UVA Darden Batten Briefing: Driving Digital Transformation

BAT TEN BR IEFI N G IMPROVING THE WORLD THROUGH ENTREPRENEURSHIP AND INNOVATION

AUG 2017

Driving Digital Transformation:

NEW MINDSETS, CULTURES, SKILLS, AND BEHAVIORS

By Malgorzata "Gosia" Glinska Associate Director of Research and Intellectual Capital Batten Institute glinskam@darden.virginia.edu

CHANGE IS COMING. And if Jack Ma is right, the change will bring decades of pain.1 Speaking at a conference in Zhengzhou, the tech billionaire and chairman of Chinese

e-commerce giant Alibaba warned about the seismic advancements in digital technologies and their impact on industries and societies. He stressed the need to reinvent the

education system as artificial intelligence, robotics, and automation continue to disrupt the labor market.

KEY INSIGHTS The Digital Age will fundamentally change how companies are managed and operated Fostering innovation throughout the company will be a strategic necessity Transforming for the Digital Age will mean much more than adopting new technologies Enabling human excellence in critical thinking, creativity, and innovation will be key to organizational survival

We can’t halt progress. Inevitably, many jobs will be automated. Innovative, agile startups will push out the incumbents. However, we can choose to view the digital revolution as an opportunity rather than a threat. And, we can follow certain steps to prepare.

Darden Professor Edward D. Hess believes that in order to thrive in the digital age, both organizations and individuals need to transform. To explore what that transformation

entails, Hess recently led a discussion at the spring 2017 gathering of the Global Innovators’ Roundtable. The roundtable, hosted by Darden’s Batten Institute for Entrepreneur-

ship and Innovation in Arlington, Virginia, brought together senior leaders from Capital One, Celgene, Corning, EnPro Industries, IBM, Marriott International, and Siemens.

This Batten Briefing presents the insights gleaned from the discussion. First, it looks at the threats and opportunities that the explosion of digital technologies has created for

companies across all sectors. Then, it examines the new leadership capabilities, mindsets,

behaviors, and corporate cultures required to support a successful digital transformation.

1

Ramli, D. 2017. “Jack Ma Sees Decades of Pain as Internet Upends Old Economy.” Bloomberg News.

https://bloom.bg/2oiZGkY.

GLOBAL INNOVATORS' ROUNDTABLE REPORT

A Tsunami of Change:

HOW DIGITAL AFFECTS BUSINESS THE STATE OF DIGITIZATION

SOME SAY WE LIVE IN THE AGE OF SMART MACHINES.3 Others proclaim that we

According to a recent study by

The nomenclature aside, two things are clear. First, technology is evolving at break-

McKinsey, in many industries digital transformation is just beginning.2

are on the cusp of the Fourth Industrial Revolution.4

neck speed. Second, both individuals and organizations need to develop entirely new capabilities to survive and thrive.

Digital technologies have significantly

The Impact on Business

penetrated media, retail, and high tech.

Digital technologies such as the cloud, mobile, robotics, artificial intelligence (AI),

However, on average, industries are less than 40% digitized.

deep learning, quantum computing, the Internet of Things (IoT), and powerful data analytics have begun to penetrate every aspect of our lives. They’ve also changed the

business landscape, affecting how companies operate, engage customers, and innovate.

DIGITIZATION OF INDUSTRY SECTORS 62% Media & entertainment

54%

Only ten years ago, Apple launched the iPhone, which propelled smartphones into the

51% Healthcare systems & services

DIGITIZATION OF DIFFERENT DIMENSIONS ACROSS INDUSTRIES 60% Products & services

47% Marketing & distribution

52% Business processes

43%

2

put it, “We are seeing technological shifts and changes on a scale we have never seen on this planet.” 5

High tech

Source: McKinsey

any other. As Marc R. Benioff, Chairman and Chief Executive Officer of Salesforce,

55% Retail

Supply chains

According to the World Economic Forum, the Fourth Industrial Revolution is unlike

mainstream. Today, billions of people with smartphone subscriptions around the world use them to access Uber, Instagram, WhatsApp, Facebook Messenger, and myriad other services that did not exist when the first iPhone was released in 2007.

Digital natives like Google, Amazon, Tesla Motors, and Alibaba, as well as large in-

cumbents like Siemens and General Electric, once deeply rooted in the physical world, are harnessing the power of digital technologies to create business innovations and

supercharge their performance. Data and analytics, for example, help them make faster, evidence-based decisions, generate insights, optimize their processes, and improve

their core operations. Forward-looking companies leverage digital technologies not

only to develop innovative products and services, but also to launch entirely new business models, disrupting other companies, and even industries, in the process. 6

For business leaders the stakes have never been higher. The evolving technologies have

demonstrated their potential to overturn established companies and transform markets “faster than perhaps any force in history.” 7

2

Bughin, J., et al. 2017. “The Case for Digital Reinvention.” McKinsey Quarterly. (1): 26-41.

3

Davenport, T. H. 2016. Only Humans Need Apply: Winners and Loser in the Age of Smart Machines. HarperCollins Publishers.

4

Reyes, A., et al. 2016. “Mastering the Fourth Industrial Revolution.” World Economic Forum Annual Meeting. http://bit.ly/1MYIesF.

5

Ibid.

6

Manyika, J. 2016. “What’s Now and Next in Analytics, AI, and Automation.” McKinsey Global Institute. http://bit.ly/2qsLQw6.

7

Bradley, J., et al. 2015. “Digital Vortex: How Digital Disruption Is Redefining Industries.” Global Center for Digital Business Transformation. http://bit.ly/2bQQ3oM.

BATTEN BRIEFING GLOBAL INNOVATORS' ROUNDTABLE REPORT

A Tsunami of Change: GOING DIGITAL

AT THE DAWN OF THE DIGITAL REVOLUTION, many companies tried to ignore the

explosion of new technologies, refusing to believe that they posed a real threat to their industries. It is now painfully clear that the forces of disruption cannot be ignored.

They create the imperative for business leaders to reimagine their organizations.8

Embracing Change The first step is to accept the cold hard truth that change is constant, and that the only way to stay competitive is to embrace it and continuously adapt.

“We don’t have a choice,” said Victor Brown, IBM’s Distinguished Engineer and

HOW ARE BUSINESS LEADERS RESPONDING TO DISRUPTION? The evidence that digital technologies are disrupting industries is all around us. Digital platforms are upending retail, as consumers shift to shopping online and brick-and-mortar stores

Director, Office of the CTO. “We are transforming right now from a legacy software

are forced to close.

and produce the next generation of technology, put it out there, and leverage it.”

Studies indicate that most business

It’s not just high-tech firms like IBM that are compelled to respond to fast-changing

global survey of 1,000 executives

business to a cloud-cognitive business. If we want to survive, we have to get ahead of

digital technologies. Increasingly, senior executives in companies from all sectors of the

economy acknowledge that they need to lead their organizations in digital reinvention.

leaders fear disruption. A recent representing large companies across multiple sectors conducted by the

Why, then, do so many struggle?

Economist Intelligence Unit (EIU)

Understanding Digital Transformation

revealed that six out of ten senior

While technology is certainly fueling the demand for change, the essence of digital

transformation is much broader. Having bold, tightly integrated digital strategies mat-

executives view disruption as a threat rather than an opportunity.9

ters; however, they are not enough. To ensure success, business leaders need to execute

concurrent transformations on many levels. As Hess put it, “Transformation will mean embracing new ways of working, new structures, new mindsets, new behaviors, new

ways of making decisions, and faster, data-driven adaptation, innovation, and resilience.”

Digital transformation is not about technology.

It's a business problem.”

Gertjan Bartlema, Vice President, Information Knowledge Utilization, Celgene

To stay relevant, business leaders Dispelling some myths surrounding digital transformation may help, too. Many busi-

ness leaders still view digital transformation primarily as a technology-driven effort—a transformation of their IT department. “Digital transformation is not about technology,” said Gertjan Bartlema, Vice President, Information Knowledge Utilization, at

must challenge themselves to see disruption as an opportunity.10 Yet, most are not prepared to do so in practice.

Celgene. “It’s a business problem.” In other words, digital transformation is about how

an organization can leverage digital technologies to enable new business opportunities, solve a wide range of challenges, and be more agile, adaptable, and innovative.

8

Rigby, D. K. 2014. “Digital-Physical Mashups.” Harvard Business Review. 92 (9): 84-92.

9

The Economist Intelligence Unit. 2016. “Thriving through Disruption.” http://bit.ly/2tj39lZ.

10

Ibid.

3

A Survival Guide for the Digital Age: FOSTERING HUMAN EXCELLENCE The Smart-Machine Age Skills

CRITICAL THINKING INNOVATIVE THINKING CREATIVITY HIGH-QUALITY EMOTIONAL ENGAGEMENT WITH OTHERS To thrive in the Smart-Machine Age, humans will need to become really good at what even the most advanced smart machines can't do. Hess calls that the NewSmart. No computer can innovate and

Redesigning the Organization Digital transformation can bring confusion and uncertainty to those who are not comfortable with change, especially when they realize that the skills that have propelled them in their careers are becoming obsolete.

Transformational leaders will certainly have to prepare their organizations by investing in new skills. They will also have to think hard about how they want to redesign

the way their companies work. “That may require,” said Hess, “new structures, cultures, processes, leadership models, and rewards designed to optimize human learning in concert with technology.”

“Things are changing very rapidly, just in machine learning,” said Sam Zoubi, Corning’s Director, Advanced Modeling and Analysis, Manufacturing Technology and

Engineering. “It’s a major change for our company. Using the existing organization to

drive digital transformation doesn’t always work. We need to create new groups to deal with digital transformation and to own it.”

“We create communities of practice,” said Celgene’s Bartlema. “As opposed to fighting

the battle of deploying a new tool, we invite people to learn new tools and create collective impact. It’s a lot of work to keep the momentum going for the community of

practice and to achieve sustainable change. You need the right passionate leadership to drive that effort.”

think creatively. No robot can

The New Skills for the Smart-Machine Age

foster meaningful relationships

The technological disruptions reshaping the business landscape—and the larger world

with humans, at least for the near future. That’s why, urges Hess, “We need to excel at the highest level of thinking, learning, and genuinely engaging with others on an emotional level.”

Source: Humility Is the New Smart

around us—can be dazzling and daunting at the same time. We marvel at the fact that

robots with neural networks can now learn to perform new tasks, how to screw a cap on

a bottle, for example.11 At the same time, we fear that tomorrow they may steal our jobs.

What is required to successfully navigate increasingly disruptive environments? How can we best prepare for the invasion of increasingly smart machines?

If you ask Darden’s Hess, the best way to deal with uncertainty and turbulence

caused by fast-changing technology is to pursue human excellence. In his latest book, Humility Is the New Smart: Rethinking Human Excellence in the Smart Machine Age,

11

Markoff, J. 2015. “New Approach Trains Robots to Match

Human Dexterity and Speed.” Nytimes.com. http://nyti. ms/2tivBoc. 12

co-authored with Katherine Ludwig, Hess explains how to achieve that by develop-

ing the four essential skills, which he calls the NewSmart: critical thinking, innovative thinking, creativity, and high-quality emotional engagement with others.12

Hess, E. D. and Ludwig, K. 2017. Humility Is the New

Smart: Rethinking Human Excellence in the Smart Machine Age. Berrett-Koehler Publishers, Inc.

4

BATTEN BRIEFING GLOBAL INNOVATORS' ROUNDTABLE REPORT

The NewSmart Behaviors To foster higher-level, creative, and innovative thinking and engagement with others, Hess recommends cultivating four critical NewSmart behaviors:

Quieting Ego To be effective, we need to perceive the world as it really is, not as we want it to be.

Unfortunately, our view is often distorted by our fears, biases, and insecurities. Quieting our egos—which requires deliberate work to reduce our reflexive emotional

HUMILITY can help us excel at the NewSmart behaviors and skills

defensiveness—will help us be more open-minded to others’ perspectives and feedback. It will make us more empathetic. As a result, we will become better thinkers,

listeners, and collaborators. Hess recommends practicing mindfulness and meditation as the most effective ways to quiet one’s ego.

Managing Self

FOUR SMARTMACHINE AGE SKILLS

Higher-level thinking is critical to success in the age of smart machines. To boost it, we need to effectively manage our own emotions. We also need to manage how we

think. We have to be open-minded and willing to stress-test our thinking, and modify opinions as needed, based on new, better data. Managing self can be invaluable in

overcoming our fear of mistakes, so that we can learn from them. In his latest book,

Humility Is the New Smart, Hess offers various tools and techniques, such as slowing down, root cause analysis, and unpacking of assumptions, to improve our thinking.

OTHERNESS

In today’s fast-paced environment, we often don’t make an effort to truly listen to others. But, listening, notes Hess, is an essential skill that helps us to learn better, collabo-

REFLECTIVE LISTENING

rate better, and build better relationships. How we listen is critical. Reflective listening requires that we slow down and truly focus on comprehending what the speaker is

saying, without judgment. Asking questions to make sure we understand the speaker’s viewpoint is part of the process.

MANAGING SELF

s havior art Be ewSm Four N

Reflective Listening

Otherness Genuinely connecting with others on an emotional level is fundamental to our

motivation and drive to live, learn, and succeed. Studies confirm that connecting with others, especially those who can help us overcome our biases, is critical to honing our

QUIETING EGO

higher-level thinking skills. Meaningful relationships with others are also indispens-

able to the kind of collaboration that results in creativity and innovation. The bottom

NewSmart + Humility

more than ever to succeed. 13

Source: Humility Is the New Smart

line: in the Smart-Machine Age, where most work is collaborative, we need others

13

Hess, E.D., and Ludwig, K.

5

A Survival Guide for the Digital Age: REDEFINING LEADERSHIP The New Mindset: Humility

A NEW BREED: HUMBLE LEADERS

One critical ingredient of success in pursuit of human excellence is a mindset of

Global business leaders increasingly

don’t automatically assume they know the answers. They accept that others know more

recognize the value of humility in a world of ambiguity and disruption.

A recent survey of 1,042 executives

humility. In his book, Hess defines humility as an accurate self-appraisal and an

understanding that it is “not all about me.” 15 Those who exhibit intellectual humility

than they do and are open to new ideas. The mindset of humility drives their commit-

ment to continuous, iterative learning, which is essential to survival in a world of rapid change and uncertainty.

and in-depth interviews with nineteen digital leaders, conducted by the

The New Leadership Model

Global Center for Digital Business

No matter the industry, senior leaders need to keep abreast of new technologies on the

Transformation and HR Consultancy metaBeratung, found that humility is one of the most important

horizon, identify competitive threats, and spot digital opportunities. However, becoming digitally fluent is hardly enough to drive a successful digital transformation.

characteristics that distinguishes

Many organizations still follow the military paradigm of the 19th century, where there was one person at the top. This is no longer the right approach. Today, the team is the star.”

leaders who are successful in disruptive environments from those who are not.14

Kurt Bettenhausen, Senior Vice President, Corporate Technology, Siemens

As recent studies attest, the most effective business executives today are adaptable and open-minded with regard to their evolving roles in the organizations they lead. They understand that the traditional, hierarchical model of leadership, with a leader as an

authoritative figure who knows all the answers, may not work in the world of digital disruption and uncertainty. 16

But this new model of leadership is yet to become widely accepted.

“Many organizations still follow the military paradigm of the 19th century, where

there was one person at the top,” said Kurt Bettenhausen, Senior Vice President, Corporate Technology, at Siemens. “This is no longer the right approach.” Bettenhausen

used a soccer analogy to emphasize the importance of collaboration and teamwork in the age of digital technologies. “In the time of Pelé and Beckenbauer, there was one

star in the field. Today, the team is the star. The players have different levels of visibility, 14

Neubauer, R., et al. 2017. “Redefining Leadership for a

Digital Age.” IMD International Institute for Manage-

but they are all important.”

ment Development and metaBeratung GmbH. http://bit. ly/2v9vl8j.

6

15

Ibid.

16

Ibid

BATTEN BRIEFING GLOBAL INNOVATORS' ROUNDTABLE REPORT

Similarly, in today’s workplace, the team is the star. “That’s why treating people with

respect and trust is becoming more important than ever,” added Bettenhausen. “If we

DEFINING HUMILITY

won’t exist in the future.”

While humility may be viewed as

don’t have respect for the people who execute and are responsible for the cash flow, we

antithetical to the image of a strong,

Treating people with respect and trust is becoming more important than ever. If we don’t have respect for the people who execute and are responsible for the cash flow, we won’t exist in the future.”

confident leader, it is, in fact, a critical

Kurt Bettenhausen

that one person cannot possibly

attribute of effective leadership today. The surveyed executives view humility as a mindset of respect for the ideas of others and acceptance know everything required to make

As Christopher Baer, Senior Director, Global Leadership Development and Expe-

decisions. Effective leaders who

rience Design at Marriott International, noted, “Embracing digital requires a new

practice humility understand that the

model of leadership rooted in humanizing work, fostering an open culture of learning,

speed and force of disruption call for

and thriving in a VUCA world.”

a more inclusive and collaborative

The idea of VUCA, which stands for volatility, uncertainty, complexity, and ambigu-

approach to decision-making.18

ity, was introduced by the U.S. Army War College to describe the world that emerged at the end of the Cold War. The acronym was created in the late 1990s and was later

adopted by business managers. Today, it denotes the “new normal”—the chaotic, turbulent, and fast-changing business environment in which companies now operate.17

Embracing digital requires a new model of leadership rooted in humanizing work, fostering an open culture of learning, and thriving in a VUCA world.”

Christopher Baer, Senior Director, Global Leadership Development and Experience Design, Marriott International

17

Chadha, S. 2017. “VUCA World: Provoking the Fu-

ture.” Human Capital. 20 (8): 14-18.

18

Neubauer, R., et al.

7

A Survival Guide for the Digital Age: THE NEW CEO

The Chief Enabling Officer As an organization, we not only need to continually feed the growth of a person, but we also need to mature the organization so that it allows that person to flourish.”

As quantum computers and powerful robots penetrate the workplace, it’s easy to

Marvin Riley, President, EnPro Industries, Fairbanks Morse Division

group, we adopted the language ‘whole human development.’ People are adaptable

A NEW LEADERSHIP MODEL FOR THE SMARTMACHINE AGE A successful leader for the Smart-Machine Age will be able to model for the rest of the organization the following mindsets and behaviors, which Darden Professor Edward Hess

fall into the trap of putting machines before people. Senior leaders at the world’s most innovative companies, however, do the opposite. They understand that

investing in human development is critical to their organizations’ effectiveness and act accordingly, creating an environment where employees can reach their full potential.

As Marriott’s Baer put it, “When we reinvented our learning and development

under the right leadership conditions, and we are committed to helping our associates grow.”

Gautam Meda, Research Director, Modeling and Simulation, at Corning, empha-

sized the importance of systematic one-on-one coaching. “We coach people to deal with risks,” he said. “No matter how much potential people have, they have to feel

that they won’t be forced into risk until they are ready for it. We give them by stepby-step stretch opportunities.” Meda also noted that an environment of psycho-

logical safety is key to success. “Some things,” he said, “you learn only by making mistakes. Having less fear makes it easier for people to own up to their mistakes and to use them as learning opportunities.”

has dubbed the 4 Es: 19

1

quiet ego and as a lifelong learner

2 3 4

We coach people to deal with risks. No matter how much potential people have, they have to feel that they won’t be forced into risk until they are ready for it.

We give them by step-by-step stretch opportunities.”

ENGAGE the world with a

EMBRACE uncertainty, ambiguity, and complexity like a courageous scientist

EXCEL at managing self and “otherness” ENABLE the highest levels of human development and performance

Gautam Meda, Research Director, Modeling and Simulation, Corning

EnPro Industries runs a program, taught by the CEO, Steve Macadam, to help its employees achieve a state of “deep awakening” so that they can find their “noble

goal and purpose.” Said Marvin Riley, President at EnPro, Fairbanks Morse Divi-

sion, “We call it ‘flourishing.’ And as an organization, we not only need to continually feed the growth of a person, but we also need to mature the organization so that it allows that person to flourish.”

19

Hess, E.D. 2016. “The Four Es: the CEO Is the Chief

Enabling Officer.” Darden Ideas to Action Website. http://bit. ly/2eCxKmn. 20

8

Hess dubs this kind of leader the “chief enabling officer.” In fact, as Hess predicts, “enable-ship,” will be the primary role of the CEO of the future.20

Ibid

BATTEN BRIEFING GLOBAL INNOVATORS' ROUNDTABLE REPORT

TRANSFORMING THE CULTURE The Collaborative Culture of Innovation As the digital revolution advances, the rate of disruption will only increase.

Therefore, innovating faster and better is critical to organizational survival.

Rapid innovation is more effective when it is done by empowered teams, whose

members collaborate and share knowledge. That’s why having the right culture is

critical. As IBM’s Brown put it, “Culture can be the biggest inhibitor of innovation.

CULTURAL WAYS

OLD VS NEW Individuals win

Teams win

You don’t get results for things you don't incentivize, so it’s important to align the

Play cards close to the chest

Transparency in communication

Often, what hinders effective collaboration is the annual performance evaluations.

Highest-ranking person can trump even the best idea

Best idea or argument wins

incentives the right way to foster the right behaviors.”

Some companies go so far as to rate employees on a bell curve, which is known as forced or stack ranking. Under the forced ranking process, the 20 percent of top

performers are rewarded, the middle 70 percent are coached on how to improve, and the bottom 10 percent are dismissed.

Listening to confirm

Listening to learn

Telling

Asking questions

Grading on a curve forces employees to sabotage one another to boost their own

Knowing

a team-driven culture. That is why some of the most well known practitioners of

IQ

rankings. It creates the kind of dysfunctional internal competition that undermines forced rankings like GE and Microsoft have abandoned it.

It’s hard to get promoted at IBM if you don’t share. The people that stand out are the ones that share the most.”

Mistakes are always bad Compete Self-promote

Being good at not knowing IQ & EQ Mistakes are learning opportunities Collaborate Self-reflect

Victor Brown, Distinguished Engineer and Director, Office of the CTO, IBM

Hess believes that to thrive in the SmartIBM replaced the traditional annual performance review with a process of an

ongoing feedback. What the company values and encourages is not only great in-

dividual work but also contributions to the performance of the entire organization.

“It’s hard to get promoted at IBM if you don’t share,” said Brown. “We post on

internal social media, where our analytics can identify the right expert for a project you’re working on. The people that stand out are the ones that share the most.”

Machine Age—and to attract and develop the best talent—organizations will need to abandon their “old cultural ways” and radically transform their environments.

Source: Humility Is the New Smart

Successful innovation also requires conditions where everyone on the team performs at their highest level. Trust, respect for one another, constructive conflict, and a sense

of belonging are necessary conditions for such peak performance. Those who achieve it also describe a sense of excitement and challenge as well as a feeling that they are

doing something that matters and makes a difference. “At work, people want to feel that they belong, and that they can change the world,” said Sherri Gilligan, former Senior Vice President, Card Marketing, at Capital One Financial.

9

A Survival Guide ... [CONTINUED] On an individual level, rapidly changing technology requires flexibility, adaptability,

At work, people want to feel that they belong, and that they can change the world.”

Sherri Gilligan, former Senior Vice President, Card Marketing, Capital One Financial

and the ability to continuously learn. So, in order to succeed in a digitally driven world,

individuals need to adapt to a work environment in which they increasingly collaborate not only with one another but also with smart machines to improve their performance and learn new skills.

The ability to digitally reimagine your business and innovate with digital technologies

requires the right culture. Senior leaders who excel at fostering such a culture have not only a high IQ, but are also highly self-aware and emotionally intelligent. They know

CULTURE & PURPOSE

how to create an environment where employees feel psychologically safe to explore

new ideas with one another, pursue challenging goals, and learn iteratively. “It’s our job as leaders,” said EnPro’s Riley, “to show them that it’s okay to take risks and fail.”

A Compelling Vision for Uncertain Times The necessity to adopt new mindsets, skills, and behaviors required to stay relevant in

the age of disruption can be challenging and confusing. We resist change. We want to preserve the status quo.

This is where senior leaders have a crucial role to play.

A recent survey of 1,000 executives from 14 countries, conducted by the Economist Intelligence Unit, found that the ability of business leaders to clearly articulate organizational

Effective leaders provide a strong, compelling long-term vision to motivate and inspire their employees in a world of uncertainty, turbulence and change. They also provide a sense of purpose and meaning.

“To get people to think differently,” said Gilligan, “we need to help them see the possi-

purpose is one of the most impor-

bilities, show them that they’ll be able to do things they were never able to do before.”

tant factors in fostering a culture of

To capture the hearts and minds of the workforce and gain broad buy-in for digital

disruptive innovation.

21

63% of all respondents agreed

transformation, senior executives increasingly turn to storytelling. “Great leaders,” said Gilligan, “create a completing vision of the future and use the power of stories to get

that having a purpose that includes

people on board.”

both financial and social objectives

Explaining why stories are often more effective than PowerPoint decks full of charts

makes their companies more innovative.

and graphs, Baer quoted Brené Brown, a professor at the University of Houston, who studies vulnerability, courage, and shame. As Brown said in one of her TED talks, stories are “data with a soul.”

But Gilligan shared a word of caution. “Stories and practices,” she said, “can lead to great results and set the mood in an organization. However, if you tell compelling stories as a leader, but your practices don’t reflect that, you’re going to fail.”

21

The Economist Intelligence Unit. 2016. “Thriving through

Disruption.” http://bit.ly/2tj39lZ.

10 BATTEN BRIEFING GLOBAL INNOVATORS' ROUNDTABLE REPORT

Final Thoughts THE STAKES OF THE DIGITAL REVOLUTION CANNOT BE OVERESTIMATED. As Jack Ma warned in his 2016 letter to the Alibaba shareholders, rapid technologi-

FURTHER READING

cal changes across different sectors of the economy could be devastating for businesses that don’t learn to adapt.22

To compete today, business leaders must integrate the new, increasingly smart technologies into every part of their businesses or risk losing out to more nimble and

adaptable competitors. However, success doesn’t depend exclusively on technology.

More than ever, it depends on people—their skills, behaviors, and mindsets. It also

Humility Is the New Smart: Rethinking Human Excellence in the Smart Machine Age. Edward D.

depends on the corporate cultures in which they work.

Senior leaders in the most innovative companies know that. While they invest in

Hess and Katherine Ludwig. 2017. Berrett-Koehler Publishers. Oakland, California.

technology to drive digital transformation, they also invest time and resources in helping their employees reach their full potential. And they create collaborative

cultures that empower individuals and teams to experiment, explore, and iteratively learn from mistakes.

Technology can certainly increase the speed and quality of innovation. However,

it’s important to remember that, ultimately, it is human talent, motivation, passion, insight, and creativity that are key drivers of success.

Learn or Die: Using Science to Build a Leading-Edge Learning Organization. 2014. Edward D. Hess.

Columbia University Press. New York, New York.

22

Cendrowski, S. 2016. “Alibaba’s Jack Ma Just Predicted

the Next 30 Years of Technological Change. Fortune.com. http://for.tn/2ejCpLd.

11

THE GLOBAL INNOVATORS’ ROUNDTABLE

For the past seven years, executives

CORPORATE PARTICIPANTS

from some of the world’s largest and most innovative companies have been

CAPITAL ONE FINANCIAL

CELGENE

Sherri Gilligan, former Senior Vice President, Card Marketing

Gertjan Bartlema, Vice President, Information Knowledge Utilization

Darden’s Batten Institute for Entrepre-

CORNING

CORNING

neurship and Innovation. Led by Darden’s

Gautam Meda, Research Director, Modeling and Simulation

Sam Zoubi, Director, Advanced Modeling and Analysis (AMA) Manufacturing Technology and Engineering

ENPRO INDUSTRIES INC.

IBM

Marvin Riley, President, Fairbanks Morse Division

Victor Brown, Distinguished Engineer and Director, Office of the CTO

seven corporations. This Batten Briefing

MARRIOTT INTERNATIONAL

SIEMENS

expands on the themes that emerged dur-

Christopher Baer, Senior Director, Global Leadership Development and Experience Design

Kurt Bettenhausen, Senior Vice President, Corporate Technology

getting together to talk about innovation in an interactive and candid environment. They are participants in the Global Innovators’ Roundtable, an initiative of

top-ranked faculty, they explore the latest research on corporate innovation, share best practices, and discuss common challenges.

The eleventh roundtable, hosted by the Batten Institute on 20 April 2017 in Arlington, Virginia, brought together executives from

ing the discussions facilitated by Professor Edward D. Hess.

Future roundtables will convene in Washington, DC, the Bay Area, India, China, and other locations.

DARDEN FACULTY LEADER Edward D. Hess Professor of Business Administration and Batten Executive-in-Residence

c o p y r i g h t i n f o r m at i o n BATTEN BRIEFINGS, August, 2017. Published by the Batten Institute at the Darden School of Business, 100 Darden Boulevard, Charlottesville, VA 22903. email: batten@darden.virginia.edu www.batteninstitute.org ©2017 The Darden School Foundation.

All rights reserved.