5 Tips to Break Out of Incremental Thinking

One of the common problems we see in our work with executive coaching and consulting clients is companies, teams, and individual leaders defaulting to a mindset of incremental thinking instead of training the eye towards step-wise or exponential growth. 

A focus on incremental growth is rooted in very rational thinking; publicly traded companies can’t take huge risks and as a result focus on strategies that lead to ongoing, incremental growth. To deliver on these incremental growth targets, companies spend the lion’s share of their time squeezing more out of the proverbial lemon as opposed to aligning resources behind game-changing opportunities. 

Some companies, such as a Fortune 500 client I worked with recently, have “moonshot” projects, which are great, but the trap is that these efforts can often be organized as standalone initiatives without significant resources, making it a challenge to succeed in integrating them into an overall growth strategy. 

For smaller companies, a focus on incremental thinking is more closely centered around risk aversion and the realities of monthly cash flow. Further, small companies often lack the time and resources needed to explore and experiment with new growth opportunities.  

In our experience, incremental thinking leads to two primary problems, which pose risk to organizations, both large and small:

  • The biggest problem we have seen with a strategy based on incremental growth is that it also breeds a culture focused on incremental thinking; products that are incrementally better than their predecessors, prices that are incrementally higher (or “improved” as my Berkeley-Haas business school professor noted), processes that are marginally improved, or talent that is incrementally superior to their counterparts. What if while your team is thinking about hitting singles or doubles, your competition is working on how to hit home runs?
  • The other problem with incrementalism is that it leaves the door wide open for companies to come in and disrupt your market through the introduction of a new technology or business models. Focusing on small, annual improvements to your core product(s) or services works well to grow revenues in an established, stagnant marketplace. But what happens when disruption strikes your industry? Long stagnant industries such as taxis and rental cars, hospitality, and automotive have been disrupted in the last 5-10 years by the likes of Uber, Lyft, Local Motors, Airbnb, and many more. Disruption could be right around the corner, so it’s a smart business strategy to try to break the chain of incremental thinking in your organization, even if it is bit by bit.

So how do you head off incremental thinking? Below I have included a few simple practices that you can use right away to break these bad habits.  

  1. Ask “Why….” And “What If…” Questions: Asking questions is a great way to drive breakthrough thinking that can lead to accelerated growth. In particular, pairing a “Why….” with a “What if…” question can help lead to more expansive thinking that isn’t bound by visceral concerns around budgets, resources, and risk. For example, what if you asked “Why do electric cars lack sleek styling and performance in line with top sports cars?” and “What if we could build an electric car which looked and performed like a Ferrari?” These questions challenge the previous assumption that electric cars had to be simple, utilitarian looking vehicles, which lacked the performance of high-end sports cars.
  2. Imagine an Extra “0” on Your Goal: One of the most effective ways to escape incremental thinking is to imagine adding an extra “0” to the end of your financial goals. So many leaders become mired in achieving low growth rates over time that the ideas to achieve those incremental growth targets become stale and lack the boldness that helped them get their business off the ground in the first place. Ask yourself, “How can I go from $1,000,000 to $10,000,000 or $10,000,000 to $100,000,000?” Imagining that extra zero forces you to think big.  
  3. Shorten the Timeline: As legendary entrepreneur and investor Peter Thiel says… “If you have a 10-year plan of how to get [somewhere], you should ask: Why can't you do this in 6 months?" Silence that voice inside that is telling you what is and what is not realistic and go through the exercise of radically re-imagining your approach and timeline. What assumptions have you made that should be reconsidered to succeed on a shortened timeline? What tasks, processes, and actions need to be blown up and built anew? 
  4. Find an Ideation Partner: Many organizations, especially those that are driven by engineering and technical functions, can suffer from a lack of ideation beyond cutting-edge technical advances. Likewise, marketing and sales driven organizations may suffer from a lack of new technical innovation that could be applied to opportunities and challenges they see in the marketplace. To help infuse a jolt of ideation to your team, look to connect with an ideation partner who sits outside of your current team. This could include inviting a member of another team or function in your organization to a brainstorming session your team is holding. It could also include engaging someone outside of your company who is strong at ideation. So gather those dreamers, big thinkers, and outsiders that will help you re-examine sacred truths. 
  5. Eliminate Limiting Beliefs: One of the biggest barriers to growth, both for individuals as well as companies, is limiting beliefs. For individuals, they are statements that sound like “Why I can’t…”, “We’ll never be able to…”, “The problem is…”. Companies are no different. I have heard executives say things such as, “Our industry isn’t like Silicon Valley, where startups are growing exponentially.” While that may be true, true visionaries find a way to think differently about their industry or what their company provides to the market. Rather than accept these as truths, ask yourself questions such as “What if that assumption weren’t true?” or “What trends or ideas could we adapt from those start-ups that are growing exponentially?” Eliminating those pre-conceived notions of what your company is or could be will help you and your team think more expansively and create awareness to options you wouldn’t have discovered otherwise.

Breaking out of incremental thinking is challenging and requires intentional effort and ongoing commitment to a set of ideation activities as well as a talent management strategy aimed at bringing in people with diverse viewpoints and experiences. What strategies do you use to break out of incremental thinking?