11: The Key Role of Executives
In spite of the alleged fondness for "grass roots" initiatives and "bottom-up" organizational management, commercial organizations are led from the top down - the little people cannot hold sway, they can merely suggest ideas to the decision-makers that are much higher up in the organization chart. The executive class decides which ideas to pursue and which to ignore, and by their behavior can either encourage or discourage the rank and file from sharing their thoughts within the organization.
The author then turns to Steve Jobs, a legendary figure for his transformation of Apple. Jobs is said to have had "an intense devotion to radical innovation projects" and often involved himself personally in product development.
In general, the culture of the organization is created at the top - so in order for a company to be innovative, which is to say for its people to be innovative, its leadership must support innovation, both in terms of individual development efforts and in creating a culture of innovation in general.
The Role of Top Executives
The hackneyed example of Steve Jobs often creates the impression that the leader must be a visionary and an egomaniac in order to make other people creative - but this is not true. The author lists some of the leaders of other innovative firms, many of whom have technical backgrounds (degrees in business, engineering, economics, and the like) and shun the limelight.
Most leaders stay well behind the scenes, providing leadership to others without getting personally involved in the process of innovation. A good leader delegates tasks to those who are best able to perform them - and in many instances the task of innovation is something a leader delegates and supports, even though he does not participate in the work. The role of a leader is to guide and support.
Considering the behavior of the top executives of innovative firms, the author has found some "essential characteristics" ...
- They see innovation as a strategic initiative. The need to innovate is not a method of accomplishing some other goal, but being innovative is a goal unto itself.
- They concern themselves with the larger issues. The innovative leader does not simply wish to increase sales of exiting products, but asks questions such as "What is the deepest reason people buy our products?" and thereby opens the door to innovative thinking about new products.
- They look far ahead. Their focus is not on the current quarter or fiscal year, but on the long-term performance of the firm that is years or decades into the future.
- They are concerned with relationships and culture. They recognize that an organization is a group of people, so including the right people and getting them to collaborate is more critical than getting people to comply with policy and procedure.
- They invest in knowledge development. While many leaders invest in immediate returns and the solution to known problems, innovative leaders are willing to allocate budget to the task of gathering knowledge that may not have immediate application, but can lead to discovery.
- They broaden the vision of their firms. Many firms define themselves as "a maker of" specific products, and in that way marry themselves to conventional solutions (and go down with the ship when those specific products become outdated). The innovative leader considers the value it provides to its market, independent of the specific vehicle(s) through which that value is delivered.
Categorically, it can be seen that firms that are innovative are led by executives who demonstrate these characteristics and firms that are not innovative are led by those in whom these characteristics are either absent or sorely lacking. In many instances, it can be seen that leaders of decaying or failed firms exhibit the exact opposite of these characteristics.
Analogy: The Art Dealer
Verganti takes some time to chase after an analogy: the executive who leads an innovative firm is likened to an art dealer. The art dealer is not an artist, but he makes his living by being able to assess art, to determine which artist have commercial merit, to build connections with buyers and sellers, and ultimately to deliver good art to those who value it.
But neither is the dealer a merchant who is wholly aloof of the world of art. He must immerse himself in the scene and become part of the social network of those who create and purchase art. Because there are other dealers who are already representing popular artists to the market, he must find those whom the market has not yet discovered (or discover a customer base that are not being served by other dealers). He must be known, respected, and trusted by the entire community.
Similarly, the executives of firms that wish to leverage the design community must be constantly engaged. They cannot show up when they have a self-interested need and expect to instantly be granted access and the respect of the community. In fact, such communities generally bristle when approached in this manner. Neither is it sufficient to attempt to leverage your employees' personal connections. The individual who ushers a hostile guest into the community suffers reputation damage and a lost of their esteem in the community.
Another common practice among successful firms is to assist in expanding the network. Most communities are normative and seek to build cohesion by eliminating diversity of ideas - but this "cohesion" comes at the cost of innovation, which is by its very nature dependent on diverse ideas. The most effective method of keeping a community innovative is to ensure an influx of ideas from outside the network. This is where companies have breakthrough thinking by applying external paradigms: an idea from the restaurant industry may inspire an innovation in the wristwatch industry, an economist may inspire an architect to think differently, etc.
The Point of it All
The end of the book is an odd passage that considers the false dichotomy - that work is a separate and different thing to life, that being a professional means divesting oneself of the very things that make us human beings. It is this way of thinking that has distanced companies from their customers, and made customers feel hostile toward the companies that serve them.
The innovative company recognizes that its ultimate purpose is to serve mankind. It is not about perfecting technology, but about creating more perfect solutions to human problems. A product is not successful because it is technically sophisticated, but because it brings value to its customers - it adds joy to their lives.
He returns to Steve Jobs as an example. His keynote speeches at the Macworld conferences are major events, attended by rabid fans. Jobs does not talk about the technological sophistication of his products, but about the way his products improve the lives of the customers. Every point in his address is about what Apple helps people to achieve - its products are merely a vehicle for doing so.
This is the fountainhead of the passion and pride that innovators feel. It is not about building a product, but about the benefit that they are delivering to their customers.