Welcome To The Best Next Thing

Welcome to The Best Next Thing, a blog and information resource for entrepreneurially-minded Kellogg students, dedicated followers of fashion and lovers of truth worldwide. The first one anyway. We (David Schonthal and Carter Cast) developed BNT to delve deeper into topics of interest, to post entrepreneurial musings and observations and to share resources we think will be useful as you pursue your new venture ideas.

In the next handful of weeks, we’ll discuss further the “10 Themes of New Venture Discovery” sheet we distributed during the first class and why we think it’s a good framework to refer to as you develop your ideas. We’ll also log odd blogs when the spirit moves us…

–  Carter + David

Leaders Need To Have More Straight Talk And Less ‘Strengths’ Talk

This piece was originally authored by Carter for Chief Executive.

For more than a decade, corporate hallways have echoed with the encouraging words of the strengths movement—enhancing employee strengths as a primary form of managerial and leadership development. Leaders have worked to incorporate the findings into their organizations and to create strong employee engagement. But now, another problem has surfaced. With all the focus on what people do well, managers are failing to give critical feedback, and the results are troubling.

One study shows as many as 67 percent of talented people will derail in their career at a cost of up to 20 times that of that employee’s salary. It’s an epidemic of underperformance.

I know firsthand how debilitating the problem is because I experienced my own career derailment event. Over 25 years ago, I was a young, promising executive at PepsiCo, certain I was on the fast track when my boss called me in and told me I was “unpromotable.” Why? Because I was “obstinate,” “resistant” and “insubordinate.”

In retrospect, that critical feedback was the best gift I ever received because it caused me not only to be more self-reflective about my own behavior, but to find out why talented people derail. What goes wrong? To that end, I’ve dug through the extensive research about career derailment, interviewed scores of HR leaders, senior managers and C-Suite executives and surveyed 100 people, who—in what should have been the prime of their career—had been fired, demoted or whose careers had plateaued. From managers and leaders to executive coaches, recruiters, CEOs and C-Suite executives, I listened to them talk about why and how good careers went bad.


The source of the problem
I discovered that two top culprits are an inability to work well with others and a lack of self-awareness about personal areas of vulnerability. The big question for leaders: Why aren’t we giving the kind of feedback to make people more aware of these shortfalls? I believe that often the strengths movement has been taken too far and used to the exclusion of other methods.

Leaders must look closely at 3 areas of their company to enact change.

1. Create a culture of frankness. If the culture of an organization is modeled around open and honest communication and clear developmental feedback, it flows down through the entire organization. It starts with the values and behaviors that are espoused by the firm’s leaders. What are the top 3 to 5 values stressed by senior leadership? Are you behaving in ways that are consistent with them? For example, when I worked at Walmart, “attention to detail” was stressed, for “retail is detail.” So I needed to ask myself questions like, “Am I really up-to-speed on the status of a particular initiative? Am I well-versed on the performance of a particular product line?

2. Give frequent, candid feedback. Having candid feedback sessions with employees once a year during the performance review cycle is standard practice, and woefully insufficient. Companies need to stress to managers the importance of giving immediate developmental feedback to their team members. Managers also should have weekly or bi-weekly one-on-ones with their subordinates, where they discuss performance against objectives and give clear developmental feedback, both positive and negative. Keep the process simple and brief, as most people can only recall and act on one thing at a time.

3. Embrace more weakness-oriented development tools. Effective personnel development assessments exist which include potential derailment areas that firms can use to initiate or further this conversation. The Hogan Development Survey and Korn Ferry / Lominger Leadership Assessment Instruments are both good, robust tools.

Organizations pursuing a developmental strategy focusing on strengths alone will not lead to the career ascension of their employees. Soon or later, unaddressed needs will limit the career progress of good people—hurting both employees and the organization.

It’s time to bring straight talk and candid discussions back into the company. Not just on performance review day, but every day.

Allbirds, How To Take A Leap Of Faith To Success

This is a piece authored by our Kellogg colleague Paul Earle for Forbes.  Allbirds was started in Carter’s New Venture Discovery class at Kellogg.  Both Carter and I thought the idea was a little nutty when Tim Brown first pitched it in class (He wanted to solve the problem of smelly athletic shoes).  Just goes to show you that with passion, drive and solid execution, wild ideas can turn into amazing businesses!  Enjoy!

Tim Brown had a crazy idea.

The former professional soccer star was troubled by what he felt was a lack of sustainable practices in footwear materials and manufacturing, not to mention the over-the-top nature of the branding landscape itself. And he wanted to change all that.

But footwear is a notoriously difficult space. And his product concept—a hybrid runner made almost entirely out of wool—was so novel that it lacked any useful frame of reference. So when Brown pitched the idea as an exchange student in the New Venture Discovery class at Northwestern University’s Kellogg School of Management, clinical professor and venture capitalist Carter Cast had… well… a few concerns.

Ultimately, as recounted to me by Brown and Cast themselves recently, Cast believed in Brown as a principled business leader, and encouraged him to follow his passion. Which Brown did, forgoing other opportunities (such as competing on the Olympic soccer team for his native New Zealand).

This embryonic idea became Allbirds, which struck a nerve in popular culture almost instantly after its launch in 2014, and today is one of the hottest lifestyle brands in the United States. It was named by Time as the “world’s most comfortable shoe.” But were it not for a leap of faith, Allbirds might not have even survived as an academic project.

Faith. It is belief without proof, and irrational by definition. And even in this age of “big data” increasingly telling us what to do, faith is required for progress.

Faith is provocative as a business principle because the term is so closely associated with a different domain: religion.

Theologian John Buchanan, summoning Kirkegaard and others, argues that all your reason, all your logic, can only take you so far. At some point, to achieve anything meaningful, you have to walk through a door without knowing what is on the other side. This is the origin of the concept known as the “leap of faith.”

If you’re wearing Allbirds as you read this, it is thanks to the fact that a very small group of people actually took that leap, initially.

Faith in any context must have at least some grounding, of course. In the case of Brown and co-founder Joey Zwillinger, their faith in their idea emanated from a belief that if they made “better things, in a better way,” success would follow (note that this has nothing to do with shoes themselves; it is a higher-order ideal).  Like most great new consumer brands today, as I’ve chronicled in this space and elsewhere, Allbirds is intensely purpose-driven.

I visited Brown and the Allbirds team at their headquarters in San Francisco last month. Here are other observations about what is making them so successful.

  • Radical consumer focus. The company operates a retail store on the ground level of its main office, and all employees, from Brown and Zwillinger to junior staffers, regularly cycle through there as clerks and salespeople. Brown said that this direct daily immersion helps them deeply understand their fans, and allows them constantly experiment with new ideas. What might be some ways established companies can follow suit?
  • Team first. The human energy at Allbirds is palpable, and it’s driven by a true egalitarian sense of mission and team. It starts at the top; Brown—a former leader in a team sport—gets it. Everyone, for example, takes turns as the receptionist in the lobby. When I arrived, randomly on the desk was Allbirds’ VP/Marketing Julie Channing, one of their top executives. (She seemed a bit distracted by something big going on in her “other” job at the company, but she nevertheless carried out her receptionist duties admirably.)

[Note: The night before publishing this, I serendipitously had dinner with a Kiwi who told me that in New Zealand, the custom of “mateship” is particularly strong. It is “friendship” times ten, and apt here.]

  • Less is more. In nearly every vertical, simple has never been more compelling and relevant than it is today. In Allbirds’ case, they do simple well (which is difficult to do, as Steve Jobs famously said). The product design is minimalist, all the way to the logo appearing as a discrete small tag on the back of the shoe, not the side. Simple also applies to the sourcing guidelines for their materials, and nearly every other element of the Allbirds brand and operations.
  • Have some fun. I’ve always believed that the brands (and teams behind them) that are having fun will perform the best: it is attractive. There is a twinkle in the eye throughout the entirety of the Allbirds experience, from the animated sheep embedded in the confirmation email following an order, to the name itself (a reference to the fact that Brown’s New Zealand homeland is inhabited by an abundance of birds; “all” may be a bit over-the-top, but you get the idea).

As I connected with Cast and Brown, I uncovered a startling postscript to their Kellogg experience together. Cast eventually became sufficiently enthusiastic about the Allbirds opportunity that he personally invested in it. His investment thesis: “I believed in Tim Brown.”

Wait a minute, I pressed. What was initially an idea that elicited a healthy dose of skepticism ended up with you reaching for your checkbook? Cast’s second response was the same as his first: “I believed in Tim Brown.” He took The Leap, capital T and L intended. And so did Brown.

(Oh, and for the class: Brown got an “A.”)

4 Keys To Becoming Your Company’s Next CEO

Below is an article published in Forbes on Carter’s new Book (by Ashley Stahl).  Enjoy!

It was a brisk LA morning as I hopped on the phone with Carter Cast, former Walmart.com CEO, to discuss his new book that’s coming out, The Right (And Wrong) Stuff: How Brilliant Careers Are Made And Unmade.

The theme of our conversation was failure, and the questions that surround it:

What causes failure?

Why does it happen?

…And how do we bounce back from it?

It can be hard to remember that failing doesn’t mean that you’re a failure. In fact, success lives around the corner from failure! And most entrepreneurs know this all too well.

Overall, our conversation was full of gems, and served as a big reminder: you are not your circumstances.

Here are four keys to move from employee to CEO, thanks to Carter Cast:

1. Understand your dark side.

In a world that’s plagued with messages about “staying positive,” we’re almost encouraged to ignore the darkness that’s inevitably ingrained in our personalities.

After all, no one is all sunshine.

Cast warns that one of the biggest vulnerabilities potential leaders face is the failure to seek out areas within themselves where they must grow in order to efficiently adapt to people and situations.

The CEO Genome, a 10-year study that discovered essential behaviors shared by top CEOs, revealed that people who excel at adapting to rapid change are 6.7 times more likely to succeed.

We all have behaviors that pop up when the going gets tough—you may tend to rebel, lash out, freeze, or even bail on responsibilities.

And these destructive tendencies have the potential to seriously damage a career when they go unseen.

Cast didn’t realize he had an anti-authority gene himself until he was 34-years-old. At the time, he struggled with a particularly heavy-handed boss. His own urge to rebel got him kicked off his team, which temporarily derailed his career. Needless to say, Cast had to come to terms with his own personality quirk so he could avoid future failures.

2. Know your motives.

Far too often, we’re so focused on “finding our passion” or “figuring out who we are” that we fail to connect to what motivates us–a key factor to unlocking your best career path.

Cast listed five indicators for motives: the desire for autonomy, achievement, purpose, relational closeness and power; and, he explained that people derail in the wrong work context.

You could be driven by purpose, but if you can’t connect with the mission of your company, that purpose is lost. Or maybe you strive to achieve. If you’re stuck at a job with no room for growth, you’ll never reach that feeling of accomplishment.

Cast himself is driven by autonomy, so this affirmed that being the CEO of a multi-million-dollar company didn’t make sense for him. Once he determined his own key motive, he pursued his passion for writing and teaching.

What motivates you?

3. Find what gives you energy.

Cast suggests paying attention to where you get energy from every day. Take note of the emails you open first in the morning, or what activities you naturally gravitate towards when you have free time. And start journaling your discoveries so that you can refer back to them as a guide for where you get your joy.

Cast recommends color coding the journal– happy tasks throughout the day are green, and neutral or indifferent ones are yellow. And of course, the moments that suck the soul out of you are CODE RED.

After a few weeks of this, flip through your journal. Notice the color patterns. Themes will pop up, and they’re not only work-based themes—they’re your life motifs.

Eventually, you’ll begin to recognize trends that help you determine what fuels you the most. As a result, you’ll have the tools you need to land a job where day-to-day tasks sport minimal “code red” moments.

4. Know how to get present.

I asked Carter Cast what big factor defines a good leader and he emphasized the “be here now” attitude.

Show your attentiveness through good eye contact and listening skills. Adopt a mindful presence, which allows you to truly BE with the people around you.

I’ve heard this same piece of wisdom in interview with other CEOs, so presence must be deeply underrated.

You should seek to understand those around you before being understood.

Successful leaders master this level of listening and authenticity.

Bring your full attention to the table and people will notice. They’ll naturally translate your active presence into the ability to lead.

As I wrapped up my conversation with Cast, his final words sat with me all day: good leaders tap into the dormant aspiration in others and present it as their own mission.

What a powerful gift.


Ashley Stahl coaches job seekers to find their purpose and land more job offers. She also runs CAKE Publishing, a ghostwriting house that helps influencers create content.

How to Recognize Your Blind Spots Before They Derail Your Career


Drivers know to watch for their blind spot when they’re on the road, but there are other blind spots in your life you need to look for–things that can trip you up if you’re not careful. From skill gaps to behavioral issues, areas of personal vulnerability can stop you from reaching your potential, and it’s important to identify and correct them, says Carter Cast, professor of business management for the Kellogg School of Management at Northwestern University and partner with Pritzker Group Venture Capital.

“People who have an inflated sense of skill level are six times more likely to derail in their career than people who have an accurate self-assessment,” says Cast.

Blind spots happen because most of us have a hard time being objective about ourselves, says Cast. “It’s generally painful to recognize a weakness or accept that you’ll never be strong in a particular area,” he says. “What we can do is try to reach minimal level of performance in the area so it doesn’t impede our ability and hurt us.”

Five common areas for blind spots are detailed in Cast’s new book, The Right—and Wrong—Stuff: How Brilliant Careers Are Made and Unmade:

  1. A me-first attitude that leads to poor listening skills
  2. Micromanaging others, hindering your ability to build and lead a team
  3. Being too comfortable with routines and resisting change
  4. Having narrow perspectives on business that undermine your ability to be strategic
  5. Not following through on promises due to poor organization or task management skills

“Chances are high that you have an issue in one of those areas,” says Cast. “It’s nothing to be ashamed of—we all have blind spots. If you can understand them, you can manage around them.


Early in his career, Cast had a blind spot that nearly derailed him. “I was under a heavy-handed boss who was a micromanager,” he says. “Instead of understanding how he liked to work, I removed myself and tried to create more freedom and distance by not keeping him in the loop. It got to the point where the boss said I was uncommunicative and difficult, and I was kicked off his team.”

If you don’t have a boss who points out your blind spot, you’ll have to be proactive. First, get in the habit of formally or informally asking for feedback, says Cast. “For example, ‘How did I do in the presentation I just gave? What is one thing I could have done better?’” he suggests. “You can give a person the right to be direct by pointing out an area you think you need to improve, such as, ‘I thought that my introduction was too long.’”

Next, try hard to observe other people’s reactions to you. “If you are in a presentation or meeting, are they sitting with their arms crossed?” says Cast. “Are they staring two inches above your eyes? Fidgeting? If so, move faster.”

Finally, seek counsel with a coach. “When I was younger, I never relished the idea of getting a coach,” says Cast. “I was dead wrong. Hiring a formal career coach is smart and useful for asking for advice. They can help you see what you’re blind to.”


Whether you have a skill gap or a behavioral issue, you need to put corrective action in place by “applying constant, steady pressure to the area,” says Cast.

“Let’s say you are told you’re non-strategic, and you’re not promotable until you become strategic,” he says. “Ask yourself, ‘What does success look like in this area? And what will I need to learn?’ It can be smart to interview people in different departments who are good at those activities.”

Sometimes you can find work-arounds to your blind spots, such as outsourcing the task or simply relinquishing the duty. “You can hire people who are good at what you’re bad at,” says Cast. “Or you can seek help from other people so this area doesn’t stop you from progressing in your career.”

And request help from your boss. “Ask, ‘What will I have done in two years to make you think this is no longer an issue?’” says Cast. “Ask for specific examples of where your blind spot shows up in your work. Also find out which employee in your company models this behavior. Then put corrective plans in place, and keep it front and center so you don’t forget about it.”

Cast has written down his career blinds spots and posts them in the place he puts his belt away at night. “I look at my areas of vulnerability and assess how I did today,” he says. “Did I succumb, or did I work to make sure they didn’t come out to play?”

Travis Kalanick’s ‘Profound Apology’​ Is a Cautionary Lesson for Young Founders

(This is an article David co-authored with our Kellogg colleague Brooke Vuckovic for Entrepreneur Magazine)

The “profound apology” issued by Uber founder and CEO Travis Kalanick that he must “fundamentally change as a leader and grow up,” in response to a video showing him berating a driver that went viral, underscores how the pressures of a high-growth startup can undermine leadership development when and where it’s needed most.

In his apology, posted on the Uber site, Kalanick admitted, “This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.” For Kalanick, who has also faced criticism for the culture at his company after sexual harassment allegations went public in a blog by a former employee, this is a crucial admission. The serial entrepreneur, who founded file sharing startup Red Swoosh in his early 20s and Uber in his early 30s, shows the importance of entrepreneurs developing holistically — vertically into self-awareness and self-management, as well as horizontally across the skills needed to run a business.

Kalanick’s statement that, “My job as your leader is to lead…and that starts with behaving in a way that makes us all proud,” is also a cautionary tale for entrepreneurs who don’t put sufficient emphasis on personal and leadership development.

As our work with young entrepreneurs shows, capturing the investors’ interest takes more than just a great idea or even good results. Founders who exhibit self-awareness, leadership ability and agility, and who can grow along with their company, will be more likely to go the distance. The intensity and pace of launching and scaling a high-growth startup are so great, young founders, in particular, must pay attention to the amplifying effects of speed on their leadership. Entrepreneurs who develop holistically establish the foundation for building the necessary confidence to manage complex relationships, competing priorities, and fast-paced decisions.

While it’s common for young entrepreneurs to have mentors, many of whom are experienced entrepreneurs and investors, much of the feedback from these sources is focused on the functional elements of business-building (product development, marketing, design, finance etc.). What’s far less common is thoughtful guidance on how these founders successfully evolve into leaders — and how their “executive DNA” may positively or negatively impact the success of their early ventures.

No matter how good the idea or convincing the business model, a startup rises and falls on the leader’s capacity to develop and grow alongside the business. There are three dimensions of awareness that deepen a young founders EQ.

Awareness One: Strengths, Weaknesses and Derailers

Without self-awareness of one’s strengths and weaknesses, it becomes difficult if not impossible to build a team with complementary skills and expertise. To gain this awareness, young founders need to reflect on the key strengths essential to the team and to the success of the business. They also should know when to rely on others’ strengths and perspectives.

The temptation among many organizations, including startups, is for leaders to gravitate toward those who are “same as me.” But as research has found, homogeneity can stifle creativity and hold back the organization. A team that is diverse in terms of gender, race and ethnicity, as well as experience, thinking styles, and background is better equipped to tackle problems and bring to bear insights that create breakthrough innovations. One cannot do this without a high degree of self-awareness.

Awareness Two: Orientation to Conflict

Without understanding their orientation to conflict, founders will struggle to manage difficult or disappointing conversations. Key reflections here are how they manage interpersonal conflict with others, and how they manage operational conflicts among competing priorities and commitments.

For founding leaders of startups, there’s no avoiding bad news, disappointing results, tough feedback, and making hard decisions that leave others unhappy. A “softer” version of conflict comes into play internally as the young founder struggles with when and how to say no. The leader who learns the art of a “positive no” is more apt to maintain a laser focus on priorities in the business and in their personal productivity. They will also avoid the classic trap of becoming over-committed and yielding anemic results across the board; unable to prioritize and delegate authority to others, particularly as the company grows.

Awareness Three: Your Values and Purpose

Though last on this list, knowing one’s values is perhaps the most important awareness founders must have, as their personal values establish their startup’s culture. Key questions here are what do you stand for, and why does this venture exist?

Much like the process of product development, developing one’s identity as a leader is an iterative, others-focused process that involves trial and error. However, the leader’s identity and toolkit are often developed at warp speed as their business begins to scale. Without a clear sense of one’s values and purpose, founders are less likely to project the optimism and confidence demanded of them, and are more likely to become over-invested in their image, less open to learning, and less clear about their goals.

In the corporate world, leaders typically gain these three dimensions of awareness as they build a sense of self over time, through training, experience, and classic management relationships. But high-growth startups are a “heat inducing laboratory” in which young founders are thrust into high-stakes leadership roles quickly, and sometimes prematurely, as the business scales and the team grows. This makes foundational coaching and interpersonal development more important early on, even before a startup is launched.  In this respect, founder-leader fit is a close second to product-market fit.

For many young founders, the first taste of executive leadership accompanies the excitement and pressure of a startup launch. For those who grow both horizontally across business functions and vertically in leadership maturity and skill, success may be more likely, and certainly more satisfying. Chances are, they’ll never have to apologize publicly for a lack of leadership maturity as Kalanick just did.

The 4-Step Guide to Refining Your Innovation Process

You may not have unlimited time to brainstorm, but you can do more to ensure that it’s on your side.

(This post originally appeared in Inc. Magazine and Kellogg Insight)

Time: you can kill it, call it, serve it, save it, make it, or get it to fly. But one thing entrepreneurs should not do with it, per David Schonthal, is leave it in a liquid state. Constraint, properly harnessed, can be one of the most powerful forces behind ingenuity. And no constraint is more powerful than time.

There are a lot of ways to deploy time successfully. Whether you are deciding to speed up or slow down processes, impose deadlines, or set aside time for reflection, the key is to be conscious of how much time you have and realistic about how you plan to allot that time.

Schonthal, a clinical associate professor of innovation and entrepreneurship at the Kellogg School and a portfolio director at IDEO, offers four key suggestions for how innovators can use time to their advantage.

Change Up Your Brainstorming Sessions

The first step of any creative process–generating ideas–can also be the most painful. Cue the mental image of your team members sitting listlessly around a conference table, ostensibly brainstorming but actually inventing new ways to doodle in the margins of their legal pads.

The best way to kick-start the idea-generation process may be to mix things up.

When brainstorming more creative solutions, one approach–backed up by Kellogg research–is to push yourself to brainstorm beyond your normal limits. Once you hit the wall, the thinking goes, you may still have a lot of very good ideas that have not made it out yet.

Schonthal swears by a process that is a bit more counterintuitive: hit it and quit it. Give your team a very short period of time–no more than 10-15 minutes–to get as many ideas as possible related to a specific prompt out on the table. Then work from there.

“People usually enter brainstorms with the wrong objectives and expectations in mind, so it’s no surprise they are dismayed with the results.”

“When you take a resource and constrain it, it forces people to do more with less, and oftentimes they come up with unexpectedly creative solutions,” Schonthal says. “So when you constrain time, it’s great for the process of being generative. People are always surprised by how much they are able to accomplish in three to four minutes. Just getting things out from the inside doesn’t take a lot.”

An important distinction Schonthal makes, however, is that he believes the best use of brainstorming is to set a general direction or vector for design, not that it will yield the

“final” billion-dollar idea right there and then.

“People usually enter brainstorms with the wrong objectives and expectations in mind,” Schonthal says, “so it’s no surprise they are dismayed with the results.”

Launch to Learn

Once your team has identified a concept to pursue, it is tempting to devote a lot of time to refining it before showing it to others. But that may not be the most effective course of action, Schonthal says.

“Something that’s been developed within a week–why not toss it out into the world and see what happens to it?” he asks. “Take the minimum viable version and get real reactions from real people.”

“Some of the earliest examples of Twitter and Airbnb products, they were literally just sketches,” Schonthal says. “But they were good enough concepts to put in front of people for reactions. Yes, there’s the danger of falling on your face, but you don’t want to spend $50 million making the same mistake that you could have made much sooner for less money.”

But will enough face-plants make potential customers wary of your creations? Not necessarily, as long as you are up-front about the fact that you are showing them products in beta.

“You can let them know, ‘Look, this is a work in progress. I just want to see your reaction to it,'” Schonthal points out.

“Consumers have become much more comfortable with looking at stuff long before it’s ready. Look at Google. They slap the word ‘beta’ right there on the masthead, so you know that you’re taking a risk in trying something that’s maybe a little bit ahead of its time.”

Iterate Often and Quickly

If you are launching in beta, you are accepting the fact that you will need to iterate–protoyping, testing, analyzing, and refining your product.

“People often don’t build time in for the iterative process,” he says. “They just assume that things will go well. They look at iteration as a very linear progression: you start at this stage, and you go to this stage. But the reality is, it’s totally messy.”

To allow for that messiness, Schonthal advises, factor in time for lots and lots of iteration cycles–but move through those cycles as quickly as possible.

He points to the experience of student entrepreneurs he oversees in Kellogg’s Zell Fellows Program, a selective venture accelerator. Initially, it takes the students three weeks to move through the first iteration cycle. The next cycle takes two weeks. By the end of the course, each iteration cycle takes less than a week, because the students have learned what “good enough” is.

That’s a crucial lesson, given how quickly things move in today’s product-development world.

“Innovation is faster today than it’s ever been,” says Schonthal. “What can be accomplished in a unit of time is completely different now than what it was when I started ten years ago. Innovation is going to be faster next year than it is today. It’s probably going to continue to go down, down, down, down.”

Take Time to Reflect

But structuring time for invention does not always mean speeding up processes. One of the most important steps in the design process–synthesis–entails deliberately pausing to reflect on what has been observed. And it is a step that is often overlooked.

“I can’t think of very many organizations that create a very clear project objective for reflection,” Schonthal says. “Usually it’s ‘Go, go, go, go, go! What’s the next step? What’s the next step?’ Well, sometimes the best next step is taking a look back at what’s happened already.”

It is natural–even expected–to realize during the synthesis process that the problem you have set out to solve with your product may not be quite the problem your product solves. That may seem like less than great news, but there is an upside: taking time to reflect makes course correction possible.

“Trying to rush synthesis is the kiss of death,” he says. “Unexpected insights necessitate reflection. They’re never on the surface. If they’re on the surface, they’re obvious to everybody, and they’re probably not all that innovative.”


Here’s What Can Happen When You Don’t Check Your Ego at the Door

(Originally published by David in Fortune Insiders)

A mistake that is not only foolish in the moment, but that can have long-term negative impact is letting difficult decisions linger. Maybe you’re procrastinating on dealing with a “people issue,” such as needing to let someone go for the good of the organization. Or, perhaps you’re reluctant to admit that your current business strategy or product just isn’t working out and you need to start over. If you agonize over informing stakeholders of a problem that has come to your attention, issues like these will only get worse.

Many of us tend to avoid the hard things — the decisions and actions that may make others unhappy or prove to be unpopular. As humans, we don’t like to be the bearer of bad news and disappoint people.

With difficult decisions, though, the longer you procrastinate in taking action, the worse things can become. For example, firing someone can be painful, and having empathy for the person to be terminated may delay your decision. But the longer the person stays in a job that, for whatever reason, is no longer a good fit, the worse it is for the rest of the organization. In my own experience, I can recall situations in which people needed to be let go, but we dragged our feet on making the decision because it was hard (not because the choice wasn’t clear). By the time we acted, what had started as a manageable problem had mushroomed into a major organizational issue.

When it becomes clear that a product or strategy isn’t working, the thought of disappointing stakeholders can be so overwhelming that you put off the decision to change direction or go back to the drawing board. That reticence may be tied up in not wanting to disappoint others, including customers and investors. But often, there is a deeper reason — ego. You’ve invested so much time, money, and energy into a particular strategy or product, that now you’re disinclined to admit that you were wrong. In this instance, your reticence to make the decision is all about your need to be right.

In startups, the ego issue is further inflated because of the glamour associated with entrepreneurship; you may tell yourself that the only way to bask in that glow is to be right. With this thinking, “humble pie” becomes very unappetizing. True entrepreneurial leadership, though, requires having the maturity to know that things don’t work out all the time. Moreover, telling investors about a problem as soon as it hits your radar may actually net a positive , even if the news is disappointing initially.

With startups and other early-stage companies, experienced investors expect problems and setbacks. Even more important, savvy investors have ideas, connections, and other resources that can help solve problems. But if you wait too long to tell your supporters, there may be nothing they can do.

There is another decision that should never be delayed: when there is an ethical problem. The longer a breach of ethics goes unaddressed, the worse the problem becomes — a potentially fatal mistake for the company, its brand and reputation, and its longevity. For example, Theranos is facing federal, civil, and criminal investigations after serious questions were raised about the validity of its testing products that were said to require only a few drops of blood. Theranos CEO Elizabeth Holmes has been banned from operating a laboratory for at least two years, and the company continues to face difficulties, including an investor lawsuit.

In contrast, consider the actions of Johnson & Johnson and its McNeil Consumer Products subsidiary when several people died in 1982 after taking Tylenol that, unbeknownst to anyone, had been contaminated with cyanide. The swiftness of the company’s response and the transparency of its actions allowed it to recover consumers’ trust and preserve the valuable brand. It’s hard not to wonder what would have happened had Theranos followed J&J’s lead and disclosed the reported problems with its blood tests as soon as they surfaced.

For startups and early-stage companies, the road forward is often bumpy and unpredictable. But being unable or unwilling to make tough decisions quickly will only compound problems, and lead you to regret a foolish mistake.

How to Nurture Your Superstar Employees

This piece is based on insights from Carter and originally published in Kellogg Insight

Most organizations have employees who are solid performers; fewer organizations are astute—or lucky—enough to have superstars.

So how can you ensure that your organization gets the most out of those superstars?

High-potential performers (or Hi-Pos) stand out due to their associative thinking skills—which help solve problems and drive innovation—their strong emotional awareness, and their incredible perseverance, according to Carter Cast, a clinical professor of innovation and entrepreneurship at the Kellogg School and former CEO of Walmart.com.

When your team lands a superstar-in-the-making, nurturing these traits is critical if you want that superstar to flourish. And tailoring a career plan gives high-flyers challenge enough to stick around.

“With high-potential high performers, it’s important to put your arm around them and say, ‘I think you have a lot of potential, and one of my key jobs is helping you reach your potential. I will get satisfaction out of helping you do that,’” says Cast.

Encourage Associative Thinking

One of the calling cards of valuable employees is the ability to innovate. But not everyone is automatically inclined to blue-sky thinking. Encouraging associative thinking—making connections between seemingly disparate ideas—can spur high-potential employees to become more creative and innovation-minded.

“Learning agility may be the most important trait of them all,” Cast says. “You are curious. You’re open to new experiences. You read a lot. You question things. You don’t take no for an answer—if something just doesn’t seem right, you go ahead and investigate it yourself. That trait drives creativity and leads to innovation.”

When Cast was at the CEO of Walmart.com, he had an interesting exercise to get his high-potential employees thinking creatively: a little bit of show-and-tell.

“As a leader, I can provide direction, clarity, and resources, and I can try to figure out what motivates an employee and then try to appeal to their motives.”

At Monday morning senior leadership meetings, the first twenty minutes were devoted to a simple question: What did you see over the weekend that struck you? Employees then shared any new trends, think-pieces, objects, or experiences that had captured their attention. “We had people bring up clothes, devices, articles, advertisements, circulars, you name it,” Cast says.

Next, they had to explain how these new trends or observations might positively affect the organization.

“People loved this open session because it was all about experience and application. You observe, capture, and try to parlay into what the company can do differently: If you saw this, what’s the application? If yes, then what?”

Cast advocates a healthy dose of career self-reflection for all employees, and those with high potential are no exception. Encourage them to consider: “What can impede your progress? What about you—we all have these things, because we’re humans—could hurt you? Where do you have weaknesses that could derail you? If you don’t want to come clean with me, at least come clean with yourself—talk to your friends, mentors, and colleagues to get a better understanding.”

Cast also suggests that employees look beyond their own intuition for skill gaps and other blind spots by utilizing 360 feedback. Putting a mirror up in front of people can help them recognize weaknesses, triggers, and gaps that may be impeding self-regulation and performance.

“Not putting your foot in your mouth, not butting in, not having flashes of anger, not receding into your shell when you’re challenged—basically, learning to modulate your behavior—allows you to present yourself more effectively, which can help you to be more effective with other people,” Cast says.

Remember, as well, the importance of developing an emotional awareness about others. High-potential employees need to learn how to really listen. “The basic principle is: seek to understand before being understood,” Cast says, “which can be hard for hard-charging Hi-Pos who are driven to complete their agendas.”

He reminds Hi-Pos to ask their own employees and colleagues how they can help. “Do you understand what goals and objectives they’re trying to accomplish? Do you understand what they need from you? If you help them, they’re more likely to reciprocate.”

Another way to cultivate that awareness of others is to make sure Hi-Pos actively engage across the organization.

“At Walmart, we encouraged our associates to get out from behind their desks, go out to stores, observe and learn,” Cast says. “We said, ‘you should shadow employees who handle customer checkout. You should shadow employees in electronics to see how they handle tough questions about how to install a home entertainment system. You should sit in the product return center to see firsthand how confusing the process is for customers to return an item they bought online to a store.’”

“Encourage them to go through an actual user scenario where they’re trying to buy something or conduct a task. It’s a really good way to get inside the experience of the consumer to see what they go through.”

Motivate, Motivate, Motivate

Employees with the grit and perseverance to keep answering the bell after getting knocked down will go far. But toughness is difficult to instill in people. It is most often a complicated, very individual drive.

“As a leader, I can provide direction, clarity, and resources, and I can try to figure out what motivates an employee and then try to appeal to their motives,” Cast says. “But ultimately they have to find a way to tap into what drives them. In the case of high-potential performers, they’re usually highly motivated and it’s more about tapping into it and directing it.”

Still, there is plenty that leaders can do to stoke employee motivation. For one, recognition can go a long way.

Cast and a colleague were in a shop in Bentonville, Arkansas and found a dusty red razorback statue at a five and dime store. “The guy gave us two bucks to get it out of the place,” Cast jokes. “We brought it back to our office in California, where the Internet division was headquartered, and we created a Red Razorback Award. Every quarter, the person that went above and beyond, or had a really good idea that improved the customer experience, got the Red Razorback.

“This ugly thing was actually coveted! I saw in resumes years later, where people wrote, ‘Red Razorback Award winner, Q2, 2006.’”

As you might expect, it is also crucial to make high potentials feel like they are improving their skills and working on projects with value.

Just don’t assume you know what counts as “self-improvement” or what motivates employees. You have to ask them. Here is a place where some leaders go wrong: they lay out a development plan without input from the employee. Cast once had an employee whom he was grooming to become a general manager. But it turns out, that employee was not looking to become a CEO. He wanted to become a CMO—the best retail and e-commerce marketer in the United States.

“I had the wrong assumption,” Cast says. “He wanted to be a functional expert. So we stopped and I said, ‘Let’s look at your skillset in marketing and where you think you have gaps, and let’s start talking about how we can fill those gaps.’”

“Treat different people differently,” Cast stresses. “Seek to understand their motives and what they’re trying to accomplish. With super high-potential people, I worked to create tailored programs to develop them, giving them unique experiences and access to resources in order to accelerate their growth.”

Cast opens these developmental conversations by asking high potentials where their passion lies—what they want to be doing in five to seven years—rather than starting with their current position. He then has them work backwards into their current position to create the through line.

“I always lead with their passion of interests and motives,” Cast says, “and then secondly, have them define areas where they have effortless ability or strong talents. So I like to start with passion and talents. Then, together, we can move on to how to apply it through projects, assignments, and other developmental activities. But I’ve found it’s key to ask them! Take nothing for granted and let them lead the conversation.”

Follow Through

You have invested in your superstars’ success. You’ve increased their learning agility and strengthened their emotional awareness. You have helped them to find their own passion and collaborated on a plan to keep them engaged and progressing. What could possibly go wrong? Well, a lot—if you leave the plan to chance.

Whatever you do, “don’t overcommit upfront and offer something you can’t deliver on,” says Cast. “Find a couple things you can do to help them, and then a couple more. If you talk a good game and don’t follow through with a cadence of assistance, it could be very detrimental, because you’ve set their expectations. It takes high potentials about five minutes after they don’t feel challenged to leave.”

Of course, superstars may leave a company anyway. But the chances are much better that they will stick around to realize their potential if they see that they are valued. “One, they’re going to be excited about the challenges, and two, they’re going to feel this affiliation towards you and towards the company for investing in them,” Cast says.

He likes to tell a story about one particular high-potential employee under his wing.

“I said, ‘You’re not going to leave here, because the opportunities we’re going to give you are going to be so phenomenal that you’re just not going to think of leaving.’ He laughed and said, ‘We’ll see.’ Seven years later, when I left the company, he was still working there.”

Your Lack of Experience Could Be Just What a Startup Is Looking For

This is a piece David originally authored for Fortune Insiders. 

If your career change moves you in the direction of a startup, there’s no need to worry about having a non-traditional background. Startups, almost by definition, exist to question norms: How can the demands of the marketplace be met in new or better ways? In contemplating that question, your non-traditional background may have equipped you with skills and perspectives that are exactly what a startup needs.

It’s not so much of a stretch, then, whether your background makes you two steps away (i.e., a large corporate environment) or five steps away (i.e., something seemingly unrelated, such as the arts or social work). In both instances, there are ways to bridge the gap from where you’ve been to where you want to go — provided it’s authentic. In other words, you must possess valuable skills without adding “spin” designed to make you look like a better fit than you really are.

Consider the two-step distance. Maybe you came from a large company where you operated within specific processes and procedures — very different from a startup with a less-structured environment. However, your knowledge of a specific industry (e.g. banking or accounting), your network of contacts, and even your knowledge of structures and processes may be the “missing link” a startup needs to scale. You bring the professionalism, rigor, and empathy for customers that the startup likely needs to get to the next level.

Typically, founders have big ideas when they launch a startup, but as the company tries to scale, they often need a distinctly different skill set in order to take the firm from the “idea stage” to the “growth stage.” Earlier in my career, for example, I worked for three of the big-five tax firms before joining a five-person medical device startup. I didn’t have experience in the medical field or in startups, but I brought to the team expertise in the kinds of processes and systems that helped the firm scale. The rest I learned on the job.

In addition to your corporate experience, you may also be passionate in totally unrelated areas that show another side of you. Your experience in, say, improvisational theater shows that you are creative, understand the importance of timing, and can think on your feet.

Now, let’s say that your professional background is five steps away — maybe you were an artist or you spent a few years in the Peace Corps. No matter that these backgrounds are completely unrelated to a startup, you possess personal strengths that helped you be successful — whether cultural, behavioral, or attributes such as problem-solving. Your artistic performances may have allowed you to develop strengths in preparation, organization, motivating a team, or creating an experience. Or, your work with an NGO in the field may have given you invaluable insight into how to do more with less. Simply having a fresh perspective can lead you to ask the one new question that unlocks a whole universe of new possibilities for a company.

A non-traditional background isn’t a deal breaker for entering a new field, especially at a startup. By being willing to learn and reframe your experience, you can work with the new team to gain a better understanding of the business, while contributing the strengths and skills that you bring.

Reflecting Before an Exit

This piece, written by Carter, was originally published by the Wall Street Journal in a section called “The Accelerators.”

The strong pace of initial public offerings in 2014 and the first half of 2015 has many entrepreneurs contemplating if, when and how to look for an exit. Even though the IPO window may be closing for the moment, delicious deals like Shake Shake or Fitbit may encourage exit-minded founders to prepare for an IPO.

Entrepreneurs have to consider a myriad of challenges that come with preparing for a liquidity event. Before even contemplating prospectuses, entrepreneurs should step back and reflect on the emotional and psychological aspects of selling — whether through an IPO, to a private equity firm or to other third parties. Relinquishing control of “their baby” may be harder than entrepreneurs realize, and selling to a buyer who has a far different vision for the company may lead to regret. It pays to keep a few things in mind:

Are you truly ready to give up control? It may seem obvious, but in the intoxicating rush to an exit it can be easy to overlook the fact that selling the company means giving up control. The emotional and psychological impact of selling the company may be underestimated by the entrepreneur, even when gaining access to more capital resources appears to make sense, at least on paper. Though selling may be the right thing for the business, entrepreneurs shouldn’t jump to make a deal without first determining their own readiness. Entrepreneurs need to ask themselves: Am I prepared to hand over the reins or, at the very least, share control of what I’ve built?

To thine own self be true. It takes a tremendous amount of self-awareness for entrepreneurs to admit, even to themselves, that their company needs a different leadership profile, a broader managerial skill set or a more experienced management team to take it to the next phase. It’s rare for a founder to conceive of and start a company, find that elusive “product/market fit,” take it through the early hyper-growth phase and lead it into a sustained-growth scaling phase. In other words, launching a company and willing it to $20 million in revenues takes one (extraordinary) skill set; scaling it into a $150 million entity takes another. Entrepreneurs must consider whether their expertise lies in early-stage product and business development, or if they have the requisite skills to scale a business by doing such things as expanding into new markets, creating scalable processes and broadening their marketing and selling efforts, while also dealing with an ever-growing group of stakeholders.

“Prince Charming” doesn’t exist. Sometimes what looks like the “perfect” deal comes along — for example, the seemingly ideal match of Trunk Club, the online men’s clothing service, with Nordstrom in a $350 million acquisition in 2014. But for most companies looking to sell, holding out for perfection raises unrealistic expectations that are almost guaranteed to result in disappointment. Or, hoping to sell at the peak can leave a company stranded when an unfortunate turn in the market comes along. Being patient in order to find the right strategic and cultural match is one thing; attempting to ride a crest wave or waiting for Prince Charming to come riding in, offering a mind-blowing multiple on forward-year revenue projections is entirely another. So understand your priorities and be prepared to pull the trigger if and when they’re met.

Are you aligned with the prospective buyer? As entrepreneurs look for an exit, especially through a merger or acquisition, they need to understand the vision and values of the buyer. Is there a meeting of the minds, a shared vision on the future direction of the company? Does the potential buyer want to accelerate growth and expand into new markets or does the buyer really want to take the core assets and shutter the rest of the company? Will the legacy of what the entrepreneur created live on, or will it be “assimilated into the Borg?”

Who’s looking out for the team? An exit is not just about the entrepreneur. Successful startups grow because of a team’s efforts, and that team has a tremendous amount of product, customer and institutional knowledge to offer. Before sealing the deal, entrepreneurs need to make sure valued team members have the right incentives and protection to stay with the company to continue its growth strategy, or conversely that they are rewarded with severance packages that take into account their contribution.

As these points illustrate, looking for an exit takes more than analyzing ratios and multiples or cashing out in the most lucrative deal. Entrepreneurs who take the time to consider the emotional, psychological and strategic aspects first will be better positioned to make a successful transition to what comes next.