How Leaders Help Innovation
(Pavan Soni is a friend I admire and envy. I admire his passion for innovation and envy the fact that he has taken time off to do a PhD in IIM Bangalore. Pavan is an Innovation Evangelist by profession and a teacher by passion. The first time I read about him, the words ‘Innovation Evangelist’ caught my attention. That is how I got in touch with him. He is currently pursuing his Doctoral Studies in the space of Corporate Strategy & Policy from IIM Bangalore. To know more about Pavan and his ‘evangelistic’ work you must take a look at www.pavansoni.net (Incidentally www according to Pavan is ‘wild wild web’!
His guest post here reflects his deep thinking about innovation in organisations. Especially the role of leadership.)
Imagine that a child climbs up a tree and below is his father standing. The child has climbed high up on the branches and now his dad says, “Time to go home,” for which our child says, “Dad. Should I jump from here?” Now when the child actually jumps from high up there, who do you think is afraid- father or the child? I believe it’s father! The child on the other hand is extremely confident that his dad would catch him. Now that’s what I call leadership. Leadership is the ability to motivate people around oneself so much that they overcome the fear of failure. This sense of leadership is the cornerstone of innovation enablement.
The million dollar question that perplexes modern day thinkers and doers is- would Apple be as innovative if Steve wasn’t there? Or would Tata Nano been possible but for Ratan Tata’s commitment? In other words, does innovation require leadership as a necessary condition? This question becomes all the more significant when we see performance dichotomies around us. We have firms such as 3M, Toyota, Samsung, BMW, Nike, McDonald’s and HCT, among others, which are characterized by low profile leaders and one might not explicitly link performance to leadership charisma or hands-on involvement here. Contrast this with the success of firms like Google, Apple, Tata Motors, Bharti Airtel, and Infosys, where one can’t but think of leaders. Even though we largely agree that great leadership is not a sufficient condition for innovation to happen, but is it that innovation can happen in absence of leadership or when leaders change? Let me attempt an answer to this question by drawing inspiration from researchers and practice, and help you with some broad-level actionable.
For starters, read this statement from William McKnight, the legendary Chairman of 3M.
“As our business grows, it becomes increasingly necessary to delegate responsibility and to encourage men and women to exercise their initiative. This requires considerable tolerance. Those men and women, to whom we delegate authority and responsibility, if they are good people, are going to want to do their jobs in their own way. Mistakes will be made. But if a person is essentially right, the mistakes he or she makes are not as serious in the long run as the mistakes management will make if it undertakes to tell those in authority exactly how they must do their jobs. Management that is destructively critical when mistakes are made kills initiative. And it’s essential that we have many people with initiative if we are to continue to grow.”
Keep in context that this statement was made in 1948, way before the word innovation became a fashion! What you read through these lines is the cognizance that mistakes will be made when someone tries something new and leadership is about giving the safety net for those to ‘try’. It’s the same philosophy that laid concepts such as, 15% time-off or linking managers’ incentives to new product performance, rules that have been adopted widely by firms ranging from Google to Facebook and even some Indian firms. This enduring philosophy articulated by McKnight is an indicative of the fact that ‘yes’ leaders do play a significant role in setting up a ‘climate’ of innovation. Please note that I used the word ‘climate’ here instead of the loaded word- ‘culture’- to emphasize that a climate can be made conducive more readily than the culture and enduring climatic conditions have the potential to influence cultures.
Getting back to the question, I initially posed. My answer, considering the ‘bounded-rationality’ that I possess, is a resounding “Yes.” I believe that great innovations require good leadership. These leaders need not be hands-on, but what’s important is setting up the overall intent of the firm, something that could be done right at the inception, the way McKnight did in the case of 3M. Either founding fathers or current captains, leaders are the necessary conditions for innovation to happen, but not sufficient.
So here is my three point agenda on how leaders can shape the innovation ‘climate’ of an organization and in turn have an enduring effect on the ‘innovation culture’. A caveat here, you needn’t be a CEO or GM to appreciate and possibly implement these lessons; they are amicable to anyone who is responsible to shape up others’ dreams and careers.
Attract Unreasonable Talent: It takes me to a dialogue between Subroto Bagchi and Azim Premji, which the former articulates in his book- Go Kiss the World. Subroto says that when he was leaving Wipro, Premji asked him the reason for leaving the company, to which he responded, “We don’t think alike. Your way to working is not same as my way of working. We are different”. To this Premji quipped, “If the way you think has to be the way I think, then why do I need you?” Now that’s the trait of a great leader. Leaders understand the virtue of being surrounded by people who are unlike them. As I say- being comfortable with people who make you feel uncomfortable. The general tendency for us is to make friend with people who are like us or even choosing to work with people who share our thought process. In life in general and in business in particular, such tendencies of seeking parity is inappropriate. Not only that such tendencies limit learning, but also dangerously inhibit thinking. It’s quintessential that managers, at all level, very consciously identify, attract and retain a share of unreasonable people around them. This unreasonable talent must be cerebrally challenging, yet emotionally enabling. In other words, resistance and argument shouldn’t be for the sake of proving a point and hence hindering progress, but to discover the right answer and not rushing through what the boss has said.
Enable Ambidexterity: Ambidexterity in literal terms is one’s ability to effectively use motor skills of both hands, but in organizational context, it translates into the ability to explore and exploit, simultaneously. It’s about exploring the current resources and capabilities of the organization, while concurrently investing into creation of future assets. It’s about not taking one’s eye off the current business and run it profitably enough, yet not getting busy with or tied-to the current performance in missing out the next growth engine. The organization that comes to mind here is Toyota, the producer of world’s largest selling economy segment car- Corolla; one of largest selling luxury cars- Lexus; and maker of world’s largest selling hybrid- Priyus. Any reasonably read business student or a manager would discern it being suicidal to compete in orthogonal markets and strive for leadership position. Yet Toyota has done it so successfully. The secret is- Ambidexterity. And where does it come from? From the top. The leaders have to apportion mindset, resources, processes and networks to enable competing asset creation, one focusing on today and another on tomorrow. Keep in mind that it’s easier said than done, as often current resource requirements siphon our any future investment, owing to the inherent risk involved in the latter. Leaders are able to balance this very well by not getting tagged to current performance issues and enabling creation of future avenues. Call this Yin and Yang of leadership, and such attributes percolate all the way down to the grassroots level in successful innovators.
Instill Belief: Countless studies have depicted that there are no major psychological, trait related differences between entrepreneurs and managers in large organizations. Two of the attributes in decision making styles that differentiate entrepreneurs from managers are- excessive usage of biases and heuristics by entrepreneurs that by managers. Leaders in organizations more akin to entrepreneurs than managers. The usage of biases and heuristics help quicker decision making, an imperative in dynamic environments, and stems from high level of self-confidence, often to an extent of over-confidence. What does it mean for innovation? Innovation is inherently a risky endeavor, albeit that one can contain the potential damage. When embarking on such efforts, a sense of belief in the cause and confidence in the means can’t be overstated. It’s essentially the prime role of a leader to provide the safety net to his team that they experiment and be ready to fail. It’s important to instill an ‘experimental mindset’ amongst the team members and the only way is to take the fear out of the equation. Remember, there’s a difference between irrational exuberance and achievable ambitions. Leaders’ role is to contain risk and make his men leverage the situation with freedom.
What I have articulated here are but three of the traits that leaders hone while inspiring ordinary people to achieve extraordinary goals. Innovation being an ambitious venture, setting the right context and enabling resources goes a long way in ensuring commitment from people. Numerous studies have hinted that innovations in large firms happen not because of organizational support, but in spite of such support. Most innovations are personal endeavors where managers leverage their position to garner resources and ‘push’ their innovation through the organizational value chain. If lack of leadership commitment and organizational alignment can produce as many innovations, imagine what a conducive environment could unleash?
Let me seal my letter with this anonymous quote: “Leading by setting example isn’t the best way to inspire anybody. It’s in fact the only way”
“Attract unreasonable talent. That is an interesting point. Have you ever thought about this?”
“No Prasna. We used to talk about not hiring clones. But this is a refreshingly different angle.”
*Prasna Rao is an unusual friend. He appears every time I start writing something. He is almost always there when I am writing my blog. He asks questions that are razor sharp and often makes me uncomfortable. He is relentless till I answer his questions in simple, clear terms. You might find that he is most of the times asking questions that you want to. Therefore he is on your side, while he is putting me in the dock. I call him my Uninvited Coach