Posts Tagged ‘Innovation’

Creating sustainable growth

Thursday, July 28th, 2011

How can we decouple growth from negative social and environmental impacts, asks Anthony Howard. Like all big questions, this is not an easy one to answer. It can be difficult enough to find agreement on the problem we are confronting, let alone the range of solutions to that problem.

The Performance Theatre (TPT) is an annual event that brings together global leaders from business, academia, government and the social sector with world class thinkers to explore answers and encourage responses to big challenges like this. This year’s gathering was held in Beijing, in the context of the new 5 year plan recently announced by China, and against the backdrop of a nation which is confronted by, and confronting, the question of sustainable growth.

Four key themes emerged to run like a thread through the talks, workshops and conversations:

  • Foster authentic leadership
  • Innovate your business model
  • Ask better questions
  • Leverage our commonalities

Authentic leaders have done the hard inner toil to integrate their life and purpose with their work and other pursuits. They are ‘real’ in the same way we attribute authenticity to a genuine diamond, or an original masterpiece. Authentic leadership springs from within such a leader who both knows themselves and knows their people, understanding their strengths and their flaws—and appreciating that this is part of being human, not something that makes one better or worse than the other. One of their finest qualities is that they attribute greatness to their followers more so than themselves, and focus on creating an environment in which their people can flourish. This approach inverts the management pyramid, placing the CEO and management at the bottom, in service of those above. Attitudes like these create the possibility for new solutions.

“Business as usual will not get us where we want,” remarked one of the speakers, calling for a new business model based on human dignity, human rights, ethics and common values. Engaging with this observation creates the possibility for business model innovation across the supply chain, talent practices, supplier relationships and customer engagement. As Gary Hamel and others have noted, while technology has revolutionised the way we do business we still tend to run businesses, and approach people management, in the same way as our predecessors did. Business model and management innovation can create organisations which stimulate growth while using less of the world’s resources. Models that posit business at the service of society and the environment, rather than the reverse, are the starting point in this endeavour.

The only way to find better answers is to ask better questions. For example, with regard to people we can ask “who will grow and develop the most from solving this problem?” rather than the traditional “who is best suited to fix this problem?” GE asked this question when confronting a recall of millions of refrigerators with faulty compressors, and chose Jeff Immelt—who had no experience with refrigerators or recalls. Geoff Colvin of Fortune Magazine says Immelt credits this experience with helping him land the top job at GE.

Or “how can we as a business help society be better socially, economically, and environmentally?” rather than “how can we maximise profits and minimise costs?” Asking this question at Unilever created three significant ten year objectives: “To help more than one billion people take action to improve their health and well-being; to halve the environmental footprint of the making and use of our products; and, to source 100 percent of our agricultural raw materials sustainably.”

Or “how can we restructure manufacturing processes at internet speed—ie every six months or less, not every 10 years?” Haier have created the world’s largest whitegoods manufacturers by asking questions like these combined with innovative management practices.

One of the striking elements of conversations with people from other cultures is our tendency to compare—East/West, investment/consumption, rural/urban, conservative/frank, process/result, collective/individual, contribution/return, quantity/quality—with a consequent attempt to draw lessons from the comparisons. A number of commentators at TPT observed that a better approach is not to compare, but to collaborate, to find and leverage our commonalities. This perspective replaces us/them language with ‘we’ thinking, which is much more conducive to recognising a common humanity and finding common solutions

The challenges we face transcend national borders and directly impact future business success, since business cannot succeed in a community that fails. As such they require a new level of response from business leaders, particularly those who lead organisations which cross national borders. Personal authenticity, courageous innovation, deeper questioning, and enhancing common interest will optimise one’s contribution for the benefit of society, flowing through to sustainable growth and a sustainable enterprise.

Edition 54 – Sustainable enterprise

Sunday, May 22nd, 2011

Business21C Weekly is available through the iTunes Podcast directory. To subscribe directly via iTunes, go to the Advanced menu in iTunes and select Subscribe to Podcast. Then paste in the following URL: http://www.business21c.com.au/podcasts/feed

Business21C Weekly is broadcast on Sydney’s 2SER 107.3 fm radio station at 9:00 am each Monday morning.

This week Professor Suzanne Benn from UTS Business School joins Business 21C Weekly to talk about sustainable enterprise.

Sustainability is of increasing importance to businesses, because it provides a focused way of addressing a range of economic, social and environmental issues that can help in the efficient, effective and responsible operation of those businesses.

Green energy, corporate social responsibility and fair trade have become bigger issues in recent years, and with carbon pricing being hotly debated, do we understand what sustainable enterprise really means? What impact can businesses have, and who is doing it well? Kirsten Lees discusses these big issues in this week’s podcast.

Edition 48 – The ‘Like’ economy

Sunday, April 3rd, 2011

Business21C Weekly is available through the iTunes Podcast directory. To subscribe directly via iTunes, go to the Advanced menu in iTunes and select Subscribe to Podcast. Then paste in the following URL: http://www.business21c.com.au/podcasts/feed

Business21C Weekly is broadcast on Sydney’s 2SER 107.3 fm radio station at 9:00 am each Monday morning.

As Facebook, Twitter and YouTube become increasingly ubiquitous in all facets of our personal and professional lives, there is little doubt that social media is changing the pace of business. This week, Business21C weekly examines the ‘Like’ economy.

With 140 million messages of 140 characters or less travelling through cyberspace everyday via Twitter, how do businesses incorporate social media in their marketing mix, and how are consumers responding? From spawning revolutions to giving customer feedback, social media have made their mark, and won’t be going anywhere. For business, this has meant creating SM strategy objectives and responding to, and being ready for, a changing future.

We talk to Rod McGuinness, social media producer at ABC Radio, Gay Flashman, director at digtital communications firm Formative, and Sandra de Castron from NAB about the ramifications of social media on business.

What makes collaboration work?

Friday, February 25th, 2011

The reality of corporate collaboration is that almost every second alliance fails. Yet some organisations are spectacularly successful at developing alliance cultures. Dr Jochen Schweitzer explains how leadership and governance are key to successful collaboration.

Collaboration is important for many organisations because it gives them access to resources that they would otherwise not have. While executives like the idea of minimising risks through collaboration, they are also attracted to the advantages that they can gain by having access to their partners’ knowledge and experience. With the learning that comes through combining and developing capabilities with external partners, alliances now contribute significantly to developing competitive advantages and achieving strategic objectives for all involved.

Alliancing has many obvious strategic and operational advantages, but the unpleasant reality of corporate collaboration in the last 25 years has been that almost every second alliance fails to achieve the anticipated outcomes. Although the wide spectrum of alliances has been intensively researched, it is not yet clear what really makes collaboration work and what doesn’t.

In my research I’ve been focussing on the issues of alliance governance, the role of alliance leadership and how innovation capabilities develop within alliance teams. In general, success often depends on to what extent the leadership team is able to agree and implement suitable governance structures and engage with the team to foster desired behaviours and work cultures.

Governance mechanisms like organisational structures, roles and responsibilities, decision-making processes or reward systems create work culture. Too often alliances fail because partners are unable to agree on governance to match their individual and joint work cultures. What’s more, organisations often have only limited ways of capturing the knowledge that is created and developing it into competitive advantages for the organisation.

I surveyed more than 400 alliances around the world, asking particularly about how they structure and govern their alliances, and how they perceive the leadership within their alliances. The focus in that study was on finding those factors that would make alliances achieve innovation and allow them to create capabilities that enable them to compete better in their markets. I looked at characteristics like innovativeness and proactiveness of people within the alliances, their ability to work with each other, the extent to which they learned from the alliance, and the extent to which they captured and advanced knowledge.

I also looked at the governance, the actual management structure and the mechanisms that were used to organise the partnership, as well as the leadership behaviour within the alliance.

In alliances as much as in any other type of organisation, leadership behaviour occurs on a continuum: At one end of the continuum we observe transformational (charismatic and inspirational) leaders, who motivate teams often based on their strong vision and outstanding personality. At the other end of the spectrum we have transactional leaders, who base their relationship with the team on the fact that they give people a reward for a certain type of work.

One might assume that a more charismatic leader would help an alliance create more entrepreneurial or innovative abilities, while on the other hand, the transactional leader would be less likely to create innovation. But in fact both types of behaviour are very important to create innovation-type capabilities. The more the leadership team in the alliance is able to show both of these types of behaviour, the more the alliance will innovate.

Alliances fail when they do not achieve the objectives that the partnering organisations agreed upon. Sometimes organisations agree to part ways when they realise this, and other times they stick to it, even though they realise it’s not going to go anywhere. Unsurprisingly it’s difficult to find data about alliances that have failed – it’s a lot easier to find examples of organisations that do really well: Organisations like IBM, Cisco or Hewlett Packard are known for their ability to collaborate at multiple levels with multiple organisations.

The key aspect for an organisation that is looking for innovation through alliances is to gain access to resources within another organisation that it wouldn’t have otherwise. From there on it is all about aligning governance mechanisms for the partnership, work culture and leadership styles with the strategic intention for the alliance.

If a firm is after innovation, there are certain mechanisms and leadership behaviours that work towards innovation. It really is about finding the right combination. Take decision-making. The partnering organisations could agree upon leaving all decisions with the alliance team (a decentralised approach). If the alliance team is flexible and open, there is a greater chance for them to be innovative and come up with solutions. On the other hand, if you leave all decision-making with the partnering organisations and force this mechanism upon the alliance, there is less flexibility, which leads to less innovation within the alliance.

If you then combine that with the type of leadership that you implement, by choosing a predominantly transformational or transactional type of leader for the organisation or the alliance, that again would influence the extent to which innovation takes place or not.

Organisations increasingly seek alliances to achieve innovation objectives and in doing so, they need ways to do it better than they did in the past. That’s why it is important to do the research to find the mechanisms that really make them work.

Integrative Thinking

Friday, February 4th, 2011

A common characteristic among many successful leaders, according to Jennifer Riel and her colleagues at the University of Toronto’s Rotman School of Management, is the capacity to analyse two opposing concepts and quickly formulate a third and superior model. The concept was dubbed ‘Integrative Thinking’ by Roger Martin, Dean of the Rotman School.

Jennifer Riel was recently in Australia to teach an Integrative Thinking masterclass at the UTS Business School and exchange ideas with the Faculty. She sat down with Business21C to talk about the origins of the idea, and how leaders can use Integrative Thinking in their business.

Introducing Integrative Thinking.

When people are given two options and asked to decide between them they will generally take the ‘least damaged’ option. Integrative Thinking encourages the formulation of a hybrid outcome that is better than both of the initial options.

Isadore Sharp wanted to build a business hotel which had the friendly atmosphere of a small hotel, and the amenities of a larger luxury hotel. The challenge of bringing the two together led to a new model that took the best of both ideas.

Recognising the respective advantages of small motels (genuinely warm and friendly staff) and large 1000-plus room hotels (economies of scale and provision of facilities for business travellers), Isadore Sharp, the founder of the Four Seasons hotel chain, settled on a strategy of providing a home-style atmosphere with amenities for corporates – a revolutionary style of hotel in the 1970s.

He wasn’t willing to make a trade-off between ‘small, friendly and uneconomic’ and ‘big, unfriendly, but successful.

A compelling characteristic revealed itself among Sharp and other business leaders that were interviewed by Riel and her colleagues: ‘the ability to hold two opposing ideas in mind and retain the ability to function’. Interviews with over 50 high achievers found that the trait was innate among many of them regardless of their field of endeavour.

While acknowledging that Integrative Thinking is not an easy concept to teach, Riel offers some techniques for incorporating it into the decision making process.

Edition 35: Best of 2010 – The business of news

Monday, January 3rd, 2011

Business21C Weekly is now available through the iTunes Podcast directory. To subscribe directly via iTunes, go to the Advanced menu in iTunes and select Subscribe to Podcast. Then paste in the following URL: http://www.business21c.com.au/podcasts/feed

Business21C Weekly is broadcast on Sydney’s 2SER 107.3 fm radio station at 9:00 am each Monday morning.

For this summer edition we are going to play a best of 2010 for Business21C Weekly. Today is the second and last “best of 2010″ with a repeat of  ’The business of news’:

This edition of Business21c Weekly looks at the business of news, as bloggers-in-pyjamas take on the might of the global media empires, as News Limited launches its paywall experiment at the Sunday Times, as iPad sales top two million worldwide, and its first look-alike challenger the iped is released in China – identical but at a fifth of the cost.

The news media landscape is a laboratory of experiments. The question isn’t simply who is making the news, but who is making money from news, and how? And how do we know whom we can trust?

Our guest is career journalist Tony Maniaty, veteran international reporter of conflict and crisis from East Timor to Lithuania. Tony is a Senior Lecturer in International Journalism at UTS and member of the advisory board of the Australian Centre for Independent Journalism.

Is it a David and Goliath contest? Or is there truly room for all, gatekeepers and gatecrashers, to meet our ever-expanding, but ever more fragmented demand for news, information and entertainment?