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Connecting Dots 56 ◎⁃◎ Disruption is Disturbing

Tokyo Stadium, June 2009

Connecting Dots is the monthly newsletter for global professionals leading innovation.

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Disruption is Disturbing

Organizational Culture and Innovation


A Disruptive Discovery

In 2017, one of my teams pioneered an AI assistant for financial managers at a leading global bank. Powered by IBM’s AI platform Watson, the assistant multiplied the performance of high-performing managers while average or underperforming managers experienced marginal to nil improvements. 

The unexpected discovery was not the tangible performance variance but the intangible impact on the culture. Employees in this company were proud of how carefully they managed funds through collaborative practices and how thoroughly teams worked together to design business processes and client interactions. The investment managers loved to describe their confidence in the product development and operations teams they worked with daily.

The AI assistant was different as it wasn’t a carefully designed process but a self-service capability. The assistant sat in a corner absorbing conversations while behind the scenes continuously ingesting the masses of reports and analyses published daily by the bank's research department. The tool was a solitary and impersonal interaction that provided managers with recommendations and summaries after the meetings without any need to engage with colleagues. 

Empowering Effects

The benefit of the assistant came from how the individuals used it and adapted it to their real-world situations. What the assistant suggested to a manager was less important than how the manager interpreted, elaborated and applied the suggestions. Using the assistant was empowering and individualistic. Contrary to the team-centricity of the culture, which had served them well. 

High performers logically felt more confident deploying and adapting the assistant. A variance that could possibly be explained by their mindset, upbringing, training or breadth of professional exposure in various cultures over their career. Whatever the individual explanation, as a cohort, high performers were able to switch between different cultural modes within the same organization. Inward and collaborative in one mode, the classic way of working. Outward and individualistic, the AI-powered way.

Disturbing Implications

Surprisingly, a result of this new AI-powered capability, was that high performers started to question their place in the firm. They wondered if they needed the scale and gravitas of the firm to provide excellent service to their clients while generating good personal returns. Or, could they do it on their own?

The lower performers also started to question their place in the firm. They often were equally competent, well educated and generated above-industry average performers. However, they started to experience anxiety about being replaced by software, losing a sense of mastery over the craft and fearing negative performance reviews even though they were in the same relative rank in terms of performance.  

Thus, the assistant while technically beneficial was harming the culture. An implication of innovation that can be very hard to sense and interpret if you aren’t looking beneath the surface. It’s much easier to stay enamoured with the positive performance numbers. The greater threat and potential cost of ignoring the cultural implications of innovation in this situation were talent turnover, inefficiency and ultimately worse commercial outcomes after the initial sugar high of boosted performance.

Why Disruption is Disturbing

It’s worth an unpack of disruption. We aren’t talking capital “D” Clayton Christensen Disruption from a strategy perspective.  This AI assistant was lowercase “d” disruption, where aspects of business and life as you know it are knocked off course. However, the overall business model was stable. From the outside, it seemed a small bit of turbulence, but for those in the middle of disruption, the experience can be deeply unsettling.

It’s disturbing because in the moment we often don’t fully know what it means, why the results are happening, how to explain them or what to do next. Small signals can be over-amplified and loud signals downplayed. Everyone involved is at risk of projecting their idealization or demonization of the results into the soup of sense-making.

Most executives are very good at the technical aspects of navigating disruption. How to fix the thing, address legal policy or adjust resource levels for example. Few are very tuned into the cultural processes triggered by innovation’s disruptions nor how to work with culture to enable the fuller benefits of innovation while containing the costs for a net benefit.


Cultural Navigation

The good news is that there is a way to identify and map how a culture can adapt to disruptive new technology. A task that I believe has become even more important with the increasingly accessible and powerful AI platforms, in particular generative AI, machine learning, large language models and a decade of digitalization and cloud migration. 

Important because:

  1. The assistants are already prevalent and causing disruption in how someone performs key tasks in their roles or how peers work together which can conflict with cultural values

  2. The ever-expanding AI capabilities are ever closer and literally at the fingertips of entire organizations, which can have significant cultural implications for what is valued in how the work is done, how it’s rewarded and what we lose along the way. 

  3. It’s easy to see that the tools can be hugely empowering and create more difference rather than similarity in organizations which often conflicts with process or collaboration-orientated cultures.

Each of these implications creates a loss of how things had been—pragmatically and perceptively. In the opening example, the AI assistant caused a loss of a collaborative culture and stability knowing who was behind what you recommended. In the AI assistant version of their culture, you interacted with a flat impersonal digital interface, not a colleague sacrificing the collective culture as you knew it. A disorienting experience.

The Competing Values Framework

I love using the Competing Values Framework in situations where culture is potentially disrupted as a result of innovation. The premise of the Competing Values Framework is that like people, companies can hold multiple and even contradictory values, but can only act on one value set at a given time. There are two axes—internal vs external focus and flexibility vs control, giving four quadrants. Over time companies intentionally or unbeknownst to themselves can shift between quadrants. For example, at different stages, Apple has succeeded in each quadrant. 

As a leader of innovation, your task is to work with the cultural aspects as much as the technical or commercial aspects of your innovation. Each is a parallel track of work for the team doing the tangible product, service or process development. The actual cultural response will depend on what’s being developed. It’s emergent but can be anticipated. Your innovation might be perfectly suited for the culture as it is, or is in conflict calling for a considered cultural shift.

It can also be overwhelming as it’s hard to sense the subtle signals of cultural shifts. or threats Sometimes it’s overt when conflict fires up, emotions run hot and disagreement is palpable. Often it’s silent as people withhold what they really think, withhold support without saying no and go about their work as if nothing has changed. The image of a smooth elegant duck comes to mind, with frantic feet fluttering underwater.

In addition to looking for cultural implications in project reviews and performance data, you can also sense your responses. The Innovation Leadership Map is a structured way to evaluate how you are responding to the work. Equally, your engagement with innovation politics can give you signals of emerging anxieties, resistance or momentum. All tangible data points measure intangible culture. 

Application of the Framework

There are three steps where the Competing Values Framework is particularly useful as an innovation leader. 

Envision

  • As the scope or validation data defines the proposition, envision how might your culture change to realize the full potential of the innovation

Evaluation

  • When a proposition is validated and heading to market the Organizational Culture Assessment Index (OCAI) gives an objective evaluation of the culture by people in your organization who score what is the culture today and what it needs to be in the future

Transition

  • If there is a gap between current and future culture, offer learning and development support to add capabilities and enable talent to internalize the shift and co-create its implementation starting with top management and most impacted departments

Realize a Positive Future Through Culture

Too often innovation leaders overlook or disregard the cultural aspect and implications of their work. Yet, it directly influences the success of innovation or can catch leaders off guard with disastrous consequences. Not just failed projects.

For example, the tragic case UK’s Royal Mail “Horizon” management platform led to the suicide and unjust prosecution of 900 postmasters. As well, once-heralded executives are potentially facing criminal charges. There was a conflict in the culture of empowering the postmasters while head office management secretly centralized and used back door control. A cultural, strategic and leadership delusion of tragic personal and professional costs. 

Instead, to realize the full benefits of innovation, such as the paradigm-changing nature of AI, it’s good to be enthusiastic but also realistic about cultural implications. By using a structured (and evidence-based) approach to working with the culture you can create a better future that minimizes the costs to maximize the upside.

*Note: the introductory story is a proxy of multiple similar experiences with various teams and companies.

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Learn more about Brett’s leadership development practice for global executives with innovation responsibilities.


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Connecting Dots 55 ◎⁃◎ Innovation Leadership - 5y Insights

Blackcomb Glacier, 4 February, 2024

Connecting Dots is the monthly newsletter for global professionals leading innovation.

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Innovation Leadership - 5y Insights

Five years ago I started this newsletter. An exploratory journey, that crossed many streams (hence the lead image). Initially, it was a way to develop my perspective and answer my questions on the mysteries of innovation leadership. I’ve also discovered many readers share the interest. 

Today, I see this newsletter was a springboard to the creation of a leadership development practice for global executives with innovation responsibilities. Central to this work has been the Innovation Leadership Map, a framework and leadership development process I created in 2021 based on a decade of research. The methods have since been road-tested on over 500 professionals with a 100% renewal or referral rate. 

It seems I’m on the right track. Therefore, I thought now was an opportunity to capture a few front-line lessons gained along the way.

“The Innovation Leadership Map has pushed the boundaries of leadership.”

~ Global Head of R&D Director at FTSE 30 Company

You’re Not Alone

Unexpectedly, it was the high performers who have the most questions and fewest answers as to why innovation is so damn hard. Despite being accomplished and even famous executives, their frustration can run deep. Sometimes at heavy professional and personal costs. Notably, they are the most motivated to seek out better answers and methods to succeed.

Today, I can confidently say that while innovation leaders often feel alone, their experiences are shared by other innovators. Curiously, this is particularly true in organizations revered for innovation. In our work together, when they see labels describing how one navigates aspects of innovation work, such as risk or empowerment, it often brings great relief to individuals and teams to learn they are not alone—physical laughter or cry-out-loud relief. 

Loneliness is partly explained by a common revelation that the culture of how innovation is understood is quite primitive. I’d suggest this is a symptom of too many theories competing to explain the same thing. It’s confusing. What missing is a tangible, evidence-based and practical approach to developing one's leadership practice. 

Innovation is Emotional

More specifically, what’s missing is a leadership practice that is not techno-centric and is instead behaviour-centric. A practice based on the reality that every situation is different, emotions are always influential and how they show up varies over time. Innovation leadership can be a practice that any professional can apply if they choose or are called upon—not just an elite cadre of heroic innovators with special jargon. 

As one participant remarked, “I want to innovate, not be an innovator”.

Logically, I've also found that most of us want to deny that innovation is highly uncertain. We want to believe that it can be neatly codified or indefinitely repeated. However, that wish is an illusion. Most innovation processes or theories are rarely successfully repeated in a different context or situation. To paraphrase Heraclitus, you never step into the same river twice. 

Your Practice Can Develop

The most exciting finding over the past few years is that we can in fact develop a practice of innovation leadership. We can integrate new and existing tools, frameworks and theories to empower innovators to face and navigate challenging behavioural dynamics in real-time. The results are exceptional, at a time we need more professionals rising to the call of innovation.

My sense and the data I receive tell me that we need leaders to elevate their knowledge and practices for working with the hidden behavioural dynamics of innovation and change resistance. It’s evident to many that 20 years of techno-optimism has turned to techno-anxiety. Innovation was already challenging in the euphoric years and arguably will be even harder going forward. 

Yet again, the good news is that leaders can tangibly develop their practices and capabilities to successfully navigate the organizational dark matter disturbed by innovation. You may be asking how. Well, that’s more than a single article. 

You Want More

At the moment I’m writing a research paper explaining my methods and findings to deepen the body of evidence for how to develop more impactful, resilient and satisfied innovation leaders. A key aspect of this paper is not to present a single new theory but rather to integrate many theories and methods into a single accessible practice. 

The main paper likely won't be published until 2025. If you want a preview or an in-depth practice case please get in touch.

Before then, I can still offer you some helpful material to advance your practice today. I’m very drawn to integrated evidence, theory and practice that stands the test of time over fashion. That is why I want to share recent reissues or extensions of research from three exceptional academics who also do real work on the inside of organizations. Thanks to Henning at INSEAD who ran a series of intimate seminars with the authors coinciding with publishing dates.

xTEAMS

  • As an executive overseeing a portfolio of innovation, what are the outward-looking drivers that enable you to realize your goals?

  • https://www.xlead.co/xteams

Right Kind of Wrong, the Science of Failing Well

  • As a manager working through the idealization and demonization of experiment results, how do you learn without losing resilience?

  • https://www.simonandschuster.com/books/Right-Kind-of-Wrong

The Friction Project

  • As an expert in a team trying to improve a process, service or product how can you help people do more of what’s in their interest by adding or removing friction?

  • https://www.bobsutton.net/book/the-friction-project/

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Learn more about Brett’s leadership development practice for global executives with innovation responsibilities.


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Connecting Dots 54 ◎⁃◎ Innovation Politics

Ai Weiwei, @ The Design Museum, UK, June 2023

Connecting Dots is the monthly newsletter for global professionals leading innovation.

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Innovation Politics

Politics? No thanks!

Years ago, when I first led innovation, I noticed a disdain or dismissal of political dynamics. Over time, I learned it is often a defence against threats to self-image or denial of organizational reality. The wish to avoid innovation politics is understandable but not practical or effective. Thus, how can you better understand and constructively engage with innovation politics?

Why acknowledge innovation politics?

All organizations are political because organizations are human systems. Every organization has goals, as does each employee. Including yourself. Rarely, if ever, do the goals emerge in harmony. Most of the time, the work of leadership is to create a good enough harmony of varying and even competing goals to enable progress.

To deliver organizational change, one must work with the political system. Especially when the change comes in the form of innovation because it almost always shifts who has power, resources and rewards—tangibly or perceptively. 

Organizational politics are the self-serving behaviours that employees use to achieve positive results. In a healthy organization, there is harmony where the individual, the organization and society achieve positive outcomes in parallel.

Some people are naturally good political operators. Many learn through experience how to become effective political operators. Others stay political passengers, consumed by the agendas of others, often unknowingly or unwillingly.

How to constructively work with innovation politics?

A tactic I often used when leading or guiding innovation teams was to declare that 'we are above politics.' A statement you may instinctively interpret as über-political. You are not wrong. 

The point was to empower the team to chart its own political course. So that we might engage intentionally and thoughtfully with the people and political dynamics present in all organizations at all times.  

Many interpreted the statement of being above politics as a purity pledge to only live the mission of the desired end outcome. That was also not wrong as it provided an openly defensible way of explaining our work. However, embedded in that pledge is the prioritization of the organization’s highest political order.

Focusing on engaging with the highest order is a practical balance of long-term vision and pragmatic progress in the eyes of primary stakeholders week to week, month to month, quarter to quarter and year to year. Your top-tier stakeholders are customers, top executives or owners/investors and sometimes regulators. 

The goal of focusing at this level was to protect my teams from being ground down by mid-level politics. This is the cut and thrust of day-to-day organizational life primarily concerned with near-term outcomes and personal gain.

That is not to ignore mid-level politics, as they can easily undermine your work. The point is to know whose top-level 'yes' enables progress and mitigate against mid-level 'no' that can derail you. 

 

Three ways to practically work with innovation politics

Here are some practical ways to visualize and work with high and low political dynamics for the year ahead.

Support Map - Where to invest effort?

  • On cards or Post-Its name all your top stakeholders (whether you have direct contact or not)

  • Post them on a wall or whiteboard

  • Separate into three groups based on who has demonstrated support (green), neutrality (amber) and opposition (red)

  • If you don’t know, assume red until you see green or amber actions

  • If green isn’t your largest group decide if you focus on amber or red

  • If green is your largest group, focus efforts there to maintain momentum unless there are individuals in amber or red that can over-rule the green coalition 

Authority Matrix - How to get to yes? 

  • Rarely is there a singular decision-maker

  • Never do you want to go into a decisive meeting without high certainty of the outcome

  • If support or negotiating points are unclear do an authority matrix of stakeholders

  • List stakeholders and label them as:

    • Responsible for the outcome

    • Accountable for doing the work to get to the outcome

    • Support to provide an objective voice of reassurance or caution

    • Consulted to provide technical input or key enabling resources

    • Informed to anticipate or coordinate other activities post-decision

  • Whether formal or informal authority, what is the minimum requirement for each to say yes?

  • As a leader, your task is to do the work to find out what they need and to either provide it, reframe it, educate it or renegotiate it

Mitigation Plan - How to anticipate and overcome obstacles?

  • Organizations are optimized for current results so your innovation will destabilize the status quo 

  • The key is to be sensitive to those who have the most to lose

  • If you have a powerful stakeholder identified in your authority matrix, you need to work with them so their destabilization doesn't become destructive

  • Engage early, so even if the outcome isn’t in their interest they may accept it for having been heard

  • Engage frequently, so you have multiple opportunities for each party to learn from the other

  • Engage collaboratively, respect their right to have an opposing view or needs and find ways to reconcile without compromising the integrity of either party

  • Engage compassionately, try to understand their position at a human level and empathetically what it’s like for them to build mutual trust and understanding

  • Engage magnanimously, if they come on side be humble as they can always withdraw support if they feel manipulated

As you think ahead to next year, make a note for yourself to surface and engage your innovation politics early on. It's the best path to success for all.

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Learn more about Brett’s leadership development practice for global executives with innovation responsibilities.


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