RealTime Leadership

Any good gardner knows that the right mixture of fertile soil, clean water, fertilizer and sunlight will produce healthy and fast-growing plants.  The same can be said for growing innovative leaders, but in this case it is necessary to cultivate the right mixture of organizational factors, leadership skills and learning opportunities.   In the November issue of Harvard Business Review, Jeffrey Cohn, Jon Katzenbach and Gus Vlak write about the unique conditions that help great companies to find and groom break-through innovators.  The break-through innovator is a catalyst who is able to bring together new ideas with great people to implement changes that lead to business results.  These leaders have a unique skill set that includes strong analytical skills, emotional intelligence, large social networks, charm and the ability to influence and persuade others. 

As you can guess, finding people with this kind of diverse skill set is rare.  The authors estimate that perhaps 5% to 10% of high-potential leaders within a company have the necessary skill set:

Most companies do a magnificent job of smothering the creative spark.  Over the past five years we have probed the innovation strategies of 25 organizations in multiple industries and countries.  Our findings are simple and somewhat disturbing, given the acknowledged necessity for innovation: Companies usually develop leaders who replicate rather than innovate.

The trick then is how to identify and develop the maverick innovators at your company.  My friend and colleague, A.J. Chopra identified a set of competencies shared by break-through  innovators in his 1999 book, “Managing the People-Side of Innovation.” 

What I have observed when working with clients is that most companies have the raw talent, what they lack is a formal process for developing and grooming the next generation of innovative leaders.  I believe one reason companies resist a formal process is the myth that innovation is something akin to magic – no one knows exactly how it happens, but it just happens.  Nothing could be further form the truth, and Cohn, Katzenback and Vlak write about the necessary ingredients for grooming innovators:

1. One-on-one Interviews – use role-playing scenarios to identify leaders  with high-potential to become break-through innovators.
2. Cross-functional Leadership – assign potential break-through innovators to lead cross-functional teams.
3. Mentoring - couple the break-through innovators with a senior leader who can provide support and guidance.
4. Peer networks – help the break-through innovators cultivate a fertile environment for sharing and growing ideas within the company.
5. Position at Innovation Hubs – insert break-through innovators into innovation hubs where they can “better see how existing products, ideas, people or even entire businesses can be recombined in new, value-adding ways.”

I would add a final point that the authors leave out, but I believe is critical to developing future innovators – that is utilizing new technologies.  The innovators of the future will be the leaders who master Web 2.0 tools such as blogs, social networking sites, twitter, and wikis.  In addition, Web 2.0 tools will help innovators leverage all of the other skills such as networking, sharing ideas and collaboration.

As the velocity of information and ideas increases, it is important that break-through innovators position themselves at the “innovation hub” of your company and utilize Web 2.0 tools to generate innovation.  In fact, I suggest that the successful innovators of tomorrow can be found today, within your own company.  One needs to look no further than the most prolific bloggers, online social networkers and wiki-contributors.

What can leaderless organizations tell us about leadership in the future?  There is a growing phenomenon of leaderless organizations that is chronicled by Ori Brafman and Rod Beckstrom in their recent book The Starfish and the Spider.  The title refers to the contrast between two animals that, at first glance, appear to be quite similar but…

If you cut off a spider’s head, it dies; but if you cut off a starfish’s leg, it grows a new one, and that leg can grow into an entirely new starfish.  Traditionally, top-down organizations are like spiders, but now starfish organizations are changing the face of business and the world.

The authors cite Wikepedia, Skype, Kazaa, Linux and other open source projects, along with Alcoholics Anonymous, the abolitionist movement and the Apache tribe as all being “starfish” or de-centralized organizations.  The point is, decentralized organizations have been around for a long time, but recently, with the advent of the Internet, these organizations are making in-roads into industries traditionally dominated by top-down centralized companies. 

One strategy put forth in the book is to find the “sweet spot” between a centralized organization and a de-centralized organization.  The authors cite eBay, Toyota and even IBM (with their embrace of Linux and Apache) as successful examples of this strategy. 

But who is behind these “leaderless” organizations?  There must be someone behind the scenes pulling the strings right?  Well, the authors say “no”, but there is a new type of leader they call a catalyst who typically spawns and then carefully guides the leaderless organization until it reaches a point where it can self-replicate and no longer needs a leader.  The catalyst leader is contrasted with the traditional CEO.  The CEO is rational, powerful, directive and uses command-and-control to lead the organization; while the catalyst is inspirational, collaborative, and behind-the-scenes, using trust and emotional intelligence.   A catalyst is able to emotionally connect with organizational members, drawing them in and inspiring them to contribute and get involved.  When it comes to AA and the Apache tribe, this kind of member-involvement is understandable, but to inspire people to contribute to an encyclopedia or build commercial-grade software? Wow, the world is changing and business needs to take notice.

My hunch is that the skills that make catalysts successful (trust, emotional intelligence, humility, collaboration) are exactly the leadership skills we need to be cultivating in our corporations to ensure they survive the coming wave of starfish attacks.  With that in mind, the stories about Jimmy Wales of Wikipedia and Craig Newmark of Cragslist are especially important for leadership development professionals to read.

And when I say starfish “attacks” I don’t just mean figuratively.  There is a dark-side to starfish organizations.  Another example of a starfish organization cited by Brafman and Beckstrom is Al Queda.  And the catalyst?  You guessed it, Osama Bin Laden.

The Snowball is an excellent new biography of Warren Buffet by Alice Schroder published in September 2008.  It is packed full of wonderful anecdotes and stories from Warren’s life.  At 838 pages one might think it is a bit long, except for the fact that Buffet’s life and business experience span such a long period, the book needs every page and probably more to give the full story justice.  I have a listed a few of Buffet’s life lessons here that relate directly to the topic of leadership:

1. Think for yourself.  This is a fundamental value that Buffet credits again and again as being critical for his success over the years.  Even at an early age, Buffet learned to trust his own judgement and think through problems by coming to his own conclusions.  This requires one to block out conventional wisdom and reject the herd mentality that is so common with money managers.  The most striking example of this virtue is an eerily prescient presentation that Warren made to a group of high flying Internet media moguls in Sun Valley in 1999. Remember, this is a time when Buffet was being dismissed by the press and other money managers as a dinosaur whose outdated view of the world was out of step with the new realities of the Internet.  Despite the fact that most of his audience thought he was crazy, he delivered a lecture on the market and investing, and he made a bold prediction that the market was extremely overvalued and that over the next seventeen years one should expect a much lower rate of return from stocks — his guess was 6 percent.  So far, his judgement is looking very sound.
2. Integrity Matters.  Like anyone who leads a bold and adventurous life, there are times when Warren finds himself in a situation when his reputation is at stake.  During these moments of truth, Buffet returns to the principles of honesty and integrity, always fiercely guarding his reputation.  He has an uncanny ability to speak the truth when it needs to be spoken.  Perhaps the most vivid example comes from his testimony to Congress during his tenure as Salomon’s Chairman when he rescued the firm from less-than-honest management.  When asked by Congress how he was going to change the culture at Salomon Brothers he said “Lose money for the firm, and I will be understanding.  Lose a shred of reputation for the firm, and I will be ruthless.”
3. Do What You Love.  When Warren is asked by journalists or students what is the secret to success, he says, “Do what you love and work for whom you admire the most, and you’ve given yourself the best chance in life you can.”  This message is extremely valuable for leadership development professionals because it speaks on two different levels.  It says, make sure the people who work at your company really love what they’re doing.  And, it also says, make sure you have leaders at your company that your employees can look up to and learn from.
4. Control The Information You Receive.  Everyone knows that to be a successful money manager you must be in New York City and you must constantly follow the streams of market data, trading in and out of positions using a Bloomberg machine (a computer terminal highly customized to sift through financial data and make trades).  But along comes Buffet, the most successful investor ever, and not only does he not live in New York City, but he doesn’t have a computer on his desk.  Rather than let the information control him, he controlled the information and used it to make good long-term investment decisions.  There is a lesson here for the new leaders of the 21st century who are glued to their computers or blackberrys. 
5. People Matter, but the Business Model Matters More.  Those of us in leadership development like to think that great leaders can do anything.  The theory goes, if we can develop great leaders, the business will be successful.  Warren’s answer assessment of that theory is that it’s flat out wrong.  Buffet says you can take poor management and place them into a good business model and still be successful, but you can take great management and place them in a lousy business and it will still fail.  When giving advice to students, he calls this, “Getting on the Right Train.”

“Managing your career is like investing – the degree of difficulty does not count. So you can save yourself money and pain by getting on the right train. “