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Rethinking leadership and management to drive innovation

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Businesses of all sizes struggle to balance innovation with business as usual. Although both activities are vitally important, it can sometimes feel as though the two are at odds with one another as they compete for attention, resource and time.

We ran an interactive event for CIPD Coventry & Warwickshire Branch that highlighted the tools you need to create a culture that embraces innovation. We also explained how to harness high performance leadership techniques that use different management approaches for innovation and the day-to-day.

Together we explored:
- The key differences between innovation and business as usual.
- Organisational Ambidexterity — what is it, why does it matter, and how does your firm stack up?
- The different types of innovation (from incremental, ‘small i’ innovation to radical, ‘Big I’ innovation) and the different management approaches that are needed even for these.
- The role of leadership, management and strategy in creating ambidexterity.
- Insights from other organisations that have got the balancing act right.

Published in: Business
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Rethinking leadership and management to drive innovation

  1. 1. Leadership & Management Rethinking to drive innovation
  2. 2. We ran an interactive event for CIPD Coventry & Warwickshire Branch that looked at... ‣ Understanding innovation and business as usual Both activities are vital, so why do they conflict? ‣ Organisational Ambidexterity The ability to both explore and exploit—is your firm a Zombie or a Conqueror? ‣ Rethinking leadership and management 5 top tips to rethink leadership and management for innovation and ambidexterity ‣ Rethinking leadership and management for your firm How does your firm stack up and what could you do differently?
  3. 3. understanding innovation and business as usual
  4. 4. can you spot the difference?
  5. 5. ©StockerPartnershipLtd2016 STOCKER PARTNERSHIP Spot the difference Business as usual Innovation How many differences can you spot? A 3 w orksheet
  6. 6. Innovation is all about thinking differently Controlled chaos Creative destruction
  7. 7. Open minded Imaginative Visionary Playful Expansive Curious Exploratory Experimental Creative and analytical Iterative Responsive Challenging Provocative Respectful and disrespectful Brave Adventurous Determined Mindful Empathic Attentive Emotional and objective Holistic Multi-disciplinary Patient and impatient Open to serendipity Insightful Comfortable with paradox Solution focused I’m thinking of... by Davide Restivo on Flickr https://flic.kr/p/4Enhme
  8. 8. Business as usual is all about the normal execution of operations
  9. 9. Backyard Hair Cut by Sean Hobson on Flickr https://flic.kr/p/7CHGWX Ordinary Maintenance Steadfast Status quo Smooth flow Seamless Low fuss Normality Everything just works Operational Incremental Efficient Continuous improvement Ongoing momentum Constant Effective Routine Productive
  10. 10. so why do innovation and business as usual conflict?
  11. 11. we’ve misled you slightly...
  12. 12. business as usual is about innovation too Ladies Ride on Mower by Leonard J Matthews on Flickr https://flic.kr/p/pqTkMF
  13. 13. Anything can be innovated! Business model Customer experience Communications Employee productivity Management style Markets Office hours Organisational structure Partnerships Pricing Processes Products Recruitment Revenue model Risk management Route to market Salary models Sales Services Sources of finance Staff holidays Strategy Supplier relationships Supply chain Technology Value proposition Waste products And much more....
  14. 14. so what is the real source of the conflict?
  15. 15. Exploration Exploitation Pioneering Disruptive New Unknown Experimental Formative and original Challenges the status quo High risk Uncertain returns Real risk of failure Radical innovation vs Efficient and effective Aligned and productive Continuous improvement Built on existing knowledge Focus on implementation Repeatable and predictable Safeguards the status quo Lower risk More certain returns Marginal gain Incremental innovation
  16. 16. Piano fingers by seriousbri on Flickr: www.flickr.com/photos/seriousbri/4148739768/ ORGANISATIONAL AMBIDEXTERITY An organisation’s ability to both explore and exploit
  17. 17. EXPLOITATION EXPLORATION Low High LowHigh ZOMBIE ADVENTURER CONQUEROR MINER Organisational Ambidexterity Matrix © Stocker Partnership 2012
  18. 18. WBS Execu*ve Educa*on The Miner The Miner Exploiting but not exploring Superpower Fatal Flaw Shies away from the future and disruptive change. Vulnerable to market shifts and innovative competitors. Keeps head down and stays focused on the immediate task at hand, regardless of distractions. Stocker, M. 2012. Ambidexterity: the skill every conqueror needs to master. Stocker Partnership [online] http://www.stockerpartnership.com/blog/ambidexterity-the-skill-every-conqueror-needs-to-master/
  19. 19. WBS Execu*ve Educa*on The Adventurer Exploring but not exploiting Struggles to put ideas into practice. Much strategic intent but little effective action. Weak on driving day-to-day performance. Seeks out out new ideas like nobody’s business. Ninja at spotting market shifts. Unafraid of risk. Superpower Fatal Flaw Stocker, M. 2012. Ambidexterity: the skill every conqueror needs to master. Stocker Partnership [online] http://www.stockerpartnership.com/blog/ambidexterity-the-skill-every-conqueror-needs-to-master/
  20. 20. Superpower Fatal Flaw WBS Execu*ve Educa*on The Zombie Neither exploring nor exploiting AKA the walking dead. Lives in denial and on borrowed time. Without significant action may cease to exist at any moment. Keeps going despite the odds. Makes other businesses look amazing by comparison! Stocker, M. 2012. Ambidexterity: the skill every conqueror needs to master. Stocker Partnership [online] http://www.stockerpartnership.com/blog/ambidexterity-the-skill-every-conqueror-needs-to-master/
  21. 21. Superpower Fatal Flaw WBS Execu*ve Educa*on The Conqueror Exploring and exploiting Can sometimes overstretch in both directions at once without the strength or resources to support this strategy. Explores the unknown while wringing every last drop out of today. Does both with equal dexterity. Stocker, M. 2012. Ambidexterity: the skill every conqueror needs to master. Stocker Partnership [online] http://www.stockerpartnership.com/blog/ambidexterity-the-skill-every-conqueror-needs-to-master/
  22. 22. WBS Execu*ve Educa*on ?So what are you
  23. 23. Your turn! ©StockerPartnershipLtd2016 STOCKER PARTNERSHIP Organisational Ambidexterity: where are you? EXPLOITATION EXPLORATION Low High LowHigh ZOMBIE ADVENTURER CONQUEROR MINER © 2012 Stocker PartnershipThe Organisational Ambidexterity Matrix In the pursuit of new knowledge and opportunities, you venture into the unknown. You search for new ideas and possibilities. You learn and experiment. You adapt quickly to change. You are proactive, innovative, and comfortable with uncertainty. You are always looking for something fresh and new. Critical conversations are encouraged. Your activities are aligned and efficient. You are effective at managing today’s business demands. You use, extend and refine your existing knowledge. Existing products, capabilities and competences are exploited. Existing advantages are reinforced. Continuous improvement builds upon and enhances value for today. A 3 w orksheet
  24. 24. WBS Execu*ve Educa*on ?How are you going to become an ambidextrous organisation
  25. 25. WBS Execu*ve Educa*on EXPLOITATION EXPLORATION Low High LowHigh ZOMBIE ADVENTURER CONQUEROR MINER Organisational Ambidexterity Matrix © Stocker Partnership 2012
  26. 26. 5top tips to rethink your leadership and management
  27. 27. Embrace contradictions1 Yin &Yang Martini by Andrew Magill on Flickr https://flic.kr/p/itHVT
  28. 28. ...innovativeness may conflict with operational efficiency, but you can’t be efficient unless you are innovative at some point—and you won’t be around to be innovative unless you know how to be efficient. “ “ Source: Smith,W., Lewis, M. &Tushman, M. 2016.“Both/And” Leadership: don’t worry so much about being consistent. Harvard Business Review, May 2016, pp.62-70.
  29. 29. ‣ Bring tensions to the surface and make them explicit ‣ Talk about contradictions as a balance (not a choice) ‣ Adopt a both/and leadership approach For example, short term results and long-term objectives; shareholder value and social responsibility; safety and risk; discipline and passion; innovation and productivity. ‣ Ensure all dimensions are represented at board level ‣ Foster a state of creative conflict within management ‣ Dare to pursue multiple (conflicting) strategic agendas As humans, we tend to dislike contradictions and conflict, seeking to either resolve or avoid the two. In reality, both/and leadership that embraces paradox is needed. Embrace contradictions
  30. 30. Create a common foundation2 Orienteering by Luigi Mengato on Flickr https://flic.kr/p/djvPZE
  31. 31. ‣ Ensure your organisation has a clear purpose, authentic values and an agreed vision ‣ Weave this story throughout everything you do ‣ Ensure that the story you’re telling and the experience of your firm is congruent —from vision to strategy to performance management to culture ‣ Make decisions in the context of this broader narrative and use this foundation to guide your actions ‣ Articulate an innovation strategy To avoid chaos from contradiction, a common foundation is needed. This foundation provides strategic alignment and allows you to effectively manage both continuity and change. Create a common foundation
  32. 32. Source: GE Capital, 2012.The GrowthValues: how GE aligned its culture with its growth strategy [PDF] http://cohort.gecapital.com/newsletter/2012/08/27/GEC_The_GE_Growth_Values.pdf
  33. 33. Having become CEO of General Electric in 2001, five years later Jeff Immelt set an ambitious target of sustaining an average organic growth rate of around 8%. Historically, GE had been known for its culture of productivity; now he wanted it to move to a culture of growth. This required fundamental change. A common foundation ‣ In 2003, Immelt assembled an executive team to revisit GE’s core values. Senior leaders from every area of the company were consulted in an extensive research process. Two years later, the GrowthValues were articulated and teams began to integrate them into every aspect of GE’s operations. ‣ A six-part ‘Execute for Growth’ process was also outlined and used to explain how specific initiatives fitted into the wider growth process. ‣ The annual strategic planning process was renamed the ‘Growth Playbook’ and its focus refined. Sources: GE Capital, 2012.The GrowthValues: how GE aligned its culture with its growth strategy [PDF] http://goo.gl/lFGyG4; Stewart,T. 2006. Growth as a process. Harvard Business Review [online] https:// hbr.org/2006/06/growth-as-a-process/ar/1 Jeff Immelt by Gage Skidmore on Flickr https://flic.kr/p/FbJYPj
  34. 34. Use the right metrics3 Leroy the Ruler by kevin.pelrine on Flickr https://flic.kr/p/7ksvqf
  35. 35. ‣ For exploration and innovation, create performance measures that reward learning and experimentation ‣ Understand the failure spectrum—build in multiple failsafes where needed; do not punish “intelligent failure” ‣ Make innovation a strategic priority at board level ‣ Monitor exploration and exploitation throughout the organisation and include both appropriately in performance appraisals Exploration and exploitation should not be measured using the same metrics. Tight controls and traditional performance measures choke innovation. Use the right metrics
  36. 36. Measuring both social and financial performance
  37. 37. DDD (Digital Divide Data) delivers business process outsourcing solutions to clients worldwide.The firm’s innovative non-profit social model employs talent from underserved populations in four operations centres (Virginia, US; Kenya; Laos and Cambodia) and provides a comprehensive programme of training, employment and higher education. Its social mission and financial sustainability are intricately linked but can also conflict. Using the right metrics in DDD ‣ To ensure that both the social mission and business mission are strategically represented, executives have created two sets of financial statements, each with its own metrics. ‣ In board meetings, CEO Jeremy Hockenstein routinely asks,“How does this decision impact our social mission?” followed by “How does this decision impact our business?” CoffeeTalk by Anna Levinzon on Flickr https://flic.kr/p/4wAz5r Sources: DDD, 2015.Annual Report [online] http://www.digitaldividedata.com/about/ annual-report; DDD, Creating a world of digital possibilities [online] http:// www.digitaldividedata.com/sites/default/files/case_study/ DDD_US_Brochure_Individual_Pages.pdf; Smith,W. et al. 2016. “Both/And” leadership. Harvard Business Review [online] https://hbr.org/2016/05/both-and-leadership
  38. 38. Enable innovation with people and process 4 Queue by Hernán Piñera on Flickr https://flic.kr/p/pGvQbe
  39. 39. ‣ Embed the process of innovation within your firm —with clear steps and objectives ‣ Design your organisation—structurally, culturally and spatially—for both exploration and exploitation ‣ Consider giving dedicated time and budget to innovation ‣ Hire both people with entrepreneurial skills (adventurers) and people with managerial skills (miners), and create innovative teams ‣ Train leadership, management and staff in innovation skills Innovation is not an event, it is a process—of turning ideas into reality. Both entrepreneurial and management skills are needed for staff to recognise and execute opportunities. Enable innovation with people and process
  40. 40. Increasing exploration and sales in a Pharma company —the secret was in the coffee! CoffeeTalk by Anna Levinzon on Flickr https://flic.kr/p/4wAz5r
  41. 41. In an HBR article, Ben Waber, Jennifer Magnolfi and Greg Lindsay tell the story of a pharmaceuticals company with 50 executives responsible for nearly $1 billion in annual sales.The researchers found that when a salesperson became more exploratory by increasing interactions with colleagues in other teams by 10%, his or her sales also rose by 10%. The secret was in the coffee ‣ As a result, the company invested significantly to rip out the existing coffee machines (at the time, roughly one coffee machine per 6 employees, which was used by the same people each day) and instead built fewer, bigger coffee stations— just one for every 120 employees. ‣ They also replaced the small cafeteria used by few employees with a large cafeteria for all employees. ‣ In the quarter after, sales rose by 20% or $200 million. Source:Waber, B et al. 2014. Workspaces that move people. Harvard Business Review [online] https://hbr.org/2014/10/workspaces-that-move-peopleCoffeeTalk by Anna Levinzon on Flickr https://flic.kr/p/4wAz5r
  42. 42. Foster an open can-do attitude5“I Can Do It” by Bridget Coila on Flickr https://flic.kr/p/arx1oD
  43. 43. Source: Richard Reed, Innocent Drinks, Part 1 (Inspiring Entrepreneurs:The Secret Ingredients). British Library Business & IP Centre What not to do—the opposite of can-do As told by Richard Reed, co-founder of Innocent Drinks
  44. 44. ‣ Create a culture that values new ideas ‣ Empower individuals to initiate change and to innovate —‘can-do’ shouldn’t be limited to a select few ‣ Seek to grow resources (instead of accepting that resources are limited) ‣ Look outside your own walls and seek inspiration from new sources ‣ Be open to collaboration—both internally and externally Ideas are fragile—they need to be treated with care and nurtured. Nothing kills creativity and innovation faster than a closed mindset that finds problems at every turn. Foster an open ‘can-do’ attitude
  45. 45. Get inspired by Kickbox Image source:Adobe Systems Incorporated. How to make a redbox v2 https://upload.wikimedia.org/wikipedia/commons/f/fb/How_to_make_a_redbox_v2.pdf
  46. 46. http://blogs.adobe.com/conversations/2015/02/kickbox-open-sourcing-makes- innovation-easily-accessible-for-all-companies.html Kickbox is an innovation process that Adobe developed for its own internal use and then open- sourced for anybody to use. It empowers any individual within an organisation to innovate, test their idea and pitch it for further funding. Putting innovation in many hands ‣ Kickbox begins with an ‘innovation-in-a-box’ kit. Each red box contains a pre-paid $1,000 credit card; reference cards with instructions, innovation tools and frameworks; stationery; a Starbucks gift card and a chocolate bar— because innovation requires caffeine and sugar! ‣ Anybody qualifies for a red box but they pick it up by attending a 2-day workshop where they learn about the innovation process and how to use the Kickbox tools. Employees are then free to use the box to prototype and test their idea —any idea! ‣ Once the idea has been validated by consumers, an employee pitches it to any number of executives, any number of times. Just one executive needs to say yes for the employee to receive a coveted ‘blue box’, which enables them to take their project from initial support to further funding and execution. Sources:Adobe Life Blog. Adobe is encouraging innovation in a whole new way. Meet Kickbox [online] http://blogs.adobe.com/adobelife/adobe-life-magazine/v1/innovation-revolution/;Adobe Kickbox. Discover Kickbox [online] https://kickbox.adobe.com/what-is-kickbox;Adobe Kickbox. Kickbox at your organisation [online] http://kickbox.adobe.com//kickbox-at-your-organization; Adobe Kickbox. How to make a redbox v2 [PDF] https://upload.wikimedia.org/wikipedia/ commons/f/fb/How_to_make_a_redbox_v2.pdf
  47. 47. WBS Execu*ve Educa*on ?How does your organisation stack up
  48. 48. Your turn! ©StockerPartnershipLtd2016 STOCKER PARTNERSHIP Rethinking Leadership and Management: Becoming Ambidexterous 1 Embrace contradictions 2 Create a common foundation 3 Use the right metrics 4 Enable innovation with people and process 5 Foster an open can-do attitude Bring tensions to the surface and make them explicit Talk about contradictions as a balance (not a choice) Adopt a both/and leadership approach For example, short term results and long-term objectives; shareholder value and social responsibility; safety and risk; discipline and passion; innovation and productivity. Ensure all dimensions are represented at board level Foster a state of creative conflict within management Dare to pursue multiple (conflicting) strategic agendas Ensure your organisation has a clear purpose, authentic values and an agreed vision Weave this story throughout everything you do Ensure that the story you’re telling and the experience of your firm is congruent —from vision to strategy to performance management to culture Make decisions in the context of this broader narrative and use this foundation to guide your actions Articulate an innovation strategy For exploration and innovation, create performance measures that reward learning and experimentation Understand the failure spectrum— build in multiple failsafes where needed; do not punish “intelligent failure” Make innovation a strategic priority at board level Monitor exploration and exploitation throughout the organisation and include both appropriately in performance appraisals Embed the process of innovation within your firm—with clear steps and objectives Design your organisation— structurally, culturally and spatially—for both exploration and exploitation Consider giving dedicated time and budget to innovation Hire both people with entrepreneurial skills (adventurers) and people with managerial skills (miners), and create innovative teams Train leadership, management and staff in innovation skills Create a culture that values new ideas Empower individuals to initiate change and to innovate—’can do’ shouldn’t be limited to a select few Seek to grow resources (instead of accepting that resources are limited) Look outside your own walls and seek inspiration from new sources Be open to collaboration—both internally and externally “I Can Do It” by Bridget Coila on Flickr https://flic.kr/p/arx1oD Queue by Hernán Piñera on Flickr https://flic.kr/p/pGvQbe Leroy the Ruler by kevin.pelrine on Flickr https://flic.kr/p/7ksvqf Orienteering by Luigi Mengato on Flickr https://flic.kr/p/djvPZE Yin & Yang Martini by Andrew Magill on Flickr https://flic.kr/p/itHVT A 3 w orksheet
  49. 49. If you would like a copy of any of the A3 worksheets or would like support to rethink leadership and management in your organisation, just drop us a line. +44 (0)24 76 100 193 hello@stockerpartnership.com Looking for worksheets or support?
  50. 50. Sources & Further Reading Adobe Systems Incorporated, 2016. Adobe is encouraging innovation in a whole new way. Meet Kickbox. Adobe Life Magazine Careers [online] http://blogs.adobe.com/adobelife/adobe-life-magazine/v1/ innovation-revolution/ Adobe Systems Incorporated, 2016. Adobe Kickbox: Kickbox at your organization [online] https:// kickbox.adobe.com/kickbox-at-your-organization Barsh, J., Capozzi, M. & Davidson, J. 2008. Leadership and innovation. McKinsey & Company [online] http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/leadership- and-innovation Skillicorn, N. 2014. Five ways HR can develop innovative cultures in large companies. HRZone [online] http://www.hrzone.com/lead/culture/five-ways-hr-can-develop-innovation-cultures-in-large-companies Smith,W., Lewis, M. &Tushman, M. 2016. “Both/And” Leadership. Harvard Business Review [online] https://hbr.org/2016/05/both-and-leadership Stocker, M. 2012. Ambidexterity: the skill every conqueror needs to master. Stocker Partnership [online] http://www.stockerpartnership.com/blog/ambidexterity-the-skill-every-conqueror-needs-to-master/ Waber, B. Magnolfi, J. & Lindsay, G. 2014. Workspaces that move people. Harvard Business Review [online] https://hbr.org/2014/10/workspaces-that-move-people
  51. 51. STOCKER PARTNERSHIP The Stocker Partnership is a strategic innovation consultancy We help organisations to create and exploit new opportunities 024 76 100 193 hello@stockerpartnership.com Matt Stocker Debbie Stocker www.stockerpartnership.com Follow us on LinkedIn Subscribe to our blog Sign up to our newsletter WE’RE NOT BUT WE ARE CLEVER BIG @mattstocker @debbiestocker Illustrations by Stina Jones (stinajones.co.uk), Robin Boyd (www.robinboyd.co.uk) and Matt Stocker

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