Leadership Caffeine for the Week of March 22, 2009

This week’s focus is on innovation.

It’s time to head back to work and jump-start your innovation-machine. While we all pursue creativity in different ways, mine always starts with a great cup of coffee.

Speaking of innovation, some of my best pots of coffee come from “custom blends” that are nothing more than the last few beans from several different varieties.  While purists might cringe, I smile as I sip the always unique, often great but unfortunately unreproducible output.  In your case, we are seeking similar results…something that surprises and delights customers, but of course, we want the output to be reproducible.

One of the great things about my view on innovation is that it’s not the sole domain of the engineers, researchers and technologists.  My definition of innovation might invite a bit of controversy, but it allows me to extend it to everyone and every function in an organization.  There are no boundaries that limit where innovation can take place.

An “Operational” Definition of Innovation and the 3 Leadership Conditions:

Innovation: creating incremental positive value for the firm by solving vexing problems with unique and reproducible approaches.

Easy to say, but the real issue is getting an entire team or organization thinking in those terms.  This does not happen with the flip of a switch, but rather is the direct result of your leadership practices.

The Three Fundamental Leadership Conditions for Innovation.

1.  You as a leader must have high personal credibility.  If you lack credibility, no amount of cajoling, cheerleading, imploring or dictating will matter.  People do not innovate on command.

2.  An effective working environment is essential.  The process of innovating requires people to expose radical and sometimes outlandish ideas.  People will only put themselves at risk in an environment where they feel safe. 

3. Good team chemistry and problem-solving experience enable innovation.  Groups that enjoy working together and have experience in tackling and solving tough problems are capable of remarkable things.  Getting a team to this level is of course your challenge.

–

Take the three conditions, add in a good crisis or a unique set of opportunities and shake vigorously, and you’ve got the ideal situation for innovation to occur. 

We are living in a target rich environment right now, and whether your firm is focusing on survival, sustaining or seizing opportunities, developing a spirit of innovation is critical.  Use this concept to help drive fear out of the workplace

Some managers look at their more administrative or infrastructure focused teams and functions and discount their ability to innovate.  I’ll push back on that self-limiting view of the world. 

I’ve seen remarkable innovations come from marketing organizations, sales teams, IT groups and support departments.  In all cases, these groups responded to a crisis or a challenge by working together to do things like cut costs, increase revenues, outflank competitors, improve service to customers, drive more leads etc.

If you’ve got conditions 1 and 2 covered (credibility and working environment), but your team is not used to thinking and acting on innovation, you may need to prime the pump. 

• Find a common cause or vexing issue, ideally focused on serving internal or external customers.  The more you can link the vexing issue to serving customers, beating competitors or enabling another team to deliver on those goals, the more interesting it will be for your team to pursue.

• Not all teams know how to problem-solve.  Teach your team to brainstorm.  You may not be the right person to facilitate, so bring in someone from another group or from outside and get out of the way so that people are not encumbered by your presence.

• Ensure that the team moves from brainstorming to selection and implementation planning in an orderly fashion.  Some groups go into brainstorm mode and never come out.

• As leader, support the implementation of ideas by knocking down obstacles.

Not every innovation attempt succeeds.  Foster a learning culture where failures are leveraged to identify improvements.  When you do succeed, make certain to identify why things worked and encourage people to do more.

The Bottom-Line:

The faster you get people focused on problem-solving and in the mindset of “seizing opportunities,” the more effective you will be at pushing fear out the door in favor of value creating activities.  It’s time to push the “GO” button on your innovation machine. 

Inspiration and Hope: Encouraging Sound Bites in a Challenging World

There’s enough negative going around.  Here’s a few worth reading that will leave you thinking and maybe even feeling a bit more upbeat.

I’ll Have Fries with that Strategy and Please Pass the Data

Students of strategy and performance excellence might want to take a closer look at how McDonald’s is using leadership, strategy, customer relations and information to successfully beat back the economic doldrums.

I’ve found it easy to ignore this nearly ubiquitous chain as our family has moved a good decade beyond the Happy Meal phase and as I’ve concluded that my calorie quota cannot afford anything in this class of restaurants.

However, a recent piece in the Wall Street Journal, entitled: McDonald’s Seeks Ways to Keep Sizzling,” has renewed my interest.  The article offers some good insights into doing things right at a time when most competitors are struggling with shrinking consumer purchasing power. 

Highlights:

• A senior leadership culture that overtly emphasizes finding good people and providing them room to do their thing, the article showcases.

• The firm’s bold and disruptive (to Starbucks) push into coffee.

• A relentless focus on cutting operating costs by improving efficiency without adversely impacting quality and customer perceived value.

• Investments in new store infrastructure at a time when most might hold off. 

• Effective use of the system-wide investment in automation for business and consumer intelligence to grab data, monitor operations and trends and make appropriate merchandising and cost decisions in near real-time.

Regardless of whether your business involved food of the fast variety (McDonald’s prefers to call it Quick Service), there are some great “nuggets” for you in how this global giant is navigating the downturn. 

Oh, I might just have to stop by and see if the rumors of good coffee are true. 

– 

Innovation Please:

For an extended dose of hope and encouragement, check out the March issue of Fast Company, where the focus is on the world’s most innovative companies. 

I love editor Robert Safian’s “One Hundred and Fifty Nine Reasons (pages) to Cheer” theme and his observation that: “the one incontrovertible truth about this era: only creativity and aggressive innovation in the face of hardship and layoffs and seriously tough choices will fuel a turnaround.”  While I might call that “effective leadership,” I won’t quibble with Mr. Safian’s conclusion. 

My advice, read this one in small sound-bites on a daily basis and let the ideas and examples of the many innovative companies sink-in, rattle around and prompt some thoughts of your own. 

Articles ranging from new product development to fresh perspectives on emerging markets as innovation incubators and the art of setting of modest goals are just a few of the many great and thought-provoking reads here. While it is easy to grow weary of “list” type articles, there are just too many good examples to ignore.

On a side note, I’ve enjoyed Fast Company since its inception in the dot.com boom of the late 90’s, when every issue was jammed full of cutting edge articles and cutting edge ads.  It was cool (best word I can think of) to read and feel like you were a part of the Fast Company community, just like it is to be a part of the Apple community today.  While not attuned to the current financial status of this publication, given the times we are living in and the editorial focus on finding firms and people pushing the envelope, it might just be in vogue to be part of this community once again.

The Bottom Line: 

Take a note from the post today and spread some “can do” and “here’s how they are doing it” wisdom today.  Get people thinking “What if?” and then get them focused on talking and trying and creating.  Safian is right.  Creativity and innovation will fuel the turnaround.  If McDonald’s can get it, so can your firm. 

Leadership Caffeine for the Week of March 8, 2009

Welcome back for this week’s double-shot of leadership motivation.  The gray and wet Midwestern weekend is giving way to a promising new week and it’s time to get going. 

I’m brewing a pot of New Mexico’s award winning Pinon Coffee, courtesy of my sister-in law as just the cure for too much exposure to Sunday morning news shows. 

Can I pour you a cup?

I’m taking my leadership cues this week from Michael Beers, a Harvard Professor with a forthcoming book: High Commitment, High Performance: How to Build a Resilient Organization for Sustained Advantage.

While I’m not certain that a Harvard Professor is the first one that I seek out to help me lead my way out of a crisis, I like what he has to say.  Mr. Beer’s focus is on building high performance teams and organizations on the back of what he describes as high commitment leaders.

His Thoughts and My Comments:

-Prof. Beer:

“CEOs of High Commitment, High Performance (HCHP) companies think very differently about their employees.  They see them as an asset and care about them as people.  Consequently, they manage the downturn very differently.”

-Art’s Comment:

This fits nicely with last week’s post on Goleman’s research into social neuroscience (Smile, Your Mirror Neurons are Firing Everyone Up.)  In essence: the most effective leaders care about and pay attention to their employees.

-Prof. Beer:

“We’ve realized that the leader can be a limiting factor in a journey to transform an organization into a HCHP organization.”

-Art’s Comment:

Didn’t need too much expensive research to figure this one out.  Your leadership style and effectiveness are the governors on your team’s performance.  It’s you, not them.  What are you doing this week to help not hinder?

-Prof. Beer:

“These CEO’s (HCHP) operate from deep beliefs and values.  Their purpose is to leave a legacy of a great firm.”

-Art’s Comment:

Even if you’re not working for such an enlightened CEO, nothing is stopping you from operating and leading with your own deep, core beliefs and values and making certain that these come through in your dealings with your team. 

-Prof Beer:

“The journey to HCHP is not a straight line up. At various stages of the journey the company will face a crisis in performance. How that crisis is dealt with will determine the organization’s future HCHP trajectory.

Will the company liquidate its investment in high commitment culture and the talented people it took years to develop and impregnate with the company’s DNA? Or will the HCHP organization be able to negotiate the crisis without liquidating its social and human capital? These moments of truth define the organization’s future much more powerfully than speeches, appeals for better teamwork, and mission or value statements.”

The Bottom-line:

You have and will continue to face “moments of truth”  in the days and weeks ahead.  Instead of reacting, seize the remarkable opportunities in this environment to turn yourself into a High Commitment, High Performance Leader.  The formula is simple, although executing on it is not.

• Stay confident and upbeat, but skip the false enthusiasm.  No one will buy a Pollyannaish view of the world, but no one needs to see the boss sulking.

• Stay in front of your team members with company news and issues.  Don’t hide from bad news.  If there is a round of layoffs, double your visibility and outreach.

• Remember Beer’s advice that how you deal with the crisis now will determine your future trajectory.  Provide challenging opportunities for your top talent.  This is a target-rich environment for apprentice opportunities for your up and coming leaders.

• Set goals focused on helping clients and companies and work relentlessly on achieving those goals.  Provide constant feedback on progress; celebrate victories and leverage mistakes to strengthen team and individual learning.

• Work darn hard.  Get out of your comfortable desk chair and get out on the floor or into the market.  Better yet, get out and help your customers win.

–

OK, pour yourself just one more cup, jot down some action items and then get to work.  You can’t fix anything by staring at the screen!

For additional reading:

Uncompromising Leadership in Tough Times by Michael Beer in the Harvard Business School Working Knowledge newsletter. 

The Right Stuff: Sprinting Towards the Future

It’s easy to focus on the bad news.  Everyone’s talking about it.  We’re bombarded with news flashes and human disaster stories as the layoffs mount and the foreclosures climb.  And make no doubt about it, these are tough times, but let’s start giving some coverage to the firms, leaders and entrepreneurs that have turned off the news channels and are too busy building or rebuilding to worry about the dire forecasts.

For a good dose of “can do” spirit, get out of your office and go talk with some smart people working to strengthen, build or start businesses.  I’m doing just that as I work with a colleague to gain market feedback for a new business venture that we are considering. 

We’re talking with the best battle-hardened, seasoned executives and operators that we can find.  The type that would have no qualms telling us that our baby is ugly. So far, they’ve highlighted a few flaws, but no one is using the U-word.

The great by-product of these discussions is the insights we are gaining into people and firms and their approaches to working and building while too many other people preoccupy on failure. 

Here are a few themes of success we are hearing from people that are sprinting towards the future instead of hiding from the present:

-Savvy operators see opportunities to out execute their skittish competitors and are strengthening every part of their firm, from people to processes, and focusing on driving results that will translate to growth.  The lack of a rising tide is actually exciting to these operators.  It’s an opportunity to pick up talent, gain customers and gain market share that will fund future investment and growth. 

-The smart firms in the venture community have a new formula: build to sustain.  Instead of the traditional model which was buy low, pump up and sell high as quickly as possible, the smartest operators are embracing the new reality by backing their firms with the best experts that money can buy and those experts are helping the firms improve execution around core tasks like development, product management and marketing.  Instead of the former oversight & badger model, the venture firms are taking responsibility to support strengthening in areas that will create value for years to come. In the words of one leader, “this is hard work, but worth it.”  

-Other entrepreneurs see remarkable opportunities in the application of new technologies to helping people manage their lives. From the Trunk Club for Men that I am now a proud customer of, where technology meets, expertise, meets convenience for men’s fashions, to new devices and programs underway to help millions of people manage difficult health problems, the entrepreneurial spirit is alive and excited about the potential.

-In chatting with the great professionals at Construx , a leader in advancing best practices in software development effectiveness, one gets the impression that what they offer is more valuable and more in demand than ever.  Their recent announcement allocating 25% of the seats in their open-enrollment workshops at no-charge to unemployed developers is both a testament to the firm’s values (I’m a former customer and got to see these values first-hand) and a remarkable gesture to support the continuing education of industry professionals.  Face it, it’s also a brilliant way to strengthen people’s allegiance to the firm. No momentarily unemployed developer will ever forget Construx’s help.

 –

I like what I am seeing and hearing.  The focus on operational execution underscores the need to focus on procuring and strengthening talent. 

The “run to sustain” model takes into account the new formula for creating value…which is of course the same one as the old model that we keep forgetting in a “mania-a-decade” world.

The focus on looking at today’s crises and creating solutions to either eliminate or to help manage is just great business. 

Hey Leader, Your Baby is Ugly

I can’t complete this piece without looping back to the reality faced inside many firms.  I talk with and teach hundreds of great professionals through workshops and in classes and what I continue to hear is that YOU (leader) don’t get it.  The nightmare stories of poor execution, misalignment, missed opportunities and waste are coming from people that want to help and fix, not people that relish the opportunity to complain. 

Try listening to your people and then try freeing them up to save your skin before throwing them into the street.  If someone has to go, throw yourself out first.  Of course, you probably don’t have the courage to do that, so focus on my first suggestion.

The Bottom-line for now:

Next week I travel to The Data Warehouse Institute’s World Conference to deliver my workshop on Leadership for Technical Professionals.  The pre-enrollment numbers are great, and I view this as a sign that everyone…even the most creative and brilliant of our technical professionals are seeking opportunities to grow and contribute.  I’ll also be looking and listening for more signs of success.  While the storm in our economy is nasty, I like the forecast just a little bit more with every conversation.  

Redefining Your Industry Landscape in an Economic Hurricane

The good professionals at Booz&Co (publishers of Strategy+Business) joined the long list of organizations offering guidance on how to cope with the current economic uncertainties, in: Rethink Your Strategy: An Urgent Memo to the CEO.

A number of the recent articles I’ve reviewed offered a fair amount of board up the windows, grab the food and flashlights and head for cover type of advice.  Rethink Your Strategy offers just a bit of that along with a good deal of practical advice on reviewing your business portfolio, shedding bad businesses and remembering that R+D and Capital expenditures are more strategic than ever.

In an interesting article offering sound guidance, I particularly enjoyed the segment on anticipating your future industry structure.  This is a key strategic topic that merits a great deal of consideration in your organization.

“This downturn is a once-in-a-century opportunity to redefine your competitive position. If there are five main players in your industry today, should there be three tomorrow? What role should you play in the consolidation? Can and should you push a competitor to the brink? Alternatively, should you sell your business even though you may be a strong player? You need to create an industry road map and then decide where your position lies in the terrain.”

As companies teeter or plunge over the brink, you will be faced with a host of remarkable opportunities and complex decisions.  One of the greatest opportunities is for you to develop programs to capture the nervous customers of your competitors, who are most concerned about continuity in their supply/service chains.

A solid company with good financials, healthy R+D pipelines and good customer service track records should run, not walk to emphasize their strengths, their stability and their desire to welcome new clients.  While the marketers (of which I am one) will have many ideas on promoting your strength and stability, I encourage top executives to make calls on your competitor’s customers at the executive level and begin forging relationships that will improve their switching comfort.  When the time comes for this client to pull the trigger and fire your competitor, the personal contact will pay ample dividends.

If you have the misfortune of playing for one of the companies teetering on the brink, an option is to consider gaining help from your clients. In industries where switching costs are high and loyalty a factor (they are out there), it’s not unheard of for customers to band together to help support suppliers or at least key units of suppliers.  I’ve watched as customers in a heavily regulated industry actually banded together to save a software supplier.  While this is not an easy path to walk, it may merit exploration depending upon your situation.

The Bottom-Line for Now:

Spend part of your time examining opportunities in this time of crisis and chaos.  While it may sound heartless to prosper at another firm’s failure, I call it capitalism.  It’s much more fun and profitable to be on the side defining the new industry rules and structure.

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