Here is an excerpt from an article written by Tom Davenport for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.
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The world continues to honor and mourn Steve Jobs weeks after his death, and there is plenty to praise. His legacy lives on in today’s iCloud and iOS 5 availability, and in the new iPhone 4S being praised by several prominent technology reviewers. David Pogue, my favorite technology writer, is so enthusiastic as to call the new phone’s features almost magical.
I’ve long admired Apple products, too. By my count there are six Macbooks, two iPads, and three iPhones—not to mention a few iPods—in my family’s possession. If you judge only by the product outcomes or by Apple’s market value, Jobs seems the best decision-maker in the history of consumer products.
But of course, like every other human, his decisions weren’t all great. In the 1980s he hired John Sculley to succeed himself as CEO of Apple, and Sculley presided over a period of slow growth and product missteps in the ensuing years. Jobs commented about Sculley: “What can I say? I hired the wrong guy. He destroyed everything I spent 10 years working for, starting with me.” Jobs’ major startup during his hiatus from Apple, NeXT Computer, was largely unsuccessful — at least in the hardware business. His decision to sell all of his Apple stock when Sculley pushed him out cost him billions. And when he came back as CEO, he allowed the backdating of stock options.
In terms of decision processes and style, Jobs was famous for being a tough micro-manager, at least where product design decisions are concerned. As a Fortune magazine article on Apple’s culture put it: “He’s a corporate dictator who makes every critical decision—and oodles of seemingly noncritical calls too, from the design of the shuttle buses that ferry employees to and from San Francisco to what food will be served in the cafeteria.”
He also didn’t believe in analytical decisions based on extensive market research. From The New York Times‘ obituary: ”Mr. Jobs’s own research and intuition, not focus groups, were his guide. When asked what market research went into the iPad, Mr. Jobs replied: “None. It’s not the consumers’ job to know what they want.”
Based on the evidence, I will grant that he made some fantastic design decisions, but not that he was an expert on effective decision processes.
Granted, there is some evidence that even Jobs came to realize the shortcomings of one man’s intuition as the only source of decision wisdom. In a summary of a 1997 interview, a New York Times article published earlier this year noted: “In his early years at Apple, before he was forced out in 1985, Mr. Jobs was notoriously hands-on, meddling with details and berating colleagues. But later, first at Pixar, the computer-animation studio he co-founded, and in his second stint at Apple, he relied more on others, listening more and trusting members of his design and business teams.”
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To read the complete article, please click here.
Tom Davenport is the President’s Distinguished Professor of Information Technology and Management at Babson College and has taught at Harvard Business School, Dartmouth’s Tuck School, the University of Texas, and the University of Chicago. He is a widely published author and speaker on the topics of analytics, information and knowledge management, reengineering, enterprise systems, and electronic business. He has written over 100 articles for such publications as Harvard Business Review, Sloan Management Review, California Management Review, the Financial Times, and many other publications, and has been a columnist for Information Week, CIO, and Darwin magazines. His latest of a dozen books is Judgment Calls: Twelve Stories of Big Decisions and the Teams That Got Them Right, co-authored with Brook Manville and published Harvard Business Review Press (2012). To check out Tom’s other blog posts, please click here.
How and why to create a “magic mix” of innovation leadership with innovation processes
Year after year, annual lists of the most highly creative organizations include “the usual suspects”: Amazon, Apple, Facebook, Google, Netflix, Nike, Pixar, Twitter, etc. With all due respect to these exemplars and to various authors who have much of value to say about innovation processes or the environment for it that effective leaders have established and sustained, no book (to the best of my knowledge) thoroughly examines both environment and leadership…until now.
According to Jane Stevenson and Bilal Kaafarani, there is a “magic mix” that enables some leaders to create a “sustainable innovation engine” within their organization. “In Breaking Away, we’ll look at why this happens and how to achieve different types of innovation success.” More specifically, these are among the key questions to which they respond:
o Why do some innovation leader succeed but most fail?
o Why do some workplace environments nourish and support innovation but most don’t?
o What is the innovation risk profile and why is it so important?
o What are the quality parameters within which to create “customer evangelists”?
Note: Ben McConnell and Jackie Huba devised the term, “customer evangelists.” Revealingly, the process of creating them involves the same core values as does the process for creating employee (or stakeholder) “evangelists.” Hmmmm…..
o Which cultural factors are essential to a workplace environment in which innovation thrives?
o Which cultural factors preclude establishing or sustaining one?
o What are the defining characteristics and unique abilities of the most effective innovation leaders?
To their great credit, Stevenson and Kaafarani identify and explain a multiple of options and considerations (e.g. “an elegantly simple model that reveals four types of innovation that can lead to growth”) with regard to the interdependence of innovation environment and leadership. They view “leadership” in two separate but essential dimensions: having the vision and authority to do whatever must be done to establish and sustain (if necessary, to protect) an environment in which the innovation process thrives, and, taking initiative at all levels (i.e. transformational, category, marketplace, and operational) and in all areas of the given enterprise. That is, innovative people “make it happen” because their leaders have ensured that it can “happen.”
With regard to this book’s title, as Stevenson and Kaafarani demonstrate in Part 3 (“The Payoff: Activating Growth”), it refers to the process by which to activate innovation in ways that (a) reduce or at least distribute risks and consequent costs and meanwhile (b) increase and improve the chances for breakthrough innovation. “At its heart,” they explain, “innovation is about how to break away from the pack and master the marketplace, using the best employees, technology, business heritage, and resources – all driven by the needs of the customer.”
However different they may be in most respects, all great innovative organizations share this in common: they “create innovation that drives sustainable growth” in marketplaces in which their competitors don’t.
Peter Sims is an author, speaker, and entrepreneur. He is the author of is Little Bets: How Breakthrough Ideas Emerge from Small Discoveries, from Simon & Schuster: Free Press. Previously, he was the co-author with Bill George of True North, the Wall Street Journal and BusinessWeek best-selling book, and he worked in venture capital with Summit Partners, a leading investment company, including as part of the team that established the firm’s London Office.
His work has appeared in Harvard Business Review, Tech Crunch, and Fortune and he’s a contributor to the Reuters, Fast Company, and Harvard Business Review blogs. He received an M.B.A. from Stanford Business School where he and several classmates established a popular course on leadership and has had a long collaboration with faculty at Stanford’s Institute of Design (the d.school). He frequently speaks or advises at corporations, associations, and universities, including Google, Eli Lilly, Cisco, ConAgra, Pixar, and Stanford University.
He lives in San Francisco and his great-great-great grandfather, Jacob Gundlach, founded Gundlach Bundschu (GunBun) in Sonoma, California’s oldest family-owned winery, which is run today by his cousins who, unlike Peter, know a lot about wine.
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Morris: Before discussing any if your books, a few general questions. First, when and why did you begin your association with Stanford’s Institute of Design (the d.school)?
Sims: I was introduced to George Kembel, the cofounder and Executive Director of the d.school in 2002. George became my design thinking teacher and mentor, while I shared about my experiences as an entrepreneur, investor, and student of leadership and entrepreneurship with George and his d.school colleagues. Understanding design methods literally changed the way I think; all of a sudden, I was immensely more creative, and the key insight I had was that those methods overlapped with the way entrepreneurs worked in the unknown. That became the basis for Little Bets.
Morris: What business lessons have you since learned from that association that have direct relevance to successful change initiatives in almost any organization, whatever its size and nature may be? For example, is it possible to design initiatives that will avoid or overcome cultural resistance?
Sims: There are a few principles from design that will influence the business world for years to come. The first is the ability to do rapid, low-cost prototyping at the early stages of developing ideas. We never learned that in business school, yet planning in PowerPoint and Excel is often a terrible waste of time when the answers exist outside the office, in the unarticulated needs of potential users of that idea. That’s where ethnographic observation and need-finding techniques from design, the kind used by anthropologists, play an important role. People in business are surprisingly bad at truly understanding their customers’ needs. Market research doesn’t work for identifying unarticulated needs; just ask Steve Jobs who often says, “People don’t know what they want if they haven’t seen it.”
Morris: Thomas Edison once observed, “Vision without execution is hallucination.” Here’s my question: Even after having designed the best strategy, what should leaders do if there is no buy-in?
Sims: I’ve experienced this; it happens all the time. If there is no buy-in, leaders should wonder if they are hallucinating. That’s one reason I’m very happy to see the rise of a number of schools of thought featured in Little Bets, such as design, lean startups, and counterinsurgency that advocate failing quickly to learn fast, in order to test assumptions and build on gains that work. We’re living in an era that rewards bottom up innovation, yet top-down thinking is still the dominant management norm, an outgrowth of industrial management. The world is far too uncertain for top-down management – just ask Generals in the Army as they’ve learned in the Middle East, where they don’t know the problems they’ll encounter each day. They have to be able to rapidly adapt.
Morris: In your opinion, are investment opportunities for venture capital firms better, worse, or about the same today as they were when you were associated with Summit Partners? Please explain.
Sims: The market is far more competitive and saturated with capital today than it was several years ago. As the investment hold periods get longer, and the return profiles fall, venture capital as an industry is going through a recalibration, where name brand firms will make it, while a lot of dumb money will go away. In addition, the social media valuations we see today, such as Linked In at 30+ times revenue, or Facebook valued the way it is indicates a bubble. The only question I cannot answer is how long that bubble will last.
Morris: Now please shift your attention to True North, a book you co-authored with Bill George. For those who have not as yet read it, what is “true north” and what is its significance?
Sims: Your True North represents your most deeply held values and aspirations.
Morris: What are the defining characteristics of “authentic leadership”?
Sims: Bill George defined authentic leadership along five dimensions in his book Authentic Leadership, most importantly leading from an ethical set of values, and a sense of purpose.
Morris: Throughout history, who do you think offer the best examples of an “authentic” leader? Please explain.
Sims: Abraham Lincoln, Nelson Mandela, Jane Adams, Bill Hewlett and Dave Packard. Oprah and Pixar’s Ed Catmull is a great modern day example, as are the leaders Jim Collins profiles as Level 5 Leaders in Good to Great.
Morris: Were Hitler and Stalin authentic leaders? Please explain.
Sims: No, because they weren’t ethical.
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To read the complete interview, please click here.
Peter Sims cordially invites you to check out the resources at these websites:
Here is an excerpt from an article written by Tom Davenport for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.
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I’m writing a new book with Larry Prusak and Brook Manville. If we had to name it today, we’d call it Judgment Days: How Great Organizations Make Great Decisions. It’s about how organizations — rather than individuals — build their capacity for good judgment and decision making. We’re going to try to show how individual decisions, made on particular “judgment days,” were shaped and succeeded by activities to improve organizational judgment. We hope to describe a variety of organizations — from companies to schools to hospitals to foundations — that make consistently great decisions over time. In order to surface some of the ideas and get feedback from readers, I’m going to start blogging about the book and plan to get Larry and Brook involved in that activity.
We think that organizations with good judgment have a number of typical attributes. One is that they involve a number of different people in making important decisions. Their senior executives keep in mind that they don’t have a monopoly on knowledge and judgment and therefore involve multiple people in decision processes.
Let me give you an example. Pixar (btw, I really enjoyed Toy Story 3) has a phenomenal track record for making great animated movies. (Ed Catmull, the studio’s president and co-founder, recently wrote an article for HBR called, “How Pixar Fosters Collective Creativity.” Click here.) We don’t have access — at least yet — to details of the particular decisions made at Pixar, though some must have been difficult: for instance, the decision to make the movie Up about a 78-year old man who loses his wife and rides his balloon-floated house to South America.
How did Pixar make that and other good decisions? There seem to be several factors going on:
Its managers give its directors a lot of autonomy. The studio prides itself on being “director led” and gives them a high degree of autonomy. “Managers like to be in control,” but Pixar fights it, according to an interview with Catmull at an event The Economist put on in March. [Click here.]
Even though directors have autonomy, they get feedback from others. “Dailies,” or movies in progress, are shown for feedback to the entire animation crew. In The Economist interview, Catmull also describes a more extensive periodic peer review process:
“We have a structure so they get their feedback from their peers…. Every two or three months they present the film to the other filmmakers…and they will go through, and they will tear the film apart. Directors aren’t forced to respond to the feedback, but they generally do — and the films are generally better for it.”
Pixar uses a process for “postmortems” on the major aspects of movies after they’re completed. Ed Catmull described it as “like taking cod liver oil,” but the company insists on it anyway. During the postmortems, the team involved in the film is asked to come up with five things they’d do again and five things they wouldn’t do again. Postmortems not only surface the information but also help to prevent the problems from festering among team members. Catmull comments that because people are starting to game that postmortem process, Pixar is thinking of alternative approaches.
Pixar admits mistakes in other ways. Sometimes, when a movie project isn’t going well, Pixar will “restart” it. Toy Story 2, for example, wasn’t going well and had to be restarted. Catmull points to that restart as a catalyst for the articulation of several key values at the company.
Pixar has an extensive education program at Pixar University, with more than 110 different courses. That’s got to improve organizational judgment. And even there, employees are encouraged to make and admit mistakes. Randy Nelson, the director of Pixar University, says, in the book Mavericks at Work: “It’s the heart of our model…giving people opportunities to fail together and to recover from mistakes together.”
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To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.
Tom Davenport holds the President’s Chair in Information Technology and Management at Babson College. Over many years he’s authored or co-authored nine books for Harvard Business Press, most recently Competing on Analytics: The New Science of Winning (2007) and Analytics at Work: Smarter Decisions, Better Results (2010). His byline has also appeared for publications such as Sloan Management Review, California Management Review, Financial Times, Information Week, CIO, and many others. For more from Tom, visit his website [click here].
Here is an excerpt from article written by Linda Hill for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit firstname.lastname@example.org.
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(Editor’s note: This post is part of a six-week blog series on how leadership might look in the future. The conversations generated by these posts will help shape the agenda of a symposium on the topic in June 2010, hosted by HBS’s Nitin Nohria, Rakesh Khurana, and Scott Snook.)
For now and into coming decade or so, the most effective leaders will lead from behind, not from the front — a phrase I’ve borrowed from none other than Nelson Mandela. In his autobiography, Mandela equated a great leader with a shepherd: “He stays behind the flock, letting the most nimble go out ahead, whereupon the others follow, not realizing that all along they are being directed from behind.”
It’s a concept whose time has come, given several realities:
The psychological contract between companies and employees is changing. Among other things, people are looking for more meaning and purpose in their work lives. They want and increasingly expect to be valued for who they are and to be able to contribute to something larger than themselves. People expect to have the opportunity to co-author their organization’s purpose. They want to be associated with organizations that serve as positive forces in the world.
Innovation — not simply incremental but continual breakthrough innovation — will be a key driver of competitiveness. Society’s notion of the brilliant innovator, the solitary genius with a sudden flash of creative insights is hard to shake. But, after all, an iPod or a Pixar movie is not the product of a single person’s vision or labors. Most innovation is the result of collaborative work involving a diverse group and a collective process of iteration and discovery. Those in positions of authority have been taught to think that it’s their job to come up with the big idea — but sustained innovation comes when everyone has an opportunity to demonstrate a “slice of genius” (an idea that has evolved from my research with Greg Brandeau, the CTO of the Walt Disney Studios, and my research associate Emily Stecker). Breakthroughs come when seemingly ordinary people make extraordinary contributions.
Leaders can encourage breakthrough ideas not by cultivating followers who can execute but building communities that can innovate. Of course, leaders do need to act as direction-setters and vision-makers, and we need to prepare them for those roles. But we often emphasize these skills at the expense of others that are growing in importance. If you’re looking for innovation, it doesn’t make much sense to say that the leader’s job is to set the course and mobilize people to follow them there. If you want your team to produce something truly original, you don’t know where you’re going, almost by definition. The traditional leadership model just doesn’t work.
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To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit email@example.com.
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Linda A. Hill is the Wallace Brett Dunham Professor of Business Administration at Harvard Business School, and Faculty Chair of the Leadership Initiative.