Seeing what others don’t
Peter Hinssen: In today’s fast-moving VUCA world, leaders need completely different capabilities. Among other things, they ought to cultivate a meritocratic and collaborative environment, favour experimentation and not be afraid to take risks in innovation. What do you see as a non-negotiable characteristic?
Jamie Anderson: In today’s VUCA world – ruled by volatility, uncertainty, complexity and ambiguity – you need to be creative as a leader and be able to see what others don’t. I love Steve Jobs’ quote stating that “Creativity is just connecting things”. When you ask innovators how they came up with their idea, they often feel a little guilt because they didn’t really do anything. They ‘merely’ saw something the others did not.
And, equally important, you ought to concede that you cannot accomplish that alone. Creative leaders have this unique ability to facilitate dialogue and gather multiple perspectives on a problem. They create an environment of trust, respect and openness. They listen more than they speak. Sadly, most corporations are ruled by ego and politics which has the exactly opposite result.
Hinssen: Who do you feel should drive innovation in an organisation? Is it management, employees, consumers,… ?
Anderson: This greatly depends on what the firm wants to accomplish. There’s this danger to use the word “innovation” too much as flavour of the month, without backing it up with a solid strategy.
First of all, organisations should ask themselves “Who are the customers I want to serve in 2 to 3 years from now?” and “What are the needs of those customers?”. Random innovation is frankly dangerous. Executive management should always make sure that innovation processes deliver solutions for the most valuable customers.
But it is as important to analyse whether an innovation conflicts in any way with the existing business and to strategically define how to address that. This is actually one of the biggest challenges since the boom of technology as digital innovations tend to compete with established offerings. One of my Belgian clients is considering developing e-commerce activities to sell their pharmaceutical products directly to the consumer. This, however, will severely jeopardize the relationship with one of their most important partners, the pharmacies.
It’s a classic dilemma: should you develop an innovative business model if it conflicts with your established activities? In most cases, senior management will pass up the opportunity. So, to get back to the original question “who should be responsible for innovation?”: in a situation like this, the established sales organisation definitely should not be. Instinctively, they will want to protect existing relationships with channel partners. They will be driven by fear, not by what’s best for the company in the long term.
Nestlé perfectly understood this. It set up its new luxury coffee brand Nespresso as a completely separate division from its instant coffee brand Nescafé, knowing that the two business models conflicted too much and that Nescafé might see the newcomer as a threat to its own business.
Hinssen: What, in your view, is at the root of a lack of innovation? Culture, methodology, talent management, company structure …?
Anderson: In my experience, the biggest challenge is focussing innovation efforts in a systematic manner. The starting-point of any innovation strategy should be the overall organisation strategy. As I said before, if you do not know who your most valued customers are today and who, ideally, will be your most valued customers tomorrow, innovation efforts are just random. Many organisations fail to understand this. You see smart and enthusiastic employees innovating in marketing, in R & D departments, in product development areas, etc. But they are often too far removed from the customers. They have no idea as to whom the executive management wants to target. No wonder that their ideas get shot down.
Focus is essential if you want innovation that brings results. Yes, there are other ways to innovate like with the over-cited case study of Google X, but most big companies – and every small and medium-sized company – obviously do not have the type of resources for this. It is very unrealistic to tell companies that they ought to try this.
Hinssen: You talk about how entrepreneurs can be inspired by the creative world. Can you elaborate on this. What can a Head of Innovation learn from a rock star?
Anderson: The three `I’s of creativity perfectly translate to the business world. “Inspiration” first: the most successful creative people all have a deep passion for what they do. You rarely meet boring or uninspiring people who are great innovators, right? They have an inner desire to discover, explore and build things. That same kind of inspired drive is always the starting-point for creativity and innovation in a corporate environment.
The second quality of creative people – Intuition - is chronically underappreciated in the business world. Many companies even reject it outright. To me, intuition is not about “this is going to work because I think it will” or about sheer luck. True intuition is born out of many years’ experience. I believe that a senior executive who has worked for 25 years in one industry does not necessarily need all of the data, market research or consumer insight reports that some companies overly rely on.
Stakeholders are always going to ask you for proof. But, in some cases, especially in radical innovation, there is no data available because it has just never been done before. In other cases, making decisions relying on gut feeling is a better solution. Because it works much faster, and you need speed in today’s market. Entrepreneurial organisations recognize something and just go for it, at the right moment. That is why they tend to be more successful than data-obsessed companies. For instance, do you really need to do deep customer research to appreciate that with the rise of YouTube, young people are likely to be switching from TV to the web for their entertainment?
The third `I’ of creativity is ‘Imagination’. It is about recognizing possibilities. About customers that are starting to behave in another way, being sharp enough to see it and being smart enough to grab the opportunity. I call this this joining the dots. If you see trends happening in the outside world, developments occurring, you have to join the dots. You have to ask “what does that mean and how can I view a different future”? That’s what truly entrepreneurial companies do. Real innovation happens when non-linear events occur, when non-incremental improvements are made. Typically that means a fundamentally new way to access a product or a service. It is typically a customer trying to do what they already do but in a very different way and a company recognizing and capitalizing on that.
Just look at the guys from Spotify. They imagined a future where people would not need to own music anymore. People expected them to fail because they were sure consumers wanted to ‘own’ music. But the founders of Spotify imagined music as a service, just like electricity and subscriptions to digibox TV are. Why were they successful? For 2 reasons. Because their concept was incredibly disruptive and conflicted with the mindset of the established music players. Secondly, while the others were doing consumer research – testing “will customers switch from music ownership to streaming” – Spotify just went ahead and did it.
Hinssen: You often say that 90% of all children are creative but that number shrinks as people get older to a staggering 10% when they are adults. How can we rekindle creativity in adults?
Anderson: First, people need to acknowledge that because of their education and experience they can be locked into linear thinking patterns. They actually should think about the way they are thinking. That’s metacognition: the ability – when you are facing a problem and are stuck – to step back and ask yourself “what assumptions am I making” or “what prejudices am I believing”?
Secondly, you need to acknowledge the impact of those around you. In organizational settings there are 3 big creativity killers. The first one is leadership. If Management criticizes or even rejects ideas on a permanent basis, this will stimulate you to keep doing what you are always doing. Second comes the wider culture of the organization: is it open to people bringing new ideas and challenging the status quo. The third relates to the practicality of resources: do you have the time and access to funds if you want to experiment and try something? So, look at the environment you are in, acknowledge its constraints and then change your mindset instead. Instead of focusing on why things cannot be done, have the courage to question how they can be done. I call that `creative courage’.
Number three is very important and mostly overlooked: health and well-being. Most business people are juggling 3 different balls: their career, family and themselves. What tends to happen with people in their 30s and 40s – the innovation peak years – is that the first two become very dominant and the third one – time for yourself, your hobby, your sports,… – is the first to get neglected. That is a real problem with regards to creativity. You need downtime and introspection to be able to generate fresh ideas.
Hinssen: What about reaching out to external channels &, for instance, collaborating with partners or even the competition to jump-start innovation? Are you in favour of that?
Anderson: Yes, completely. One of the most important shifts from the industrial age to modern-age economy is that the former was completely centred around firms and their internal resources and capabilities. But in the current digital environment – and with all the online collaboration and sharing tools at hand – you can and have to look outside your own boundaries. Many of today’s most successful businesses are platforms that simply connect customers, ideas and outcomes. I agree with what you write in the ‘Network Always Wins’: how the really successful firms are those which are networks as opposed to those operating as silos and standing as separate entities. The future is all about connections, between seemingly unrelated concepts, between people and between organisations.
About Jamie Anderson
Jamie Anderson is jointly Deputy Professor in Strategic Management with Antwerp Management School in Belgium and the Lorange Institute in Zurich, Switzerland. He has been called a “management guru” by the Financial Times, and one of the world’s top-25 management thinkers by the journal Business Strategy Review, alongside internationally renowned thought leaders such as Gary Hamel, Philip Kotler and Henry Mintzberg. Jamie brings together the theories and frameworks of business strategy, innovation and change with a unique presentation style that never fails to both enlighten and entertain.
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