Move from command and control to discovery: Rita McGrath

One of the things that is really different here is about ensuring that people can operate in a permissionless way, which means decisions are made as close as possible to the customer, to the markets, and to the edges of the organisation and also as quickly as possible. In an hierarchical structure, the moment is past by the time information gets all the way up to the top and all the way back down again. So you need to build organisations where people feel they can operate freely, without fear.  This doesn’t mean there is no sense of accountability–you want to have high performance expectations for people to offer their best efforts.  

Q. How best can leaders navigate this shift?

It takes a lot of work because it is a big personal change. Remember that the old system of personal perks, incentives, and reward worked really well for leaders. So there is a real need to, first of all, recognise that the shift is necessary. So I would begin with awareness. Then, realise that few people can make this kind of transition on their own. They need honest feedback and real development opportunities. That makes coaching important. It is also crucial to have a view of what is necessary and where do you want to get to. The better companies, the ones that are going to survive, have leaders that get this right—like Microsoft’s Satya Nadella who has spoken about the need to move from being ‘know it alls’ to being ‘learn it alls’.

Also read: Compromise should be the last decision, not the first: Joshua N Weiss

Q. Fostering a learning culture…

You should use every device at your disposal to ensure this. A brilliant example is that of Kathleen Hogan, chief human resources officer at Microsoft. She spent nine months convening listening sessions, reading up on culture, creating a “culture cabinet” and bringing in outside experts, on top of the normal developmental opportunities Microsoft has always provided its employees.  The goal was to ensure a learning culture across the organisation.

Leaders need to more proactively architect the information flows they can tap into. Many spend more time on email and PowerPoints instead of personally getting inputs that can help in making smarter decisions. They should instead think of ways in which people can communicate rich ideas and the thinking behind them. Amazon ditched PowerPoint long ago in favour of typed, six-page documents in which the person pitching an idea describes it. The first 20 minutes or so of a meeting are taken up reading it and typically questions get answered therein, so it is more fruitful once the discussion starts.  

Another important idea is to look for ‘helpful Cassandras’ (a term used by Andy Grove, formerly of Intel). The key here is to find those people with valuable information (which may fly in the face of current corporate beliefs). They may not usually come to executive meetings. They may be working remotely or they may be junior and hence afraid to bring up uncomfortable topics.  

Q. Diversity initiatives to avoid blind spots…  

You can bring diverse people into your operation, but if they are not actually being listened to and not being guided in how to learn best, then you are not really including them. There are simple things you can do. For instance, at meetings, make sure that everybody has a turn. A no-interruption rule can ensure that people do not talk over each other. Also, try to make sure that your events are inclusive so that you do not have something like say, men’s golf outings where women or people not familiar with golf do not get included. Another useful approach is the nominal group technique. Basically, everybody gets into a room and then you pose a question like let’s say, what’s the best way to improve customer service in a particular region. Everybody writes down their best ideas and then you have a facilitated meeting where people get to really contribute. 

Also read: Innovation has no borders, no owners: Alex Goryachev

Q. In your books, you talk about the transient nature of competitive advantage. How helpful is a learning mindset when it’s time to move on?

The life cycle of a competitive advantage has at least three parts. The first is the conception stage that entails ideation and innovation. Then you have a period of scaling up and exploitation. In business, what we mostly teach people is that part, which is: I have got an advantage in place, I am going to exploit it for a long, long time, and that is going to be what I do for the rest of my career. We don’t do a great job, even today, of teaching people the basics of how to innovate and the disciplines that are appropriate for that.

Another part where we struggle is when that advantage begins to reach the end of its life cycle. Then there is a need to transform the organisation to move to the next advantage. But leaders are not generally trained in the skills of either innovation or transformation. Consequently, they are poorly equipped to lead efforts involving major uncertainties and change. Also, it may be an experience that many not have encountered at an individual level. This is why being discovery-driven is so critical.  

The whole theme of being discovery-driven is about how to pick up those signals, how to foster innovation, how to get the right balance between investing for what is going to produce results today and investing for what could produce results tomorrow, and how to manage all that. WL Gore, Corning, 3M, and Spotify are among companies that do this very well.  Spotify, for instance, involves users in creating ideas for new features, promotes social sharing among its users and develops new concepts such as a carbon-calculator for bands to know what the carbon footprint of their tours actually is.   

Q. Skills leaders need to learn…

Empathy is skill number one—the ability to understand your employees and customers and being able to emotionally relate to them. Second is pattern recognition—being able to figure out what the core challenges your organisation is facing and then identifying the mechanism to tackle that. Third would be analytics—being able to see the numbers beyond the numbers and think for the long-term benefit of the corporation.