit shoes they needed to forget everything they knew about how to make uppers.
Breaking path dependence first requires an awareness of dependence and challenging the accepted wisdom (e.g. the benchmarks and KPI’s used, the current relationships used etc etc). It’s often achieved over many small steps as opposed to one big jump. The authors suggest identifying the most important six words used in an organisation and to then interrogate them. Furthermore they recommend mapping out all the process steps and challenging each one. It’s also worthwhile looking at things through a different lens (e.g. using external people – including your consumers).
Unilever challenged its own assumptions, by asking what would happen to taste if they increased the amount of green tomatoes allowed in their recipes from 5 to 10% – a criteria set many years before and had never been challenged.
Surf dug deeper into their ‘Savvy shopper’ segment by mapping their entire day through the lens of the snakes and ladders game. They identified that cleaning is lonely and joyless. This allowed them to build new emotions into the brand.
Visa changed who they wanted to be benchmarked against from their standard competitors such as Mastercard to the world’s most powerful brands such as Apple and Nike.
The US Navy had to break many paths of dependence to develop aircraft carriers.
One of the other sources to break conventions is to start asking different questions (ask the same questions, get the same answers). For example, asking how to market a brand when in heavy constraint (such as dark markets where no advertising is allowed as small brands are effectively in the dark shadows of high spending brands).
Virgin use the flight safety video as another ‘advertising space’ to demonstrate the brands distinctive personality.
Step 3: Ask propelling questions
Part of the way to break through is to start asking more powerful questions.
Just focusing on being ‘a bit better’ than your competition is a recipe for extinction. You need to think bigger – and focus on better meeting the real needs of your consumers. “Don’t just be ‘better’, be really amazing”, says Larry Page of Google. He sees his role to ask bigger questions. He calls these ‘10x’ questions. He asks questions that on the surface seem ridiculous or impossible, such as “How can we reduce car accidents?” Asking impossibly difficult questions demands novel solutions rather than staying inside the normal parameters of problem solution.
These ‘How to’ or ‘How can’ questions are called Propelling Questions as they force you to think differently. A propelling question has both a bold ambition and a significant constraint.
The construct of a propelling questions is asking a How to….(Bold ambition) with …(constraint) e.g. How to grow better barley with less water?
IKEA asked a propelling question: “How to make a durable, well-designed table for $5?” To answer this, they had to ignore the conventions of table making and explore lateral solutions. They found the answer by sawing doors in half.
Audi asked a propelling question: “How to win LeMans if our car could go no faster than the others?” The answer was to make it more fuel efficient (as less pit stops). Hence the development of the first Diesel racing car that won LeMans three years in a row.
Made.com asked a propelling question: “How to exhibit at the world’s most prestigious furniture exhibitions in Milan without paying for an exhibition hall?” They were able to borrow the apartments of four of their supporters and used them as exhibition spaces. They received over 1,000 guests.
SAB asked, “How to increase barley yield and quality while reducing water consumption by 10%?” They spoke to Barley farmers and found that barley growth has three distinct stages. Reduced water in the middle stage promotes growth. The new approach reduced water consumption by 48%, yet increased yield (with a reduced cost per hectare of $40).
George Bernard Shaw once wrote, “The reasonable man adapts himself to the world, while the unreasonable man persists in adapting the world to himself….therefore all progress belongs to the unreasonable man”. Consumers are becoming more demanding – compromise is no longer tolerated (which becomes an empowering constraint). Those who unlock an area of compromise in a category open themselves up to great fortunes.
The authors identify a range of different areas of constraint (but there may be others unique to your organisation):
– Constraint of Foundation – A fundamental foundation for success – e.g. How to see shoes without a retail outlet on the high streets?
– Constraint of Resource – Budget, time, people, skills, knowledge – e.g. How to launch a new rum brand without a budget?
– Constraint of Method – Where constrained by a certain mode of delivery – e.g. How to win at LeMans without a faster car?
There are of course many external constraints on an organizations as well (e.g. Political, Economic, Social, Technological, Environmental, Legal, etc)
There are four sources of ‘unreasonableness’:
– The unreasonable regulator – e.g. US Government set corporate average fuel economy goals of 54.5miles per gallon by 2025.
– The unreasonable consumer – Why can’t I have high fashion items at high street prices? I want cleaners that clean as well as other products but are ecologically friendly. I want the best mobile phones and the best networks without being tied into a contract etc.
– The unreasonable customer – e.g. Walmart demand higher standards of pricing points from its suppliers.
– The unreasonable challenger – Challengers from outside the category. e.g. Air BnB. Or challengers from a young upstart in a category – e.g. Tesla vs Mercedes.
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Step 4: Can-if
Optimism erodes away over time. That’s why we need propelling questions and leaders that keeping inspiring action towards the goal. Academics have shown that positivity correlates with both resilience and openness. You need to keep focus on what has to happen to make it work rather than be de-railed by why it can’t work.
The authors coin a phrase, ‘Can…If’ (versus, ‘We can’t because…’).
Fail your way forward – Keep investing in solving the problem. If at first you don’t succeed, find a new way (rather than getting trapped in just trying to do the same strategy again). So don’t fall in love with your strategy else it will blind you to its failings.
IDEO’s Tim Brown has observed that constraints (like most issues) are rarely one-dimensional. Thus to really unpick a problem requires multiple layers of ‘Can…If.
Taiwan needed to build a robust economic platform to withstand the pressures from mainland China, but they had a key constraint, natural resources. So the propelling question became, ‘How do we boost our economy without natural resources? The first level answer from their ‘Can…If’ questions was, “We can boost our economy without natural resources IF we increased the level of education”. But this led to the next constraint of a lack of teachers. Their next ‘Can..If’ helped them to utilise graduates as teachers. This then fed the next identified constraint of lack of schools. This resulted in identifying new sources of funds (effectively taking funds from other government departments who would all benefit from raised educational standards). Since improving the education, Taiwan’s economy has grown by c9% every year for 30 years (higher than Japan). They are a country of just 23m yet have the fourth largest cash reserves in the world.
Useful sources of ‘Can…If’ are:
-We can if we think of it as… – Metaphorical approaches that breaks the constrained pattern of thinking – e.g. Health services who see patients as customers.
In the time it takes to load a game, players can now practice their skills – so no longer see the upload time as a negative experience of the game.
-We can..if we use other people to… – Think laterally about who to ask help from.
DuoLingo has 1.2m people translating for free as they see it as an opportunity to improve their language skills.
-We can..if we remove x… – Often simplifying a process helps unlock value and time.
A chain of hair colouring salons in New Zealand stopped drying customers hair, allowing the stylists to move quicker onto new customers, saving time and money.
CitizenM looked at what people most wanted in a great hotel experience (bed, shower, technology and design) and took away the things that mattered less (no double sinks, no robes, no slippers, no tea, no minibar, no paper receipts etc).Thus they were able to offer top hotel experience at 75% of the price.
-We can…if we access knowledge of… – Finding new sources of knowledge.
PHD, the global media agency, tapped into the knowledge resource of its 3,000 global employee base. A brief would be open to all employees (it included a gaming element where there was a publicised leader board of those who had contributed the most).
-We can…if we introduce a… – New product or service.
Surf increased its fragrance levels leading to a more emotionally rewarding experience. Surf grew by 36% globally from 2009 to 2012.
-We can…if we substitute x for y… – e.g. substituting an airbag ‘scarf’ for a cycle helmet (as many people found helmets flattened their hair).
-We can…if we fund it by… – Finding new sources of funding e.g. crowd sourcing, customer sourcing (cf BrewDog) etc.
-We can…if we mix together… – Putting new things together.
Recipes generated by a computer led to ‘Thai Swiss Asparagus Quiche’.
-We can…if we resource it by… – Finding new resources that currently do not have.
E.g. Rent a runway wanted to rent out top designer fashions, but they did not have the finance to buy the items. So they convinced top designers to supply them the dresses for free. Uber, AirBnB and BlaBlaCar riding service in France are all examples of tapping into new sources.
In Kenya, chicken farmers were losing a lot of chicks to arial predators such as eagles and hawks. The other issue was disease. But farmers did not want to invest in inoculating all their chicks since most of them got eaten. By painting the chicks blue the eagles did not recognise them, thus increasing the yield, making it more cost effective for farmers to inoculate. These two measures increased survival rates from 20% to c85%. However, this created a knock-on problem: food. The Can…if solution was to exploit the underground legions of termites. But the next issue was how to ‘excavate’ them? Another part of Kenya had already solved this issue using bundles of waste crop soaked in water.
Step 5: Creating abundance
The award winning TV show, ‘Whose line is it anyway’ works off the core idea of constrained resources. The comedians see this as a leverage point for creativity rather than a restriction. It’s easy solving problems with more resources – but more fun and rewarding to do it with less. To start you need a positive mindset. Secondly we need to be open to new sources. People born into poverty tend to be more resourceful than those born into a world of abundance. Thirdly, we rarely mine all the resource opportunities we have around us as. For example we only think of resources as those being within our immediate control; we tend to wait for resources to be given to us rather than going out hunting for new ones; the resources we do have we do not extract all the resources possible from them. Finally we do not think what resources we have that we could barter with.
There are four common resources to explore:
– Invested stakeholders – e.g. made.com were able to exhibit at Milan by displaying their furniture in four of their customers spaces
– External partners – e.g SAB working closely with farmers
– Resource owners – e.g. The NGO Colalife used CocaCola’s distribution might to deliver packs of their dehydration salts to children suffering from diarrhoea across Africa
– Competition – e.g. Ford & Toyota collaborating on technologies for hybrid trucks.
When Virgin America launched in 2007 their goal was to ‘put glamour back into air travel’. They wanted their airlines to feel like nightclubs in the sky. But they lacked money for the launch. They saw the planes as an asset they could leverage. So they flew Victoria Secret’s models to their annual fashion show (gaining lots of PR for their in flight pyjama party).
Those who share our agenda/values/mission/purpose are more likely to contribute resources. Also those who recognise they lack something we have will also be up for bartering. The aim should be to work on selling people our mission/purpose/values etc and also helping them to see that what we have is what they re missing.
The World Association of Girl Guides and Girl Scouts benefits from the Dove Self Esteem program as they have a shared vision of preparing girls to become fully functioning successful adults.
Nike gave away the intellectual property rights for its ‘Making’ app (which catalogs 75,000 different materials by environmental impact and sustainability) because Nike values a sustainable future for all.
Step 6: Activating emotions
Admiral William McRaven, Commander of the US Special Operations Command wrote a book called Spec Ops. In it he discussed six principles that make special operations successful – Simplicity, Security, Repetition, Surprise, Speed and Purpose. Purpose helps drive meaning and internal motivation that overcomes the barriers along the way. It turns something from a want to a MUST.
Gallup has shown how giving people meaning at work drives performance (after all if you don’t care about the problem then less likely to solve it). Angela Duckworth identified ‘grit’ as a key component of successful people – that tenacity to keep on pushing forward towards a goal despite obstacles, hurdles and failure. She found out it was a bigger predictor of success than IQ.
‘Desirable Difficulties’ describes the notion that there can be some advantages of a disadvantage. For example, a person from a ‘constrained’ background may be more resilient, more resourceful and may have more drive to succeed than those born into affluence.
No way out – When you offer people an ‘early exit’ strategy it allows people to opt out, and not keep pushing. If there is no way out of something, then people are forced to keep on pushing.
Utilising different emotions – Negative emotions can be a powerful driver leading to persistence, commitment and focus. Dan Wieden (W&K advertising) likes a milder form of fear – anxiety. “If you can remain insecure, yet optimistic, you’ve got a pretty good chance of changing the world”. Many brands are born from dissatisfaction with the category. BrewDog came about because its founder hated the ‘mainstream, industrial, monolithic, insipid, bland, tasteless, apathetic beers that dominate the market’, making them into the ‘punks’ of beer.
The UK pub chain, JD Wetherspoon was named after a teacher who told Tim Martin he would never amount to anything.
Juxtaposing an ‘away from’ negative emotion with a ‘towards’ positive emotion offers an even greater chance of success. Research has shown that the most successful problem solvers toggle between looking at a broad range of stimuli (which relies on positive emotional energy) and then switching to a focused persistence (ideally driven by fear and anger as these help you really focus your energies). Jack Dorsey, the founder of Twitter and Square talked about this value of tension in setting up his businesses.
Prof. Gabriele Oettingen, the head of Motivation at New York University has distinguished three approaches to reach a desired outcome:
– Indulging – Create a vivid picture of what it would look like if (so inspired by its positive emotions).
– Dwelling – Sitting in a place of negativity where think of all the things that could go wrong or what would happen if did not achieve this goal. This creates the anxiety and fear that motivates.
– Toggling – The most effective space. It’s a bit like an electric motor – the shifting between -ve and +ve creates the drive.
Critically though, it does need a plan that gets actioned!
Stanford’s Design for Extreme Affordability is one of the most difficult courses to get into (only 6% applications accepted). They look for EQ (emotional intelligence) as much as IQ as they realise the inter-relationships between the students is critical to problem solving. They deal with high stress situations (e.g. premature babies) so they need to remain calm under pressure.
The fertile zero
The resource curse – Countries rich in natural resources tend to do worse economically than those without resources (Norway accepted) as excess resources leads to complacency. This theme runs true with organisations and individuals.
Tobacco companies bankrolled Formula one for decades. In 2005 the gravy train ended with the banning of tobacco sponsorship. Ron Dennis, the leader of McLaren instructed that every single process be interrogated to identify areas of savings and improvement. This led to many step change processes, one of which included reducing pit stops from 4sec to 2.5sec.
Sometimes going for ‘zero’ can unlock new creative solutions. Some routes to explore are:
– Drama & surprise – BrewDog had no money and hence no advertising (in a category where advertising drives sales). This forced them to be creative and make the brand come alive in social media. Drama helps the brand stand out, create attention and engages emotions. It also promotes conversation and creates memorability. It’s recommended to be ‘unexpected’ to create surprise.
Warby Parker, the eye wear specialists created an unexpected annual report where they talked about the inner workings (including unexpected facts and mistakes).
Prof Sir Andre Geim found it difficult to convince his science peers about electromagnetism – so he levitated a frog to bring alive the power of electormagnatism.
– Being interesting on the inside – If you do not have the budget to talk about yourself, you need to get others to talk about you. To do this you need a great story. If it’s not interesting, it’s not shared. Thus the focus is on creating interest.
Sailor Jerry Rum was created by an advertising creative called Steve Grasse from his agency Quaker Mercantile. Ironically he built it with no advertising spend. The brand was built through support of grass roots movement amongst punk bands and a clothing range (Grasse talks about how it is key to be true to the tribe you want to engage). He claims that because he did not know how rum brands were meant to ‘behave’ he did it his own way, defying the conventions of the category.
Grasse’s next project was recreating old pre-industrial folk recipes such as Rhubarb tea (The story behind this is Benjamin Franklin brought rhubarb seeds to America and gave it to the King’s Botanist, John Bertram who developed a tea from it).
Cordarounds sell corduroy trousers with their ridges running horizontally rather than vertically. They are distinctive and it creates a talking point.
Aesop beauty brand has grown to 43 stores worldwide. They want to put intelligence into beauty. Thus their shop staff were asked to refrain from mindless small talk/chatter.
– Making a secondary medium your primary idea platform – This is about owning a distinctive media space.
Alcohol advertising was banned in the 80’s in France. Heineken developed different bottle shapes and sizes to match different drinking occasions, helping it grow by 600%.
– Alliance to scale – Building new types of partnership. History has shown great advances are made when there is a strong coalition of people working towards a common goal.
CitizenM did not have money for mass refurbishment. Vita, the Swiss furniture company also did not have the money co-develop retail outlets. A coalition meant Citizen M got their lobbies decorated for free, and Vitra got a showroom in every city.
– Other people’s resources – Using customers and consumers as your R&D resource.
– Commercial innovation –
Vitamin water developed an alliance with the rapper 50 Cent.
English Rugby needed to raise £2.5m in 2011. They placed a £250,000 bet with the bookies that they would win.
Constraint driven cultures
The culture of an organisation influences the accepted behaviour. Often the history (the ways the company does things) and the values of the founder/senior leaders can deeply affect current behaviour. Embracing constraints is part and parcel of some organisation’s culture. The key success factors appear to be:
-Big ambition and strong intent
-Start from the top and empower key people
-Make it central to the business
-Be consistent
-Be willing to challenge and interrogate every partnership and process
-Be a storytelling culture
Ingvar Kamprad, the founder of IKEA came from Smaland, a place that used the rocks from the fields to build the walls and the road. Kamprad was always looking at ways of reducing/using waste (hence why he used the feathers from plucked chickens to make affordable duvets). Such attitudes run all the way through IKEA.
Nike had a problem with workers not wearing face masks to protect from the toxic fumes from the glue. Rather than monitor them 24 hours a day, they instead developed a less harmful glue.
Unilever’s goal is to double its size whilst halving its environmental impact by 2020. They do not have all the answers, but feel committed to work through the solutions.
Change success takes a number of different factors – if any one of them is not done then it will not lead to the high levels of success:
Summary
Constraints make us search for solutions in new areas. They make us ask different questions and rethink things. Constraints help us expand, not constrict. In the global competitive world, we need to create better solutions, and constraint thinking is a powerful tool to inspire new ways of thinking and doing.
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