leadership for innovation: rethinking management and organization paradigms

Rethinking management and organization paradigms

Edward Erasmus MA Mini workshop

University of Aruba

November 28, 2011

Leadership for innovation

A little about me…

What we will do in the next 30 minutes…

• Have a conversation about innovation, leadership, and organizations…

Agenda • Explain innovation (briefly)

• Challenges for leaders

• Leadership qualities of the 21st century

• How organizations need to adapt

• Creating a climate for Innovation

• Questions / discussions

Innovation?...

. . . is generally understood as the successful introduction of a new thing or method . . . Innovation is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or services.”

- Luecke and Katz (2003)

Title We see innovation

as a means to:

• unlock talents of all of our people

• develop every area of the economy and, in particular, wherever high value added businesses can flourish and grow

• generate sustainable prosperity

“Transforming the (current) resources of our nation (Aruba) through the creativity of people into new resources and wealth.”

Our own definition of innovation…

….without visionary leaders

No innovation no change no development….

Key leadership challenges…

SPEED PEOPLE

MANAGEMENT

PARADIGMS TOMORROW

1. SPEED!!

if you walk you stand still, so you’ll need to run pretty fast to advance just a little.

Radical innovation and technological developments is going to dominate your daily schedule….

Radical innovation

…….an improvement or advancement that enhances a product, service or a process in a manner that has never been expected by the market…..

• Good for consumers

• Disruptive for existing industries

(some will adapt, others will fade away)

Radical innovation

Radical innovation…

The biggest fear by big companies in this technological innovation era is not to be able to recognize radical innovation and (timely) capitalize on it when it appears….

“Successful organizations face considerable difficulty in maintaining their strength and might. Of the 25 largest companies in 1900, only two have remained in that select company. The rest have failed, been merged out of existence, or simply fallen in size.” ~ Paap & Katz, 2004

Coping with ‘Speed’…

• Do not fear radical transformations….

• In its place, look for opportunities instead of deterring threats.

• Or… seek to be at the forefront of innovation

2. PEOPLE You don’t control consumers… Consumers control you...

Thanks to social networking:

• Society is moving towards a more social, collaborative, interactive and responsive web

• Higher interconnectivity

• Building communities

SN gives people a powerful voice…..

From social media to social movement

Say goodbye to the era of

monologue

The new communication model is

dialogue

Social Networking has changed the ‘game’ in marketing and communication, but also how organizations need to respond to consumer needs….

Mass customization….

Co-creation…

and co-branding….

take on new forms

massively multiplayer online role-playing game (MMORPG)

Co-creation….

Starbucks gave consumers a

voice....the result:

over 50,000 product ideas

• Forget B2C or B2B……

it’s now P2P (person-2-person)

…customers want to connect and interact with companies on a 1:1 social level

…and those who can deliver that, will gain substantial competitive edge...

Engaging ‘People’…

• Allow customers ‘inside’ your organizations.

• Opportunities to engage in creative new forms of online communication with all sorts of stakeholders.

• Use the ‘consumer voice’ to enhance your competitive edge.

“We are living on this planet as if we had another one to go to.” - Terri Swearingen

3. TOMORROW!!

• Environmental resources are limited and are quite sensitive to everything that we do.

• We are starting to experience the effects of the actions of generations that came before us.

To make sure that future generations will not experience worse, we need to be aware of the ideals and requirements of sustainability….

Think sustainable….

Why adopting sustainability practices..?

Companies have learned the hard lesson that without a sustainable society, there is no sustainable business….

In order for a business to be truly sustainable, it must sustain not only the necessary environmental resources, but also its social resources, including employees, customers (the community), and its reputation

Sustainable enterprise…

• Reduced packaging materials for products

• Reengineered its logistics by rerouting trucks and save 100 million miles

• Helped save $200 millions in costs, while reducing fuel consumption (and emission) and lowered disposal costs to landfills

Sustainable enterprises

1. Incorporating principles of sustainability into each of their business decisions.

2. Supplying or consuming environmentally friendly products or services that replaces demand for non green products and/or services.

3. Greener than traditional competition.

4. Enduring commitment to environmental principles in their business operations.

Coping with ‘Tomorrow’…

• Think ‘sustainability’ in every decision

• Creating value through sustainable enterprising

• Focus on triple bottom line: people, planet and profits….

4. MANAGEMENT PARADIGMS

Too much of today’s management thinking is still rooted in the industrial revolution…

Design to control: Workers seen as machines made up of interlocking parts that each play a clearly defined role in the functioning of the whole…

Old-fashioned leadership styles

Businesses are organized to operate, not to create…

• People employed to make the organization operate as efficiently as possible.

• A small number of people are selected to lead the people who are operators.

• An even smaller number of people are selected to lead an entire business function, and

• One person to lead the organization itself.

Old-fashioned leadership styles

Exploitation of resources, like nature, people, capital and trust for the purpose of short-term profits…

….and guess what?....

New leadership paradigm

• Create and embrace diversity in knowledge, people and sources.

• Focus on ‘creation’…not just ‘operation’.

• Think ‘Win-Win’ and long-term.

• Embrace new forms of capital.

New forms of capital

Intellectual Capital

Social Capital

Creative Capital

Intellectual capital

Collective knowledge (whether or not documented) of the individuals in an organization or society.

This knowledge can be used to produce wealth, multiply output of physical assets, gain competitive advantage, and/or to enhance value of other types of capital.

IC can include: • skills and knowledge that a company has developed about how to

make its goods or services; • individual employees or groups of employees whose knowledge is

deemed critical to a company's continued success (knowledge about processes, customers, research results, and other information)

Social capital

= Social relations that have productive benefits.

People acting and interacting well in communities can create better solutions, greater accountability, and more economic growth.

“Social capital is about the value of social networks, bonding similar people and bridging between

diverse people, with norms of reciprocity.”

(Dekker and Uslaner, 2001)

Creative capital

• Passion and drive of people / societies seeking to understand, embrace, and nurture creativity.

Creativity -> Invention -> Innovation

“…creativity will be the single most important leadership quality for organizations forging a path through the complexity of today’s marketplace, workplace, and community.”

~IBM Global CEO Study (2010)

Time to start educating our leaders in a new paradigm…

CLO’s needed….

Chief Listening Officers

CNO’S needed….

Chief Networking

Officers

CEO’S needed….

Chief Empowering Officers

Ret

hin

kin

g o

rgan

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ion

s…

Organizations?.. • An organization neither has a conscience or a soul,

only the people in the organization have them.

• An organization is a series of conversations and dialogues, external or internal, in pursuit of solutions….

Sir, yes sir!

Hierarchy models

….too rigid and not welcoming for innovation

Building new forms of organizations

We need to rethink organizations for a more open, transparent and competitive world…

Network-based structure

Rethinking organizations…

Designing organizations to create…not just to operate…. Focus on:

• Creativity • Networks • Collaboration • Learning

Leadership: Creating a climate for Innovation

Head – establishing clarity of purpose. Leaders need to make a personal commitment to innovation, communicate what it means inside the company, and lead by example, emphasizing innovation in their day-to-day decisions.

Heart – cultivating an open and supportive environment. Leaders must have the ability to build trust and mutual respect with employees, foster open airing of problems and disagreements, and solve conflict in creative ways.

Guts – facilitating idea generation. Leaders should challenge people to consider alternative approaches and give them time and resources to pursue innovative ideas.


New Leadership approaches

New Organization

models Innovation


…and many others

Final thought…

Instead of thinking “outside the box”, just

get rid of the box…

Final thought…

Act Different,

Think Different,

Make a Difference

“The people who are crazy enough to think they can change the world are the ones who do.”

~ Apple’s “Think Different” Campaign (1997)

Edward M. Erasmus, MA

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QUESTIONS???