President John F. Kennedy once observed that the word “crisis” in Chinese is composed of two characters; one representing danger, the other opportunity. He may not have been entirely correct on the linguistics, but the sentiment is true enough: a crisis presents a choice.
This is particularly true today.
How are executives responding? As might be expected, they are largely focusing on maintaining business continuity, especially in their core. Executives must weigh cutting costs, driving productivity, and implementing safety measures against supporting innovation-led growth.
Unsurprisingly, investments in innovation are suffering. The executives in a recent survey by McKinsey & Company showed that they strongly believe that they will return to innovation-related initiatives once the world has stabilized, the core business is secure, and the path forward is clearer. However, only a quarter reported that capturing new growth was a top priority (first- or second-order) today, compared to roughly 60 percent before the crisis hit
Possibly the most important discussion around business today, design lead creativity and innovation is about spearheading business reinvention and the disruptive economy.
Innovation, the successful implementation of new ideas, is an important driver of economic growth.
Successful innovation creates customer value through new products, services and processes, giving rise to new markets and economic growth, as well as contributing to higher productivity, lower costs, increased profits and employment. The central role of innovation in creating future prosperity and quality of life is widely acknowledged and accepted. Innovation drives long-term economic growth, and states that:
Innovation… has long been viewed as central to economic performance and social welfare and empirical evidence has confirmed the link between innovation and growth. This means that all businesses must understand the importance of innovation and develop an innovation culture to strengthen its efforts and outcomes. In addition to its growing importance and profile, innovation culture has also evolved in line with developing thinking about the scope and nature of innovation in a disruptive economy.
There is a huge gap between aspiration and reality, McKinsey & Company yearly global CEO report show that 84% of world leaders are still operating in a horizon 1 strategy. Leaders who use vision to navigate the future often employ strategy to help them steer their organizations more effectively toward its destination.
To lead with vision, however, requires a fine balance among what matters today, what we anticipate will matter tomorrow, and how we can create the future through inspired, collective effort. There are three horizons that leaders should understand to ensure that vision unfolds as one would hope. To define the horizon thinking:
• Horizon 1 ideas provide continuous innovation to a company’s existing business model and core capabilities in the short-term.
• Horizon 2 ideas extend a company’s existing business model and core capabilities to new customers, markets, or targets.
• Horizon 3 is the creation of new capabilities and new business to take advantage of or respond to disruptive opportunities or to counter disruption.
Leaders need to see beyond the short termism, uncertainty and address the risks while finding the opportunities in digital disruption, the economy, and geopolitical uncertainties, this requires a horizon 2 and horizon 3 approach. CEO’s are the company’s ultimate strategist.
Less well understood is that she/he is also the ultimate integrator, charged with identifying the issues that span the enterprise and formulating a response that brings all the right resources to bear. To do that well requires a broad range of contradictory perspectives: outside in and inside out; a telescope to see the world and a microscope to break it down; a snapshot view of the immediate issues and a time-lapse series to see into the future with the right lens.
Throughout the world, organizations are seeking ways to streamline their processes and improve employee experiences. One way that is presenting itself as the ultimate panacea to enhancing the customer journey is to create dialectical leadership’ and ‘distributed leadership’ and combine them depending on the situation, to achieve a balance between various contradictory elements such as the ‘tug-of-war between efficiency and creativity’, and demonstrate organizational adaptability.
While strong communication is critical for teams to succeed, businesses need cross-departmental collaboration to move the needle and achieve their overarching goals There is a name for this approach—a holistic growth strategy. The goal of a holistic growth strategy is to unite every department to work together as one cohesive unit. While each team has a different specialty, people complete their tasks with the bigger picture at the forefront of their minds. Each employee will understand and be focused on how their work contributes to the company’s holistic goals, like scaling, boosting return on investment (ROI) and retaining customers. Driving sustainable, inclusive growth requires the right mindset, strategy, and capabilities.
Here are some steps that could help foster successful growth. Companies are now shifting away from that kind of mindset in favour of a more holistic approach. The latter involves considering the impact that every change is going to have on the entire organization, and not just specific functions or departments. The reason behind this approach is to attain a business transformation that is embedded in the very culture of the organization; is aligned with the organization’s purpose, and embraced equally by every single employee– not just enforced upon members by the managers. Such a shift means that the organization holds employees and leaders across each department accountable for their roles in the success of the business. An organization that takes a disjointed approach to implement technology only risks having a section of its employees lacking the skills needed to keep up with today’s fast-paced, disruptive and dynamic business environment.
In my experience, innovative cultures start with a philosophy and a tone one analogous to the classic parenting advice that children need both “roots and wings.” As an innovation leader, you must ground creative people in accountability for the organization’s objectives, key focus areas, core capabilities, and commitments to stakeholders. Then you give them broad discretion to conduct their work in service of those parameters. Obsessing too much about budget and deadlines will kill ideas before they get off the ground. Once your scientists understand that they are ultimately accountable for delivering practical products and processes that can be manufactured affordably, you can trust them to not embarrass you by wasting a lot of money and effort.
This trust helps forge an innovation culture. Innovation parenting also pays attention to innovators’ social development. Millennials, in particular, will expect and seek out opportunities to interact with people who interest and excite them exchanges that should, in turn, build innovation energy. To help individuals see where their work fits in the knowledge ecosystem, encourage relationships with colleagues in the internal innovation chain, from manufacturing to marketing and distribution. I ask my new hires to generate a list of who’s who at Corning within the first few months on the job. This helps them overcome the assumption that many hold that they must do everything themselves.
That’s nonsense; others within the organization often have already sorted through similar problems. Understanding that early in one’s tenure reduces wasted effort and can inspire new bursts of collaborative creativity. Innovation culture is made up of practices that support and strengthen innovation as a significant aspect of progress and growth. It includes all structures, habits, processes, instructions, pursuits, and incentives that institutions implement to make innovation happen. It values, drives, and supports innovative thinking in order for it to be successful on an organizational level. To fully understand the importance of your company’s innovation culture you need to know how this impacts what employees do or say at work every day. This will help establish specific behaviours within the organization such as communication patterns between departments during meetings or who gets credit for new ideas when they come about.
While most business leaders now believe having a diverse and inclusive culture is critical to performance, they don’t always know how to achieve that goal. Continuous innovation stimulates revenue growth and helps companies perform better during economic downturns. Fixation on top-line growth can skew innovation efforts, resulting only in innovative gains from the low-hanging fruit of incremental growth.
Disruptive innovation is only possible when the entire organization is set up for an innovation mindset, a process that starts with proper leadership training. In this environment, nimble decision-making is a companion to rigorous experimentation. Team members must make the best decisions possible as quickly as required. These decisions must be open to re-examination as new information surfaces.
This means that decisions should be refined on an ongoing basis. The need to be “right” must be set aside in favour of continual learning. What was once called “flip flopping” will now be called “learning.” An example of nimble decision-making is an organization that offers training to help participants combine data-based decision-making with intuitive decision making to leverage the power of both. They make decisions at the appropriate point to support the process of experimentation. When experiments are run, participants learn, and prior decisions will be revisited when appropriate and updated. Leaders and their employees must value adaptability, flexibility, and curiosity.
All of these skills and aptitudes support an individual’s ability to navigate rapid change. Employees must remain flexible and focused on the face of ongoing change. They need the capacity to feel comfortable and supported by their colleagues so that they can adapt to planned and unplanned change with creativity and focus.
Trust is one of the most vital forms of capital a leader has today. Amid economic turbulence and global uncertainty, people are increasingly turning to their employers and business leaders as a source of truth, rather than their institutions and government officials. Trust, which can be defined as a belief in the abilities, integrity, and character of another person, is often thought of as something that personal relationships are built on.
A high-trust organization is one in which employees feel safe to take risks, express themselves freely, and innovate. When trust is instilled in an organization, tasks get accomplished with less difficulty because people are more likely to collaborate and communicate with each other in productive ways. As a result, outcomes tend to be more successful. No heroic leader can resolve the complex challenges we face today. To address the important issues of our time we need a fundamental change of perspective. We need to start questioning many of our taken for granted assumptions about our business and social environment.
Leaders serve as role models for their followers and demonstrate the behavioural boundaries set within an organisation. The appropriate and desired behaviour is enhanced through culture and socialisation process of the newcomers. Employees learn about values from watching leaders in action. The more the leader “walks the talk”, by translating internalized values into action, the higher level of trust and respect he generates from followers. To help bridge the trust gap we recognise that organisations need to work with each other and with wider society to identify practicable, actionable steps that businesses can take to shape a new relationship with wider society: a new ‘settlement’ based on mutual understanding and a shared recognition of the positive role that business plays in people’s lives.
To create such a settlement, businesses need to see themselves as part of a diverse, interconnected and interdependent ecosystem one that involves government, regulators, individual citizens and more. Trust within and across this ecosystem is key to its long-term sustainability and survival. That’s why trust needs to be restored to the heart of the business world.
Positive habit formation is a method that successful athletes have tried and tested. It entails identifying what behaviour is required to achieve a win and establishing a routine to reinforce this. To apply it in business, ask yourself: what consistent actions do I need to start taking that would improve my overall performance? For instance, if meetings with a certain colleague often overrun, it’s worth considering how that time is being used, adopting a more efficient format and then embedding this through repetition. Great performance is as much about the purpose and culture of the organisation. These beliefs are found in the vision, ethos and values, leadership, the strategy and plans, in people, and importantly that people are trusted to make things happen. Reconnecting with your purpose and values will make it possible, when this crisis has passed, to look back with pride at how your company responded.
Culture always matters, but it matters now more than ever. If these core attributes are applied to the business then high-performance leaders must have an overwhelming desire to lead and that the desire to lead must be for the right reasons. It is only through having this overwhelming desire that they will have the emotional energy, enthusiasm, stamina and drive to undertake the unremitting pressure and sustained hard work required to turn an average organisation into a high performing one.
Events have changed our world and the way that we work in an extraordinarily short time. It is becoming increasingly evident that we will have to live with and adapt to these changes for a long time and it is far from certain that we will ever return to life exactly as it was before the pandemic. These changes bring with them great challenges and risks. These are uncharted and difficult waters to navigate. However, in our view there are also great opportunities, and these challenges can be met where leaders are able to move from a crisis management mindset to thinking about how to run their businesses differently, with a strong focus on culture.
Company’s that get this wrong run the risk of poor conduct, low staff morale and ultimately, weak future performance. However, those that find ways to nudge behaviours in the right direction have the chance to build business models and resilient cultures that adapt to the new circumstances with positive outcomes for customers, employees and investors.
It’s important to have a holistic strategy that enables people to work effectively with colleagues regardless of location. Key to this is a shared purpose and a sense of cohesion. This strategy should be driven from the top and include all teams. Equip and trust your people to build and use capabilities that suit them. Provide support from a mental wellbeing perspective help people find ways of working and connections that work best for them in this new world of work. AI can be used to help employees make better decisions and focus on higher-value tasks, whilst also boosting inclusivity and sparking creativity.
Your people are the heartbeat of your business. Leaders must ensure people have the right skills and technology to succeed and the ability to innovate wherever and however they work. They must meet the needs of every individual embracing diversity in all forms. An effective culture gives people not only the means to be productive but the drive to innovate, adapt, and progress. Support the workplace with technologies that suit remote, office, and frontline workers while keeping them secure. Organisations need an integrated and intelligent approach to security, powered by the cloud and AI. Customer trust is everything. Therefore, ensuring employees have access to the information they need, wherever they are, whilst maintaining security, privacy, and regulatory compliance is vital. Key to the hybrid workplace is human centred design and complemented is a technology platform that allows strategic direction and a strong culture.
Finally, the essential practices underpinning distinctive innovation have not changed in this time of crisis, but the relative emphasis and urgency of where businesses should focus has.
Above all, organizations need to realize that innovation, now more than ever, is a choice. Regardless of the relative emphasis and order, which for years have helped leading innovators more than double the total returns to shareholders compared to laggards, will continue to be critical in navigating and emerging even stronger from this crisis.
As Tim Brown, former CEO of IDEO, once said:
“The transformation of a business-as-usual culture into one focused on innovation and driven by design involves activities, decisions, and attitudes. Workshops help expose people to design thinking as a new approach. Pilot projects help market the benefits of design thinking within the organization. Leadership focuses the program of change and gives people permission to learn and experiment. Assembling interdisciplinary teams ensures that the effort is broadly based. Dedicated spaces such as the P&G Innovation Gym provide a resource for longer-term thinking and ensure that the effort will be sustained. Measurement of impacts, both quantitative and qualitative, helps make the business case and ensures that resources are appropriately allocated. It may make sense to establish incentives for business units to collaborate in new ways so that younger talent sees innovation as a path to success rather than as a career risk.”
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