How to Build a Framework for Intellectual Capital

“When you have a framework, you can plug things in, and the things that you plug in matter less than the framework.”

– Tom Stewart

What you will learn

• How successful people stay on message (02:31)
• Why Tom is in love with big ideas (05:46)
• How he pioneered a new trend in book publishing. (08:37)
• How Tom got started writing about a new idea called intellectual capital (09:30)
• Why the value of information is in doing a Marie Kondo (10:41)
• The Michelin guide as an example on how big ideas frame smaller ones (12:16)
• The 3 kinds of thinking and why abductive thought leads to ideas (19:41)
• Speaking and debating is a way of processing information (24:09) 
• Peter Drucker learned by listening to himself (25:26)
• Routines and blocking time on the calendar (28:41)
• Writing isn’t always with a pen or keyboard (30:01)
• Filtering information is about going to the right person (32:42)
• How to thrive in a world drowning in information (36:15)

Episode resources

• The Harvard Business Review
• The 8 Step Process For Leading Change – John Kotter
• Abductive Reasoning
• Fortune Magazine
• Marie Kondo
• The Michelin Guide
• Peter Drucker
• The Evelyn Wood Seven-Day Speed Reading and Learning Program by Stanley Frank

Transcript

Ross: Dawson: Tom, it’s an absolute delight to have you on the Thriving on Overload podcast.

Tom Stewart: Ross, it has been far too long since we’ve seen each other face to face, although we’re not seeing each other face to face. So, pixel to pixel, I guess. But it’s wonderful to be here with you. I guess the last time you and I were together was in Manhattan, I think, somewhere in the West 20s. But I remember a lunch with you in Sydney Harbor a few years ago, that was one of the most perfect days and a perfect lunch. It’s good to see you again.

Ross: Absolutely. Tom, you have thrived on information throughout your entire life. I first knew you as a journalist. Obviously, you’ve taken that far beyond that, editor at Harvard Business Review and many other roles. As a starting point, what is it that helps you frame what information is useful to you, is relevant to you, as something you should be paying attention to? What is the bigger frame or the purpose or the objectives or the expertise you’re trying to develop which helps you frame that?

Tom: I remember seeing once the then CEO—I can’t remember which Houghton it was—who was the CEO of Corning, I was interviewing him at Fortune. It was one of the first CEO interviews I had at Fortune. I remember him sitting down at the interview and he had a piece of paper at his right hand. He wrote down three or four words on that piece of paper. Those were, I realized later, the three or four messages he wanted to work into whatever answers he was giving to my questions. I had a bunch of questions to ask; he had a bunch of themes he wanted to make sure were woven into that answer. I realized this was good media training on his part.

I also realized later, when I read the work of John Kotter—now Emeritus as Harvard professor—who wrote a wonderful book called The General Managers, he shadowed a bunch of general managers and found what they did. He found that each of those successful general managers had three or four load stars, three or four issues, three or four things—like the things that Jamie Houghton had written down—that they attach their actions to. “I’m trying to drive the organization forward on these three areas. So, whatever you bring to me or whatever I read in the newspaper or whatever my customer says to me, whatever it is, I try to hang these things like baubles on a Christmas tree around these themes.”

Now, I don’t know that I’m that way. Personally, when I got into the business of business, before I went to Fortune, I had been nearly 20 years in the book publishing business. I was an editor. I was commissioning books. If you asked me what kind of books I was the best editor for, I’m not sure I would have understood the question. I was a magpie. I like this, I like this, I like the other thing. A little, nagging voice kept telling me, “You really ought to focus.” Even though a good publisher’s list is eclectic and has many different books and different types on it, there would be some value if you were an expert in jazz, an expert in avant-garde fiction. An expert in something so that your expertise was a magnet that drew things to you and also that the magnetic energy went to and from, where you’re a part of that community. I never really did it. I never really did it in the book business, although willy-nilly some sort of things kind of happened.

But what I did discover there was that I really was very good at getting excited by ideas. That idea, that sort of excitement at the idea—a cat with a new toy, a Tigger just swarming with energy around something—that excitement with a new idea is what has sort of framed me or what has inspired me. Now, that is like a cat with a new toy. That tends to be “now I’m bored, I’m going to go on to the next one.” That’s the pattern.

The pattern is, is there an idea that has gotten me excited, that gives me some new way of interpreting all that stuff that I’m seeing? It’s some new Christmas tree on which to hang the things I say. Those ideas have changed over time. But it’s that desire to see, to make sense of things. It’s that desire to say, “Yes, that’s true because of this larger thing that is true,” and you can attach to that idea. That has helped me. I’m not sure it’s helped me decide what’s irrelevant, but it’s helped me decide what I’m going to focus my energy on.

Ross: In a certain way, you’re starting from the excitement. If it excites you, that’s where you go. Perhaps later on, you can deconstruct what it is that excites you.

Tom: Yes. What’s also interesting is that, these days, we get to call it mansplaining. But I have a deep drive, as I said, to try to make sense of things, to try to come up with an overarching theory. This is all part of a big picture in which we see X, Y, and Z. I’m intellectually most comfortable at 39,000 feet. So, the degree to which I can abstract things into principles and frameworks and ideas and so on and so forth, that’s where I’m excited. When you have a framework, you can plug things in, and the things that you plug in matter less than the framework.

Ross: How do you go about building these frameworks?

Tom: I don’t know. Years ago, when I was first at Fortune, Fortune had had a tradition of publishing a beginning of the year article that was like the most fascinating business people of whatever you’re at what. One year, Walter Kiechel, who was the deputy managing editor, and Marshall Loeb who was the managing editor, Walter persuaded Marshall to do fascinating ideas instead of fascinating people. That was for 1991, it was 30 years ago. I was relatively new at Fortune, but somehow my reputation as being this idea magpie had established. They came to me and said, “Would you work with Charlie Burke,” who was a senior editor, “and would you be the writer? They’ll be other writers, too.”

We ended up with 20 short articles, and I wrote about 10 of them. That was actually where I first started writing about intellectual capital, that little piece, the lead piece in that packet was called “now, capital means brains, not bucks.” That got me into the whole intellectual capital area. But it was in there that I met a guy named Eli Noam. Eli was a professor at Columbia University, later went on to be a telecoms regulator for the state of New York. One of the things in this essay, in this package of essays, was a precious, little article that I wrote called Everything that Communicates Must Converge. At the time, this was this radical idea that if you can put it in ones and zeros all communication, a media blend, then they become this hyper media, this thing that we’re now kind of used to.

Eli, it turned out, was somebody I read about. We got in touch, I went up to his office to interview him. He told me that we’d been college classmates, which neither of us had known at the time. Eli Noam said this gnomic thing to me, he said, “In a world of information overload, the value added is the information subtracted.” It’s your ability to do a sort of intellectual Marie Kondo and say, “This does not spark joy, I don’t need this. Get rid of this.” It’s the erosion of the crap and the remaining of whatever granite is there that is the more solid rock, that’s what reveals what’s important. Since I’ve never been particularly a detail-oriented person anyway, that idea resonated with me. “That’s great, none of these details matter, let’s just get the big picture,” that resonated with my personality. That was really how I started thinking about that.

That’s on the one hand, this idea, the value added information is subtracted. Now, I’m sort of thinking aloud because there’s another hand. As I said, I like 39,000 feet, I like reasoning from the big picture down to how the big picture explains this detail. If you go and open up one of the classic Michelin Green Guides, the Green Guide to France, the Green Guide to a region of France, whatever it is, you will notice that those Green Guides all begin with geology. They begin with, “This is Tuscany, here is the geology.” They discuss the geology and the discuss the geography and they discuss the climate. They discuss all these other things, and then they work from there to the history. Then they work from there to go look at this Chateau, it’s a three-star Chateau, and here’s this amazing journey.

There’s something about that that appeals to me. Here’s the big map, and then you can start locating this human activity, this CEO trying to do this with his company or her company. You can locate them on the map. It has an analogue—and I’m just realizing this right now, I have no idea if there’s intellectual kinship—this Michelin Green Guide framework has an analogue in the Annales historians’ work. If you take a look at the great work, for example, of Fernand Braudel who wrote this three-volume history of capitalism and also wrote a magnificent work called The Mediterranean, and the Mediterranean World in the Age of Philip II, a two-volume work, Braudel is the same kind of thing.

In his case actually, he works the other way around. He does this history of capitalism, the first book, called The Structures of Everyday Life. But it’s farmers, nomads, how people actually live their ordinary lives. Then he puts businesses on top of that, and then he puts global enterprises on top of that in the sort of emergence of capitalism. But it’s the same sort of thing, let’s find this foundational stuff or this super structural stuff—depending on where you’re working—and then use that to explain what we see and to try to give it some sort of context.

Ross: Probably the framework is, I suppose, from the fundamentals to the “what’s built on top of that,” as you’re describing the Michelin Guide. Part of, I think, the framework is around connections, what are the connections between the different elements, and often visualizing things as a tool to be able to do that. Do you ever describe some of these frameworks or use visual things, or do you map out connections? Is this all inside your mind, building these lattices of the underlying geology and geography of the domain and what lies on top of that?

Tom: Well, I’m going to show you this—even though it won’t show up on the podcast. This is how I take notes, it’s indecipherable. Sometimes I number things, 1, 2, 3, 4, 5, 6, 7. Other times, I’m simply sort of randomly doing things. Here’s a more typical page, these are the notes from panel discussion we had. There’s some Roman numerals in there were I thought I identified some themes with it. Later on today actually, I have to write that up, take those for four Roman numerals, and turn them into prose. We had a lively discussion, and these were the four elements of things we talked about. But of course, this is pulling the other scattered pieces.

The short answer your question is yes. I’ve never been a visual notetaker. I’m not one of these people who can draw cartoons on walls or anything like that. But what will happen to me in the course of a conversation or an interview or whatever is that a visualization will come to me. It’s very often a two by two. I have no idea why that is, maybe it’s from having spent half a dozen years in consulting; everything can be expressed as a two by two. But something like that will come to me.

The other day, I was interviewing a wonderful guy named, Larry Inks, who’s on the faculty at the Business School at The Ohio State University. I was talking to Larry for my podcast, and we were talking about the questions of getting back to work or reorganizing the workplace, what do you want to do as you think about a COVID-infused world? Somehow, in the course of our conversation, something ended up being a two by three. But something came up and I said, “I picked up something I’ve read in HBR about. You need to think about three kinds of jobs, and then you need to think about short term and long term.” Three types of jobs, short term, long term—one, two, three—you’ve got a six-box matrix, and then within that you can start making a decision. So, that sort of thing happens to me, and I’m not quite sure why.

At one point, I was thinking about the Episcopal Church, in the rite to confession, we have done those things that we ought not to have done, we failed to do. We’ve had sins of omission and sins of commission, we have not loved our God our whole hearts and our whole minds, and we have not loved our neighbors as ourselves. That’s a two by two, right? They’re sins of omission and sins of commission. Those two sins are not loving God and not loving our neighbor.

You can set them up as a two by two. You could actually put that two by two up on the wall and you could say, “Let’s do a little self-inventory,” if one were congressionally-minded. I’m still sort of waiting for the priest to give a sermon to say, “Here’s a great way to organize your inventory of where you’ve gone wrong. You can just take it right here from the confession, put it up on a two by two, put it on a PowerPoint slide projector against the wall and think and repent. I don’t know why it happens, it just does.

Ross: I think part of this process is that when we look at this idea of thriving and overload, I think many people are unaware of their own processes. That’s part of what we’re trying to do, is to unpick that, to take that to the next step. You talked about the sensemaking, you were talking about beginning to build these frameworks with these geologies and geographies, or matrices. What is then the process? Is it getting into a state of mind? Is it a way of thinking? Is it sort of being able to get other perspectives on what you’re doing? What, for you, is that process of being able to make sense to where the exciting idea becomes something which takes shape for you?

Tom: When we were growing up, we were taught that there were two kinds of thinking: deductive and inductive. The deductive thinking was reasoning from the theory to the specific or drawing a conclusion from things that you saw. Inductive was sort of building it up from the bottom. It turns out, as I think we know—but I didn’t learn this until not many years ago—there’s this third thing which is called abductive. Abductive thinking is and in fact what we do when we think. We look at a bunch of stuff and we think, “I’ve got an idea. It’s the process of hypothesizing.” It’s the process of saying maybe this means X, which you then test. It’s that leap to an explanation.

It turns out that that’s it’s a mystery of consciousness, and it’s critical. If you simply sit there inductively, you will be looking at all the grains of sand and never see the beach. If you simply look deductively, you’ll see the beach and never see that fantastic starfish right at your foot. But it’s that abductive thing.

There’s some fascinating studies that were done by, I think, Antonio Damasio, who was a neuroscientist at the University of Iowa. I think he might now be at NYU, but I’m not sure. He did some studies of people who had had damage to certain parts of their brain. One of the studies that I remember from one of his books they study, these people were given a deck of cards, and they put some galvanic sensors on their skin just so that they could get some sort of visceral response. They were given this deck of cards, I think they were supposed to turn cards until they saw something, and they were going to try to win whatever this game was.

The way this thing worked was that the card game was rigged. There was a certain pattern. Once you detected the pattern, you could figure out how to win the game. They discovered that normal people would go along, and after ten or so cards they get a galvanic skin response. They get a spidey sense that something was going on, something intuitive. Then they would say, “I think that this is what’s going on,” and then they would change their behavior and they’d start winning the game. That was the normal response.

But these people whose brain was damaged in an area where emotions could take place, they could go along, and some of them never saw the pattern at all. Some of them saw the pattern, but they had no galvanic skin response, so it didn’t affect them anywhere else than intellectually. Those who saw the pattern could not change their behavior, they would see this is what’s going on, but they still played the game in a way that guaranteed that they would lose. So, somewhere in there is this thing that there’s something that sparks—something that sparks it.

I’ve never known for me what it is. I do have this ability, whatever it is, to connect A to M and Q to B. Although these things might be related, I don’t know why that is. A psychologist once told me that she thought I had an unusual ability to see connection—sometimes connections that weren’t even there—between the different pieces that might be lying on a table or on the blackboard in my mind. I will just sort of say, “Well, that’s connected to this,” or you can explain how these things might be connected. If that’s the case, then maybe you can connect other things to it. But I just don’t know the process.

Ross: There’s no conditions, as in the state of mind, what you’re doing. Is there a particular time when you can?

Tom: Sometimes, when I’m talking, this is actually true. When I was in high school, I was a high school debater. I was a very good one. I really liked it. What I learned in debate shaped me in two ways. Number one, almost everything I write, I’m trying to make a point. There may not be a plot, but there’s an argument. We’re trying to get to something. The idea of marshalling evidence in support of any idea is my intellectual framework, partly because of that. It also convinced me that debate as a technique is a really good way of exposing falsehood, but not a very good way of finding truth; that winning an argument is not the same thing as finding.

I had to reframe my head as I got into college saying, “No, wait a minute, just because you won the argument doesn’t mean you were right.” So, I had to think about that. But it is true that the act of speaking, for me, is a way of connecting things and finding frameworks. Finding something to complete the sentence I just began may cause me to reach back into my memory or just something else that somebody told me, and it does this.

This reminds me of a funny story. I’m not going to compare myself to Peter Drucker, but many years ago Warren Bennis, the great management writer and thinker, went around and talked to people about how they learned. He talked to various of his peers. I don’t know if you ever met Peter Drucker, but he was a journalist’s dream or nightmare. Because with Peter Drucker, you never had to ask more than one question. You would say, “Peter, how’s the weather?” He would go on and he would give you this extraordinary answer, and it was kind of wonderful. So, Warren goes around, he’s asking all kinds of people, “How do you learn?” He goes to Drucker and he says, “Peter, how did you learn?” Drucker says, in his Austrian accent, “I learn by listening… to myself.”

In a sense, that is it. I found that, as a journalist, I could go out and talk to all these people, but it was the act of having to write it down where the learning took place. I didn’t learn from the listening, I learned from the writing. I think it’s the act of trying to turn all this stuff into a simple, declarative sentence, or a complex sentence, that generates the connection and the framing and the learning.

Ross: Absolutely. I’m a deep believer that teaching in dialogue and conversation are a large part of how you frame things for yourselves. To be frank, I learned by listening to myself when I’m talking to people.

Tom: When I was a kid, like everybody else, I wanted to grow up to be either a doctor or a scientist or something like this. Then I realized that I never felt that I learned very much in labs. I felt that I learned more in lectures, but the labs might give me stuff that I could attach to what I learned in the lecture. My learning took place at that abstracted level. I was not very good at looking at that annelid worm and figuring out everything that you could figure at that level. But tell me about the annelid worm and then I could say, “Yes, I see it here.” That makes me ask a question. I could then ask a sharp question about it and go further, but I needed some abductive leap before I could get back down into the detail.

Ross: Taking just a bit of a hop to filtering. You have access to any number of potential sources of information, how do you select your sources? Do you have any structure to that? How you select your sources and inputs? Do you have an information routine, and how does that go? How is that structured?

Tom: I’m intellectually most energetic in the morning. I’m intellectually most vibrant in the morning. If I have my dream day, I pour myself a couple of cups of coffee, do some warm up exercises on the keyboard, which is to say get rid of the easiest email to get rid of, and then dive into whatever serious project I’m working on. I can give it a good solid couple of hours before I start petering off into distraction and a lack of energy. That’s my dream day.

In reality, it’s more chaotic because three days a week we have a morning team huddle that goes from 8:30 to 9:00. There’s the email and something urgent comes up, and one is distracted from it. What I’ve had to do is I’ve blocked time on my calendar writing projects or other projects, and I just block. I try to create spaces where I do that. Now, even then, I have found that when I’m working on something, I need that warm up time.

I was at Fortune and what would happen is you’d go out report, report, report, report. You’d read, you talk to people, and then you’d have the week when you were writing. When I was there, we all wrote from offices, which was kind of nice. The offices had this long corridor inside our 1271 6th Avenue Rockefeller Center that was dimly lit. They’re canister lights on this dim corridor. I remember I’d be writing along and then you’d sort of hit some roadblock. You know how this works, you have to stand up, you take a walk. Apparently, there’s actually neuroscientific reasons for this, that by standing up and taking the walk you ignite other parts of your brain that have been tied up so new things happen. One time I’m walking a counter clockwise around the office and I see Andy Kupfer, and he’s walking clockwise around the office. At the second time I passed him I said, “Writing?” He said, “Yeah.” Then we tread back to our office.

But when I’m actually in the middle of writing—aka, thinking—I still need to do that warm up. The metaphor I sometimes thought of is it’s like a potter with a bunch of clay, you got to get it working. I would sit down and fiddle and edit. I’ll go over what I wrote yesterday, I’ll start rewriting it. Only after I’ve been doing some stuff there could I begin to push it forward. I’ve sort of intellectually procrastinated and edited and polished long enough, “Back to the coalface, Tom. Push it forward.” When that would go on, things would happen in the process of that. You’d sort of say, “I got an idea,” or you’d stand up and you believe. I will be going to the subway and say, “Oh, that’s the idea” I started keeping, before we had telephones, little pieces of paper, so that if something occurred to me I could write it down. Sometimes, once or twice, I even wrote it down on my hand, “This is the solution to that problem.” I would keep it so that I wouldn’t lose it like a dream when I got back to the coalface the next day.

Ross: What sources of information do you go to? Do you tend to go to primary sources—in particular, publications? Do you use social filtering or aggregators? Where do you find the information that keeps you across what’s going on in the world?

Tom: I pull on string and keep pulling. I don’t rely on aggregators. There’s Wall Street Journal and Financial Times news summaries that come and a couple of other things that come that I look at. I’m checking a couple of newspapers regularly. But mostly, when I have an idea that I’m pursuing, I will sort of see who or what I already know, I can talk to about it.

The other day, I was having a conversation with Russell Kline, who is the CEO of the American Marketing Association, whom I met when I was at Ohio State because he’s a big Buckeye and he was a loyal alumnus. We got to know each other and we became pals. I was talking to him about an article that I’m working on, about the effect of pandemic disruptions on customer loyalty, and I was asking him for his ideas. I said, “Who else do you know?” He gave me the name of a couple of people who he thought were doing some interesting work on that.

One of my jobs today is to send them a reminder email, “I just sent you a note, can we talk? I’m working on this.” I’ll talk to them, and they’ll lead me to somebody else. Because those two are both professors, I will say, “Do you have any examples of stories?’ They’ll give me a story. So, that’s usually the way it was. When I was at Fortune, consultants were always really great because they had a financial dog in the hunt. They wanted to talk to Fortune because they wanted to be quoted in Fortune because it might be worth business to them. So, they would always pick up the phone. They were an easy get.

They would give you smart ideas, smart frameworks—of course, they had a vested interest. Then I’d say, “Do you have any clients?” “Well, I can’t talk about my clients.” “Well, can you talk to your clients and can you ask them if they’d like to talk? Because I need stories.” I always find that if I’m getting passionate about something, what happens is there’s a moment. First it’s a fog, then you’re really talking about great stuff. There’s a moment when I get distracted by a rabbit hole. When I know that I’m about done is when there’s this tiny, little byway and sideway that I’m so interested in. I’ll go down and say, “Back up, that’s too small. Nobody’s interested in that.” That’s when I would know I was complete, or as complete as journalism ever gets. When I would start going from the arteries, to the to the capillaries, to the tiniest capillaries, I get back to the arterial flow. That’s where you need to be. It’s sort of that process.

Ross: People at the heart of it, which I think is classically the great source. As an information master, having been awash with information and synthesizing and pulling together and being able to convey these ideas, is there anything else to share in terms of insights or advice or prescriptions or proscriptions on how to thrive in a world awash with information?

Tom: Quoting a guy named Christopher Locke, we were talking about information overload, and he called it infoglut. I got a note—I’m not sure whether it’s an email or an actual letter—a few days after this article that I wrote appeared from somebody whose name I’ve forgotten. It said, “The solution here is that you need to be able to read more and read longer,” that this is a physical fitness problem. It’s not that information overload, it’s just that you are not fit enough He had developed, he said, a series of eye exercises that you could use. He said the problem is you get fatigued because the muscles that move your eyeballs get tired. I rolled my eyeballs and ignored him.

He actually sent me some floppy disks—if you remember floppy disks—that revealed these exercises. This reminded me of something that I did when I was 12 or 13 years old. There was a woman named Evelyn Wood, who had something that she would call dynamic reading, but it’s all Evelyn Wood speed reading. It was a technique for reading a page, by scanning rather than reading, that will allow you to read at a much faster pace. This idea that the way to cope with information overload is to be the fastest hamster in the wheel it out there. Ultimately, it’s self-defeating. Ultimately, we’re creating more terabytes of information every day, you’re going to get drowned by it.

I think that the one piece of advice I would give is get off the wheel. It’s to say you can’t possibly keep up. These tools that we have, the tools that create this tsunami of information coming out complete with all the garbage—the telephone poles, the trucks, that dirty dinner dishes that it sweeps up—create the ability to instead of waiting for it to overwhelm you, give you the ability to fish for what you need. Rather than let it overwhelm you, think “I am looking for X.” Be a hunter, don’t be overwhelmed. Instead, use it to search rather than have it sweep over you.

Ross: Take control rather than be controlled.

Tom: That sort of means you need to know what you’re trying to do. If you don’t know where you’re going, any road will take you there, and you will get lost on the information superhighway—to continue that metaphor. But if you do know where you want to go, or if you have an idea, “This is kind of what I’m interested in, I want to think about this topic,” then these very tools that would otherwise overwhelm you will actually allow you to get this stuff. I don’t want to say take control because I don’t think you can. But at least you can start shaping what you’re seeing and bring it to a manageable universe of relevance, and you can then start working through that to find what you need to find and to do what you need to do.

Ross: Absolutely. That’s probably a good note to end on. Thank you so much for your insights, Tom, some great stories and great insights from everything you do. Wonderful to have you on the show, Tom, and look forward to catching up with you again before too long.

Tom: Thank you, Ross.

Ross: Take care.