Read More - Zenger Folkman

LEADERSHIPINNOVATIONAre You a Good Leader?Create an evolutionary advantage over time.by Gary HamelMOST LEADERS EXERcisecontrol viastandard operatingprocedures, tight supervision, detailedrole definitions, a minimum of selfdirectedtime, and frequent reviews.These mechanisms bring people toheel, but they also put a short leash oninitiative, creativity, and passion.Luckily there are other ways of leadingand managing. For example, whilethe in-store teams at Whole Foods havediscretion over staffing, pricing, andproduct selection, they are also heldaccountable for the profitability of theirdepartments. Teams are assessedagainst monthly profitability targets,and when they meet those goals, teammembers receive a bonus in their paycheck.Since the rewards are teambased,associates have little tolerancefor colleagues who don’t pull theirweight. Every team’s performance isvisible across the company—incentiveto work hard and stay focused.You don’t need much top-down disciplinewhen: 1) first-line employeesare responsible for results; 2) teammembers have access to real-time performancedata; 3) they have decisionauthority over key variables that influenceperformance outcomes; and 4)there’s a tight coupling betweenresults, compensation, and recognition.• For example, Gore would seem tosuffer from an excess of freedom. Associateschoose which teams to work on.They can say no to requests and allocatetheir dabble time as they see fit.But they are reviewed by their peerseach year—and these assessments determinetheir compensation. And, oncea project moves beyond the dabblestage, a cross-functional review processputs the development team through anexercise called “Real, Win, Worth.” Toattract resources, a product championmust first show that the opportunity isreal and that Gore can win in the marketplace.Then, the focus turns to profitability.While Gore encourages grassrootsinnovation, associates must builda solid business case before they canget funding. And pensions are closelytied to Gore’s share price. This is whyGore is as disciplined as it is inventive.• And then there’s Google—with itstop-to-bottom anti-authoritarian vibe—where if a person feels something ismore important than anything they areasked to do, they should “follow theirpassion.” Can you hear your VP ofoperations saying something like that?Google’s equivalent of Real, Win,Worth is “Learn fast, fail fast.” Employeesdon’t need many sign-offs to trysomething new, but they won’t getmany resources until they have somepositive user feedback. Since every projecthas its own internal website, engineeringteams get a lot of peer feedback.This transparency weeds out stupidideas and beefs up goodones—reducing the need forformal reviews. And, there’sGoogle’s reputational scoreboard.Titles don’t meanmuch at Google—you haveto develop a product thatattracts millions of users; thiskeeps developers focused onreal-world problems.And the quarterlyFounders Awards grant millions of dollars’worth of restricted stock to teamsthat make remarkable contributions. Toget a big bonus, you have to build somethingthat makes money. These mechanismshelp to keep noses to grindstones.In these cases, what at first glancelooks like a slacker’s paradise turnsout to be anything but. Discipline andfreedom can coexist, but not if leadersrely on stick-instead-of-carrot methodsfor keeping employees in line.Drawing a clear distinction betweenthe what and how of discipline can helpuproot management dogma. Peopleoften defend the how of a hoary oldmanagement process simply becausethey haven’t thought deeply aboutother ways of accomplishing the goalsthat process serves. Help them distinguishbetween the what and the how,give them some time to think, andnew approaches are likely to emerge.The sooner you start sloughing offyour legacy management beliefs, thesooner you become fit for the future. Afew companies are already travelinglight, having left a lot of their outdatedmanagement baggage. In the end,there’s not much of a choice: You caneither wait for tomorrow’s managementheretics to beat the orthodoxiesout of your company, or you can startcoaxing them out right now.What does the future of leadershiplook like to you? Can you imaginedramatic changes in the way humaneffort is mobilized and organized? Canyou envision radical and far-reachingchanges in the way you manage?What you need is a methodologyfor breakthrough thinking. While youcan’t entirely script innovation, youcan have a disciplined process forchallenging the long-standing orthodoxiesthat constrain creative thinking.Rooting out dogma is all about askingthe right questions repeatedly: Isthis a belief worth challenging? Is itdebilitating? Does it get in the way ofan important attribute (like strategicadaptability)? Is this belief universallyvalid? Are there counterexamples? Ifso, what do we learn from those cases?Have our choices and assumptionsconspired to make thisbelief self-fulfilling? Is thisbelief true simply becausewe have made it true? Ifso, can we imagine alternatives?These questions areyour pickax. They’ll helpyou break through “impenetrable”orthodoxies.When talking to leaders,I often get the sense they’dlike their employees to be more experimental,but they’re worried this mightdistract them from a laser-like focus onefficiency and execution. These sentimentsreveal a persistent mindset: Ifyou allow people the freedom to innovate,discipline will take a beating.This view holds that having more ofone means having less of the other.Yet is it possible to have more innovationand more discipline. Thesevirtues can coexist! Leadership innovationis innovation in principles andprocesses that changes the practice ofwhat leaders do, and how they do it.The ultimate test of any leadershipteam is not how fast it can grow thecompany short-term, but how consistentlyit can grow it over time. A worldof relentless change demands a capacityfor rapid strategic adaptation. Inrecent years, we’ve witnessed manyadaptation failures. What the laggardsfail to grasp is that what matters mosttoday is not a competitive advantageat a point in time, but an evolutionaryadvantage over time. The capacity toevolve is the greatest advantage of all. LEGary Hamel is the author of The Future of Management (HBSPress). Visit www.GaryHamel.com or www.bigspeak.com.ACTION: Assess your leadership innovation.Leadership Excellence May 2008 5