Nilofer Merchant: Success Formula for Leading in the Social Era

Will leadership in social era require us to unlearn principles we hold as true?

Nilofer Merchant, sometimes called the Jane Bond of innovation. Winner of many awards, she is the grande dame behind almost 100 product launches that have rung up an amazing 18 billion US dollars in revenue. A woman to whom Steve Jobs’ very first word was the f-word. Not ”How do you pronounce your name?” or any other common form of chit-chat. Once you hear a person has worked for Jobs, you expect an interesting session.

Leaders need to know two things

Back in 1997, Merchant was leading the most profitable product team at Apple. She engineered  impressive growth from two million dollars to 180 million dollars in 18 months while other product lines were declining. In a meeting with Jobs and other managers Merchant presented a business plan, hoping to impress Jobs. What happened instead might bother her now. Incensed because of the feedback she received, Merchant ran out of the room and applied for a job with another company. One year later she bumped into her former colleague at Apple who told her that they were following her plan and doing great. At that time she learned something very important: leaders need to know to things. First, they need to run towards the future. Second, they have to manage day-to-day routines. Managing a business is a complex thing. You have to figure out how to invent and hold true.

Get ready for change

Merchant wants the audience to learn one lesson from her experience with Jobs and her presentation. It is not about whether or not the change is going to happen, it is about getting ready for it. It is about unlearning the things we hold as true, it is about running towards the future and not worrying about preserving today.

Merchant then switches her attention to social interaction. She asks the audience to act social for a moment, walks around and talks to some of the guests. The point in this pattern break is to show that being social in the digital era is more than social media. ”It is something humans do deeply well,” she concludes.

Success is about getting others excited

Describe soft topics through equations. That is what Merchant’s geek husband makes her do sometimes. Inspired by that or not, Merchant has come up with a success formula: S = TPC. But more on that later. She tells about TEDx organization – a global non-profit idea-sharing enterprise – and how they have grown from a tiny group to a worldwide event organizer with a 1,000+ people, who have organized over 7,000 events.

”In this is a big lesson about what really matters,” she says and continues, ”There used to be a time when the size of an organization was incredibly important for an idea to scale.” This does not apply to most companies in the social era. We all should be more like gazelles, leaping from opportunity to opportunity – rather than gorillas in spandex, trying to act and convince ourselves to be quick and lean. Success, among many things, is about getting other people to be as excited as you are, to share the same passion – and to act as one.

Connected people are aligned with purpose

We listen to a sad example about people’s passion being overrun by corporate bureaucracy. ”She is now then more productive than when she worked in an organization,” Merchant tells about a person who had recently retired, and throws out a rhetorical question. How many companies actually decrease productivity although they do everything to increase it?

”The thing I keep noticing over and over again is how much connected people can now do that large organizations once could,” she says. They are not doing it for money, not because someone has told them to, they do it because they are deeply aligned with purpose. Right, the purpose. I get a flashback of former Nordic Business Forum speaker Daniel Pink and the self-determination theory he publicized, which states that motivation centers around autonomy, mastery, and purpose. Merchant says that purpose brings out the best people. Makes sense, right?

She now gets back to the success formula:. T = Talent; is it inherent or based on credentials? P = Purpose; are you working for meaning or money? C = Culture; is the working culture relational or based on routines? In a nutshell: success is where talent and purpose are multiplied and taken to the highest power by the culture. She uses charts to show that if the culture is zero, it does not matter how much talent there is and how strong the purpose, the success always equals only 1.

What should big companies do?

After finishing her excellent presentation, the moderator, Antoni Lacinai asks Merchant what big companies should do. After all, the world is moving towards smaller units, independent people who unite and separate faster than a big company can produce a press release. Is the time for big companies over? Let’s hear what Merchant says.

”Don’t try to tell yourself that you can just sort of make yourself leaner and act faster,” she starts. Rather than that, big companies should focus on what allows them to act faster, fail faster and learn. As an example, we hear a brief account of one of our recent failure-to-success stories, the popular Finnish mobile game, Angry Birds.

”Try a bunch of things and evaluate them at the end of the year,” Merchant continues. That way you learn what is working. For many, the problem is that they want to be successful straightaway. So, rather than thinking is something right or wrong, big companies should think about what they just learned. Merchant compares this to learning to walk. Before being able to run, you have to learn how to walk. You will land on your butt many times and build muscle to get up faster – and stay up and ahead.

Bonus: pull ideas from your employees

Merchant relates the example of a company that decided to use part of its profits in a new way. Rather than increasing budgets by 5%, they created a money pool. So, the company wanted its employees to pitch their ideas about how the money should be used. The idea of pitching was well received by the employees; about 180 ideas were presented. Many of the ideas were such that, quoting Brian Tracy, ”Wow! I never thought of that!” For example; the company cafeteria served only comfort food, because they thought people like comfort food. But when one of the employees came up with an idea of selling more greens and taking care of the employees’ health, many others supported the idea. Overall, the ideas created changes. Not because of the money, but because people were committed to it.


Nilofer Merchant is a business advisor who has personally launched 100 products amounting to $18B in revenue. She’s won the Thinkers50 Future Thinker award and her “11 Rules for Creating Value in #SocialEra” was Fast Company’s Best Business Book of 2012.

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