BMNT Editor’s note: This is the fourth in a series explaining the common beginner-steps needed to get an innovation practice off the ground or improve an existing innovation practice. Find our first post, explaining the goals of implementing a structure to guide innovation and training workers how to use it, here. The second installment, on how to create an innovation thesis to guide your team’s activities, is here. The third piece, on how to assemble the right team for the job, is here.
GUEST POST from Brian Miller
Steve Blank, the godfather of Silicon Valley, says that “for innovation to contribute to a company or government agency, it needs to be designed as a process from start to deployment.” At the start, you need a steady influx of new project ideas to replace and restore eroding capabilities. Investors refer to this influx as “deal flow,” and it is considered the single most important factor in their success. Here are the key principles and practices to generate the deal flow your innovation practice needs to succeed.
1. Open your pipeline wider than you feel comfortable
It’s cliche to say this, but get comfortable with the uncomfortable. It may take hundreds of initial problems to find a few dozen pilot projects, and only a handful of successful programs may result from those pilots. A rigorous process, like the Innovation Pipeline®, ensures you manage the risk and uncertainty of innovation along with your finite resources. When venture capital investors raise a fund, they initially invest only about 40 percent to 60 percent of it. Cash reserves, known as “dry powder,” are held back so investors can quickly invest more in the early bets that pan out. Translating this to the government, resources are first invested in validating a project (explore). Only after validation are significant investments made in deploying a new capability (exploit).
The Innovation Pipeline
To get started, you must first understand what you’re doing and where problems will come from. Are you gathering problems from your organization’s workforce (if you’re trying to improve your structure, processes, and culture), your customer base (if you’re trying to improve their job), or both?
If the former, you could use or create an internal portal, akin to a digital comment box with more rigor. If the latter, you could use a tool like SurveyMonkey or something more sophisticated. If that’s not feasible right away, just do it manually. An innovation pipeline needs a lot of inputs at the beginning in order to produce disruptive solutions at the end. It’s the fuel for innovation, so walk the halls of your organization, cold-call your customers, or deputize people already embedded in key places to be your eyes and ears, spotting and assessing opportunity by collecting problems for you.
2. Scope and prioritize problems at the atomic level to find the right project ideas
You will need to see a lot of problems, and rigorously assess them, to find the needs that will lead to transformative change. You cannot be too selective up front, so prepare for the volume by using a simple framework to deconstruct problems into their atomic units.
A Key Beneficiary has a basic need in order to achieve a desired outcome. This problem-centric approach will help you scope and prioritize all the in-bound opportunities so you can easily focus on certain beneficiaries or certain desired outcomes.
Pro-tip: If your pipeline is brand-new, focus on a beneficiary group that you can co-opt, like insurgents, to build momentum in your organization. Or focus on the desired outcomes that align to your organization’s stated and published strategic priorities. If you’re still stuck, revisit your innovation thesis (or create one if you haven’t already) to help guide your problem sourcing and triage in-bound opportunities.
3. Respond to everyone
Do not leave hundreds or thousands of people hanging if you collect their problems. If your problem sourcing is yet another black box in a large organization, apathy will quickly set in and your projects will dry up. Rather than leave problem-submitters guessing, be honest with them about (1) how you will decide what will get worked on, and (2) that not everyone’s problem will get worked on directly. This communication can be as simple as a Senior Leader announcement at a town hall, or it can be memorialized in an Innovation Doctrine that lays out the fundamental principles that guide coordinated action in your organization.
Pro-tip: the best innovation programs provide all problem owners with valuable information in exchange for their input. For example, pointing them in the direction of the office that can help them solve a simple problem; connecting them to someone experiencing a similar one, so they can band together; or just showing them a dashboard of your deal flow so they can see where their problem ranks or fits with others. A transparent and responsive innovation practice keeps contributors motivated to pursue their ideas and contribute to new ones in the future.
4. Look for patterns
Not every problem will get worked on. Even with infinite resources, you must prioritize based on your innovation thesis. However, seeing patterns in hundreds or thousands of problems, even the ones you set aside, will reveal the root cause of something greater. For example, you may find lots of problems related to testing new software. Instead of fixing each one, fix the process for testing, evaluating, and approving new software tools, eliminating an entire category of problems in one project.
5. Generate short, descriptive problem statements
Your success or failure is based on a disciplined commitment to problem-centric innovation. The best way to keep yourself honest is to initially frame projects as problem statements that provide sufficient background on the origins of the problem to be solved. This kick-starts the next stage of innovation (Curation) and ideally identifies (for the purpose of recruitment) at least some of the key stakeholders around a problem, their basic needs, and an early definition of success.
Pro-tip: a great problem statement should be shareable with and understandable by anyone. The goal is to present a clear articulation of the opportunity and to expand the coalition around the problem so that others can help you solve it.
Next, you’ll rigorously assess and prioritize your problems, and you’ll begin to interview and observe people affected by them. In the next post, we’ll share more insights on how to do it, so you know you can trust the data that results and amplify the confidence in your decisions.
Image credits: BMNT, Pixabay
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Many would-be innovators obsess over ideas, wait for inspiration to strike, and believe that with the right idea, success can miraculously come overnight.
However, as we’ve written before, that’s just not going to happen. In fact, usually the only thing separating the winning innovators from the rest is execution. It makes all the difference in the world, and yet, it’s still a vastly underrated capability.
As part of our coaching program, we’ve asked hundreds of corporate innovators and innovation leaders to reflect on their strengths and weaknesses. And, by far, the most common answer is that they’re great at coming up with ideas and thinking about the big picture but lack the patience and discipline to see things through to results.
As such, it’s safe to say that as a community, we innovators need to take a hard look in the mirror and admit that this an area where most of us have a lot of room for improvement.
So, in today’s article, we’ll explore the topic of executing innovation in more detail to try to understand what the problems associated with it are, and what successful execution of an innovation really takes. This is designed to be a guide to help leaders get it right, but I think there’s a lot that every innovator regardless of job title can learn from.
What does executing innovation mean?
Before we dive deeper, it’s probably a good idea to clarify what we mean with the term “executing innovation”, and how it relates to “implementing innovation”.
These are often used interchangeably, but I think it’s useful to distinguish them from one another. The way we like to put this is as follows:
Implementing innovation is the process of taking an idea and then turning that into reality.
Executing innovation, on the other hand, is the entire process of creating value with innovation.
In other words, implementation is what you do for an individual idea to make that happen. Execution covers the implementation, but also the process of turning that (along with many other ideas and innovations) into something that actually creates value and can be scaled up.
Implementation isn’t always easy, but it’s still typically a linear project that you can usually plan out in advance. Execution, on the other hand, is a much more complex and multidisciplinary effort.
To succeed at delivering value, you need to get a lot of things right. And with innovation, there are many assumptions in that plan. Some of those assumptions will always prove to be false, and you’ll need to deviate from the plan.
That combination of multidisciplinary collaboration and the need to deviate from original plans often leads to a myriad of practical challenges in many large organizations.
However, before we dive deeper into those challenges, let’s first take a step back to realize why execution is so critical.
Why execution is critical for innovation success
There’s a reason for innovation being defined as the act of introducing something new.
Everyone has ideas. Many can even implement some form of them, typically a prototype, but few successfully realize the full potential of the idea by truly executing on it successfully.
To clarify, ideas are an important starting point, but with every great idea, there are hundreds or even thousands of people across the world who’ve had the same exact idea.
Most never start working on it. Many give up in the process. Some make it to market, and a few might even make that into a feasible business. There are usually only a couple of winners. Those are the ones that succeeded in executing that idea.
Everyone has ideas, but few successfully realize the full potential of their ideas. The ones that do are the ones that know how to execute well.
This is of course a bit of an oversimplification but should help explain the fundamental importance of proper execution.
And that is not just true for individual ideas and innovations, but it’s also the case for corporate strategies at large. Look at any given industry, and it’s quite likely that you’ll see many companies with a nearly identical strategy. Again, the difference comes down to how well the company succeeded in executing that strategy.
In other words, your idea or strategy sets the ceiling for your impact if successful, but execution determines how close to that ceiling you’ll get. Even the best idea or strategy is worth nothing unless it’s executed well.
On the other hand, even with a mediocre strategy or idea, you can achieve remarkable success if you just execute it well enough. There are dozens of well-known companies like McDonald’s and FedEx that are obvious examples of this. There’s nothing particularly remarkable or distinctive about their ideas or strategies. They weren’t the first in their respective fields, they just executed on their ideas brilliantly.
What’s more, if you’re a strong executor, you’ll soon find out the limits of the original strategy or idea, at which point you can adapt and change course accordingly. But, it doesn’t work the other way around.
Thus, no matter the situation, execution will always be more important than your idea or strategy.
Misconceptions about executing innovation
As you might have realized by now, execution is of course a massive, nuanced, context-specific and very complex endeavor. In practice, it’s an endless jungle of interlinked choices and actions affecting one another that you need to navigate with limited information to get to the other side.
Thus, the space of possible challenges and problems you might encounter is pretty extensive. So, instead of looking at the individual problems themselves, it’s more helpful for us to try to understand the common misconceptions that ultimately lead to teams underappreciating execution and thus subsequently failing at it.
A big factor behind most of these is the fundamental uncertainty that innovation is always associated with. Because you can’t know everything in advance, it’s not going to be a nice and linear process of doing simple steps one after another. Instead, it’s a messy and iterative process of creative problem-solving.
Anyway, with that, here are the top four that I most commonly see innovation leaders and their teams have.
1. The leader’s job is just to get the big picture right
This is probably the most common problem I’ve come across, and it’s especially common among inexperienced executives, or ones that otherwise lack execution experience, such as some management consultants and academics.
There are many shapes this one might take, and we’ll return to it later, but what it ultimately comes down to is the glorification of strategy work and/or surface-level creativity.
In business school, and in consulting, we’re taught to think about the big picture as the job of top management. We’re led to believe that a leader or innovator takes in a market analysis, compares a few scenarios, chooses a positioning, and then paints an inspiring vision to show direction for the company. Then the pieces will simply fall in place and success happens.
While the above mentioned are of course still useful activities, if you’ve ever actually turned an innovative idea into a successful business, you know that in practice, there’s a lot more to it than that, and experienced executives are of course well aware of that
Strategic choices can be made across the organization, but the responsibility for execution always lies at the top.
As Professor Martin has well put it, CEOs should stop thinking that execution is somebody else’s job, and the same applies for every innovation leader. Strategic choices can be, and frequently are, made where the action is. Yet, the responsibility for execution always lies at the top. After all, there’s a reason for the CEO being the Chief Executive Officer.
2. I don’t need to understand the details
The second is closely related to our first one. It’s easy to think that as a leader or visionary innovator, you’re the person responsible for the vision, ideas, and big picture decisions, and then the experts will then figure things out in practice. After all, that’s why you hired them, right?
Well, that might work if you’re operating in a static industry where all the variables are known and static, but with innovation that really isn’t the case.
You need to get the big picture right, but it isn’t enough to succeed. You need to also have the right product, business model, technology, customer experience, customer acquisition channels and tactics, operating models, etc. All of these have a wide variety of choices that depend on one another and changes in any of the areas will force you to change many of the other pieces in the puzzle too.
With innovation, the devil is in the details!
As an innovation leader, connecting the dots is ultimately your job, and you can’t do that without understanding the details.
That’s why you’ll find an obsession for the details in pretty much every successful innovator, both past and present. They have the same in-depth understanding and attention to detail as the best artists, athletes and top representatives of other fields do too.
So, while you absolutely need to engage with and empower the experts, they are experts in their own field and likely don’t know how to consider all the other moving pieces in the puzzle. As an innovation leader, connecting the dots is ultimately your job, and you can’t do that without understanding the details.
It’s the one responsibility you simply can’t delegate away.
3. Execution requires a clear and unambiguous plan
Even if you are an experienced executive and value the importance of execution highly, it doesn’t mean you couldn’t fail when executing innovation. Here the most common problems occur if the leader’s experience comes primarily from operations within the known and well understood confines of “business as usual”.
When the environment is well understood, and the scale large from the get-go, it’s of course valuable to try to plan carefully, analyze business cases and craft detailed project plans prior to execution.
Also, since everyone knows that innovation is a risky endeavor, it of course makes sense to try to reduce those risks before your start a big innovation project to try to avoid major mistakes and generally just ensure that you’ve done a good job in planning and preparation before committing to the project.
This often leads to large companies commissioning all kinds of market studies and strategy projects. Some of those can certainly be useful in increasing your understanding of the landscape, but most invest way too much time, energy, and money into these. Also, every now and then these projects seem to be ordered only to have a scapegoat in case something goes wrong.
Regardless, there’s a fundamental problem: with innovation, you can’t have all the answers in advance. You’ll always need to make a number of assumptions upon which your plan relies on, some of which will inevitably prove to be wrong.
With innovation, you won’t have all the answers in advance.
Thus, if you require innovators to propose clear, detailed and unambiguous plans for you, or conversely create such plans and then hold innovators accountable for successfully executing them, it just won’t work out. And, whenever it then comes to surface that everything hasn’t gone according to the plan, innovation projects are frequently shut down, even if they’d still hold a lot of potential.
You obviously still need to align with the strategy, plan ahead, and have a disciplined approach to execution, but it’s not so much about creating a detailed roadmap, as it is about choosing direction and figuring out which questions or problems you’ll need to address first.
In other words, you need to embrace the uncertainty and the fact that you can’t have a perfectly unambiguous and detailed plan before starting to execute it. Instead, figure out what the assumptions and uncertainties in your plan are and commit to a disciplined learning effort to figure out the right path forward.
4. Innovation is fun
There’s a stereotype around people working in innovation being these visionaries that are bursting with great ideas and seem to come up with great new concepts all the time. And as mentioned in the intro to this article, that is often true.
That skillset is of course very useful for innovation, but there’s also a downside. There are naturally exceptions, but many of us working on innovation can find execution too boring and repetitive, and/or lack the perseverance, discipline, and patience needed to succeed at it.
Innovators often spend too much on the creative and “fun parts” of innovation, as opposed to what’s really needed to turn an idea into a successful innovation
As a group, we generally love creative work, and are always looking for fresh, new stimuli to feed that inspiration. That often leads us to spend too much time and effort on the “fun parts” of innovation, and too little on the not so fun, more repetitive, and laborious parts of the process that execution essentially is comprised of. The reality is that for every minute you spend coming up with ideas, you’ll probably need to spend a day, a week, or even more implementing those ideas.
So, if your innovation team is primarily filled with, or led by, such “idea people”, which is quite common, then there’s a big risk of a systematic lack of respect for and capabilities in execution. This will lead to a very suboptimal culture for innovation, and ultimately disappointing business outcomes.
Getting Execution Right
As already mentioned, there are a lot of similarities between successful execution in “business as usual”, and in innovation. However, there are also clear differences between the two.
So, to help you navigate the differences, and to succeed at executing on whatever innovation you’re working on, here are the five most important factors to keep in mind whenever you’re trying to execute on an innovation and build something truly novel.
1. Take the path most likely to succeed, but keep your options open
As mentioned, with innovation planning and strategy work need to be done a bit differently than you would with an existing business.
Good decisions here make it much easier for your team to figure out how to move forward and can save a lot of time money going down the wrong path. Regardless, you’ll soon end up at another crossroads and need to make another decision. Heck, sometimes you might even come across a dead-end and need to backtrack to an earlier crossroads. Sometimes Plan C or D is the way to go.
The point is that no matter which path you choose, you won’t see what’s ahead all the way to the end.
Thus, good strategy work requires you to embrace uncertainty, test assumptions critically, and think deeply about the real-life feasibility of each path ahead.
And it’s certainly not a one-time project you do at the beginning, but more of a continuous learning process as you unravel the puzzle piece by piece.
If you keep an open mind and build your teams and products to embrace that uncertainty, you can quickly recover and learn from setbacks, as well as embrace new opportunities you couldn’t even think of before you set out. This is what’s known as cognitive and organizational flexibility.
2. Solve the biggest problems first
As humans, most of us have a bit of a tendency to go for the comfortable low-hanging fruits and procrastinate on the hard but important problems, as well as uncomfortable truths.
I’ve certainly been guilty of this on many occasions, even while writing of this article. Getting a number of small things done makes us feel like we’re making good progress, but unfortunately that’s often a bit of a false sensation as we might not really be any better off than when we began.
With the inherit uncertainty in innovation, that is naturally a bit of a problem. When you’re executing any given innovation, there’s countless things that need to be done so it’s easy to just start checking off boxes like building more features, creating marketing materials, getting compliance approvals, or whatever you may have on your agenda.
But, it’s the big things that make or break your innovation early on. For example: will a customer benefit from my product, how much are they willing to pay, can I even build the product I’ve envisioned, etc.
While you need to care about the details, it’s the big things that make or break your innovation early on. So, start from the big problems, even if it hurts!
The key is finding a way to figure out what these big problems or critical assumptions are, and then find ways to quickly test and address them. This allows you to quickly figure out if you’re on to something, which of course saves a lot of time and money for you in the inevitable case that you weren’t quite there from the get-go.
Also, if you get the big things right, you can already deliver most of the value, and that means you can more quickly start capturing some of that value to get a return for your investments.
Plus, if you tackle these early on when you still have a small team, changing course will be much quicker and easier, and you’ll have spent much less money solving the same important problems than you would with a larger team later on.
In most businesses, these critical assumptions revolve around how much value you can deliver to customers, and how valuable they see that to be. However, in certain circumstances, those can be related to something entirely different, such as the feasibility of implementation when developing a new breakthrough drug.
Solving for the hardest problems first does generally require a bit more of a leadership commitment as you won’t always be able to show quick wins as early on, but at least it can save you from an embarrassing and costly failure like CNN+.
3. Build the right team
It might be a bit of an obvious statement, but it’s still probably worth pointing out: innovation is a bit of a team sport. So, to do well at it, you need the right team.
However, what might not be as obvious is that ‘the right team’ means in practice. In our experience, there are two key parts to this:
Multidisciplinary team with talented individuals in each area
Leadership and individuals that share the right mindset for innovation
The prior is pretty self-explanatory. Innovation is almost always a cross-disciplinary effort. The specifics depend on what kind of an innovation you’re working on, but usually you need expertise in at least design, engineering, commercial and operational matters.
The most impactful innovations are actually comprised of a stack of innovations in many of these areas, each designed to work together to address a specific problem or ‘job’ for the customer. Thus, if you have talent at every position, the outcome will be much more than the sum of its parts.
The latter, however, is the part that many teams fail to appreciate. Innovation is, by definition, doing something that others haven’t succeeded at before, so the journey won’t be easy.
Your team will face a lot of uncertainty and struggles, and will still need to perform at their best, often under a lot of pressure. That requires a very specific type of culture within the team, but also the right mindset for each individual. You want people that can cope with uncertainty and are able to remain optimistic and overcome difficult situations while still being realistic and ruthlessly critical of their own capabilities. They need to have an innate passion to strive for excellence, and a lot of discipline, grit, and perseverance.
And, of course, because it’s a team sport, people need to be able to work well together and perform as a team. This, however, isn’t usually much of an issue as long as people can leave their egos at the door. The struggles you will face together as a team will build bonds and gel you into a team.
4. Make sure every decision and detail are aligned
As we already discussed, you don’t need (and usually can’t have) a clear and unambiguous plan for an innovation project where every role and task would be charted out in advance. However, as we also discussed, the devil is often in the details and seemingly small things can derail the project from its goals?
So, what gives?
Well, the point is that with innovation, you need to keep an eye on everything. As an innovation leader, you need to maintain excellent awareness of both the big picture and the details throughout the project. But, because the environment changes dynamically and you need to move fast, you can’t really do that work upfront.
Nor can you just look at some KPIs and financial reports to figure out if things are moving in the right direction because the important things won’t show up in these for quite a while, and at that point, it’s often too already too late to react.
As a leader, your primary job is to keep up with what’s going on both with the ever-changing big picture, and the details on the ground so that you can spot problems early and intervene before it’s too late, no matter where the issues might arise from. If you don’t understand how everything works in practice and know what problems everyone is working on and why, it will be pretty much impossible to do that.
Some might see the latter as micro-management, but it doesn’t mean you have to dictate what everyone does. It just means that as a leader, you need to be the person that connects the dots and then empowers the team to succeed. There’s a clear difference.
Which brings us nicely to our last point.
5. Take full ownership for the execution
As we’ve covered, execution is the make-or-break part in the lifecycle for every innovation.
It’s always a bit of an exploratory process where you need to remain flexible, while still moving forward quickly and executing at a high level.
And, at the same time, seemingly inconsequential low-level choices related to implementation turn out to become existential issues for any innovation project.
Again, you don’t need to decide everything on behalf of your team. In fact, often it’s best to let the experts solve problems and do their job, as long as you can give them the right guidance and constraints to work with. Instead, you need to think of every potential problem as your fault and then figure out a way to get past them together with your team.
The bottom line is that being an innovation leader isn’t easy. It takes a lot of time and work to understand and stay on top of things, but as already mentioned, that’s the one thing you can’t really skip, automate, or delegate. Essentially everything else you can.
The only way to succeed at that is to take full ownership and commit to the process.
Conclusion
We’ve covered a lot of ground, so let’s do a bit of a recap.
Innovation isn’t a linear project that you can plan out in advance and monitor progress with a Gantt chart. There will always be plenty of surprises. Many unpleasant, but usually some positive ones too. You’ll need to be flexible enough to react to these and alter course accordingly.
It’s an inherently messy and iterative process of figuring out a way to build new things and align all the pieces so that everything works out.
Fundamentally, an innovation leader’s job is to show direction and try to keep track of everything that’s happening, align those puzzle pieces together with the big picture while always being on the lookout for potential problems and then eliminate those before they derail the project, as there will be many.
It’s not an easy or comfortable job, but if you can get it right, it’s an incredibly rewarding one.
Ironically, despite all the talk about practical issues and attention to detail being vital, this has been a bit of a high-level overview on the topic. So, if you’re interested in learning more about the details related to what we’ve discussed today, I have a couple of practical recommendations for you:
First, the best way to learn to innovate is by doing. So, get your hands dirty, keep these tips in mind, do your best, and I’ll guarantee you’ll learn a lot.
But, if you currently don’t quite have the time to commit to an innovation project, a good alternative way to learn more about innovation management is with our Innovation System online coaching program. We’ve now made the program completely free of charge for the first 1000 readers to sign up for it.
This article was originally published in Viima’s blog.
Image credits: Unsplash, Viima
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In today’s fast-paced digital landscape, traditional leadership styles are undergoing a significant transformation. The rise of technology and the acceleration of digital transformation processes demand leaders who are not only adaptive but also capable of fostering innovation and guiding organizations through the complexities of change. This article explores the evolving leadership styles suited for the digital age and presents case studies of organizations and leaders who have successfully navigated this transformation.
Embracing Agile Leadership
Agile leadership emphasizes flexibility, collaboration, and rapid decision-making. In a digital world, this style enables organizations to respond swiftly to market changes, technological advancements, and consumer demands. Agile leaders prioritize transparency, empower teams, and encourage continuous feedback to drive innovation.
Case Study 1: Spotify’s Agile Framework
Spotify, the digital music streaming service, exemplifies agile leadership. The organization employs a unique framework that divides teams into “squads,” each responsible for specific projects or features. These squads operate autonomously, with a high degree of flexibility and accountability. The leadership at Spotify focuses on setting clear goals and providing guidance while allowing squads the freedom to innovate and make decisions.
This agile approach has empowered Spotify to regularly release updates and enhancements, keeping the service fresh and responsive to user needs. The success of this leadership transformation lies in Spotify’s ability to cultivate a culture of trust, collaboration, and empowerment, which are crucial elements for thriving in the digital age.
Fostering Transformational Leadership
Transformational leadership goes beyond managing change; it inspires and motivates employees to go above and beyond, aligning their goals with the organization’s vision. In a digital context, transformational leaders are visionary, communicative, and capable of guiding their teams through disruption and innovation.
Case Study 2: Microsoft’s Cultural Renaissance
Under the leadership of CEO Satya Nadella, Microsoft underwent a significant cultural and strategic transformation. Nadella’s leadership style shifted towards empowerment, empathy, and fostering a growth mindset within the company. A key element was breaking down silos and encouraging cross-collaboration among different teams.
Nadella’s transformational leadership has revitalized Microsoft’s product offerings and improved employee engagement. His focus on empathy and understanding has encouraged a culture where innovative ideas can flourish, leading to the development of successful new products and services that are at the forefront of the digital era.
Leading with Emotional Intelligence
In the digital age, emotional intelligence (EI) is crucial for effective leadership. Leaders with high EI can navigate the complex interpersonal dynamics of diverse, often remote teams, fostering environments where employees feel valued and understood.
As organizations continue to adapt to the demands of the digital world, transforming leadership styles is not just a competitive advantage—it’s a necessity. By embracing agile and transformational leadership, and leading with emotional intelligence, leaders can guide their organizations through the challenges and opportunities of the digital age, creating resilient, innovative, and successful enterprises.
Conclusion
The digital age calls for adaptive, visionary leaders who are prepared to transform organizational cultures and lead with empathy and agility. The case studies of Spotify and Microsoft offer valuable insights into how modern leadership styles can drive innovation and success in a rapidly changing world.
Extra Extra: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.
Image credit: Pixabay
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In today’s rapidly evolving business environment, the need for organizational change is unavoidable. Organizations must adapt, innovate, and evolve to survive and thrive. At the heart of this transformation lies leadership. Effective leadership is pivotal in orchestrating change and guiding organizations through periods of transition. In this article, we will explore the essential roles that leaders play in driving organizational change, supported by two compelling case studies.
The Leadership Advantage in Change Management
Leadership is more than just setting the direction; it is about inspiring and engaging people to willingly pursue a new path. Successful leaders champion change, communicate a clear vision, and foster a culture that is open to new ideas. They also play a critical role in aligning resources, managing risks, and ensuring that the organizational structure supports the desired change.
1. Creating a Compelling Vision
A compelling vision acts as a North Star for organizational change. It is the leader’s responsibility to develop and articulate a vision that resonates with employees, customers, and stakeholders. This vision must be clear, inspirational, and aligned with the organization’s core values and objectives.
2. Communication and Engagement
Change initiatives often fail due to insufficient communication. Leaders must ensure that communication is ongoing, transparent, and two-way. Engaging with employees at all levels to gather feedback and address concerns is crucial for minimizing resistance and building trust.
3. Building a Change-Ready Culture
Leaders play a key role in creating and nurturing an organizational culture that embraces change. By encouraging innovation and rewarding flexibility, leaders reinforce behaviors conducive to change.
Case Study 1: Transforming a Traditional Retailer
A well-established retail company faced declining sales as consumer preferences shifted towards online shopping. Under the leadership of a forward-thinking CEO, the company embarked on a transformational journey. The CEO communicated a vision of becoming a customer-centric omnichannel retailer. Multiple initiatives were launched, including enhancing the online shopping experience and integrating digital touchpoints in physical stores.
Throughout the process, leadership played a crucial role. The CEO encouraged open communication forums where employees could voice concerns and ideas. Leadership training programs were implemented to equip managers with change management skills. As a result, the company successfully repositioned itself in the market, achieving a renewed competitive edge.
Case Study 2: Digital Transformation in Healthcare
A large healthcare provider recognized the need for digital transformation to improve patient care and operational efficiency. The initiative was championed by the CIO, who set forth a bold vision for leveraging technology to enhance service delivery.
Leadership was instrumental in this change journey. The CIO established cross-functional teams to break down silos and encourage collaboration. Regular updates and successes were communicated to all staff, with feedback loops to address challenges. By fostering an environment of continuous learning and adaptation, the healthcare provider successfully implemented electronic health records and telehealth services, significantly improving patient satisfaction.
Conclusion
Effective leadership is indispensable in navigating organizational change. By crafting a compelling vision, promoting transparent communication, and fostering a culture that welcomes change, leaders can drive successful transformations. As demonstrated in the case studies, the journey is fraught with challenges, but with the right leadership approach, organizations can emerge stronger and more resilient.
Extra Extra: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.
Image credit: Unsplash
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How do we become disengaged? What triggers disengagement in employees? When employees are engaged they embody the vision, values, and purpose of the company. The ultimate goal is to have a team of passionate contributors who are driven toward innovation and are positive and innovative problem solvers. As Leaders, we need to understand what causes our team to be disengaged if we want to shift them towards innovation.
Problems
When considering the signs of disengagement, often the first thing that comes to mind is laziness, apathy, and dissidence. These are merely symptoms, and as leaders, we need to dig deeper to discover what is happening at the core of our company and organizational culture that is causing these symptoms to surface.
To fully understand disengagement we first need to realize there are 3 employee classifications, according to Gallup; engaged, not engaged, and actively disengaged. Less than 31% of U.S workers were engaged in their jobs in 2014 and while it is easy to see the signs of an employee who is not engaged, actively disengaged employees tend to blend in as they are choosing this path, and just want to blend in.
There are a few telltale signs to look out for:
No initiative in employee performance
Unhealthy Activities
Silence can indicate a problem in the workplace
Lack of learning and lack of motivation
Wasted weekends
When we begin to look at our company culture and organizational culture we can start defining what the cause of this dissidence is. Systemic cultural issues can be due to:
Lack of challenge in the workplace
Lack of recognition
Lack of communication
Lack of trust
Siloed teamwork
Missing transparency
Disengaged employees sometimes need a spark. They are almost never bad employees, check out these 5 tips to reengage the disengaged.
1. How Might We
Addressing a lack of challenge in the workplace can seem like a difficult task, but one easy shift a leader can make lies in reframing. The first step in this type of reframing is identifying themes and insights for your company. This sheds light on problem areas for clients and employees alike. Reframing the insights to include ‘How might we’ creates an opportunity for would-be innovators to freely share ideas openly because it is framed as a possibility rather than a perfected final product. Reframing to these 3 words suggests that a solution is possible and it opens the door for a variety of creative ideation and problem-solving. When we pose a question to the team in the form of ‘How Might We’ we are encouraging them rather than inhibiting them. This combats disengagement by inviting each member of the team to voice their ideas in determining the solution. Every idea is valuable, and when you create a psychologically safe environment for all voices to be heard, your team will be fully unleashed.
2. Embrace Flexibility
The future of work is shifting, and with it many organizations are realizing that the traditional way we worked in the past, 9-5 in the office, may not necessarily be the best for unlocking teams’ full potential. The Bureau of Labor Statistics estimates that 50 million jobs are work-at-home capable. This means offering employees options for in-office, remote, or hybrid schedules is not only feasible, but it could increase positive productivity, and decrease the percentage of disengaged employees.
3. Employee Experience
Understanding the expectations and needs of your employees is vital to a company’s team health. When we work to recognize employees on a deeper level we can begin to change the culture to one that is thriving with ideas. Transparency and psychological safety will elevate your team and pave the way for healthy interactions that are sure to combat disengaged employees. A critical organization system we utilize is our Employee User Manual. This document is intended to open up conversations company-wide, to ensure every employee has the ability to share preferences, growth plans, and core values. By leading teams with an exercise such as this, you are building a foundation of psychological safety, transparency, and trust.
4. Compassion and Empathy
As leaders, there has never been a better time to build meaningful relationships with employees and communities alike. Nurturing these relationships is key to keeping disengaged employees happy, productive, and satisfied with their work.
“High-performing leaders of today are different. They’re empathetic, they think about people and society, and they really listen. There will always be financially-driven executives, but they’re getting pummeled and won’t be effective today,”
Empathy, ethics, and values lining up between leaders and teams has the potential to increase retention, cultivate ideas, and deliver a healthy work environment.
5. Motivation and Talent
Disengaged employees may simply be lacking the recognition to develop their talents. It is reported that 69% of employers say they are struggling to find the talent that they need, but with a shift in organizational culture, that talent may be present and in need of a little nurturing to fully blossom. As Terry Lee outlines, there is great potential inside everyone. It’s up to great leaders to bring it out in four nurturing ways:
Training
Leaders should connect with their teams as they help them better understand their importance and the value they bring to the organization.
Connection
Leaders should connect with their teams as they help them better understand their importance and the value they bring to the organization. Every leader should understand their company’s mission and articulate that message to staff consistently and authentically.
Challenges
When team members complete meaningful tasks, they may receive an intrinsic reward. One way to amplify this reward is by talking to teams to determine what they think are the most important parts of their job. Then leaders can help them structure their day around tasks that give them a feeling of purpose.
Coaching
Team members need coaches to meet them where they’re at. They help staff identify what options they may have to reach goals and then set the appropriate challenges that lead them to success.
Shifting Work Culture to Engage the Disengaged
At Voltage Control we believe that every team member has potential that is waiting to be released. We believe that change is necessary to remain relevant in the world of work, and through interventions and training, we can help leaders and teams unlock and unleash that potential.
In today’s dynamic professional landscape, organizations are increasingly characterized by a unique composition of inter-generational workforces. This fusion of Baby Boomers, Gen X, Millennials, and Gen Z in the workplace offers immense potential for innovation, provided that leaders understand and navigate the diverse expectations and work styles inherent to each generation.
Diverse Expectations in the Workplace
Each generation brings its distinctive perspective shaped by the world events, cultural shifts, and technological advancements they have experienced. Here are some condensed insights into the expectations and characteristics of each generation:
Baby Boomers: Value job security, loyalty, and are often motivated by position and titles.
Generation X: Appreciate work-life balance, are independent, and often act as a bridge between older and younger employees.
Millennials: Seek purpose-driven work, value collaboration, and prioritize digital communication.
Generation Z: Are digital natives, expect rapid feedback, and value diversity and inclusion highly.
Case Studies
Case Study 1: Tech Innovators Inc.
Tech Innovators Inc. is a rapidly growing technology firm with a vibrant mix of employees across generations. The company noticed a frequent clash between the collaborative approach of millennials and the more structured communication style preferred by Baby Boomers.
To address this, the company initiated a mentorship program where employees from different generations were paired together. The aim was two-fold: older employees gained insights into digital collaboration tools, while younger employees learned about industry history and strategic planning.
The result was a harmonious blend of traditional experience and modern efficiency. Productivity saw a notable increase, and employee satisfaction metrics rose by 20%. The mentorship program became a cornerstone in fostering an inclusive and resilient workplace culture.
Case Study 2: GreenFuture Energy
GreenFuture Energy, a leader in sustainable solutions, faced challenges with inter-generational team dynamics, primarily the differing expectations around feedback and professional development.
In response, GreenFuture implemented regular “feedback forums” where real-time feedback was encouraged across all levels. Each forum was designed to be a safe space promoting open communication, facilitated by trained mediators to maintain respect and constructive dialogue.
This initiative empowered Gen Z employees to express their innovative ideas and receive guidance, while Baby Boomers and Gen X provided context and depth through their rich experience. As a consequence, team initiatives became more innovative and execution rates improved by 35%.
Strategies for Navigating Diverse Expectations
To harness the potential of an inter-generational workforce, organizations must adopt intentional strategies:
Foster Open Communication: Encourage transparent dialogues where all generations feel heard and valued.
Promote Inclusive Leadership: Develop leadership teams that reflect the generational diversity of the workforce.
Provide Tailored Professional Development: Offer training programs that cater to the distinct learning and career growth needs of each generation.
Leverage Technology: Use digital tools to bridge communication gaps and streamline collaboration across diverse teams.
Conclusion
Successfully managing an inter-generational workforce requires more than understanding generational stereotypes. It demands a genuine commitment to building a culture of inclusivity and adaptability, where diverse expectations are not just acknowledged but leveraged for organizational growth. Through strategic initiatives and open-minded leadership, companies can transform potential inter-generational hurdles into opportunities for innovation and enhanced team synergy.
Extra Extra: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.
Image credit: Pexels
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Innovation is the lifeblood of any successful organization, driving growth, competitive advantage, and adaptation in an ever-evolving marketplace. At the core of driving and sustaining innovation is a talented leadership team. Creating an innovation-focused leadership team requires more than just appointing skilled individuals; it demands a deliberate strategy aimed at fostering collaboration, adaptability, and a shared vision for future success.
This article explores the key considerations necessary for building an effective leadership team centered around innovation. It also provides real-world case studies that demonstrate how successful strategies can lead to transformative outcomes.
1. Defining a Clear Vision for Innovation
The first step in assembling a leadership team focused on innovation is establishing a clear and compelling vision. This vision should define what innovation means for the organization and outline the strategic objectives necessary to achieve that vision. Members of the leadership team need to be united by this common purpose, ensuring alignment and collaboration throughout the innovation journey.
2. Fostering a Culture of Collaboration
Innovation thrives in environments where open communication and cross-functional collaboration are encouraged. Leadership teams should comprise individuals with diverse backgrounds, experiences, and perspectives to bring varied ideas to the table. It’s crucial to create an environment where team members feel comfortable sharing their insights and challenging the status quo.
3. Promoting Agile Decision-Making
An innovative leadership team must be agile and adaptable, capable of making quick, informed decisions in response to changing circumstances. This requires a willingness to experiment, embrace failure as a learning opportunity, and pivot strategies when necessary. Tools such as rapid prototyping and lean methodology can be instrumental in maintaining momentum while minimizing risks associated with innovation initiatives.
4. Encouraging Continuous Learning
The rapidly evolving nature of business and technology requires leadership teams that are committed to continuous learning. Providing ongoing education and professional development opportunities fosters an environment where team members can stay abreast of new trends, technologies, and methodologies, enabling them to drive innovation more effectively.
Case Study 1: Google’s Innovative Leadership Approach
Google, renowned for its innovation and creativity, offers a compelling case study of an organization that has mastered the art of building a leadership team focused on innovation. Google’s success can be attributed to its commitment to fostering a culture that values experimentation and encourages collaborative problem-solving across all levels of the company.
At Google, the leadership team is not only tasked with strategic decision-making but also with creating a supportive environment where innovation can thrive. Key to their approach is the “20% Time” policy, which allows employees to dedicate a portion of their workweek to passion projects. This initiative encourages employees to explore new ideas and develop innovations that might not fit within their standard job responsibilities.
Google’s leadership team also invests in building diverse teams to bring a variety of perspectives and ideas to the table. The emphasis on diversity and inclusion has been instrumental in driving creativity and innovation, as it allows for a wider range of solutions to address complex challenges.
Case Study 2: 3M’s Culture of Innovation
3M is another exemplary organization known for its innovative leadership and dedication to research and development. The company’s success lies in its model of decentralized decision-making, where leaders at different levels have the autonomy to pursue innovative ideas and projects.
This approach allows 3M to harness the creative potential of its workforce, leading to the development of breakthrough products and technologies across various domains. The leadership team prioritizes risk-taking and experimentation, encouraging employees to learn from failures and iterate rapidly.
3M’s leadership also promotes a communal learning culture by establishing forums and platforms for knowledge sharing. Their “Tech Forum” program organizes monthly gatherings where employees can present ideas, collaborate, and receive feedback from peers. This initiative strengthens cross-disciplinary collaboration and cultivates a vibrant innovation ecosystem within the company.
5. Leveraging Technology and Data
An effective innovation leadership team is adept at leveraging technology and data to drive strategic decisions. This involves utilizing analytics to glean insights about changing consumer preferences, market trends, and the impact of innovation initiatives. By integrating technology into the decision-making process, leaders can identify opportunities for improvement and make data-driven decisions that propel the organization forward.
Conclusion
Building an innovative leadership team is a dynamic and ongoing process that requires cultivating a collaborative culture, promoting agility, and fostering a commitment to continuous learning. By aligning the leadership team’s vision with the strategic goals of the organization and investing in diverse talent, companies can create a powerful engine for innovation.
The examples of Google and 3M illuminate how strategic initiatives, such as encouraging employee-driven ideas and decentralizing decision-making, can produce outstanding results. By learning from these organizations, businesses can develop their own innovative leadership teams to navigate the complexities of the modern world and achieve sustained success.
Extra Extra: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.
Image credit: Unsplash
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It’s been a tough two and a half for everyone since the COVID-19 crisis began. Some of us have been hit very, very hard, by the impact of the pandemic exacerbated by the rate of exponential change and now, by the impact of the conflict in Ukraine.
As result, many of us are feeling overwhelmed and exhausted and languishing in varying states of anxiety and discomfort. Some of us are struggling with “not knowing” how to deal with the extreme uncertainty existing within our business and personal environments, whilst many of us are optimistically seeking to prepare and manage for what might possibly come next.
At the same time, many of us are seeking collaborative partnerships to support us and explore options for keeping both ourselves, our people, and teams engaged in moving forward creatively in a constantly changing world. Where both the work environment and the nature of work are in a state of flux, where we are going through exceptional and extraordinary changes, and, where to both survive and thrive, we need to get comfortable with being uncomfortable with it all.
Safely stepping into the unknown
This creates an opening and a threshold to partner with others in resourceful and creative ways to support them, to safely and bravely step into the unknown.
To perceive this unique moment in time as an opportunity for growth, shape-shifting, and change – by empowering and equipping them to cautiously abandon and exit their comfort zones and get comfortable with being uncomfortable. Because the patterned worlds of our “business as usual” existences, which traditionally kept us get comfortable and calm, and helped us stay emotionally and mentally even, free from anxiety and worry to a great degree, are no longer certain, predictable or stable.
Where constant and accelerating change, coupled with uncertainty are the harsh realities of today, and of tomorrow, in the decade emerging as one of both disruption and transformation.
Impact of our neurological survival mechanisms
As humans, we have an internal need for consistency, represented by our internally mapped, largely unconscious, neurological comfort zones, our own unique places for getting comfortable, and amenable to what we habitually do. When we experience cognitive dissonance, in an extremely uncertain and disruptive operating environment, we unconsciously encounter apparent inconsistencies between what is really happening and what we believe to be really true.
As result, we often, mostly unconsciously, slip into our auto-pilot range of varied aggressive and passive defensive, reactive responses: including avoidance, denial, anger, opposition, and resistance to change. Often described as the “retreat, freeze, or take flight or fight” reactions to what is “seemingly” going on. This is because we distort and generalize our thoughts or feelings into believing that have no control over events. Which is a normal and natural neurological, yet primitive, survival mechanism that enables us to cope with the situation.
However, when we operate this way, we lose our personal power and question our abilities to shape and manifest the outcomes we want, or feel we lack the ability to influence others or constructively impact our environments.
Resistance is futile
Manifesting as feelings of discomfort, most of us will do anything to move away from – because we want to avoid pervasive, visceral, challenging thoughts and feelings, derived from our conflicting beliefs and values. Our auto-responses or neurological urges to remove the discomfort, and typically keep us in our comfort zones, where we procrastinate, make excuses, shift into denial, avoidance, and justification, resulting ultimately, in immobilisation and inaction.
The outcome is that we may feel paralysed, and become inert, inhibiting and preventing us from developing the mindsets, behaviours, and actions required to thrive in the future. Where our only “new normal” will depend on our abilities to flow with constant change, unpredictability, instability, and uncertainty and get comfortable with being uncomfortable.
Hidden costs of resistance
Resistance to change prevents us from:
Adapting to the current and future environment is not the survival of the fittest, it’s he or she who is the most adaptive, who ultimately survives, and thrives!
Exploiting this moment in time as an opportunity and threshold to improve our confidence, competence, and emotional capacity to effectively transition through the range of professional and personal crises, brought on by uncertainty and disruption.
Exploring possibilities and unleashing opportunities available in this moment in time as a turning point to learn and grow, as a coach, leader, or team.
Strategizing in the new global, hybrid, and virtual work environment to improve, competitiveness, productivity, and innovation grow our practices and help our members expand their roles, and grow their teams and businesses.
Breaking down silos that add to many of our member’s current states of disconnection and loneliness, and inhibit connection and collaboration.
Creating permission, tolerance, and safety for members to safely download and let go of their fears and anxieties, share their negativity and pessimism, fears of failure, and co-create positivity and optimism towards thriving in an uncertain future, together.
Embracing the new world of digitisation and experimentation, from implementing change, enhancing individual and organisational agility, and developing the mindsets, behaviours, and skills to be comfortable in constantly changing contexts.
What can we do about it?
Being agile and adaptive
In normal times, creating a comfort zone is a healthy adaptation for controlling much of our lives. Yet having the boldness, bravery, and courage in extreme uncertainty, to step up and out of our comfort zones helps us be agile and adaptive in transitioning, growing, and transforming through the enormous challenges, disruptions, and adversities many of us are confronting.
Entering the learning zone
In fact, once we do take the first baby steps out of our comfort zones and into our fear zone (fear of loss, blame, shame, envy, punishment, retribution, opposition, being controlled, humiliation, being envied or made wrong) we can safely enter the learning zone. Being in the Learning Zone is the first stopping point toward generating creative energy and expanding our comfort zones.
Facing the fear
Doing this builds the foundations for being more comfortable with being uncomfortable by facing, feeling, acknowledging, and letting go of some of our deepest fears by dealing with them rationally and realistically, with empathy and compassion, and without bias and distortion.
Reducing our levels of anxiety
By withdrawing, discerning, and deciding to let go of the need to be constantly in charge and in control and be willing to enter the Growth Zone, where everything that happens is a resource for being tolerant, and accepting, of the possibilities for making positive change.
Stepping into being comfortable
This is a great opportunity to co-create a new playbook for ourselves, our people, and their teams by enabling and empowering the mindset shift to the Growth Zone, to transform cognitive dissonance, and use it as the creative tensions toward being comfortable with being uncomfortable.
This involves engaging in a set of consistent and regular practices, to build and support a willingness to embrace change, disruption, and uncertainty, to take on even the impossible.
Hit your Pause Button: retreat from activity, get grounded in stillness and silence, and be fully present to your energetic state. Be mindful and pay deep attention to recognise your patterns, attune to what is really going on, and get unhooked from any internal chatter, stories, and unconscious default patterns.
Label Your Thoughts and Emotions: be fully present and get connected to yourself and to others you are interacting with, feel the feeling, knowing that it is transient.
Acknowledge and Accept: allow yourself to accept and embrace the range of feelings, be empathic, compassionate, and open-hearted with yourself and with others.
Detach from and Observe your Thoughts and Emotions: be willing to create and sustain an open mind, be inquisitive and curious, explore the non-judgemental space between your feelings and how to effectively respond to them.
Identify difficult feelings: as you experience them and find more appropriate ways of responding instead of reacting, be willing to become a “detached observer”.
Be emotionally agile: learn to see yourself as the operating system, filled with possibilities, knowing that you are more than one part of it and flow with it
Be courageous and brave: challenge the status quo, and your habitual thinking, feeling, and decision-making habits and build your confidence to reboot, consistently disrupt yourself and be comfortable with being uncomfortable.
Be imaginative and creative: reimagine your most desirable future state, be optimistic and positive about choosing the best ways to reset, and walk your way forward into the unknown.
Focusing your attention and being intentional
Being comfortable with being uncomfortable, enables us to re-think creates openings and thresholds for developing 21st-century superpowers, limitless possibilities for change, growth, learning, and innovation.
By empowering us to respond positively to uncertainty, and dynamic change that respects and engages people’s values and humanity, in co-creative and innovative ways that improve the quality of people’s lives in ways they value, appreciate, and cherish.
An opportunity to learn more
Find out about our learning products and tools, including The Coach for Innovators Certified Program, a collaborative, intimate, and deep personalized innovation coaching and learning program, supported by a global group of peers over 9-weeks, starting Tuesday, May 4, 2022.
It is a blended and transformational change and learning program that will give you a deep understanding of the language, principles, and applications of an ecosystem focus, human-centric approach, and emergent structure (Theory U) to innovation, and upskill people and teams and develop their future fitness, within your unique context.
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The value of intangible assets in organizations is nowadays five times greater than the one of tangible assets. In fact, 84% of value in S&P companies is currently represented by intangible assets, like intellectual property, knowledge, or brand recognition, compared to merely 16% for tangible ones.
Even so, some leaders still have difficulties in grasping the power of knowledge and how it can be leveraged and managed to drive more innovation in their organizations. One of the biggest challenges for these leaders is that the majority of knowledge that makes more innovation happen is tacit, and therefore it’s harder to tap into its full potential through the traditional methods: processes, procedures and policies available in databases and documents.
Unfortunately, companies that were not able to keep up with these changes in value distribution faced difficulties and were surpassed by those that leveraged tacit knowledge better. Now, the question that arises is how top companies tap into the full potential of tacit knowledge.
So, in today’s article we’ll explain how different types of knowledge trigger innovation, what is the true value of tacit knowledge, as well as some practical tips on how to make the most of tacit knowledge.
Explicit, implicit, and tacit knowledge and their role in driving innovation
Before diving into the practical things, we’ll go through some theoretical aspects which can help clarify the reasoning behind some actions. There’s a lot of literature on tacit knowledge and knowledge management which you can explore more in depth if you’re interested, but for the purpose of this article we chose the essential information which can serve leaders, managers and decision-makers who want to tap into the potential of tacit knowledge.
The goal of this article is not to offer a perspective rooted in cognitive science and we are aware that there are different interpretations and a variety of opinions on the topic. That being said, let’s get to it.
Knowledge, especially tacit, is hard to quantify and measure, which makes it elusive and difficult to capture, but its role in driving innovation is undeniable. To exploit its innovation potential, it’s essential to understand the different types of knowledge, how they can be managed and how they come into play in an organization.
For this, we’ll briefly explain the three main types of knowledge and their role in making innovation happen.
First, there is explicit knowledge, which is the easiest to manage and understand. It’s the most basic type of knowledge that can be collected and transmitted throughout an organization. It comes from organizing, structuring, and processing data and it’s usually stored in databases or files like internal documentation, reports, analytics and financials, process maps, handbooks, and so on.
For example, all metrics and KPIs are forms of explicit knowledge. Explicit knowledge supports everyday improvements which primarily leads to incremental innovations.
Next is implicit knowledge, which oftentimes is put under the same umbrella with tacit knowledge. However, we prefer to separate the two because there are small differences in how you should manage them in practice.
Implicit knowledge is essentially explicit knowledge applied: how we make use of existing information and put it into practice. Each of us has different past experiences and ways of thinking. As you’ve probably seen, that means that we can draw different conclusions from the same data, and thus apply the same explicit knowledge in very different ways.
This is true especially when we think of how people communicate and transfer information. For example, when we create a report or a presentation, even if we work with the same data points and results, different people may choose to focus on different pieces of information and tell a very different story.
Last, but not least, is the focus of this article: tacit knowledge. Tacit knowledge refers to the wisdom we accumulate through experience but that is not codified or clearly expressed. These are the things we know but can’t really put into words. Think cognitive skills, mental models, intuition, and general know-how.
Different sources are citing various figures of how knowledge is distirbuted in an organization. From 80% all the way to 95%, tacit knowledge seems to be the bottom of an iceberg, hidden under water. Regardless of what the specific number really is, it’s probably safe to say, that the vast majority of information is tacit.
It’s believed that turning tacit knowledge into explicit knowledge is extremely difficult because of its nature. Many times, when we think we articulate or codify tacit knowledge, we might deal with implicit knowledge instead. Why is it then so hard to capture tacit knowledge — and should we even try to make it explicit?
In practice, people often aren’t aware of the tacit knowledge they possess, and that’s a big part of what makes it so elusive. Transferring know-how and cognitive skills requires regular contact, interaction, and trust between people. When this can be turned into a conscious, systematic effort, that’s when we start to get its value and make the best of it.
The importance of tacit knowledge and how to make the most of it
In the era of information technology, it’s so easy to become obsolete, that retaining and acquiring knowledge has become a central focus for most organizations.
Today most companies recognize employees’ talent and knowledge as a major competitive advantage. We’ll explain later in the article why most innovations and breakthroughs don’t come from explicit, but from tacit knowledge.
Losing employees with the tacit knowledge that hasn’t been passed on can lead to the inability to complete projects or meet strategic targets. For example, an engineering company lost its dominant market position simply because it lost the experienced engineers that major clients were looking for. Typically, that relationship isn’t as obvious, but the same principles still apply. The most talented or experienced employees create dramatically outsized returns for the organization.
As already mentioned, explicit knowledge refers to the public information, which would be easily accessible if desired, because it can be codified and transmitted in writing. As we know, such knowledge generally contributes to incremental improvements, but breakthrough innovations require truly novel knowledge, and that usually starts at an individual level.
From a highly experienced floor worker who comes up with ideas to streamline processes to a researcher’s insights that help develop a new product, the key is to make this individual knowledge available to others. That is one of the main sources of competitive advantage in knowledge-centric companies.
How tacit knowledge impacts organizational performance
Traditionally, knowledge isn’t systematically measured against financial results, so some executives might not be aware of how knowledge loss impacts their performance. It’s understandable, given that it’s easier to measure and track the impact of tangible assets, so the focus usually goes in that direction.
However, nowadays we have plenty of research that supports the idea that losing knowledge has a significant negative impact on an organization’s performance. This helps us better understand how losing tacit knowledge affects the bottom line. At the same time, if leaders can articulate the role of tacit knowledge, they can also assess the real costs of managing it and raise awareness on the investments required to create, retain, and transmit it.
Losing knowledge capital can affect the performance of an organization in different ways.
From reduced organizational capabilities or ability to achieve strategic objectives, to disruptions, increased time to accomplish tasks, increased costs, or reduced customer satisfaction.
Let’s take the example of a company where a veteran sales executive who played a major role in dealing with important customers is leaving the organization. His strong customer relationships developed over the years could affect the firm, leading to a loss of up to $ 10 million. The business will not only lose significant revenue but its ability to acquire new ones will also diminish.
In such cases, the external social capital is useful for the organization at large. Having access to a diverse external network allows people inside the organization to tap into a wide range of information.
On the other side, when these connections are exclusively internal, politics can get in the way and affect the transparent flow of information.
To summarize, losing knowledge capital can affect the performance of an organization in different ways. From reduced organizational capabilities or ability to achieve strategic objectives, to disruptions, increased time to accomplish tasks, increased costs, or reduced customer satisfaction.
On the other hand, if you focus on developing a knowledge-creating company that encourages continuous learning, interaction, and constant dialogue you will see additional benefits, as well as positive impact on the bottom line.
By now, you’re surely thinking what all this theory means in practice, so let’s take a look at that next by going through some methods that can help reap these benefits.
How to capture tacit knowledge
As already mentioned, turning tacit knowledge into explicit knowledge requires some work and effort, but by starting with baby steps like getting people to share thoughts, issues, or ideas on a regular basis you are already one step ahead.
We believe there’s no need to overcomplicate things and the good news is that something as simple as gathering ideas will force people to turn their tacit knowledge into something more tangible. Obviously, each organization has its share of bad ideas, but even so, it’s still a great way of bringing people’s insights to the table because it can uncover new opportunities, sometimes even unrelated with the idea itself.
It might not be the first thing that comes to mind when trying to access tacit knowledge, but an idea management tool can help you turn it into a systematic, continuous practice that on the long run, can lead to more innovation.
However, at the end of the day, a tool is just a tool. It helps you organize your processes better, automate tasks, and facilitates easy communication. The complexity and nature of such methods and processes varies greatly from one organization to the next.
If you are operating in an industry with higher risks, codifying tacit knowledge becomes even more complicated. A continuous ideation process could reveal new creative ways of accessing it as well as maintain communication and a constant flow of information.
To put things in perspective, let’s take the example of a maintenance technician who retired from a plant that produced soybean oil. After he left, the produced oil quickly started to go bad. It took the company two years and it cost them millions of dollars before they realized that the maintenance worker had been changing a seal on the machines that pressed the oil every week, instead of the eight weeks that was instructed in the maintenance manual.
The first reaction would be to blame the technician for not transferring that information before leaving, but in reality, it’s the company’s responsibility to have in place processes that ensure smooth transfer of information and knowledge.
Managers and leaders should be aware of these differences in procedures and in this particular case the mistake could have been easily avoided with a better process of documenting the steps taken to produce the soybean oil.
As this example shows, different organizations need different processes at various levels of complexity. Developing those processes that support knowledge creation and retention is still up to you, so let’s have a look at three simple steps that can make a big difference.
Bring to the surface the knowledge losses and the risk associated with that. What knowledge supports the strategic objectives and business goals? To run a diagnosis process you could, for example, start with a series of interviews that will help you surface potential issues.
Here’s where you want to identify the critical knowledge that might be lost and its impact, the interviewees perception of existing knowledge and the transfer processes and opportunities to leverage knowledge in case employees leave.
Map the employees and the roles whose knowledge is essential and play a key role in transmitting it. The previous step can also guide you in creating this map or list.
Create the environment and practices that encourage socialization and interaction. Since tacit knowledge is about the know-how and the skills we acquire through experience, these are best learned through emulation, imitation, and repetition.
There are many ways to go about this, and in the best practice section we go a bit deeper into these details.
Best practices for accessing tacit knowledge
These are three first steps that could be applied in any organization, regardless of their profile. They can become the foundation for a more thought-through process which you can develop in time. On a more practical level, the methods and processes you decide on, can be supported by some of these best practices:
It encourages contribution and collaboration between people. It enables networks of relationships that help the organization function effectively. When these connections are strong and built on trust and transparency, they facilitate the transfer of know-how and other skills that otherwise would be lost.
Encourage constant social interaction and exchange of ideas
As already mentioned, tacit knowledge is about the know-how and the skills acquired through experience. These skills are better transmitted through emulation, mentorship, and repetition. This knowledge is deeply embedded in people’s minds and human interactions are essential to facilitate the transfer of information.
This won’t help you just to find answers and solutions to specific problems but also to uncover opportunities that have an impact on the entire organization.
Collecting ideas systematically enables the entire workforce to get involved and build on each other’s knowledge. Moving from a traditional “suggestion box” to a more wholistic and transparent approach with an idea management tool can dramatically help in sharing and making knowledge more accessible.
Encourage storytelling in different forms
You can create a “lessons learned” database where people can learn about successes and failures that lead people to acquire their knowledge. The best way to tell these lessons, might be through stories.
Storytelling is a powerful tool because it allows people to reflect on their learnings. Essentially, you want people to share their (true) stories that serve as metaphors which make difficult-to-grasp information easier to digest and understand. Stories are powerful because they convey meaning and knowledge, not just unconnected bits of information. For example, you can put this in practice through internal newsletters, or casebooks.
Create succession planning, retirement policies, and mentoring programs
Retirement is one of the causes of knowledge loss and some companies don’t tap into the tacit knowledge of older employees. The loss of experienced employees can threaten core capabilities that rely on complex experiential knowledge. Organizations should have mentoring programs to train less experienced employees, as well as retirement policies and plans that help maintain the balance of the workforce.
Examples of codifying tacit knowledge:
As you’ve seen so far, there are different factors that can help you either capture tacit knowledge or turn it into explicit knowledge. And as mentioned, sometimes learning new things also comes from emulation and imitation. With that in mind, let’s see what other companies are doing to address the issue of tacit knowledge and think of what you could also learn from their experiences.
Matsushita Electric
The first example is one that helped popularizing the concept of tacit knowledge as well as the idea that it supports innovation.
In 1985 Matsushita Electric, now Panasonic, was working on creating a better home bread-machine. However, they lacked the knowledge a baker had. So Ikuko Tanaka, a software developer at Matsushita decided to learn from the best. He trained with the master baker at The Osaka International Hotel and observed the technique he had for kneading the dough.
The know-how of the baker, his special stretching technique, was the tacit knowledge that Matshushita was lacking, and that Tanaka was able to uncover and reproduce through imitation and observation. After working with the baker, experimenting, testing and developing the product, Matsushita created a final product that led to record sales.
Rolls-Royce
Even though it’s not a recent example Rolls-Royce is still a good case to look into. Rolls-Royce turbojet engines powered Concorde, the aircraft that introduced supersonic air travel to the world. The Rolls-Royce engineers held most of the knowledge on how to maintain the sophisticated supersonic jet engines and many of them were preparing for retirement.
Before the Concorde was retired in 2003 the company identified how the big number of retirements would impact their key capabilities. This helped them prepare for uncertainties and decide on future investments.
Bessemer
Last, but not least, an example that takes us even farther back into the history is Henry Bessemer and his patent for an advanced steelmaking process. Bessemer sold his patent, but he was later sued because they couldn’t make it work. So, Bessemer set up his steel company because he knew best how to do it, even though he wasn’t able to articulate it.
As you can see from these examples, tacit knowledge spans its impact in various areas and at different levels in each organization. So, it’s important to remember that tacit knowledge plays an important role in all stages of innovation.
It can be in the early stages, where there’s a higher degree of ambiguity so more knowledge to be harnessed. Or, it can be in the later stages of innovation, where execution and implementation require you to tap into the tacit knowledge of your employees to speed up the process and get better results
Conclusion
“We can know more than we can tell”, said Polanyi, the one to whom we attribute the concept of tacit knowledge. We couldn’t agree more. We can’t possibly articulate everything we know, so we need to find other means to go about it.
As leaders, managers, or someone with decision-making powers, you have to maximize the opportunities of expressing this knowledge. You can choose to develop a culture of innovation where continuous learning, improvement and knowledge exchange are encouraged and sustained. With a strategic and systematic approach, the flow of information will become more natural and easier to manage.
This article was originally published in Viima’s blog.
Image credits: Viima, Pixabay, Unsplash, Pexels
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Change isn’t what it used to be. Where earlier generations had leaders like Gandhi, King and Mandela, today’s change efforts seem rudderless. Movements like #Occupy, Black Lives Matter and #MeToo hold marches replete with strident calls for change, but they never seem to get anywhere. Lots of sound and fury, signifying nothing.
Many believe that if only these movements had more charismatic leaders or more inspiring oratory they would be able to gain more traction. Others say that society has become too corrupt and our politics too coarse to make change happen. They want to blow the system up, not work within it.
The truth is that leadership has little to do with fancy speeches or clever slogans. The notion that today’s call for change face greater opposition than the British Raj, Jim Crow or Apartheid is simply laughable. In researching my book, Cascades, however, I found that, despite important differences, transformational leaders had these four things in common.
1. They Work To Make A Difference, Not Just Make A Point
When the #Occupy Wall Street movement broke out in 2011, it inspired millions with its rallying call,, “We are the 99%.” Yet soon it became clear that all was not well. As New York Times columnist Joe Nocera noted, the group “had plenty of grievances, aimed mainly at the ‘oppressive” power of corporations,’ but “never got beyond their own slogans.” It soon fizzled out, a massive waste of time.
Making lots of noise and achieving little seems to be a common theme among the failed revolutions of today. All too often they believe that the righteousness of their cause, along with some clever memes on social media, will win the day. It won’t. Real change requires real work. You have to want to make a difference, not just make a point
It’s not just young activists who make this mistake. Corporate bigwigs often fall into the same trap. They seek to “disrupt” without any real affirmative plan for change. In Lights Out, Wall Street Journal reporters Thomas Gryta and Ted Mann chronicle how General Electric CEO Jerrfey Immelt tried mightily to gin up the stock price and project an innovative image, but did little to create actual value.
For transformative leaders, making a difference is the real point. Thurgood Marshall, to take just one example, spent decades working in relative obscurity, not to mention facing significant danger, before he triumphed in Brown vs. Board of Education. If we are to achieve anything of significance, we need to think less about disruption and more about tackling grand challenges.
2. They Lead With Values
Today, we regard Nelson Mandela as an almost saintly figure, but it wasn’t always that way. In fact, throughout his career as an activist, he was accused of being a communist, an anarchist and worse. When confronted with these accusations, however, he always pointed out that no one had to guess what he believed in, because it was written down in the Freedom Charter in 1955.
Being explicit about values helped to signal to external stakeholders, such as international institutions, that the anti-Aparthied activists shared common values with them. In fact, although the Freedom Charter was a truly revolutionary document, its call for things like equal rights and equal protection would be considered unremarkable in most societies.
After Apartheid fell and Mandela rose to power, the values spelled out in the Freedom Charter became important constraints. To uphold the stated principle that “all should be equal under the law,” his government couldn’t oppress whites. His reconciliation efforts are a big part of the reason he is so revered today.
Values are just as powerful in a corporate context for many of the same reasons. In Lou Gerstner’s IBM turnaround in the 1990s, for example, he not only put forth serving customers as an important value, he also made it clear that he was willing to forego revenue on every sale to make good on it. His willingness to incur costs showed his values were more than lip service.
Make no mistake. Every significant change comes with costs and being explicit about values makes it clear what costs you are willing to incur. Far too many would-be change leaders fail to be explicit about their values because they don’t want to be constrained in any way. It’s much easier to spout slogans like “Disrupt” or “Innovate or Die” than to think seriously about what change will cost you and others.
3. They Shape Networks
The March on Washington was a defining moment for the civil rights movement and for America. So it shouldn’t be surprising that those seeking change today, such as Black Lives Matter and the modern women’s movement, try to emulate that earlier success with marches of their own. These efforts consistently fail to achieve anything real and, in fact, often do significant damage when they spin out of control.
The truth is that the civil rights movement didn’t become powerful because it held the March on Washington. In fact, it was very much the opposite. The March on Washington was held because the civil rights movements had already become powerful. It wasn’t an opening shot, but part of the end game, the culmination of decades of painstaking work of not just Martin Luther King Jr., but a broad array of leaders.
General Stanley McChrystal took a similar approach in revamping the US Special Forces in Iraq to fight Al Qaeda. Realizing that a conventional approach would not be effective against an unconventional opponent, he declared that “it takes a network to defeat a network and shifted his “focus from moving pieces on the board to shaping the ecosystem.”
The truth is that it is networks of small groups, loosely connected but united by a shared purpose that drives transformational change. Effective leaders know that their role is to empower others by helping to connect people in order to achieve that purpose.
4. They Learn From Their Mistakes
One of the most surprising things I found in my research is how consistently early efforts failed. The first march on Washington, the Woman Suffrage Procession of 1913, quickly spiraled out of control. Gandhi’s first efforts to bring disobedience to India ended so horribly he would later call it his Himalayan miscalculation. Steve jobs, quite famously, was fired from Apple.
What made the difference wasn’t the mistakes they made, but how they learned from them. Alice Paul developed more innovative strategies, such as the Silent Sentinel protests, which were less vulnerable to disruption. Suffrage was won in 1919. Gandhi replaced widespread protests with the Salt March. Steve Jobs became more focused and built the World’s most valuable company.
Unfortunately, many of today’s activists don’t seem to have the same strategic flexibility. Once the #Occupy protesters went home, they never seemed to come up with an alternative approach. The riots at Ferguson were replaced, six years later, by the George Floyd riots. The modern women’s movement continues to march, with little to show for it.
None of this is to say that these causes are unworthy or that they are doomed to failure. What it does mean is that, if they are to succeed, they need to understand how revolutions fail and do something different. In an age of disruption, the only viable strategy is to adapt.