Playing To Win
Innovation-Driven Change
The Importance of Reverse-Engineering the Status Quo
Last week, I gave a speech at a design school conference and enjoyed numerous conversations as I hung around for the rest of the day. The conversations reminded me of the importance of reverse-engineering the status quo. I decided to reflect on that in this Playing to Win/Practitioner Insights (PTW/PI) piece called Innovation-Driven Change: The Importance of Reverse-Engineering the Status Quo. And as always, you can find all the previous PTW/PI here.
The Conference
The conference, Signals 2025, took place at the Institute of Design (ID) at the Illinois Institute of Technology (IIT). It was a student-run conference, which reminded me of how much I loved when students took the lead at the Rotman School when I was dean. These students, like mine at Rotman, worked their butts off to deliver a great conference.
One purpose of the conference was to showcase the latest, greatest thinking in design, featuring lots of terrific ID alumni. The other was to honor Patrick Whitney, dean of the school for 28 years from 1989 to 2016 — and a longtime friend and collaborator of mine. I worked with Patrick and David Kelley to create DesignWorks for Claudia Kotchka at P&G in 2005 and thereafter brought it to the Rotman School. Under Patrick’s leadership, ID advanced from being just another design school to an intellectual force in design education and research, including creating the first PhD program in design in the US.
The closing ceremony of the conference was the public announcement of the creation of an endowed chair in Patrick Whitney’s name. It was made by Jamshyd Godrej, Chair of the family company that is one of India’s great business conglomerates and which provided the endowment funding. What a lovely idea — to create an endowed chair in the name of a long-serving dean who turned around the fortunes of a school!
I was asked to give the keynote address to open the conference and stayed for the day, which got me into lots of conversations at breaks, lunch, and receptions. And the same old issue that has been coming up in design for decades featured prominently in the conversations, and that is the challenge of getting the principles of design accepted in the analytical world of modern business. There was a high level of frustration from students, alumni and design academics alike. How could they cause innovative, design-driven ideas to be given a chance?
Reverse-Engineering the Status Quo
The many conversations during the day got me thinking about the importance of reverse-engineering the status quo. In the Strategic Choice Structuring Process that I use to create strategy with leadership teams, reverse-engineering of possibilities is a key step. After defining the strategic problem to be solved and imagining a set of strategy choice possibilities to resolve the problem, I help the team to reverse-engineer each problem by asking the question what would have to be true (WWHTBT) for each possibility to be a great choice?
I call WWHTBT the most important question in strategy because it helps a leadership team agree on the logic of each possibility. It is a better question than What is True? That question co-mingles logic and data and, by failing to distinguish between the two, tends to produce unhelpful disagreements and entrenched positions. Those disagreeing don’t know whether they disagree on the logic itself or on the data which they choose to apply to their logic. The WWHTBT question separates out the logic and provides a way for the leadership team identify and agree on which of those things that must be true feel least likely to be true. Those are the barriers to choice (BTC), which are the factors that would keep a leadership team from committing to that possibility.
Specifying the BTC enables the leadership team to focus its research, modeling and analytical work precisely on either overcoming the BTC and therefore confirming and committing to the possibility or confirming that the BTC can’t be overcome and rejecting the possibility.
Importantly, in addition to reverse-engineering the strategic possibilities, I insist that the leadership team reverse-engineer the status quo. It actually involves reverse-engineering twice. The first is to reverse-engineer what the status quo actually is — because it is usually implicit or the stated strategy has nothing to do with the strategy it is currently enacting. That means identifying what is its current Winning Aspiration (WA), Where-to-Play (WTP), How-to-Win (HTW), Must-have Capabilities (MHC), and Enabling Management Systems (EMS). Often the WA has nothing to do with winning and the HTW is, in fact, a how-to-participate. But it is important to identify the real starting point for strategy — rather than some fake, made-up one.
The second reverse-engineering is the WWHTBT exercise — i.e. WWHTBT for the status quo to be a great strategy going forward. And finally, I have them identify the BTC — i.e. which of the things that would have to be true are we least confident will continue to be and/or become true as we go forward.
The value of reverse-engineering the status quo is that it puts the status quo and the alternative possibilities on the same footing. Let’s say you come up with four interesting possibilities. That would mean that including the status quo, you have five choice cascades, five WWHTBT diagrams, and five sets of BTC.
What you will find is that all five have meaningful BTC — and therefore risks associated with them that can’t be mitigated entirely because you can never eliminate all future risks. If a team does not reverse-engineer it, the status quo will implicitly feel riskless. What we are doing today is working in a way we understand. Even if it isn’t working great, we implicitly think that it will continue to work the way it is currently working.
In contrast, it feels that adopting any one of the other four will be risky, unlike sticking with the status quo. Heck, we are doing it now and we aren’t dead, so it isn’t risky. Changing to a new strategy: that is what is really risky!
Obviously, that notion is silly on its face. But in my experience, if you don’t reverse-engineer the status quo, it will feel that way and there will be a genuine reluctance to choose one of the alternative possibilities. Hence, I won’t do strategy without reverse-engineering the status quo.
As I often point out, in multiple strategy assignments that I have led, the leadership team rejects the status quo out of hand after it is reverse engineered because the WWHTBT is preposterous. But that is only evident to them after they do the reverse engineering.
Application to Design
A similar logic applies to innovative designs. Any innovative design will always be risky. It is just like a strategy possibility. Always reverse-engineer it. Always ask WWHTBT about the industry, customers, our capabilities, our costs, and competitors for this innovative design to succeed. Determine which are the biggest bets — the BTC — that you are making with your innovative design.
But then reverse-engineer the status quo. WWHTBT in the future with respect to our current trajectory — without the innovative design? What are the BTC — the things that must be true for our current strategy to continue to (or maybe start to) succeed that appear least likely to be true?
That will put the innovative design and the status quo on equal footing and not put the latter in the privileged position it is usually afforded. The innovative design is guaranteed to be risky. It wouldn’t be innovative if it wasn’t. But the status quo is also guaranteed to be risky. In the modern world of business, the former risks are put under a microscope and the latter are typically simply ignored. Because the risks of the innovative design are put under the microscope, the design tends to be whittled away at until it is less innovative (or rejected if it isn’t dumbed down). As a result, slight modifications of the status quo are the order of the day.
Senior executives shake their heads and complain that they don’t get enough awesome innovative design ideas — just dangerously risky ones. They just don’t understand that they crucified the awesome innovative ideas and turned them into tiny advances — if that.
That is the number one reason why the conference goers were so disappointed in the adoption of innovative design ideas.
Practitioner Insights
The status quo holds a steely grip on life on the planet — for individuals and for organizations. It is because of the love of humans for familiarity and comfort, as I discuss in this Harvard Business Review article. In human behavior, the devil you know has a fundamental advantage over the one you don’t.
People will automatically assume the status quo is less risky than it really is — usually implicitly. Unless there is a truly burning platform, they will be comforted by the familiarity of the status quo. To make the leap from the status quo, it is crucial to surface the bets about the future that the status quo is implicitly making.
Don’t try to show that your innovative idea is riskless or even understate its riskiness. That is a losing battle. It isn’t riskless — and any level of risk in your innovative idea will be perceived as riskier than the ‘riskless’ status quo.
The key is to subject the status quo to the same assessment as the innovative idea — by reverse-engineering both in exactly the same way. Lay out the WWHTBT and the BTC for both to help the decisionmakers see the risks on equal footing. Work to demonstrate — if indeed true — that the bet for innovation doesn’t have longer odds than the status quo.
This is a case of the old adage: you don’t have to outrun the bear; just the other guy. You don’t have to be riskless, just less risky than the status quo.
******
As a reminder, I am doing a PTW/PI podcast series with friend Tiffani Bova. The eighth in the series will be here on LinkedIn on Wednesday, June 18th at 12 noon EST and 9am PST. I look forward to seeing you there.
