Archive for the ‘Transformational Leadership’ Category

Valence

May 3rd

One of the most important elements of the new dynamic is being created by activists constituencies. There will be the need for future leaders to recognize and to anticipate this force. No surprise, many will say. There has been a need to recognize multiple stakeholder constituencies in the past. After all, there are functional specialties within the typical firm to manage customer experience, shareholder issues, labor relations, supplier management and so forth.

Valence

These functional specialties will only become more sophisticated as stakeholders become more active. But what makes this process of communications important to the stakeholders is that the stake are getting bigger. As markets change more rapidly and corporations and others are forced to adapt and to transform, it’s going to be clear to the stakeholders that they will want to have a greater voice in strategic decisions.   Likewise, the traditional business functional leaders who have historically managed stakeholder interests that the activists need to be better connected to the strategic thinking of the organization.

Unfortunately, what will make the communication process more complex will be the fact that the agenda of the individual groups will change as the organization moves through the stages of transformation. When it is clear that a change may be coming, but that it’s not likely to come soon, employees and customers can anticipate the ominous future but like residents living on a floodplain they will not necessarily act to protect themselves.

As the necessity for action comes, the stakeholders will divide between those who understand the future and want to shape it and those who have different strategies. Many don’t want to hear about negative trends they they view as self-fulfilling prophecies.  Others may recognize the direction of the future but do not want to lose the protections that the traditional enterprise has provided. Agendas change from anticipation to engagement to avoidance depending upon the way in which the activists may shape there actions to deal with the necessity of change.

An example makes the issue clearer.  Stakeholders who believe that they don’t have a choice, who will be punished by the negative consequences of decline want to protect themselves.  Those who have a choice will calculate that to eir interests and move to alternative products and services.  It’s important to understand the stakeholders and their voices.

In simple terms, the up slope and that downslope required different muscles.  Those on the rise have different priorities from those who are descending.  The curve acquires valence as it reaches the inflection point and turns downward.

 

Crafting Innovation for a Transparent, Interactive Marketplace

April 26th

While there is widespread acceptance of the idea that in times that demand transformational change innovation has become an important, even critical management capability.  And the notion that innovation needs to anticipate both investments in sustaining technologies and investment in new disruptive business models – the ideas first advanced by Professor Clayton Christensen of Harvard Business School in his book, the Innovator’s Dilemma – have received widespread support as well.  But the approaches that are often suggested for engaging the forces of disruptive change may need to be revised to anticipate the age of social media.

The problem is not a surprising one.  No one is in favor of disruptive change when it undermines them.  Long-time line managers who have developed their careers in a business model  favoring one kind of profile are naturally likely to resist investing in a new business model that will put them at a disadvantage and possibly even bring in leadership from a new generation or new group with a different skill set. S it’s not surprising that an old-line institution such as the Postal Service might have managers who would resist a new era of digital media. But what might be even more surprising is the subtleties within the disciplines inside the institution – those who have made their careers improving the delivery of letter mail, resisting new patterns that would emphasize parcel delivery and integration of the traditionally independent institution with new e-commerce providers.

But if the customers are going to act as Christianson suggests that they will in his exposition of the shift too disruptive technologies, then there’s a need to refine strategies for him bracing the disruptive future.

Christianson suggests three models in an article written in Harvard business review quote “on innovation”, a Harvard business review paperback copyright 2001, “meeting the challenge of disruptive change”, Clayton M Christiansen and Michael Overdorf first there’s the skunk works that develops the new technologies in a laboratory set apart from the traditional enterprise. Second there’s the division within the company that said apart from others and finally there’s the strategy of acquiring the technology that allows for disruptive change.

Each of these three strategies might be seen as a “sequestering strategy” where the new investments are protected from interference from the traditional line managers. The problem with relying on sequestering strategies alone is that organizations are increasingly transparent and services require integration. Both features of the network economy are likely to make it almost impossible to protect the alternative vision of the future from the traditional enterprise. This is good news for entrepreneurs but it is going to be challenging for large complex organizations. How do you invest in alternative visions of the future without being stopped?

One pathway that’ worth a new look may be to revisit the notion of open innovation. Clayton Christianson writes about open innovation in his blog (Wednesday, September 19, 2012) he relates his experience at the annual meeting of the Academy of management (AoM). He describes a session on open innovation featuring Allan Afuah from Carnegie Mellon, Karim Lakhani and Michel Tushman from HBS, and Todd Zenger from Washington University in St. Louis.

“Open innovation is a method of innovation that has arisen in recent years which allows companies to essentially source some of their innovation efforts to outside parties, often through contests where individuals compete to develop the best solution to the innovation challenge the company has set forth,” Christensen writes.

He describes the way in which such challenges work and notes the work of InnoCentive to help companies to “clearly define the innovation challenges they are facing” and develop platforms where challenges can be held.  And Christensen notes the way that the changing marketplace has played a key role in this development,

“The rise of social media in recent years has been a significant enabler of open innovation, as it allows firms to develop strong communities of external innovators eager to solve problems.”

What’s interesting about Christensen’s review of the open innovation panel is that he both acknowledges the benefits of open innovation that offer some promise to work past the obstacles to the sequestering strategies that are created in transparent interactive enterprise and at the same time he recognizes some of the limitations,

“Open innovation can be an excellent means for innovating around specific technical challenges.  In contrast, open innovation may be a less effective means for bigger architectural or business model innovations.”

Opening the innovation process but at the same time given the challenge and the intended solution precise definition offers an important potential path around difficulties that will become increasingly apparent in the future enterprise.

The Stakeholder Constituencies

April 23rd

 

Stakeholders

If the moral of the story here were to “adapt to new technology” it would still be a worthy discussion.  But there would be little news. Organizations throughout the economy have had to adapt to survive and many haven’t been successful. The Internet and the technologies that are associated with it have undermined the fundamental business models of many of the icons of the American economy. The impact of new technologies is a story that has been told many times.

But in fact, there is an even more important and interesting story that is unfolding in every sector of the economy. The implication of the new communications modes that have made global communication instant, ubiquitous and free have had brought implications for the way in which companies communicate with one another and within themselves. The classic model of communications for the firm is one that emphasizes the employees and management. Many of the key conversations that take place are therefore thought to take place within the box outlined above.

Even before there was Internet communication facilitating global connections, the boundaries of organizations were becoming less important and connections between the traditional organization and its customers, its shareholders (in the case of public at organizations this is taxpayers, and their representatives), suppliers and even host communities describe the multiple dimensions that describe the stakeholders in a representative manner.  The pressures that they supply are easiest to see and understand.

What has become important in the modern era has been that the economics of communications have made it so dramatically easier that there are new voices seeking to express their views and to defend their interests.  Even more importantly, there is growing recognition that the stakes really do matter.  Transparent enterprise and the abundant self-publishing sources of analysis have made it easier to see strategic issues as they appear on the horizon of the leadership.  The types of products, the location of tomorrows jobs, all of these issues and more are being contested in the new, increasingly competitive market.

If the Internet Age has brought a new era of challenge, the scope of the issues have moved far beyond adapting to the new technology and now include the Democratic Impulse that has awakened the stakeholders. √

Strategic Inflection

April 22nd

Andrew S. Grove, the former leader of Intel, wrote a book in the mid-nineties in which he sought to help leaders “exploit the crisis points that challenge every company.”  In 1996 when the book (Only the Paranoid Survive) was published, not even the head of Intel might’ve guessed the true scope of the revolution that was underway.

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In the short term, virtually every institution, both public and private, was forced to contend with the impact the creation of a global Communications system that was immediate, global, ubiquitous and virtually free. Harvard held two conferences, one in 1998 and one and 2000, and sought to involve the entire university in thinking about the Internet and Society.  There was wide recognition at the time that the Internet would have a dramatic impact on concerns that range from business to learning to global diplomacy.

The question was asked “Was this a revolution that was more like Gutenberg or Luther? the invention of the printing press or the Reformation?”  This may sound like Harvard. But the point should not be lost that there has been a recognition for some time that a revolution was taking place and that it would have wide implications for the economy, security, knowledge and much much more.  But whether the Internet would be a call to action for a given organization or not, it was the perfect illustration of the challenge for leadership in seeking to deal with pending change.

How was one to know that a downturn was actually a lead up to a strategic inflection point? Grove defined strategic inflection points as the place where a business or public institution recognizes that the fundamentals of the traditional business model were about to change. He described his own practice of looking for “10 next change” among the critical variables.

And he emphasized that change did not have to signal pending disaster.  For those who can become adept at anticipating strategic inflection and operating in a new way, these moments of transformational change can offer opportunities.

The Coming Tension: The Democratic High Performance Enterprise

April 19th

There is a growing tension that will will be seen in the future Enterprise as many of the same technologies that are making it possible for new voices to be heard will also empower the sometimes opposing effect of top-down, centralized management.

I have discussed the dynamics of the bottom up communications revolution from a number of perspectives. But in essence what is most important is the recognition that the constituencies of the traditional firm–the myriad stakeholders are being given a new voice What’s more., the transparency of the modern enterprise makes it possible for these stakeholders to see the effect of the forces of competition. They can see and now they have every reason to be concerned.

What the empowerment of stakeholder constituencies has done is to create a new democratic force that will ultimately change the dynamics of the traditional hierarchical enterprise. The force of democracy will exert new pressures that will ultimately change historical traditions and strategic priorities for the future.

Yet at the same time, technology is making it possible to improve performance in the short term by creating a new age of performance management.  Today we live in the era of the smart enterprise as IBM might put it where there are indicators of performance, intelligence about the movement of the operating parts and interoperability among information systems.  By creating measures of performance where none have existed in the past, the modern enterprise is going to be able to wire itself to a new performance ethic.

The Coming TensionMany of the conversations about data and technology are leading in this direction.  The Internet of Things and the new capabilities of Big Data analytics are going to empower the power of top down controls at the same time that Information Technology has strengthened the capacity of the grassroots organization to assert new powers from the bottom up.

That there will be new tensions within the modern organization as top down meets bottom up.  Successful future leaders will build the capacity to mitigate tension and establish decision priorities.  There will be times when different, and possibly contradictory priorities are most important to the future of the enterprise.

To establish principles of service and frameworks for evaluating value will be critical in defining the ultimate goal by which these contrary impulses may be reconciled in the future