Customers don’t have problems to solve. They have imagined futures that are better than today.

One view of how businesses succeed is that they solve the problems that people need solving. That’s the “jobs to be done” school of thought, popularized by Clayton Christensen and embraced by many others. This school of thought pictures people’s lives as being full of problems, and the role of entrepreneurship and innovation as fixing them.

Do consumers buy a subscription to Netflix because they have the problem of being bored or repulsed by alternative content? Do startup companies buy cloud services from AWS because they have a computing problem to solve? Does Mom buy frozen dinners to solve the problem of what to feed the kids?

No. It’s the wrong mental model – the wrong way to think about the demand side of economics and the role of businesses in our lives. The energy of economic growth derives not from the negativity of thinking about problems but the positivity of thinking about opportunities for betterment. The capitalist business system is powered by customers’ imaginations. They see the possibility of a better future, a set of circumstances that is different from and preferred to the current state. They imagine this desired state, not so much as a set of features, but as to how they will feel in it. Today’s circumstances may be fine, but there’s always that inner voice that thinks, “Things could be better.” When it’s really important, “Things that matter to me could be better.”

It’s purely an act of creativity. It’s what social scientists call “counterfactual”. People are imagining a future that doesn’t yet exist, yet they can conjure up the future feeling in their mind. There might not even be the possibility of it existing today, because it requires an innovation to bring it about. How brilliant is that? It’s the same level of imagination that Einstein employed to think about relativity and  Niels Bohr used to think through quantum physics, when relativity and quantum theory didn’t yet exist.

It is cognitive acts of counterfactual imagination that drive civilizational advance, the unrelenting seeking of human progress. And the same counterfactual imagination drives commercial innovation, from the iPhone to new flavors of breakfast cereal. Things could be better. Our phones could cease to be tethered so that we can talk on them while walking. They could cease to be clunky so that we can enjoy the elegance of design. They could help us do multiple tasks so that we can carry one device instead of many. Users didn’t invent these functions. Users made them possible by imagining the world as a better place – more convenient, more amenable to our preferences for convenience and speed and aesthetics. By being open to new value propositions, users bring new value into being. 

The other face of the customer’s imagination of future value that’s better than today’s is entrepreneurship. Entrepreneurship is the business function that turns the customer’s imagined future into commercial new reality. Entrepreneurship is the second stage of innovative genius, the stage that responds to the customer’s initiation. Entrepreneurship is the imagination of not just the future feeling of satisfaction that the customer feels, but also of the product or service or proposition that delivers the satisfaction. Entrepreneurial imagination becomes more and more substantive over time. It starts with an idea – “what if we were able to….” – that’s framed in an incentive: there could be a significant economic reward from the customer if we are successful in realizing the idea as a deliverable product or service. The process moves from idea to concept to some kind of early-stage artifact (the sketch on the back of a napkin) to prototype and MVP and test market. At every stage there’s a check-in with the customer who is imagining a better future: is this idea / concept / artifact / prototype / MVP aligned with your imagination? Is this what you were thinking? (Because, of course, they don’t “know” what they were thinking. What they had in mind was an abstract desired state. But when prompted with an artifact, they can respond – yes, that sorta/kinda points in the right direction. Such encouragement is sufficient to fuel the entrepreneurial development process.)

There’s an ultimate test of the alignment of the new value proposition with the imagined future state. It’s willingness to pay. If the customer is willing to make an exchange of something valuable to them – usually money or some derivative of money like a credit card payment, but also their time and effort – in return for the new product or service, it must, by definition, feel to them like it will bring about their imagined future state, or at least part of it, or, at the very least, provide a useful test of the viability of reaching that desired state through commerce.

People buy Tesla EV’s. Businesses buy AWS cloud computing services and harness Microsoft’s AI tools to help them succeed. These are all innovations that stimulate the customer’s imagination of a better world – an emissions-free transportation system that counters the trend towards climate change; a world of easy access for all businesses to the most advanced and robust computing power; a world of new learning and experimentation. These are all imagined first by customers – “these things that matter to me could be better” – and then by entrepreneurs in response. It’s not a linear progression, of course. Perhaps the first act of imagination that ultimately led to EV’s was the thought that air pollution from tailpipe emissions is unpleasant. That meme becomes a vector in a complex system where EV’s emerge from an unfathomable number of interactions and consequences and further interactions and new experiments and news cycles and conferences and scientific advances. We can’t untangle it. Reductionism no longer applies. There’s no cause and effect. But EV’s wouldn’t happen without customers imagining a better world in the future.

The Value Creators Podcast Episode #25. Jacqueline Porter on The Power of Visual Design

Visual design is an important element in value creation, especially in telling a brand’s or a business’s story in a way that engages with customers and communicates shared values. Visual designers are multi-talented artists and storytellers with an acute understanding of customers and their emotional responses to visual cues. Our guest this week is Jacqueline Porter, an accomplished professional in her field and a very successful business owner in her own right.

We explored the business of design and creativity from the challenges within design education, and the drawbacks of rigid design frameworks and the value of subjective, creative approaches. A notable reference to a transitional figure in design Steve Jobs shows how simplicity and creativity – rules and no-rules – can work together.

The conversation moves to the realm of implementation in branding, exploring the delicate and shifting balance between fixed and flexible elements. Jacqueline advocates for constant evolution, telling a story with a dynamic interplay between exploration and exploitation for sustained success. Consistency is achieved with creativity, empathy, and adaptability.



0:00 | Intro

02:28 | Jacqueline’s Defines Visual Design: Inclusions, Exclusions and Importance

03:54 | Nike Example: What Represents a Good Design?

05:32 | Jacqueline on Branding: Advertising’s Impact

06:54 | Professional Approach: Visual and Wood Synergy in Business

09:28 | Clients Don’t Know What They Want: Process VS magic

11:02 | Lum Spirits Story

15:51 | Color Palette: First Step for Visual Representation of Lum Brand

20:09 | Visual Design Mastery: Empathy, Psychology and Branding

21:23 | History of Rules VS No Rules

22:54 | Newtonian Economic Thinking and Bauhaus Analogies

24:42 | Steve Jobs Simplicity is a Transitional Example

26:27 | Designer Examples: Getting Outside of the Box

29:05 | Crack is Wack

32:22 | Implementation of Design

34:50 | Wrap Up: Fixed and Flexible Idea

Knowledge Capsule:

We can all think of excellent elements of great visual design:

  • They become an important part of our lives, our thinking, and our engagement with the world.
  • Jacqueline chose the Nike swoosh to illustrate.

Subjectivity in Design:

  • Design is a field where the subjectivism we advocate in value creation is uniquely valuable.
  • Every customer will respond personally and idiosyncratically to visual design stimulus. It will mean something different to different people.
  • Understanding the psychology of subjective value is a skill for designers.
  • Breaking traditional rules can generate more acute emotional responses..

There was a 20th century movement to make design obey objective rules: “good design”.

  • Bauhaus is associated with the “good design” concept, with prescriptive rules about function, simplicity and order.
  • When these rules were taught in design schools, it raised concerns about students becoming replaceable, like interchangeable parts, due to strict design boundaries.
  • New approaches like the Stanford D School approach left these rigidities behind, introducing the same empathic process for design as we use for value creation: understanding customer emotions, preferences and contexts comes first.

Steve Jobs as a Transitional Example:

  • Steve Jobs, despite being rules-oriented, broke conventions creatively.
  • Achieving simplicity in design while incorporating complexity in technology.

Examples of Breaking Design Rules:

  • David Carson’s defiance of good design ideals led to influential graphic design in Ray Gun.
  • Exploration of unconventional layouts, upside-down pages, layered typography, reflecting punk culture.

Great design can have huge social impact:

  • “Crack is Wack” : Keith Haring’s appeal from the heart about the crack cocaine epidemic..
  • The powerful impact of design in raising awareness and creating a call to action.

Empathy and Emotional Storytelling:

  • Hunter and Jacqueline discuss the recurring theme of empathy in effective design.
  • Emotional storytelling through research and understanding user experiences.
  • Jacqueline described the storytelling journey of Lum vodka seltzer from “illuminating the night” to “illuminating life” led to a major visual rebranding.

Brand Design and Implementation:

  • Discussion on the balance between fixed and flexible elements in branding.
  • The need for consistency in brand recognition while allowing for creative evolution.
  • Embracing constant change and evolution in design.
  • The balance between exploration and exploitation for sustained brand success.

Visual design parallels value creation in its leverage of creativity, rule-breaking, empathy, and constant evolution in the field of design and branding.

There’s no place for management any more. What will replace it?

The Drucker Forum has put out a call to management scholars, executives and consultants to “reframe management”.  The existing management model that dominates today’s business practice and education – Drucker Forum calls it the “inflexible machine-management model” – is at odds with today’s complex and unpredictable world. Therefore, they propose, let’s replace this model with another, “The Next Management”.

A more appropriate step would be to recognize that management as a concept is no longer needed and no longer valid. There should be no “management”, whether the old model or a new one. When business sensed the need for management as a rational approach to bring order to the new scales of mass production, mass distribution and mass marketing that the Industrial Revolution made possible, the science of complex systems had not been formalized. This science, specifically the science of complex adaptive systems or complex evolving systems is genuinely new. The business world didn’t have its insights and findings when management was invented. They had Newtonian physics; economics aspired to be like physics; and management looked to economics for initial guidance. 

We now have the opportunity to learn from the latest advances in systems science.

Business firms, industries and economies can themselves be viewed as a member of a class of complex evolving systems. Evolving systems display these three attributes.

1. They are composed of numerous diverse and interacting components that have the potential to combine in vast numbers of different configurations – a multiplicity of emergent structures. It is impossible to predict the configurations that will emerge, which will be successful, which will survive and which will die.

2. The multiplicity of new configurations is autocatalytically generated, simply from the interaction, combination and recombination of the components. More firms are born than survive, more projects and business models are created and tested than actually persist and become established.

  • The term autocatalysis introduces one of a number of related principles from systems science that are fundamental for emergence: self-organization, autopoiesis, self-creation. They all relate to the idea of evolution: that there is constant endogenous change that has its own energy and can’t be stopped or even influenced by exogenous forces.

3. In the multiplicity of new emergent configurations, as in evolution, there are winners and losers, those that survive and thrive and those that don’t. Winners are established through a process of selection. Configurations are preferentially selected based on function (sometimes referred to as fitness, as in fitness for a purpose).

Among business firms, the function that is selected is the creation of value for customers. The market is the selection mechanism, through customers’ willingness or unwillingness to pay for value.

The functional capacity for value creation is determined by functional knowledge – knowledge of what actions are advantaged in value creation. There is actually a scientific law in play: the law of increasing functional information, that the system will evolve (its functional information will increase) if many configurations of the system undergo selection for function. Firms are knowledge building systems utilizing experimentation to generate new knowledge.

Therefore, the function of “management” – which can be thought of as an arrangement to attempt to bring developmental order to a firm, making the results it achieves more predictable and controllable – is replaced by experimentation, a number of concurrent trials, tests and bets with no attempt to predict or control outcomes since no predictability is conceivable. 

There’s an equivalent in economics, which is entrepreneurship: action under absolute uncertainty. Entrepreneurship is a mindset of imagining multiple possible futures and setting in motion a selected set of experiments from which one of those futures will autocatalytically emerge through the mechanism of creating value for customers, a value that is unpredictable from the entrepreneurial perspective because there is too much swirling change in the evolving ecosystem for any prediction or estimation.

Management as a rational approach to bring order has no role to play. Decision problems are no longer well defined, and therefore not amenable to rationality. The challenge is to translate knowledge and expertise into new experiments, without predicting how they will work or what the payoffs might be. This challenge can’t be conceived as management in any form. Entrepreneurship is the method to establish new starting conditions for new value creation, and market selection will take care of future allocation of resources between winners and losers.

The Value Creators Episode #24. Amanda Goodall on The Power Of Expert Leaders

In our ongoing series investigating leadership in business – coming from the skeptical perspective of “Is there such a thing?” – we meet Amanda Goodall, a professor of leadership at Bayes Business School, City University of London, specializing in the influence of leaders and managers on performance, shares insights from her book “Credible: The Power of Expert Leaders.” 

She has a new perspective on business leadership. It’s not a general management function that can be taught in an MBA course. It can’t be learned from leadership courses. It can’t be implemented by management consulting firms. Leaders must first be experts in their field and the core business of the firm.

Amanda shares the importance of experts in providing a clearer sense of purpose and fostering a longer-term organizational perspective. The dialogue concludes with a call to establish expert-friendly environments, and emphasizes the removal of impediments to harness expertise for organizational success.


Knowledge Capsule:

Evolution of Management:

  • Amanda discusses the historical transition from individuals working their way up through the industry to the influence of Taylorism in the 1940s.
  • Taylorism introduced a hierarchical structure, separating workers from managers, marking a significant change in organizational dynamics.

Role of Business Schools – making leadership generic and generalized:

  • Highlighting the initial existence of business schools that provided specialized education tailored to specific industries.
  • Business schools transitioned towards offering more general degrees, such as MBAs, contributing to a generic approach to leadership and management.

Management Consulting Firms – promoters of generic leadership:

  • Management consulting firms became promoters of generic leadership principles, differing from business schools.
  • The irony is that these firms, despite promoting generic leadership, are led by individuals who are internal experts, having worked their way up within the organization.

Metrics Obsession and Bureaucracy:

  • Amanda emphasizes that metrics and measurements control more and more aspects of the business. Where non-experts don’t understand the core business, they use metrics for assessing performance.
  • This results in a metric-obsessed and bureaucratic approach, impairing decision-making processes.

Importance of Expert Leadership:

  • Expert leadership contributes to a clearer sense of purpose within organizations.
  • Expert leaders win the respect of those they work with, precisely because of their expertise, and create a more collaborative and collegial workplace.
  • Expert leaders are more likely to invest in research and development, contributing to a longer-term organizational perspective.

Creating Expert-Friendly Organizations:

  • Amanda emphasizes that expert-friendly organizations recognize and cater to the needs of core workers, valuing their expertise.
  • Expert-friendly organizations can remove unnecessary barriers to expert direction, such as excessive rules and bureaucracy, to create an expert-friendly work environment.

Value Geeks

What is The Geek Way? Andy McAfee has just released a book with that title, in which he writes about the organizational culture of modern business firms who have achieved extraordinary results in a short period of time. He’s taking about Netflix and amazon and Microsoft and Apple and their Silicon Valley neighbors. These are all tech firms, but McAfee is not focused on the technology behind their products and services, but on the culture and mental models of their organizational setup and their managerial practices.

He calls their approach to organization and business “The Geek Way” as a device to separate their thinking from that of the typical business school where it is believed that study and analysis by wise observers can deliver some general propositions about how to run a successful business. Geeks believe the opposite: that there are no generalizable propositions and that learning does not come from others but from within oneself and within the firm. It’s cultural.

Geeks focus on a narrowly defined subject matter, and then dig into it deeply with insatiable curiosity and love of experimentation. They’re not pre-committed to any outcome of their experiments and they certainly don’t concern themselves with conventional wisdom or majority opinion. They go wherever their inquiries take them

McAfee’s book is about management geeks. Discarding conventional business school teaching about how to manage firms, the geeks the author studies think from first principles about how to manage the new firms that have emerged in the digital era and which don’t seem to conform to industrial age thinking about command-and-control management structures, hierarchical organization and business planning. The new age companies flow. They’re not managed.

McAfee proposes that there are 4 guiding principles for management geeks: speed, ownership, science and openness. Speed refers to speed of iteration – the capacity to run lots of experiments that can be quickly mounted, analyzed, interpreted and used as design feedback for the next version, next step, or next move. Ownership refers to the removal of bureaucratic barriers to rapid decision making – distributing both authority and accountability so that the right individual can make – and own – a decision without running it up too many flagpoles or organizational hierarchies. Science refers to the determination of good and bad ideas through the scientific method of falsification. A good example is an A-B test: rather than making a decision about red versus blue as a color choice, run an A-B test with customers and let the response data point to the better choice. It’s better than HiPPO – the highest paid person’s opinion. Openness refers to bringing all opinions and arguments for and against any proposition to the table without any deference to hierarchy or supposed expertise. Argumentation rather than consensus is the method to get to agreement on how to proceed. Once the argument is resolved everyone moves on in unison.

The problem with the Geek Way that McAfee describes is its introversion. Geeks tend to be introverted, unconcerned with the opinions and preferences of others and entirely concerned with their own projects, their own firms, and their own technology platforms. But that won’t do for business success. 

The purpose of business is to create value for customers. Those who work at building and growing a healthy business need to be Value Geeks not management geeks. To do so requires an extroverted approach – always looking outwards to the customer and the market, listening to customers’ hopes and concerns, translating the signals that the market sends, and turning them into ideas and projects for new and better ways to provide value in response.

The algorithm for Value Geeks is different than the one for management geeks. The four guiding principles are:

Empathy – the number one mindset and most important skillset for value geeks is empathy, the ability to identify the customer’s mental model of a desired state compared to their current state, and to be able to think like they think when ideas and propositions are run through that mental model. Value geeks can’t feel what customer’s feel – that’s a false claim for empathy – but they can simulate how they think and the implied consequences for choices they will make in the future.

Creativity – via empathy, value geeks understand customer dissatisfactions, what customers are uneasy about in their current circumstances, what they think could be better in the future or under different circumstances. But customers can’t invent new solutions; they’re not the innovators. How do innovative businesses create new value and new solutions? It requires creativity, that magic, unpredictable leap of imagination to a place that no one’s gone before. Value geeks prize creativity above all, because it holds the promise of novelty and surprise, the keys to new value. Will every creative idea be a winner? Of course not, so value geeks test and probe and experiment to add more substance and certainty until one of them is ready for market. But it’s creativity that is the essential ingredient to get the value process started.

Value Propositions –  the form of the experiment to test for market acceptance is the value proposition, a promise to the customer that a product or service or experience proposed in a business offering will deliver a benefit that the customer will value. A value proposition incorporates the idea that the business listened to and understood the customer’s needs, creatively translated the customer’s signal into an innovation, and is humbly offering it for customer evaluation. A value proposition is an exquisite act of design and a persuasive act of communication, a promise that entices and a promise that is kept. Value propositions are creative art and delivery science, offered with the humility of hoping to get it right while ever-willing to improve.

Learning – value is a process, a learning process. For the customer, it’s the process of identifying, selecting, purchasing, using, experiencing and evaluating. The customer can’t know exactly what the experience will be in advance. They learn, and they evaluate by comparing actual with expected value. Similarly, the business making the value proposition is learning, too. They learned enough about needs to make a responsive design, and they subsequently learn from the customer’s evaluation of their experience how accurate the design turned out to be, and how to improve it if it’s off-target in any way. Learning is accomplished through open recursive feedback loops from the customer to the business. Value geeks welcome feedback and seek it out at every point in the process because they love to learn. Learning is fuel for value.

Empathy, creativity, value propositions, learning. These are the 4 guiding principles for that make up the value geek way. 

The Value Creators Podcast Episode #23. Moshik Temkin on Leadership By Warriors, Rebels, and Saints – Leadership Wisdom from the Pages of History

Moshik Temkin is a historian who offers an alternative perspective on leadership. He asks, do leaders make history or does history make leaders? Those two forces can’t be separated. While leaders contribute to shaping history, they are also molded by powerful historical forces. This nuanced perspective is evident in analyses of historical figures like FDR, Margaret Thatcher, Martin Luther King Jr., and Malcolm X, emphasizing the role of circumstances in leadership’s response to complex historical challenges, ultimately leading to significant changes in their respective nations. The conversation explores moral leadership in the civil rights movement, comparing the approaches of Martin Luther King Jr. and Malcolm X. Despite their distinct styles, both leaders shared a commitment to collective progress and justice, challenging the prevailing emphasis on individual success. Temkin addresses the ethical dilemmas leaders encounter during crises, prompting reflection on the justifiability of extreme measures for the sake of victory.

How does this discussion contribute to the question of leadership in business? Leadership is subjective. We look to those who we feel can guide us, whether in politics or business. There are principles that cross both fields.


Knowledge Capsule:

Leadership Perspectives:

  • Moshik Temkin explores the complex relationship between leaders and historical context, emphasizing that leaders both make history and are influenced by historical forces.
  • Rejecting a simplistic view of leadership, Temkin suggests that circumstances and historical momentum often shape the significance of individual leaders.

Individual Leaders in Historical Events:

  • Examining historical figures like FDR, Margaret Thatcher, Martin Luther King Jr., and Malcolm X, Temkin highlights how leaders interact with historical events and crises.
  • While acknowledging the impact of individuals, he emphasizes the role of historical circumstances in determining the success or failure of leadership.

Moral Leadership and Collective Progress:

  • Delving into the civil rights movement, Temkin discusses the contrasting leadership styles of Martin Luther King Jr. and Malcolm X.
  • Both leaders, despite their differences, shared a commitment to collective progress and justice, emphasizing the importance of leaders focusing on the well-being of the entire community rather than individual success.

Transformative Leadership:

  • Temkin underscores the concept of “transformational leadership” by citing examples such as FDR and Margaret Thatcher, leaders who brought significant changes to their respective nations during critical periods.
  • These leaders exhibited the ability to transform existing structures and navigate through complex historical challenges.

Leadership and Decision-Making in Crises:

  • Temkin explores the difficult decisions leaders face in times of crisis, referencing instances like the decision to drop atomic bombs on Japan during World War II.
  • The conversation touches on the ethical dilemmas leaders encounter, questioning the justifiability of extreme measures in the pursuit of victory in war.

Leadership’s Collective Impact:

  • Acknowledging that leaders play a role in shaping history, Temkin emphasizes the collective impact of historical forces and societal structures on the emergence and effectiveness of leadership.
  • The conversation prompts reflection on how understanding historical context is crucial for comprehending the complexities of leadership.