CEO Confidential

Leading Innovation, Creativity in your Enterprise

IBM’s New York Stock Exchange survey of more than 1,500 CEO’s from 60 countries and 33 industries reported that creativity mattered more than rigour, management discipline, integrity or even vision to successfully navigate an increasing complex world. Moreover, less than 50% of global CEOs believe their enterprises are adequately prepared to handle a Volatile, Uncertain, Complex and Ambiguous (VUCA) environment. So, how exactly do CEO’s encourage great ideas, which turn into profitable and sustainable innovations in a VUCA world? This is a subject I explore in a new book for Bloomsbury entitled “Leading Innovation, Creativity and Enterprise” which looks at how you nurture what I call “Brain Based Enterprises” (BBEs).

Ambiguity and improvisation

One of the capabilities that separate great leaders from good ones is the ability to tolerate or even relish an uncertain world. Strategic uncertainty for can be envisioned as being principally about questions of direction / ends, the journey / means or both ends and means, which we term a “wicked problem”:

Responses to strategic uncertainty include:

  1. Creating a shared vision when there is uncertainly in terms of the destination of travel (the ends). Leaders employ participative strategies and tools such as visioning, scenario planning, open space technology and so on, to help others focus on the destination and align passions with a common purpose.
  1. Using systematic divergent and convergent thinking to develop ingenious solutions for problems and opportunities where the destination is known and shared but where innovative ideas are needed to break through to a sustainable answer (the means). This is the realm of strategies and tools for systematic divergent and convergent thinking or what I call “better brainstorming”. A better brainstorming tool improves the effectiveness of divergent thinking (in terms of the fit and sustainability of ideas) and the efficiency of divergent thinking (how many ideas can be produced in a given time). We explore a range of such tools in Leading Innovation, Creativity and Enterprise.
  1. Using both of the above approaches if there we face a “wicked problem”. Examples of wicked problems include solving transport problems in cities, designing business strategy in a VUCA world, solving structural problems in enterprises and handling cultural change. It is always a mistake to treat a wicked problem as if it is a tame one with a single cause and many chronic world problems persist by being treated in a piecemeal way using “digital solutions to analogue problems”.

The core skill to cope with uncertainty is that of thoughtful and structured improvisation, which helps great leaders and followers “lean into the future” rather than being “trapped by the past”. What then can we learn about improvisation from fields outside of business?

The Music of Improvisation

We can learn a great deal about improvisation in business through the study of music, especially those people who improvise within their art, whether this is jazz, rock, blues or even those few improvising orchestras that exist. During the course of my work at The Academy of Rock, I’ve been privileged to talk with artists such as Sheila E, Marcus Anderson (Prince’s sax player), George Clinton of Parliament / Funkadelic through to John Mayall (The Godfather of British Blues), Nigel Kennedy and John Etheridge to AC/DC’s drummer Chris Slade. What unites them is some uncommon wisdom about improvisation and its transferability to business life:

  1. Improvisation is not just about “making it up”. A casual view of jazz might suggest that it is a formless musical genre, yet it has shared rules of engagement, often visible through shared signs that let the band know how to navigate through uncertainty. Just watch a jazz band perform and notice the slight of hand movements, winks and nods that act as shared signals for change in direction and the distribution of leadership within the ensemble. Improvisation in all walks of life craves structure and this is counter-intuitive to what is commonly held in business. We find this also to be true in the most agile of companies such as FujiFilm, Google and Nokia.
  1. Deliberate practice matters if you want to master your art. Deliberate practice is a phrase coined by K. Anders Ericsson and involves focusing on the things you find hard to do in business, in the same way that world-class musicians practice outside their comfort zones in order to excel. Prince’s saxophonist, Marcus Anderson, explains the importance of deliberate practice and alludes to the 10 000 hours effect in our video interview. In business, we experience the same parallel, neatly summed up by Anita Roddick of The Body Shop:

“If you think learning is expensive, try ignorance for a change”

  1. Improvisation requires that you are comfortable with failure and indeed see it as a way to learn more rapidly than those that avoid all risks. We see this both in the development of music, in fields such as breakthrough surgical procedures and in innovative businesses such as Virgin, 3M and WL Gore. This is perhaps one of the more difficult concepts for CEO’s to embrace as leaders and we look at this next.

The Business of Improvisation and Failure

People who don’t take risks generally make about two big mistakes a year. People who do take risks generally make about two big mistakes a year.

Peter Drucker

Do not fear mistakes. There are none

Miles Davis

I interviewed Sir Richard Branson about failure in Leading Innovation, Creativity and Enterprise. His answers were counter-intuitive and refreshingly honest:

“We’ve had our fair share of failures over the years but it’s not something that worries us, if anyone tells you they haven’t then they’re lying. Failure needs to be embraced as it’s going to happen if you’re willing to take risks – the key is ensuring that you learn from your mistakes. An example I often give is that of Virgin Cola. While we usually look to enter an industry and disrupt it, offering consumers a better product or service, we didn’t really have anything superior to give them on this occasion. Virgin Cola was a good product, but so is Coca Cola, and we soon found out that our presence in the market was not welcome by our competitors, who pulled out all the stops to drive us out of business. When British Airways tried to do this with Virgin Atlantic we were able to stand out ground, our customers wanted to stick with us as we were offering something truly different – the same cannot be said of Virgin Cola. We learnt a big lesson by going through this process. We also unearthed some great talent that went on to work on many of our other projects. A failure can give you more than a success sometimes”.

Virgin’s fall from grace in the Cola Wars was dramatic. Branson had learned that when trying to promote anything in the US one really has to ‘Go big or go home’ – he decided to go large … As part of the launch he drove a vintage Sherman tank down Broadway … heroically smashing through a giant wall of Coke and Pepsi cans. Coca Cola were unmoved by the stunt and simply engaged their massive distribution machine to ensure there was no room on the shelves for Virgin’s product, Coke was discounted massively and Virgin retired injured. Although his strategy of playing “David to Goliath” did not succeed on this occasion his ability to candidly admit the mistake is a mark of his authenticity and transparency as an emotionally intelligent leader. Virgin’s structure also tends to make it more resilient and antifragile than most in terms of becoming stronger when shocked and I discuss aspects of corporate structure for a VUCA world in the Bloomsbury book.

Five improvisation tips for leaders

  1. Leadership style must change in a VUCA world – it is no longer good enough or even feasible to attempt to conduct your enterprise from a central command point. Approaches to organisational design that are based on distributed leadership must be employed.
  1. Wicked problems cannot be approached using ‘digital’ either / or strategies. They usually require a deep understanding of the underlying multiple causes and systemic consequences of action before reaching a strategic decision. Great CEO’s are, above all else great decision makers, although that may require the collaboration of others if execution is to follow the decision.
  1. CEO’s can learn much about coping with ambiguity from the study of musical artforms, particularly those that involve improvisation such as rock music, blues or jazz.
  1. To be excellent is not a matter of fate or luck. It usually involves thousands of deliberate practice. Musicians and great leaders understand the issue of deliberate practice well.
  1. Great leaders are not just great when things go well. They are especially so when failures occur in their enterprise as demonstrated graphically by Sir Richard Branson.

Have you read?

Author: Peter Cook leads Human Dynamics, offering Business and Organisation Development. He also delivers keynotes around the world that blend business intelligence with parallel lessons from music via The Academy of Rock. Author of and contributor to twelve books on business leadership, acclaimed by Tom Peters, Professors Charles Handy, Adrian Furnham and Harvey Goldsmith CBE.  His three passions are science, business and music, having led innovation teams for 18 years to develop life-saving drugs including the first treatments for AIDS, Herpes and the development of Human Insulin. 18 years in academia and 18 + years running his businesses. All his life since the age of four playing music.

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