Creativity as a key CEO leadership characteristic

mushroomlamp“CEOs now realize that creativity trumps other leadership characteristics. Creative leaders are comfortable with ambiguity and experimentation. To connect with and inspire a new generation, they lead and interact in entirely new ways.”

IBM CEO C-Suite Report

This is an interesting statement as I believe it is true a characteristic in modern business, as any other key leadership trait.

The goal of strategy is value-creation rather than value appropriation, says Ghoshal. I see value-creation as a positive activity of any business built to thrive, and while notions of value appropriation may serve to enhance our perceptions of strategy, I feel value-creation can be utilized just as effectively when coupled with a powerful business philosophy. Creativity is the mental process used by the executive, end wider employee community, to shape truly differentiating strategies. The goal of business philosophy is to promote new and integrated modes of operation which will see strategy manifest more positively as a result. A company does not merely employ people; it is made up of all the actors involved in the value-creation process, including customers, employees and even competitors. A new conception of the employee-organization relationship needs to be conceived, since the act of value-creation is fast becoming an act of co-operation rather than compliance or obedience.

CEO’s need to be creative about designing and leading their businesses into the future.

Developing ideas in a corporate eco-system

Idea development is a natural process. It’s the result of problem solving activity, its the result of deliberate acts of creation, its the result of many elements that make humans wanting to do new things. For the sake of this discussion let me separate the development of ideas into two opposite camps; on the one side we have scientific ideas that are result of deliberate inquiry and on the other end we have ideas that result in having people enabled to expose their ideas as they develop creatively.

Ideas can be sourced from open environments via clients, partners and solution providers; or ideas can be generated through internal sources like employee campaigns. There are various methods that can be used to develop ideas and these vary depending on the intended outcome. For the sake of this post, the focus is on the corporate that is more engaged in services related activity for example the bank, insurance provider, technology support organizations, etc.

The critical question is; should there be different approaches to developing ideas in services companies compared to industrial organizations? Are the processes that are followed the same, or can we use a one size fits all (squeezing ideas through the funnel approach)?

We are entering an era where acts of co-design, co-production and co-delivery are shaping entirely new ethos around idea development, deployment all the way through to benefits realization. If you have a large services organization where you need to capture the essence of what’s important to your success, having a small central team re-designing the future business will not be sufficient. You need to crowdsource your ideas across the business and develop an eco-system of collaboration and participation.

“Ideation” of old is under re-think and re-design. Shaping a new world of generating ideas across the enterprise and extending this out into partners, customers, competitors are pushing the boundaries of having to decide what to focus on by when…

Rewarding people for new ideas, or not

Rewards for new ideas is a highly contested and discussed topic in the world of innovation. Let’s look at the concept of an “idea”. From the days of Plato the concept of what an idea means has been discussed. Is it only an abstract, metaphysical and “in mind” phenomena? Or, can we use Rudolf Steiner’s view that ideas are objects of experience that develop as we progress along our journey in life? Ideas develop as we are exposed to situations, conditions of life, education, and other situational phenomena.

Since we are an integrated being; humans love to collaborate and share ideas across many different platforms. Ideas can be expressed in various forms that include, visual, auditory, physical, etc. In most cases we will develop ideas over time using various tools to our disposal and integrate these with our thinking processes. Kant separated in his reasoning ideas from concepts. I like this approach as we need to take our ideas and develop them into appropriate and integrated concepts over time. These concepts need to produce relevant benefit or output for us to determine if the idea was worth anything in the first place.

Platforms include both humanistic and technological platforms. We want easy ways to store and retrieve ideas as they mean something to us. Human idea platforms include discussion sessions, meetings, and the plethora or other human-human interaction styles. Technological platforms are fragmented and diverse an can include to-do lists, email, social networks, post-its, idea management software products, etc. As humans we are idea machines that require an outlet for all of our thinking.

I have the sense that people either over value or undervalue the value of ideas as they progress through a lifecycle. In actual fact, the importance of an idea is almost always attached to a carrier. This carrier of the idea plays an incredibly important role in how the idea will be perceived by others.

So, in an organizational setting; if the CEO has a great idea, the entire (well, almost all people) organization will find the idea attractive. But, if a radical and outspoken person in the same setting has an idea that might be much more relevant or beneficial to the business, it will never get the same airtime as the former example. Is there a way to expose ideas quickly and develop reward systems for the collective to make the idea work?

With a world filled with ideas, how valuable can an idea really be unless its developed and used in the correct setting? Maybe the only reward for ideas should be for those that can put their energy in the right idea, to produce the most appropriate outcome, in the most optimal setting…

Waves of change towards a more interconnected world?

Throughout the book you will be introduced to social, networked and interconnected behavior as being critical to a clear understanding of the landscape in which we all exist. This new landscape is showing signs of the ever-nearing third megawave. What has proved to be the real hindrance in understanding change holistically and therefore the appreciation of our placement in the world, is the presentation of change theories that are situation specific. The three megawaves are not set out to displace old theories but to present an opportunity by which to understand the bigger shifts that have transcended all spheres of activity and encompass all of human experience. I try to show this as a superwave to indicate that radical shifts across our understanding of the world are imminent.
What this story has also shown is the increasingly complex nature of developing in an increasingly interconnected world. As we will come to realize, innovating in the modern world is no longer a straightforward affair, it requires knowledge of technologies, lifestyles, habits, individual desire, and most importantly an understanding of the tension between a growing consolidation of technologies and their imminent divergent nature, a concept we will revisit later on. This is partly what has been responsible for the rise of super powers as they develop and conquer, and also what has provided the platforms for some of the most disruptive changes in modern history. But we’ll get to this.

Pondering formal structure in business

The formal structure, in the business innovation sense and at its most basic level, pertains to the formal systems of hierarchy set in place within a company. The man in the cubicle reports to the man in the white walled office, who answers to the man upstairs, who in turn falls at the feet of the man sipping Chivas in his private jet. This is not an unfamiliar system.

In terms of value creation and idea management, it means that ideas are handled by research and development (R&D) or in most cases by a dedicated team, and potentially valuable ideas are then processed by the few individuals or committees involved in decision making. From time-to-time people attempt to include the wider organization by incentivizing individuals for their great ideas, and without fail these initiatives fall apart. The concept of open innovation has already pointed out the flaws in such a system, where those involved in value creation are subject to the restrictions of an internally orientated idea sharing environment and the necessity for businesses to employ skilled individuals for this job to name but two. But a move towards open innovation cannot escape the formal structure entirely.

But, even if value creation can be found in networked, external spaces that revolutionize the concept of innovation, the mass of ideas are still subject to the scrutiny of those committees appointed by the businesses to sift through ideas and ultimately decide what is in the company’s best interests in terms of implementation. This leads to the “funnel” effect. Understanding this phenomenon is paramount since it directly relates to what social based innovation seeks to resist and revolutionize in the neatly packaged word we have come to know as innovation.

The ability to circumvent the rigidity of the formal structure by using socially oriented approaches is imperative to successful innovation initiatives. So, if your intent is to save money or make more money, innovation is used every day in your business. It is not always formalized, and is not always organized. But, it is always on the minds of people who want to get ahead.

Marvin Bower, the brain behind management consulting and the person that built McKinsey, spent a big part of his life trying to solve this problem of hierarchy. Elizabeth Haas Edersheim wrote “Marvin Bower held fast to his belief that people are the most important assets of any organization. While at Jones, Day, he had experienced only too painfully the downside of hierarchical organizations that, by their inherent structure, failed to leverage this asset. Furthermore, Marvin knew that no organization was sustainable without a strong foundation of committed people willing to act individually and as a team to ensure the future.”

Some lessons:
1. Structure will be around for while
2. The shadow organization is becoming more visible and important
3. The ability to come up with great ideas will always be part of your job
4. Funneling great ideas too formally will fail to deliver value in services industries
5. Finding innovative ways to deal with the formal vs social structures can become your competitive advantage

Towards the new basics

Crowdsourcing is going through the paces when you get auditing firms 😉 discussing the merit of such a phenomena. Look at this entry by PwC. The concept of “crowd behaviour”, “crowd wisdom”, “crowd sourcing” concepts are discussed in the same way as “market behaviour”, “market wisdom”, and “market segmentation” of late. The biggest difference is that the value of the individual is amplified in the modern business. This goes for employees and consumers/customers/clients alike.

We feel we have the right to better product, the right to customize, the right to select freely, and the right to participate with the supplier of services and products during the delivery (and making of goods and services) phases. So, co-production and crowdsourcing are now integrated into most propositions of the modern business. The advent of automated and integrated social networking technologies have caused this shift towards crowd power to accelerate. And it doesn’t matter what industry you are in; your life will change over the next few years as you expect more from the worlds top providers. The spill-over of finding new competitive frontiers will hit the companies that think they can compete by doing the basics right.

The basics have shifted, and you need to figure out what those are. My take on some of the new basics:
1. Real-time enabled strategic capabilities and not core competencies
2. Crowdsourcing and crowd wisdom based analysis and not market segmentation
3. Configurable business value creation configurations and not the hierarchy through command and control only
4. Dematerialized value statements and not vision statements
5. Offerings as propositions to customers and not products and services
6. Open and transparent value networks and not closed value- and supply-chains
7. Energizing the shadow organization through champions and not appointed change agents

Is this the time to redefine the basics? Could the basics for you and me be different?

A collective re-design is imminent

The world is upbeat about the changes in economic activity. Consumers, customer, patients, guests and clients are all spending more than recently (well, a few month ago). We want to feel upbeat about positive change and will look for signs of change to support our views of the major growth cycle we are about to experience. Our “brains” translate the recovery as a trend and the feeling of “it will all be ok” sets in.

With this phenomena comes the deep rooted paranoia that forces us to look at alternatives. We need to rethink why we did things in a certain way and re-look at certain decisions and behaviors during the “bad times”. If you are in a corporate setting this gets amplified as everybody wants to make a mark on the new era where positive thinking will result in good returns, major returns and overall a new era of growth.

This brought me to the conclusion that we need recessions more than growth periods to stimulate innovation. Yes, I know, many people have written about and discussed the reasons why you should innovate during a recession, but this is different. People need to be constrained, scared and shaken before they feel upbeat enough and ready to move onto new things.

We have noticed major activity in our services clients, especially in banking and telco’s, to the extent that most now have “redesign the business” mandates or initiatives. Executives are ready to make major leaps forward in testing new innovations to drive competitiveness. For those that believe that a redesign is not necessary, be warned that when a larger collective initiate “change”, typically a major shift in an industry’s competitiveness results.

The changes will probably come in three stages:
1. Initiate by testing options: this is where organizations reorganize and reshape their top teams for optimal redesign mandates. This requires strong leadership and decision making capabilities to get the correct changes approved. Some will be disciplined and purposeful and others will be add-hoc and unfocused.
2. Spend money: a redesign program is typically messy as many of the dimensions of change are not tested and might result in poorer performance in the interim. The “business case” culture is challenged and a more “benefits oriented” approach is followed where holistic returns are expected. As experimentation with technology is not often liked by business people, technology will be implemented prematurely and result in major redesign initiatives after this phase.
3. Deal with the aftermath: only some of the organizations that embarked on change initiatives will reap the benefit. This will result in a new era of corrective action, with a new kind of business that is highly automated, efficient delivery oriented, client intimate, and well integrated. The mandate of survival versus reshape will start all over again.

Just think about the changes in banking, telco’s, insurance, let alone manufacturing over the last 20 years in technology and automation, legislation, delivery mechanisms, size of markets, etc and the picture gets interesting… we are about to enter one of the most intense periods of re-design, the world has ever experienced.

Making the case for Social Based Innovation

I’ve been discussion many concepts relating to innovation over the last few years. But kept the development of our new approach under wraps as we are testing some of the constructs. So, let me give you a sniplet of what’s been going on.

Working globally with financial services, manufacturing, and other services firms we discovered some interesting concepts in innovation. You would’ve noticed that I have a number of posts on social networking (the hot topic of the day I guess), and other social related phenomena. All these contribute partly to the concept of Social Based Innovation.

The initial definition is:
Social Based Innovation is the ability to influence social actions in such a way, that benefit is obtained by the social group in its tribal setting, behaving in a way that value is captured by the collective.

Social Based Innovation websiteShadow organizations as they are called, refer to the social interactions that happen outside of the formal structures as defined by leadership. These shadows are often overlooked as sources of value and not nurtured. Social Based Innovation as an approach is used to capture value holistically by allowing all dimensions of the community to interact. This drives the tribal approach where common beliefs and ideas are developed even if these are from customers, employees, competitors, or other traditional constructs. Crowdsourcing, Co-production, crowd spirit, etc are concepts that try to capture the emerging world of social mobilization. Leveraging communities as crowds that influence your innovation mandate has become a new topic of discussion.

Some notes on where reward systems (check out McKinsey&Company’s And the winner is… paper) and Social Based Innovation intersect:
– Identify excellence through social rating approach and tribal acceptance and co-development of ideas and innovations.
– Influence public perception by exposing a wider community to rewards for great ideas and innovations.
– Focus a community by getting the entire social group involved in collective activity for common purpose without the traditional organizational boundaries.
– Identify and mobilize new talent by allowing individuals to have creative freedom during idea development and guidance through implementation.
– Strengthen the community by getting tribes actively involved in problem solving.
– Educate and improve skills by getting champions of innovation to emerge based on their attitudinal and aptitude towards innovation. These people can then assist others in achieving more in the network.
– Mobilize capital once the strategic intent of the campaign and involvement of the formal and social structures have delivered a verdict.

Is innovation as a discipline evolving faster than before due to the effects of social networking?

Thoughts on designing the “social innovation” system

The team at SystemicLogic has done some great work in testing social based systems in corporate settings. One of the areas that has been of particular interest to me; is the use of social systems in organizations where formal structures and more add-hoc based social systems are in conflict. This conflict can be used to drive innovation energy if used in a constructive fashion.

Organizations are designed to implement the defined purpose and must produce economic prosperity (or in the case of a non-profit firm, design needs to achieve the firm’s mandate). There are many other factors including efficiency, effectiveness, geographical factors, access to skill, etc that all play a role in the design process. But, at the end of (and often while…) the thinking process there is a structure where people feel they fit into the greater whole.

These structural formalisms are used to depict the organization, but is not the way in which people use ideas to drive innovation. Innovative people need the intellectual freedom to test ideas, both formally and informally, without the boundaries of the structure.

In reality work gets done by people interacting in many different ways; and often in ways never intended. I see that the emergence of new forms of designs will form part of an “expanding architecture” theme. Learning from other disciplines, I feel that “Expanding Architecture: Design as Activism” is a great book that addresses some of these issues. Have a look at this short clip that explains some of the concepts.

New York Expanding Architecture Design Conversations Part I from Metropolis magazine on Vimeo.

The move towards understanding new forms of responsible structures is well underway. As seen in the video clip; our ability to influence design in every day situations is also becoming more prominent. The more adaptive organizations have been using these concepts for some time now. But can we apply these principles when designing a system of innovation?

Can idea systems facilitate this messy process of getting ideas developed throughout the organization? How do we get the process of self-help and “wikinomics” implemented by means of natural social development?

Design oriented innovation is becoming a core capability where design decisions are pushed into the network of actors rather than left upto a small group of specialists. The implications are that changes will come about mo

“There is no issue that’s not a design issue”
– Bryan Bell

Something to say for Return on Innovation (RoI)

We all have been looking at Apple as it transformed itself over the last few years. But how much of a turnaround has it been? And, and what point will an Apple, Google and alliance pose a threat to Microsoft where full replacement technologies are a reality?
Looking at the financial crises globally, we’ve returned to “cash is king”. Apple has $25billion, Google has $14.4billion and Microsoft has $21billion in cash reserves. Microsoft’s deal with Yahoo is still lingering, but for how long (or is it now finally over)? Revenue growth for the quarter is looking pretty good where Apple has shown 27% growth, Google at 31% and Microsoft at 18%.

If the network is becoming the computer (as initially promoted by Sun) how long before the world stop using desktop operating systems and applications all together? We are seeing massive growth in telecommunications infrastructure and broad-band upgrade projects around the globe. Companies like MTN is pursuing business on the African continent to bring telephony to the masses; people who have little access to basic lifestyle products – yet they own cellphones…

The new world of innovation is far removed from the classical industrial view on innovation. Here are some points to ponder:
– re-thinking your business’s abstract value in relation to its value proposition (Apple is becoming a media company)
– redefining business models by separating the participative customers from economic customers (Google is an infomogul)
– driving open innovation models by using collaborative and socially connected talent pools (Google’s Android is a developer ecosystem, etc)
– protecting your business channel turf (Microsoft’s focus on interrelated and mass-adopted products)