Michael Lissack
This pattern repeats across business history:
• Kodak engineers invented digital photography but interpreted it as a niche technology that wouldn't replace film—leading to minimal investment • Apple interpreted the smartphone as a revolutionary computing platform rather than just a phone—leading to the development of the iPhone • Netflix initially interpreted streaming as a complementary ser- vice to DVD rentals—but later reinterpreted it as the core busi- ness, leading to a complete strategic pivot The critical insight is that actions don't follow directly from reality but from our interpretations of reality—interpretations shaped by our mental models. This explains why smart, capable organizations can miss obvious opportunities or persist with failing strategies. It's not because they lack information, but because their mental models lead them to interpret that information in particular ways. For leaders, this raises important questions: • What interpretations am I making about my business environment? • What alternative interpretations might be possible? • How might these different interpretations lead to different actions? • Whose interpretations am I listening to, and whose am I dismissing? By recognizing that actions depend on interpretations, leaders can deliberately cultivate multiple interpretations of the same situation, ex- panding their range of possible responses.
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