Solving Problems with Integrative Thinking

HANNAH BATES: Welcome to HBR On Strategy, case studies and conversations with the world’s top business and management experts, hand-selected to help you unlock new ways of doing business. Imagine you’re trying to solve a problem, but none of your options are all that great. You could walk away. OR you might be able to use an idea like “integrative thinking” to figure out how to take the best of your inadequate options and negotiate a compromise. Today, we bring you a conversation about strategic problem solving with Jennifer Riel, who teaches at the Rotman School of Management in Toronto AND is the Global Director of Strategy at IDEO, the global design company. You’ll learn how leaders in the film industry used integrative thinking to balance brand safety with creativity behind the scenes of The LEGO Movie. And you’ll learn how to apply integrative thinking to your business problems, using a four-step process.  This episode originally aired on HBR IdeaCast in September 2017. Here it is.

CURT NICKISCH: Welcome to the HBR IdeaCast, from Harvard Business Review. I’m Curt Nickisch in for Sarah Green Carmichael.

[Theme music from The LEGO Movie]

If you don’t know that music, it’s the theme song from The LEGO Movie. The animated film grossed nearly a half billion dollars in 2014. It also breathed new life into the brand. People loved seeing the little plastic pieces of their childhood in action. The hero is a construction worker who falls down a hole one day, into the LEGO underground.

[Sound from The Lego Movie]

Behind the scenes, The LEGO Group went through its own adventure. Turns out, there’s a strategic decision-making story behind the blockbuster. And it’s a case that Jennifer Riel and her co-author, Roger Martin, study in their new book, Creating Great Choices: A Leader’s Guide to Integrative Thinking. Riel teaches at the University of Toronto’s Rotman School of Management. She also loves movies. So today, she’s here to talk about integrative thinking through the lens of the film industry. Jennifer, Thanks for coming in and talking with the HBR IdeaCast.

JENNIFER RIEL: My pleasure. Happy to be here.

CURT NICKISCH: The LEGO Movie—amazing success—but it could have turned out much differently, right?

JENNIFER RIEL: Absolutely. And interesting enough I didn’t know until I had the chance to talk to Jorgen Vig Knudstorp, who was the CEO of LEGO at the time, that there had actually been a previous iteration of a LEGO movie that actually made a LEGO movie before the LEGO movie.

CURT NICKISCH: I didn’t know about this either.

JENNIFER RIEL: I was fascinated It’s called The Adventures of Clutch Powers. And it had come out of the fact that LEGO for a long time—I mean, they make the little plastic bricks that we all grew up with. It’s been a successful brand for decades—just kind of amazing for a little company in Europe. And they had started getting into branded—co-branded—entertainments like the Harry Potter LEGO games or Star Wars LEGO games would be the most popular example. And so, it was inevitable someone was eventually going to come and say, Let’s do a movie about LEGO, and maybe let’s have it be original, not tied to another entertainment brand, and so they did. They created this The Adventures of Clutch Powers. And they partnered in a way that most companies would, which was, they prioritized the protection of the brand. So, they had final sign-off on the script, and then all of the filmmakers. And they made sure that it was true to the brand and that it protected the company. And as Jorgen say with a laugh, it was really boring and not very successful, not a very successful film, not very successful for the company. So, they were approached again, from a Hollywood studio saying, Let’s really do this; let’s really make the LEGO movie. And they were confronted with, What do we do? The last time it didn’t work, right? And we prioritized that we should have creative control. That was a huge bone of contention because they recognized that part of the challenge is getting really great talent who would be willing to work on our project for which the company had creative control. They wanted talent that would create a really great movie. To do that, the hypothesis would be you’ve got to give total creative control to that talent. You will not get great directors great filmmakers if they feel they’re going to beholden to corporate interests like they’re uncomfortable enough being beholden to the studio, let alone to a company. So, this question of, How do we tackle that the seeming tradeoff, the either-or choice between maintaining absolute, strict creative control but probably giving up the ultimate quality, creativity of the film; versus give someone else total creative control—you’re probably going to get a great film out of it, but that’s a huge risk to take for the reputation of the company, because who knows what they’re going to do.

CURT NICKISCH: Meet in the middle. The happy medium.

JENNIFER RIEL: Absolutely. You can imagine all kinds of compromises in between where you really aren’t thrilled with the answer but you can live with it. And very often, leaders frame the problem of tradeoffs in that way. Michael Porter, the father of all strategy, tells us strategy is making tradeoffs. You can’t be everything to everyone, and that’s true. You absolutely have to make tradeoffs as a leader. What we found—LEGO is a great example of this; Jorgen is a great example of this—is that there are some problems for which making that tradeoff is unacceptable. If I make the tradeoff, I lose. If I make the trade off, it’s not going to solve the problem. And it is in that situation where you ask yourself, Could there be a better way? Could I imagine doing something either than choosing the either-or, or finding the barely acceptable compromise, and actually seek to create a better choice, something new that doesn’t exist today, that might actually solve the problem, be great for the organization. And in Jorgen’s case, he was really clear: I want a really amazing movie, an awesome movie, if you will. But I also wanted to be awesome for LEGO, right? I want LEGO to be better off from having engaged in this process. He looked at the challenge and realized that on creative control, ultimately, he did have to make that choice that, Look, if I want great talent—really great talent, not good enough talent—they’re going to have to have control of the script, of everything that they do, of the casting, of the film itself; and, yeah, they may give us the right to review it. But actually, we need to trust them, and they need to see that we trust them. But if I’m going to do that, I can ask for something that I believe is going to make a better answer. And the thing he asked for was their time before they started working on the movie. And he said, What I would like you to do is spend time not with me but with LEGO’s most committed, fanatical customers. Going to the fan conventions. I want you to spend time with kids as they play with LEGO. I want you to spend time talking to these super fans and understanding what LEGO means to them. Essentially, he was finding a way to help these filmmakers fall in love with the brand the way that a kid does. And if he could do that, if he could get them to fall in love with LEGO, then they would protect the brand. They would be the ones who were dedicated to its preservation, and they would create an amazing movie that held LEGO at its heart. What’s kind of cool about the engagement that they had, with the adult fans in particular—I didn’t know this—but apparently the one thing that is absolutely forbidden, even amongst the adult LEGO fans: you’re never allowed to use glue. Because the spirit of LEGO is taking it apart and building it again. And so that insight about fans and how they feel about LEGO becomes a plot point in the movie. They now build a huge part of the narrative around how evil it is to use glue. And this better answer produces the LEGO movie.

CURT NICKISCH: So, what would most companies have done?

JENNIFER RIEL: What most companies would have done is what LEGO did the first time. Treat it as an optimization problem. Figure out, you know, what does it we want? We want a movie that protects the brand. Probably even prioritize that over the notion of it being a good movie—make their own interest paramount over the interest of the viewer. And be surprised when the movie’s not very good. And it actually makes people think less of the brand anyway. It’s sort of the catch 22. You end up producing the result that you were trying to avoid. I think lots of organizations tend to either just make the tradeoff or lay out the possibilities, analyze those possibilities endlessly, right. We hear about these meetings that go on and on, and you get progressively less excited about all of the answers as you analyze them. But as you do that, you can start to say, OK, we can’t just choose one or the other; let’s build the Frankenstein option, the consensus option here, where we can all live with this as a solution. It’s not going to thrill anyone; it’s not going to be great; but at least no one is going to get fired. When we talk about integrated thinking is this idea of leveraging the tension of opposing ideas leveraging that disagreement. And it’s not that you want to stay in disagreement forever; you ultimately want to create a great answer that we can achieve consensus around. But it’s a fundamental belief that you have to go through the challenge or the tension of disagreement to get there.

CURT NICKISCH: I mean, I think of this almost as like the “getting to yes” book. It’s sort of like, “getting to yes, and”— coming up with solutions in negotiations that are creative, that end up making both sides happier than they ever imagined, even, like, walking into the situation. You’re saying that that’s kind of possible with if you play an integrative thinking to business problems.

JENNIFER RIEL: I love the idea of “getting to yes.” That is delightful. Not every problem is going to be well suited to this way of thinking. There are lots of great thinking and decision-making tools, and if you have something that you love and that work really well for you, keep using them. We endorse all of these. Think about it as being particularly useful when you look at the problem in front of you, you look at the possibilities are the options that are laid out. You look at the tradeoff and you say, I’m just not willing to make that tradeoff. I just I can’t imagine making that choice. I need a better answer. So, it’s one thing to say, I need to do something other than choose here; and it’s another to actually have a methodology.

CURT NICKISCH: Coming up, we’re going to break down that methodology, talking through the stages of integrative thinking. But first, let’s look at another real-world example—from the movies. In the 1990s, the Toronto International Film Festival, TIFF for short, screened a few hundred movies. It was for film lovers, for everyone really, and sold a lot of tickets, but it wasn’t profitable. That was the challenge facing Piers Handling he became festival CEO in 1994. Handling considered the Cannes Film Festival as another model. It’s exclusive, with a juried prize, the Palme d’Or. Cannes gets news coverage, star names, and a ton of sponsorship money. Most executives would look at TIFF’s challenge as an optimization question: where on the scale between community and exclusivity is the best place to balance between ticket sales and sponsorship money? But the new CEO asked himself: why even make the trade-off? Is there a way to get the benefits of both? Keep TIFF just as inclusive, but make it more buzzworthy, too? Integrative thinking. Here’s Handling in 2012.

PIERS HANDLING: We measure the success of our festival against many factors. It is the films we showcase, the audience reaction to those films, the talent that emerges, and the attention the films attract from the industry and the media.

CURT NICKISCH: What Handling figured out is that Toronto’s huge, diverse audience of film-goers wasn’t a liability – they were an asset. Take Slumdog Millionaire. It won the People’s Choice Award—and then eight Oscars.

[Sound from Slumdog Millionaire]

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

[Sound from The King’s Speech]

Turns out –TIFF’s audience was a powerful market predictor.

JENNIFER RIEL: It’s now the case that if you have a movie you think might win an Academy Award, you bring it to Toronto. You see how the audience responds.

So, for instance, Crouching Tiger Hidden Dragon had come in to Toronto with the studio not quite sure. I mean, if someone had said to you, in the year 2000, the big hit movie of the year is going to be a Mandarin-language film in which warriors dance on treetops, right, not many people are going to say, American audiences are going to love that. But Toronto audiences did—and adored the film. And so, they were able to look back at what had been predicted about the audience in the past and say, If we really elevate this idea of an audience prize, make it really central, we believe, based on prior evidence, that it’s more likely to be successful. But this is a case where they made a bit of a bigger bet, and it was in part because what they were doing wasn’t working. And sometimes you have to be pragmatic: how do we start doing this? and see whether it’s going to be more successful. I think in Pier’s case, you don’t have a ton to lose by trying an audience prize and seeing whether it was actually going to produce the outcome that he cared about.

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

JENNIFER RIEL: It’s a four-stage process. Stage 1, get clear about what your problem is. You find the problem you think is worth solving where you believe the answers in front of you aren’t good enough. And some of them fall into the category of internal organizational tensions. A number of organizations I’ve worked with where structure: we were completely centralized structure, and we were slow to move, so we de-centralized, moved decision making out into the organization. That didn’t work terribly well for us. We found that you know while there were moments of great interaction with consumers we were doing things in one part of the organization very, very different than others. We’d lost efficiency and lost economies of scale, and very often in organizations, they’ll say, Well, centralization didn’t really work very well. Decentralization definitely didn’t work very well. And the pendulum just swings back to centralization again, and it’s the definition of insanity at that point. Well if it didn’t work before it’s probably not going to work this time either. And so, the idea of saying, you know, if you’ve been solving the problem over and over in the organization, or if you feel an internal tension like centralization and decentralization or standardization and customization or—those internal tensions are often problematic because the choices aren’t good enough. Right. We know we need both. We just can’t figure out the how. And so, we want to be able to help you figure out the how. In step one, what we want to do is take that problem and explore two very opposing ways of solving it. So, we would dive very deeply into, All right, if we were totally centralized, what would that look like? Let’s describe that just so we all know what we’re talking about. Totally decentralized—pushing them out to extremes, because that’s where the most tension is. We can’t be totally centralized and totally decentralized at the same time.

CURT NICKISCH: Right. Force yourself not to find the balance.

JENNIFER RIEL: Exactly.

CURT NICKISCH: Engineers do this right when they test things: they’re like, What would happen if labor costs go to zero? Like, How would you design a warehouse that way? or whatever.

JENNIFER RIEL: Absolutely. And it provokes new thinking. We then try to fall in love with each of those models. Opening your mind to understanding what is truly great about that choice; what does it get us that might be helpful in building the better answer. Step two, here’s where we actually hold them in tension, right? Here’s where we’ll look at them together and we essentially push ourselves to see what we see, to notice what we notice: Where are they more similar in terms of outcomes that we might have expected? Where are their true distinctions or points of difference? A really great outcome from model a that just doesn’t exist in model B. This is stage three, right? Generate possibilities: what could a better answer look like? And in some ways, you just ask that question: What do I really value, and could I imagine creating something out of the things that I truly value? And so ultimately, you’d want to generate a few answers so that you’re not just focused on one. Step four, how could you try your new models, see how an audience or a customer base or a shareholder group reacts, and then continue to move forward with that as a possibility? So, instead of just saying, We’re done; let’s launch, can you actually test those prototypes as you roll them out?

CURT NICKISCH: At which step do most companies stumble?

JENNIFER RIEL: So, I think that there are a couple of places that are challenging. Sometimes there is an inclination not to do this at all—just make the tradeoff. Sometimes it’s hard to fall in love with one of the models because you already really like one. And so, it’s important to bring people into the room who can help push your thinking on that. Sometimes they’ll get stuck on examining the models by just treating it as a checklist: We’ve got 15 minutes. What’s similar? What’s different? What assumptions? And, sort of, be a little dogmatic and just push through those. Part of this is recognizing that pushing forward to new ideas doesn’t happen on an immediate timeline, right? Giving yourself a bit of time and room to walk away from the problem and come back to it. Certainly, if you’ve got an afternoon, and that’s all you can spend on it, you can make progress. But best practice would be convening the group a couple of times to go through the different stages at different points in time so you’ve had some time to think.

CURT NICKISCH: How do you know when, you know, in the middle of this, like, unfamiliar process, that you’re on the right track? What are the signs that you’re succeeding? What are signs that would tell you you’ve got to start over?

JENNIFER RIEL: So, I think they’re largely emotional. In stage one, if you really are able to push yourself to have genuine affection for the two models, get to a place where you say, I understand why someone would use these; there’s something good in it. That is a good sign that it’s working. When you’re examining the models, if you feel a little in the weeds of the complexity, you do need to dive into the complexity of this in order to push yourself forward; if you feel like you see something new that you didn’t see before—it might not be earth shattering; it might not be world changing—but something that I didn’t recognize before I started this process that might push me in a new direction. And then in terms of the possibilities, Is it better than what I started with? Have I made progress? Have I produced something that I believed was a better job of solving the problem than where I began? And as you’re testing, Am I actually making this idea better? Am I learning as I go. Am I producing an answer that I’m excited about? Some of it’s managerial judgment, right. If this were an algorithm it wouldn’t actually be all that valuable to you. It is a process or a methodology that you can follow that, paired with your own understanding of your business, with your own leadership acumen, enables you to tackle problems in a different way.

CURT NICKISCH: Jennifer Riel, thanks so much for taking us through this process.

JENNIFER RIEL: It’s my pleasure.

HANNAH BATES: That was Jennifer Riel – in conversation with Curt Nickisch on the HBR IdeaCast. Riel is adjunct professor and executive in residence at the Rotman School of Management at the University of Toronto. If you liked this episode, check out HBR IdeaCast wherever you get your podcasts. We’ll be back next Wednesday with another hand-picked conversation about business strategy from the Harvard Business Review. If you found this episode helpful, share it with your friends and colleagues, and follow our show on Apple Podcasts, Spotify, or wherever you get your podcasts. While you’re there, be sure to leave us a review. We’re a production of the Harvard Business Review – if you want more articles, case studies, books, and videos like this, be sure to subscribe to HBR at HBR.org. This episode was produced by Anne Saini, Ian Fox, and me, Hannah Bates. Special thanks to Maureen Hoch, Adi Ignatius, Karen Player, Ramsey Khabbaz, Nicole Smith, Anne Bartholomew, and you – our listener. See you next week.