INNOVATION SPECIAL ..................Leading Innovation is the Art of Creating ‘Collective Genius’

Leading Innovation is the Art of Creating ‘Collective Genius’
 

As Linda Hill sees it, innovation requires its own brand of leadership. The coauthor of the new book Collective Genius discusses what's been learned from 16 of the best business innovators.

As Harvard Business School Professor Linda A. Hill began to dig into the scholarship around leadership and innovation, she soon realized there was a lot of research on both.

What she didn't find, however, was work linking the two. Specifically, what is the role of the leader in creating and sustaining an innovative organization? A new book written with three coauthors attempts to answer the question of why some companies, such as Pixar, are able to invent continuously, while others aren't.

“Conventional leadership won't get you to innovation”

The book, Collective Genius: The Art and Practice of Leading Innovation, was written by Hill, the Wallace Brett Donham Professor of Business Administration, with Greg Brandeau, former CTO of The Walt Disney Studios and current COO/president of Media Maker; Emily Truelove, a PhD candidate at MIT's Sloan School of Management; and Kent Lineback, Hill's cowriter on Being the Boss: The 3 Imperatives for Becoming a Good Leader.

What most distinguishes innovation leadership, the book argues, is recognition that innovation is a "team sport," not the act of a sole inventor. "Truly innovative groups are consistently able to elicit and then combine members' separate slices of genius into a single work of collective genius," the authors write.

Or, as Hill puts it, "Conventional leadership won't get you to innovation."

 The authors identified organizations with reputations for being highly innovative, then found 16 leaders within those organizations and studied how they worked.

Determined to feature a global perspective, the authors include narratives of executives within India-based IT company HCL Technologies, the German division of online auctioneer eBay, and the marketing division of automaker Volkswagen in Europe.

Willing to take chances

In a chapter devoted to how executives can create the ability to innovate in their group, the authors explore how Pixar's Brandeau, eBay's Philipp Justus, and Google's Bill Coughran use discussion, conflict, and trial and error to advantage.

At Pixar, for example, the company was caught up short in 2008 in a clash over production schedules for the movie Up and the short film Cars Toons. Blindsided by news that Cars Toons was behind schedule, coauthor Brandeau had to figure out how to finish both projects on time with limited computing resources while also limiting friction among the forces.

The crazy solution: Brandeau asked Disney Animation (Disney bought Pixar in 2006) if the studio could borrow 250 computers, an idea someone initially called "insane." The team trucked the computers 360 miles from Burbank, California, to Emeryville, near San Francisco, setting the systems up over a weekend. The move worked and the studio hit both deadlines. The book cites short-term innovation, in the decision to borrow the computers, and the team's ability to creatively resolve conflict, as marks of innovative leadership.

At eBay Germany, the authors found examples of how a maturing company like eBay can retain its innovative spirit. For a holiday promotion, a young project manager and his marketing colleagues launched a "treasure hunt," working nonstop to launch registration pages, clues, and an hourly countdown clock. Trouble was, the launch violated eBay's well-established corporate project-development processes. When the treasure hunt began, 10 million contestants logged on, crashing the local servers.

Justus, eBay's senior VP in charge of Europe, could have stopped this and other similar "micro-projects," but instead he decided to pursue them and fly under the radar of corporate headquarters. Successful innovations emerged, such as an Easy Lister feature, and separate registration processes for private and business sellers. Later, Justus shared the successes with then CEO Meg Whitman, which led to a global micro-projects strategy.

With eBay, Hill says, the authors wanted to show how Whitman's willingness to experiment with rapid prototyping "broke rules to get something done," and modeled such behavior for the entire organization.

Collective Genius shows how Bill Coughran, Google's then senior vice president of engineering, created an environment where engineers could figure out on their own how to best address the company's massive storage challenges in 2006. The problem: Storage issues were created by the huge amount of data processed by the Google File System, (GFS), designed for Google web searches.

One team, called Big Table, argued for adding systems on top of GFS; the other team, called Build from Scratch, wanted to replace GFS entirely. Coughran decided to give the two teams space to defend their ideas, letting them collect data and test rigorously. The Build from Scratch team eventually realized its system wouldn't meet the company's requirements, but members were assigned to work on a next-generation system and many of those ideas were eventually used.

Coughran gave the teams the room they needed to create a resolution, the mark of a leader who lets innovation happen, Hill says. He also never tried to be the visionary, the expert, or the decisive "I'm in charge," leader, she says. Instead he asked difficult and probing questions during regular review meetings that helped frame issues and sharpen discussions.

"He wasn't passive," Hill says. "He was weighing two things and letting them play out."

Companies often make the mistake of compromising too early or letting one or two groups dominate. "He allowed both ideas to be developed and tested enough, to learn and not combine them right away," Hill says. "He let them play it out. His job as leader was to figure out when to step in."

THE "YOUNG SPARKS"

Of the 16 leaders studied, Hill says Delhi-based HCL, under former CEO Vineer Nayar, might be the boldest. Nayar, who pulled the company out of a five-year slump, challenged the common belief that Indian companies provide low-cost products and services but don't innovate. "That (assumption) made him crazy," Hill says. "He said 'We can and will compete that way.' "

Nayar focused on changing the organization from within, starting by empowering employees. In 2005, he told a team of 30-something young employees called the "Young Sparks" to develop the brand and a plan to change how employees experienced HCL. The group started with an icon, Thambi, which means "brother" in Tamil, symbolizing "the importance of the individual and the value of the collective" at HCL.

Nayar recast his role as leader. He pushed for more transparency, adding 360-degree reviews for all employees and 360-degree feedback of his own work—he promised to resign if his own review dropped to a certain level. He set up a portal that asked employees to solve "my problems" and reported getting incredible answers from workers.

From 2005 to 2013, when Nayar led HCL as president and then CEO, the company's sales, market cap, and profits increased six fold, according to the book. Fortune magazine wrote that the HCL had "the world's most modern management" and the company was named one of Businessweek's most influential companies.

Nayar tells people, "I don't know the answers," which goes against the common belief in Indian business that the CEO should be a visionary. For Hill, Nayar shows the possibilities of what can be accomplished by an innovative leader who embraces a new style of leadership.

Since finishing the book, Hill has been traveling, meeting with business and organizational leaders about how to implement the team's leadership ideas at different management levels.

"We're meeting with a lot of interesting people to try to figure this out," she says.

Kim Girard is a writer based in San Francisco.