Leadership and Innovation - A Different Perspective

Malisa Mlinaric

14 minute read

Developing a positive culture, taking the reins of your emotions, planting seeds for innovation: this is what you see the leaders that make a difference doing every day.

Everything changes. Gone are the times when a company could stay at the top of its game without modifying its product for decades: it's difficult to imagine an industry that hasn't been affected by the disruptive processes of the last years. "Factors like digitalization, globalization and the need to operate on two speeds — fast in emerging markets, and slow in mature ones — are making waves in all sectors of the economy. The traditional differences like the size, reach and trajectory of an organization are things of the past," says expert in management John Mattone.

This evolving scenario puts more and more pressure on the shoulders of CEOs. "To maintain an advantage, executives and senior management need to be constantly re-thinking and remodeling the purpose of the company, as well as their own purposes," adds Mattone. "If a company doesn't have a great leader in charge, with character, values, and good thought patterns, strong abilities and a solid emotional base; with the ability and courage to think differently, but also a large dose of humility, it is impossible to create and sustain a positive work culture that will lead to successful results," he concludes. To many specialists in management like the author and speaker Michael S. Hyatt, that sum of qualities can be summarized in one attribute: authenticity. "It's not a coincidence that the words ‘influence' and ‘influenza' have the same etymological roots. True leaders are contagious. They are people that ‘catch' what they transmit; they feel attracted to their vision and values," he reflects.

From the Inside Out

According to Travis Bradberry, the cofounder of the consulting group TalentSmart and author of bestselling books Leadership 2.0 and The Personality Code, one of the paths to strengthening those personality traits is emotional intelligence: a cocktail that includes not only being conscious of your own feelings, but also the ability to control them and channel behavior in a flexible way, and understand others' emotions. Once that is developed, it is possible to use those attributes to "manage" interpersonal relationships efficiently. "In my research, which required that I study more than a million cases, we discovered that 90% of executives that achieve high performance show high levels of emotional intelligence. On the other hand, barely 20% of those that obtain low productivity achieve similar goals," affirms Bradberry, who recognizes that this is a long journey. "Only 36% of individuals that we analyze were capable of correctly identifying their emotions," he adds. This means that two out of three people can't control their own emotions, can't detect or use them for their own benefit. That isn't learned in school. We enter the job market knowing how to read, write and use certain knowledge, but without the ability to control our emotions so that they help us deal with the challenges we face on a daily basis. To make good decisions you need more than information: that command over your emotions must be understood, developed and rewarded.

Bradberry believes that knowing yourself is the most important part of developing emotional intelligence. "Once you've developed that ability, it is much simpler to incorporate the rest of the abilities that define emotional intelligence, and they are useful for improving our leadership abilities. This requires a real interest in discovering aspects of oneself that were hidden before. If that makes you uncomfortable, that's a good thing: it means that we are moving in the right direction."

"TO MAINTAIN AN ADVANTAGE, EXECUTIVES AND SENIOR MANAGEMENT NEED TO BE CONSTANTLY RE-THINKING AND REMODELING THE PURPOSE OF THE COMPANY, AS WELL AS THEIR OWN PURPOSES." JOHN MATTONE.

Jim Whitehurst: The facilitator

"My first interview at Red Hat showed me that working here would be a different experience," remembers the CEO of the company, Jim Whitehurst, in his book The Open Organization. There was no traditional hierarchy or special treatment for the executives, at least in the sense that you expect to find at the majority of companies. With time, I learned that the entire organization was based on the principle of meritocracy, a concept that comes from the philosophy of open sourcing: the best idea wins, regardless of whether it comes from the highest paid executive or a summer intern. In other words, my first experiences at Red Hat were an introduction to what I believe will be the future of leadership," he revealed.

Unlike traditional software,in which the coded lines of a system are written by an internal team of engineers at the company that designs them, 80% of the structure that gives form to Red Hat's products comes from "non-employees." Like that, a programmer that works at another company can participate in a "development community," generating new functions for open code projects. "Contributing to open source communities is a badge of honor, because it's about people that are building their reputation internally and externally," explained Whitehorse to the Argentine newspaper La Nacion. "We have to let developers participate in them to retain them."

The transition from a "traditional and structured" organization like Delta Airlines to this new company culture wasn't simple for him. "When I started at Red Hat, I thought it was chaotic. I remember telling my wife, ‘I have to clean this place up, it's not professional.' Eight years after I got there, the posture he adopts is different. "Instead of hierarchy and control, we foment a culture of participation to achieve high performance. Literally, we try to make innovation happen from the bottom up. In every sense, my work here isn't directing as much as allowing things to happen," he explains.

That concept, which Whitehurst defines as "catalytic leadership," translates the concept of communities to all of the company's teams. Each member must show his or her progress, doubts and ideas to the rest of the group in periodic meetings, and others give feedback, making suggestions and coming up with potential solutions. This way, the participants grow into responsibilities, become more confident and increase their potential. "If we want everyone to commit to a cause, we have to give them time and space to ‘co-create' their way of approaching it," he says.

The Era of "Superbosses"

Nine out of 11 executives that worked with Larry Ellison at Oracle between 1994 and 2004 later became CEOs, presidents of the board or directors of operations at other companies. 20 of the 32 coaches of the teams that participate in the NFL were trained by Bill Walsh at the San Francisco 49ers. Dozens of executives that worked under Julian Robertson,founder of the investment bank Tiger Management, are now successfully heading other firms in the sector. Determined to discover the patterns of "leaders that create leaders," Sydney Finkelstein, professor at Tuck School of Business, analyzed thousands of journalistic articles and interviewed more than 200 people. "Once I identified 18 ‘superbosses,' he wrote in the book Superbosses: How Exceptional Leaders Manage the Flow of Talent, I dedicated my time to looking for common behaviors, tastes and inclinations that could explain why this people could generate growth not only in their companies, but also in their disciples. And I discovered that they tend to demonstrate great confidence in themselves, they have a lot of imagination and they are very competitive. They act with integrity and aren't afraid to show their true selves."

Finkelstein observed three types of "superbosses" throughout his analysis. The "glorious bastards" like Ellison and Robertson, who only think about winning but know that they need the best teams to achieve their goals, and they invest in them. Then there are the "breeders" like Mary Kay Ash, of the company that bares her name, or Michael Miles, former CEO of KFC, who behave like true mentors, dedicating particular effort to helping their employees achieve extraordinary achievements. The there are the "iconoclasts" — Ralph Lauren, George Lucas or Lorne Michaels, the creator of Saturday Night Live, to name a few — that develop creative activities; their passion for what they do is what pushes their teams to grow. However it happens, these leaders are able to leave a mark on the people that surround them. Tom Carroll, who was the global president of the ad agency TBWA, felt that passion through working with Kay Chiat, one of the great leaders in the industry. "He did something that kept people from acting ordinary.

Alex Ferguson, the Blacksmith

Without a doubt, at some moment in his 27 years as the head coach of Manchester United, the club must have felt obliged to add to its display of trophies at Old Trafford stadium. Ferguson — who coached the likes of Eric Cantona, Ryan Riggs and David Beckham — obtained a total of 38 titles at the head of the "red devils," among them 13 Premier League championships, five FA Cup titles, two UEFA Champions League titles, one Copa Intercontinental and another for the Club World Cup. His work made United one of the most popular clubs on the planet, with around 600 million fans distributed across five continents.

The recipe for this coach's success isn't so different from that of any other contemporary CEO, although it contains an ingredient that no corporate leader would dare utter out loud: "The keys are discipline, hard work, analysis, innovation, and surrounding yourself with ‘bad losers,'" he told a group of researchers at Harvard Business School. From the beginning, Ferguson developed a long-term plan. "As soon as I got to Manchester United, I focused on one thing: building a football club out of nothing. I always tried to create fluidity in the arrival of players to the starting lineup. With that approach, all of the athletes were going to grow together, producing a union that over time, becomes a spirit" that forms future stars.

"I was proud of coaching young players. The work of a manager, like that of a maestro, is to inspire each individual to be better. If one contributes more technical abilities and helps them become winners and better people, they will be able to do whatever they set out to do in life. Giving them that opportunity, we aren't only increasing the life expectancy of a team, but also developing loyalty," he says. "What is forged that way is a deep sense of family. It is surprising what you can achieve if you pay attention to the young ones, and give them an opportunity to succeed."

To Ferguson, who was declared a knight by the British crown in 1999, the technical talks he gives are of central importance. "Before the games, we talked about everyone's expectations, the players' faith in themselves and confidence in each other. At halftime, if we were winning, everything was easier; on the other hand, in the middle of a defeat, I had to generate an impact. I preferred to focus on highlighting strengths, but I also had to correct errors that were leading us to defeat," he affirmed. "Reprimanding is important, but I wouldn't do it until after the game. I wouldn't wait until the next Monday, though; I would do it as soon as possible. It doesn't make sense to criticize a player all of the time."

There was a before and after," he said.

Developing these aptitudes can seem simple, but sustaining acquired behavior is a complicated task. "It's important that a leader emit clear, persuasive and convincing messages about the ‘gifts' and ‘holes' in the organization, explaining what needs to be transformed," says Mattone, who highlights the importance of encouraging cyclical actions — like plenary meetings and focus groups — that generate feedback and turn innovative ideas into problems to be solved. In that context, the fear of making a mistake doesn't have to be inconvenient. "There needs to be what Amy Edmonson, professor of leadership and management at Harvard, called ‘psychological security': the confidence that no member of a team will be punished for speaking, asking for help or failing in a specific task. When bosses create an atmosphere of psychological security, or when members of a team feel comfortable failing and then they comment and share their mistakes with others, everyone can learn and improve. In exchange, when mistakes are hidden, it's less likely that people will learn and it increases the probability of repeating those mistakes," says the psychologist and "recovering perfectionist" Tal Ben-Shahar.

The Visionary

At 46 years old, and after rising in the company over a few decade, Lars Rieben Sorensen was named the president and CEO of Novo Nordisk, a Danish laboratory that controls around half of the global insulin market. His leadership style, based on the Nordic tradition, led him to reach the top of the ranking of leaders that Harvard Business Review creates every year. "Sorensen is a good example of a model for management that came out of Denmark that looks to create a balance between short-term results and holistic strategies for the long term," explains Flemming Poulfelt, professor of management and vice dean of the Copenhagen School of Business.

How did a practically unknown CEO who didn't found the company that he worked at, and doesn't even have an MBA on his CV, outperform Jeff Bezos on the rankings? On the one hand, there is the growth of diabetes on a global scale, which pushed sales at Novo Nordisk and multiplied the value of its shares in the past years. "External analysts tend to suggest diversifying our business, because diabetes generates 80% of our revenue. Nonetheless, I've always believed that we should concentrate efforts on whatever we know how to do well. We have tried many development strategies for new business in the past, but we often failed because of scientific and commercial questions that come from our own naivety. For that reason, our expansion has been completely organic," recognizes Sorensen. On the other hand, his particular perspective on corporate social responsibility explains the level of success that was achieved: in the opposite direction of large pharmaceuticals, Novo Nordisk produces "high quality" generic insulin to be commercialized at a low cost in developing countries. "Consultants tend to say that companies shouldn't do that. To us, this strategy helps our reputation," he says.

Sorensen's vision for the future aims to create a proportional schism in the laboratory that he leads. "When I became CEO, I predicted that in 15 years, we were going to have the cure for diabetes. We are still 15 years away from that goal, but that is our bet. I tell my employees that if we develop that cure, even though it will destroy the greater part of our business, we are all going to be able to get work anywhere else. We will have served humanity in a way that no pharmaceutical company has, and that would be phenomenal." According to Poulfelt, who Sorenson considers his mentor, these attitudes are the ones that make the difference for the 42,300 employees that the company has worldwide. These days, work has to make sense; productivity isn't associated with a salary, but with a type of task that collaborators are charged with," he reflects.