CHAPTER
7

Leading Innovation

In the past, a CEO’s view of innovation was often limited to the budget allocated to the company’s R&D division. R&D was a distant organizational specter, somehow beyond the conventional reach or understanding of the company’s leaders.

Now, with innovation having become an issue for the CEO, providing leadership to those who are charged with innovating is part and parcel of senior management’s responsibility. The trouble is that those who work in innovation often defy traditional leadership. They are smart, are experts in their fields, and often consider their peers to be the equally smart people doing similar things in other organizations rather than executives in their own organization.

The challenge in providing leadership to these groups is powerfully mapped out by Rob Goffee and Gareth Jones in Clever. “How do you corral a group of extremely smart and highly creative individuals into an organization, and then inspire them not only to achieve their fullest potential as individuals, but to do so in a way that creates wealth and value for all your stakeholders?” they ask.

If there’s one defining characteristic of these people, it is that they claim they do not want to be led. Clearly, this poses an enormous challenge for corporate leaders. Smart executives may not have the answers to all the questions, but the best of them understand the problem of not effectively managing their intellectual know-how and those who generate it.

Jonothan Neelands is professor of creative education at Warwick Business School. He argues that organizations need to create open spaces to nurture innovation and creativity. This, he says, is based on three concepts:

The first concept is flow. Originally proposed by the Hungarian psychologist Mihaly Csíkszentmihályi, flow is the mental state of operation in which a person performing an activity is fully immersed in a feeling of energized focus, full involvement, and enjoyment in the process of the activity. Think of losing yourself in playing music or writing, or in playing a sport. According to Csíkszentmihályi, flow is completely focused motivation, so that the self is immersed in the activity.

Open spaces are usually spaces shared with other actors or colleagues, so there is also openness in terms of how we dwell together in creative spaces. Flow is the desired state that we aspire to.

This raises important questions for businesses. In particular, what forms of cooperation foster social creativity? The mood of learning, working, creating in open spaces is subjunctive—full of possibilities, imaginings, what-ifs, maybes, and possible beginnings.

At best, it is a cooperative space without coercion or external legislation. We capitalize on our strengths and differences. It is a differentiated mode of exchange. It is also a public rather than an intimate space; we come wearing the neutral masks of the citizen, the disinterested professional, or the crafts-person. It is important that we do so, and that our cooperation is indirect and impersonal.

In essence, being in flow is accepting that nothing is predetermined or set in stone. We—and our business processes—are in a fluid rather than a solid state.

Closely related to flow, the second concept implicit in open space learning is that of playfulness.

The key to social transformations on the scale required to meet the demands of the twenty-first century is understanding how to utilize, in our adult world, the playful strategies of children, both with objects and the pursuit of socially playful goals and in their innate uses of the imagination.

There are connections between children’s uses of play, the play of a company of actors in producing a play, and the possibility that play as an attitude to process rather than as an event may offer a model to other groups that are intent on creative invention.

So play is also a preparation for the necessity of repetition and modulation in creative training and work. Because there is no penalty for not achieving a predetermined goal in play, children learn to succeed through constant repetition and modulation. They practice for hours with the same Lego or clay, for instance, in the same way that an artist must practice for hours to create original music.

Along with flow and playfulness, the third principle of open space learning is togetherness, or working as part of an ensemble. This is where personal or individual creativity crosses the line into business creativity. In the workplace, we need to work as part of the larger organization. Even though there are opportunities for individual creative brilliance, the creative ego needs to be harnessed to—or engaged by—the organizational goals.

One of the first and most important aspects of this sort of togetherness is the setting aside of hierarchical position. So, in open space learning, there are flexible and less hierarchical uses of space, and knowledge is considered provisional, problematic, and unfinished. There is often an “uncrowning” of the power of the teacher, leader, or director and an expectation that learning, or rehearsal, will be negotiated and co-constructed. Open space learning requires trust and mutuality among participants; the circle is its essential shape. Crucially, the space is open to others; it is a shared public space that is set up in order to negotiate meanings socially and artistically.

Organizing for Innovation

Creating organizations along these lines is difficult for companies that have been reared on traditional twentieth-century thinking. In the search for alternative models, one of the most popular sources of inspiration is the world of design. Roger Martin has championed design thinking, and the approach of the world-famous design firm IDEO has been justly celebrated.

IDEO emerged from a business begun by Bill Moggridge in London in the 1960s. As British industry hit the rocks in the late 1970s, Moggridge looked elsewhere for work. He found himself in Silicon Valley, where things were just beginning to get interesting. Moggridge hooked up with another designer, the American David Kelley. Before long, Moggridge and Kelley’s companies were supplemented by a spin-off company run by another British designer, Mike Nuttall. The companies then combined as IDEO.

IDEO has quietly thrived. Along the way, it has survived being labeled one of the world’s coolest companies to work for and has survived eulogies from the American guru Tom Peters. “It’s finally happened. I’ve seen a company where I can imagine working,” pronounced Peters upon visiting IDEO’s Palo Alto office for the first time.

The company is different not because of its designs—innovative though they are—but because of its culture. While copying IDEO’s designs would be largely pointless and potentially illegal, seeking to emulate its culture may make a great deal of sense—although, of course, it is the most demanding thing to copy.

IDEO practices grown-up management. Its innovation is the way it works and the way it is. The first notable thing about the company is that it has not expanded at breakneck speed. Indeed, by most measures, it has hardly expanded at all. Despite being internationally lauded and profitable, IDEO has relatively few employees.

The second key to grown-up management is that IDEO is based around projects. In keeping with its unwillingness to embrace growth for its own sake, multiskilled project teams change from project to project. Projects are its culture.

The company’s folklore (captured in Tom Kelley’s book The Art of Innovation) is brimming with stories of supermarket trolleys being redesigned in a week and how the company developed the first Apple computer mouse. Amid stories of developing the first single-use instant camera, creating all-terrain eyewear, and reinventing the light switch, there is no mention of costs and profits. The unspoken understanding is that brilliant, problem-solving design makes money for the company and its clients. It is user-based design. At the heart of the business is using design thinking to help clients be more valuable.

Another core element of the IDEO culture is the concept of the studio. The IDEO-style studio is not a production line with an all-knowing, all-seeing font of creativity standing at one end. The star designer does not breeze in and out while a tribe of assistants labors over his latest creation. Most design companies are based on a single individual and fail when that individual moves on. Others are based on confrontation. IDEO works through open critiques of people’s work. Its belief is that part of being a studio is defending what you believe to be true.

The makeup of IDEO’s staff has subtly evolved, particularly over recent years. The power of IDEO was to take what otherwise might have been quite a “siloed” situation—designers don’t talk to engineers, and neither group will talk to human factors people—and create a culture in which team members respect one another.

In many ways, the design studio, as practiced at IDEO, is an organizational model that is in tune with our times. For one thing, it is small and creative. It is also low on hierarchy and big on communication, and it requires a minimal amount of ego. IDEO’s designers may take the starring role in a particular project and then find themselves back in the chorus on the next project.

Sustaining this culture requires dedication rather than innovative wackiness. It starts in the recruitment process. Compared to those of many other organizations, IDEO’s recruitment process is long and drawn out. There are three or four interviews. Applicants then show their work and discuss it with a group of IDEO people. Then they get to meet everyone and look at the projects that are underway to see how they interact. This is time-consuming, but essential, says IDEO. It wants to know how well people will fit. The teams have a say.

The rigor that IDEO brings to recruitment is increasingly matched by the attention it pays to evaluating performance. It has annual formal reviews based on a matrix of five elements: content, culture (team working and team leadership), client, commerce, and mentoring and leadership.

The Innovation Route

The ideal environment for creativity and innovation, suggested by IDEO and others, is far removed from corporate reality. Clearly, this has enormous repercussions for how companies should be organized and led if they want to be innovative.

So, how do you provide the best leadership for innovation?

Providing intellectual leadership on this tortured subject is Linda Hill, the Wallace Brett Donham Professor of Business Administration at Harvard Business School. She is the coauthor, with Kent Lineback, of Being the Boss and author of Becoming a Manager. More recently, her research (along with Greg Brandeau, Kent Lineback, and Emily Stecker Truelove) has looked at exceptional leaders of innovation in a wide range of industries—from IT to law to design—throughout the world.

Hill describes herself as an ethnographer. She is now in her thirtieth year at Harvard Business School and has twice been shortlisted for Thinkers50 awards.

What is the focus of your research?
I study three things: how people learn to lead, how people lead innovation, and implementing global strategies. I’ve always worked on all three of those to some extent, but the one that means the most to me is leading innovation.

Because of that, one of our former deans asked me to do a couple of things. Given that our mission is to educate leaders to make a difference in the world, he asked me to help create our first required course on leadership. I led the team. Second, he asked me to help develop our e-learning strategy. This was at the end of the 1990s, so he was really quite a visionary in understanding that education was going to go down that route, that we needed to be able to use the Internet to deliver educational experiences, both here on campus and also, more important, to people around the world. That was great for me.

Your work is notably international.
I am usually out of the country about twice a month, certainly when I’m not teaching. My father was in the military, and so I went to high school in Bangkok and grew up thinking about the world. I went to India for the first time when I was 14, and I’ve always had this sense of wanting to be out and about and feeling that there are lots of interesting people in the world.

I’m a business professor because I fundamentally am interested in economic development. My PhD is in behavioral sciences, which is an interdisciplinary degree, but I’m actually more of a sociologist than a psychologist.

My parents come from modest backgrounds, and I didn’t really know about business per se. My relatives were coal miners or worked on the factory floor, so I didn’t really know about business.

What I’ve always been interested in is, how do you create organizations that allow people to fulfill their ambitions? The only organizations I knew were educational ones. I studied learning theory in college and then went to the University of Chicago, where I met Jacob Getzels, who is considered to be the father of research on creativity.

Actually, the first research project I ever did was a study on creativity and brainstorming as a freshman at Bryn Mawr College.

So, all my life I’ve been interested in creativity. Mr. Getzels [coauthor of Creativity and Intelligence in 1962], as we called him, was one of the founders of creativity research. He was very interested in how you design educational institutions that allow people to be creative. I worked on his projects, and one of them involved studying artists at the Art Institute of Chicago to see who was the most creative and why, and how the organizational setting affected their creativity.

At that time, creativity wasn’t really taken seriously or looked at.
Mr. Getzels used to tell me, “Any theory you have, Linda, if it’s a good theory, it will help people solve a practical problem.” So he helped me understand that there was really no difference between rigor and relevance. You couldn’t be relevant without being rigorous, and how could you be rigorous about something that wasn’t relevant, that wouldn’t solve a problem?

I was interested in wicked social problems, and how people could, by being creative, help solve those problems. So I’ve always gone between business and other sectors because I’m really interested in economic development and how you help improve people’s lives and livelihoods. Harvard Business School has been a fabulous platform for me, letting me be able to move around and do the things I wanted to do, from being on the board of the Rockefeller Foundation and learning about how you create organizations to come up with an AIDS vaccine, to trying to help a businessperson figure out something.

And all of this leads to your current work.
Yes. Greg Brandeau, the former chief technology officer of Pixar, Kent Lineback, Emily Stecker Truelove, and I have spent six years traveling the world, studying 16 leaders who created teams at organizations that were able to routinely innovate.

In a way, this project started when I was asked to write a piece on what I thought leadership would look like in the twenty-first century. I had been the faculty chair of a required course on leadership for nine years or so, and I had become concerned that we might not be developing the kind of leaders we need.

I was spending a fair amount of time in South Africa and had the privilege of meeting some people who had been in prison with Nelson Mandela, and then I met Mandela himself. I wrote about Nelson Mandela and his notions of leadership.

Then I met someone who was running Google’s infrastructure group. There was an interesting connection between what it means to lead a revolution and what it means to lead a major innovation. These people who were running these very innovative groups thought about leadership in the same way.

Mandela says that a leader is like a shepherd. He stays behind the flock, letting the most nimble go on ahead whereupon others follow, not realizing that all along they are being directed from behind. And people leading innovative groups say much the same thing: it’s not about me saying, “This is where we need to go, and you follow me,” and me inspiring you to follow me, because fundamentally, I don’t know the answer. I don’t know where we’re going. So that’s not what leadership is about. It’s about creating these teams or groups where people are willing and able to do innovative problem solving together, and so we’re trying to provide an integrated model for thinking about that.

What really struck me is that no one really writes about what leaders do and how they think about leadership when innovation is their primary concern.

Leadership really began to be seriously studied at business schools only at the beginning of the 1990s.
Yes. People ended up thinking that leadership is about being visionary. But when you’re talking about innovation, that whole charismatic visionary thing is a problem. Most innovations are the result of collaborative efforts, discovery-driven learning, and more integrated decision making. The tasks, roles, and responsibilities of leaders and followers are very different when you really think about innovation as your goal, about discovering something that doesn’t exist at the moment, about solving problems.

One of the things you always hear about leadership is that despite all the executive programs, all the training, and all the books, there’s a shortage of leaders. And similarly with innovation; despite all the books on and study of innovation, it remains largely a mystery to most organizations.
Yes. I think that is because people don’t really understand the connection between leadership, what leaders think they’re supposed to be doing, and what it actually takes to build an organization that can be innovative. They’re disconnected disciplines. I don’t think we have much insight into what an individual leader should be doing or thinking about, or how people should think about what the role of that leader should be if she wants to be innovative.

Everybody has a slice of genius in his organization. How do you combine those slices of genius in integrated ways to come up with solutions to problems? Some people would say, you don’t want that many geniuses, because then there’s the too-many-cooks-in-the-kitchen problem. Well, there are organizations that have figured out how you can have lots of cooks in the kitchen and still have them cook an absolutely fabulous meal.

Pixar has been a very successful studio, financially, artistically, and technologically, and that really goes back to how the people there think about leadership. No place is perfect, but Pixar has a certain way of thinking about what it’s up to and what leadership is about that has allowed it to create a community culture with the capabilities that are essential for innovative problem solving.

What surprised you along the way with the research?
Well, there were two things. The first big one was that the fields of leadership and innovation were so separate, so very siloed.

The other was that when we first went through the data, we picked up themes about the norms in the organizations, about how you’re supposed to interact with people or how you’re supposed to treat people. What we didn’t pick up on until we began to look a little bit more at the capabilities of these organizations was that there were also norms about how you’re supposed to think about a problem. So that was a surprise. As we tried to explain what we were seeing in certain settings, we said, “This isn’t about how you interact with people; this is really about how you frame and solve problems.” Because these organizations have some norms about how you’re supposed to think about problems, and that’s one of the things that allows them to get through the too-many-cooks-in-the-kitchen problem.

In many ways, it seems that we have preferred a simple explanation of how leading innovation works rather than the complex reality.
I think that people like simple, relatively speaking. Things need to be simpler as opposed to more complex, and this led to the worshipping of a myth about how innovation happens. Albert Einstein did not work alone and have an aha experience. Innovation is collaborative. Howard Gardner talks about the social process and the environment that affects creativity.

I think leading change is different from leading innovation. So there’s not one right way to lead in all circumstances, and a lot of the work on leadership versus management came from organizations that were failing suddenly and had to be revived and turned around. Change is not exactly the same as innovation. They’re somewhat different issues.

How does this work relate to your book Being the Boss?
In Being the Boss, the second imperative was managing your network. Many people, when they think about leadership, think only about managing people over whom they have formal authority. But in today’s organization, you also need to think about managing people that you don’t have formal authority over.

It came from me talking to a lot of my former students and executives I worked with and seeing their common missteps. Why weren’t they realizing their potential, and why weren’t they powerful? They weren’t thinking about leadership in a way that helped them really address what they needed to—that it’s about yourself, your network, and your team.