Sunday, July 27, 2014

Building New Strategies with Lessons of the Past

At last month’s Cannes Lions festival, I had the privilege of participating in a session with advertising legend Chuck Porter on “building new strategies for creative excellence.”  The session was organized by the Berlin School of Creative Leadership around the contrast between strategic insights drawn from the successful creative work of his agency, Crispin Porter + Bogusky, and more orthodox strategic approaches associated with Harvard Business School Professor Michael E. Porter (no relation).  In preparation, my Berlin School colleague, Professor Paul Verdin, and I had drafted a White Paper on the topic.

The session and paper yielded several conclusions about new priorities for building strategy for creative excellence.  For example, while acknowledging the greater need for flexibility and speed in decision-making today, we identified the persisting importance of making adaptive commitments to brand values and strategic priorities.  Likewise, we identified other crucial principles: serving communities of participation, building trust through storytelling, and finally recognizing accumulative value creation rather than pursuing competitive advantage for strategic success.  Overall, we proposed a fundamental shift from the traditional, largely adversarial orientation focused on competitors to an emphasis on value creation through the engagement of customers.

In doing so, the White Paper picked up on several currents of thought about the evolution of strategy.  Customer-centricity, involving better understanding and engagement of customers as well as enhancing capabilities for serving customers, is one such stream.  Another is the transformation of traditional value chain and scale economies by digital technologies and an information economy whose creation, distribution, and transaction costs have an entirely different structure.  Perhaps best-known, to use the title of Rita Gunther McGrath’s 2013 book, is “the end of competitive advantage.”  Rather than achieving a long-term, stable and sustainable market position in a well-defined industry, following Michael Porter, the new world of strategy is marked by developing a portfolio of transient advantages able to capture shifting “connections between customers and solutions.”

At same time as the Cannes festival, another debate around innovation and disruption began roiling.  Jill Lepore, a professor of history at Harvard (in the Faculty of Arts and Science, not Business School), published a withering piece on the contemporary “gospel of innovation” in The New Yorker.  “The Disruption Machine” took on the prevailing model of disruptive innovation associated with Clayton Christensen, another Harvard Business School faculty member.  His theory contends that while an incumbent firm seeks to maintain its market advantage through sustaining, or incremental, technological innovations, it is often overtaken by new entrants whose disruptive innovations, typically offered at lower-cost and with lower-performing technologies, end up remaking the market and leading to the failure of the incumbent firm.  Lepore alleged the theory, which she extracted primarily from Christensen’s groundbreaking 1997 The Innovator’s Dilemma, mistakenly explained the emergence of new technologies and the dynamics of firms.  In doing so, she also personalized the critique by questioning the integrity of his research and his claims about the theory’s ability to predict market failures.  In a Bloomberg BusinessWeek interview, Christensen responded briefly and quizzically both about the personal nature of the attack and the lack of actual difference in their questioning of innovation.

Much commentary and side-taking has ensued.   Many pieces noted how “disruption,” in particular, had become an overused shorthand for innovation-driven (some would say, -fixated) entrepreneurs and businesses.  On Vox.com, for instance, Timothy B. Lee’s post was tellingly titled, “Disruption is a dumb buzzword.  It’s also an important concept.”  Kevin Roose similarly wrote on nymag.com that, for actual disruption to work best,‘disruption’ has got to go.”   Some comments took on the larger state of innovation in both business and management studies.  In the Financial Times, Andrew Hill thus made the case for a more measured use of the theory of disruption, citing its relevance to analyzing corporate failures like Kodak and Blackberry. 

While Christensen has understandably been at the heart of many of these discussions, Michael Porter’s place has also been important.  On Forbes.com, Stephen Denning wrote that Lepore had been “the assistant to the assistant of Porter” and he then cast her attack in terms of the conflicting views of Porter and Christensen.  Specifically, this meant distinguishing the strategic goals of maximizing shareholder value and creating and maintaining customers.  The recent imbroglio around disruption is a “symptom,” in Denning’s word, of a more far-reaching debate around core assumptions of contemporary management and business.

In fact, among the most important lessons of the Lepore-Christensen exchange seem precisely the value of reflecting on and wrestling with one’s own guiding principles and assumptions in business leadership.  That lesson was also a basis of the Porter vs. Porter White Paper and Cannes session.  Such questioning can include:

1. Language
Too often, as with “disruption,” we use or overuse language without fuller explanation or understanding.  Sometimes context is lacking.  For those in creative and marketing communications, for instance, Jean-Marie Dru, now the Chairman of the TBWA Worldwide advertising agency, developed the distinct concept and specific creative methodology of “disruption” at the same time as Christensen in the mid-1990s.  More generally, as I wrote in a recent post, we don’t take adequate care in our everyday usage of key words like innovation and creativity to ensure clear and effective communication of their meaning in given situations.

2.  Assumptions and Contexts
If the language around disruption or innovation would benefit from greater care and precision of usage, the assumptions underpinning that language can likewise have greater impact when more fully understood.  This is not to suggest, of course, that any discussion of innovation should revert to exploring the finer points of Christensen’s (or Porter’s) research.  It is, however, to posit the value of stepping back and assessing the larger ideas behind, or wider implications of, specific potential decisions, actions or strategies.  Some of the best commentaries on Lepore and Christensen, like John Hagel’s, are illuminating exactly because they analyze seemingly familiar ideas more acutely and pose bigger questions.

3. Beyond Prediction
One of Lepore’s major critiques in “The Disruption Machine” is how poorly Christensen’s model predicts business success or failure due to disruptive innovation.  Similarly, in the Cannes session, Chuck Porter observed how our White Paper about his agency’s creative work amounted to “backfilling” explanations for earlier strategic and creative work that may not be practically useful going forward.  Any prediction or forecasting for an increasingly uncertain future is obviously challenging.  Yet predicting the future is not the only standard or purpose for analyzing and modeling the past.  Even more, as Lepore herself allows (in quoting a recent New York Times report on innovation), “disruption is a predictable pattern across many industries” – patterns being a matter of deeper understanding and far different from concrete predictions about future performance at specific firms.

4. Models and Theories – and Learning
The distinction is essential.  As an educator who uses historical cases and models, my priority is often to connect particular examples to wider patterns.  However, the purpose in doing so is not the connections themselves but to help build individuals’ capacities for effective analysis and action.  Those capacities are enabled by learning multiple examples and experiences, models and patterns, and developing the discernment and agility to use them, as appropriate, to make sense of different situations and contexts.  Models and theories, like that of disruptive innovation, are always only potential means for conducting analyses.  Rather than ends in themselves, we should look to them to help us improve our thinking, sharpen frames of reference, and ultimately serve as aids to better understanding, decisions, and problem-solving. 


Friday, July 4, 2014

Review of 'Collective Genius: The Art and Practice of Leading Innovation,' by Linda A. Hill, Greg Brandeau, Emily Truelove & Kent Lineback (Boston: Harvard Business Review Press, 2014)

The Introduction to Collective Genius: The Art and Practice of Leading Innovation calls for a different kind of leader who creates organizations both willing and able to innovate.  From that innocuous opening, this new study quickly moves to engage the challenges and complexities confronting those wanting to enable innovation.  Much of the complexity is captured in six paradoxes – from “support” and “confrontation” to “bottom up” and “top down” – that create ongoing tension.  These are then summarized in a “fundamental paradox” between “unleashing” and “harnessing” the talents in an organization.  Through the dozen case studies that follow, these paradoxes demonstrate not only the potential of different kinds of leaders but the value of different kinds of thinking about leadership in fostering and driving innovation.

In less capable hands, such a reliance on paradoxes or tensions in describing leadership might reflect indecisive or incomplete analysis.  For Linda A. Hill, Greg Brandeau, Emily Truelove, and Kent Lineback, it instead conveys with evidence and assurance the complicated realities of new organizational forms and behaviors.  In fact, despite its presentation of a series of individual leaders, the book establishes a category of its own that yokes together the best of conventional analyses of leadership and innovation.  The result is an invaluable guide to enabling collaboration and collective behavior at a time when innovation and creative problem-solving are increasingly the norm.

The first major section of Collective Genius addresses how leaders create a willingness to do the hard work of innovation.  There are three major challenges here:
  • Purpose: Why we exist
  • Shared Values: What we agree is important
  • Rules of Engagement: How we interact with each other and think about problems
Defining these elements helps to create a context in which others can innovate.  Looking at Volkswagen and Pentagram, the design agency, the authors offer practical instances of encouraging risk-taking, trying new ideas, and building solutions together to form a greater sense of community.

The second major section takes on how leaders can create the ability to do the hard work of innovation.  It is also defined in three aspects: 
  • Creative Abrasion: The ability to generate ideas through discourse and debate
  • Creative Agility: The ability to test and experiment through quick pursuit, reflection and adjustment
  • Creative Resolution: The ability to make integrative decisions that combine disparate or even opposing ideas
Together, these organizational skills correspond to the major elements of the innovation process – collaboration, decision-based learning, and integrative decision-making.  Tracking efforts at Pixar, eBay in Germany, and Google, the authors offer examples of how practically these skills can be operationalized and also integrated with each other.  

Amidst all the discussion of innovation processes and organizational behavior, how exactly do leaders fit here?  They may be visionaries – but don’t have to be.  Even if they are, they don’t hold forth and inspire from the mountaintop.  Instead, the role of the leader is re-cast again and again in these pages.  Vineet Nayer, of HCL, is a “social architect”; Larry Smarr of Calit2, “a dot-connector extraordinaire”; and managers at Google, according to then CEO Eric Schmidt, “aggregators of viewpoints, not dictators of decisions.”  What is consistent in Collective Genius is that traditional formal authority gives way to nimble orchestration, informal facilitation, and contributions to community-building.

The real hero for Hill and her co-authors, as a result, is less the individual than the innovation eco-system.  Successful leaders, they conclude, work to create innovation environments “in which the unique slices of genius in their organization are rendered into a single work of collective genius.” Moreover, and this is ultimately the book's most illuminating lesson, that collective genius not only yields more sustainable innovation but transforms leadership itself. 

Friday, June 20, 2014

Building New Strategies for Creative Excellence: Michael Porter vs. Chuck Porter

On Thursday evening, June 19, I had the privilege of presenting ideas for 'building new strategies for creative excellence' at the Cannes Lions International Festival of Creativity.  The session grew out of a White Paper with the same title co-authored with my Berlin School of Creative Leadership colleague, Professor Paul Verdin.  Guiding both session and paper were a series of contrasts drawn between the strategic thinking of Harvard Professor Michael Porter and the strategy Paul and I identified in the words and work of advertising legend Chuck Porter.  (The full paper is downloadable here.)

The Executive Summary reads:
Strategy is changing amidst volatile markets, disruptive technologies, and transformed customer and public relationships. Contrasting some of the major tenets of traditional strategic thinking, an analysis of the work and words of Chuck Porter enables the mapping of several key principles of a new strategy of creative excellence.  These include 1) forming an adaptive commitment to strategic intent and ongoing public engagement, 2) fostering communities of participation as part of generating a wider cultural conversation of creative work, 3) building trust through imaginative, often offbeat and interactive storytelling, and 4) moving beyond competition to highlight the value emerging through creative breakthroughs or community-building.

The following images give a further sense of the contrast we draw between the 'Five Forces' model of industry competition that shape firm strategy of Michael Porter and the emergent Forces that enable value creation we associate with Chuck Porter.





Saturday, June 14, 2014

Cannes Lions as Global Creative Leadership Classroom

The Cannes Lions International Festival of Creativity held each June is the world’s leading celebration of brand communications and creativity.  The official programme of the week-long festival combines a dizzying array of industry and agency showcases, formal seminars, lectures, workshops, teaching academies, and award shows.  Arguably even more happens unofficially, with agency and holding companies gathering their global talent and leadership, often with clients, in meetings and parties, and with informal business meetings and social gatherings occurring around the clock. 

For each of the last five years, the Berlin School ofCreative Leadership has partnered with Cannes Lions to offer the premiere educational programme among the many held at the festival.  The Cannes Creative Leaders Programme (CCLP) begins with six intensive days of leadership training in Berlin followed by six days of the festival curation and closed-door sessions with industry leaders in Cannes.  While individual faculty, industry speakers and sessions provide many specific insights to programme participants, CCLP also emphasizes how more generally to learn from the festival itself – from Cannes as a model classroom for creative excellence.  The result is a fresh approach to sustaining creative and intellectual stimulation both within individual businesses and at other idea and creativity festivals. 

Here are a handful of the touchstones we urge participants to adopt in making the most from the festival:

·      Relevance
Why should I care about what’s said or shown on the stage at Cannes when we are pursuing creative excellence?  It’s a large question but an essential one: beyond the hype and personality cults and justifiable admiration for strong imaginative work, what is relevant to my own creative leadership and why?  Is a brand, client or consumer problem being defined and an original solution being plotted, one or both of which may be relevant to my own situation (either now or in the foreseeable future)?  Direct relevance and applicability are not the only tests of value, of course, but particularly in sessions featuring high-profile individuals or agencies, we do well by asking what concretely are the ideas or insights being shared and how are they relevant to our own work.  Too often, on big stages in Cannes and elsewhere (from other live events like MIPTV for television professionals to online offerings like TED), we partake in what I call “popcorn creative thinking” – easy and even enjoyable to consume in the moment but failing to provide any real nourishment or impact.  The more we question relevance and value, the more sharply we gather knowledge and insights from others that can help to make us better leaders.

·      Inspiration
Part of what animates Cannes is a core tenet of creative leadership and all creative work: inspiration.  We’re inspired by the examples of new standards of work that move the industry forward and even improve society, the innovative solutions to business and human problems, and the perspectives of leading voices and thinkers.  Inspiration doesn’t always readily pass the relevance test, but it is vital to advancing creative excellence.  The challenge is to know how to take the inspiration of a Cannes session or speaker (or, again, those at any number of other events) back home to enrich our own work.  Sometimes the answer is as simple as reflecting on what kind of inspiration we’re experiencing.  In its 2012 CEO survey, IBM looked closely at what constituted inspirational leadership and revealed five major characteristics: creating a compelling vision, driving stretch goals, hewing to shared principles, exercising enthusiasm, and guiding with expertise.  By asking that additional question – how specifically are we being inspired? – we increase the likelihood of taking away practical knowledge of how to sustain the inspiration of the moment and use it to lead others.

·      Idea Events
Part of the attraction, even magic, of Cannes Lions is that it happens only once a year.  Thousands gather from around the world and produce a singular, energetic mass of industry voices, experience and successful work.  The festival consequently becomes what anthropologists call a “tournament of values,” a site where the priorities of a community, here of global creative communication professionals, determines its leading values, standards and priorities.  Tracking closely which values – or ideas, debates, challenges, and kinds of work – are highlighted and celebrated helps further our understanding of the shape and future of the industry.  Viewed this way as a hothouse of industry ideas, however, Cannes Lions also becomes a model for us as individual leaders to stimulate thinking and engage diverse ideas more consistently.  Put in more practical terms, how do we as creative leaders construct similar opportunities for our teams or businesses to learn from and be inspired by multiple voices and engage in industry-defining debates and conversations?  Many organizations, large and small, from BBDO’s Digital Lab to Pixar University, have institutionalized such continuing engagement with diverse and innovative ideas.  The question remains for us, how are we doing so in ours?

·      Creativity Voyeurism
Common to testing relevance, sustaining inspiration, and continuing engagement with diverse ideas is the challenge of actively taking home the experiences and insights of Cannes and making them a part of our own creative leadership practice.  Again, not all lessons or experiences of Cannes Lions or other events can or should be immediately applicable (some of what happens in Cannes should indeed stay in Cannes…).  But too often, the big names, the trend-setting work, and the fresh ideas – and a kind of romance with creativity they often come to represent – can turn us into passive viewers and admirers.  As an educator of professionals and executives, this tendency casts light on a special imperative for me in any setting in which I work: what will you do with what you’ve learned?  For creatives, the added burden of what I call “creativity voyeurism” can dull our capacity to embrace and transfer the rich diversity of ideas we experience.  Put simply, often the greatest challenge of participating in Cannes Lions or any idea festival is to act concretely and locally after the event is over. 

·      Making the Story Your Own
We have the good fortune to be living in (and hopefully contributing to) a golden age of creativity and innovation in business.  From reading Fast Company, Inc. and Entrepreneur to following our favorite TED-talks and video blogs to attending Cannes Lions and SXSW, we are awash in tales of creative leadership, bleeding-edge practices, and innovative possibility.  Yet the voyeurism I’ve mentioned, while allowing us to be cocktail-party conversant in what our creative heroes are doing, can easily leave us doing little if any comparable work ourselves.  One of the exercises we do in CCLP is to respond to sessions, speakers or experiences at Cannes Lions by creating our own individual stories about them.  They may be stories we would tell our bosses, our clients, our friends or loved ones and they may speak to the opportunity, awe or even irrelevance of the ideas or experiences.  But what’s crucial is that the stories of creativity become ours.  In the crucible of storymaking, we at least begin to transfer the creative leadership, learning and experience of others to ourselves.  In that way, we take a critical step toward making real for us the extraordinary ideas, insights, excitement, and possibilities of Cannes.


Thursday, June 5, 2014

'The Soft Edge: Where Great Companies Find Lasting Success,' by Rich Karlgaard (Wiley)

For Rich Karlgaard, publisher of Forbes and writer of its “Innovation Rules” column, businesses able to create and sustain success do so by balancing attention and development of a strategic base, a hard edge and a soft edge.  Each of those edges is constituted, in turn, by five elements.  Historically, managers have tended to focus on the hard edge as the basis of business success, favoring its more clearly concrete and measurable focus on speed, cost, supply chain, logistics, and capital efficiency in decision-making and the fight for organizational resources.  The soft edge, by contrast, has until recently been viewed, as secondary, fuzzy and, yes, soft, values that are nice to have but not at the core of lasting success.  Karlgaard’s new book, The Soft Edge, seeks to re-set those priorities. 

Most of the book is taken up exploring the five deep values of the soft edge.  Trust between leaders and their teams, and colleagues more generally, is needed to create grit, the ability to sustain interest in and effort toward very long-term goals (as advanced by Angela Duckworth).  Smarts takes the idea of grit and contends that it helps to accelerate and sustain learning, both learning new things and solving novel problems and applying the outcomes of learning.  Teams, marked by chemistry, passion and grit, are where the hard work of combining and building on different perspectives and shared values take place.  Taste is the discernment that guides the design process, a broader sensibility that deploys teamwork to generate abiding experiences for customers.  Story is the source of persuasion in the market but also of purpose and motivation for teams and organizations, even when those stories are increasingly told better by outsiders, like customers, and data.

Of the five values, taste is perhaps the book’s most distinctive contribution for leaders seeking to build brands, organizations, and lasting success.  Karlgaard breaks out that sensibility into function, form and finally meaning, indicating how all three must combine to create “an emotional engagement” or demonstrate “the significance and associations customers experience with a product” or service.  The resulting complex and well-integrated experience flies in the face of classical business ideas like building economies of scale, as he acknowledges, shifting focus from pursuing cost advantage over competition to delivering more substantially to customers.  Summing up this priority, Margit Wennmachers of Andreesen Horowitz is quoted to say, “taste is a matter of really understanding your customer on a very, very fundamental level.”

Using the example of Specialized Bicycle’s data analysis of wind resistance in designing high-performance bicycles, Karlgaard argues how leaders should seek to combine design, creativity and data for memorable experiences today.  One of the commendable features of The Soft Edge is its consistent attention to how the tools of the digital age and the knowledge production and management that makes those tools all the more important have altered the business landscape.  In fact, the book closes with a sustained discussion across the five values of how important is the collaboration of CMOs and CIOs for businesses to be successful amidst the increasing complexity of messaging and marketing platforms shaped by sensors, computers, and analytics.

Specifically how and when to apply the values of the soft edge, particularly in coordination with  each other and the elements of the other edges, is mostly not discussed here.  Nor is there an elaboration of the potentially distinct approaches to developing soft edge values and, again, their balance, with other core elements of lasting value, in different kinds of businesses, particularly creative ones.  Even at its most evocative, as in the closing call for leaders to operate in the “elusive sweet spot between data truth and human truth,” the book also leaves largely open the matter of how to work in that zone effectively.  More than once while reading, I hoped that a Soft Edge “Workbook” might soon appear to help leaders and others to take and implement the wealth of practically helpful thinking here.  (Several related tools, including a free self-assessment of individual leadership needs and opportunities related to the values of the soft edge, are available online at http://bit.ly/TJRWFg).

Yet even without additional guidance for implementation, the model of organizational success in The Soft Edge provides many useful spurs to those striving to improve their businesses.  Producing and sustaining high performance depends of striking the right balance of hard and soft skills in given settings and situations.  Karlgaard’s useful insights and varied business examples offer a valuable resource for leaders committed to thinking deeply about and engaging in their own organizations the too-often-neglected values of the soft edge.