7 Tips From New-Age Management Gurus

7/28/2019 7 Tips From New-Age Management Gurus

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*7 tips from new-age management gurus*

ET Bureau

May the management concepts of

yore rest in peace. As India Inc

speeds into 2011, we present

original articles from a select set of

new-age management guruswith

cutting-edge ideas geared to our fast

changing times

[1]Design thinking: Why business leaders

need to think like

designers

Design thinking is about applying

the principles of design to solutions

for business. The phrase came out of

a conversation that Tim Brown, the

CEO of IDEO and Roger L. Martin,

a leading business strategist had in

2002 on the transformation of

IDEO's business. IDEO started off

as a design firm for high technologyproducts, like the first commercial

working mouse, but increasingly

was moving into more abstract uses

of design like designing customer

experience or designing


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organisational structures.

Design has always been around in corporations but it has operated in

silos. That's what they wanted break companies out of, by bring it into

operations. Their approach is about teaching general managers to thinklike designers. And this can be used to solve any business problem

increase market share of a product or redesign compensation packages.

General Electric today is very big on this.

Design thinking can become a huge competitive advantage for Indian

companies so that they can sell not solely on cost arbitrage, but please

the more sophisticated consumer with their design thinking rather than

cheap prices. The world needs to move away from its dependence onanalytical thinking.

May the management concepts of yore rest in peace. As India Inc speeds

into 2011, CD presents original articles from a select set of new-age

management guruswith cutting-edge ideas geared to our fast

changing times:

Roger L. Martin is a leading business strategist, author and Dean of the

Rotman School of Management at the University of Toronto.

Design thinking is about applying the principles of design to solutions

for business. The phrase came out of a conversation that Tim Brown, the

CEO of IDEO and I had in 2002 on the transformation of IDEO's

business. IDEO started off as a design firm for high technology

products, like the first commercial working mouse, but increasingly was

moving into more abstract uses of design like designing customer

experience or designing organisational structures.

Brown's challenge was that the firm needed to start to think more

generally about design. And so I said, yes, what you need to do is

design thinking.


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My own personal journey into design thinking began in 2001 when I got

involved with Procter & Gamble's design revolution, spearheaded by

chairman AG Lafley. He had just appointed P&G's first vice president of

design innovation in 2001.

Together with Brown and IDEO's founder David Kelley, I worked on

integrating this new design initiative into general management

techniques, because ultimately all that design work had to go

commercial. What we discovered is that the design community is great

at two things, which make up two-thirds of the concept of design

thinking.

They're really good at deep holistic, ethnographic user understandingand they're obviously very good at visualising, imagining and

prototyping. The third part is actually tying this to business strategy.

Those are the three gears of business design. What we created was an

end-to- end process that we called design works and it transformed the

way P&G thought about everything.

Design has always been around in corporations but it has operated in

silos. That's what we wanted to break companies out of, by bring it into

operations. Our approach is about teaching general managers to think

like designers. And this can be used to solve any business problem

increase market share of a product or redesign compensation packages.

General Electric today is very big on this.

My biggest worry is that we've become over dependent on analytical

thinking. Corporations have become far too analytical, and education

systems as well. In this modern, scientific, rational world I am mortified

at the degree to which kids are taught that if you want to be relevant andget good jobs drop subjects like art, take math and science.

I don't believe that you can be only left brained or right brained; we're all

born with more right brain capacity than we'll ever need. But I also

believe that if you don't use it you could lose it, but then you can always


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retrain yourself. It's like BF Skinner who taught pigeons how to play

ping pong. You don't always have to choose between music and math.

This is a problem that arises from the education system. However it is

slowly changing in some quarters of business education. Design thinkinghas become such a hot topic that, as with other hot topics, everybody's

trying to figure out what's the easiest way to incorporate it. Of course,

one easy way is to take your students to a design school and give them

exposure to that.

Another easy way is to declare the management of design to be

important and teach that. There are people doing both. However there

are very few people doing IP development in business design andcreating brand new conceptual frameworks for thinking about design

thinking and teaching it. We've done that at Rotman School of

Management by redesigning the way we teach business education and

students love it.

Design thinking can become a huge competitive advantage for Indian

companies so that they can sell not solely on cost arbitrage, but please

the more sophisticated consumer with their design thinking rather than

cheap prices.

The world needs to move away from its dependence on analytical

thinking.

Our entire lineage of modern scientific thought can be traced back to

Aristotle and his book Analytica, which forms the basis of the scientific

method that we all use, whether people know it or not. What we are

forgetting is that at the end of the tome he says that this book and the

methods described in this book are for that part of the world wherethings cannot be other than they are. So an oak tree is an oak tree and an

ant is an ant and neither can be anything else. He said use this book for

that part of the world.


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[2]Inspirational leadership: Lead not govern

The 21st Century began ten yearsago, yet many business executives

have not yet shed 20th Century

leadership habits. Executives who

continue to rely on outdated

approaches should address a crucial

question: Can I lead instead of

govern? The two activities may

sound similar but they differ inimportant ways.

Leaders motivate their employees,

through rewards and punishments, to

adhere to these rules and to achieve

these objectives. When employees

become more productive, we boost

their salary or give them a bonus.

When employees fall short of performance objectives or break the rules,we take away their bonus, freeze their salary or fire them. By relying on

this operating system, leaders try to get behavior out of people.

Instead, leaders should inspire principled performance in their people.

Leadership based on shared values and delivered through inspiration

does not ask what we can and cannot do; instead, it asks what we should

and should not do for the long-term good of our shareholders,

employees, customers, communities and other stakeholders.




changing times:


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Dov Seidman is the founder, chairman and chief executive officer of

LRN, a company that helps businesses develop ethical corporate

cultures and inspire principled performance.

The 21st Century began ten years ago, yet many business executives

have not yet shed 20th Century leadership habits. Executives who

continue to rely on outdated approaches should address a crucial

question: Can I lead instead of govern? The two activities may sound

similar but they differ in important ways.

Today, most leaders are governing, not leading. The governance

operating system is based on an underlying assumption that employeesact in their self-interest. This model includes formal policies,

procedures, processes, financial objectives and performance targets.

Leaders motivate their employees, through rewards and punishments, to

adhere to these rules and to achieve these objectives.

When employees become more productive, we boost their salary or give

them a bonus. When employees fall short of performance objectives or

break the rules, we take away their bonus, freeze their salary or fire

them. By relying on this operating system, leaders try to get behavior out

of people. Instead, leaders should inspire principled performance in their

people.

The Limits of Governance

Motivation is an expensive and ineffective way to propel behavior,

particularly in a period of economic volatility when there are fewer

carrots to go around. Additionally, breakthroughs in Internet technologyand connectivity have established a global state of hyper-connectedness

that puts information in the hands of many and requires companies to

operate in an environment of hyper-transparency, which reveals how

they behave. For these reasons, we are learning that we can't write

enough rules in the 21st Century to get the behaviors we want.


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For example, less than ten years ago, US President George W Bush

signed the Sarbanes-Oxley Act, a new law that represented the most

sweeping set of corporate governance regulations enacted in the United

States since the 1930s.

Yet, these complex new rules did not bring about greater responsibility

on Wall Street where irresponsible behavior sparked the world's worst

financial crisis since the Great Depression only six years after Sarbanes-

Oxley became law. The US is hardly the only country where

questionable regulatory decisions and other governance-related abuses

have cost citizens billions of dollarsas India, beset by a massive

telecommunications scandal, can attest to.

Rules can, and do, provide great value in many contexts. Regulations

can help make buildings earthquake resistant, medicines safer and

businesses more transparent. However, rules are less successful when

they seek to govern human conduct and behavior.

Rules ultimately fail because we cannot write a rule to control every

possible behavior or to cover every possible circumstance. It is very

difficult to regulate deception, for instance. That's why we need values

delivered through Inspirational Leadership.

. United Airlines CEO Jeff Smisek recently crystallized the value and

importance of focusing more on leadership and less on governance.

Asked by a Wall Street Journal reporter if he agreed that the Obama

administration has been unnecessarily tough on the industry, Smisek

responded that the question was essentially off the mark.

"This administration is the first to really begin focusing on modernizing

the air-traffic control system," Smisek responded. "I applaud them for

that. In terms of the various [new] consumer rules, my own goal is to

have an airline where all of that is irrelevant. If you have the right


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culture, the right folks and you've given them the right tools, they'll

exceed whatever regulations or laws or whatever the government can

dream up."

The right culture, humans and tools can address any regulatory risk,

according to Smisek. This approach should help jolt more CEOs into the

21st Century. Regulatory and compliance concerns currently rank as the

top business risks in the U.S., according to a survey report Ernst and

Young conducts each year. In other words, concerns about following

current and future rules keep CEOs awake at night more frequently

than concerns about innovation, talent, emerging markets and other

risks.

Smisek seems to understand that his company's operating system

should focus more on humans than it does on rules and other

governance levers. By creating the right culture and equipping his

people with the right tools, Smisek rightly believes that regulatory and

compliance risks will barely rate a blip on United's radar screen.

Inspiring performance in people

Business leaders should shift their focus away from erecting formal

structures of governance to achieving desired governance though a

vision and mission that emphasizes fostering a strong, vibrant, and

sustainable culture. However, the mere existence of a purpose and a

mission does not ensure that these messages inspire the right

behaviors and decisions.

In one business that my company, LRN, works with we found that

nearly 70 percent of employees would agree that a strong mission and

purpose drive their organization. However, when looking deeper, we

discovered that more than 60 percent of employees thought that

supporting a peer who acted within their company values and purpose,


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but in conflict with a policy, would result in disapproval or even

possible punishment by the organization.

As we begin the second decade of the 21st Century, there is work to be

done in shifting from governance to leadership and in becoming leaderswho inspire principled performance in people. As leaders, we need to

learn how to connect and collaborate in new ways, by sharing a vision,

enlisting people in a meaningful purpose and inspiring the kind of

outcomes we want by aligning around a common, deep and sustainable

set of human, societal and environmental values.

As Albert Einstein once said, "In the middle of every difficulty lies

opportunity." How do leaders keep themselves and their employeesfocused on opportunity when the challengesresponding to global

financial crises, collaborating with partners around the world, creating

disruptive and game-changing innovations, representing the company in

every online and personal interactionare of such a great magnitude?

The answer comes not in bracing for more economic volatility or in

creating additional governance structures, but in embracing and

leveraging the realities of the 21st Century.

Executives who chose to govern will lag, while those who chose to lead

will thriveas will their organizations and their people.


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[3]Decoding the mental habits of successful

thinkers

Does thinking matter to success inbusiness? The successful would like

to think so: without being able to

explain their success as the outcome

of their abilities, that success would

amount to no more than a ticket in a

lottery. Media would also like that to

be the caseotherwise, the

promulgation of business andorganizational 'heroes' of all types

would amount to no more than a

'culture of make-believe'.

Most of the humans who invest in

the development of their own

personal capital, put themselves

through expensive training programs

and try to figure out the 'laws of success' have an vested interest in theanswer being a resounding 'yes'.

Yet, the searches for individual performance measures that are

predictive of successthe quest for 'successful intelligence'has

proved to be elusive for social and behavioral scientists of all types. IQ,

EQ, MQ and any other Q you can think ofcoupled with presumably

stable and measurable personality traits like conscientiousness,

extroversion and even neuroticismcan explain no more than 25-30%of the variance in outcomes

May the management concepts of yore rest in peace. As India Inc

speeds into 2011, CD presents original articles from a select set of new-

age management gurus with cutting-edge ideas geared to our fast


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changing times:

Mihnea C. Moldoveanu is the Desautels Professor of Integrative

Thinking at the Rotman School of Management, University of Toronto

Does thinking matter to success in business? The successful would like

to think so: without being able to explain their success as the outcome

of their abilities, that success would amount to no more than a ticket in

a lottery. Media would also like that to be the case otherwise, the

promulgation of business and organisational 'heroes' of all types would

amount to no more than a 'culture of make-believe'.

Most of the humans who invest in the development of their own

personal capital, put themselves through expensive training programs

and try to figure out the 'laws of success' have an vested interest in the

answer being a resounding 'yes'.

Yet, the searches for individual performance measures that are

predictive of success the quest for 'successful intelligence' has

proved to be elusive for social and behavioral scientists of all types. IQ,

EQ, MQ and any other Q you can think of coupled with presumably

stable and measurable personality traits like conscientiousness,

extroversion and even neuroticism can explain no more than 25-30%

of the variance in outcomes.

A lot rides on the question, and not a lot of help is to be found either in

the archives of academia or the chronicles of business success.


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What to do?

Over the past five years, we have taken an altogether different

approach to this question at the Rotman School of Management. We

studied the minds of successful business people

stellar managers,entrepreneurs and investors in their natural habitat in the context

in which their minds actually worked, and we built models of these

minds using a dedicated language developed especially for studying the

workings of the mind 'in the real world' as opposed to the

laboratory. This dedicated language is made up of modules, which work

together in the same way in which the parts of a large computer

program do.

Each module is an algorithm (think of it as a 'recipe' for figuring stuff

out) or a heuristic (a rule of thumb') and it corresponds to a

particular mental habit. Because much of human behaviour is habitual

and thinking is a form of behaviour, it seems reasonable that much of

our mental behaviour is habitual as well.

Using our models of the mental habits of managers, entrepreneurs and

world-builders of all kinds a kind of general purpose 'mentalese'

we could ask: are there identifiable habits that would perform better

than others at understanding and predicting a world characterised by

complexity, ambiguity, nonlinearity and randomness?

And we found one type of thinking that has the making of a smoking

gun which links modes of thinking to success. We called the minds that

exhibit this type of thinking Diamindsshort for 'dialectical minds'

and we traced the way they work, in real time, in real places, in order to

produce a 'movie-like' account of successful intelligence that informs the

way we ourselves teach and think.


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The key to the Diamind is its ability to flip between at least two different

modes of thinking and representing, which in turn generates the requisite

mode of internal complexity for dealing with a greater range ofambiguous, complex problems.

Most humans' thinking is 'sticky': they fall into single-mode patterns of

thinking and emoting, of reasoning and feeling. This stickiness feels

'stable' to them, and it is useful as an emotional cocoon against the

complexity of the world; but it also curtails their view of possibilities,

implications and complications inherent in a complex, unstructured

environment, because they see the world 'in one way only'.

By contrast, the Diamind is bi-stable. In the same way in which, after

some exercise, one can see both the duck head and the rabbit head in the

bi-stable image herein, our Diaminds could see the humans they interact

with both as embodied minds/souls capable of reason and feeling and as

biological organisms, subject to the laws of physics and the mechanisms

of physiology.

Whereas most managers implicitly relate to their organisations as

hierarchies, or as families, or as sports teams, our Diaminds could easily

flip between seeing their organisations as hierarchies in which authority

and power and as arm's length markets, wherein favors, money and

information is exchanged, converted and often bartered.

But there is more. The versatility of our Diaminds was not limited to

seeing objects or phenomena in different ways, but also to thinking in

different ways. Some business people think about a lot of different bits

of informationstories, anecdotes, sensationsbut they do not think


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deeply about any of them. Othersparticularly those with deep

training in logic or the natural sciencesthink deeply about a few

variables.

But our Diaminds could flip between thinking deeply and thinking

broadlybetween 'thinking' and 'blinking'according to the situation

and it is this adaptive intelligence that is at the foundation of the

design of an intelligent embodied system. The good news is that the

elements of adaptive intelligence can be isolated and learned. There are

numerous lessons to be learned from this, but, one stands out especially

for us, as we engage in selecting and training the world builders and

problem solvers of the future.

It is that programs that purport to train such elites must understand how

the successful mind thinks, and not only what it thinksthe stuff of

most education systems worldwide which stress mechanical and

mnemonic forms of intelligence. And, to do that, we need a new

language for thinking about the way we think and a new educational

model that teaches not only the 'know what' of various disciplines but

the know-how of successful adaptation "in the wild".

This article is based on the book Diaminds: Decoding the Mental Habits

of Successful Thinkers

(University of Toronto Press, 2009), co-authored with Roger L. Martin,

who is Dean of the Rotman School of Management


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[4]Peripheral vision: The vigilant

organization

In our interconnected world,

organisations are increasingly

employing networks to compete

effectively. Whether it's utilising the

reach of facebook's network to

create grassroot support for a new

initiative or leveraging the dynamicfeedback from supply chain

networks to inform better product

marketing decisions, networks offer

a fertile opportunity for creating

competitive advantages.

One of these key competitive

advantages is improving yourorganisation's 'peripheral vision' by

using networks to sense and respond

to changes in your strategic environment. The peripherythat 'fuzzy

zone' at the edges of your organisation's focusis where early signals

of both threats and opportunities can first be sensed.

Successful peripheral vision - in monitoring other industries, remote

markets, new research and tangential dataentails much more than

sensing incipient change. It is also about knowing where to look forclues, how to interpret weak signals, and how to act when the signals are

still ambiguous. Truly vigilant organisations are able to mind a broad

periphery and mine the weak signals that emerge for relevance and

meaning.


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changing times:

Scott Snyder is a senior partner with Decision Strategies International,

Paul Schoemaker , Chairman of Decision Strategies International,

George Day is the Geoffrey T. Boisi Professor, professor of Marketing

In our interconnected world, organisations are increasingly employing

networks to compete effectively. Whether it's utilising the reach of

facebook's network to create grassroot support for a new initiative or

leveraging the dynamic feedback from supply chain networks to inform

better product marketing decisions, networks offer a fertile opportunity

for creating competitive advantages.

One of these key competitive advantages is improving your

organisation's 'peripheral vision' by using networks to sense and

respond to changes in your strategic environment.

The periphery that 'fuzzy zone' at the edges of your organisation's

focus is where early signals of both threats and opportunities can

first be sensed. Unfortunately, most organisations focus narrowly on

their immediate environment a complicated landscape of markets,

customers, competitors, regulations, technology and stakeholders.

While such unwavering attention can benefit short-term performance,

it often comes at the expense of missing subtle signals about changes


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that could threaten the organisation's long-term survival.

Our study of more than 300 global executives found that 80 per cent

felt that their organisation had less capacity for peripheral vision than itneeded, and two-thirds of strategists in another study said that they

had been surprised by as many as three high-impact events in the past

five years alone.

Successful peripheral vision - in monitoring other industries, remote

markets, new research and tangential data entails much more than

sensing incipient change. It is also about knowing where to look for

clues, how to interpret weak signals, and how to act when the signals

are still ambiguous. Truly vigilant organisations are able to mind a

broad periphery and mine the weak signals that emerge for relevance

and meaning.

Detecting important signals amidst the clutter

The more an organisation already knows about a particular topic, the

greater its 'absorptive capacity' to rapidly and effectively process

related new information. This concept originally applied to the limit of

scientific or technical information a firm could absorb but has been

expanded to any new, external information available to the firm. It is

the weak signals from less familiar areas outside the zone of core

competencies that are likely to be missed or misinterpreted.

Following are four ways to concurrently leverage networks and tap into

the knowledge and insights of the periphery:


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1. Sharing Intelligence. Industry trade associations have long served this

role. Participants in narrow industry verticals or wide agglomerations

such as the Business Round Table, the Conference Board or theAssociation of National Advertisers are drawn by shared interests to

exchange information or collect new insights. However, because these

associations function as affinity groups, they tend to reinforce existing

beliefs and mental models. In some cases, they become echo-chambers

where like-minded managers further confirm their beliefs and biases.

2. External Scanning. The Global Business Network brings together

people from diverse fields to identify events and patterns with

implications for their clients, while the Mack Center for Technological

Innovation at the Wharton School serves as a network for leading

companies and academics in scouting emerging technologies and

related business models.

3. Customised Insights. Sharing information across networks is also

critical within large organisations. Customer insights are often widely

dispersed or isolated in the research group, making it harder for

companies to obtain data at the point where segments, channels and

categories exist, or to create a coherent picture of customers.

One solution is to create an 'insights network' that integrates internal

data and encompasses relationships with expert third parties and key

suppliers or customers who can provide data on regional or store-level

competitor intelligence.


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4. Open Innovation. A variety of networks have emerged to help firms

search for ideas and help inventors find markets for their ideas.

Networks such as Innocentive and Nine Sigma are designed to find

solutions by posing problems to a global community of scientists.Procter & Gamble has similarly extended networks of individuals and

institutions that they use to identify products, ideas, and solutions to

technical problems.

Optimising Your Networks for Peripheral Vision

In order to optimise your networks, you need audit your past

performance around Peripheral Vision. This means identifying which

important changes in your strategic environment were detected early

versus late (or missed) by the organisation and understanding the

underlying cause for both cases.

The chances are high that information sharing across internal and

external networks played a role in both the successes and failures,

presenting both opportunities for learning and improvement. In order

to improve the reach, capture, speed and resilience of your networks,

we suggest creating a visual 'network map' showing all the key nodes in

the network, the information content at each node, and the types of

information flows between nodes. This map can then be used to

identify 'gateways' (entry and exit points), links and broken circuits that

can be enhanced with network additions or extensions.

In closing

As William Gibson once noted, the future is already here, but it is


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unevenly distributed. Some organisations have learned to harness

technological advances to increase their peripheral vision, while others

lack the ability to mine their networks or mind weak signals without

becoming overwhelmed by what appears to be random noise.

The challenge for each organisation is to set its own filters to avoid

information overload and balance the error of missing key signals with

the cost of paying attention to too many signals.

In the end, the best organisations are shaped by leaders who seek and

value early warnings and mobilise their colleagues to pay attention to

the periphery. They adopt an inquisitive approach to strategy that

alerts them to possible challenges from the periphery; make the

necessary investments in knowledge systems and analytical support;

and assign clear accountability for detecting, tracking and sharing weak

signals.

By creating an environment that promotes vigilance and discovery, they

are using their networks to extract better insights from their widening

periphery sooner than their rivals.

(The preceding is excerpted from The Network Challenge: Strategy,

Profit and Risk in an Interlinked World (Wharton Publishing, 2009)


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[5]Ensemble working: Lessons from the

armed forces and the

performing arts:One of the challenges that face

corporate leaders today is the tension

that exists between strong leadership

and the need for innovation within

the workforce. There is a close

connection between the motivation

and self-respect that employees feel,

and their willingness to speak up andoffer creative suggestions that will

make a company innovative and

successful.

The more people are controlled,

monitored, and told what to do, the

less likely they are to display

initiative, go the extra mile and have the courage to challenge poordecisions or suggest new ideas.

The trick that the elite groups in the arts and in the army are able to

perform, is both to operate a disciplined hierarchy and to collaborate as

empowered individuals of equal status, when required to invent an

original solution to a problem.

When the creative work is done and a solution has been found, they are

then able quickly to pick up their roles within the hierarchy and execute

their collective plan; with all the discipline and efficiency that a well

structured hierarchy can allow




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changing times:

Piers Ibbotson is an internationally respected speaker, coach and

facilitator He is Visiting Fellow at the University of Kingston, where heteaches Creative Leadership.

One of the challenges that face corporate leaders today is the tension that

exists between strong leadership and the need for innovation within the

workforce. There is a close connection between the motivation and self-

respect that employees feel, and their willingness to speak up and offer

creative suggestions that will make a company innovative and

successful.

The more people are controlled, monitored, and told what to do, the less

likely they are to display initiative, go the extra mile and have the

courage to challenge poor decisions or suggest new ideas.

There are some groundbreaking new insights into this problem, coming

from two, unexpected, sources; one is the performing arts and the other

is the armed forces. In both these worlds, there are elite companies that

are required to deliver highly complex projects, with immense

discipline, while at the same time displaying an ability to improvise,

adapt, and to deliver successful outcomes, on time and on budget.

My own researches have revealed that despite these two worlds seeming

to be so very different, their elite companies use astonishingly similar

techniques and approaches when it comes to the question of innovation.

One of the surprising things that both the military and the performingarts have in common is their attitude to hierarchy, status and

collaboration. Hierarchy is necessary to get things done quickly and

efficiently, hierarchy requires discipline and obedience. But with

hierarchy comes status, which is not quite the same thing.


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Status relates to the relative power that people in a hierarchy feel, or are

able to express. You can be top of the hierarchy and behave as if you

have low status (although people try to avoid this) and you can be at the

bottom of the hierarchy and behave in a very bold and high status way.

This tension, between people's rank and the behaviour they feel they are

able to display, can be a block to innovation and collaboration,

particularly in organisations and cultures where people are used to

matching their behaviour to their place in the hierarchy. Senior

managers, who feel under pressure to deliver results, can fall into the

trap of using their position to push and bully their employees.

While this may motivate people to work harder, it may not motivatethem to work smarter. They may deliver the results the boss wants, but

they may miss opportunities, or find strategies to evade failure that are

damaging, both to their bosses and to their organisation as a whole.

The trick that the elite groups in the arts and in the army are able to

perform, is both to operate a disciplined hierarchy and to collaborate as

empowered individuals of equal status, when required to invent an

original solution to a problem. When the creative work is done and a

solution has been found, they are then able quickly to pick up their roles

within the hierarchy and execute their collective plan; with all the

discipline and efficiency that a well structured hierarchy can allow.

This ability of a group of people to work together creatively; to pool

their experience, insights and ideas, is the key to all successful

innovation. In the theatre it is called ensemble working . However, it

requires a particular mind-set and a level of trust between the individuals

in the group that is often hard to achieve in cultures where hierarchy isdominant. The key to developing this ability lies in the training.

Both the army and the performing arts invest heavily in training; not just

training in skills and knowledge, but training groups of people to trust

one another enough to both accept the discipline of hierarchy and to


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drop the hierarchy and really listen and accept one another's ideas -

wherever those ideas may come from in the group- when there are

problems to be solved or plans to be made.

Close study of the ways in which elite companies in the military and theperforming arts really operate, is allowing the development of more

sophisticated and appropriate methods for helping groups of people to

understand the way in which hierarchy, status, motivation and

innovation, work together.

A whole new approach to training and development that draws on the

experience of the arts and the success of the military, is being developed

to deliver practical solutions to the problems facing today's corporateleaders.

[6]Strategic creativity: Imagine the unseen

Creativity is sometimes perceived as

a fuzzy concept, applied to the useof specific techniques such as

ideation, brain storming and so on.

While process approaches to

boosting organisational creativity

can help open people up to new

ideas, we have found these

approaches to be limited in their

ability to help leaders optimise the

creative potential of people andorganisations.

What leaders have to do is undergo a

major change in mind-set regarding

creativity, and for this they should


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seek answers not from consulting firms or business schools, but the

world of art. Fostering creativity in organisations means recognising two

different dimensions: the individual and the collective.

Firstly, at the individual level, leaders and employees need to be able tounderstand their own creative potential. Truly exploring personal

creativity can reveal hidden treasures and open the door to a more

grounded creative culture.

Secondly, collective creativity is determined by the way employees

interact in order to find new solutions, to innovate and to solve

problems. Both levels are not only tightly connected but also intertwined

in the way that one kind of creativity needs the other one to fully harvestits potenti




changing times:

(Martin Kupp is a member of the faculty and Programme Director at the

European School of Management and Technology, Berlin, Jrg

Reckhenrich is an artist and founder of Art-Thinking Consulting, Jamie

Anderson is Adjunct Professor at TiasNimbas Business School)

In May 2010 IBM published an international research study titled

Capitalising on Complexity - Insights from the Global Chief Executive

Officer Study.

Based on world-wide research with over 1500 CEO's and executives,

creativity was identified as the most important leadership competency


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for enterprises seeking success in the contemporary business world.

Business leaders at all levels realise that the complex situations they

face cannot be approached in a routine manner, and therefore the

quest for creativity starts.

But creativity is sometimes perceived as a fuzzy concept, applied to the

use of specific techniques such as ideation, brain storming and so on.

While process approaches to boosting organisational creativity can help

open people up to new ideas, we have found these approaches to be

limited in their ability to help leaders optimise the creative potential of

people and organisations. What leaders have to do is undergo a major

change in mind-set regarding creativity, and for this they should seek

answers not from consulting firms or business schools, but the world of

art.

If leaders really want to boost innovation and profits through a more

enlightened approach to the creative process perhaps, we believe that

they should look to artists such Joseph Beuys, rather than the wisdom

of management gurus such as Gary Hamel or Peter Drucker.

The German artist Joseph Beuys (1921 - 1986) one stated: "Every

human is a creator when he strives for introspection with his self".

Through his radical approach to philosophy and interpersonal dynamic

of creativity, Beuys became one of the most controversial artists of his

time. But today the statement sounds like a prediction of the upcoming

challenges of leaders to drive and shape organisations according to the

complex needs of modern society.


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Fostering creativity in organisations means recognising two different

dimensions: the individual and the collective. Firstly, at the individual

level, leaders and employees need to be able to understand their owncreative potential. Truly exploring personal creativity can reveal hidden

treasures and open the door to a more grounded creative culture.

Secondly, collective creativity is determined by the way employees

interact in order to find new solutions, to innovate and to solve

problems. Both levels are not only tightly connected but also

intertwined in the way that one kind of creativity needs the other one

to fully harvest its potential.

A closer look to Beuys' approach can provide deep insights to unleash

creativity first on the personal, secondly at the collective level.

Therefore we introduce three core concepts.

1. Make the secrets productive: How to be creative

Understanding oneself as an artist, Beuys said, is less about having the

ability to paint, do sculpture or compose music, but rather about being

aware of one's general latent creative abilities. In order to get access to

that source, an individual needs to strive to discover which dimensions

of his or her creativity is mostly developed. Beuys said if you ask

yourself who you are and "risk the debate with yourself". Everybody

could be creative being an artist in his own field or profession.

Leaders who want to foster creativity must take this challenge.


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2. The active form of thinking: The three "I"s of Creativity

The active form of thinking is key to the creative process. There are

three steps: inspiration, intuition and imagination. While inspiration isthe very beginning, the "click" moment where you get the first spark of

an idea, intuition is the second step where you sense and feel the

impact of the idea.

The final step, imagination, lets you communicate the idea to others as

a compelling image or story. Imagination is a core ability of leaders

nowadays in order to create a strong and clear image to guide people

through complex situations.

3. Collective creativity - The social sculpture

When Beuys was asked to name the most important piece of work that

he ever produced, he spoke about the concept of the "social sculpture".

Claiming a concept to be a 'real' piece of art might be unusual but has a

deep impact. Beuys saw the interaction of humans as a sculptural

space, which could be shaped, on a metaphorical level, in the same way

as a real sculpture. As leaders we can give that space form and quality if

we start to orchestrate the creative potential of people we are closely

working with.

These fundamental ideas given by the artist Joseph Beuys, provide the

core of strategic creativity. It creates a new understanding of

leadership, and for manager this means that they have to actively think

about ways to orchestrate for creativity, within the company. Managers


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have to identify and test shared beliefs, values and visions, define the

project clearly and find the appropriate business model for the venture.

[7]Forecasting: Why it

fails and what we can

do to plan for change

It seems like a long time ago in a

galaxy far, far away. But in reality it

was less than three years ago on thisvery planet. The entire world was

booming, partly on the back of

triple-A investment innovations

devised by a master race of financial

jedi. And then: crash, bang, global


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recession.

Suddenly it was all over. Triple-A turned into a euphemism for

"subprime", which itself began to translate as "toxic". The banking jedi

were cast out with no bonusesmany into bankruptcy, take-over ornationalization. Welcome to the empire of the credit crunch.

It's a story as well known as Star Wars by now. But what is fascinating

is one single neglected fact, namely that almost no one saw the financial

crises coming: none of the experts, none of the academics, none of the

politicians and certainly none of the banking CEOs. It's time for business

experts and practitioners to come to terms with the fact that accurate

forecasts simply aren't possible in their world. Business needs a wholenew attitude towards the future




changing times:

Anil Gaba directs the Centre on Decision Making and Risk Analysis at

INSEAD, Robin M Hogarth is an ICREA Research Professor atUniversitat Pompeu Fabra, Barcelona, Spyros Makridakis is founding

chief editor of the Journal of Forecasting and the International Journal

of Forecasting

It seems like a long time ago in a galaxy far, far away. But in reality it

was less than three years ago on this very planet. The entire world was

booming, partly on the back of triple-A investment innovations devised

by a master race of financial jedi. And then: crash, bang, globalrecession.

Suddenly it was all over. Triple-A turned into a euphemism for

"subprime", which itself began to translate as "toxic". The banking jedi

were cast out with no bonusesmany into bankruptcy, take-over or


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nationalisation. Welcome to the empire of the credit crunch.

It's a story as well known as Star Wars by now. But what fascinates us is

one single neglected fact, namely that almost no one saw the financial

crises coming: none of the experts, none of the academics, none of thepoliticians and certainly none of the banking CEOs. And this is the

fundamental point we'd like to get across: It's time for business experts

and practitioners to come to terms with the fact that accurate forecasts

simply aren't possible in their world.

In short, we're saying that business needs a whole new attitude towards

the future. Back in the 1970s and 1980s, business professors and other

social scientists hoped that post-space-age computing technology andsophisticated models would enable them to have the same success in

forecasting as their colleagues in the physical sciences.

For a variety of reasons, it's now clear that these hopes were unfounded.

Instead, empirical evidence can only tell us:

The future is often a bit like the past, but never exactly the same. This

means that extrapolating patterns and relationships from the past to the

future can't provide accurate predictions.

There are plenty of statistically sophisticated models that can fit past

data almost perfectly. However, these complex models don't necessarily

predict the future quite so well. (In fact, simple statistical models that

don't fit the past so well do better at predicting the future).

Human judgment is even worse at predicting the future than statistical

models.

Humans are often quite surprised by the extent of their forecasting

mistakes. If statistical models were capable of emotion, then they would

be surprised by the size of their errors too.


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On a brighter note, averaging the independent predictions of several

individuals (whether experts or not) generally improves forecasting

accuracy.

What's more, averaging forecasts based on more than one model alsoimproves accuracy.

These empirical conclusions raise vital issues for anyone making

business decisions. How can we plan, let alone formulate strategies in

the context of high uncertainty and possible futures that we can't even

imagine?

Physical scientists are generally very good at making predictions.

But the scientific community is equally good at knowing its own limits.

And earthquakes are one of them. Scientists accept that it's impossible to

predict the timing and location of large earthquakes. How, then, does the

world cope with earthquakes? The answer is simple. Instead of relying

on prediction, the strategy focuses on being prepared.

We know that there have been so many disastrously bad forecastsnot

only in the last few yearsthat it's obvious a different strategy is

needed to cope with the full range of uncertainty. The key is not to

develop precise plans based on predictions, but to have alternative plans

for a variety of possibilities.

You can use the analogy of "being prepared" to make contingency plans

for classes of events. Indeed, many of us already do so by using

insurance or practicing fire drills in the work place. Most insurance

policies cover a wide range of potential disasters and the evacuation

techniques practiced in the name of fire would be just as well-suited forbomb scares, floods or gas leaks.

Quite how you translate that to your own business is a matter for you

and your team. Perhaps you'll use a hedging strategy or develop a plan B

for evolving your business model. Or maybe you'll take a "venture

capital" approach to innovation, developing several new ideas at a time


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in the knowledge that only one or two are truly likely to succeed? You

might even have an exit strategy prepared for all of your major global

locationsagain a bit like a venture capitalist?

The main thing is that you stop believing your own predictions about thefuture and develop plans that can cope with surprises, whether future

credit crunches or other recessionary forces. The key is to change your

approach from believing that accurate forecasting is possible to being

prepared to face various classes of events you cannot accurately predict.

Finally, it is crucial that you accept that you're operating in an uncertain

world and that you assess the level of future uncertainty as realistically

as possible. Typically, when guessing what will happen, people tend tounderestimate the chance of extreme events occurring (imagine stock

prices, sales, or even the weather).

We end up seeing too many "surprises" or events that fall outside the

range of possibilities that we considered. Our advice is to double the

range of possibilities you have been considering. Empirical evidence has

shown that by doing so your assessment of future uncertainty will be

much more realistic and the chances of surprises much smaller.

Together they are the co-authors of the book DANCE WITH CHANCE:Making Luck Work For You (Oneworld Publications).

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7 Tips From New-Age Management Gurus