Fall 2008 issue of Horizons

GUEST FEATURE Ken Harrington, Center for Entrepreneurial Studies Washington University in St. Louis (cont.)

Leaders and organizations that try to “always be right” in these situations are particularly handicapped. It is their nature, and their people expect this style. Net Present Value, Return on Investment, scenario assumptions, discount rates and cost accounting allocations provide good answers. How do they change their approach? I would suggest that leaders use delegation to allow virtual teams to form. These teams can then employ self-directed collaboration and dynamic actions without the leader’s involvement. To make these teams effective, the leader needs to provide small amounts of innovation resources that can be autonomously used to experiment and pursue their ideas. In other words, catalyze people to be more entrepreneurial. Ideas, innovations and individuals stagnate and smolder when waiting their turn in the approval, meeting, scheduling queue. Leaders will benefit by letting them pursue their ideas. But how does a leader allow this change without inviting entrepreneurial anarchy? How does a leader allow mistakes and still achieve the results that are required in the current enterprise? It actually can be quite simple. It also is less costly, lower risk and more fun than one might think. It is about lubricating the relationships between your people so that they collaborate more frequently and effectively. To make this type of change, leadership action needs to be taken at two levels. Here are my thoughts and ideas. Outcomes may come more quickly than you think. 1) Retain the organization’s current structure, resource allocations, controls and decision-making approaches. To repeat the old cliché, don’t throw the baby out with the bathwater. 2) Check to see if there is hidden innovation energy in the organization’s people. Some signs are: a. Frustrated people b. Functional groups or business units that are in silos and compete internally c. Leaders trying to make only “big bets” I. CEO or Senior Executive Leadership Actions

d. Being focused on picking only winners e. Team meetings in which people argue about being right versus trying to understand the other team members f. Betting more on logic than passionate, committed people g. A history of being slow to decide and, even worse, being slow to stop when a decision proves wrong h. Pleas for big resource commitments to spur innovation 3) If point No. 2 is true, then formally appoint, fund andannouncean innovationdirector who reports directly to the CEO or top executive. Select someone who is collaborative, fair and willing to direct credit to others when innovations happen (see “The New Principles of Swarm Business,” MIT Sloan Management Review, Spring 2007, Gloor & Cooper, for some principals). 4) Bepatient.Becontentwith1percentparticipation and involvement at the beginning. Most people will need to see how others do and how they are treated before they will participate. 1) Create low-cost and high-energy events and activities that reduce the separation between scientists, functional groups and business units. These events should cause people to meet, collaborate, exchange ideas and form teams. (See “Managing Creativity in Small Worlds,” California Management Review, Summer 2006, Fleming & Marx, for some ideas.) 2) Focus on creating an environment that tries new things. 3) DO NOT try to pick idea winners. Let the free market (collaborators, customers, secondary funders) decide who survives. Individual persistence may be more important than initial idea quality.

II. Information Director Leadership Actions

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