Lost In Transformation
Lost In Transformation
Rising From Crisis: From A Music School To An Award-Winning Digital Organization
"Once you understand the problem we're solving, the path to innovation becomes really clear.” In this episode, we welcome Scott Anthony back to the show. This time, the Managing Director of Innosight Consulting shares an inspiring transformation story of helping his friend transform a music school after times of deep crisis.
Tune in for Scott’s advises on what it takes to come up with great ideas, to identify spaces of success, and how to empower leaders to master disruptive change.
Scott: (00:02)
The lesson I take away from this is it is hard. It is not easy to go from to, it is not easy to do different things. It does require that determination. It does require that leadership. It does require that commitment, but the payoff is truly worth it.
Christine: (00:20)
Welcome to the Lost in Transformation podcast series dedicated to the complex world of Digital Transformation. We feature guests from large corporations, start-ups, consultancies and more, to shed light on the success factors around Innovation, Transformation, and adjacent topics.
We share first-hand insights and inspiration from experts for all the intrapreneurs, entrepreneurs and anyone curious about Digital Transformation.
Christine: (00:49)
We welcome Scott Anthony back for another episode. The Managing Director of Innosight Consulting in Asia Pacific focuses on empowering leaders to master disruptive change. And here he shares his inspiring story of helping his friend transform a music school after times of deep crisis. Listen to the full story and all the learnings now.
Christine: (01:13)
Hi Scott. Happy to have you back with us for a second episode and this time we're going to dive into a whole another story. So, you have been part of the transformation of Settlement Music School in the US and we're curious to hear more about this. Can you let us know how the transformation journey basically started?
Scott: (01:33)
Yes, and thank you again, Christine for having me on the podcast and I am thrilled to share the story of Settlement Music School. It's a story that I don't think many people have heard. It's a very different kind of organization, but I think it has some real generalizable lessons about what it takes to fundamentally transform an organization through innovation. So, let me take you back to the beginning. And the story starts in 2010. 2010 Helen Eaton becomes the CEO of Settlement Music School. Now I have to admit some of the connections to the story. Helen Eaton is the best friend of my older sister, Michelle, so she's somebody that I have known for, I don't know, 30 plus years. So, Helen takes over in 2010. Settlement Music School is a not-for-profit in the Philadelphia area in the United States, on the East Coast of the United States.
Scott: (02:19)
Historically, Settlement Music School is a place that provides music education to children. It has six physical branches in the Philadelphia area and people would go there to learn classical music and learn jazz music. It's more than a hundred year organization. It's had some pretty famous people walk through its halls. So Kevin Bacon once was a student. Einstein once was a student at very prestigious, very well known institution. Now when Helen takes over, it's kind of a tough time for the institution. This is right after the global financial crisis. People had sharply decreased their donations to not-for-profit organizations. And classic and jazz music kind of feels passe in 2010. Kids are doing different things. The iPhone and smartphone era is upon us. People are playing games and not doing music the way that they used to. So, Helen made a decision, that is I am going to transform the organization through innovation. In 2012 we engaged with Helen and we did something, where we gave everyone on our team the tools and mindsets that are required to spot innovation opportunities, to go and try new things to go and understand needs in the market and so on.
Scott: (03:27)
And then Helen essentially set them out into the market and said, where do you see opportunities for us to do something different? Where do you see opportunities for us to change Settlement in ways that will allow us to fulfill our mission, to educate the community and prosper in our local organization? What emerged over time was that Settlement needed to make two fundamental shifts. The first shift was to fundamentally transform the way that it looked at its six physical centers. Historically, these were places where children would gather to get educated in classical and jazz music. That of course maintains, but increasingly Settlement saw opportunities to turn these centers into essentially community hubs. That wouldn't just be places where children would gather, but would be places, where adults would gather as well. To get the adults they had to find innovative offerings that were connected to music. One of the ideas they came up with was called, adult rock band.
Scott: (04:22)
As they were going out into the community and talking to adults, they found a persistent problem. It's hard for adults these days to make new friends. You just get into your routines and your rots and you just don't meet new people. It's not that easy to do in today's world. And music, music is something that would connect people, connect people to other people, connect people in many ways to their youth. So, the idea of adult rock band is you run a 12 week program, where people who have never met before come together, have an instructor and begin to jam. This is a great way for people to connect. It's a great way for them to recapture their youth. This a great way for them to spend time and get out of the house. So, this is one of the programs they introduced. Settlement also introduced programs, say that kind of redefined what they were doing.
Scott: (05:07)
They found ways to combine together music and therapy. Sometimes it would be physical, sometimes it would be psychological, but again a different way to connect to the adults, that are in the community. So, you see the centers themselves begin to transform. Then, the other thing that settlement began to do was essentially to get out of the centers to say how do we take the things that makes us great and bring it to communities? How do we change lives through arts education? They created a program called Pathways. Pathways has both a physical and a digital component. The physical component is working with local schools. Many of which have budgets that have been slashed and the arts are one of the first things to go and figure out ways to enable them, to continue to provide arts and music based education to their local community.
Scott: (05:54)
So, this is curriculum design, this is giving tools and techniques. This is finding ways to infuse music throughout the greater Philadelphia area. And then, there's the effort to go and digitize things to try and figure out, how can we begin to use online, so we can reach different communities in different ways. All of this has been hugely successful. Settlement has been recognized as one of the most innovative, not-for-profit organizations in the United States. Helen Eaton has been recognized as one of the most innovative leaders in the United States. They have earned a significant number of charitable grants to go and drive some of these programs from very prestigious foundations. And through all of this, they've maintained an optimism, that I think is so critical, particularly in today's tough times. So, we're having this conversation right in the middle of the Covid-19 crisis. I got an email from Helen Eaton just this week, and you might think somebody who operates six physical centers in a part of the United States, that has been hit as hard as any with Covid-19, the email I would've gotten from her would be one of despondency. We are not physically gathering, we don't know what to do, etc.
Scott: (07:04)
But Helen's note to me was pure optimism. She said innovation, the ability to do something different, that creates value, I am so thankful that our organization learned about this, that we develop muscle around it, that we have skills around it because we're doing amazing things in the midst of the crisis. I'd always wanted, Helen said to launch a seventh center. The seventh center being a fully digital one and that's what we're doing now. More than ever people need arts, people need music, people need ways to connect to humanity and this crisis has given us the opportunity to accelerate that effort and touch the hearts, minds and souls of people in the Philadelphia area. I've got a book coming out later this year called "Eat, sleep, innovate" and Helen Eaton and Settlement Music School is one of the stories, that we focus on in the book. And I asked Helen to give a kind of capstone comment about what she's learned in now a decade long commitment to driving transformation through innovation and this is what she said: "The theories, the ideas, the concepts, they all work. No matter how large or small your organization. They are motivating, they are inspiring. It requires patient and dogged determination coupled with a dose of reality, when something is really not just going to take of.
Scott: (08:20)
The lesson I take away from this is it is hard. It is not easy to go from to, it is not easy to do different things. It does require that determination. It does require that leadership. It does require that commitment, but the payoff is truly worth it. And in this time, where there's a lot of darkness and a lot of despair, there also should be lots of reasons for optimism and for hope, because some of the constraints that people face historically quite clearly show that these are things that can enable new opportunities. If you have leaders like Helen Eaton that can keep their heads looking up and not down and figure out ways to continue to drive innovation and transformation. So that's a short overview of the Settlement Music School story.
Sebastian: (09:05)
So, I'm curious, because you mentioned all the tools and the methods enabling them for innovation, what are actually some of these tools that really then help them to identify where they might find new success?
Scott: (09:20)
Great question. So, there really are two tools that I think Helen would say have been most critical. And the two tools are the idea of the job to be done and the idea of disciplined experimentation. So, let me just spend a minute talking about each of those tools. So, the job to be done, is a very foundational concept that Innosight has long been promulgating. The idea is deceptively simple. The idea is people don't buy products. People don't buy services. What they do is they hire them to get a job done in their life. They've got a problem they're trying to solve. They try and figure out what is the best solution to that problem and they go and hire it. This goes back to something that Peter Drucker once said, the customer rarely buys what the company thinks it is selling because you think you provide a product, you think you offer a service, but that's not what actually happens.
Scott: (10:08)
The customer has a problem and they look to hire something that solves the problem. So, as the Settlement Music School has taken that idea, that's what led to ideas like adult rock band, because they went out in the community and they talked to people. Not asking them what they want, as people don't answer that question well. Rather they just tried to understand their lives, tried to understand the problems they had, tried to understand the frustrations they have. Because once you understand a problem we're solving, well, the path to innovation becomes really clear. So, that's one of the key tools. The other one is disciplined experimentation. You know, I've been in the innovation field for almost 20 years now and in that time I've seen hundreds, if not thousands of ideas to innovate, to do something different that creates value. The little secret is that every one of those ideas in its early stages is exactly the same, because every idea, and I mean every idea is partially right and partially wrong.
Scott: (11:02)
The trick when you're standing at what I call the first mile of innovation is you don't know which part is which. Now, inside most large organizations, the default behavior is to get to truth through analysis. So they're going to mission on market research, do very elaborate financial forecast, talk to experts. All in the hopes that you will come up with a perfect plan that you can go and execute. There is no such thing. If you try to follow an analytically driven approach to figure out what's right and what's wrong, you will learn a life lesson taught by the great American philosopher, actor and occasional boxer, Mike Tyson, who once said, everybody has a plan until they get punched in the face. The punch that would be innovative receives is the plan that looked perfect on paper was resting on shaky assumptions. The only way you figure out truth is by disciplined experimentation.
Scott: (11:53)
You have a hypothesis, you find a way to test it. Adult rock band is an example. They came up with a concept that was on a piece of paper. They shared it with people. They got feedback. They ran a prototype. They did one adult rock band in one center. They then expand it to a few centers. They learned that it worked in some contexts, didn't work in others, the way the program worked had to change, et cetera, et cetera. The fundamental mindset shift here is you don't start by saying you're right. You start by assuming you're wrong and try to figure out as quickly as possible, how you are wrong and iterate towards success. So, those are the two tools that I think have been most helpful in Settlement's journey.
Sebastian: (12:31)
So, in that spirits, in the example of a Settlement, when they finally came out with a couple of successful initiatives, that you shared earlier, how many things were in the beginning actually on the wall, tried, failed. How long did that take to find the things that really work?
Scott: (12:51)
That's a great question. So, 2012 was when the journey began and you know, 2020 is when you say, okay, we can now tell the entire integrated story together. And it does follow the pattern of a book I wrote a couple of years ago, called Dual Transformation, where if an organization is to fundamentally transform, become a new version of itself, it doesn't do one thing it does two, hence the title dual. And we call it in the book transformation A, where you're repositioning what exists and transformation B, where you're creating what doesn't. So, you see the transformation A is let's change the way the centers function. Transformation B is let's get out of the centers. So, it takes a few years for this really to form and for you to really figure out how these things work. In the case of Settlement, the transformation A part, they had a pretty clear view after about a year about what it was going to look like to change the centers, make them a community hub, target more adults and so on.
Scott: (13:45)
But the full programming took about five years to really get nailed down. Adult rock band was an early idea. There were six or seven other things that were kind of sticky note level things, that they rejected very quickly. And then other ideas like this fusion of art and therapy, those are things that emerged along the way. That's the way these things usually work. You get it partially right in the beginning. You've got to reject a lot of stuff to go and do it. And then some of the best ideas are the ideas you didn't have in the beginning. I think there's a key to this, which is again recognizing that you're never going to have the answer fully formed. So, the fundamental curiosity and the desire to savor the surprises that you didn't expect and be willing to do different things is a really key, important part of success.
Scott: (14:30)
And then the transformation B effort, the effort to get out into the community. This is something that was happening in parallel and again it took a few turns before Eaton and team really figured out what was going to be the approach that worked, what were the right foundations to work with, what were the right schools to work with and so on. Now, I wish I could give you a mathematical formula that says, you know, for every great idea you need to have ten mediocre ideas and a hundred starting points. It just doesn't work like that. So, in some contexts I've seen it does take a hundred to get to one and others, I've seen people think of two or three things and one of them really is the thing and they just able to go and take it and go. But it always is at least more than one. That that is one thing that is very consistent. You're never going to have a hundred percent success rate. There's just too much uncertainty in the world.
Sebastian: (15:17)
So, let me take for example, the jobs to be done framework, where essentially you have a type of customer, right? It's your current customer or potentially a new one as you share then also expanded to a new type of customer and then you have to the job that they want to get done as your existing or your new customer. What are the ways that are maybe most natural for a company to expand in terms of moving to a new job, moving to a new type of customer? Where would you most likely find some, maybe those early successes or some maybe larger potentials?
Scott: (16:02)
That's a very good question. In the first chapter of Dual Transformation, the book I mentioned before, we have a very simple two by two. On the vertical axis we say, what is the job that you're doing? On the horizontal axis we say, how are you doing that job? So, basically the vertical axis are the customer problems you're solving. The horizontal axis is your business or operating model. And each of the four quadrants there, we have current and new as the labels on each axis. Each of those quadrants has opportunities to find different jobs to go and solve. So, current jobs in using your current business model, you go and understand with your current customers what are things that we could be doing better? What are frustrations you have around the products and services that we offer? How do we essentially optimize to deepen our connection to you?
Scott: (16:46)
If you think about current capabilities to new jobs, this would be in the upper left quadrant. You say, where is there something that we've got a skill or capability, that can help somebody solve a particular problem? So, we go and think about an adjacent market that we can go into, where we've got a natural right to compete there. We've just never solved that problem before. As you move to the right squares, that's where the more transformative opportunities are. Solving current problems in a very different way. That's what we call transformation A. So, you say, okay, the job that we do in Settlement is we go and we connect people, we create communities, we provide music to them, but we're going to change our operating model by bringing new people in, having different types of courses and so on. We're going to figure out ways to solve those jobs in a different sort of way.
Scott: (17:33)
And then the upper right is different jobs using different capabilities. And this again is that the Pathways program where you say, we're going to stretch out into different market segments, solve different problems. We might not target the direct student, we might be targeting schools, whatever, and we're going to do that in a different way. So, I think you can use the concept quite expansively. If I were to simplify things down as much as I can, I would say really you want to look for two things. One is current, how do you find ways to deliver against what they really want in a deeper way? And the second is to look for new. What are things that are people that we're not currently serving today, that we could figure out ways to go and solve. And recognize that they're going to be different flavors of those things.
Scott: (18:15)
But you want to make sure it isn't just one of those things. And I think that's a mistake that people often make when they start talking about innovation. They fail to recognize that innovation, doing something different that creates value, has lots of different flavors. And I gave you my core adjacent transformation A, transformation B. There is the McKinsey three horizon model. VJ Govindarajan has the three box framework, whatever. There's lots of different ways to classify it. I don't care what you use as long as you recognize that any organization should have at least two types of innovation and at least one of those types of innovations should be today. And one of those should be tomorrow. As long as you do that, I'm okay, as if you don't do that, you're going to miss opportunities.
Sebastian: (19:00)
And then within that, even the today, let's not even talk about the tomorrow, you mentioned can take years to really ripen. You mentioned that they had a vision of what a new today looks like after a year, but it really takes four or five years maybe more to unfold. And of course, transformation, innovation should be something continuous anyways. It's not a one time exercise to stop, right? If we now extrapolate that to a really larger organizations, where a CEO tenures are getting shorter and shorter and it's typically very critical for the CEO to be driving all of this, what can large companies CEO's do or what would we have to expect of them to be able to drive something for a period of five years, ten years? It doesn't work at first. A lot of experimentation, a lot of failure. How can you justify this?
Scott: (19:54)
It is an outstanding question and one that a lot of organizations wrestle with. And you know, if you go and look at large sample research like the Harvard business review every year, does the hundred best performing CEOs? If you look at the average tenure of those that are top performers, they are people who've got significant years under their belt. I think the average number is nine or something like that, and you've got people 20, 30 years of experience and it's not really that much of a surprise, right? Cause if you're in a circumstance where you can look beyond a one to three year horizon, you're just gonna think and act in different ways. But let's imagine you are in that circumstance. You know you're a new CEO, the clock is ticking. You figure you've got three years to do and if you don't do it in three years, you're kind of toast.
Scott: (20:36)
The way that we think about it is still, even though you feel that three year window, think about the vision, think about what life needs to be like ten years out and then critically work backwards from there to today. And people particularly now, you know, we're in the middle of a global crisis. Everyone looks down, right? They say, I gotta make sure that I can meet payroll tomorrow, that I can deliver things tomorrow. Yes, of course you absolutely have to do. But also there are huge long term opportunities. There are huge longterm implications. The decisions you make today will dramatically impact what you do tomorrow. So, if you've got that ten year view but you're able to zoom it back to today, you know the activities that you can take to set yourself up for longterm success. And yes, in three years you might not fully get there, but if you know the destination and you know some of the milestones or artifacts along the way, you can say very conclusively after three years, this is our path to, these are the things we've achieved.
Scott: (21:33)
These are the reasons why the next seven years are going to be even better years. The failure that I think many people do or many people have is they don't have that long term vision. And because they don't have that long term vision, it just seems like they're doing a lot of random things. You've got a vision, you've got a story. You can then begin to say, here are the proof points that show what we're doing is ultimately going to bear fruit. Okay, this is hard. I'm not going to pretend that it is easy. If you're in that circumstance, where you know the clock is ticking. But I think the McKinsey research on this is very clear. If you want to deliver short term results for your shareholders, the number one way to do it, the number one way to do it is to have a longterm orientation. Paradoxically, those that seek to maximize the short term destroy value in the short term. So, no matter what lens you want to use, having that long term view is a good thing to do.
Sebastian: (22:33)
So, basically it also goes back to what Jeff Bezos said: The next quarter is not something that we're actually making this quarter. It's something we made three years ago. So, the short term in that way is actually the long term, unless you want to destroy a substance with extremely short term thinking.
Scott: (22:38)
Exactly right. And you look at Satya Nadella and what he describes in "Hit Refresh", same sort of thing. So, our financial results are massively lagging indicators, so that's decisions made years ago. We need to have different metrics. We need the leading indicators, which might be net promoter scores, it might be how our early innovations are doing, whatever. The leading indicators are the things we really need to pay attention to as a management team.
Sebastian: (23:00)
One thing I'm curious about, specifically about the Settlement Music School, is how you see how non-profits are different in the types of the circumstances, pressures that they might be under in terms of their funding model compared to corporations, who are run on the profits that they directly make from customers.
Scott: (23:23)
So, as always, you know, it's an interesting thing I've observed in my time in the field, no matter what context you're in, everybody will tell you we have a uniquely hard. So, a not-for-profit says it's harder for us than a corporation. A corporation says it's harder for us than in not-for-profit. This industry says it's harder than that industry, whatever. And this stuff is difficult for everyone. I don't discount that. But every balance sheet has two sides to it. Right? So, I think in the not-for-profit, one of the big challenges you have is you don't have the profit motive that sometimes leads to people thinking and acting in different ways. Having the discipline that comes from the profit motive sometimes can be a challenge. On the flip side, a not-for-profit, almost every one of them will be a purpose driven organization, where the people there are motivated to go and have that long term perspective.
Scott: (24:09)
Think about helping customers and stakeholders and really have their hearts truly in what they're trying to do. So, you know, I think you have the challenge, where you have to then align a big group. You got to align the people who are working for you, you've got to align the donors, you have to align the communities that you're working with. This is something that Helen says that she spends a huge amount of time doing, trying to find ways to make sure that that makes sense for everybody. But on the flip side, she says, when I do that, when I get everyone working together, it is amazingly powerful, because the collaboration that exists makes everything stronger. So, you know, again, it's different from different points of view but that's how I think about the not-for-profit angle.
Sebastian: (24:48)
So, then when non-for-profits are a maybe a good role model for the kind of stakeholder capitalism that people are calling for in the for-profit world.
Scott: (24:56)
You know, interestingly in the "Eat, sleep, innovate", and historically in books that I've written, I don't have many not-for-profit. I mean we are consulting organization, we're too small to have a pro bono. We don't do too much work with not-for-profits. The project with Helen, was a family friend and we figured out creative ways to do it. But you know, as we are working on this book, we've got the Settlement story. We've got a story from the Salvation Army, we've got some stories from UNICEF. So it's just interesting to see that we have this collection of stories from very different contexts, which I think number one does show, that there's a lot to be said about stakeholder capitalism and not-for-profits. And number two reminds us that innovation happens everywhere. It happens at big for-profit organizations. It happens at entrepreneurial startups. It happens within the public sector. It happens within not-for-profits. Innovation really is something that can apply in any context.
Christine: (25:47)
Thanks so much for the insights into the not-for-profit area. Very different also to when we were talking about the DBS story. Thanks so much, Scott.
Christine: (25:58)
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