TED Talk Review: Exploring vs Exploiting by Knut Haanaes

Thu Sep 9 2016 Michael McQueen

In early 2015 I was approached by a number of Rotary International’s key leaders to form part of a strategic planning committee tasked with mapping out Rotary’s future. As an organization that is well over a century old, Rotary’s 1.2 million members have had a phenomenal impact on the globe (including the near-eradication of Polio). However, the organization has languished in recent years as it has struggled to clearly define what a 21st century service movement should look like.

As part of a recent gathering of this strategic planning committee, we reviewed a simple but brilliant TED talk by business strategist Knut Hannes.

What struck me most about Haanaes’s message was the simple way he described some of the common dynamics that can cause an organization to fail. In short, he said that every leader and organization committed to maintaining growth and vitality must strike a balance between two things:

  • Exploiting
  • Exploring

According to Haanaes, ‘exploiting’ describes the process of taking what an organization already does and refining it – making it better, faster, cheaper. Further still, it is about enjoying long-term recurring benefits from models and approaches that the organization has worked hard to perfect – milking what already exists for all it’s worth.

‘Exploration’ on the other hand is defined as the more traditional forms of innovation – seeking out the new, the fresh, the unchartered and the untested. Haanaes likens an explorers mindset to that of a fascination-driven child. Children approach the world with wide-eyed wonder and boundless imagination. In contrast, it is not uncommon for adults to lose this bent toward exploration as they grow older, have more knowledge to exploit, and become more competent.

Despite the benefits that exploring and exploiting can offer, each has a dark side. Exploit for too long and you become dated and fall behind. However, over emphasising exploration can lead to a fixation on changing for the sake of changing or even getting stuck in navel-gazing mode and failing to implement and execute.

Examining a number of case studies including Nespresso, Toyota and Netflix, Haannaes makes the point that while both exploiting and exploring are powerful, pursuing one at the expense of the other is profoundly dangerous. Despite this, he argues that only 2% of companies are currently managing to strike the balance.

In order to help achieve this balance of exploration and exploitation, Haanaes recommends that leaders:

a. Actively look to engage people who will challenge the status quo and can bring a child-like bent towards growth and innovation.

b. Be ‘wary of success’. Quoting Bill Gates, Haanaes suggests that leaders and businesses would do well to remember that success is a lousy teacher as it seduces us into thinking we cannot fail.

c. Think in multiple time scales. By keeping one eye on the short-term and another on the long-term, we’re more likely to equally value exploiting in the here-and-now while simultaneously exploring what new horizons could look like.

I believe the insights in this TED Talk would be valuable for any leader or organization. They powerfully shaped our discussions regarding Rotary’s future and I suspect you’ll find them equally valuable regardless of your position or context.

So where do you spend most of your time – exploiting or exploring? Is it time to shift the balance in one direction or the other?