It’s interesting (well, some of us don’t get out much), if you invite contenders for the great innovations of the twentieth century, you might hear the microchip, the web, the mapping of the human genome, global sourcing – O.K., it depends whom you ask. But, whomever you ask, the nominee for the award for great innovation is unlikely to be ‘management’. As with many omissions, it is so obvious that the ordinary person misses it. I know I did. It took renowned strategist Professor Gary Hamel, “the world’s most influential business thinker”, according to The Wall Street Journal, to enlighten me. Think of what management science and professional managers have made possible: mass production, efficiency and quality control, sophisticated supply chain and distribution models, multinational corporations, and extraordinary wealth creation. Improbable as it may sometimes feel, management was once a pioneering technology that genuinely helped things get done.
The theory that good management can survive (for a while at least) poor leadership—the ‘show must go on’ principle—implies that good management is, well, good. For a variety of reasons, the sourcing industry is populated by good managers. Promotion and advancement tend, quite sensibly, to follow classic metrics of management performance, that is, the cost and quality control paradigm: measurable and predictable results, risk containment, expense control, resource maximization, demonstrable, accumulated experience that becomes ‘applied expertise’ and so on. Only a fool would dispute the economic merit of these management outcomes. The 21st century innovator however, will immediately perceive the inherent inadequacy of this model when confronted by the leadership challenge of strategic innovation. The innovation challenge necessitates a dramatically different set of skills. Whilst management propels the core business forward – doing things right ever more efficiently – the leader’s challenge is to constantly question what the right thing is, today, and what it may be tomorrow.
The leader setting an innovation agenda has to chart a future course that ensures the business avoids doing the wrong thing ever more efficiently. Self evident? Surprisingly not. While businesses are very rarely suddenly disrupted, the magnetic field of today’s high margin product or service can be a powerful force constricting exploration of outer spaces, untested territory and attention to the as yet ‘weak signals’ of the emergent disruptor.
This is not the territory of absolute answers but of framing the important questions. The ascent of questioning over solving is symptomatic of the complex nature of the problems businesses face in our hyper-connected, radically changing, and technologically explosive 21st-Century global economies. Problems assume the qualities of dilemmas—without a ‘right’ answer, only an optimum, feasible response. Educational norms and professional experience, however, have inculcated in most of us, except, perhaps, pure researchers, that success comes to the answer-person. It is not an easy, nor necessarily safe, habit to kick. (The answer to many of the threshold planning and budgetary questions at early-stage innovation tends to be “it depends”. Is this a big idea? Well, it depends on when, how, in whose hands. It even depends on things we do not control. To the traditionalist, “it depends” does not cut is as an answer; to the innovator, it is the only way to cut through the dense forest of our assumptions in order to uncover the answer).
The cruel paradox, and I don’t know about you but I don’t come across cruel paradoxes every day, is that certain of the valued attributes that fuel professional advancement within a traditional management context such as firm predictions and linear planning become disablers for the dramatically different executive task of leading breakthrough innovation initiatives.
This is not to say that management excellence – for example, the skills that propel an organisation to be ‘best in class’ – are not vital to organisational performance. It is simply that the innovation battle engages in a different arena. This arena is where we are all destined to be gladiators, sooner or later, because the productivity, service level and efficiency contest inevitably ends in a draw.
The fabulous thinker Bob Johansen uses language coined by the US Military College to describe this “space”. Dr. Johansen, former head of the renowned”Institute for the Future”, speaks in his most recent book “Leaders Make the Future: Ten New Leadership Skills for an Uncertain World” about navigating a ‘VUCA’ universe. This is a universe defined by: Volatility, Uncertainty, Complexity and Ambiguity.
In today’s global sourcing industry, we know this much is true. Deeper than that, in our lives today, we know this much is true. So the question presents itself, how do we, as individuals – and we may as well concede now that the manager-leader distinction was over-emphasised for simplicity – with simultaneous management and leadership responsibility, how do we make sense of this VUCA universe? Its challenges do not relieve or reduce our imperatives of building relationships across our value chain, sustainable growth, defending against margin pressure, attracting and retaining customers profitably. In other words, how do we, in these shifting times work with and for people so that our business and its beneficiaries thrive?
One answer, maybe the answer, is that a leader who can navigate the VUCA conditions will have the quality of entrepreneurial mindset that the Chicago School economist Frank Knight as the person who “plays a human role over a vast range of activities, involving management, judgment, insight, intuition and creativity”. Moreover, the leader who can nurture these attributes broadly in the organisation’s talent pool will create a further competitive advantage. Ironically, knowledge-based economies may commoditize knowledge itself over time. Demographic shifts and the ubiquity of global sourcing mean that intelligence, diligence and strong work ethics can be bought or substituted to an historically unprecedented degree. Creativity, insight and intuition—and the judgment skills to deploy these for commercial ends—are much harder to subcontract and replace. It is time for the hierarchy of exceptional competence to embrace a hierarchy of exceptional creativity.
This is an exciting and enabling perspective for many reasons. Management is still at the fore, so our toiling at the Leaders Make the Future still has value. But, the non-conventional attributes are rich in possibility because we all have access to them irrespective of hierarchy or advantage. It follows that the innovation landscape, albeit difficult terrain, will open up possibilities to a breadth of diversity of perspectives and ideas that the traditional schematic did not.
The literature and case studies already tell us that innovation is notoriously non-linear and especially ‘messy’ at what is termed the “front end” of innovation – the idea stage. Innovation, as has been proved, also comes with failure as a frequent, non-optional extra. This is why Professor Knight’s reference to the “human role” resonates so compellingly. Innovating, discovering, embracing change, connecting the unconnected – are innate human capabilities. In the 20th century we thought of technology as substituting for or replacing people. The seismic shifts in the technological and global business landscape of the 21st century mean that we must now think of technology as connecting and enabling people. People create and innovate, not systems, not processes.
What matters is to ensure that the essentially human dimensions of interpreting and succeeding in the VUCA world are nurtured and capitalised as organisational competencies. Insight and creativity are not ‘soft’ goals on the performance review. They are indispensable keys to differentiation. Enhanced management and leadership, because I can now admit how often they are conflated, are allies not enemies. It is at the intersection or, better yet, mutual exchange, of solid traditional management orthodoxy, and the passion, initiative and creativity of an innovation paradigm that exciting value creation will occur.
In conclusion, I offer the following “temperature takers”:
Ask yourself if your organisation’s vision is so compelling that the volatility we know surrounds us recedes dramatically.
- Consider in a world of such uncertainty if your organisation is building and enhancing understanding of shifting trends, behaviors, outcomes, in a way that creates confidence.
- In the face of pervasive complexity, are you energised by a clarity of purpose that diffuses that complexity?
- Global changes of unprecedented size and speed challenge assumptions and lead to dilemmas, which unlike problems have no ‘right answer’. Do you have the support and tools you need to inhabit ambiguity?
Leaders don’t manage innovation. They champion, inspire and enable it. When the optimum equilibrium between imagination and discipline is struck, the manager leads the business into the future each and every day. □
Karen Morris is a Strategic Advisor to WR Berkley group of insurance companies. She specializes in all aspects of innovations strategy and execution. With over 25 years of experience in law, management, underwriting, and multinational business, she is a frequent speaker and writer on innovation as well as an adjunct professor at Fordham University. Her email is firstname.lastname@example.org.