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*7 tips from new-age management gurus*
ET Bureau
May the management concepts of
yore rest in peace. As India Inc
speeds into 2011, we present
original articles from a select set of
new-age management guruswith
cutting-edge ideas geared to our fast
changing times
[1]Design thinking: Why business leaders
need to think like
designers
Design thinking is about applying
the principles of design to solutions
for business. The phrase came out of
a conversation that Tim Brown, the
CEO of IDEO and Roger L. Martin,
a leading business strategist had in
2002 on the transformation of
IDEO's business. IDEO started off
as a design firm for high technologyproducts, like the first commercial
working mouse, but increasingly
was moving into more abstract uses
of design like designing customer
experience or designing
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organisational structures.
Design has always been around in corporations but it has operated in
silos. That's what they wanted break companies out of, by bring it into
operations. Their approach is about teaching general managers to thinklike designers. And this can be used to solve any business problem
increase market share of a product or redesign compensation packages.
General Electric today is very big on this.
Design thinking can become a huge competitive advantage for Indian
companies so that they can sell not solely on cost arbitrage, but please
the more sophisticated consumer with their design thinking rather than
cheap prices. The world needs to move away from its dependence onanalytical thinking.
May the management concepts of yore rest in peace. As India Inc speeds
into 2011, CD presents original articles from a select set of new-age
management guruswith cutting-edge ideas geared to our fast
changing times:
Roger L. Martin is a leading business strategist, author and Dean of the
Rotman School of Management at the University of Toronto.
Design thinking is about applying the principles of design to solutions
for business. The phrase came out of a conversation that Tim Brown, the
CEO of IDEO and I had in 2002 on the transformation of IDEO's
business. IDEO started off as a design firm for high technology
products, like the first commercial working mouse, but increasingly was
moving into more abstract uses of design like designing customer
experience or designing organisational structures.
Brown's challenge was that the firm needed to start to think more
generally about design. And so I said, yes, what you need to do is
design thinking.
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My own personal journey into design thinking began in 2001 when I got
involved with Procter & Gamble's design revolution, spearheaded by
chairman AG Lafley. He had just appointed P&G's first vice president of
design innovation in 2001.
Together with Brown and IDEO's founder David Kelley, I worked on
integrating this new design initiative into general management
techniques, because ultimately all that design work had to go
commercial. What we discovered is that the design community is great
at two things, which make up two-thirds of the concept of design
thinking.
They're really good at deep holistic, ethnographic user understandingand they're obviously very good at visualising, imagining and
prototyping. The third part is actually tying this to business strategy.
Those are the three gears of business design. What we created was an
end-to- end process that we called design works and it transformed the
way P&G thought about everything.
Design has always been around in corporations but it has operated in
silos. That's what we wanted to break companies out of, by bring it into
operations. Our approach is about teaching general managers to think
like designers. And this can be used to solve any business problem
increase market share of a product or redesign compensation packages.
General Electric today is very big on this.
My biggest worry is that we've become over dependent on analytical
thinking. Corporations have become far too analytical, and education
systems as well. In this modern, scientific, rational world I am mortified
at the degree to which kids are taught that if you want to be relevant andget good jobs drop subjects like art, take math and science.
I don't believe that you can be only left brained or right brained; we're all
born with more right brain capacity than we'll ever need. But I also
believe that if you don't use it you could lose it, but then you can always
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retrain yourself. It's like BF Skinner who taught pigeons how to play
ping pong. You don't always have to choose between music and math.
This is a problem that arises from the education system. However it is
slowly changing in some quarters of business education. Design thinkinghas become such a hot topic that, as with other hot topics, everybody's
trying to figure out what's the easiest way to incorporate it. Of course,
one easy way is to take your students to a design school and give them
exposure to that.
Another easy way is to declare the management of design to be
important and teach that. There are people doing both. However there
are very few people doing IP development in business design andcreating brand new conceptual frameworks for thinking about design
thinking and teaching it. We've done that at Rotman School of
Management by redesigning the way we teach business education and
students love it.
Design thinking can become a huge competitive advantage for Indian
companies so that they can sell not solely on cost arbitrage, but please
the more sophisticated consumer with their design thinking rather than
cheap prices.
The world needs to move away from its dependence on analytical
thinking.
Our entire lineage of modern scientific thought can be traced back to
Aristotle and his book Analytica, which forms the basis of the scientific
method that we all use, whether people know it or not. What we are
forgetting is that at the end of the tome he says that this book and the
methods described in this book are for that part of the world wherethings cannot be other than they are. So an oak tree is an oak tree and an
ant is an ant and neither can be anything else. He said use this book for
that part of the world.
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[2]Inspirational leadership: Lead not govern
The 21st Century began ten yearsago, yet many business executives
have not yet shed 20th Century
leadership habits. Executives who
continue to rely on outdated
approaches should address a crucial
question: Can I lead instead of
govern? The two activities may
sound similar but they differ inimportant ways.
Leaders motivate their employees,
through rewards and punishments, to
adhere to these rules and to achieve
these objectives. When employees
become more productive, we boost
their salary or give them a bonus.
When employees fall short of performance objectives or break the rules,we take away their bonus, freeze their salary or fire them. By relying on
this operating system, leaders try to get behavior out of people.
Instead, leaders should inspire principled performance in their people.
Leadership based on shared values and delivered through inspiration
does not ask what we can and cannot do; instead, it asks what we should
and should not do for the long-term good of our shareholders,
employees, customers, communities and other stakeholders.
May the management concepts of yore rest in peace. As India Inc speeds
into 2011, CD presents original articles from a select set of new-age
management guruswith cutting-edge ideas geared to our fast
changing times:
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Dov Seidman is the founder, chairman and chief executive officer of
LRN, a company that helps businesses develop ethical corporate
cultures and inspire principled performance.
The 21st Century began ten years ago, yet many business executives
have not yet shed 20th Century leadership habits. Executives who
continue to rely on outdated approaches should address a crucial
question: Can I lead instead of govern? The two activities may sound
similar but they differ in important ways.
Today, most leaders are governing, not leading. The governance
operating system is based on an underlying assumption that employeesact in their self-interest. This model includes formal policies,
procedures, processes, financial objectives and performance targets.
Leaders motivate their employees, through rewards and punishments, to
adhere to these rules and to achieve these objectives.
When employees become more productive, we boost their salary or give
them a bonus. When employees fall short of performance objectives or
break the rules, we take away their bonus, freeze their salary or fire
them. By relying on this operating system, leaders try to get behavior out
of people. Instead, leaders should inspire principled performance in their
people.
The Limits of Governance
Motivation is an expensive and ineffective way to propel behavior,
particularly in a period of economic volatility when there are fewer
carrots to go around. Additionally, breakthroughs in Internet technologyand connectivity have established a global state of hyper-connectedness
that puts information in the hands of many and requires companies to
operate in an environment of hyper-transparency, which reveals how
they behave. For these reasons, we are learning that we can't write
enough rules in the 21st Century to get the behaviors we want.
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For example, less than ten years ago, US President George W Bush
signed the Sarbanes-Oxley Act, a new law that represented the most
sweeping set of corporate governance regulations enacted in the United
States since the 1930s.
Yet, these complex new rules did not bring about greater responsibility
on Wall Street where irresponsible behavior sparked the world's worst
financial crisis since the Great Depression only six years after Sarbanes-
Oxley became law. The US is hardly the only country where
questionable regulatory decisions and other governance-related abuses
have cost citizens billions of dollarsas India, beset by a massive
telecommunications scandal, can attest to.
Rules can, and do, provide great value in many contexts. Regulations
can help make buildings earthquake resistant, medicines safer and
businesses more transparent. However, rules are less successful when
they seek to govern human conduct and behavior.
Rules ultimately fail because we cannot write a rule to control every
possible behavior or to cover every possible circumstance. It is very
difficult to regulate deception, for instance. That's why we need values
delivered through Inspirational Leadership.
. United Airlines CEO Jeff Smisek recently crystallized the value and
importance of focusing more on leadership and less on governance.
Asked by a Wall Street Journal reporter if he agreed that the Obama
administration has been unnecessarily tough on the industry, Smisek
responded that the question was essentially off the mark.
"This administration is the first to really begin focusing on modernizing
the air-traffic control system," Smisek responded. "I applaud them for
that. In terms of the various [new] consumer rules, my own goal is to
have an airline where all of that is irrelevant. If you have the right
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culture, the right folks and you've given them the right tools, they'll
exceed whatever regulations or laws or whatever the government can
dream up."
The right culture, humans and tools can address any regulatory risk,
according to Smisek. This approach should help jolt more CEOs into the
21st Century. Regulatory and compliance concerns currently rank as the
top business risks in the U.S., according to a survey report Ernst and
Young conducts each year. In other words, concerns about following
current and future rules keep CEOs awake at night more frequently
than concerns about innovation, talent, emerging markets and other
risks.
Smisek seems to understand that his company's operating system
should focus more on humans than it does on rules and other
governance levers. By creating the right culture and equipping his
people with the right tools, Smisek rightly believes that regulatory and
compliance risks will barely rate a blip on United's radar screen.
Inspiring performance in people
Business leaders should shift their focus away from erecting formal
structures of governance to achieving desired governance though a
vision and mission that emphasizes fostering a strong, vibrant, and
sustainable culture. However, the mere existence of a purpose and a
mission does not ensure that these messages inspire the right
behaviors and decisions.
In one business that my company, LRN, works with we found that
nearly 70 percent of employees would agree that a strong mission and
purpose drive their organization. However, when looking deeper, we
discovered that more than 60 percent of employees thought that
supporting a peer who acted within their company values and purpose,
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but in conflict with a policy, would result in disapproval or even
possible punishment by the organization.
As we begin the second decade of the 21st Century, there is work to be
done in shifting from governance to leadership and in becoming leaderswho inspire principled performance in people. As leaders, we need to
learn how to connect and collaborate in new ways, by sharing a vision,
enlisting people in a meaningful purpose and inspiring the kind of
outcomes we want by aligning around a common, deep and sustainable
set of human, societal and environmental values.
As Albert Einstein once said, "In the middle of every difficulty lies
opportunity." How do leaders keep themselves and their employeesfocused on opportunity when the challengesresponding to global
financial crises, collaborating with partners around the world, creating
disruptive and game-changing innovations, representing the company in
every online and personal interactionare of such a great magnitude?
The answer comes not in bracing for more economic volatility or in
creating additional governance structures, but in embracing and
leveraging the realities of the 21st Century.
Executives who chose to govern will lag, while those who chose to lead
will thriveas will their organizations and their people.
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[3]Decoding the mental habits of successful
thinkers
Does thinking matter to success inbusiness? The successful would like
to think so: without being able to
explain their success as the outcome
of their abilities, that success would
amount to no more than a ticket in a
lottery. Media would also like that to
be the caseotherwise, the
promulgation of business andorganizational 'heroes' of all types
would amount to no more than a
'culture of make-believe'.
Most of the humans who invest in
the development of their own
personal capital, put themselves
through expensive training programs
and try to figure out the 'laws of success' have an vested interest in theanswer being a resounding 'yes'.
Yet, the searches for individual performance measures that are
predictive of successthe quest for 'successful intelligence'has
proved to be elusive for social and behavioral scientists of all types. IQ,
EQ, MQ and any other Q you can think ofcoupled with presumably
stable and measurable personality traits like conscientiousness,
extroversion and even neuroticismcan explain no more than 25-30%of the variance in outcomes
May the management concepts of yore rest in peace. As India Inc
speeds into 2011, CD presents original articles from a select set of new-
age management gurus with cutting-edge ideas geared to our fast
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changing times:
Mihnea C. Moldoveanu is the Desautels Professor of Integrative
Thinking at the Rotman School of Management, University of Toronto
Does thinking matter to success in business? The successful would like
to think so: without being able to explain their success as the outcome
of their abilities, that success would amount to no more than a ticket in
a lottery. Media would also like that to be the case otherwise, the
promulgation of business and organisational 'heroes' of all types would
amount to no more than a 'culture of make-believe'.
Most of the humans who invest in the development of their own
personal capital, put themselves through expensive training programs
and try to figure out the 'laws of success' have an vested interest in the
answer being a resounding 'yes'.
Yet, the searches for individual performance measures that are
predictive of success the quest for 'successful intelligence' has
proved to be elusive for social and behavioral scientists of all types. IQ,
EQ, MQ and any other Q you can think of coupled with presumably
stable and measurable personality traits like conscientiousness,
extroversion and even neuroticism can explain no more than 25-30%
of the variance in outcomes.
A lot rides on the question, and not a lot of help is to be found either in
the archives of academia or the chronicles of business success.
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What to do?
Over the past five years, we have taken an altogether different
approach to this question at the Rotman School of Management. We
studied the minds of successful business people
stellar managers,entrepreneurs and investors in their natural habitat in the context
in which their minds actually worked, and we built models of these
minds using a dedicated language developed especially for studying the
workings of the mind 'in the real world' as opposed to the
laboratory. This dedicated language is made up of modules, which work
together in the same way in which the parts of a large computer
program do.
Each module is an algorithm (think of it as a 'recipe' for figuring stuff
out) or a heuristic (a rule of thumb') and it corresponds to a
particular mental habit. Because much of human behaviour is habitual
and thinking is a form of behaviour, it seems reasonable that much of
our mental behaviour is habitual as well.
Using our models of the mental habits of managers, entrepreneurs and
world-builders of all kinds a kind of general purpose 'mentalese'
we could ask: are there identifiable habits that would perform better
than others at understanding and predicting a world characterised by
complexity, ambiguity, nonlinearity and randomness?
And we found one type of thinking that has the making of a smoking
gun which links modes of thinking to success. We called the minds that
exhibit this type of thinking Diamindsshort for 'dialectical minds'
and we traced the way they work, in real time, in real places, in order to
produce a 'movie-like' account of successful intelligence that informs the
way we ourselves teach and think.
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The key to the Diamind is its ability to flip between at least two different
modes of thinking and representing, which in turn generates the requisite
mode of internal complexity for dealing with a greater range ofambiguous, complex problems.
Most humans' thinking is 'sticky': they fall into single-mode patterns of
thinking and emoting, of reasoning and feeling. This stickiness feels
'stable' to them, and it is useful as an emotional cocoon against the
complexity of the world; but it also curtails their view of possibilities,
implications and complications inherent in a complex, unstructured
environment, because they see the world 'in one way only'.
By contrast, the Diamind is bi-stable. In the same way in which, after
some exercise, one can see both the duck head and the rabbit head in the
bi-stable image herein, our Diaminds could see the humans they interact
with both as embodied minds/souls capable of reason and feeling and as
biological organisms, subject to the laws of physics and the mechanisms
of physiology.
Whereas most managers implicitly relate to their organisations as
hierarchies, or as families, or as sports teams, our Diaminds could easily
flip between seeing their organisations as hierarchies in which authority
and power and as arm's length markets, wherein favors, money and
information is exchanged, converted and often bartered.
But there is more. The versatility of our Diaminds was not limited to
seeing objects or phenomena in different ways, but also to thinking in
different ways. Some business people think about a lot of different bits
of informationstories, anecdotes, sensationsbut they do not think
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deeply about any of them. Othersparticularly those with deep
training in logic or the natural sciencesthink deeply about a few
variables.
But our Diaminds could flip between thinking deeply and thinking
broadlybetween 'thinking' and 'blinking'according to the situation
and it is this adaptive intelligence that is at the foundation of the
design of an intelligent embodied system. The good news is that the
elements of adaptive intelligence can be isolated and learned. There are
numerous lessons to be learned from this, but, one stands out especially
for us, as we engage in selecting and training the world builders and
problem solvers of the future.
It is that programs that purport to train such elites must understand how
the successful mind thinks, and not only what it thinksthe stuff of
most education systems worldwide which stress mechanical and
mnemonic forms of intelligence. And, to do that, we need a new
language for thinking about the way we think and a new educational
model that teaches not only the 'know what' of various disciplines but
the know-how of successful adaptation "in the wild".
This article is based on the book Diaminds: Decoding the Mental Habits
of Successful Thinkers
(University of Toronto Press, 2009), co-authored with Roger L. Martin,
who is Dean of the Rotman School of Management
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[4]Peripheral vision: The vigilant
organization
In our interconnected world,
organisations are increasingly
employing networks to compete
effectively. Whether it's utilising the
reach of facebook's network to
create grassroot support for a new
initiative or leveraging the dynamicfeedback from supply chain
networks to inform better product
marketing decisions, networks offer
a fertile opportunity for creating
competitive advantages.
One of these key competitive
advantages is improving yourorganisation's 'peripheral vision' by
using networks to sense and respond
to changes in your strategic environment. The peripherythat 'fuzzy
zone' at the edges of your organisation's focusis where early signals
of both threats and opportunities can first be sensed.
Successful peripheral vision - in monitoring other industries, remote
markets, new research and tangential dataentails much more than
sensing incipient change. It is also about knowing where to look forclues, how to interpret weak signals, and how to act when the signals are
still ambiguous. Truly vigilant organisations are able to mind a broad
periphery and mine the weak signals that emerge for relevance and
meaning.
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May the management concepts of yore rest in peace. As India Inc
speeds into 2011, CD presents original articles from a select set of new-
age management gurus with cutting-edge ideas geared to our fast
changing times:
Scott Snyder is a senior partner with Decision Strategies International,
Paul Schoemaker , Chairman of Decision Strategies International,
George Day is the Geoffrey T. Boisi Professor, professor of Marketing
In our interconnected world, organisations are increasingly employing
networks to compete effectively. Whether it's utilising the reach of
facebook's network to create grassroot support for a new initiative or
leveraging the dynamic feedback from supply chain networks to inform
better product marketing decisions, networks offer a fertile opportunity
for creating competitive advantages.
One of these key competitive advantages is improving your
organisation's 'peripheral vision' by using networks to sense and
respond to changes in your strategic environment.
The periphery that 'fuzzy zone' at the edges of your organisation's
focus is where early signals of both threats and opportunities can
first be sensed. Unfortunately, most organisations focus narrowly on
their immediate environment a complicated landscape of markets,
customers, competitors, regulations, technology and stakeholders.
While such unwavering attention can benefit short-term performance,
it often comes at the expense of missing subtle signals about changes
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that could threaten the organisation's long-term survival.
Our study of more than 300 global executives found that 80 per cent
felt that their organisation had less capacity for peripheral vision than itneeded, and two-thirds of strategists in another study said that they
had been surprised by as many as three high-impact events in the past
five years alone.
Successful peripheral vision - in monitoring other industries, remote
markets, new research and tangential data entails much more than
sensing incipient change. It is also about knowing where to look for
clues, how to interpret weak signals, and how to act when the signals
are still ambiguous. Truly vigilant organisations are able to mind a
broad periphery and mine the weak signals that emerge for relevance
and meaning.
Detecting important signals amidst the clutter
The more an organisation already knows about a particular topic, the
greater its 'absorptive capacity' to rapidly and effectively process
related new information. This concept originally applied to the limit of
scientific or technical information a firm could absorb but has been
expanded to any new, external information available to the firm. It is
the weak signals from less familiar areas outside the zone of core
competencies that are likely to be missed or misinterpreted.
Following are four ways to concurrently leverage networks and tap into
the knowledge and insights of the periphery:
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1. Sharing Intelligence. Industry trade associations have long served this
role. Participants in narrow industry verticals or wide agglomerations
such as the Business Round Table, the Conference Board or theAssociation of National Advertisers are drawn by shared interests to
exchange information or collect new insights. However, because these
associations function as affinity groups, they tend to reinforce existing
beliefs and mental models. In some cases, they become echo-chambers
where like-minded managers further confirm their beliefs and biases.
2. External Scanning. The Global Business Network brings together
people from diverse fields to identify events and patterns with
implications for their clients, while the Mack Center for Technological
Innovation at the Wharton School serves as a network for leading
companies and academics in scouting emerging technologies and
related business models.
3. Customised Insights. Sharing information across networks is also
critical within large organisations. Customer insights are often widely
dispersed or isolated in the research group, making it harder for
companies to obtain data at the point where segments, channels and
categories exist, or to create a coherent picture of customers.
One solution is to create an 'insights network' that integrates internal
data and encompasses relationships with expert third parties and key
suppliers or customers who can provide data on regional or store-level
competitor intelligence.
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4. Open Innovation. A variety of networks have emerged to help firms
search for ideas and help inventors find markets for their ideas.
Networks such as Innocentive and Nine Sigma are designed to find
solutions by posing problems to a global community of scientists.Procter & Gamble has similarly extended networks of individuals and
institutions that they use to identify products, ideas, and solutions to
technical problems.
Optimising Your Networks for Peripheral Vision
In order to optimise your networks, you need audit your past
performance around Peripheral Vision. This means identifying which
important changes in your strategic environment were detected early
versus late (or missed) by the organisation and understanding the
underlying cause for both cases.
The chances are high that information sharing across internal and
external networks played a role in both the successes and failures,
presenting both opportunities for learning and improvement. In order
to improve the reach, capture, speed and resilience of your networks,
we suggest creating a visual 'network map' showing all the key nodes in
the network, the information content at each node, and the types of
information flows between nodes. This map can then be used to
identify 'gateways' (entry and exit points), links and broken circuits that
can be enhanced with network additions or extensions.
In closing
As William Gibson once noted, the future is already here, but it is
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unevenly distributed. Some organisations have learned to harness
technological advances to increase their peripheral vision, while others
lack the ability to mine their networks or mind weak signals without
becoming overwhelmed by what appears to be random noise.
The challenge for each organisation is to set its own filters to avoid
information overload and balance the error of missing key signals with
the cost of paying attention to too many signals.
In the end, the best organisations are shaped by leaders who seek and
value early warnings and mobilise their colleagues to pay attention to
the periphery. They adopt an inquisitive approach to strategy that
alerts them to possible challenges from the periphery; make the
necessary investments in knowledge systems and analytical support;
and assign clear accountability for detecting, tracking and sharing weak
signals.
By creating an environment that promotes vigilance and discovery, they
are using their networks to extract better insights from their widening
periphery sooner than their rivals.
(The preceding is excerpted from The Network Challenge: Strategy,
Profit and Risk in an Interlinked World (Wharton Publishing, 2009)
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[5]Ensemble working: Lessons from the
armed forces and the
performing arts:One of the challenges that face
corporate leaders today is the tension
that exists between strong leadership
and the need for innovation within
the workforce. There is a close
connection between the motivation
and self-respect that employees feel,
and their willingness to speak up andoffer creative suggestions that will
make a company innovative and
successful.
The more people are controlled,
monitored, and told what to do, the
less likely they are to display
initiative, go the extra mile and have the courage to challenge poordecisions or suggest new ideas.
The trick that the elite groups in the arts and in the army are able to
perform, is both to operate a disciplined hierarchy and to collaborate as
empowered individuals of equal status, when required to invent an
original solution to a problem.
When the creative work is done and a solution has been found, they are
then able quickly to pick up their roles within the hierarchy and execute
their collective plan; with all the discipline and efficiency that a well
structured hierarchy can allow
May the management concepts of yore rest in peace. As India Inc speeds
into 2011, CD presents original articles from a select set of new-age
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management guruswith cutting-edge ideas geared to our fast
changing times:
Piers Ibbotson is an internationally respected speaker, coach and
facilitator He is Visiting Fellow at the University of Kingston, where heteaches Creative Leadership.
One of the challenges that face corporate leaders today is the tension that
exists between strong leadership and the need for innovation within the
workforce. There is a close connection between the motivation and self-
respect that employees feel, and their willingness to speak up and offer
creative suggestions that will make a company innovative and
successful.
The more people are controlled, monitored, and told what to do, the less
likely they are to display initiative, go the extra mile and have the
courage to challenge poor decisions or suggest new ideas.
There are some groundbreaking new insights into this problem, coming
from two, unexpected, sources; one is the performing arts and the other
is the armed forces. In both these worlds, there are elite companies that
are required to deliver highly complex projects, with immense
discipline, while at the same time displaying an ability to improvise,
adapt, and to deliver successful outcomes, on time and on budget.
My own researches have revealed that despite these two worlds seeming
to be so very different, their elite companies use astonishingly similar
techniques and approaches when it comes to the question of innovation.
One of the surprising things that both the military and the performingarts have in common is their attitude to hierarchy, status and
collaboration. Hierarchy is necessary to get things done quickly and
efficiently, hierarchy requires discipline and obedience. But with
hierarchy comes status, which is not quite the same thing.
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Status relates to the relative power that people in a hierarchy feel, or are
able to express. You can be top of the hierarchy and behave as if you
have low status (although people try to avoid this) and you can be at the
bottom of the hierarchy and behave in a very bold and high status way.
This tension, between people's rank and the behaviour they feel they are
able to display, can be a block to innovation and collaboration,
particularly in organisations and cultures where people are used to
matching their behaviour to their place in the hierarchy. Senior
managers, who feel under pressure to deliver results, can fall into the
trap of using their position to push and bully their employees.
While this may motivate people to work harder, it may not motivatethem to work smarter. They may deliver the results the boss wants, but
they may miss opportunities, or find strategies to evade failure that are
damaging, both to their bosses and to their organisation as a whole.
The trick that the elite groups in the arts and in the army are able to
perform, is both to operate a disciplined hierarchy and to collaborate as
empowered individuals of equal status, when required to invent an
original solution to a problem. When the creative work is done and a
solution has been found, they are then able quickly to pick up their roles
within the hierarchy and execute their collective plan; with all the
discipline and efficiency that a well structured hierarchy can allow.
This ability of a group of people to work together creatively; to pool
their experience, insights and ideas, is the key to all successful
innovation. In the theatre it is called ensemble working . However, it
requires a particular mind-set and a level of trust between the individuals
in the group that is often hard to achieve in cultures where hierarchy isdominant. The key to developing this ability lies in the training.
Both the army and the performing arts invest heavily in training; not just
training in skills and knowledge, but training groups of people to trust
one another enough to both accept the discipline of hierarchy and to
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drop the hierarchy and really listen and accept one another's ideas -
wherever those ideas may come from in the group- when there are
problems to be solved or plans to be made.
Close study of the ways in which elite companies in the military and theperforming arts really operate, is allowing the development of more
sophisticated and appropriate methods for helping groups of people to
understand the way in which hierarchy, status, motivation and
innovation, work together.
A whole new approach to training and development that draws on the
experience of the arts and the success of the military, is being developed
to deliver practical solutions to the problems facing today's corporateleaders.
[6]Strategic creativity: Imagine the unseen
Creativity is sometimes perceived as
a fuzzy concept, applied to the useof specific techniques such as
ideation, brain storming and so on.
While process approaches to
boosting organisational creativity
can help open people up to new
ideas, we have found these
approaches to be limited in their
ability to help leaders optimise the
creative potential of people andorganisations.
What leaders have to do is undergo a
major change in mind-set regarding
creativity, and for this they should
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seek answers not from consulting firms or business schools, but the
world of art. Fostering creativity in organisations means recognising two
different dimensions: the individual and the collective.
Firstly, at the individual level, leaders and employees need to be able tounderstand their own creative potential. Truly exploring personal
creativity can reveal hidden treasures and open the door to a more
grounded creative culture.
Secondly, collective creativity is determined by the way employees
interact in order to find new solutions, to innovate and to solve
problems. Both levels are not only tightly connected but also intertwined
in the way that one kind of creativity needs the other one to fully harvestits potenti
May the management concepts of yore rest in peace. As India Inc
speeds into 2011, CD presents original articles from a select set of new-
age management gurus with cutting-edge ideas geared to our fast
changing times:
(Martin Kupp is a member of the faculty and Programme Director at the
European School of Management and Technology, Berlin, Jrg
Reckhenrich is an artist and founder of Art-Thinking Consulting, Jamie
Anderson is Adjunct Professor at TiasNimbas Business School)
In May 2010 IBM published an international research study titled
Capitalising on Complexity - Insights from the Global Chief Executive
Officer Study.
Based on world-wide research with over 1500 CEO's and executives,
creativity was identified as the most important leadership competency
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for enterprises seeking success in the contemporary business world.
Business leaders at all levels realise that the complex situations they
face cannot be approached in a routine manner, and therefore the
quest for creativity starts.
But creativity is sometimes perceived as a fuzzy concept, applied to the
use of specific techniques such as ideation, brain storming and so on.
While process approaches to boosting organisational creativity can help
open people up to new ideas, we have found these approaches to be
limited in their ability to help leaders optimise the creative potential of
people and organisations. What leaders have to do is undergo a major
change in mind-set regarding creativity, and for this they should seek
answers not from consulting firms or business schools, but the world of
art.
If leaders really want to boost innovation and profits through a more
enlightened approach to the creative process perhaps, we believe that
they should look to artists such Joseph Beuys, rather than the wisdom
of management gurus such as Gary Hamel or Peter Drucker.
The German artist Joseph Beuys (1921 - 1986) one stated: "Every
human is a creator when he strives for introspection with his self".
Through his radical approach to philosophy and interpersonal dynamic
of creativity, Beuys became one of the most controversial artists of his
time. But today the statement sounds like a prediction of the upcoming
challenges of leaders to drive and shape organisations according to the
complex needs of modern society.
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Fostering creativity in organisations means recognising two different
dimensions: the individual and the collective. Firstly, at the individual
level, leaders and employees need to be able to understand their owncreative potential. Truly exploring personal creativity can reveal hidden
treasures and open the door to a more grounded creative culture.
Secondly, collective creativity is determined by the way employees
interact in order to find new solutions, to innovate and to solve
problems. Both levels are not only tightly connected but also
intertwined in the way that one kind of creativity needs the other one
to fully harvest its potential.
A closer look to Beuys' approach can provide deep insights to unleash
creativity first on the personal, secondly at the collective level.
Therefore we introduce three core concepts.
1. Make the secrets productive: How to be creative
Understanding oneself as an artist, Beuys said, is less about having the
ability to paint, do sculpture or compose music, but rather about being
aware of one's general latent creative abilities. In order to get access to
that source, an individual needs to strive to discover which dimensions
of his or her creativity is mostly developed. Beuys said if you ask
yourself who you are and "risk the debate with yourself". Everybody
could be creative being an artist in his own field or profession.
Leaders who want to foster creativity must take this challenge.
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2. The active form of thinking: The three "I"s of Creativity
The active form of thinking is key to the creative process. There are
three steps: inspiration, intuition and imagination. While inspiration isthe very beginning, the "click" moment where you get the first spark of
an idea, intuition is the second step where you sense and feel the
impact of the idea.
The final step, imagination, lets you communicate the idea to others as
a compelling image or story. Imagination is a core ability of leaders
nowadays in order to create a strong and clear image to guide people
through complex situations.
3. Collective creativity - The social sculpture
When Beuys was asked to name the most important piece of work that
he ever produced, he spoke about the concept of the "social sculpture".
Claiming a concept to be a 'real' piece of art might be unusual but has a
deep impact. Beuys saw the interaction of humans as a sculptural
space, which could be shaped, on a metaphorical level, in the same way
as a real sculpture. As leaders we can give that space form and quality if
we start to orchestrate the creative potential of people we are closely
working with.
These fundamental ideas given by the artist Joseph Beuys, provide the
core of strategic creativity. It creates a new understanding of
leadership, and for manager this means that they have to actively think
about ways to orchestrate for creativity, within the company. Managers
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have to identify and test shared beliefs, values and visions, define the
project clearly and find the appropriate business model for the venture.
[7]Forecasting: Why it
fails and what we can
do to plan for change
It seems like a long time ago in a
galaxy far, far away. But in reality it
was less than three years ago on thisvery planet. The entire world was
booming, partly on the back of
triple-A investment innovations
devised by a master race of financial
jedi. And then: crash, bang, global
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recession.
Suddenly it was all over. Triple-A turned into a euphemism for
"subprime", which itself began to translate as "toxic". The banking jedi
were cast out with no bonusesmany into bankruptcy, take-over ornationalization. Welcome to the empire of the credit crunch.
It's a story as well known as Star Wars by now. But what is fascinating
is one single neglected fact, namely that almost no one saw the financial
crises coming: none of the experts, none of the academics, none of the
politicians and certainly none of the banking CEOs. It's time for business
experts and practitioners to come to terms with the fact that accurate
forecasts simply aren't possible in their world. Business needs a wholenew attitude towards the future
May the management concepts of yore rest in peace. As India Inc speeds
into 2011, CD presents original articles from a select set of new-age
management guruswith cutting-edge ideas geared to our fast
changing times:
Anil Gaba directs the Centre on Decision Making and Risk Analysis at
INSEAD, Robin M Hogarth is an ICREA Research Professor atUniversitat Pompeu Fabra, Barcelona, Spyros Makridakis is founding
chief editor of the Journal of Forecasting and the International Journal
of Forecasting
It seems like a long time ago in a galaxy far, far away. But in reality it
was less than three years ago on this very planet. The entire world was
booming, partly on the back of triple-A investment innovations devised
by a master race of financial jedi. And then: crash, bang, globalrecession.
Suddenly it was all over. Triple-A turned into a euphemism for
"subprime", which itself began to translate as "toxic". The banking jedi
were cast out with no bonusesmany into bankruptcy, take-over or
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nationalisation. Welcome to the empire of the credit crunch.
It's a story as well known as Star Wars by now. But what fascinates us is
one single neglected fact, namely that almost no one saw the financial
crises coming: none of the experts, none of the academics, none of thepoliticians and certainly none of the banking CEOs. And this is the
fundamental point we'd like to get across: It's time for business experts
and practitioners to come to terms with the fact that accurate forecasts
simply aren't possible in their world.
In short, we're saying that business needs a whole new attitude towards
the future. Back in the 1970s and 1980s, business professors and other
social scientists hoped that post-space-age computing technology andsophisticated models would enable them to have the same success in
forecasting as their colleagues in the physical sciences.
For a variety of reasons, it's now clear that these hopes were unfounded.
Instead, empirical evidence can only tell us:
The future is often a bit like the past, but never exactly the same. This
means that extrapolating patterns and relationships from the past to the
future can't provide accurate predictions.
There are plenty of statistically sophisticated models that can fit past
data almost perfectly. However, these complex models don't necessarily
predict the future quite so well. (In fact, simple statistical models that
don't fit the past so well do better at predicting the future).
Human judgment is even worse at predicting the future than statistical
models.
Humans are often quite surprised by the extent of their forecasting
mistakes. If statistical models were capable of emotion, then they would
be surprised by the size of their errors too.
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On a brighter note, averaging the independent predictions of several
individuals (whether experts or not) generally improves forecasting
accuracy.
What's more, averaging forecasts based on more than one model alsoimproves accuracy.
These empirical conclusions raise vital issues for anyone making
business decisions. How can we plan, let alone formulate strategies in
the context of high uncertainty and possible futures that we can't even
imagine?
Physical scientists are generally very good at making predictions.
But the scientific community is equally good at knowing its own limits.
And earthquakes are one of them. Scientists accept that it's impossible to
predict the timing and location of large earthquakes. How, then, does the
world cope with earthquakes? The answer is simple. Instead of relying
on prediction, the strategy focuses on being prepared.
We know that there have been so many disastrously bad forecastsnot
only in the last few yearsthat it's obvious a different strategy is
needed to cope with the full range of uncertainty. The key is not to
develop precise plans based on predictions, but to have alternative plans
for a variety of possibilities.
You can use the analogy of "being prepared" to make contingency plans
for classes of events. Indeed, many of us already do so by using
insurance or practicing fire drills in the work place. Most insurance
policies cover a wide range of potential disasters and the evacuation
techniques practiced in the name of fire would be just as well-suited forbomb scares, floods or gas leaks.
Quite how you translate that to your own business is a matter for you
and your team. Perhaps you'll use a hedging strategy or develop a plan B
for evolving your business model. Or maybe you'll take a "venture
capital" approach to innovation, developing several new ideas at a time
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in the knowledge that only one or two are truly likely to succeed? You
might even have an exit strategy prepared for all of your major global
locationsagain a bit like a venture capitalist?
The main thing is that you stop believing your own predictions about thefuture and develop plans that can cope with surprises, whether future
credit crunches or other recessionary forces. The key is to change your
approach from believing that accurate forecasting is possible to being
prepared to face various classes of events you cannot accurately predict.
Finally, it is crucial that you accept that you're operating in an uncertain
world and that you assess the level of future uncertainty as realistically
as possible. Typically, when guessing what will happen, people tend tounderestimate the chance of extreme events occurring (imagine stock
prices, sales, or even the weather).
We end up seeing too many "surprises" or events that fall outside the
range of possibilities that we considered. Our advice is to double the
range of possibilities you have been considering. Empirical evidence has
shown that by doing so your assessment of future uncertainty will be
much more realistic and the chances of surprises much smaller.
Together they are the co-authors of the book DANCE WITH CHANCE:Making Luck Work For You (Oneworld Publications).