Thinkers

III THINKERS

ISSN 2321-9297

www.thinkers.in

Henry Mintzberg Lifetime Achievement Award

The Best of

Management Thinkers LEADING IDEAS, INSIGHTS AND BEST PRACTICE FROM AROUND THE WORLD

www.thinkers50.com

Vol 1, Issue 4.

October - December 2015

THINKERS Magazine is now available in the following versions: Print: Get access to the print copy which will be delivered to your place. (Available only in India) Digital: Available on Magzter.

Editor-in-Chief AMIT KAPOOR

Single copy Price: $14.99 | `500

Designed By MediaGenies / Jasper Levi

Annual subscription Price: $45 | `1500 Subscription includes: In India, a copy of print magazine For international readers, access to digital version.

Publisher Institute for Competitiveness

Guest Editors STUART CRAINER & DES DEARLOVE

Editorial Board In alphabetical order ANURAG BATRA Chairman Business World JOAN BIGHAM Managing Director Global Solution Networks Executive Vice President Tapscott Group MANOJ KUMAR Managing Partner Hammurabi & Solomon NEERA VOHRA Program Coordinator Institute for Competitiveness

THINKERS, is a presentation of Thinkers50 India, which is about discussing new ideas, new thoughts, addressing challenging issues, forging new paths, and in the process creating an ever widening circle of thought leadership. Further, we seek to create synergies in the thought leadership space by integrating the online and offline experiences.

Thinkers50 India is a joint initiative of Institute for Competitiveness, India and Thinkers50.

Institute for Competitiveness, India is an international initiative centred in India, dedicated to enlarging and purposeful disseminating of the body of research and knowledge on competition and strategy. Institute for Competitiveness, India conducts and supports indigenous research, offers academic and executive courses, and provides advisory services to the Corporate and the Governments. The institute studies competition and its implications for company strategy; the competitiveness of nations, regions & cities and thus generates guidelines for businesses and those in governance; and suggests and provides solutions for socioeconomic problems.

Created in 2001 by Stuart Crainer and Des Dearlove, the Thinkers50 was the first-ever global ranking of management thinkers. In the intervening decade, the scope of Thinkers50 has broadened to include a range of activities that support its mission of identifying, ranking and sharing the best management thinking in the world. Today, Thinkers50 is widely recognized as the world’s definitive ranking of the top 50 business thinkers, and the T50 Distinguished Achievement Awards are widely regarded as the “Oscars of management thinking.”

The Best of

Management Thinkers

06 In Conversation with Henry Mintzberg In an interaction with Henry Mintzberg, to celebrate his receiving the Thinkers50 Lifetime Achievement Award we re-visit a classic Thinkers50 interview with the practical radical.

10 The Nature of Managerial Mintzberg

24 Best for Talent Which thinkers are shaking up the world of talent?

26 Change Comes from Within

By Marshall Goldsmith

By Des Dearlove & Stuart Crainer

Change can’t be dictated, demanded, or otherwise forced upon people. A man or woman has to whole-heartedly commit to change.

To celebrate Henry Mintzberg receiving the Thinkers50 Lifetime Achievement Award we take a look at his classic book: The Nature of Managerial Work.

28 In Conversation with Nilofer Merchant

12 Reinventing Capitalism How to harness capitalism as a force for good.

14 The Nature Of Strategic Planning

By Georgina Peters

Insights galore in Henry Mintzberg’s The Rise and Fall of Strategic Planning.

18 Tomorrow’s Thought Leaders Who are the thinkers likely to shape the future of management and business?

20 In Conversation with Linda Hill Proving intellectual leadership on the often fraught subject of leadership and its relationship to innovation is Linda Hill, the Wallace Brett Donham Professor of Business Administration at Harvard Business School.

Nilofer Merchant, Fellow, Martin Prosperity Institute, shares her view on how to create value in the social era.

34 Light Bulb Thinkers Which thinkers are setting the pace in innovation?

36 Is It Time To Put A Value On Leadership?

By Dave Ulrich

Dave Ulrich talks about his new book, The Leadership Capital Index: Realising the Market Value of Leadership wherein he draws on a useful metaphor for how to include, conceive,

3 THINKERS

and audit leadership in the assessment of firm value.

40 Strategy Masters Need strategic advice? Who should you turn to?

42 In conversation with Gianpiero Petriglieri Gianpiero Petriglieri, Associate Professor INSEAD, shares his views on leadership, adult development and experiential learning.

48 The Big Ideas Which are the breakthrough business ideas of our times?

50 Managing Up Without Sucking Up

By Whitney Johnson

Whitney Johnson’s straightforward steps to help the squeamish build a successful relationship with their superiors – without feeling manipulative.

54 Leading Lights Who are the agenda-setting thinkers on leadership?

56 Innovators Wear Cardigans

By Stuart Crainer & Des Dearlove

Innovation is not solely the preserve of desperately fashionable entrepreneurs in Silicon Valley. Sometimes it comes wearing a cardigan.

60 - 67 Big Ideas Ideas of thinkers from across the globe.

70 In conversation with Stew Friedman Stew Friedman, practice professor of management at Wharton, shares his views on leadership at the edge of town.

74 Digital thinking Which thinkers best make sense of the new digital reality?

76 In conversation with Lee Newman Lee Newman, Dean, IE School of Human Sciences and Technology, suggests a new approach to leadership designed to achieve behavioral advantage.

82 The Slow Lane

By Stuart Crainer

Stuart Crainer shares his experience of crossing the Atlantic on a 38 foot yatch.

84 The Circular Economy

By Mark Esposito, Terence Tse and Khaled Soufani The authors describe the steps for moving forward a circular economy.

90 Book Extract: The Base Of The Pyramid Promise An extract from Jack London’s latest book.

NOTE FROM EDITOR-IN-CHIEF This issue of Thinkers is about the celebration of ideas from the finest minds in the field of management.

We have articles, interviews, big ideas from Thinkers from across the spectrum who touch upon issues about strategy, leadership, social media, et al. I clearly see this as an issue that stands apart as a collectors issue reflecting on the ideas that would drive the future of management thinking. This issue is as well a precursor of things to come wherein we are taking the magazine, in print format with our partners, across the globe and in turn creating conversations that are deeper, meaningful and reaches more customers who are looking at quenching their thirst for knowledge. Also, I must mention that we are proud of our association with Thinkers50 to bring out the particular issue.

Regards, Amit Kapoor

GUEST EDITOR’S NOTE The State of Ideas Since 2001, every two years we have produced the Thinkers50 ranking of management thinkers. As the concept of the ranking and, now, the Thinkers50 Awards, has developed we have found ourselves spending more and more time on the project.

One of the attractions is that you get to meet and spend time with some truly brilliant, charismatic and plain interesting people. Over the years we have walked down a London street with Peter Drucker, visited Tom Peters’ Vermont farm, attended a cabinet meeting in Malaysia with one thinker, lost at tennis to another, and visited Barbizon with W Chan Kim. As the Thinkers50 has developed so, too, has the mix of thinkers we feature. Once it was largely male, pale and stale. Now, the thinkers we encounter are truly global in perspective, origin and experience. Progress can be measured in the changing make up of the ranking and of the thinkers we feature.

While it is easy to be seduced by the wiles and wisdom of the thinkers it is worth remembering that what the managers and organizations of the world consume is ideas. The ideas are the thing.

Increasingly, we see our job as being the curators of ideas; nurturing, examining and championing the very best ideas. We believe that ideas can, do and must change the world.

This issue of Thinkers, the magazine published by Thinkers50 India, exemplifies the range and power of ideas at the disposal of the managers of the world.

Regards, Stuart Crainer and Des Dearlove

6

IN CONVERSATION WITH HENRY MINTZBERG

by Des Dearlove & Stuart Crainer

In an interaction with Henry Mintzberg, to celebrate his receiving the Thinkers50 Lifetime Achievement Award we re-visit a classic Thinkers50 interview with the practical radical.

7

Mintzberg has also been a thorn in the side of traditional management education. What was radical 30 years ago is today coming into fashion.

Traditional MBA programs around the world are starting to adapt some of the radical ideas and methods of the International Masters in Practicing Management (IMPM) program which Mintzberg helped create. While traditional MBA programs stress learning about business, the IMPM program helps students learn how to manage — recognizing that students have as much to learn from each other as from the faculty.

Always ready with a different perspective on the work of management, his books include Strategy Safari: A Guided Tour Through the Wilds of Strategic Management and Why I Hate Flying: Tales for the Tormented Traveler. To learn more about Mintzberg, visit http://www. henrymintzberg.com.

In this interview from 2001, Mintzberg focuses on his iconoclastic views on strategy and other key management subjects….

You have been critical of formulaic, analysisdriven strategic planning. Why? Because analysis-driven strategic planning is little more than elaborating and operationalizing the strategies that companies already have. That’s not strategic thinking.

Why does the method fail?

Because it is predicated on three fatal pitfalls.

First is the assumption that discontinuities can be predicated. They can’t — at least they can’t with any real accuracy. Forecasting techniques are limited by the fact that they tend to assume that the future will resemble the past. There isn’t much that can be more fatal to an organization than that assumption.

The second pitfall?

Planners are detached from the reality of the organization. Planners have traditionally been

obsessed with gathering hard data on their industry, markets, and competitors. Soft data — networks of contacts, talking with customers, suppliers, and employees, using intuition and using the grapevine — have all but been ignored. To gain real understanding of an organization’s competitive situation, soft data needs to be dynamically integrated into the strategy process. While hard data may inform the intellect, it is largely soft data that generate wisdom. They may be difficult to “analyze,” but they are indispensable for synthesis, which is the key to strategy making.

“The world heads in different directions all the time; who knows which one will dominate. It is absolutely wrong to tell managers what is going to happen next.”

And the third?

The assumption that strategy making can be formalized. The left side of the brain has dominated strategy formulation with its emphasis on logic and analysis. Alternatives which do not fit into the pre determined structure are ignored. The right side of the brain needs to become part of the process with its emphasis on intuition and creativity. Planning by its very nature defines and preserves categories.

Creativity by its very nature creates categories or rearranges established ones. This is why strategic planning can neither provide creativity, nor deal with it when it emerges by other means. The real challenge in crafting strategy lies in detecting the subtle discontinuities that may undermine a business in the future. And for that there is no technique, no program, just a sharp mind in touch with the situation.

If you’re right, then the “golden age” of strategic planning and perhaps reengineering is over. If so, where is management headed?

I don’t like to play that game. Nobody can predict.

The world heads in different directions all the time; who knows which one will dominate. It is absolutely

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While most academics focus on how business should work, Henry Mintzberg has focused on how managers really work. His first book, The Nature of Managerial Work, was published in 1973 after being rejected by 15 publishers, and it has become a classic in the field.

8 “People think they are being trained as managers.

What kind of managers?

They learn to talk, not to listen. Management education should be based on experience. Managers cannot be made in vitro.” wrong to tell managers what is going to happen next.

Fair enough. How about MBA programs? As a long-standing critic, your comments have had important impacts in America and Europe. What is wrong with MBA programs?

MBA programs train the wrong people in the wrong ways for the wrong reasons. The MBAs are B-programs, business based — not A-programs, about administration (meaning management).

People think they are being trained as managers.

What kind of managers? They learn to talk, not to listen. Management education should be based on experience. Managers cannot be made in vitro.

In your examinations of managerial work, you found that managers did not do what they liked to think they do.

That’s right. I found that instead of spending time contemplating the long term, which is what managers often are assumed to be doing, managers were slaves to the moment, moving from task to task with every move dogged by another diversion, another call. The median time spent on any one issue was a mere nine minutes.

So, if managers aren’t continuously pondering the future, what are their roles?

Managers must perform at three broad levels:

informational, people, and action — all three both inside and outside their units. That is one demanding job.

We greatly enjoyed your book Why I Hate Flying. Can you tell us more about it?

It is a spoof on management looking at the management practices of airlines and airports from my experience. “Welcome aboard ladies and gentlemen, this is your author scribbling,” is the opening. At the beginning of each chapter there’s a piece on how the airline and airport experience relates to management. For example, it looks at how change management — “Change always comes first” is one of the lines — converts passengers from cattle into sardines; customer service means constantly interrupting passengers as they try to sleep; and customer loyalty means rewarding people so they fly on other airlines.

Whom would you pick as the most influential management thinker?

Peter Drucker had a lot of ideas; he was undoubtedly a great influence. But I would also name Herbert Simon. He is not very much talked about among the management community, but he had a deep influence on the issue of how the decisions of the manager are made. He changed the way of looking at organizations. In an historic perspective, I would name Frederick Taylor as the most influential. We still continue to practice Taylorism on a large scale.

If you go into a company, what is the most important question you ask?

No, I would ask no questions before I see, on the ground, with my own eyes, what is going on in the place — what it looks like, how it seems to work, who its people are, etc. I have done this often in consulting, and it has proved invaluable.

What questions would you like to ask the managers of the world?

Are you making the world a better place? Do the people who report to you think so?

10

THE NATURE OF

MANAGERIAL

MINTZBERG

by Des Dearlove & Stuart Crainer

To celebrate Henry Mintzberg receiving the Thinkers50 Lifetime Achievement Award we take a look at his first classic book: The Nature of Managerial Work.

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The reality largely went unexplored until Henry Mintzberg’s The Nature of Managerial Work published in 1973. Instead of accepting pat answers to perennial questions, Mintzberg went in search of the reality. He simply observed what a number of managers actually did. The resulting book blew away the managerial mystique.

Instead of spending time contemplating the longterm, Mintzberg found that managers were slaves to the moment, moving from task to task with every move dogged by another diversion, another call. The median time spent on any one issue was a mere nine minutes. In The Nature of Managerial Work, Mintzberg identifies the characteristics of the manager at work: • • • • • •

performs a great quantity of work at an unrelenting pace undertakes activities marked by variety, brevity and fragmentation has a preference for issues which are current, specific and non-routine prefers verbal rather than written means of communication acts within a web of internal and external contacts is subject to heavy constraints but can exert some control over the work.

From these observations, Mintzberg identified the manager’s ‘work roles’ as: Interpersonal roles Figurehead: representing the organization/unit to outsiders Leader: motivating subordinates, unifying effort Liaiser: maintaining lateral contacts

Instead of spending time contemplating the longterm, Mintzberg found that managers were slaves to the moment, moving from task to task with every move dogged by another diversion, another call.

Informational roles Monitor: of information flows Disseminator: of information to subordinates Spokesman: transmission of information to outsiders Decisional roles Entrepreneur: initiator and designer of change Disturbance handler: handling non-routine events Resource allocator: deciding who gets what and who will do what Negotiator: negotiating.

‘All managerial work encompasses these roles, but the prominence of each role varies in different managerial jobs,’ writes Mintzberg.

Says Gary Hamel: “Five reasons I like Henry Mintzberg: He is a world class iconoclast. He loves the messy world of real companies (see The Nature of Managerial Work). He is a master storyteller. He is conceptual and pragmatic. He doesn’t believe in easy answers.”

Strangely, The Nature of Managerial Work has produced few worthwhile imitators. Researchers appear content to rely on neat case studies filled with retrospective wisdom and which are outdated as soon as they are written; or general interviews in which managers pontificate generally without being tied down to particulars. The actual work of managing enterprises often goes unnoticed behind the fashion and hyperbole. Pity.

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What managers actually do, how they do it and why, are fundamental questions. There are a number of generally accepted answers. Managers have a vision of themselves -- which they largely persist in believing and propagating -- that they sit in solitude contemplating the great strategic issues of the day; that they make time to reach the best decisions and that their meetings are highpowered, concentrating on the meta-narrative rather than the nitty-gritty.

REINVENTING CAPITALISM

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Thinkers50 selection of the best commentators and thinkers on how to harness capitalism as a force for good.

13 Charles Hampden-Turner and Fons Trompenaars Long-term Anglo-Dutch writing duo provide new visions for the future of capitalism in new book Nine Visions of Capitalism (Infinite Ideas, 2015) based on unlocking the true meaning of wealth creation. Lots of reinventing capitalism ideas, but this is the most coherent.

Vicky Colbert Co-creator of the Escuela Nueva (New School) pedagogical model, adopted by Colombia’s Ministry of Education and now in 16 countries.

Pamela Hartigan Director of Skoll Centre for Social Entrepreneurship at Saïd Business School; managing director of the Schwab Foundation for Social Entrepreneurship; and co-author The Power of Unreasonable People (HBR, 2011).

Bill Drayton Founder and CEO of Ashoka, a non-profit organization dedicated to finding and fostering social entrepreneurs worldwide.

John Elkington Founding partner and executive chairman of Volans; and cofounder of Sustainability.

Co-author of The Power of Unreasonable People (Harvard, 2011). Fast Company blogger and originator of Triple Bottom Line concept.

Mark Esposito Professor at Grenoble Graduate School of Business, France.

Founding director of the LabCenter for Competitiveness and teaches at Harvard University.

Esposito has worked on the topic of creation of prosperity and sustainable business practices.

Paul Farmer Harvard professor and author of To Repair the World (University of California Press, 2013).

Rebecca Henderson Professor at Harvard University, research fellow at National Bureau of Economic Research, joint editor of Leading Sustainable Change (OUP, 2015), leads ‘Reinventing capitalism’ course at Harvard Business School, and HBR blogger.

Leila Janah Social entrepreneur, founder of the Sama Group, a family of impact enterprises. Youngest recipient of the 2012 Club de Madrid Leadership Award, and the Heinz Award in 2014. Named Social Entrepreneur of the Year by the Social Enterprise Alliance, one of Fortune‘s Most Powerful Women Entrepreneurs, and one of the seven most powerful women in tech in 2014 by Entrepreneur.

Johanna Mair Professor at the Hertie School of Governance in Berlin and

visiting scholar at the Stanford Center on Philanthropy and Civil Society. Academic editor, Stanford Social Innovation Review.

Alex Nicholls Professor of social entrepeneurship at Said Business School, Oxford. Author of Changing the Game: The Politics of Social Entrepreneurship (forthcoming).

Jacqueline Novogratz Founder of nonprofit Acumen, author of The Blue Sweater (Rodale, 2010).

Sally Osberg & Roger Martin Osberg is President and CEO of the Skoll Foundation, and Martin is a best-selling author and director of the Martin Prosperity Institute at the Rotman School of Management. Osberg and Martin are co-authors of ‘Two Keys to Sustainable Social Enterprise’ (HBR, May 2015) and Getting Beyond Better (Harvard, 2015).

Michael Porter and Scott Stern Porter is world famous Harvard professor and originator of the Five Forces Framework and much more and Stern is a professor at MIT. They are the founders and originators of the Social Progress Index.

THINKERS

Liam Black One of the UK’s best-known social entrepreneurs, having led some of the country’s most successful social enterprises, most recently Fifteen which, with chef Jamie Oliver. Author of There’s No Business Like Social Business (The Cat’s Pyjamas, 2004), and the Social Entrepreneur’s A to Z (2014).

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THE NATURE OF

STRATEGIC PLANNING

by Georgina Peters

Insights galore in Henry Mintzberg’s The Rise and Fall of Strategic Planning.

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Mintzberg has long been a critic of formulae and analysis-driven strategic planning. In The Rise and Fall of Strategic Planning, he remorselessly destroys much conventional wisdom and proposes his own interpretations.

He defines planning as ‘a formalized system for codifying, elaborating and operationalizing the strategies which companies already have’. In contrast, strategy is either an ‘emergent’ pattern or a deliberate ‘perspective’. Mintzberg argues that strategy cannot be planned. While planning is concerned with analysis, strategy making is concerned with synthesis. Planners are not redundant but are only valuable as strategy finders, analysts and catalysts. They are supporters of line managers, forever questioning rather than providing automatic answers. Their most effective role is in unearthing ‘fledgling strategies in unexpected pockets of the organization so that consideration can be given to (expanding) them’.

Mintzberg identifies three central pitfalls to today’s strategy planning practices.

First, the assumption that discontinuities can be predicated. Forecasting techniques are limited by the fact that they tend to assume that the future will resemble the past. This gives artificial reassurance and creates strategies which are liable to disintegrate as they are overtaken by events.

He points out that our passion for planning mostly flourishes during stable times such as in the 1960s.

Confronted by a new world order, planners are left seeking to re-create a long-forgotten past.

Second, that planners are detached from the reality of the organization. Mintzberg is critical of the ‘assumption of detachment’. ‘If the system does the thinking,’ he writes, ‘the thought must be detached from the action, strategy from operations,

(and) ostensible thinkers from doers. ... It is this disassociation of thinking from acting that lies close to the root of (strategic planning’s) problem.’

Planners have traditionally been obsessed with gathering hard data on their industry, markets, competitors. Soft data - networks of contacts, talking with customers, suppliers and employees, using intuition and using the grapevine - have all but been ignored.

Mintzberg points out that much of what is considered ‘hard’ data is often anything but. There is a ‘soft underbelly of hard data’, typified by the fallacy of ‘measuring what’s measurable’. The results are limiting, for example a pronounced tendency ‘to favor cost leadership strategies

He defines planning as ‘a formalized system for codifying, elaborating and operationalizing the strategies which companies already have’. In contrast, strategy is either an ‘emergent’ pattern or a deliberate ‘perspective’. (emphasizing operating efficiencies, which are generally measurable) over product-leadership strategies (emphasizing innovative design or high quality, which tends to be less measurable)’.

To gain real and useful understanding of an organization’s competitive situation soft data needs to be dynamically integrated into the planning process. ‘Strategy-making is an immensely complex process involving the most sophisticated, subtle and at times subconscious of human cognitive and social processes,’ writes Mintzberg. ‘While hard data may inform the intellect, it is largely soft data that generate wisdom. They may be difficult to “analyze”, but they are indispensable for synthesis the key to strategy making.’

THINKERS

Henry Mintzberg’s The Rise and Fall of Strategic Planning (1994) reflects a general dissatisfaction with the process of strategic planning - research by the US Planning Forum found that only 25 percent of companies considered their planning processes to be effective and OC&C Strategy Consultants observed that ‘the humane thing to do with most strategic planning processes is to kill them off’.

16 Strategy-making is an immensely complex process involving the most sophisticated, subtle and at times subconscious of human cognitive and social processes.

The third and final flaw identified by Mintzberg is the assumption that strategy making can be formalized. The left-side of the brain has dominated strategy formulation with its emphasis on logic and analysis. Overly structured, this creates a narrow range of options. Alternatives which do not fit into the pre-determined structure are ignored. The right -side of the brain needs to become part of the process with its emphasis on intuition and creativity.

‘Planning by its very nature,’ concludes Mintzberg, ‘defines and preserves categories. Creativity, by its very nature, creates categories or rearranges established ones. This is why strategic planning can neither provide creativity, nor deal with it when it emerges by other means.’ Mold-breaking strategies ‘grow initially like weeds, they are not cultivated like tomatoes in a hothouse. ... (They) can take root in all kinds of places’.

Strategy-making, as presented by Mintzberg is: • derived from synthesis • informal and visionary, rather than programmed and formalized • relies on divergent thinking, intuition and using the subconscious. This leads to outbursts of creativity as new discoveries are made.

• is irregular unexpected, ad hoc, instinctive. It upsets stable patterns • managers are adaptive information manipulators, opportunists, rather than aloof conductors • done in time of instability characterized by discontinuous change • results from an approach which takes in broad perspectives and is, therefore, visionary, and involves a variety of actors capable of experimenting and then integrating.

The Rise and Fall of Strategic Planning attracted a great deal of attention and some vituperative debate.

‘In many ways, the book’s title should be reversed to the fall and rise of planning,’ observed Christopher Lorenz in the Financial Times arguing that the book represented the ‘mellowing of Mintzberg’.

Mintzberg’s work brought a spirited response from the defenders of strategy. Andrew Campbell, coauthor of Corporate-Level Strategy, wrote: ‘Strategic planing is not futile. Research has shown that some companies - both conglomerates and more focused groups - have strategic planning processes that add real value.’ The solution, according to Campbell is not to deem planning an inappropriate corporate activity but will only occur when ‘the corporate center develops a value-creating, corporate-level strategy and builds the management processes needed to implement it’.

As the debate rumbles on, Mintzberg increasingly expanded his intellectual horizons to talk about what he calls “nuanced managing” -- “I don’t think it is a better way of managing, I think it is managing,” he explains. “I think all decent management is nuanced. Bad management is not nuanced; bad management is categorical. Nuanced management is about getting involved, knowing the business, knowing what’s going on day-to-day.

For me it’s all about getting past all the nonsense that passes for management. It’s getting in touch, knowing what’s really going on, being responsive and responsible.”

Mintzberg has reflected that he has spent his public life dealing with organizations, and his private life escaping from them. “I just don’t like big hierarchical organizations,” he told Thinkers50 co-founder Des Dearlove in 2002. “In the past some large organizations treated people paternalistically, but reasonably decently. But many have destroyed that contract. It’s significant that the two most popular management techniques of all time – Taylor’s work study methods - to control your hands - and strategic planning - to control your brain – were adopted most enthusiastically by two groups, communist governments and American corporations.”

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TOMORROW’S

THOUGHT

LEADERS Which of the new generation of business thinkers is most likely to shape the future of business and business thinking? Whose work has the potential to challenge the way we think about management? Thinkers50 founders Stuart Crainer and Des Dearlove spend their time scanning the world of business ideas.

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Jamie Anderson Australian organizational theorist and professor at the Antwerp Management School.

Co-author The Fine Art of Success (Wiley, 2011).

Brené Brown Research professor at the University of Houston Graduate College of Social Work. Research examines vulnerability, courage, worthiness, and shame. Author of Rising Strong (Vermillion, 2015) and Daring Greatly (Penguin, 2012).

David Burkus Oral Roberts University professor and author of The Myths of Creativity (Jossey-Bass, 2013).

Laurence Capron Professor of strategy at INSEAD. Co-author (with Will Mitchell) of Build, Borrow or Buy: Solving the Growth Dilemma, (HBR, 2012).

Dana Carney Associate professor at Hass School of Business, University of California.

Amy Cuddy Associate Professor at Harvard Business School. Author of Presence: Bringing Your Boldest Self to Your Biggest Challenges (Little Brown & Company, forthcoming 2015).

Erica Dhawan Formerly with Lehman Brothers,

Barclays Capital and Deloitte, now champion of idea of connectional intelligence. Coauthor Get Big Things Done (St Martins Press, 2015).

Steven D’Souza Director of Programs at the FT/ IE Corporate Learning Alliance and co-author of the award winning Not Knowing: The Art of Turning Uncertainty into Possibility (LID, 2014).

Mark Esposito Professor at Grenoble Graduate School of Business in France.

Founding director of the LabCenter for Competitiveness.

Frances Frei Professor in the Technology and Operations Management Unit at Harvard Business School and co-author of Uncommon Service: How to Win by Putting Customers at the Core of Your Business (HBR, 2012).

Francesca Gino Author of Sidetracked: Why Our Decisions Get Derailed and How We Can Stick to the Plan (HBR, 2013) and professor at Harvard Business School.

Vlatka Hlupic Professor at the University of Westminster and author of The Management Shift - How to Harness the Power of People and Transform Your Organization for Sustainable Success (Palgrave Macmillan, 2014).

Erin Meyer INSEAD professor and author of The Culture Map (Public Affairs, 2014) and articles in Harvard Business Review.

Dambisa Moyo Author of Winner Take All (Allen Lane, 2012), Moyo analyzes the macroeconomy and international affairs. She is a former economist at Goldman Sachs and a consultant to the World Bank.

Jennifer Petriglieri INSEAD professor, rated as one of best business school professors under the age of 40.

Erin Reid Questrom School of Business, Boston University professor.

Attention grabbing 2014 HBR blog “Why some men pretend to work 80 hour weeks”.

Lauren Rivera A professor at Kellogg, Northwestern University, Rivera is a cultural sociologist who previously worked for Monitor.

Arun Sundararajan Professor at Stern School of Business NY. His research has been recognized by six Best Paper awards, and been supported by organizations including Yahoo!, Microsoft, Google and IBM. Zenep Ton Adjunct associate professor in the operations management group at MIT Sloan School of Management. Before MIT Sloan, she spent seven years on the faculty at Harvard Business School. Author of The Good Jobs Strategy (New Harvest, 2014).

THINKERS

Cameron Anderson Lorraine Tyson Mitchell Chair in Leadership & Communication at the Haas School of Management.

20

IN CONVERSATION WITH

LINDA HILL

by Stuart Crainer

Proving intellectual leadership on the often fraught subject of leadership and its relationship to innovation is Linda Hill, the Wallace Brett Donham Professor of Business Administration at Harvard Business School.

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What is the focus of your research?

I study three things: how people learn to lead, how people lead innovation, and implementing global strategies. I’ve always worked on all three of those to some extent, but the one that means the most to me is leading innovation.

Because of that, one of our former deans asked me to do a couple of things. Given that our mission is to educate leaders to make a difference in the world, he asked me to help create our first required course on leadership. I led the team. Second, he asked me to help develop our e-learning strategy.

This was at the end of the 1990s, so he was really quite a visionary in understanding that education was going to go down that route, that we needed to be able to use the Internet to deliver educational experiences, both here on campus and also, more important, to people around the world. That was great for me.

Your work is notably international.

I am usually out of the country about twice a month, certainly when I’m not teaching. My father was in the military, and so I went to high school in Bangkok and grew up thinking about the world. I went to India for the first time when I was 14, and I’ve always had this sense of wanting to be out and about and feeling that there are lots of interesting people in the world.

I’m a business professor because I fundamentally am interested in economic development. My PhD is

in behavioral sciences, which is an interdisciplinary degree, but I’m actually more of a sociologist than a psychologist.

My parents come from modest backgrounds, and I didn’t really know about business per se. My relatives were coal miners or worked on the factory floor, so I didn’t really know about business.

What I’ve always been interested in is, how do you create organizations that allow people to fulfill their ambitions? The only organizations I knew were educational ones. I studied learning theory in college and then went to the University of Chicago, where I met Jacob Getzels, who is considered to be the father of research on creativity.

What I’ve always been interested in is, how do you create organizations that allow people to fulfill their ambitions? The only organizations I knew were educational ones.

Actually, the first research project I ever did was a study on creativity and brainstorming as a freshman at Bryn Mawr College.

So, all my life I’ve been interested in creativity. Mr. Getzels [coauthor of Creativity and Intelligence in 1962], as we called him, was one of the founders of creativity research. He was very interested in how you design educational institutions that allow people to be creative. I worked on his projects, and one of them involved studying artists at the Art Institute of Chicago to see who was the most creative and why, and how the organizational setting affected their creativity.

At that time, creativity wasn’t really taken seriously or looked at. Mr. Getzels used to tell me, “Any theory you have, Linda, if it’s a good theory, it will help people solve a practical problem.” So he helped me understand that there was really no difference between rigor and relevance. You couldn’t be

THINKERS

How do you provide the best leadership for innovation? Providing intellectual leadership on this often tortured subject is Linda Hill, the Wallace Brett Donham Professor of Business Administration at Harvard Business School. She is the coauthor, with Kent Lineback, of Being the Boss and author of Becoming a Manager. More recently, her research (along with Greg Brandeau and Emily Stecker Truelove) has looked at exceptional leaders of innovation in a wide range of industries—from IT to law to design—throughout the world. This resulted in the bestselling book Collective Genius.

Consistently ranked as one of the world’s leading management thinkers and shortlisted for the 2015 Thinkers50 Innovation award, Hill describes herself as an ethnographer. She talked with Thinkers50 cofounder Stuart Crainer

22 Harvard Business School has been a fabulous platform for me, letting me be able to move around and do the things I wanted to do, from being on the board of the Rockefeller Foundation and learning about how you create organizations to come up with an AIDS vaccine, to trying to help a businessperson figure out something. relevant without being rigorous, and how could you be rigorous about something that wasn’t relevant, that wouldn’t solve a problem?

I was interested in wicked social problems, and how people could, by being creative, help solve those problems. So I’ve always gone between business and other sectors because I’m really interested in economic development and how you help improve people’s lives and livelihoods. Harvard Business School has been a fabulous platform for me, letting me be able to move around and do the things I wanted to do, from being on the board of the Rockefeller Foundation and learning about how you create organizations to come up with an AIDS vaccine, to trying to help a businessperson figure out something.

And all of this leads to your current work.

Yes. Greg Brandeau, the former chief technology officer of Pixar, Emily Stecker Truelove, and I have spent six years traveling the world, studying 16 leaders who created teams at organizations that were able to routinely innovate.

In a way, this project started when I was asked to write a piece on what I thought leadership would look like in the twenty-first century. I had been the

faculty chair of a required course on leadership for nine years or so, and I had become concerned that we might not be developing the kind of leaders we need.

I was spending a fair amount of time in South Africa and had the privilege of meeting some people who had been in prison with Nelson Mandela, and then I met Mandela himself. I wrote about Nelson Mandela and his notions of leadership.

Then I met someone who was running Google’s infrastructure group. There was an interesting connection between what it means to lead a revolution and what it means to lead a major innovation. These people who were running these very innovative groups thought about leadership in the same way.

Mandela said that a leader is like a shepherd. He stays behind the flock. People follow, not realizing that they are being directed from behind. And people leading innovative groups say much the same thing: it’s not about me saying, “This is where we need to go, and you follow me,” and me inspiring you to follow me, because fundamentally, I don’t know the answer. I don’t know where we’re going.

So that’s not what leadership is about. It’s about creating these teams or groups where people are willing and able to do innovative problem solving together, and so we’re trying to provide an integrated model for thinking about that.

What really struck me is that no one really writes about what leaders do and how they think about leadership when innovation is their primary concern.

Leadership really began to be seriously studied at business schools only at the beginning of the 1990s.

Yes. People ended up thinking that leadership is about being visionary. But when you’re talking about innovation, that whole charismatic visionary thing is a problem. Most innovations are the result of collaborative efforts, discovery-driven learning, and more integrated decision making. The tasks, roles, and responsibilities of leaders and followers are very different when you really think about innovation as your goal, about discovering something that doesn’t exist at the moment, about solving problems.

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Yes. I think that is because people don’t really understand the connection between leadership, what leaders think they’re supposed to be doing, and what it actually takes to build an organization that can be innovative. They’re disconnected disciplines.

I don’t think we have much insight into what an individual leader should be doing or thinking about, or how people should think about what the role of that leader should be if she wants to be innovative.

Everybody has a slice of genius in his organization.

How do you combine those slices of genius in integrated ways to come up with solutions to problems? Some people would say, you don’t want that many geniuses, because then there’s the toomany-cooks-in-the-kitchen problem. Well, there are organizations that have figured out how you can have lots of cooks in the kitchen and still have them cook an absolutely fabulous meal.

Pixar has been a very successful studio, financially, artistically, and technologically, and that really goes back to how the people there think about leadership.

No place is perfect, but Pixar has a certain way of thinking about what it’s up to and what leadership is about that has allowed it to create a community culture with the capabilities that are essential for innovative problem solving.

What surprised you along the way with the research?

Well, there were two things. The first big one was that the fields of leadership and innovation were so separate, so very siloed.

The other was that when we first went through the data, we picked up themes about the norms in the organizations, about how you’re supposed to interact with people or how you’re supposed to treat people. What we didn’t pick up on until we began to look a little bit more at the capabilities of these organizations was that there were also norms about

how you’re supposed to think about a problem. So that was a surprise. As we tried to explain what we were seeing in certain settings, we said, “This isn’t about how you interact with people; this is really about how you frame and solve problems.” Because these organizations have some norms about how you’re supposed to think about problems, and that’s one of the things that allows them to get through the too-many-cooks-in-the-kitchen problem.

In many ways, it seems that we have preferred a simple explanation of how leading innovation works rather than the complex reality.

I think that people like simple, relatively speaking.

Things need to be simpler as opposed to more complex, and this led to the worshipping of a myth about how innovation happens. Albert Einstein did not work alone and have an aha experience.

Innovation is collaborative. Howard Gardner talks about the social process and the environment that affects creativity.

I think leading change is different from leading innovation. So there’s not one right way to lead in all circumstances, and a lot of the work on leadership versus management came from organizations that were failing suddenly and had to be revived and turned around. Change is not exactly the same as innovation. They’re somewhat different issues.

How does this work relate to your book Being the Boss?

In Being the Boss, the second imperative was managing your network. Many people, when they think about leadership, think only about managing people over whom they have formal authority.

But in today’s organization, you also need to think about managing people that you don’t have formal authority over.

It came from me talking to a lot of my former students and executives I worked with and seeing their common missteps. Why weren’t they realizing their potential, and why weren’t they powerful?

They weren’t thinking about leadership in a way that helped them really address what they needed to—that it’s about yourself, your network, and your team.

THINKERS

One of the things you always hear about leadership is that despite all the executive programs, all the training, and all the books, there’s a shortage of leaders. And similarly with innovation; despite all the books on and study of innovation, it remains largely a mystery to most organizations.

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BEST FOR TALENT

Research into talent has never been so important and practically useful. Here is Thinkers50 selection of the best thinkers on talent.

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Tomas Chamorro-Premuzic University College, London and Columbia academic as well as head of assessment company.

Author of the book Confidence (Profile, 2013).

Robin Ely Harvard Business School professor and expert on gender and race issues.

Tammy Erickson McKinsey Award-winning author and adjunct professor at London Business School. Her books include Plugged In (HBR, 2008) and What’s Next gen X? (HBR, 2008).

Claudio Fernandez-Araoz Senior adviser at Egon Zehnder.

Author of It’s Not the How or the What but the Who: Succeed

by Surrounding Yourself with the Best, (HBR, 2014).

Stew Friedman Practice professor at Wharton.

Books include Total Leadership (HBR, 2008) and Baby Bust: New Choices for Men and Women, (Wharton Digital Press, 2013), and Leading the Life You Want (HBR, 2014).

Adam Galinsky & Maurice Schweitzer The Columbia and Wharton professors are authors of Friend and Foe (Crown, 2015) which argues that the foundation of all human interaction lies in cooperation and competition.

The key is to balance the tension between the two.

Marshall Goldsmith Executive coach, teacher and best-selling author, Goldsmith’s latest book (co-authored with Mark Reiter) is Triggers: Creating Behaviors That Last (Crown, 2015).

Monika Hamori Professor at IE Business School in Madrid, co-author (with Peter Cappelli & Rocio Bonet) Who’s Got Those Top Jobs? (Harvard Business Review, March 2014).

Whitney Johnson Founder and Managing Director of Springboard Fund, and co-

founder of Rose Park Advisors along with Clayton Christensen.

Author of Dare, Dream, Do (Bibliomotion, 2012); and Disrupt Yourself (Bibliomotion, 2015).

Nilofer Merchant Silicon Valley-based ex-exec Merchant, author of 11 Rules for Creating Value in the Social Era (HBR, 2012).

Doug Ready Author of Harvard Business Review articles, Senior Lecturer in Organization Effectiveness at the MIT Sloan School of Management and founder of the International Consortium for Executive Development Research.

Zeynep Ton Adjunct associate professor in the operations management group at MIT Sloan School of Management. Before MIT Sloan, she spent seven years on the faculty at Harvard Business School. Author of The Good Jobs Strategy (New Harvest, 2014).

THINKERS

Jennifer Aaker Social psychologist, Professor of Marketing at Stanford. Coauthor (with Andy Smith) of The Dragonfly Effect: Quick, Effective, and Powerful Ways to Use Social Media to Impact Social Change (Jossey-Bass, 2010).

Aaker’s research focuses on the psychology of time, money and happiness.

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CHANGE COMES FROM WITHIN

by Marshall Goldsmith

Change can’t be dictated, demanded, or otherwise forced upon people.

A man or woman has to whole-heartedly commit to change.

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You know the people I’m talking about: she says she wants to change, but when it comes time to do so, she makes excuses and doesn’t follow through; or he says he’s eager for a new life, and then defends his old ways at every turn. It’s exhausting to keep up with the denial tactics, finger pointing, arguments, and justifications that people who really don’t want to change can come up with!

If I’ve learned one thing over my 35 years as an executive coach, speaker and author, it’s this: change has to come from within. It can’t be dictated, demanded, or otherwise forced upon people. A man or woman who does not whole-heartedly commit to change will never change.

That seems self-evident, but I didn’t absorb this simple truth until my twelfth year in the “change” business. By then I had done intensive one-on-one coaching with more than a hundred executives, nearly all successes but a smattering of failures too.

If I’ve learned one thing as an executive coach, speaker and author, it’s this: change has to come from within. an overwhelming need to be the smartest person in the room, always proving that he was right, winning every argument. It was exhausting and off-putting.

Who could say how many opportunities had vanished because people loathed being pummeled and browbeaten?

As Harry and I reviewed his 360° feedback, he claimed to value the opinions of his co-workers and family members. Yet whenever I brought up an area for improvement, Harry would explain point by point how his questionable behaviour was actually justified. He’d remind me that he majored in psychology in college and then analyze the behavioural problems of everyone around him, concluding that they needed to change. In a mind-bending display of chutzpah, he asked me for suggestions in helping these people get better.

Not long after this revelation, I was asked to work with Harry, the chief operating officer of a large consulting firm. Harry was a smart, motivated, hardworking deliver-the-numbers alpha male who was also arrogant and over-delighted with himself. He was habitually disrespectful to his direct reports, driving several of them away to work for the competition. This development rattled the CEO, hence the call to me to coach Harry.

In my younger days, I would have overlooked Harry’s resistance. Mimicking his arrogance and denial, I would have convinced myself that I could help Harry where lesser mortals would fail. Fortunately I remembered my earlier lesson: Some people say they want to change, but they don’t really mean it.

It was dawning on me that Harry was using our work together as another opportunity to display his superiority and to reverse the misperceptions of all the confused people surrounding him, including his wife and kids. By our fourth meeting I gave up the ghost. I told Harry that my coaching wouldn’t be helpful to him, and we parted ways. (I felt neither joy nor surprise when I later learned that the firm had fired Harry. Evidently the CEO had concluded that an individual who actively resists help has maxed out professionally and personally.)

Harry talked a good game at first, assuring me that he was eager to get started and get better. I interviewed his colleagues and direct reports, even his wife and teenaged children. They all told the same story.

Despite his sterling professional qualities, Harry had

I often call up my time with Harry as a stark example that, even when altering our behaviour represents all reward and no risk – and clinging to the status quo can cost us our careers and relationships – we resist change.

As I reviewed my failures, one conclusion leapt out: Some people say they want to change, but they don’t really mean it. I had erred profoundly in client selection. I believed the clients when they said they were committed to changing, but I had not drilled deeper to determine if they were telling the truth.

THINKERS

Change has to come from within. It can’t be dictated, demanded, or otherwise forced upon people. A man or woman who does not whole-heartedly commit to change will never change!

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IN CONVERSATION WITH NILOFER MERCHANT

by Des Dearlove and Stuart Crainer

Nilofer Merchant shares her view on how to create value in the social era.

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Was he right?

He was dead right. That’s given me so much perspective because it’s so easy to keep thinking that the base of revenue is what you need to protect. If anything, I now have the opposite instinct, which is that as soon as you know you’re succeeding, you have to figure out how to begin building the next thing.

You can’t tell how quickly the future is going to happen. But what you can know is that you need to go in that direction because all the things that you try and fail with in the meantime teach you how to get it right when the time is right. I always talk about building the innovation muscles so that you can be ready for that moment when you need to sprint.

Rita McGrath from Columbia Business School talks about the end of sustainable competitive advantage and the importance of being able to close things down as well as start things up. Do you agree?

I think she’s on to something. I reviewed her manuscript probably two years ago, and she hadn’t named it as The End of Competitive Advantage at that point. I wrote Rita a note to say that the first thing you actually have to say is to clarify what you’re saying, which is that it’s the end of competitive advantage, and complete that thought for business leaders, because that’s what’s going to help it land with people. The old operating rules are no longer the right operating rules. But yeah, I think she is right. You need to be able to wind things down or know how to transition, maybe.

But mostly you need to know how to invest in the future.

“You can’t tell how quickly the future is going to happen. But what you can know is that you need to go in that direction because all the things that you try and fail with in the meantime teach you how to get it right when the time is right.”

Companies don’t usually shut down profitable operations in order to migrate. Is that something new?

I’ve been doing all this work in boardrooms now for 15 years or so, and one of the things I started noticing was that all of them ask the exact same question: How much do I budget for the future development of the business? If I’m wanting to go faster in the new space, am I allocating 5 percent, am I allocating 10 or 15 percent? Give me a high, medium, low budget range so I can start thinking, at least with dollars and allocation of resources, start thinking about what’s next.

Is there a correct answer to that question?

I used to show leaders indexes of companies across industries and what they were doing because quite often we had a back-channel view of what equivalent companies were doing. I would share that these guys are investing about 7, these guys are investing about 15, and five years ago what they were investing was this.

We could show them a spectrum, and that helped them act, invest in the right direction. It usually turned out that the right number was around 10 or 15 percent. If you invested more, you actually didn’t get any more because the organization couldn’t handle it. Inventing the future is always as much about change management as anything else, and so even if you threw more money at it, you couldn’t make it go any faster.

You are increasingly well known as a business thinker, but you are also a practitioner. Your bio says you have personally launched more than

THINKERS

What were some of your formative business experiences?

One of the experiences I had really early in my career was working with Steve Jobs. I did a presentation to him, and he told me that that what I was doing was going to be eliminated. It wasn’t necessary, it wasn’t even part of the picture, he said, and I was looking at him and thinking, “You are out of your mind,” because at that time it was delivering something like 20 percent of the total revenues of Apple and 47 percent of the profit of the company.

30 100 products, which netted $18 billion. Can you tell us about that part of your career and some of the products you were involved in?

Sure. Let’s go back to the Apple story. I was involved in pricing Apple products in different parts of the marketing mix at a relatively early point in my career. Then at one point I was asked to solve a problem that the business division had.

The GM [general manger] of the Americas at that time just handed me a spreadsheet, and apparently, in retrospect, he’d been trying to hand it to virtually everybody. But he just tagged me, and I didn’t know enough to run.

He said, There’s one part of the business that is about 50 percent margin right now and making only a few million dollars. But if we could get

“The key for every firm— regardless of size — is to figure out how to consistently create value in a demanding, ever-changing market. That is hard no matter what size you are, no matter what industry you’re in.” this part to grow, it could actually sustain us with everything else, including the decline of every other part of the business. He said, Do you think you can help me solve this problem? And with the audacity of a 24- or 25-year-old, not knowing any better, I said, Sure, I can help you with that problem.

I went in to my boss and said I have no idea what I just picked up, and he said no, you don’t. And I said, well, I’ll figure it out. And that product line turned out to be the first $180 million of that $18 billion.

This was in the early days of the web, basically preweb, and it was a matter of figuring out how to market the Apple server product, getting people to think about how to buy it.

All I did was figure out why was it currently selling well, and then try to discover whether there was a secret to that that we could use to duplicate that success. That turned out to be hugely successful and got written up in the newspapers.

Let’s talk about your book 11 Rules for Creating Value in the #SocialEra. What are the big ideas in that book?

The genesis of the book is telling. I’d gone to a board meeting at which I was sitting in as a guest for a Fortune 100 company to see if I wanted to join that board. I heard the chairman of the board talking about how they needed to protect their existing market, how they needed to build a bigger moat around it, how they needed to manage the efficiency of the value chain.

I was sitting there cringing. Everything they were saying seemed so viscerally wrong to me because I don’t think that any customer is at the end of some value chain anymore. That construct is a very linear one and diminishes where value can actually come from. I came back to my desk wanting to write this e-mail, a personal thank you for the opportunity to join the board but explaining I wouldn’t be joining because I didn’t think it was a good match.

But the other emotion was that I really wanted to help them. With my background in consulting being what it is, I thought, Let me see if I can actually help you see something that you can’t see.

I wanted to simply send them something someone else had written. I came back and looked around, and I looked at who else could have written this, and where is the argument, and I honestly couldn’t find it. And it was like, gosh, it seems so obvious.

So then I reached out to some other business thinkers—friends who I thought would be the right people who would have seen it or written it and who said hat customers are as much a part of the co-creation process, not just a recipient, and that the value chain construct is one of the past.

Connected individuals can now connect to one another without the need for a large corporation to orchestrate their activities. Networks allow you to do what once only large centralized organizations could. If that’s the case, what is the point of all these existing organizations? Networks change the

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What was the idea behind it?

There are a few nuggets. The first point is that social is more than just media. It is an opportunity that cuts across every part of the business model.

You can use it to build a product, ship a product, design a product. Every possible thing that you do in a business can be social. I’ve seen it in different parts. No one’s actually integrated them across eight functional areas of a business, but I’ve seen it work. That’s one big step forward.

Then the idea that’s controversial, that got me known, was the argument about why Michael Porter’s theories are no longer working. That was the headline of the piece. What I argue is that since connected individuals can now do what only large organizations could do before, it challenges two parts of fundamental management theory. One is the thesis of the firm—Ronald Coase’s original thesis of the firm and why it actually exists.

And the other one is the notion of competitive advantage.

As information and knowledge flows are pervasive, it becomes impossible to protect business by hoarding information. The challenge going forward is to figure out how to actually expose that information and allow other people to build something with you. Advantages then happen because people want to work with you and solve problems faster through their ability to scan the environment and change it.

The social era book’s thesis was this idea of connected individuals being able to do what only centralized organizations could do before. The implication of that is that it changes what you do, how you do it, and then what form it takes, which changes the basis of how you compete.

Is this the death knell of large organizations?

Are big corporations like GE obsolete in this new world?

I know a lot of people would like to say they are. I don’t think so. People say old companies can’t innovate and small companies are more inventive. That argument is both old and wrong.

Joseph Schumpeter, the noted economist, said in I believe it was 1909 that small companies were more inventive than large ones. But then in 1942, Schumpeter reversed himself and argued that big companies had more ability and incentive to invest in new products. A look at any performance measure shows that innovation can come from either size and that both arguments are oversimplifications.

The key for every firm—regardless of size—is to figure out how to consistently create value in a demanding, ever-changing market. That is hard no matter what size you are, no matter what industry you’re in.

What I will say is that traditional organizations will have a very different basis. Let me give you an example. Years ago, IBM started doing something that I found truly profound, especially when I compared it with companies such as HP that didn’t do it. IBM started saying our expertise isn’t just what we ship, it isn’t just what we build, it isn’t just what we create all by ourselves. We could actually allow other people to shape that.

IBM’s Smarter Planet initiative started off as an effort to say, “We should do something in the green space, but we don’t know what.” They asked the questions to participants really broadly, drawing on talent that was outside the firm. They were eliminating the perimeter of the firm, not trying to help with an existing problem that was defined but saying, What problems should we solve?

They changed their perspective: the parameter of the question was open, and who could participate in solving that problem was also open. And with that Smarter Planet is now making a pretty sizable contribution to the business. Now, is that enough to sustain an entire business? No, but I think it’s indicative of how social can work to fuel new innovations.

THINKERS

nature of competition by changing who you are competing with.

And they were all shaking their heads. No one’s written that, they said, but you should. I shook it off for two months, and then one day in this diatribe moment I wrote a 4,000-word initial take on what this argument was and sent it to my editor over at Harvard Business Review, and she said, “Oh, my gosh, we have to get this in the magazine right away.” I said, whoa, this is the first time I’ve even had the thought this clearly. How about we blog it? And that was what we did.

32 “I think the key shift isn’t what you make but how you make it and who you ask the right questions to inform what you’re thinking.”

Which is to say that within five years you can achieve a lot. Let’s take another example. You can’t do it today, but if in 5 years or 10 years I can take a picture of a jet engine and use a 3D printer type of thing to manufacture it, I no longer need to be inside your plant to know what that engine is. If I can take a picture of some functional thing and then get it to an engineer and have it produced, what is GE’s role in “making” that thing? It isn’t just about their ability to manufacture. It is about their ability to design it, and their know-how, and their ability to ask the right questions to customers.

I think the key shift isn’t what you make but how you make it and who you ask the right questions to inform what you’re thinking. IBM is one of the best at understanding how to solve really complex problems, so of course you would continue going to them, because they’ve done it before. That’s their advantage. But it’s not about defending turf or even saying we’re going to keep you out. It’s much more about IBM or GE saying come and build something with me.

What you’re describing is co-creation as a competitive advantage. It’s the opposite of building barriers to entry; it’s the ability to invite people in.

Yes, instead of all the stuff going on inside your building, in your architecture, with a big moat around it, and saying please don’t come here because this is ours, this is our hill that we’ve created and we’re the castle on top of the hill, it’s much more like an open playground where we invite a whole bunch of people to play and then see what we can create together. And what do we do after we have created something together? What do we do with all that stuff? How do we sell it? How do we make money? All those other questions can

come. Then you draw on talent that you couldn’t get any other way. That’s the advantage.

We’re talking about a new model where we see organizations as social systems. You’re talking about them competing with one another on the basis of how social they are.

I’m talking about moving from a closed system— closed meaning thinking about things as us versus them—to an open system that says we allow you to play in terms of what we create, what questions we’re asking, and who we invite. Who else could be involved in helping us solve these problems or creating this opportunity?

Where are we now with this social revolution?

How far into it are we? Do we have critical mass?

We’re probably 10 years in. We’ve had 10 years with enough cognitive surplus and with the ability to do this connectivity stuff. But probably only in the last three years can you see something where you can make money at it. You can organize all that stuff pretty efficiently, so that’s why TED is an interesting case.

There are a couple of other examples of organizations. However, we’re at a very early stage, which is why my social era book is a hypothesis.

I said I can’t prove this to you yet because there’s not enough evidence, but I’m going to use the weak signal to suggest there’s a directional shift. The question is: When does everyone do this?

Bill Gates said that with the impact of all the new technology we overestimate the change that will occur in next 2 years and underestimate the change that will occur in the next 10. I think that’s true, so we shouldn’t let ourselves be lulled into inaction by saying it’s far away. But building it into a business model and building it into really viable leadership constructs could take 20 years for us to see the results.

Do you see anything that could derail it, or is this inevitable?

Things could definitely derail it. There are a couple of things that you can point to right now that nobody knows the answer to. One is that way too many people are working for free. The idea that

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It gave them more media attention, gave them maybe more impact, all those things, yes, but sometimes people have got to buy shoes and feed the kids. We have to wrap the economic balance point around that, and until that’s fixed, I think we’re going to continue to really struggle. The other issue is that everyone tends to look at these social initiatives and ask why they failed. Why did Occupy

Wall Street fail? Why did the Arab Spring fail?

Some people will say the Arab Spring succeeded.

But I think we had one dictator and now we have a different one, and so we didn’t really see a big change in allowing people’s voices to come forward and create a new result. Thus, the question is about whether we can really effect change, tectonic change, not just the appearance of change. How can we get to outcomes we want, not just feel better for a while? There are very few signals that we’re there yet.

That’s the area where we need to see more evidence in order to make forward motion.

THINKERS

all of us can do the work together, blah, blah, blah, is really interesting. The dark side of this is that if you look at those 6,000 people who created TED events, most of them didn’t earn any money from that.

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LIGHT BULB THINKERS If necessity is the mother of invention, then innovation is its nurturing father.

It has never been more pressing - in society as well as in organizations. Here is Thinkers50 selection of the best commentators and thinkers on innovation.

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Scott Anthony Managing partner of Innosight, coauthor with Clay Christensen and solo of The First Mile (HBR, 2014).

David Burkus Oral Roberts University professor and author of The Myths of Creativity (Jossey-Bass, 2013). New book, Under New Management coming out in 2016.

Henry Chesbrough Exec director Center for Open Innovation at Haas School and author of, most recently, Managing Open Innovation in Large Firms (Fraunhofer Verlag, 2013).

Alexa Clay & Kyra Maya Phillips Innovation comes from the fringe. How to hustle like a gangster, think like a pirate and more alternative takes revealed in Misfit Economy (Simon & Schuster, 2015).

Jeff DeGraff Professor at University of Michigan’s Ross School.

Developer of the Competing Values framework. Most recent

book Innovation You (Ballantine, 2011).

Rowan Gibson Co-founder of Innovation Excellence and author, most recently, of Four Lenses of Innovation (Wiley, 2015).

Vijay Govindarajan Creator of reverse innovation.

Tuck Business School professor and author of forthcoming The Three Box Solution (HBR, 2016).

Linda Hill Harvard Business School professor and co-author Collective Genius (HBR, 2014).

Gary Pisano Harvard Business School professor, co-author Producing Prosperity (HBR, 2012) and most recently author of “You Need an Innovation Strategy” in Harvard Business Review.

Joseph Pistrui Creator of the concept of “nextsensing”. Former consultant, now IE Business School professor.

Jaideep Prabhu & Navi Radjou Authors of Frugal Innovation (Economist, 2015), developing from championing of concept of “jugaad innovation”.

Alf Rehn Finnish speaker, academic and author of Dangerous Ideas (Marshall Cavendish, 2011) and coauthor of Trendspotting (ebook, 2013).

Juan Pablo Vazquez Sampere Professor at IE Business School and frequent HBR blogger applying disruptive innovation concepts to current managerial challenges.

Tina Seelig Professor at Stanford University.

Executive Director for the Stanford Technology Ventures Program. Author of Insight Out: Get Ideas Out of Your Head and Into the World (HarperCollins, 2015).

Robert Sutton Professor at Stanford Engineering School. Author of Good Boss; Bad Boss (2010); and Scaling Up Excellence: Getting to More without Settling for Less (with Huggy Rao, Crown Business, 2014).

THINKERS

Ron Adner Tuck Business School professor and author of The Wide Lens (HBR, 2013).

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IS IT TIME TO PUT A

VALUE ON

LEADERSHIP?

by Dave Ulrich

Dave Ulrich talks about his new book, The Leadership Capital Index: Realising the Market Value of Leadership wherein he draws on a useful metaphor for how to include, conceive, and audit leadership in the assessment of firm value.

37

My own research over more than 20 years suggests it is both possible and necessary. To see the monetary value of non-financial assets one needs to look no further than the stock markets. Two firms in the same industry with the same earnings would be expected to have similar market value, but they don’t. In recent years, investors have learned that defining the market value of a firm may be based on earnings, but goes beyond.

Recently, traditional financial outcomes (e.g., cash flow, EBITDA) have been found to predict about 50% of a firm’s market value. To gain more insights into a specific firm, investors have shown increased interest in intangibles like strategy, brand, R&D, talent, collaboration, innovation, risk, and information flow. A next step is for investors to use a disciplined methodology for measuring the impact of leadership on market value.

Wise, long-term investors recognise that leadership matters. In our research, we found that investors allocate about 30% of their decision-making on the quality of leadership. Quality of leadership predicts intangible value, which in turn produces financial results. But too often assessments of leadership are haphazard and narrow. Investors may say “this leader is charismatic, has a vision, or treats people well” but there is little analysis behind what has become a ‘gut feel’ approach to assessment among many investors.

Leadership assessments should go beyond isolated observations to more rigorous analytics. To move firm valuation discussions from financials to intangibles to leadership requires synthesizing massive studies and insights about leaders and leadership into a useable and simple leadership valuation solution.

My new book, The Leadership Capital Index: Realising the Market Value of Leadership draws on a useful metaphor for how to include, conceive, and audit leadership in the assessment of firm value. A leadership capital index is like a financial confidence index — Moody’s or Standard & Poor’s. It moves

beyond casual and piecemeal observations of leaders to more thorough assessment of leadership.

A leadership index differs from a leadership standard.

Standards define what is expected; indices rate how well an activity performs. For example, consider the Economist’s Big Mac index, which measures the cost of a Big Mac in various countries in terms of its difference from the average Big Mac price in the United States.

It doesn’t try to tell you how much a Big Mac should cost—instead, it is a crude but useful assessment of the cost of living around the world.

Quality of leadership predicts intangible value, which in turn produces financial results.

An index guides investors to make more informed choices. When a rating agency like Moody’s or S&P downgrades a company, it is not saying the company did or did not meet financial reporting requirements.

It is offering an opinion about the firm’s ability to repay loans in the future. Likewise, a leadership capital index would inform investors about the readiness of the firm’s leadership to meet business challenges.

To create a leadership capital index, I also looked at dozens of studies by consulting firms and experts who put substance behind the assessment of leadership.

In general, these studies offered deep insights on one piece of an overall leadership puzzle. Some focused on personal leadership style, others on compensation or training practices, and still others on organisation governance and design. Few attempted to prepare a comprehensive approach to leadership as a whole that could be accessed by investors.

My leadership ratings index has two dimensions, or domains: individual and organisational Individual refers to the personal qualities (competencies, traits, characteristics) of the key leaders in the organisation. Organisational refers to the systems these leaders create to manage leadership throughout the organisation and the application of organisation systems to specific business conditions. Using these two domains, previous leadership and human capital work may be synthesized into a leadership capital

THINKERS

Organisations are routinely exhorted to manage their assets more effectively. When those assets have a financial value attached to them they are more likely to be treated with respect. But leadership – arguably the greatest asset of all – remains a stubbornly esoteric notion. So is it possible (and even desirable) to attach a monetary value to the quality of an organisation’s leadership?

38 index that investors can use to inform their valuation decisions.

characteristics of leaders and more how investors might view them.

This leadership capital index will have relevance for many stakeholders interested in firm valuation.

Equity investors (venture capitalists, private equity, portfolio managers, mutual/hedge fund managers) will have a more thorough and rigorous way to evaluate and realise a firm’s full market value. Debt holders will have more confidence in a firm’s ability to repay its debt. Rating agencies (ISS, government groups, Moody’s) can offer a more refined assessment of the firm’s full value by including leadership in the assessment. Boards of directors can have a more thorough process for evaluating the quality of leadership within their organisation. C-suite executives who have primary responsibility for firm value can include leadership as part of this discussion.

Leadership development specialists charged with developing leaders can focus less on personal

Realising the market value of leadership could also have a significant impact on many organisation processes: risk management, governance, social responsibility, reputation, and leadership development.

Transitioning from a gut feel or narrow assessment of leadership to an index that can start to predict the impact leaders have on intangible value creation changes the game of leadership assessment and development. It provides stakeholders with a clearer lens through which to see the impact of leadership in realising full market value. It is now time for investors to use a leadership capital index.

It is also time for other organisations to recognise and value their leadership assets by putting a monetary vale on it.

39 THINKERS

SM

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Includes destinations served by United Airlines Inc. and United Express.

shut-eye

friendly

Flat-bed seats on all flights from Delhi and Mumbai to New York/Newark with connections to more than 300 destinations across the Americas. united.com/flatbed

STRATEGY

40

MASTERS If you were running a corporation who would you turn to for strategic advice? Here is Thinkers50 selection of the best strategy commentators and thinkers.

41

Richard D’Aveni Tuck Business School professor, creator of “hypercompetition”.

Most recent work on impact of 3D-printing revolution. Books include Strategic Capitalism (McGraw Hill, 2012).

Niraj Dawar Ivey Business School professor, author of Tilt: Shifting Your Strategy from Products to Customers (HBR, 2013).

Pankaj Ghemawat Professor of Management and Strategy and Director of the Center for the Globalization of Education and Management at the Stern School of Business.

Author of World 3.0 (HBR, 2011).

Benjamin Gomes-Casseres Professor of International Business at the Brandeis International Business School.

Author of Remix Strategy: The Three Laws of Business Combinations (HBR, 2015).

Andrea Kates Founder of the Business Genome project and author of Find Your Next: Using the Business Genome Approach to Find Your Company’s Next Competitive Edge (McGraw-Hill, 2011).

Rita G McGrath Professor at Columbia Business School and author of The End of Competitive Advantage (Harvard, 2013).

Matthew May Consultant, coach and speaker.

Author of The Elegant Solution (Free Press, 2007); In Pursuit of Elegance (Crown, 2009); The Shibumi Strategy (JosseyBass, 2010) and The Laws of Subtraction (McGraw Hill, 2012).

Alex Osterwalder & Yves Pigneur Authors of Business Model Generation (Wiley, 2010), inventors of the “Business Model Canvas,” used by companies worldwide. The original book followed by Business Model You (Wiley, 2012) and Value Proposition Design (Wiley, 2014).

Michael Porter & James E. Heppelmann HBS strategy guru and Heppelmann, CEO of PTC, authored influential November 2014 article in HBR, ‘How Smart Connected Products are Transforming Competition’.

Martin Reeves, Knut Haanaes, & Janmejaya Sinha Boston Consulting Group strategy experts and co-authors of Your Strategy Needs a Strategy (HBR, 2015).

THINKERS

Laurence Capron Professor of strategy at INSEAD. Co-author (with Will Mitchell) of Build, Borrow or Buy: Solving the Growth Dilemma (HBR, 2012).

42

IN CONVERSATION WITH GIANPIERO PETRIGLIERI

by Des Dearlove and Stuart Crainer

Gianpiero Petriglieri, Associate Professor INSEAD, shares his views on leadership, adult development and experiential learning.

43

I have always had a passion for understanding and assisting the unfolding of human lives in social contexts. At the broadest level, all my work—whether it is research, writing, teaching, coaching, consulting, and in the past my practice as a psychotherapist—has gravitated around two endeavors. The first is to examine how people’s history and aspirations, along with the dynamics of the groups and social systems they are in, affect the way they think, feel, and act in personal and professional roles. I am interested in how those forces, consciously and unconsciously, shape human being as well as human becoming. The second is to help people take their experience seriously without, however, taking it too literally so that they can make new meaning out of their experience and develop more options for dealing with it.

When I trained in psychiatry, I was very interested in groups. In Italy there’s a long tradition of social psychiatry. It is one of the world centers for systemic family therapy, for example. I had witnessed my dad’s work in a psychiatric treatment community growing up, and there was a lot of focus on the importance of communities in my own training, on how families, social groups, work groups, and organizations contribute to making individuals more or less sane, how they help us thrive or keep us struggling. That stayed with me.

Through my interest in groups I got to meet Jack Wood, a professor at IMD in Lausanne who became a mentor, close friend, colleague, and coauthor and introduced me to the British roots of systemic clinical work applied to management and organizations. The United Kingdom has a long and lively tradition of people who bridge the world of psychoanalysis and the organizational world, both at the Tavistock Clinic and at the Tavistock Institute.

Toward the end of my residency, I enrolled in a two-year program at the Tavistock to study organizational consultation and also started my own personal analysis. Both were instrumental in

my transition out of Italian psychiatry and into an uncertain and attractive future. I also became more involved in interpersonal approaches to clinical and organizational work, such as transactional analysis and the work of the NTL Institute in the United States.

After I finished my residency, I worked at IMD as a coach and consultant in leadership development programs and as a psychotherapist within the context of their MBA program. Meanwhile, I read, studied, wrote, trained more, and became familiar with the promise and perils of being “in between,” a state that continues to fascinate and puzzle me to this day.

Those years were formative. I was working at the boundary between clinical practice and leadership development, and that made me aware of the need to look at, write about, and practice leadership development with more depth and breadth, focusing both on the richness of what we bring to work every day and on the complexity of the organizations and communities in which we work.

“I have always had a passion for understanding and assisting the unfolding of human lives in social contexts.”

In 2004 I was invited to design and teach the leadership course in the MBA program at Copenhagen Business School, where I began to experiment with bringing into the classroom some of those personal and systemic concerns. My course included both cases and a large experiential component, and its success was a big hint that I was becoming a management professor, if not a traditional one. INSEAD took an interest in me a couple of years later. I was delighted, and I had no idea of how much it would stretch and deepen and support my work since it became my professional home.

That was my trajectory so far. My interest in helping people be more effective and bring more

THINKERS

What is particularly striking about your résumé is the move from psychiatry into management academia. It seems an unusual leap.

Lots of people ask me that: Why spend 10 years training, do all this work, and then change career?

But personally I don’t feel I have changed direction that much.

44 of themselves into the workplace has remained constant. I may have changed context, but the things that make me curious or trouble me remain largely the same. People laugh when I make the joke that training in psychiatry is a great foundation for working in a business school, especially these days, when work is so personal and confusing. But it is only half a joke.

Think of the place of work in contemporary civilization. It’s very central. Work organizations and businesses occupy a place in the popular imagination similar to what the church or the military did historically. Consider the figures people look up to and celebrate or blame. Who are they?

CEOs and entrepreneurs. In many ways they have become beacons of virtue. We look up to them not just as exemplars of how to do well but also to point toward how to live a good life.

I’m interested in the way organizations and business schools in general, and whatever goes under the banner of leadership development in particular, function as what Jennifer Petriglieri and I have called “identity workspaces.” We look at organizations not just in terms of what they make individuals do but also in terms of who they make people become.

This function has always been there. Once you would go and work for IBM, General Motors, or

“People don’t necessarily expect or even desire to have their whole career in the same organization or even country. That makes work more precarious. At the same time, people want work to be an expression of who they are, of their true selves, whatever that means.

That makes work more personal.”

General Electric, and if you did well, that gave you a solid identity and a trajectory into the future, often stretching over your whole work life. These days, however, organizations and careers have changed profoundly, and that trajectory cannot be taken for granted.

Organizations are still important to many people; don’t get me wrong. There is often a profound commitment, but there isn’t necessarily an expectation of loyalty. In today’s workplace two kinds of boundaries have become less clear. The first is the boundary between organizations and sectors. People move around more than they used to. The second is the boundary between what is personal and what is professional.

People don’t necessarily expect or even desire to have their whole career in the same organization or even country. That makes work more precarious. At the same time, people want work to be an expression of who they are, of their true selves, whatever that means. That makes work more personal.

This decoupling of commitment and loyalty and this mixture of precariousness and personalization are phenomena that require us to rethink not just the relationship between organizations and individuals but also the meaning of work, leadership, and leadership development.

What does it take to have successful and meaningful careers in this context? What does it mean to lead? What does it take to lead well?

And how do we help aspiring leaders do it? All my writing and teaching revolves around these questions.

How do you research these topics?

I’m a qualitative researcher. I talk to people, I spend time with them, and I try to make sense of their experience: how their inner world shapes and is shaped by their outer world.

For example, Jennifer, Jack, and I did a large study following a cohort going through an intense MBA program. We looked at their development not from the perspective of what kind of jobs they got or what they learned or didn’t learn but with a focus on their identity—how their sense of who

45

One of the things we unearthed was the process these managers went through to personalize their learning—how they employed the MBA to bring who they were closer to what they did. That study resonated with many. It even won an award as the “most important contribution to graduate management education” from the Academy of Management. I think it was because more and more people hope that their work will foster their personal development, help them thrive and grow, not just get things done and make a living.

Another thing we found was that managers who no longer rely on their employing organizations to provide them with a career trajectory for life often use leadership development programs as a way to make themselves more portable, to access and equip themselves for the kinds of uncertain and mobile careers that are very fashionable these days.

This ties in with a study I am working on with Isabelle Solal that is focused on what we call “nomadic professionals.” These are individuals whose mobility often affords them valuable learning and opportunities to access leadership positions. Precisely because of their flexibility and mobility, however, these professionals’ history, mindset, and experiences are often divorced from those of people who don’t have the opportunity to move around as much.

What we have now is a nomadic leadership elite.

Yes, Richard Sennett, a sociologist at the London School of Economics, has written a lot about it. He says, Look, it’s a small minority, but it’s a minority that has profound cultural influence because they are people who are celebrated and visible, so they have enormous access to opportunity.

I am fascinated by this shift because for millennia, nomads certainly weren’t elite in any way, shape, or form. In fact people who moved around a lot were considered to be questionable, unacceptable, dangerous.

Isn’t that’s why we have trouble trusting people who are part of this elite, because they travel constantly?

That’s the paradox that I’m interested in. On one hand we keep telling people to move around and gather experiences because that’s the only way you’re going to get access to senior roles. But the kinds of prescriptions we’re offering to become a leader are possibly putting you at risk when you are a leader. They make you qualified but not necessarily trusted to lead. That’s the promise and peril of this zeitgeist.

Given that this elite is leading organizations, why should people feel loyalty to organizations?

There’s data showing that the psychological contract between people and organizations has shifted dramatically from a relational one based on mutual commitment to a more transactional one based on an exchange of services for rewards. We’re now past the generation that felt betrayed by that shift, and we have a generation that has adapted to it, saying, Well, if organizations are not prepared to show me any loyalty, why should I? At a psychological level the chance to experience liberation in this very uncertain labor market is perhaps the biggest privilege you can have, as opposed to the vast majority of people who experience profound anxiety because they don’t know how stable their jobs are or are likely to be.

Yes. If you consider that to be liberation.

Well, I think the people who can experience it as liberation are the fortunate ones, but they aren’t the majority.

Another one of my interests has to do with our preoccupation with meaningful work. It’s very hard to find meaning in the sense that people talk about it, as an almost romantic experience of fusion with your work. Many of us desire this meaningful employment, and at the same time we don’t want the potential flip side, which is that you can be consumed.

In my research and my work with executives, however, I have found that the people who experience the most meaning at work are both liberated and committed. Their commitments don’t

THINKERS

they were, where they came from, and what they wanted was affected by their business school experience.

46 tie them up but push them to be more themselves, to take more risk, to stay open. If you go back to psychology, it’s a bit like love. Love doesn’t always constrain you. Sometimes it brings you to be more who you are than you would be if you weren’t with the person you love.

An increasing number of organizations say, join us because we’d like you to be more than you could be on your own. I’m interested in what it takes to make good on that promise. I don’t believe it is just marketing. There is a real demand on the part of individuals, and it’s only going to get larger as a new generation enters the workforce that has been raised with the idea of following their dreams.

“In my research and my work with executives, however, I have found that the people who experience the most meaning at work are both liberated and committed. Their commitments don’t tie them up but push them to be more themselves, to take more risk, to stay open.

Have people now got unrealistic expectations?

Will they ultimately be disappointed?

Life is full of disappointments. The question is, what kind? A great quality of mental health comes from having survived disappointment with some learning but without having had your soul crushed. If we can help people engage with their ambitions and their ideals and then learn to suffer disappointment without losing hope, I think we’re going to have very good leaders.

I don’t think anyone can lead in an inspiring way if he or she is a realist. There has to be an element of idealism, of wishing and uncompromising hope. At the same time, what you don’t want is leaders who,

because of their burning ambition and idealism, can’t deal with setbacks or aren’t able to tolerate questioning or to question themselves. They are the most dangerous, the most fundamentalist leaders.

I do a lot of work with senior executives, and I always ask, How many of you stress because things aren’t going in the direction you really wish them to go or aren’t going there fast enough for you? And all of them raise their hands. Then I ask, How many of you beat yourself up for it, stand in front of the mirror and say maybe that’s because I’m not as good a leader as I should be? And all raise their hands again.

We keep telling people that they can lead and be happy, but the reality of leadership is often different.

Acknowledging the tension built into leadership may help get us leaders who are more able to accept limitations without losing aspiration.

Is there a crisis of leadership? There’s always the slight suspicion that every generation throughout the ages has said there’s a crisis of leadership.

I don’t think there’s any generation that hasn’t thought that the way people led in the previous generation was strange and inadequate.

I use the metaphor of a bus. There’s always been at some point for every generation a struggle for the steering wheel and new generations saying, Okay, now I want to drive the bus, and the way you’re driving it isn’t the way I think it should be driven, and where you’re taking us isn’t where we should be going. Today, however, what you see is lots of people questioning whether we should be on the bus, trying to get off the bus altogether, and trying to find new means of transportation, metaphorically speaking.

We are not just questioning current leaders; we are questioning the ability of current institutions to produce and enable good leadership and good followership.

But we’ve had over 50 years of leadership development programs.

That’s a great fascination of mine. Leadership development is one of very few industries that can chastise its own product and continue producing it! I think the issue, frankly, is that leadership development has not changed as much as the world of work has.

47

A lot of leadership development is still designed with this implicit goal in mind. But today, work and organizations are very different, as we were saying earlier. They aren’t homogeneous. They are precarious; they are very personal. Therefore, leadership development can’t be focused on rising up and distinguishing yourself. It has to be reoriented toward a different goal, that is, keeping people connected to themselves and others—the two connections we need for a shared purpose and direction to emerge.

This is why in my leadership development programs, where I apply these ideas and research, we focus not only on developing leaders—on helping executives get the perspectives, skills, and courage they need to lead—but on developing leadership communities as well, that is, groups of leaders who take joint ownership and responsibility for their organizations’ results, structure, and culture.

Leadership communities, of course, are not always inside one organization. For many executives, the people they trust and rely on are actually peers in different organizations or in different sectors. What does it mean for an organization that these leaders are influenced by a community that is actually outside the organization? Usually we’re very positive about this because we look at how these external ties open their minds, keep them connected, and create networks and opportunities for the company.

But there’s a dark side again. These bonds make those leaders slightly questionable. If I’m a follower, I may

be tempted to ask, Where do your commitments lie?

Do they lie with me or do they lie with this group that seems to be very important to you? And so what happens is that by cultivating the outside connections leaders need to be effective, they also make it a little harder to gather trust. And as a leader if you don’t have trust, you have nothing.

The conversation is moving toward your definition of leadership.

I do take issue with this idea of leadership as the ability to get others to do things that they wouldn’t otherwise have done. That’s a traditional definition.

And I think we’d be a lot better off with a definition of leadership as having the courage, commitment, ability, and trust to articulate, embody, and help realize the story of possibility for a group of people at a point in time. That is closer to what leaders really do. First you need to have the courage to do something. You need commitment. You can’t do it just for a day or two. You do need some skills, but you also need to be trusted.

It is something that comes from within and is also grounded in some group at a certain point in time. If you want to be “a leader,” you are no one’s leader.

We know from history that people forgive leaders for murder but don’t forgive them for inconsistency.

The classic disappointment with charismatic leaders is that they articulate their vision so beautifully and embody it with such great purity that people think some profound transformation is going to happen.

Then the realization inevitably meets constraints, and what happens is that people blame the leader.

Sometimes there’s a thin line between what leaders promise and the promise that people see in their leaders. That’s a very beautiful word in the English language that someone is promising, which can really mean both things, which is that they are promising something but we see promise in them.

For me, the view of leadership as a position and a possession—as a job or a set of skills—is quite dangerous because it doesn’t prepare people for the complexity, for the depth, and for the reality of leadership. It reduces it to a title or a checklist. I’m not saying you don’t need all of that, but there’s a lot more to leadership than that.

THINKERS

Look at the way we have defined leadership for the last 30 years as the exercise of influence, as an activity, as something that the leader does to others.

We haven’t paid enough attention to leading as something that the leader does on behalf of others.

We have looked much more at one side of the leadership relationship, which is from the leader to the follower, and we’ve neglected the other side, from the follower to the leader. Leadership development has a long history that goes back to World War II and military and homogeneous organizations. In that kind of organization, developing leaders means helping people rise up, distinguish themselves.

48

THE BIG

IDEAS What are the big ideas set to change the world of work now and in the future? Here is Thinkers50 selection of big ideas to investigate now.

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Peers Inc./Robin Chase The incorporation of the peerto-peer economy into the business world, championed by co-founder of Zipcar and transportation entrepreneur.

Book of the same title published

by Public Affairs (2015). A doer and a thinker. Unusual. www.robinchase.org Nine Visions of Capitalism/ Charles Hampden-Turner and Fons Trompenaars Long-term Anglo-Dutch writing duo provide new visions for the future of capitalism based on unlocking the true meaning of wealth creation. Lots of reinventing capitalism ideas, but this is the most coherent.

Exponential Organizations/ Salim Ismail, Michael Malone and Yuri van Geest Ismail is an entrepreneur, former VP of Yahoo, founding executive director of Singularity University; Malone a leading journalist and author; and van Geest a digital consultant and speaker based in the Netherlands. Authors of Exponential Organizations (Diversion, 2014). www.exponentialorgs.com

Return on Character/Fred Kiel Co-founder and principal of KRW International, Kiel talked to 100 CEOs and researched for seven years to bring evidence to bear on how and why character is the bedrock of effective leadership. Proof positive. www.krw-intl.com

Behavioral Fitness/Lee Newman Workplace behaviors can be fine-tuned and improved in similar ways to how we improve our bodies. Positive psychology meets leadership courtesy of IE Business School professor and former consultant. www.leenewman.org

Blue Ocean Leadership/W Chan Kim & Renée Mauborgne INSEAD professors and authors of global bestseller Blue Ocean Strategy (HBR, 2005), turn their attention to leadership and reconstitute it as a service. www.blueoceanstrategy.com

Holacracy/Brian Robertson Philadelphia-based entrepreneur and former CEO, author of Holacracy (Portfolio, 2015) which provides an antidote to hierarchy. www.holacracy.org

Collaborative Intelligence/ Dawna Markova and Angie McArthur Markova (ex-MIT) and McArthur of Professional Thinking Partners champion the concept of CQ in 2015 book Collaborative Intelligence (Random House). www.ptpinc.org Onlyness/Nilofer Merchant “The thing that only that one individual can bring to a situation,” explains the Silicon Valley-based ex-exec Merchant, author of 11 Rules for Creating Value in the Social Era (HBR, 2012). Working now on new book. www.nilofermerchant.com The Culture Map/Erin Meyer Cultural relativity applied to the contemporary business world by INSEAD professor and author of The Culture Map (Public Affairs, 2014). www.erinmeyer.com

Leading from the Emerging Future/Otto Scharmer Scharmer is founding chair of MIT IDEAS program and the Presencing Institute. Awful name, we know. Author of Leading from the Emerging Future (Berrett Koehler, 2013), Theory U (Berrett Koehler, 2009), and Presence (Crown, 2008). www.ottoscharmer.com Leadership Capital Index/ Dave Ulrich Prolific author from the University of Michigan’s Ross School, provides an index by which investors can gauge leadership strength of an organization. Important now tool for investors. Book out later this year (Berrett Koehler). www.daveulrich.com

THINKERS

Collaborative Consumption/ Rachel Botsman Co-author of What’s Mine is Yours: How Collaborative Consumption is Changing the Way We Live (HarperCollins) and a visiting lecturer at Oxford University, Saïd Business School, Botsman’s TED talk on the collaborative economy has been watched by more than 2 million people. www.rachelbotsman.com

50

MANAGING UP WITHOUT SUCKING UP

by Whitney Johnson

Whitney Johnson’s straightforward steps to help the squeamish build a successful relationship with their superiors – without feeling manipulative.

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Finch achieves this remarkable feat through a combination of lying, scheming and manipulating.

He tells the head of HR that the CEO said to give him a job when he hadn’t. Then he supports a rival for a promotion, not to be selfless, but because it’s a dead-end job. And when he’s about to get fired, he refers to all his fellow employees as family, saving his skin.

If “managing up” also makes you think of “sucking up,” here are my straightforward steps to help the squeamish build a successful relationship with their superiors – without feeling manipulative.

Be very clear about what job you were hired to do – and do it. It seems self-evident, but as Pam Fox Rollin shares in her book 42 Rules for Your New Leadership Role, “Many flameouts can be traced to missteps during their first quarter. More importantly, for the 60-75% of leaders that survive into a second year (1/3 fail within the first year), these leaders’ effectiveness and trajectory are powerfully affected by choices made in the first year.” When you get hired, you are being hired to do a very specific job, even if your manager doesn’t know exactly what it is yet. When you are new, you will see lots of areas that could be improved upon outside of your purview. Make note of them, but don’t let them distract you. I have certainly made this mistake, suggesting to my boss that I solve all those pesky problems out there, rather than focusing on the ones right in front of me. The first step to managing up is to scope out the job you were hired to do – and then execute it.

Understand what job your boss was hired to do. In the kind of organisation you want to work for – not an Office-like farce — what got your boss to the next rung of power was properly understanding the job and meticulously performing. She was, as a consequence, given an opportunity to do a more important job. It’s easy to slip into the mindset of your boss as a vending machine for your needs, giving you an opportunity to learn, to get promoted, to make a living, because we all tend to be self-focused.

It’s easy to slip into the mindset of your boss as a vending machine for your needs, giving you an opportunity to learn, to get promoted, to make a living, because we all tend to be self-focused.

Let’s revisit an experience I wrote about a few years ago. When I shared my career aspirations with my boss’s boss, he dismissed me. I now wonder what would have happened if I had taken my own advice, and rather than approaching him hat in hand, I had sussed out what problem he was trying to solve, and presented him with a credible solution, behaving as the senior manager I hoped to be. Perhaps the conversation would have gone differently. When my juniors present me with a solution, I may not agree, but if they have done their homework, it’s an opportunity for me to see how they think, and to further engage. The raison d’etre of organisational life is to get things done. So the second step to managing up is to know what problem your superior is trying to solve in order to create value, to become an indispensable solution.

Remember that the people you work with are not family. I can’t emphasise this one enough. Pop culture likes to suggest that our co-workers are family, as did J. Pierrepont Finch when he belted out The Brotherhood of Man to save his job. In most fictional media about the workplace, there is a familial type of relationship. It is easy to understand how this sense of familiarity develops, given that we often spend more time with our co-workers than our actual family. This was historically reinforced by the patriarchal view of the workplace – you trade your life for a paycheque and benefits. But it’s difficult to manage up, acting the responsible adult that you are, when you’ve hired (no doubt, subconsciously) your boss to do the emotional job of being a parent or partner. If you want to be taken seriously, you have to solve problems and own your expertise. Avoid becoming too familiar – your boss is not your best friend.

THINKERS

When I hear the phrase “managing up,” I automatically think of the seemingly spineless J. Pierrepont Finch who rises from window washer to president of Worldwide Wicket Company in How to Succeed In Business Without Really Trying.

52 It is easy to understand how this sense of familiarity develops, given that we often spend more time with our co-workers than our actual family.

When it comes to managing up, there is an underlying belief in an asymmetry of power, and you either manipulate your way around this, or resign yourself to the fact that the boss or the stakeholder on the other side of the table has

the power and you don’t. Try turning this power struggle on its head and think of your boss as a client – as if you were working freelance. Provided there are no J. Pierrepont Finch politics at play, so long as you create value, you will have a job. If you don’t, you won’t. Power is the ability to get things done. Managing up helps you get the resources you need to get those things done. The classic definition of managing up is about developing a good working relationship with a superior. Better to simplify: managing up is solving problems that your stakeholders need solved.

This article originally appeared in Harvard Business Review.

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54

LEADING

LIGHTS

Teams, corporations, and organizations of every kind, demand and require leadership. Yet the nature of that leadership and how we understand the role of the leader is constantly being reappraised. Here is Thinkers50 selection of leading lights.

55 Marc and Samantha Hurwitz Husband and wife consulting team. Authors Leadership is Half the Story: Rethinking Followership, Leadership, and Collaboration (University of Toronto Press, 2015).

Amy Cuddy Harvard Business School social psychologist, author of Presence (later in 2015).

Herminia Ibarra INSEAD professor and author of bestselling Think Like a Leader, Act Like a Leader (HBR, 2015).

Marshall Goldsmith One of the world’s leading executive coaches and author, most recently of Triggers (Crown, 2015).

Fred Kiel Co-founder and principal of KRW International. Author of Return on Character (HBR, 2015).

Hal Gregersen Executive director MIT Leadership Center; and coauthor of The Innovator’s DNA (HBR, 2011).

W Chan Kim & Renée Mauborgne Creators of concept of Blue Ocean Leadership. INSEAD professors and authors of bestselling Blue Ocean Strategy (HBR, 2005).

Heidi Grant Halvorson Social psychologist based at Columbia Business School and the NeuroLeadership Institute.

Author of No One Understands You and What to do About It (HBR, 2015).

Tim Leberecht Chief marketing officer of NBBJ and ex-Frog Design. Author of The Business Romantic (HarperBusiness, 2015).

Gianpiero Petriglieri Psychiatrist, INSEAD professor and prolific HBR blogger.

Otto Scharmer Founding chair of MIT IDEAS program and the Presencing Institute. Ideas. Author of Theory U (Berrett Koehler, 2009) and Leading from the Emerging Future (Berrett Koehler, 2013).

Linda Scott Said Business School academic and creator of concept of the Double X Economy.

Dov Seidman Founder and chairman of LRN. Author of How (Wiley, 2011).

Liz Wiseman Former Oracle exec and author of Multipliers (Harper, 2010) and co-author of The Multipliers Effect (Corwin, 2013), Rookie Smarts: Why Learning Beats Knowing in the New World of Work (HarperBusiness, 2014).

THINKERS

Bas Blekkingh Teaches at Nyenrode Business School, former soldier turned champion of authenticity. His book Authentic Leadership (Infinite Ideas, 2015) is now available in English.

56

INNOVATORS WEAR

CARDIGANS

by Stuart Crainer & Des Dearlove

Innovation is not solely the preserve of desperately fashionable entrepreneurs in Silicon Valley. Sometimes it comes wearing a cardigan.

57

We met the managers and leaders from the Japanese company Fujitsu involved in this huge project. It was striking how down-to-earth they were. The Fujitsu team were not classic Silicon Valley material. They were neither hip nor cool.

There were no jeans, not even chinos. No casual wear; nothing casual at all. Indeed, when we met the project manager he looked like a typical middle-aged Japanese corporate man wearing a suit with a cardigan to stave off the Tokyo winter chill. Ordinary people involved in an extraordinary project.

We also talked to Aiichirou Inque, a gentle, affable yet intense man. After 27 years with the company one could have forgiven him for an air of ennui.

Instead, when we spoke he was a ball of creative energy, excited and under pressure in equal measure. “At my previous company I couldn’t do the things I wanted to do. I wanted to build something by myself, not just to use it, but to build it. For me that’s what it is all about.”

And now Inque was charged with developing the K Computer being built at Japan’s Institute of Physical and Chemical Research, known as Riken, near Osaka.

Developing the supercomputer is about more than an arms race. The term supercomputer was coined in the 1960s to describe a computer that is at the frontier of current computing capability. Today, supercomputers are attracting a lot of attention as a tool for solving important challenges facing human society, such as environmental issues and the next generation of healthcare.

Supercomputers are capable of quickly performing large-scale and advanced calculations that are difficult or impossible to solve with conventional computers. For example, they are used in

quantum physics, weather forecasting, and climate research. Supercomputers are used instead of experimentation for physical simulations such as testing airplanes in wind tunnels, and research into nuclear fusion. They are also used to compute the structures and properties of chemical compounds, biological macromolecules, polymers and crystals.

One reason why supercomputers have become so important is because of their role in computer simulations. Computer simulations, which use computers to reproduce various phenomena, have been called the “third pillar of science”, alongside theory and experimentation. Increasingly, the power of supercomputers allows researchers and designers to identify optimal solutions without the need for time-consuming trial and error.

Today, supercomputers are attracting a lot of attention as a tool for solving important challenges facing human society, such as environmental issues and the next generation of healthcare.

Inque points to the Batista heart operation as an example of the new supercomputers life changing powers. The Batista procedure is an experimental open-heart surgery procedure that aimed to reverse the effects of remodeling in cases of endstage dilated cardiomyopathy. Invented in 1994 by Brazilian surgeon Randas Batista, the operation involves removing a portion of viable tissue from the left ventricle to reduce its size.

Although several studies showed benefits from this procedure, studies at the Cleveland Clinic concluded that it was associated with a high failure rate. One use of the K computer that Fujitsu is exploring is the development of a heart simulator, which would allow surgeons to anticipate the likely effects of the Batista procedure to determine whether it would be beneficial to the patient and the likelihood of complications.

THINKERS

The world’s biggest supercomputer is a big deal. In 2012 we talked to members of the Japanese team involved in developing a computer nicknamed K. The name was a play on the Japanese word ‘kei’ for the number 10 to the power of 16. It is a big number and it was a big build with a $1 billion development budget and over 1,000 people involved. Development began in 2007 and ended in 2012 with the K being celebrated as the fastest of the fastest.

58 But this is only possible if Fujitsu’s engineers work closely with the doctors who are highly skilled in performing the operation. “The point where the computer engineer talks to the doctor is key,” says Inque. “That ability to work with customers and end-users is part of Fujitsu’s DNA.”The potential benefits for mankind are huge. But so are the challenges of building the world’s most powerful computer, as Inque acknowledges. “The reality is that because the supercomputer is so large we will and are encountering things we haven’t experienced before or don’t really expect. That’s part of the challenge – and its also part of the excitement. We are really pushing the boundaries of what is possible with computing.” Such a project is also highly inspirational for Fujitsu employees.

“I want the young engineers working on this project to be excited and to enjoy their work,” says Aiichirou Inque. “But, let’s be clear: the K Computer will make the future for Fujitsu, Japan and for human beings. It will give us the ability to look at the weather of the future and there are a huge number of healthcare uses. That’s what I mean about its power to change humanity. A computer is

just a big box; what’s interesting is to see it as a tool to help mankind and society.”

Yet, Inque reins in any thought that Fujitsu is throwing every resource into a single project or that he is creating some commercial misfit. “There is a balance. You don’t want to throw everything at it.

You need to think of costs and customers. You don’t build the biggest computer simply for its own sake.”

The current market for supercomputers is estimated to be around $9 billion and Fujitsu hopes to control 10 per cent of that market by tapping in to growing demand in Europe, especially in Germany, France and the UK. What makes this all the more exciting is the advent of Big Data. Collecting and making sense of large amounts of data requires big computing power. Big Data and supercomputers could be a marriage made in heaven.

In the end, though, there is more than money involved. As Inque explains: “first and foremost the computer needs to work and, second, it needs to be heavily used. That’s how its success should be judged. Does it make a difference to human life?”

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THINKERS

It's character that creates impact!

59

60

BIG D E A S

Ideas of thinkers from across the globe.

61 | Don Tapscott

How technology and globalization are reshaping the world economy? What it means for us as individuals and for corporations. Fundamentally as I look at just 12-13 years from now, emerging economies will be half of the world’s GDP and shall account for more than half of the FDI flows from the world. In fact, not just markets and production centres but also business services are emerging as the world’s hotspots for innovation whether its Bangalore or Beijing. I would say globalizing the corporate brain, i.e. we need to be very well informed, be smart and be open about the key hotspots in the world. We also need to be very capable of integrating and connecting the dots. The diversity of the world will just confuse us. If you think about IBM, Google, Microsoft and Wal-Mart, they are trying to say is that the world is diverse but at the same time, highly interconnected.

How can we play with this new economy along with learning from it? So being multipolar, interconnected, and global hotspots are my big idea.

There are new models of how we can solve the world’s problems, cooperate, and govern ourselves on the shrinking planet.

The old models are necessary, but they are insufficient. They are based on nation and states, and they came out of the end of the Second World War, the UN, the World Bank, the IMF, the G8, the G20 and so on but increasingly, they are unable to address the growing problems effacing us. Are these problems too hard to solve or do we need a new model. I’m working on what are the new models? There are many different types of these new models that are involved in advocacy and developing policy, creating knowledge and in some cases, we have networks that govern something on the planet but are not based on states. The internet itself would be an example of that.

So, this is a wonderful new opportunity to address these problems differently enabled by the digital revolution but we don’t know anything about these networks. So, my Big Idea is let’s find out what these things are, what makes them tick, how they can be more effective and we can have a real impact on business and the world.

| Daniel Pink Today like it or not, we are all in sales now.

A huge portion of what we do is selling products, selling ideas, selling ourselves but sales aren’t what it used to be. We have moved from a world of information asymmetry to a world of information parity, a world of buyer-beware to a world of celeb-beware. In a world of celebbeware, you have to learn the new A, B, C’s, attunement, buoyancy, and clarity, perspective taking, resiliency, and going from problem-solving to problem finding.

You have to master three key skills. To pitch, to improvise, and to serve and ultimately what this idea says is that we are all in sales now but today the way to do it better is not by being more like a sleazy sales person but being more human and more like yourself.

| Douglas Ready The idea that I’m concerned about regarding investigating more is to understand the core ingredients that really comprise gamechanging companies, and my argument is that these are companies that have simultaneously inculcated three critical capabilities. These are organizations that are purpose driven, performance oriented, and principles led. This sounds very easy to do but incredibly difficult to maintain those balances. So, I think finding organizations that are led by a sense of purpose yet have the edge of being high performance oriented and are guided by a set of enduring principles and values are what I think a lot of organizations are looking for. They often can master two of the three and yet it is all

THINKERS

| Anil Gupta

62 about putting those three things together.

This is what I think is the next Big Idea.

| Erin Meyer In today’s globalized economy, you might be in America and working in Nigeria, you might be a French woman negotiating a deal in Japan or an Australian trying to woo a new client in Brazil. You can do your work over the phone, over Skype, or you can get on a plane that’s the easy part. The difficult part is trying to figure out how to conduct your business with another culture. Is it the Mexicans who don’t like criticism and the Danes who don’t want to mince words or is it the other way around? Is it the British who like a lot of small talk and the Chinese who want to get right down to business or is it the reverse? In today’s global world, we need to be constantly teasing out how our cultural bias is impacting our effectiveness so that we can get the results we need wherever in the world we may be.

| Gianpiero Petriglieri One of the marks of good leadership is the ability to hold the tension between pursuing a consistent direction and being able to question it. The moment you lose hold of that tension, is the moment you stop being a leader and become a fundamentalist. By that point, you’re no longer wearing the mantle of leadership the mantle has worn you out. I don’t think our fundamental expectations of leaders has changed at all.

Our expectation is the same as previous years; that they understand our concerns and aspirations, look after the people, places, and principles we care about, articulate and embody and realize a story of possibility. This maybe called a vision or a strategy, but it remains a story that gives us hope for the future. The things that have changed for the worst are the aesthetics of leadership, the meanings and images that we associate towards leaders. Leadership

is very important because it drives the way we conduct ourselves. When we get to lead, who gets to lead in the first place, and who we choose to follow?

We’re still too accustomed to an image of leadership as a position, or a possession of a thing that one owns; by the title, brilliance, skills that entitles one to set a direction for others. Until we change the images that drive us, we come to realize that leadership is more than a position or a possession, it’s an activity and a relationship. Until we come to view leaders as custodians as much as shapers of the purpose and principles that we care about we’ll keep getting more and more leaders who are very hard to trust. There is no such thing as future leaders. There are people who lead and people who don’t. There are moments and circumstances in which we can lead and other moments and other circumstances in which we can’t. Leadership is not where you need to be of a certain age and get a stamp of approval. To be a leader one needs to have purpose, some courage, and the permission of the people who matter most, the people whom you’re inviting to follow. A Management Acceleration program should put equal emphasis on personal and professional development.

We pay as much attention to what leaders do as we do to who leaders are. It should also put equal emphasis on the individual’s history and aspiration and on the groups and social systems in which they operate.

So, we are participants, explore and learn to manage the intersection between their own needs & expectations and needs & expectations of the groups they are in.

That is a space where leadership happens or when it fails sometimes. Finally, the approach should aim not just to develop individual leaders but to develop what we call leadership communities as well, because that ultimately is what leadership is. It is working with others, every day, to make your organization and your community more like the one you like to live in.

63 Part of being a great leader is being innovative, creating solutions that no one else has seen. So, I make choices to build new businesses and new ideas that make a powerful deep impact. I need to change my actions to produce those sorts of creative ideas. Here’s what innovative leaders do, they ask provocative questions, they look at the world around them trying to figure out what’s going well, what’s not and they will not give up with their questions until they figure out why. Then, once they start asking the right questions, they get out of their office, they get into the world, and they start collecting data themselves on real time. So, they go out, and they observe like an anthropologist. They are careful in their observations and are looking for surprises, the unexpected things that no one else sees.

They also talk with people and network with people who are not like them. When we are seeking out friends, we look for people who are like us, and they are friendly to us but when we are looking for new ideas, we have to seek out people who are not like us, different gender, different ethnicity, different industry and so on. Innovative companies are led by innovative leaders. It has been observed from the global data that to make a company innovative one needs to act innovatively. This is expected from everyone in the company which means getting new ideas for processes, products, services, and even business models that take harnessing thousands of people. Getting them engaged with the same skills to get ideas about their part of the workflow can help a company to be more innovative. The innovative companies around the world hire people who have these skills coming into them. Companies who are innovative also have these processes in place that enable lots of people to be graded for innovation.

For example, the Keyence Corporation in Japan makes small sensors. They do a superb job of training all of their sales staff to go in as great observers in the factory environments, come back to the technologist

and create the perfect sensor for the environment. Investors are willing to pay more for the company share price because they believe they will do something good in the future. When it comes to innovation, this walking the talk, doing it yourself, I think is more important than any other change initiative that a manager can lead because innovation at the core is risky. Jeff Bezos, the CEO of Amazon said that his job as a leader at Amazon is to reduce the cost of experimentation, taking risks and trying things so that many experiments happen at Amazon. The attitude indicates that the job is not only as an experimenter and a risk taker but building good ideas, cutting the path or creating the way, building the space around the organization which is safe for anyone.

| Herminia Ibarra Today the managers have to step up to the leadership roles but without the benefit of a formal job move or an anticipated promotion. So, it’s up to them to figure out when that famous “we got you here,” “we’ll get you there” moment has come but also to come up with their own means of making the transition. Usually when you move up into a new role, you have to interact with different kinds of people and people treat you differently. You are assigned different kinds of work which changes you irrespective of the fact whether you are in the same role/title. Even though the expectations change but the environment conspires you to stay the same. So, you have got to manage it yourself, and the only way to do so is by changing your activities and your relationships. This would change the mindset that you need to step up the leadership.

| Lawrence Capron Business leaders have to change their strategic thinking because they often jump to their favourite mode of growth instead

THINKERS

| Hal Gregersen

64 of thinking very carefully how they should grow their organization. Should they grow organically? Should they buy companies or should they enter into alliances and partnerships? It’s difficult for business leaders to adjust their mind-set for three main reasons. Firstly, they have their own personal biases. Some of them prefer to do acquisitions, others prefer to focus on internal innovation. Secondly, some teams, are very powerful with vested interest within their organization. For instance, in some companies the M&A team will be very powerful and will gear the organization towards making acquisitions. Thirdly, even very good acquirers tend to be trapped by their processes. They always rely on the same mode of growth. Partnerships and alliances become increasingly important for business leaders. We see innovation emerging from so different parts of the world that it’s important to try to have access to new source of knowledge and most of the time it’s not possible to have full control of all the organization that can potentially have interesting capabilities.

Knowledge for your own organization and the alliances are so to be more flexible and less expensive than full acquisitions. The program on mergers and acquisitions should see the acquisition as part of corporate development toolkit instead of looking at acquisition as a strategy by itself. Most of business leaders have an objective to learn how to execute an acquisition deal but also more importantly they should focus a lot on when does it makes sense to make an acquisition instead of using partnerships or internal development.

| Liz Mellon The strategy gets stuck in organizations, i.e. it doesn’t get executed is because of the changing initiatives. Assuming $415 billion would be spent on strategy, 70% of it is wasted. Initially it was thought that the strategy gets stuck because of lazy workers or people not working hard enough.

By 1980s and 90s, we were at the middle manager level when they got blamed for a lot of things. They were called appalling names like cooked keys, the frozen middle and the concrete layer. Though the strategy was fine but it got stuck at the middle level.

The executive level just below the CEO and his or her executive committee don’t buy the strategy, and they don’t see themselves as an aligned force for good to execute the strategy. That’s where it’s getting stuck.

| Liz Wiseman Our organizations and our work teams are more intelligent than we can see with our naked eye. There is more intelligence inside of our companies than we are using essentially. There is latent intelligence all around us. A kind of leader who gets access to that intelligence realizes that there are a lot of people who are working extremely hard, they might even be overworked but they are underutilized, and these leaders who utilize the intelligence of others are called Multipliers. They use their intelligence to access, grow, multiply the intelligence of people around them.

I also studied leaders I call ‘Diminishers’.

These are leaders who are smart. They solve problems that get things done, but they use their own intelligence in a way that tends to drain intelligence from people around them. They are smart, but the organization around them isn’t smart. An Interesting about these multiplier leaders and these ‘Diminisher’ leaders is that these ‘Diminishers’ get less than half of the intelligence in people around them where these leaders that I call Multipliers get all of it. The idea behind Multipliers is that leaders can use their intelligence to amplify the intelligence of others. At the top of the intelligence, hierarchy isn’t the genius who has the answers who gets it done but the genius maker, the leader who uses his or her intelligence to ask the question, to issue the challenge, to unleash and harness intelligence across the entire organization.

65 Inspired by my daughter, Dr. Kelly Goldsmith, we come up with six questions every day to challenge everybody that we work with, and the results have been fantastic. The questions were- firstly, did you do your best to set clear goals?

Secondly, did you do your best to make progress toward goal achievement? Thirdly, did you do your best to be happy. Fourth, did you do your best to refined meaning?

Fifth, did you do your best to set clear goals? And finally sixth, did you do your best to be fully engaged? We asked the above 6 questions from people everyday and observed that they get to focus on themselves and see what they can do to make a positive difference. This has led to increase in employee engagement. After a two-week study, it was found 59% of the people got better at everything, 59% better at 4/6 and 86% got better at something and nobody gets worse. So that is my Big Idea.

| Martin Lindstrom Home Creation of Brands - Now, what is that? Now, we all know 3D printing right but that would go much further in the future just as you today are subscribing to Netflix, you’ll in the future subscribe to various brands, securing the permission to produce those products at home. You’ll produce your own set of liquors at home, your own instruction manual, lego bricks, your own perfume or even your own candy because that is what printers allow us to do, to print the products at home and secure a license from the various brands we love and adore. This is the future of branding, basically to print the brands at home on your own printer.

| Nilofer Merchant Relationships are to the social era what efficiency is to the industrial era. This has a

| Navi Radjou ‘Jugaad’ is a mind-set that is embodied by thousands of entrepreneurs in emerging markets like India, Africa, Brazil, and China.

They were able to innovate in very difficult conditions. There are very limited resources, and yet they tap into the ingenuity to create affordable and sustainable solutions that bring more value at less cost for the fellow citizens. In the west because of lack of resources we recommend and advise western companies to adopt this Jugaad mind-set to create more value and less cost for western consumers as well. So, encouraging oneself to look at the idea of Jugaad Innovation and how it can be applied in the company to create more value at less cost for all stakeholders.

| Peter Fisk Game Changers - These are the companies who are changing the world in their own vision. They have the audacity to create their own space in markets. They are the companies who play by their own game and by their own rules. They are the companies who create their own organizations in response to that changing world. They are the speed boats who zig in and out of a fast changing environment, not like the super tankers who are stuck on one course and they connect to the ideas that really matter to people today. They make life better, and they make the world a better place.

THINKERS

| Marshall Goldsmith

lot of implications for organizations. Today it fundamentally matters on who you are as an individual because connecting the visuals can do what once large organizations could; which means you have to tap into who you are. The story whether good and bad, to be able to create value is called ‘Onlyness,’ the place that only you’re standing at and when you tap into that place, you can create anything.

66 | Richard Rumelt Game Changers - These are the companies who are changing the world in their own vision. They have the audacity to create their own space in markets. They are the companies who play by their own game and by their own rules. They are the companies who create their own organizations in response to that changing world. They are the speed boats who zig in and out of a fast changing environment, not like the super tankers who are stuck on one course and they connect to the ideas that really matter to people today. They make life better, and they make the world a better place.

| Rita McGrath A concept that departs from a lot of traditional views and strategy is that the most important predictor of performance is going to be where a company stacks up, and positions within its industry and I think that’s very misleading. What I think we need to be thinking about instead is a concept called an ‘Arena,’ which is a specific market or customer group that you’re targeting which may or may not have anything to do with other people in your industry. Just as an example, in the year since the iPhone was introduced spending by American households on everything other than telecommunications and similar products has gone down. So, if we are benchmarking ourselves against other things in our industry, we don’t see that the disposable income we need has just evaporated, we’re going to be making a big mistake in our strategy analysis. So, think Arenas, not industries.

| Roger Martin Distinguishing between Expectations and Reality - Most people believe that a stock

price is something real that it’s based on the earnings of the company and the numbers of the company. It is not. It is the sum of all the expectations of people watching the company about its future. That is why companies can’t beat their expectations forever, and that is why stock prices go up for periods. Even if the company is still performing well, it will plummet and this creates havoc in the market. It also is why stock-based compensation which rewards increasing expectations rather than rewards increasing real performance. This is bad for companies and bad for the economy and actually should be banned, and that’s because we should be focusing on making companies better not on manipulating the expectations about the future of companies.

| Stewart Friedman My recently published book called Baby Bust: New Choices for Men and Women & Work & Family, reports the results of our study comparing the class of 1992 with the class of 2012. In 1992, hundreds of people were surveyed about all aspects of their lives, careers, hopes, and their dreams and the same set of questions were asked from the class of 2012, the Millennial. One of the questions we asked was whether they had plan to have or adopt children, and the response options were yes, probably, not sure, probably not and no. In 1992, 78% said yes and in 2012, 42% said yes. In Baby Bust, I explored the reasons for why we see this drastic shift. Among men and women, the reasons are different but most importantly is our social policy, educational policy, organizational practices and what we can do as individuals and as families. What can we do to help those who want to have children, make it possible for them to do so? The reasons that men don’t plan to have children to the same degree as in the past have to do with their wanting to be more engaged in their families. If they became fathers, they are concerned about the debt that they’re carrying, and they see a conflict between

67

| Subir Chowdhury How the quality makes an impact on the economic advancement of the nation, the waste, which is a by-product of quality failures? Policy making is the sad part in any nation and the majority of the decisions are based on the advice of the economists. In my viewpoint the majority of the economists are making predictions and do not know how to transform a bad into good. The entire thinking process is how we’ll take the same principle of quality and apply to the governmental organizations so that public policy makers and the economist also get educated on the quality principles. One of the ways to do it could be to have the major awareness within the common citizens.

Why quality should be their own personal business , their own personal responsibility and once the personal responsibility of the quality shine it is the only way you can look at the quality process improvement and that’s my idea.

| Tammy Erickson Our actions both regarding corporate actions and personal actions come from a logical history maybe as much as anything a historian thinking about how history has

shaped us and how we have been shaped by it. It gives us the freedom and the motivation to change for the future.

| Whit Mitchell The leading cause of death of an executive career is a lack of self-awareness. So, my Big Idea is for people in executive positions to make sure that they understand as much as they can about themselves by asking others to be open and transparent with feedback. I think we get ourselves into trouble by not understanding the impact and the intent of our behaviour. So, when executives need things done, their intent is usually pretty good. Their impact sometimes of how they ask for duties to be done or responsibilities to be accomplished, aggressiveness or their determination or their desire for results can sometimes come across to the employees that are doing the work as not caring and not sincere. So, if executives have a better understanding of the impact of their behaviour, I think that they can get a lot more done. So, the idea is become more self-aware, go out and ask the question. How am I doing? What could I do differently? By listening openly and understanding the impact and asking those kinds of questions, you’re going to open up the avenues of communications within your executive team, and once you build that, you’re going to build trust and once you build trust, you’re going to get results. So, go out and ask how you’re doing?

These are transcribed interviews and we have tried to retain the tone of the verbal conversation.

THINKERS

work and the other parts of life because they expect their spouses are going to be fully engaged in their careers. The reason for women are different and have to do with their involvement in having a positive social impact through their work, which seems to be crowding out room in their lives for becoming mothers.

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IN CONVERSATION WITH STEW FRIEDMAN

by Des Dearlove and Stuart Crainer Stew Friedman, practice professor of management at Wharton, shares his views on leadership at the edge of town.

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It was really in the 1980s that leadership took off.

Of course, people have been thinking about and struggling with the issue of how you develop future leaders since Plato. This is not a new issue. But in the 1980s it took off in the modern business world.

Although there had been an emerging literature bubbling up through the 1960s and 1970s, the watershed book was Tom Peters and Robert Waterman’s In Search of Excellence. They were the first to shine a bright light on the whole issue of culture and leadership, and the role of leadership in organizational performance.

The whole human potential movement was another important precursor to a focus on quality of life, on taking account of the whole person and seeing leadership as something that was available to everyone – and not just an executive role in a hierarchy but a person’s capacity to contribute to some larger social mission or cause.

What’s really interesting in your work is the link between work/life integration and leadership.

I have pursued the idea that the solution to the work/life dilemma is leadership and that the heart of leadership is really the whole person.

I have, I hope, demonstrated and brought to life the idea that you can advance your leadership capacity, performance, and results at work and elsewhere by

We have a long way to go in terms of how we think about the centrality of developing leadership capacity and giving people the sense of confidence and competence in creating meaningful and sustainable change in their lives – a primary goal of the Total Leadership approach bringing together the different parts of your life; integrating them in an intelligent way that works for you. Behind this is the notion that each person can emerge as more of a leader than he or she currently is. And that leadership can be learned, practiced, and developed, like any performing art or a sport, even if it cannot be taught.

The work/life debate is often polarized as a gender issue. You take a very different perspective.

While it has often and unfortunately been characterized thus, the work/life dilemma is certainly not a woman’s issue – it’s a social, human and economic issue. What I was intentionally, and subversively, trying to accomplish with the idea of Total Leadership was to create a language that enabled men to access these principles and methods and to use them to better integrate their lives and for it to be legitimate for them to do so.

So it’s about leadership, performance, and measurable results, in all parts of life – work, home, community, and the private self (mind, body, spirit) – what I call “four-way wins.” That’s something that a man, as well as a woman, can get excited about pursuing and, perhaps more importantly, can feel comfortable pursuing.

The genesis of many of these ideas can be traced back to your time working with Ford, starting in 1999.

Yes, that absolutely transformed my thinking about just about everything. My world was completely

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Leadership has become a heavy industry, but when you started out it was barely recognized as worthy of serious study. How did you come to look at leadership?

My dissertation research 30 years ago at the University of Michigan was about how executives are prepared and selected for their positions in large companies. That led to my work on executive development, succession planning, CEO succession and leadership development systems. In 1991 I started the Wharton Leadership Program. That was when Wharton did a major revamping of our whole curriculum. One of the critical elements of that work was to ensure that our students – over 800 first-year MBAs – had real-world experience working together in teams and providing feedback on leading in a team environment. We created learning teams which, at that time, was innovative in an MBA curriculum.

72 turned around by my experience as a senior executive in that incredible company for that two and a half year period. The first thing that I would say about that experience, reflecting back now almost 15 years ago, is how humbled I was by the challenge of trying to get anything done in a large social system.

I came away with a profoundly different kind of respect and admiration for people who spend their adult lives leading organizations and trying to get important things done in them. It’s so much harder than it looks from the outside in.

The good news is that there is a growing convergence between men and women about their attitudes and values about both work and family life.

You were running their Leadership Development Center, a 50-person, $25 million operation. How did that come about?

When Jac Nasser became CEO of Ford, he was looking to transform the culture of the company and to change the mindset of employees to focus more on the consumer and less on the manufacturing side. He wanted everyone in the company to be outwardly facing and to really take in the environment and to see themselves as leaders in all the different parts of their lives.

Interviewing for the job, I told Jac that what I’m going to do here, if he were to hire me, is to make leadership development be about the whole person, and not just about business. And when he said, “Great, I love it!” that sealed the deal for me.

It’s still counter to what a lot of people think companies should be worrying about. But we have come a long way. It’s amazing to reflect on how different the world is today with respect to the legitimacy and value of leadership development.

It’s definitely an idea that is now fully embraced.

It’s also heartening to see how men are now much more comfortable talking about work/life dilemmas

and seeing leadership from the point of view of the whole person.

And yet people still complain that there’s a shortage of leaders.

Yes, that’s true. We have a long way to go in terms of how we think about the centrality of developing leadership capacity and giving people the sense of confidence and competence in creating meaningful and sustainable change in their lives – a primary goal of the Total Leadership approach. There’s still so much wasted effort and talent as a result of our not taking this issue seriously enough. But that’s not to say we haven’t made a lot of progress.

What is your current research looking at?

One question I get asked a lot is this: “A whole person view of leadership sounds good in theory, Stew, but in the real world you can’t really do anything great unless you’re completely and fully dedicated to it, right?” I have been asking students and others to write short biographies of people they admire and who exemplify the principles of Total Leadership, who have figured out for themselves what it means for them to be real (to act with authenticity by clarifying what matters to them), to be whole (to act with integrity by respecting the whole person), and to be innovative (to act with creativity by continually experimenting with how things get done). These are people who have achieved greatness in the world not in spite of their commitments to other parts of their lives, but because of how their work benefits from their investments in family, community, and the private self.

The mythology is that you have to trade off the rest of your life in order to have success as a leader in the world and, of course, you always have to make sacrifices at some point. But, there are many examples of people who have drawn power, wisdom, and support from their families, from their communities, and from their emotional and spiritual lives in order to achieve great things in their professional lives by finding mutual value among the different parts of life. Indeed this is the story I tell in my book, Leading the Life You Want.

The Total Leadership message is to have a systematic and disciplined approach to focusing on what matters most to you and to the people around

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You are also still leading Wharton’s Work/Life Integration Project.

The Work/Life Integration Project started in 1991 and had two primary missions. One was to bring together thought leaders in business, academia, and the public sector and to have them discover and share best practices in integrating the different parts of life, at the individual level, executive level, organization and societal level.

The other part of the project was research on the lives and careers of Wharton students and alumni.

The first product of that was the 2000 book, Work and Family – Allies or Enemies? In 1992 we gathered in-depth survey data from the graduating class and 20 years later we administered the same survey to the graduates of the class of 2012. Then we went back to the class of 1992 and asked them further questions about their lives, careers, achievements, and future aspirations. And we asked about how they deal with work/life challenges, their views on dual career relationships, how their work has evolved, how technology has affected them, and so on.

One of the questions we asked of both classes was do you plan to have children? And in 1992, 79 percent men and women said yes. And in 2012, 42 percent said yes. Another book is called Baby Bust which looks at how the past two decades have seen enormous changes in both work and family life. I describe why and how things have changed, and in very different ways for men and for women. For example, the reasons why fewer men are planning to have children are not the same as the reasons that fewer women are planning to have children.

The good news is that there is a growing convergence between men and women about their attitudes and values about both work and family life. And the ideas and methods in the Total

Leadership program can help them create a new social order. That is, among the key takeaways from the Total Leadership program is that people learn to recognize that they have a lot more power and discretion to create change and to harness that power. This enables them to attend to the things that matter most to them and to make a greater contribution to the world, in ways that work for them and for the people around them.

What’s so exciting about this moment in history is that we’re taking the idea of human liberation one step further. Earlier in my life, in the 1960s, there was an explosion of interest in liberating the human spirit. The next phase of our evolution is underway.

There’s so much experimentation now with the way that families live their lives, with many young people questioning what’s possible and acceptable.

And, of course, the advent of the digital revolution has accelerated everything. There are going to be a lot more options available to people, men and women, in how they choose to work and how they contribute.

Do you think of yourself as a leader?

I want everyone to think of themselves as a leader and certainly that applies to me too. My main conception of what leaders do is that they bring people together, they mobilise people, to accomplish some valued goal. And for it to be valuable the goal has to make things better for other people. So that’s my mission through my work and that’s an idea that I’m trying my best to help cultivate wherever I go – with our students at Wharton and beyond. Each of us is ourselves in whatever sphere we’re in – at work, at home, in the community, and alone with our private thoughts. We need to bring ourselves in full to all the important domains in our lives to make the world better.

There is a powerful strain of optimism in your work.

Well, I’m glad that you picked that up, because that is, to me, the hallmark of what leaders have to do; to convert the harsh realities of today into a hopeful path to make the world a little better. It is about looking at reality as clearly as you can and then creatively, and in concert with other people, trying to figure out ways to improve the human condition.

THINKERS

you and then experimenting with ways of creating what I call four-way wins. We have identified a set of skills that bring to life the three main principles of being real, being whole, and being innovative.

Leading the Life You Want features six great leaders who’ve lived good lives and an analysis of the skills they’ve used to do so. It will show how anyone can practice those skills.

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DIGITAL THINKING Thinkers50 founders Stuart Crainer and Des Dearlove spend their time scanning the world of business ideas. Here is their selection of some of the best commentators and thinkers on matters digital.

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Erik Brynjolfsson & Andrew McAfee @erikbryn @amcafee MIT co-authors of The Second Machine Age (Norton, 2014) and Race Against the Machine (Digital Frontier Press, 2011).

Enrique Dans @edans Professor at IE Business School, blogger at enriquedans.com, one of most followed tech opinion formers.

Salim Ismail, Michael S. Malone and Yuri van Geest @ salimismail Authors of Exponential Organizations (Diversion, 2014).

Ismail is an entrepreneur and former VP of Yahoo, founding executive director of Singularity University. Malone is a journalist and author; van Geest is a Dutch digital consultant and speaker.

Jose Esteves @jmesteves13 IE Business School professor researching hacking, egovernment and more.

Rohit Talwar @fastfuture CEO of Fast Future, author and futurist. Editor of The Future of Business (Fast Future, 2015).

Umair Haque @umairh Commentator, HBR blogger, author of The Lamp and the Light (ebook, 2015).

Don Tapscott @dtapscott Author of Digital Capital, Wikinomics and other bestsellers including Radical Openness (TED, 2013).

Ben Horowitz @bhorowitz Co-founder Andreessen Horowitz VC firm, blogger and author The Hard Thing About Hard Things (Harper, 2014).

Andrew Keen @ajkeen Author of The Internet is Not the Answer (Atlantic Books, 2015), executive director of Future Cast, columnist and presenter.

Nilofer Merchant @nilofer Silicon Valley-based ex-exec, author 11 Rules for Creating Value in the Social Era (HBR, 2012).

Alex ‘Sandy’ Pentland Director Human Dynamics Lab at MIT, author of Social Physics (Penguin, 2014).

Jim Whitehurst @jwhitehurst Ex-Delta CEO and now CEO of Red Hat, author The Open Organization (HBR, 2015).

Peter Diamandis @ peterdiamandis Founder X Prize Foundation, co-author of Abundance (Free Press, 2012) and Bold (Simon & Schuster, 2015), and co-founder Singularity University.

THINKERS

Jeremy Bailenson @ stanfordVR Founding director of Stanford University’s Virtual Human Interaction Lab and co-author Infinite Reality (William Morrow, 2012).

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IN CONVERSATION WITH

by Des Dearlove

LEE NEWMAN

In an interaction with Lee Newman, Dean, IE School of Human Sciences and Technology, he suggests a new approach to leadership designed to achieve behavioral advantage—“an advantage achieved by building an organization of individuals and teams that think and perform better at all levels”. He argues that sustainable competitive advantage is no longer attainable in the conventional sense but that it is possible to obtain behavioral advantage.

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You talk about a new source of competitive advantage. Can you explain?

As I see it, the traditional types of competitive advantage are not really very sustainable anymore.

A product or service advantage -- say your company delivers products better than the competition -- just doesn’t last, and even information advantages where your company gets better information faster than the competition also don’t last.

There’s a kind of new source of sustainable advantage for companies, a behavioral advantage.

The idea is that if you imagine a company where employees literally are able to outthink and outbehave their competition time and time again that’s an incredible advantage. It’s hard to achieve, but it’s even harder to copy. Although leadership is often treated as a lofty concept reserved for the few, in my view it really comes down to concrete behaviors that happen moment by moment.

Leadership plays out “in the moment” – in the daily conversations, meetings, presentations, negotiations, interpersonal conflicts, and thinking and problemsolving sessions that we engage in every day in the workplace.

So that’s the backdrop to positive leadership.

Positive leadership is about how we can achieve this behavioral advantage, by improving performance in the moment.

What problem or challenge does positive leadership address?

The core problem it addresses is engagement.

When you look at employee engagement numbers in global surveys, regardless of which one you look at, basically only about 20 to 30 percent of employees are fully engaged. Of course this is bad for the wellbeing of the employees and it’s equally bad for the bottom line of companies.

If you think about engagement, which is one of the core missions of any organizational leader or manager, in a sense the profession of leadership and management is failing. We’re failing as an institution. If doctors had a success rate of only 20

to 30 percent in curing basic ailments, we would be outraged.

I think the key question is what can managers and leaders do to turn the situation around and achieve a behavioral advantage? The answer is positive leadership.

I think the key question is what can managers and leaders do to turn the situation around and achieve a behavioral advantage?

Define positive leadership. You’ve given us a great context and logic for why we need it, but what is it?

Engagement and performance in the workplace is not an abstract thing. It’s something that happens moment by moment. To achieve high levels of engagement, to solve this problem that I just mentioned, to help employees to think better in the moment and create the conditions in which peak performance can happen, something has to change.

The idea is to bring the findings of behavioral science and research to bear on helping people perform at their best and to help managers create an environment in which they can do so.

The way I define positive leadership is to say that it enables high engagement and performance in three ways. The first core element is what I call mindware training, and the idea is literally to rethink the way that we think in the workplace.

Psychology and neuroscience have made great inroads in circumscribing a set of components that drive how we think, feel, and act. We can call these components “mindware”, and science has shown pretty clearly that there is a set of predictable defaults, biases, and errors that can produce behaviors that are far less productive and effective than they otherwise could be. Our attention wanders, we tend jump too quickly to conclusions about people and facts, and we take ownership of our early ideas and close ourselves to contradictory information and opinions.

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Newman was shortlisted for the 2015 Thinker50 Breakthrough Idea Award. Des Dearlove talked to Lee Newman in Madrid. He started by talking about the disappearance of traditional notions of competitive advantage.

78 If we can understand what those biases and unproductive shortcuts are, we can address them through simple “rethinks” that allow us to improve our performance with very little extra time. That’s the first element of positive leadership.

Can you give me an example of the first point?

Absolutely. One of the most pervasive and dangerous thinking biases is something that we talk about as narrow thinking and confirmation bias. Overall, this leads to incomplete thinking. What you see happen all the time is that people have an initial idea about how to approach the launch of a product or how to approach a situation in a meeting where there is a conflict, and what they tend to do is consider too few alternative courses of action and look for information that supports the idea they have in mind.

I think that managers play a key role here in establishing a culture in their teams or their units, a modus operandi in which we are all changing, we are all constantly improving.

It turns out that that sends you down quite a slippery slope of thinking because it eliminates consideration of the kinds of things you might find that would actually go against what you are thinking. You also tend to act on that initial thought without scanning the environment and looking at more possibilities.

Thus, as managers and leaders we tend to ask onesided questions and tend to reason in a way that gets us what we want from the very beginning. But we’re not aware that that’s what we are doing.

I work with executives and our Master’s students to teach them how to “flip” their thinking and how to be more mindful in the moment so that they can catch themselves committing these types of errors before it is too late.

Mindware and retraining how we think is the first component of positive leadership. What’s next?

The second part has to do with a positive environment. How can we build a positive environment in which people can perform at their best? Research shows very clearly that when the daily dose of positive relative to negative emotions that you experience is high, this has a profound impact on the quality of your behavior – how you think and behave…today. In the long term, if a person can maintain consistently high positivity ratios, it can boost important psychological resources such as resilience and even physical health. From a leadership standpoint, we can work to help employees reduce the impact of the negative emotions they experience every day, or even convert them to positive emotions and also change the environment so that on the whole it creates more positive emotional moments and fewer negative emotional moments.

That’s one piece of building a positive environment.

Another has to do with changing the paradigm of development from being only about developing weaknesses to also being about helping people identify their strengths and use their strengths more in the workplace. When people use strengths to work on challenging tasks, it feels good -- it creates positive emotions – and they become more engaged.

In contrast, when people too frequently rely on weaknesses to meet workplace challenges, it drains them – it disengages them.

A third part of building a positive environment is also training managers to understand in concrete terms what exactly well-being is, how it is integrally linked to sustainable engagement and performance, and what kinds of things a manager can do to drive higher well-being in the workplace.

Creating a positive environment is the second part. What’s the third?

The third and critical piece to pull it together is a concept I have developed called behavioral fitness.

A person may want to improve performance based on some behavioral change, for example, becoming a better listener, doing less micromanaging, being more open to ideas of colleagues, or changing the way she handles negative events. The motivation

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The way I think about it is that you don’t go to the gym for three days and come out physically fit. It’s the same thing with training behaviors. We need to shift the paradigm in terms of viewing our own professional development as an everyday process, not as an event. We need to think of the workplace in the same way we think about the gym.

A conflict-oriented meeting that you are going run tomorrow morning, the negotiations you are going to have with the client in the afternoon -- these are the exercise stations of the workplace. If all you do is sit on a bench and stare at a barbell, nothing happens. The same thing applies to the workplace: if you don’t consider your meetings, conversations, and problem-solving sessions as opportunities to practice and improve your behaviors, no development happens. The idea is that you’ve got to practice the behaviors you want to improve. There is a rich and vast array of tools and techniques we can pull from the behavioral sciences to help us improve our odds of making behavioral changes happen in the workplace.

What would be an example of that? What sort of things can people actually do?

We can think of the current behaviors we would like to change in certain situations as habits. There’s a whole science of how habits work. We can bring those simple ideas to bear in helping people improve the odds of making change happen. There’s a nice framework that’s been put forward for thinking about habits as a kind of habit loop. For example, you want to become a better listener (and your coworkers want this as well). Your current behavior might be to frequently think that you know what others are saying and interrupt them before they have finished expressing their thoughts. What triggers this behavior? Perhaps it’s time pressure, perhaps overconfidence or ego; different things might trigger the behavior for different people. And why do you do it? There is some reward. Perhaps the behavior saves you time, or it strokes your ego,

or gives you a sense of being smarter than others.

Thus, for any change we want to make, we have to identify what the current behavior is and then make a plan for what we want the new behavior to be. To drive the change, we sometimes may have to create triggers for the new behavior, and also create rewards that incentivize us to do it. By using habit science, we can literally rewire behaviors. It’s never easy, but with a structured process for doing it, the odds of success greatly increase.

Are you saying that understanding and even mapping our own behaviors is something many people haven’t traditionally done?

Yes, that’s exactly right. When you sign up for the gym, the trainer will ask you what you want to work on? Do you want to work on legs? Do you want to work on shoulders? Do you want to work on core muscle strength? You tell the trainer, and then the trainer designs a program for you. But the exercise program is just an idea. You’ve got to go to the gym and you’ve got to actually practice at the different stations and the different elements of your program; otherwise nothing happens.

What I’m proposing is basically the same thing for the workplace. If you have the intention of becoming a better listener, you need to identify the situations that happen daily at work in which you feel you are not a good listener, and you need a specific plan that you are going to put in place, so that when you find yourself in these moments, instead of the bad listening behavior coming out, the new and better form of listening comes out. Once you practice the new behavior, it eventually becomes your new habit, and you are a better listener. But motivation and intention to become a better listener on their own don’t get you there.

In this new model that you are advocating, who plays the role of the fitness coach or the personal trainer?

There are three parties involved. First, someone has to work with individuals to help them identify what behaviors to change and then give them tools for making those changes happen. That’s just the start.

Then people need to practice in the workplace, and to practice there needs to be a safe and changeoriented, change-promoting environment. That’s

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and intention to do those things is wonderful, but research shows that most of our attempts to change end in failure. We start but never finish. How do we increase the likelihood that we’re going to be successful in any kind of behavioral change?

Behavioral fitness is a solution to this problem.

80 the role of managers. I think that managers play a key role here in establishing a culture in their teams or their units, a modus operandi in which we are all changing, we are all constantly improving.

There’s the individual and manager training that has to happen, which I think can happen at business schools and in corporate training programs. Then

there is a third role, a social element to this. If I’m in a safe environment and the people I’m working with know that I’m working on becoming a better listener, they can be active helpers in supporting the change process. Thus, socializing my change effort can provide a healthy and positive form of pressure and also supportive feedback.

81 THINKERS

AGRICULTURE EDUCATION ENERGY

INNOVATION MANUFACTURING

HEALTHCARE GLOBAL INDIA

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The India Council on Competitiveness is a non-partisan network of leaders from corporate CEO, University Chancellors and Civil Society leaders working to make India a competitive nation with a mission of setting forth an action agenda to ensure prosperity for all Indians.

BE PART OF INDIA’S GROWTH STORY WITH THE COUNCIL. For further details visit www.compete.org.in To join the council, please contact: amit.kapoor@compete.org.in or neera.vohra@compete.org.in MEMBERSHIP IS BY INVITATION ONLY

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THE SLOW LANE

by Stuart Crainer

Stuart Crainer shares his experience of crossing the Atlantic on a 38 foot yatch.

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You do, of course, learn things in any 23-day period in life and on a boat in the middle of the ocean. But the process of learning is as ad hoc as it normally is, learning is gradually acquired rather than arriving in dramatic and sizeable lightning bolts. Learning happens and evolves.

It is your willingness to accept and embrace the slowness and granularity of the process, which is key.

This also applied to the brand of leadership I encountered while on board. The captain was a former headteacher. His modus operandi was to allow you to give something a try and then intercede with some helpful advice as the rope failed to move, the sail continued to flap or the gas didn’t ignite.

Good theory, but it is amazing how challenging that approach actually is. It feels like low key, educational leadership, but for the person being given the opportunity to try something and, in my case, almost certainly fail to do it, the pressure is intense. I could feel the faith he was putting in me every time. I wanted to be able to do it. And I could feel the spectre of failure hovering.

The truth is that I am not used to failure. My adult life has been spent deliberately putting myself in situations where I can utilise the skills and insights I have. It is good, I know, to get out of your comfort

zone. But that is not how most people spend their personal and professional lives. You don’t want to be the one person who can’t do something, you don’t want to repeatedly get things wrong, you don’t want to fail – especially in front of others.

Our captain’s leadership also had an interesting safety mechanism. When it was suggested that he might do something – let a reef out so the sail was bigger and we would go faster, put the genoa up, change tack and so on – his reaction was often to say no. “Good idea, but let’s wait 20 minutes and see what the wind is doing then,” he would say in a positively-negative tone honed in the classroom.

When he would say such things, we would glance at each other, roll our eyes slightly and think to ourselves that the captain was a great guy but not a fearless and quick decision maker.

We were, of course, wrong. Time after time, after twenty minutes the situation was completely different from the one we had imagined. Taking a reef out or putting a sail up would have been ill advised and sometimes dangerous.

Partly this was down to experience. The captain had been in more similar situations so he was able to make the right call. But, more importantly, the captain repeatedly got decisions right because he pressed pause and went with the status quo while he weighed things up.

Of course, the natural suspicion is that this brand of slow leadership wouldn’t work in the fast moving corporate world. But, the weather changes very quickly in the ocean. Before making any decision, a leader is well advised to press pause and consider whether the change will definitely improve performance and to consider the motives of those advising change. Slow leadership is often the quickest way forward.

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Recently I spent 23 days in the company of four other middle-aged men on a 38-foot yacht crossing the Atlantic Ocean. Since returning, people have been asking me what I learned along the way. It is interesting – and a relatively recent phenomenon – that you are expected to learn something in any unusual experience. The experience in itself is not enough, you have to actively have learned something from it. As one of my crew mates (a CEO as it turns out) observed: “Twenty odd days on a boat in the middle of nothingness and I still haven’t figured out the meaning of life.”

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THE CIRCULAR ECONOMY

AN OPPORTUNITY FOR RENEWAL, GROWTH AND STABILITY

by Mark Esposito, Terence Tse and Khaled Soufani

The authors describe the steps for moving forward a circular economy.

85 improvements invented over the decades. Because our natural capital is rapidly depleting and affecting our world ecology even as we continue to invent and innovate, our output is no longer as great as it used to be, in an ironic backslide in productivity across time. For instance, in spite of technological advances in fertilization and irrigation, productivity gains in grain crops have fallen 66% since the 1970s.4 In another example, constant mining of the earth has also taken its toll. The average percentage of metals retrieved from mining has slowly been falling in terms of both quality and concentration, making mining a more expensive proposition.5 Productivity is also beholden to the planet: when a drought kills entire crops in a region or a widespread disease kills tens of thousands of livestock, those foods become more expensive for everyone, or in some cases, not available at all.

Fundamental resources such as water, food, and energy are at stake. The energy that we expend today to operate cars, airplanes, overhead lights, and other modern-day technologies, took billions of years for the planet to collect and to store in plants and fossil fuels. Now we spend that energy at a much faster rate than the planet can produce.

Since the industrial revolution, we have been living in a linear economy.

Our producers and “single use” lifestyles have made the planet a “take, make, dispose” world.

Resource scarcity is a real problem. The nonprofit group Forum for the Future estimates that we are consuming resources 50% faster than can be replaced. By 2030, our demand will require more than two planets worth of natural resources if they are to be met.1 By 2050, three planets’ worth.2 Moreover, according to the OECD, the global middle class will have doubled by the year 2030, which will drive demand for resource-intensive goods such as vehicles and other contemporary conveniences that many of us in advanced industrialized countries enjoy today.3 It gets worse. It isn’t just that we are using resources faster than the Earth can possibly produce; our global economic productivity is also falling, despite technology and efficiency

But despite these sobering statistics, all is not lost.

Thanks to organizations like the World Economic Forum and the Ellen MacArthur Foundation, research on a different model of consumption and production, called the circular economy, is gaining more attention recently.

The Circular Economy While many current sustainability paradigms revolve around doing more with less, the circular economy is also recuperative. In terms of sustainability, it would be incomplete to say that the circular economy is environmentally friendly.

1 Forum for the Future and Retail Industry Leaders Association, “Retail Horizons - Toolkit,” 56, accessed August 9, 2015, http://www. forumforthefuture.org/sites/default/files/Retail%20Horizons%20-%20Toolkit.pdf 2 Peter Lacy, “The Circular Economy. Great Idea, But Can It Work?” Forbes, accessed August 2, 2015, http://www.forbes.com/sites/ valleyvoices/2015/01/20/the-circular-economy-great-idea-but-can-it-work/.

3 OECD, “Perspectives on Global Development 2012: Social Cohesion in a Shifting World,” OECD Publishing, 2011, 18.

4 Ibid, 23.

5 Ibid, 22-23.

THINKERS

Introduction Since the industrial revolution, we have been living in a linear economy. Our producers and “single use” lifestyles have made the planet a “take, make, dispose” world. For those unfamiliar with the phrase, it refers to a very one-directional model of production: natural resources provide our factory inputs, which are used to create mass-produced goods to be purchased and typically thrown away after a single use. Thrown away though, does not capture in any capacity the reality of what actually happens; what remains after use is christened as trash and go on to spend the rest of eternity in a landfill instead of having parts reclaimed or remanufactured for other uses. It becomes obvious very quickly that the mode of a linear economy is unsustainable. Our model of mass production and mass consumption is testing the physical limits of the globe and threatening the stability of our future.

86 While that may be one of its characteristics, the circular economy is not just about feel-good, idealistic words like recycling. The circular economy is focused on maximizing what is already in use along all points of a product’s lifecycle, from sourcing, to supply chain, to consumption, to the remaining unusable parts for one function and converted back into a new source for another

The industrial revolution and our resulting linear economy may have forever changed the earth’s ecology and our relationship with the environment, but what is changed can continue to change, this time for the better. purpose. Researchers and modeling experts at the Ellen MacArthur Foundation and the McKinsey Center for Business and Environment estimate that, in a circular economy scenario, consumption of new materials could be reduced by as much as 32 percent within fifteen years, and by 2050, by more than half at 53%.6 Instead, primary materials used in construction, car manufacturing, synthetic fertilizers and pesticides, fuel and non-renewable energy, and land use among other uses, can be replaced with recovered and repurposed materials in cascaded use.

Examples of low utilization are abound in advanced industrialized countries. In Europe. for instance, researchers discovered in a study that cars were parked 92% of the time.7 In the workplace,

offices are used only 35–40%—and that’s during working hours.8 Moreover, the opportunity for new efficiencies is greater than ever, and across all industries and aspects of the supply chain— for instance, according to the Ellen MacArthur Foundation, only 40% of irrigation water actually reaches plants.9 For the US, opportunities to benefit from the circular economy are particularly good.

With its position as a consumption-based economy among other smaller countries that must most of its import raw materials, the US can be a seller of materials for other nations while insulating itself from price volatility and waste. Not only that, but moving toward a circular economy could eliminate 100 million tons of materials waste globally in the next five years alone.10 How Do We Start?

Although the logistics of implementation on a visionary scale still have many unanswered questions, some initial areas of opportunity point to the first steps toward creating a circular economy.

The Virtue of Proximity: Materials Recovery and Economies of Scale Central sites of human activity are an opportunity to capture economies of scale. Today, over half the human population lives in urban environments.

Future projections indicate the number will be even greater by 2045 when cities in developing countries catch up to the urban resident rate of advanced industrialized countries.11 Despite the fact that urban centers are heat islands and hubs of pollution, “megacities” are here to stay. Fortunately, the concentration of human activity in cities means that it is that much more realistic for us to recover and treat post-consumer materials on a large scale to prepare them for re-use in a new capacity.

As a model of circular economy theory in action, the transnational company Veolia is already hard at work to create a closed loop with urban waste.

6 Ellen MacArthur Foundation and the McKinsey Center for Business and Environment, “Growth Within: A Circular Economy Vision for a Competitive Europe,” Foundation for Environmental Economics and Sustainability (SUN [Stiftungsfonds für Umweltökonomie] and Nachhaltigkeit GmbH), June 2015, 15.

7 Ellen MacArthur Foundation, “Growth Within,” 18.

8 Ibid., 20.

9 Ellen MacArthur Foundation, “Growth Within,” 20. These are independent calculations made by the publication’s researchers based on data from the European Environment Agency. See: European Environment Agency, “Towards Efficient Use of Water Resources in Europe,” 2012.

10 World Economic Forum, “Towards the Circular Economy: Accelerating the scale-up across global supply chains,” Report, January 2014, ‘11, accessed August 2, 2015, http://www3.weforum.org/docs/WEF_ENV_TowardsCircularEconomy_Report_2014.pdf.

11 United Nations Department of Economic and Social Affairs, “World’s population increasingly urban with more than half living in urban areas,” United Nations, July 10, 2014, accessed July 29, 2015, http://www.un.org/en/development/desa/news/population/worldurbanization-prospects-2014.html.

87

The Shared Economy and Urban Environments: Matching Demand with Capacity Another opportunity for the circular economy through the urban environment is the ability to align demand with the capacity of the shared economy. The Internet and software technology has eliminated the high cost of and logistical barriers to on-demand communication and making peerto-peer transactions, opening up a pathway for sharing and renting resources from either private owners or within public systems, such as citywide bike-sharing programs as seen in cities including Boston and Washington, DC. With so much private and individual excess capacity available and concentrated in urban areas, the sharing economy is poised to make an impact on resource use. Currently, car-sharing is one of the most well known concepts of the sharing economy. Carsharing is available in a number of ways—users can either rent cars from car owners rather than buy a car of their own; hire a car and its owner to do the driving; or connect with drivers headed in the same direction with a few extra seats to spare to split the cost of gasoline. With these three car-sharing models working in tandem within megacities, carsharing keeps fewer cars on the road, meaning less pollution in the air, fewer primary materials used, and less transportation capacity wasted.

Other areas of the shared economy, such as shortterm home sharing, makes it possible to avoid building more hotels to meet demand. Airbnb, which brokers such transactions and founded only seven years ago in 2008, now operates in over

34,000 cities and 137 countries with over 20 million registered members.13 The growing success of companies in the sharing economy such as Airbnb and Uber, which operates in fifty-two countries and still expanding further, illustrate the economy of scale and the viability of sharing access to products and services—an important principle of the circular economy.14 The Built Environment: Improved Technology and Better Urban Planning A third area of immediate opportunity is within the built environment. Aside from virtualizing the office and/or sharing physical office space, new technologies and methods—including 3D printing, solar and green roofing; smart energy management and monitoring; use of renewable materials; and better design—have the potential to improve how we use space and how we store and use energy.

More importantly, there is also ample room for improvement in how we manage our construction waste to move the circular economy forward.

Presently, only 85-90% of building materials are actually used during construction, and when an older building is torn down, over half of the demolition materials get sent to the landfill, when those materials could in fact be reused again.15 Other ways to capture waste and lost opportunity include the land itself: dense, optimized cities can be achieved by reclaiming vacant land in the innercity and allowing for mixed-use buildings instead of permitting an endless urban sprawl.

New Regulatory Frameworks: Leadership for a Circular Economy Lawmakers have many different levers available to them to encourage circular economy principles. As an example of how governments in the U.S. can spur change toward a circular economy, already thirtyone states have variously passed what are known as product stewardship (producer responsibility) laws, in which companies must take responsibility for the environmental, health, and safety ramifications of their products.16 Some states have also completely

12 Veolia. “Reinventing Veolia’s Businesses.” Report, 6. January 24, 2013. Accessed July 29, 2015. http://www.finance.veolia.com/docs/ Veolia_Press_Day_English.pdf Ellen MacArthur Foundation, “Growth Within,” 25.

13 Ensor, Josie, “Uber: where does the online taxi service operate – and where has it been banned?”, The Guardian, accessed July 10, 2015, 14 http://www.telegraph.co.uk/news/worldnews/11288103/Uber-where-does-the-online-taxi-service-operate-and-where-has-it-beenbanned.html.

15 Ellen MacArthur Foundation, “Growth Within,” 82.

16 Forum for the Future, “Retail Horizons,” 53.

THINKERS

Veolia operates in 40 countries, working with both industry customers and municipalities to collect, sort, and treat waste from industrial environments and households, and to operate landfills and treat wastewater.12 After processing, municipal and industrial waste is reintroduced into production systems for reuse. Treated wastewater becomes potable water and is also used in other regenerative processes such as the making of agricultural fertilizer and for power generation.

88 banned organic matter from landfills, which has motivated businesses to focus on reducing the amount of food waste generated.17 In addition to providing responsibility laws and directives, policymakers can also leverage tax laws and other business incentives. Today, taxes are mostly focused on income and labor. Rather than taxing labor, taxing businesses and companies that consume more resources instead will create a dual benefit of motivating companies to reduce consumption and slow down the depletion of natural capital, while also placing more value on labor, creating an opportunity for policymakers to encourage job creation in addition to circular economy principles.

Additionally, regulations that favor traditional, linear economy businesses or that have been barriers to circular economy principles such as the sharing economy, will need to be revisited if we are to address the long-term challenge of resource dependency. Legislators must be able to find a balance between addressing regulatory concerns while also paving the way for the sharing economy to play a meaningful role in the circular economy.

All told, policymakers have immense power and influence when it comes to regulating and supporting important systems and functions of the circular economy.

Measuring Progress Of course, questions of metrics and progress must be asked: how exactly do we measure the gains from a circular economy? Some tools have already been developed that we can use today. The System of Environmental-Economic Accounting allows us to calculate degradation-adjusted net value add (NVA).18 Meanwhile, the European Commission’s Eurostat has created a Resource Efficiency Scoreboard to calculate GDP generated per unit of net virgin finite material input.19 Moreover, the

17 Ibid.

18 Environment Agency, “Towards Efficient Use,” 48.

19 Ellen MacArthur Foundation, “Growth Within,” 25.

20 Ibid.

total cost of externalities and opportunity cost of not changing can also be gathered using preexisting methods of measuring human activity’s impact on issues such as water pollution and toxicity, air quality, congestion, and public health.20 Shared Planet, Shared Fate The current steps described herein are just the first steps for moving toward a circular economy. There is much more work to be done in terms of getting companies to collaborate together to reduce waste and also to share and trade reusable inputs, instead of just competing for customers and revenue.

Different groups, including municipal and top-level governments, firms, and local businesses, will have to cooperate to steward our valuable resources for the best outcomes. Though competition for resources, political instability, and greater variance in food security and global climate may threaten our way of life, there are opportunities ahead for us to find ways to preserve our natural capital while also extending the quality of life on our planet. The circular economy provides some guidance to what it will take to permanently reduce our dependency on the limited natural resources that may not always be there when we need it. The circular economy will undoubtedly come to pass, if not out of choice, out of necessity.

As the circular economy’s objective is to decouple growth and production from a dependence on natural resources, the circular economy model require us to implement new paradigms into today’s systems on a collaborative scale to make a real impact. The industrial revolution and our resulting linear economy may have forever changed the earth’s ecology and our relationship with the environment, but what is changed can continue to change, this time for the better.

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Brookings Institute. “Global Metro Monitor.”

Accessed August 1, 2015. http://www.brookings. edu/research/reports2/2015/01/22-globalmetro-monitor.

Council for the Environment and Infrastructure.

“Circular Economy: From Wish to Practice.”

June 2015. Accessed August 1, 2015. http:// en.rli.nl/sites/default/files/150615_rli_advice_ circular_economy_from_wish_to_practice_1.pdf.

Ellen MacArthur Foundation and the McKinsey Center for Business and Environment.

“Growth Within: A Circular Economy Vision for a Competitive Europe.” Foundation for Environmental Economics and Sustainability.

June 2015.

Ensor, Josie, “Uber: where does the online taxi service operate – and where has it been banned?”, The Guardian. Accessed July 10, 2015. http://www.telegraph.co.uk/news/ worldnews/11288103/Uber-where-does-theonline-taxi-service-operate-and-where-has-itbeen-banned.html.

European Commission. “Nearly-Zero Energy Buildings.” Last modified August 18, 2015. https://ec.europa.eu/energy/en/topics/energyefficiency/buildings/nearly-zero-energybuildings.

Eurostat. “Unemployment Statistics – Statistics Explained.” Eurostat. Accessed July 20, 2015. http://ec.europa.eu/eurostat/statisticsexplained/index.php/Unemployment_statistics.

Fischer-Kowalski, M. et al. “Decoupling Natural Resource Use and Environmental Impacts from Economic Growth. Report of the Working Group on Decoupling to the International Resource Panel.” United Nations Environment Program. 2011.

Forum for the Future and Retail Industry Leaders Association, “Retail Horizons Toolkit,” Accessed August 9, 2015. http://www. forumforthefuture.org/sites/default/files/ Retail%20Horizons%20-%20Toolkit.pdf.

Global Commission on the Economy and Climate. “Better Growth Better Climate: The New Climate Economy Report – The Synthesis Report.” Report. September 2014. Accessed August 1, 2015. http://newclimateeconomy. report/TheNewClimateEconomyReport.pdf.

Hajer, Maaarten. “Europe needs ‘smart

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urbanism’ not ‘smart cities’.” The Parliament Magazine. May 28, 2014. Accessed July 28, 2015. https://www.theparliamentmagazine.eu/ articles/feature/europe-needs-smart-urbanismnot-smart-cities.

Lacy, Peter. “The Circular Economy. Great Idea, But Can It Work?” Forbes. Accessed August 2, 2015, http://www.forbes.com/sites/ valleyvoices/2015/01/20/the-circular-economygreat-idea-but-can-it-work/.

Mohindra, Desiree. “Circular Economy Can Generate US$ 1 Trillion Annually by 2025.”

World Economic Forum. Press release. Accessed August 1, 2015. http://www.weforum.org/news/ circular-economy-can-generate-us-1-trillionannually-2025.

OECD. “Perspectives on Global Development 2012: Social Cohesion in a Shifting World.”

OECD Publishing. 2011.

Tellus Institute, “More Jobs, Less Pollution – Growing the Recycle Economy in the US, 2013.

Accessed July 21, 2015. http://www.tellus.org/ pub/More%20Jobs,%20Less%20Pollution%20 -%20Growing%20the%20Recycling%20 Economy%20in%20the%20US.pdf.

Ton Bastein, et al. “Opportunities for a Circular Economy in the Netherlands.” Netherlands Organization for Applied Scientific Research.

2013.

United Nations Department of Economic and Social Affairs. “World’s population increasingly urban with more than half living in urban areas.”

United Nations. July 10, 2014. Accessed August 2, 2015. http://www.un.org/en/development/ desa/news/population/world-urbanizationprospects-2014.html.

Veolia. “2013 Key Figures.” Report. Accessed July 29, 2015. http://www.veolia.com/sites/g/ files/dvc181/f/assets/documents/2014/06/ veolia_key-figures_gb.pdf.

Veolia. “Reinventing Veolia’s Businesses.”

Report, 6. January 24, 2013. Accessed July 29, 2015. http://www.finance.veolia.com/docs/ Veolia_Press_Day_English.pdf.

World Economic Forum. “Towards the Circular Economy: Accelerating the scaleup across global supply chains.” Report.

January 2014. Accessed August 2, 2015. http:// www3.weforum.org/docs/WEF_ENV_ TowardsCircularEconomy_Report_2014.pdf.

THINKERS

Bibliography

90

BOOK EXTRACT:

THE BASE OF THE PYRAMID PROMISE

91

The debate around BoP focus has also changed substantially over time. The focus is no longer, Should we be doing this? Today that debate is over.

Business is and will continue to serve the BoP. Furthermore, most business leaders don’t need motivational stories encouraging them to consider BoP markets. Nor do development community professionals need to be convinced of the potential poverty alleviation benefits of BoP impact enterprises. Rather, the focus has moved on to, How can we do this better?

Yet despite this steady growth in interest and investment, enterprise per¬formance to date has been mixed. We know that success is certainly possible, as the cell phone revolution in emerging markets has shown. Yet many of these new BoP impact enterprises are not as good as we want them to be—or as good as they have been represented to the world—and few of them have yet achieved the necessary scale to which we aspire. We need more BoP impact enterprises that are sustainable at scale.

So what is to be done? How can we help the next generation of successful enterprises emerge? How can we build more sustainable, scalable enterprises with impact?

What’s urgently needed now are managerially friendly tools, frame¬works, and guidelines that can help move BoP impact enterprises forward:

THINKERS

Interest in creating impact enterprises for BoP markets has increased dra¬matically in the past decade. There’s a growing portfolio of these enterprises, and a growing number of entrepreneurial leaders seeking to craft more of them. This interest transcends, and blends, industries: energy, sanitation, health care, agriculture, technology, and consumer goods, to name a few. Equally, this interest transcends institutions: Company leaders, entrepre¬neurs, nonprofit managers, development professionals, and government offi¬cials all see great promise in investing in impact enterprise development in BoP markets. The lessons and frameworks in this book apply across these industries and institutions.

I have found strategies and models that can guide the development of these enterprises. My goal is to create standardized frameworks that enterprise leaders can customize to respond to the specific contexts and circumstances they face.

away from wishful thinking and hyperbole to practical, hands-on advice for for-profit, nonprofit, and development sector leaders who want to build enterprises that can generate sufficient profits while also having substantial poverty alleviation impacts.

Until now, no such integrated set of tools and strategies has existed. In its absence, all too many entrepreneurs and enterprise leaders are making the same mistakes as those who have gone before them—continually reinventing the wrong version of the wheel, if you will—thereby limiting their impact, scalability, and profitability and wasting precious time, money, and talent.

Since 1989, I have lived in, worked with, and studied BoP markets and impact enterprises, including engagements with dozens of leadership teams across the globe. Through this work, I have found that three key components must be correctly implemented and integrated to build enterprises with impact. I have translated that discovery into specific and actionable

92 recom¬mendations and frameworks for creating, sustaining, and scaling BoP impact enterprises.

My approach has three cornerstones: • Leveraging customizable tools, frameworks, and strategies to enhance enterprise development.

• Creating value with the BoP by truly understanding the poverty alle¬viation opportunity.

• Understanding how to establish an ecosystem of partners to sustain those enterprises.

I argue that for BoP impact enterprises to succeed, each of these cornerstones must be considered

and effectively addressed. Indeed, these three corner¬stones are mutually reinforcing—and, in fact, they are inseparable.

In The Base of the Pyramid Promise, I intersperse description and prescription, with an emphasis on the latter. In other words, what’s the problem, and how can we solve it? What’s the opportunity, and how can we pursue it? This is the road map that I have long contemplated. It is my prescription for building enterprises with impact and scale for the benefit of all.

93 Contributors

Dr. Anil K. Gupta is the Michael D. Dingman Chair in Strategy, Globalization and Entrepreneurship and Distinguished ScholarTeacher at the Smith School of Business, The University of Maryland at College Park.

Anil also serves as chairman, The China India Institute, a Washington DC-based research and consulting organization.

moderate or exacerbate socio-demographic disparities in cognitive development.

Daniel H. Pink

Erin Meyer

Daniel H. Pink is the author of several provocative, bestselling books about business, work, and behavior. He is the author of five provocative books — including three longrunning New York Times bestsellers, A Whole New Mind, Drive, and To Sell is Human. His books have been translated into 34 languages and have sold more than 2 million copies worldwide.

Erin Meyer is a professor at INSEAD, one of the leading international business schools.

Her work focuses on how the world’s most successful managers navigate the complexities of cultural differences in a global environment.

She offers cutting-edge insight and practical strategies to improve the effectiveness of projects that span the globe.

Dave Ulrich

Gianpiero Petriglieri

Dave Ulrich is Rensis Likert Professor of Business at the University of Michigan and a Partner at the RBL Group. His latest book is The Leadership Capital Index (Berrett Koehler).

He was shortlisted for the 2015 Thinkers50 Breakthrough Idea Award.

Gianpiero Petriglieri is an Associate Professor of Organisational Behaviour at INSEAD. He directs the Management Acceleration Programme, the school’s flagship executive programme for emerging leaders, and the INSEAD initiative for Learning Innovation and Teaching Excellence.

Des Dearlove

Hal Gregersen

An adjunct professor at IE Business School, Des is one of the founders of the Thinkers50.

He teaches on executive education programs, consults to organizations and thought leaders, and is the author of more than 15 books including Gravy Training and Generation Entrepreneur.

Hal Gregersen is a cutting-edge innovation and leadership guru, co-author of “The Innovator’s DNA” (with Clayton Christensen and Jeff Dyer), and Executive Director of the MIT Leadership Center and Senior Lecturer at the MIT Sloan School, he challenges organizations and individuals to question the way we think and act to make our world a better, more creative place.

Don Tapscott Don is one of the world’s leading authorities on innovation, media, and the economic and social impact of technology and advises business and government leaders around the world.

Douglas Ready Dr. Ready, is an Associate Professor of Education and Public Policy, researches the links between education policy, social policy, and educational equity. Much of his research focuses on how contemporary policies

THINKERS

Anil K. Gupta

94 Henry Mintzberg Henry Mintzberg currently holds the Cleghorn Professorship of Management Studies,at Mc Gill University and visiting professor at CarnegieMellon University in Pittsburgh, London Business School in the U.K., Insead in France, and H.E.C. in Montreal.

Herminia Ibarra Herminia Ibarra is the Cora Chaired Professor of Leadership and Learning, and Professor of Organizational Behavior at INSEAD. She is a member of the World Economic Forum Global Agenda Councils, a judge for the Financial Times and McKinsey Business Book of the Year Award, and Chairs the Visiting Committee of the Harvard Business School. Thinkers 50 ranked Ibarra #9 among the most influential business gurus in the world.

Laurence Capron Laurence Capron is Professor of Strategy at INSEAD where she holds the Paul Desmarais Chair in Partnership and Active Ownership and is Director of the Executive Education Programme on M&As and Corporate Strategy.

Lee Newman Lee Newman currently serve as a Dean of IE’s School of Human Sciences and Technology and Professor of Behavioral Science and Leadership at IE University and IE Business School in Madrid. He is a dean, professor, teacher, trainer, speaker, author, and educational entrepreneur.

Linda Hill Linda Hill is the Wallace Brett Donham Professor of Business Administration at Harvard Business School. She is the coauthor,

with Kent Lineback, of Being the Boss and author of Becoming a Manager. More recently, her research (along with Greg Brandeau and Emily Stecker Truelove) has looked at exceptional leaders of innovation in a wide range of industries—from IT to law to design—throughout the world. This resulted in the bestselling book Collective Genius.

Consistently ranked as one of the world’s leading management thinkers and shortlisted for the 2015 Thinkers50 Innovation award.

Liz Mellon Liz Mellon has co-founded the first overseas office for Duke Corporate Education in London in 2000 and later served as Regional Managing Director India. Before joining Duke, she was professor of organizational behavior at the London Business School. She is currently Chair of the Editorial Board of Dialogue, Duke CE’s new global journal and Executive Director of Authentic Leadership Ltd. She has worked in leadership development for twenty five years.

Liz Wiseman Liz Wiseman teaches leadership to executives and emerging leaders around the world. She is the President of The Wiseman Group, a leadership research and development firm headquartered in Silicon Valley. She been listed on the Thinkers50 ranking and named as one of the top 10 leadership thinkers in the world.

Marshall Goldsmith Marshall Goldsmith is the author or editor of 35 books, which have sold over two million copies, been translated into 30 languages and become bestsellers in 12 countries. He has written two New York Times bestsellers, MOJO and What Got You Here Won’t Get You There – a Wall Street Journal #1 business book and winner of the Harold Longman Award for Business Book of the Year. His new book Triggers: Creating Behavior that Lasts – Becoming the Person You Want to Be will be published May 19, 2015.

He was shortlisted for the 2015 Thinkers50 Leadership Award.

Martin Lindstrom Martin Lindstrom is one of the world’s premier

95

Navi Radjou Navi Radjou is an innovation and leadership advisor based in Silicon Valley. A Fellow at Judge Business School, University of Cambridge, he won the 2013 Thinkers50 Innovation Award and spoke at TED Global 2014. He is the co-author of Frugal Innovation, published by The Economist in February 2015. He also co-authored the international bestsellers Jugaad Innovation and From Smart to Wise.

Nilofer Merchant Nilofer Merchant is a fellow of the Martin Prosperity Institute and author of two bestselling books: The New How (2010) and 11 Rules for Creating Value in the #SocialEra (2012). She won the 2013 Thinkers50 Future Thinker Award and was shortlisted for the 2015 Thinkers50 Digital Thinking Award.

Peter Fisk Peter is a bestselling author, keynote speaker, and expert business advisor. His new book “Gamechangers: Creating Innovative Strategies for Business and Brands” is just published.

He is founder and CEO of GeniusWorks, a boutique consulting firm specialising in innovative growth, and Visiting Professor of strategy, innovation and marketing at IE Business School. He features in the prestigious “Thinkers 50 Guru Radar” as one of the best new business thinkers.

Richard Rumelt Richard Rumelt is a Professor at INSEAD, headed the Corporate Renewal Initiative, a research-intervention center devoted to the study and practice of corporate transformation.

Contributors

Professor Rumelt’s research has centered on corporate diversification strategy and the sources of sustainable advantage to individual business strategies.

Rita McGrath Rita Gunther McGrath, a Professor at Columbia Business School, is a globally recognized expert on strategy in uncertain and volatile environments. Her thinking is highly regarded by readers and clients who include Pearson, Covidien, Coca-Cola Enterprises, General Electric, Alliance Boots, and the World Economic Forum. She is a popular instructor, a sought-after speaker, and a consultant to senior leadership teams. She was recognized as one of the top 10 management thinkers by global management award Thinkers50 in 2013, and won the award for outstanding achievement in the strategy category.

Roger Martin Professor Roger Martin is a writer, strategy advisor and the former Dean and current Institute Director of the Martin Prosperity Institute at the Rotman School of Management at the University of Toronto in Canada. He is also the Premier’s Chair in Productivity & Competitiveness. From 1998 to 2013, he served as Dean. In 2013, he was named global Dean of the Year by the leading business school website, Poets & Quants.

Stewart Friedman Stew Friedman has been on the Wharton faculty since 1984. He became the Management Department’s first Practice Professor for his work on applying theory and research to the real challenges facing organizations. As founding director of the Wharton Leadership Program, in 1991 he

THINKERS

(and toughest) brand building experts – advising Fortune 100 brands from the CocaCola Company to Nestle to Red Bull on how to build future-proof brands. Lindstrom is the recipient of TIME Magazine’s Worlds 100 Most Influential People”. He is a New York Times and Wall St Journal best-selling author of six groundbreaking books on branding, including Buyology: The Truth and Lies About Why We Buy, BRANDsense and Brandwashed.

96 initiated the required MBA and Undergraduate leadership courses. He is also founding director of Wharton’s Work/Life Integration Project.

Stuart Crainer Stuart Crainer is former editor of the award-winning magazine Business Strategy Review and co-founder of the Thinkers50.

According to Personnel Today he is one of the most influential people in British people management. His book credits include The Management Century and a biography of the management guru Tom Peters. His work with Des Dearlove in business thought leadership led Management Today to describe them as “market makers par excellence.” Stuart is an adjunct professor at IE Business School.

Subir Chowdhury Subir Chowdhury has been a thought leader in quality management strategy and methodology for more than 20 years. Currently Chairman and CEO of ASI Consulting Group, LLC, he leads Six Sigma and Quality Leadership implementation, and consulting and training efforts.

Tammy Erickson Tammy Erickson is an author and expert on organizations and the changing workforce and, in particular, the generational differences between workers today. She has also done extensive research on how corporations innovate through collaboration.

Ted London Ted London is vice president and senior research fellow at the William Davidson Institute and a member of the faculty at the University of Michigan’s Ross School of Business. An internationally recognized expert on the intersection of business strategy and poverty alleviation, his research focuses on enterprise strategies for low-income markets, capabilities for cross-sector collaborations, and poverty-reduction outcomes of business ventures.

Whitney Johnson Whitney Johnson is a co-founder of Rose Park Advisors, and the author of Dare-DreamDo: Remarkable Things Happen When You Dare to Dream (Bibliomotion, 2012) and Disrupt Yourself (Bibliomotion, 2015). She was shortlisted for the 2015 Thinkers50 Talent Award.

Whit Mitchell Whit Mitchell is an Executive Coach, Team Dynamics expert, author and professional speaker. He is the founder and CEO of Working InSync International. Over the past 30 years, Whit has worked with a extensive variety of individuals and teams to discover and solve obstacles to success. Using a method called Inner Circle Coaching™, Whit helps individuals and teams to work more effectively, develop a system for success, and discover ways to build better relationships both inside and outside their organizations.

97 THINKERS

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