Blog #3 of 4: The nature of organizations has changed, and the leaders they require in the future will be fundamentally different from those they require today. It is time to recreate leadership for the requirements of the modern organization.
When I was at Cisco, my team experimented with a radically different approach to leadership and leadership development. It was an approach that allowed the company — indeed at times forced it — to recreate its understanding and operationalization of leadership. Think of it as leadership innovation – a type of disruptive leadership intervention. At the time, it was necessary because Cisco faced upheaval in its markets and needed to find new ways to innovate and respond as an organization. It was already clear that what got us here, won’t get us there.
Cisco is not alone in facing a highly competitive environment. Today, many companies are faced with the need to reinvent their business and organization models – and the leaders who will lead them into the future. Interestingly, few executives would question the critical importance of innovation for the long-term success of a large organization. If you want to remain competitive or transform an organization, you have to have a healthy pipeline of new business ideas and models. But in my experience, ideas are usually not the problem. Most companies are good at generating ideas: what they are less good at building robust systems of experimentation to vet and test the good ones and take them to market in a timely, cost effective and value creating way. The same is true of leaders.
What I often hear from business executives is that their organizations are bursting with ideas and talent. But ideas and talent only get you so far. What’s harder is funneling those ideas and potential leaders through the organization in a way that challenges, tests, channels, and changes them to make them viable in the real world.
First, you need to challenge them, to test whether they are viable across multiple business models and markets. Second, you need to be deliberate in how you direct the talent to the right parts of the organization so that you match capability and development needs with business opportunities. And finally, you need to change – to reconfigure the organization itself so that the leader can deliver on their value promise.
So how can companies test the viability of ideas and leaders without wasting millions of dollars on expensive flops? How can CEOs be sure that their innovation pipeline is bulging with viable businesses rather than hare brained schemes? And similarly, how can CEOs be sure that their leadership pipeline is bulging with viable capabilities for today’s operation as well as tomorrow’s business? How can organizations learn how to experiment so to avoid dreaded failures? In short, how can you build innovation labs that develop not only business ideas, but also business leaders?
In my experience, the playbook can be relatively simple.
Start with identifying ideas that have the potential to make a real impact on your business– business ideas that are big, really big. These ideas need to be strategic enough that the solutions produced are disruptive – to the market and to the organization. Work with your CEO to select projects that keep his/her leadership team awake at night. The project must be meaty enough that it demands leaders to collaborate differently in order to come to the best, most value-producing solution(s). And it must create a leadership development ‘crucible’ in that it is sufficiently challenging to stretch leaders out of their comfort zone and into new ways of thinking and operating. By putting leaders into situations where they will have crucible experiences while transforming the business, they are developing naturally, and this way their true viability as future leaders can be better evaluated.
And then formally assemble a team of promising leaders to strategically, operationally, financially and culturally answer three questions: Is the concept viable? Is there business value in it? And, can it be executed in this organization, at this time? In essence, how can the company create, capture and deliver value?
In a presentation that I gave on innovation last week, one person in the audience said, “Easy at Cisco – it is a company wired for innovation.” In my response, I acknowledged that it is easier to innovate in companies that are wired for such. But the model works in companies wired to innovate and those wired for scaled efficiency. I could say this with confidence in that I had just concluded a major project with a world-class financial services company that is faced with innovating in a high compliance, regulatory environment. We applied the same action learning model of create, capture and deliver value to challenges facing private wealth management, women investors and health savings accounts and produced break through results not only for the business but for the leaders for whom we were developing.
To change the culture of a company, you need to change the leaders. You can change the leaders by hiring new ones. And you can change the leaders by ‘reinventing’ the ones that you have in place today. Just no idea is perfectly formed – nor is any leader. In order to cross the chasm from brilliant insight to profitable business, every idea and promising leader has to go through an arduous and bruising process of exposure to the real world: Those that make it are inevitably transformed by the process.
Many organizations rely on armies of management consultants to advise on the feasibility of its business strategies and innovations. Rather than importing this wisdom from consulting firms, why not build the capability within your own promising leaders to evaluate and lead ideas? This will not only leverage your company’s talent strategically but it will also develop a cadre of leaders prepared to lead the change required to implement the ideas.