Recommended Readings for Creative Leaders for Fall 2014

Thus far in 2014, we have seen at least two additions to the short bookshelf of essential readings for creative leaders: Pixar CEO Ed Catmull’s account (with Amy Wallace) of building and sustaining a successful creative culture, Creativity, Inc.: Overcoming the Unseen Forces that Stand in the Way of True Inspiration; and Harvard Business School Professor Linda A. Hill’s masterful guide to leading successful innovation across organizations, Collective Genius: The Art and Practice of Leading Innovation (written with Greg Brandeau, Kent Lineback, and Emily Truelove). Other recent highlights included Connected by Design: Seven Principles for Business Transformation through Functional Integration, the outstanding work about new ways to create value through brand ecosystems, by Barry Wacksman and Chris Stutzman of the legendary creative agency, R/GA; Stanford professors Robert I. Sutton and Huggy Rao’s major study of how to build up businesses successfully, Scaling Up Excellence: Getting to More Without Settling for Less; and Arianna Huffington’s manifesto for re-defining well-being, work and success, revisionist study of talent and creativity, Thrive: The Third Metric and Redefining Success and Creating a Life of Well-being, Wisdom, and Wonder.

The fall book season is now upon us and promises further new and relevant titles. These will include analyses of marketing, China, and Google, a handful of titles on innovation, ranging from practical implementation guides to a longer history, and, perhaps most far-reaching, reflections on the changes wrought by digital technologies to individuals and society. All contain insights valuable to the work and lives of creative leaders.

1) Ulrich Boser, The Leap: The Science of Trust and Why It Matters (Houghton Mifflin Harcourt/New Harvest, September 16)

Traveling from rural Rwanda to corporate America, and from paying taxes to using technology, Boser argues that individuals are hard-wired for trust and trustworthiness and that emphasizing and restoring trust can benefit us as humans as well as our institutions and communities.

2) Richard Branson, The Virgin Way: Everything I Know About Leadership (Penguin/Portfolio, September 9)

The iconic CEO and entrepreneur, already author of a best-selling autobiography and books on business, here describes his key leadership principles like good listening, keeping things simple, remaining iconoclastic, motivating people, and having fun along the way.

3) Nicholas Carr, The Glass Cage: Automation and Us (Norton, September 29)

Carr, the consistently trenchant analyst of technological change who wrote The Shallows: What the Internet is Doing to Our Brains, here offers a thoughtful and sometimes disturbing account, grounded in science and poetry alike, of the ways that our increasing reliance on technology is affecting our happiness and re-shaping our humanity.

4) Lawrence A. Cunningham, Berkshire Beyond Buffett: The Enduring Value of Values (Columbia Business School Publishing, October 21)

An extraordinary portrait of the fifty direct subsidiaries of Berkshire Hathaway, investment guru Warren Buffett’s $300 billion conglomerate, told through the companies’ distinct stories and the vital values like integrity, autonomy, entrepreneurship and a sense of permanence that they, and Buffett, share.

5) Tom Doctoroff, Twitter Is Not a Strategy: Remastering the Art of Brand Marketing (Palgrave MacMillan, November 11)

The Asia CEO of the J. Walter Thompson advertising agency, Doctoroff uses characteristic wit and decades of experience to take on the twin hypes of digital media and the China market and to offer insightful principles for successful customer engagement and integrated brand marketing.

6) Stewart D. Friedman, Leading the Life You Want: Skills for Integrating Work and Life (Harvard Business Review Press, October 7)

Wharton professor Friedman, building on his excellent study, Total Leadership, uses examples ranging from Sheryl Sandberg to Bruce Springsteen to move from familiar calls to balance competing work and life commitments toward taking steps, instead, to integrate our passions and values across the domains of work, home, community, and the private self.

7) Nathan Furr and Jeff Dyer, The Innovator’s Method: Bringing the Lean Startup into Your Organization (Harvard Business Review Press, September 9)

How can business leaders better manage the uncertainty intrinsic to prototyping and experimentation? Picking up from Dyer’s bestselling guide to generating ideas, The Innovator’s DNA (written with Hal Gregersen and Clay Christensen), this new volume focuses on proven techniques that allow start-ups and established firms to commercialize ideas successfully.

8) Walter Isaacson, The Innovators: How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution (Simon & Schuster, October 7)

Isaacson, the biographer of Ben Franklin, Albert Einstein, and most recently, Steve Jobs, has penned a sweeping history of digital technologies, the computer and internet, beginning in the mid-nineteenth century, with Lord Byron’s daughter, and tracing the innovative thinking, creative leadership and energetic collaboration to the present day.  

9) Langdon Morris, Moses Ma and Po Chi Wu, Agile Innovation: The Revolutionary Approach to Accelerate Success, Inspire Engagement, and Ignite Creativity Hardcover (Wiley, September 22)

Two leading innovation thinkers and consultants (Morris and Ma) and an engineering professor (Wu) have written an excellent (and overdue) guide to how agile techniques, like process acceleration, risk management, and fuller team engagement, have fostered successful innovation for leading businesses and can be put into practice elsewhere.

10) Alexander Osterwalder, Yves Pigneur, Gregory Bernarda, Alan Smith, Value Proposition Design: How to Create Products and Services Customers Want (Wiley, October 20)

Using the same engaging visual approach as their groundbreaking Business Model Generation, which pioneered the business model canvas, Osterwalder et al focus on the most important of the canvas’ building blocks, the value proposition, and enable readers to work through seven key principles for better designing what matters to customers. 

11) Shaun Rein, The End of Copycat China: The Rise of Creativity, Innovation and Individualism in China (Wiley, October 20)

A leading consultant and commentator on the Chinese society and economy, and the author of The End of Cheap China, Rein analyzes current large-scale shifts in China from investment toward consumption, and from copying to innovation, that require a strategic re-thinking by investors and creative leaders doing (or wanting to do) business there.

12) Paul Roberts, The Impulse Society: America in the Age of Instant Gratification (Bloomsbury, September 2)

A troubling, cross-disciplinary account of how individual pursuits of consumption, pleasure, and immediate rewards, advanced by new technologies and compromised ethics, have evolved in a new and pervasive ‘culture of narcissism’ — that journalist Roberts nevertheless closes on a hopeful note of how we can pull back and change.

13) Jonathan Rosenberg and Eric Schmidt, How Google Works (Grand Central/Business Plus, September 23).

Google’s former SVP of Products and ex-CEO reveal how the global tech company has grown by doing things differently, like hiring multitalented ‘smart creatives’ and leading with the recognition that ‘consensus requires dissension,’ in order to continually create new products and serve consumers in a fast-changing environment.

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. 

Saying 'Innovation' or 'Creativity' Is Not Enough

“What’s the opposite of innovation?,” the joke begins.  A tart punchline quickly follows: “Innovation consultants.”   

Since I teach, coach and sometimes consult on innovation and creative leadership, that cynical joke gives me pause.  Consultants of all kinds are easy marks, of course, whether they are from well-known global firms or one-person shops.  But it is innovation, as an idea and, increasingly, the basis of a cottage industry for consulting, advising, coaching and even counseling, that is the real target here.

Isn’t innovation good, though?, we ask.  Doesn’t thinking, designing, building and leading for innovation enable firms of all kinds to create and capture value?  Doesn’t imaginative collaboration, teaming, and organizing lead to breakthroughs that can transform businesses, industries and even markets?  Doesn’t innovation ultimately benefit individuals by encouraging and nurturing self-awareness, empathy, courage, and growth – human values that help contribute to personal fulfillment?

All true.  Yet that very sweep and sprawl of meanings is part of the problem.  Innovation is everywhere, from social and political agendas and corporate mission and vision statements to strategic positioning and brand marketing priorities to team charters and individual performance goals.  Likewise, creativity, often in adjectival form, has become a necessary qualifier for nearly all aspects of management and operations: leadership, strategy, talent management, organizational design, customer or client relationships, collaboration, and teamwork.  Even creative accounting has become a worthy aspiration (just not “too” creative…).

The expanded usage, to be sure, reflects some far-reaching and very real economic and historical shifts that have recently foregrounded aspects of creativity and innovation for individuals, firms and larger economies.  I myself often assert that “creativity is the new normal” to underscore the unprecedented opportunities, even necessities, facing businesses in a world where technology is transforming old and new industries alike.  My question here is whether the words themselves, asked to say so much in their varied and continual usage, increasingly end up saying little or nothing at all. 

There is no shortage of models, frameworks and typologies attempting to break out and define more precise and different meanings.  Classic distinctions of “innovation,” many well-drawn by some of our most astute observers and analysts of business and management, tend to delve deeply into specific areas.  We might think here of Clayton Christensen on disruptive innovation, Gary Hamel on management innovation, and Vijay Govindarajan on reverse innovation.  And so many other qualifiers of the word have become commonplace: incremental, radical, architectural, modular, technological, knowledge, product, process and so on.  Much more typically, though, both “innovation” and “creativity” are used generically by firms themselves, consultancies, the popular and business press, the blogosphere, and even some academic research to burnish a diverse but finally vague range of insights, tools and management practices.

Having an excess of overlapping and alternative tools and models is fine, of course, for leaders on the ground who use them to gain greater insights about, or to address directly, specific situations.  That assumes, however, a thorough familiarity with these different innovative approaches and how (or, more fundamentally, if) to apply them usefully to those specific situations.  Here we might return to the question of innovation consultants.  What is the precise form of expertise they offer?  Launching start-ups based on original ideas, developing new products or services for established firms, redesigning work processes, nurturing creative people or cultures, re-drawing business models?  Maybe all of those.  Or maybe none.  The challenge is finding the right fit of specific capabilities and experience from the growing constellation of offerings made using the same terms.

How did our usage of “innovation” and “creativity” spiral out of control?  From recent history, we might start looking in the 1980s-1990s.  The redefinition of creative work, industries and economies, began then in the UK and was furthered elsewhere by analysts like Richard Florida, who repositioned creativity as a driving force in the (re-)development of cities, societies and economies.  More generally at the same time, though hearkening back to the early 20^th century writings of Joseph Schumpeter, a doctrine of “innovation economics” emerged in the work of a diverse group of theorists and analysts to argue that knowledge, innovation and entrepreneurship are not outliers but essential to economic growth and productivity. 

Yet probably nothing has had as great an impact as the profound developments that have occurred in Silicon Valley (and the larger technology economy to which it has been central).  Combining a mythology of individual ingenuity, a culture of business entrepreneurship, and a demonstrated potential for world-changing invention, Silicon Valley has become a vital source for popular and corporate imaginings of creativity and innovation.  Even as the technologies produced there have transformed lives, societies and economies around the world, the thinking and language of openness, risk-taking, start-ups, and innovation has spread as far.

Amidst the concern that tech firms are in the midst of another financial bubble, with unjustifiably high market valuations potentially ready to burst, I see another Silicon Valley bubble in play.  It involves the inflation of certain ways of thinking and talking about innovation that originated in and around tech firms.  This language bubble, or what we might otherwise see as an internally-referencing echo chamber, grows through a continuing series of blogposts, websites, magazine articles, and books that largely re-package the same practices, policies and behaviors as being conducive to innovation and creativity.

What would Google do?, we ask.  A loose grouping of ideas and beliefs and leading practices have come increasingly to represent current thinking about how all organizations, regardless of industry or market, can best cultivate innovative and creative work.  Much of this is enormously positive, both fulfilling for people and productive for organizations.  In the process, the larger popular and practical discourse around Silicon Valley-style innovation has grown and grown.  One consequence is what Bill O’Connor, of Autodesk, calls “innovation pornography,” in which too many people become voyeurs, rapturously watching others innovate without doing so themselves.  Another is the myth that creativity and original thinking can solve any problem or develop an idea the world will eventually embrace. 

While I do believe fully in that problem-solving and even society-transforming potential, my point is that the generic superpower of creativity or innovation will not be the force to do so.  Rather, it is by understanding how creativity and innovation, even with all their inherent messiness, disorder, and indirectness, need specific situations and contexts in order to flourish and effect meaningful change.  Innovation and creativity, writ large and generic, are not strategic silver bullets.

A challenge I regularly pose to executives is to ask themselves “the follow-up question” about key words they use to characterize themselves or their firms.  So once they’ve identified their core values, for example, they need to probe more deeply what those values mean to them and the situations in which they’re working.  Trust, growth, inspiration, and purpose are all admirable values.  Yet they can mean very different things to different people and in different leadership situations.  What do those words mean to you, I ask, and why are they so important?  Innovation and creativity, I contend, warrant the same depth of reflection and elaboration.

To begin, you might ask yourself such questions as:

·      What are your benchmarks or examples when you speak of innovation? How relevant are they to your existing situation – and your people, culture, industry, market(s), and customers?  Even the most inspiring general cases of innovation – think of Edison’s light bulb, the Manhattan Project, or the pirates at Apple who developed the Macintosh – may have no relevance to the innovation that’s right for you, now.  Choose your examples, the stars that guide you, wisely and appropriately.

·      Going further, which examples of successful innovation and creative work outside of Silicon Valley (especially the usual suspects like Apple, Google, and Facebook) do you reference and seek to emulate?  While there’s much to admire, learn and adopt from the tech firms that have over the last two decades been so successful, their policies and practices may not be directly helpful to firms of various sizes across industries and at different stages of growth.  Instructive examples are everywhere.  To wit, I recently worked with the leader of a tech start-up whose breakthrough thinking emerged, counter-intuitively, from the practices of a century-old manufacturing firm.

·      And if you’re in an established firm, how many of your benchmarks come from start-ups?  Yes, you can and should likewise learn and draw from the approaches and actions of entrepreneurial start-ups, and elements of models like Eric Ries’ Lean Start-Up, but only if they’re applicable to and align with your own specific goals.

·      Is your entire organization, from people and performance metrics to strategic goals and resource allocation, guided by the same fuller understanding of innovation – that is, what you’re pursuing together, how, and why?  Managing the language of innovation requires both thoughtful consideration and development across organizations and ongoing effective communication.  The only leadership work harder than creating a collective vision for organizational innovation is sustaining the shared understanding and motivation that will enable its successful execution. 

·      Once you’ve developed your own fuller understanding of what you mean when you say innovation, ask if this is the innovation you and your team unit or firm really need.  All leaders need to forge the future and all organizations need to change.  The question is how best to do so.  Aligning specific kinds of innovation with individual organizational needs, capabilities and situations requires careful effort but is crucial.

This isn’t just an academic exercise.  Thoughtful leaders have long recognized the value of auditing their current innovation or creativity activities, needs and capabilities.  As time has passed and both words have been used more and more, it also seems increasingly useful to conduct an innovation and creativity language audit.  What do you mean when you say that innovation is a core value or a strategic priority?  What does specifying creative talent development mean for the shape and orientation of a HR processes or organizational learning?  More generally, how does innovation or creativity practically differentiate decisions, behaviors and results?

More than five decades ago, Theodore Levitt wrote “Creativity Is Not Enough,” one of the most famous articles in the history of marketing management.  Today, the words of his title arguably resonate in distinct ways.  The ubiquity of “innovation” and “creativity” in the language of business and management is threatening to empty them of meaning.  Increasingly, neither is sufficient to convey the vision, inspiration, newness, value, and strategy that drive a given leader, unit or firm.  

How do we change that?  One use at a time.  By doing the hard work of understanding and clarifying the newness, utility, value and change that we really envision and seek in specific situations.  Each of us needs to help take back the power of the words.  Next time you say or write “innovation” or “creativity,” pause.  How would you qualify those key words?  Or how else, beyond using placeholders, would you make your point?   Most simply, what do you really mean when you say and act on “innovation” or creativity” – and are you making that important meaning clear to others?

Ten Lessons of Start-ups for Established Businesses

The Berlin School of Creative Leadership is traveling this month to the Bay Area in Northern California for the second week of the U.S. residency of its Executive MBA program.  Among the key topics orienting the week are innovation, agile leadership, and effective, entrepreneurial and ethical teamwork.  Overall, for already experienced leaders of creative communications firms, the week offers an opportunity for immersion in an atmosphere of entrepreneurship and innovative start-ups.  It consequently prompts a crucial question for many creative leaders, What are the lessons of start-ups and early-stage entrepreneurial businesses for more established firms?

An undeniable romance surrounds start-ups and entrepreneurship.  The prospect of building something entirely new, of developing an original idea and implementing it successfully in the market, is alluring.  Even viewed more prosaically, such an extended process of risk-taking in order to create new value and build a successful business, is exciting. Established firms are, by contrast, fraught with a host of messy, pre-existing practicalities. They already contain some version of all the elements, from products or services and strategy to talent, organizational structures and cultures, and leadership that many entrepreneurs dream of instituting anew.

Of course, the distinction is hardly so sharp. In Silicon Valley in 2014, amidst the continuing percolation of entrepreneurial energy and effort, part of what’s most fascinating to consider is how relatively recent start-ups have grown rapidly into large, established firms.  In only 10 or 15 years, in some cases, companies have become among the largest, best-known companies on the planet.  For example, Google, which the Berlin School will be visiting, was incorporated in 1997 and now has more than 46,000 employees.  Increasingly for these still relatively young firms grown, the challenge is how to sustain that early energy and avoid the loss of entrepreneurial spirit.

Older firms, too, have sought to embrace the principles and tools of start-ups as means to becoming more innovative. In a recent LinkedIn post, Beth Comstock, CMO of GE, discusses her experience at one of the world’s largest corporations. She opens by saying that she and her colleagues consider their efforts “to act small even if we’re big…as the biggest implementation of Lean Startup principles on earth.” Comstock then offers four key learnings from the company’s recent past:

·      Simplicity is the key

·      We have to work fast

·      We don’t have all the answers, but you might

·      Uncertainty is okay

The objective, shewrites, is to find constructive ways to be “constantly tinkering with our business models to get leaner and more agile and to get closer to our customers.”

(www.linkedin.com/today/post/article/20131210134205-19748378-we-ve-learned-these-four-lessons-from-startups-and-we-re-using-them-to-transform-ge?trk=vsrp_people_res_infl_post).

Comstock’s reference is to the LeanStartup methodology developed by Eric Ries and among the most influential operating today.  Lean is, for Ries, a management process tailored for accelerated new product development and, especially, delivery to customers. “Startups exist not to make stuff, make money, or serve customers,” he has said.  “They exist to learn how to build a sustainable business. This learning can be validated scientifically, by running experiments that allow us to test each element of our vision.” Ries goes on to specify that,  “The unit of progress for Lean Startups is validated learning – a rigorous method for demonstrating progress when one is embedded in the soil of extreme uncertainty.”  Such priorities, as well as the following key principles of Lean, should resonate with leaders of established businesses seeking to prioritize learning, innovation and leadership at all levels of their firms:  

1.     Entrepreneurs are everywhere

2.     Entrepreneurship is management

3.     Validated Learning

4.     Innovation Accounting

5.     Build-Measure-Learn

(http://theleanstartup.com/principles) 

Ries’ priorities indeed arguably dovetail with some of the major elements of other recent and current approaches to change and strategic management in existing firms.  For instance, his imperative to model, measure and specially learn faster in Lean parallels the urgency of John Kotter’s renowned change model (http://www.kotterinternational.com/our-principles/changesteps). (There’s a fascinating study waiting to be written more generally comparing Ries’ Lean methodology to Kotter’s 8-step change model.)  Likewise, the faster pace and greater uncertainty of business and markets, and as a result the demand for the greater speed of effective strategic leadership, underpins Rita Gunther McGrath’s paradigm-shifting argument for “transient advantage” in The End of Competitive Advantage. 

Exactly that kind of parallel, combined with successful examples of existing companies like GE, allows us to identify principles and practices that are central to building start-ups and also potentially valuable to established firms seeking to build new businesses and gain new advantage. 

1. Speed

The essential argument of McGrath’s The End of Competitive Advantage, as just noted, is that a new, faster-paced marketplace places different demands upon individual businesses for success.  Her idea of “transient advantage” directly recognizes how the most competitive leadership and strategic response to these new conditions is speed (http://hbr.org/2013/06/transient-advantage/ar/2).  One of McGrath’s favorite examples is Milliken & Co., which transformed itself, through continuous strategic reassessment and reprioritization, from a company that “had been largely focused on textiles and chemicals through the 1960s, and advanced materials and flameproof products through the 1990s, had become a leader in specialty materials and high-IP specialty chemicals by the 2000s.”

2. Adaptability

R/GA, the legendary creative agency (which the Berlin School EMBA group will be visiting in New York the week before hitting the Bay Area), has re-invented itself every nine years since its founding in the mid-1970s.  This has meant ranging, always successfully, from computer-assisted filmmaking (1977-1985) to an integrated digital studio (2005-2012).  The regular willingness to reassess its place in the marketing universe demonstrates an extraordinary adaptability to rapidly changing environmental conditions and internal capabilities alike (http://www.rga.com/the-next-9-years/).    

3. Customer-centrism

Amazon’s commitment to service is renowned, from founder Jeff Bezos’s keeping an “empty chair” at board meetings as a reminder of the customer being in charge to the required annual call-center training required of all employees to maintain their humility and empathy (http://www.youtube.com/watch?v=56GFhr9r36Y). Such priorities of start-ups as gathering and working with customer feedback (increasingly data, as well) and getting products in customers’ hands faster and more easily should also be objectives for both existing and potential new businesses of established firms.

4. New business opportunities

Since its founding in 1997, Netflix has continually reinvented itself by exploring new business opportunities in the rapidly changing media and entertainment sector.  Such exploration has been driven both by competitive necessity and new technological and market possibilities.  Seeking to “revolutionize the way people watch TV shows and movies,” the company has repeatedly revised its business model to offer multiple services, often combining distinct offerings like streaming with DVD home delivery, and recently, with original programming in an effort to be “the world’s leading Internet television network”

http://www.businessweek.com/articles/2013-05-09/netflix-reed-hastings-survive-missteps-to-join-silicon-valleys-elite

5. New structures

Of the many changes needing to be made within existing businesses to become more entrepreneurial, organizational re-structuring and resource sharing are among the easiest to attempt and also the most difficult to get right.  These crucial changes need to be tied, as P&G’s Connect + Develop program has been, to core tenets of the organization’s culture and identity.  In building an open innovation platform and structuring a Global Business Development team around its complex global operations, P&G met its initial goal, in only four years, of having half its innovations fueled by external partnerships (http://www.pgconnectdevelop.com/home/pg_open_innovation.html).

6. New metrics and testing – particularly of existing talent

Most firms recognize the imperative to create aggressive and appropriate metrics for testing new product or service offerings – and, as the Lean Startup methodology would have it, embrace “validated learning.”  More challenging is the inclusion of existing talent in the process, particularly in ways that allow their skills to be re-directed to new projects.  In the December issue of Harvard Business Review, Professor David Garvin details “How Google Sold Its Engineers on Management” by making the company’s management assessment and talent development more systematic while retaining its humanity and eary-stage spirit of innovation (http://blogs.hbr.org/2013/12/this-is-what-it-looks-like-when-a-google-manager-gets-feedback/). 

7. Uncertainty is okay

“Navigating uncertainty is what defines entrepreneurship,” writes Beth Comstock.  At GE, she goes on, in the aforementioned LinkedIn post, “we’ve made it a point to protect some ideas from the pressures of developed operations. We have a class of internal start ups that need to be nurtured, like GE's Durathon battery, a green backup power source for cell phone towers in Africa that started life as a hybrid locomotive battery.”  Enabling those start ups with space, time and resources to develop, without any certainty of positive results, is crucial today.

8. Balancing new and existing, inventing and improving

In management terms, “ambidexterity” is the ability of firms to exploit existing, often mature markets and to explore new, often emerging ones simultaneously.  At the heart of established firms’ efforts to spur innovation, the challenge is how to allocate resources to strike an appropriate balance between these two often conflicting strategic directions.  Harvard’s Michael Tushman has incisively analyzed the more than decade-long successful efforts at IBM to grow new businesses like Pervasive Computing, which allows mobile workers greater access to data and supports M(mobile)-commerce (http://blogs.hbr.org/2012/07/exploring-and-exploiting-growt/).

9. Top leadership buy-in

In March 2013, one of the world’s successful media companies, Axel Springer, sent its top executives (flying economy-class and then sharing rooms in a two-star hotel) to Silicon Valley to learn the language of digital entrepreneurship.  The results included their setting up their own garage for innovation (!) and, more substantively, returning to Germany where they became roles models and drivers of change within their company (http://www.inma.org/blogs/media-entrepreneur/post.cfm/finding-common-ground-with-digital-nerds-in-silicon-valley).

10. Simplicity pays

Annually for the last four years, the strategic branding firm Siegel+Gale has ranked global brands for simplicity (http://simplicity.siegelgale.com/2013/). The European-based discount supermarket brand, ALDI, ranked as the #1 global brand in 2013. Despite being far-flung with more than 9,000 stores worldwide and a brand that “focuses on the essentials, no matter what city,” ALDI’s good-value-for-the-money reputation has adapted to thrive before, during and since the economic crisis.  Beyond serving customers, however, Siegel+Gale’s research shows how innovation within a firm like ALDI is served by the greater clarity of shared purpose and goals accompanying brand simplicity.

All these lessons should inform the decisions and behaviors of two central actors in any established firm wanting to be more entrepreneurial and act more like a start-up.  The first actor is existing talent.  While unavoidable that organizational transformations often require the hard, if hopefully mutual, realization that formerly valuable talent no longer fit in new priorities and plans, the participation of current workers in any entrepreneurial venture is vital for its success.  Some talent will obviously be more directly involved in such efforts than others, but all need to recognize the shared purpose. 

The other actors, of course, are leaders.  Some of the lessons here, like adaptability or uncertainty or senior leadership buy-in, explicitly reference the demands (and opportunities) of leadership.  Yet several key principles and practices of start-ups, like Ries’ “entrepreneurship is everywhere” and “entrepreneurship is management” accord well with the more generally valuable precept that leaders, in existing firms, especially, are defined by what they do rather than by where they sit or the titles they hold.  In the end, at the heart of established firms should be leaders seeking, like their counterparts in start-ups, to grow business faster, serve customers better, transform existing markets and make inroads into new ones, and creatively sustain the elusive spirit of ongoing innovation.

The Stories We Tell

My first reaction upon viewing Martin Scorsese’s new film, The Wolf of Wall Street, was how closely it resembled Goodfellas, the director’s masterful account of mob informant Henry Hill’s life in organized crime.  Like that historical snapshot of the American Dream colorfully run off the rails, the new film tracks the wanton greed and excessive personal behaviors of Jordan Belfort (played by Leonardo DiCaprio) during the 1990s.  Belfort made tens of millions of dollars selling “penny stocks” and manipulating the stock market through his firm, Stratton Oakmont, before being convicted of securities fraud and money laundering.

While the Goodfellas parallel, in particular, urges Scorsese’s current production to be viewed as a cautionary tale of unbridled Capitalism, what else the film says about “Wall Street” or contemporary business and markets – what more specific stories it may be telling about them – is less clearcut.  In a characteristically incisive New York Times column, Joe Nocera asks exactly that question about the film’s larger message regarding business.  Commenting on Scorsese’s relentless preoccupation with his protagonists’ sexual obsessions and drug use (rather than, say, the specifics of Belfort’s fraudulent trading activities), Nocera concludes that, “to use Stratton Oakmont to represent Wall Street doesn’t begin to get at Wall Street’s sins.”    

Yet Nocera’s question touches on the more fundamental matter of how we tell meaningful stories either about specific businesses or business activities.  Typically, of course, as in the film’s preoccupation with the dissipated indulgences of DiCaprio’s Belfort, we tend to focus on individual leaders and their actions.  Consider a few of the prevailing narratives of business today: the visionary entrepreneur, the rapacious exploiter, or the small businessman at the heart of the economy.  Some corporations do acquire a collective identity that shapes their stories – Enron as the hubristic “smartest guys in the room” or Goldman Sachs as a “great vampire squid” – but they are exceptions. 

In Hollywood and, arguably, the wider popular imagination alike, there’s a further need to simplify and dramatize the activities of business like stock trading.  At one point in The Wolf of Wall Street’s occasional voiceover, in fact, DiCaprio’s Belfort begins to describe the specifics of his trading activities only to acknowledge they don’t really matter to the audience and stops.  Moreover, any connection in the film between Stratton Oakmont’s actual dealings in the 1990’s and the ethics of big Wall Street firms’ early trafficking of Collateralized Debt Obligations (CDOs) becomes speculative, at best, as the film’s story increasingly dwells on Belfort’s own spiraling out of control.  The complexity of such activities and any ethical or legal claims to be made about them, much like the operations of other financial entities like hedge funds or private equity firms, make them difficult if not impossible to render meaningfully in dramatic stories.  It should give us pause in thinking about how we characterize the activities, and differentiators, of our own businesses in the stories we tell of them.

Formal business education regularly addresses the challenge of telling business stories.  The case method thus often requires that firms, their constituent units and leaders, be analyzed closely.  Cases can obviously be structured in different ways, but the most typical approaches rely on carefully drawn narratives: decision-making cases confront the protagonist (and students) with a decision freighted with the complexity of preceding events, for example, while best practice cases present the emergence of those practices through a particular sequence of decisions and events.  Harvard Business cases often go so far as to intentionally scramble the elements of business narratives in order for students to have to make sense of them.  Dexterous re-construction of the full story becomes the touchstone for analysis and learning – while also modeling the valuable skill of producing coherent stories from the disparate facts and other pieces of information found in everyday life.

More broadly, the stories of business organizations that circulate externally cannot but help shape the wider understanding of those organizations (regardless of their accuracy).  Marketers in this way rely on narratives to construct and differentiate the status of company (or its constituent product) brands.  As media and entertainment mogul Peter Guber makes clear in his bestselling Tell to Win, the value of stories is the “emotional transportation” they offer customers or clients.  That “transportation” may lead to very different ends, of escape or transformation or even-self discovery, but it is ultimately borne on the wings of compelling stories that touch our hearts as customers, partners, or collaborators.

Internal to businesses, narratives, what some call “organizational scripts,” can spell out the distinctive and locally appropriate behaviors to be performed in various situations.  Some of these are “origin stories,” of founders’ decisions or critical events, while others capture the defining ways the business organizations manage change, solve problems or otherwise collectively behave.  Still other stories are aspirational and define the organization according to the future it envisions (for example, in Google’s case, having all the world’s information organized).  In fact, the most influential organizational stories are often those that describe where individual workers want to go together and how they aim to get there. 

At the center of such scripting and storytelling are leaders.  In their Animal Spirits, which argues that humans are hard-wired to organize information and experience into narratives, Nobel Laureates George Akerlof and Robert J. Shiller noted that, “Great leaders are foremost creators of stories.”  Creators, yes, but also evangelists, translators, exemplars and finally guardians of the organizational DNA organized into and relayed through stories.

Like all genetic influences, however, the core elements of given stories of organizations and business activities only go so far in shaping their eventual impact.  Ever-changing environmental dynamics, say, of shifting markets, require that stories be continually refined.  In his conclusion to The Leader’s Guide to Storytelling, Stephen Denning makes the crucial point that narrative elements and techniques should ultimately serve as the basis of connection and communication with employees and customers.  Rather than being self-contained and complete, in other words, stories should convey essential truths about the business they describe while still having rough edges and opening out to continuing interaction.  Although that doesn’t necessarily work in Hollywood’s scripts and productions, such openness and adaptability in meaningful storytelling about organizations and business activities are among the paramount responsibilities – and most powerful opportunities – of real leadership.