11 Mar 2014
3 Ways to Innovate in a Stagnant Environment
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HBS Professor Rosabeth Moss Kanter on innovation, advanced leadership, and how to make change in an inflexible organization. She also tells Brian why she has no use for the ‘r-word’: Retirement.

Music: Happytime by Podington Bear



The Business is a Harvard Business School podcast. Twice a month during the academic year, host Brian Kenny will bring you a new take on the business world through unexpected stories, and conversations with business leaders, entrepreneurs and faculty members. Subscribe on iTunesU.

 

Transcript

Brian Kenny: Our guest today is Harvard Business School Professor Rosabeth Moss Kanter. She's a renowned thought leader on most things management related, but her sweet spots are innovation and leadership for change. In addition to her teaching and research at Harvard Business School, Professor Kanter is the creator, chair, and director of Harvard University's advanced leadership initiative. She's a prolific writer of books, articles, and blogs, and she's won more awards than I could list here. Suffice to say, we're very pleased to have you join us on the business today. Welcome.

Rosabeth Moss Kanter: Thank you, my pleasure.

BK: Can you tell me your definition of innovation?

RMK: Innovation is putting new ideas into use. It's not necessarily invention. You don't necessarily have to have it dreamed up by yourself, but it's putting it into use, it's making it happen, that's innovation.

BK: Can you give me an example of an individual or an enterprise, somebody who's using innovation in that way?

RMK: Well, I think most big companies now want more innovation, that doesn't mean they've got it, in fact, they bring me in and say, “We want more innovation, who else is doing it?” And I think when they say that they sort of miss the point, which is you have to be willing to stick your neck out, take some chances, so there are companies for whom new products are always important and in the pipeline, technology companies in particular. But they have to remember that innovation is much broader than just your products, it's also services, it's your processes. I mean, for example, General Motors, which is currently trying to innovate in a lot of new vehicle technologies, electric vehicles, digitally enabled vehicles. But one of their great innovations in history was consumer credit, was a finance innovation so that people could afford it.

BK: Uh hmm.

RMK: Afford the car.

BK: I was doing some research for our podcast here and I found that you've got a whole page on Brainy Quote, I don't know if you knew that, that's a website where they quote smart people I guess. One of the quotes that they attributed to you is as follows "Leaders must wake people out of inertia. They must get people excited about something they've never seen before, something that does not yet exist." Are good innovators good leaders?

RMK: Well to bring an idea into use you have to be able to influence other people to follow you in the development of it and then you have to influence other people to actually use it. And so there's a lot of influence and leadership that goes into the process but sometimes a good innovator has a great idea, but by themselves isn't able to create the positive climate that will allow for its acceptance. So then you need visionaries, you need visionary leaders, and you need leaders who understand enough about the change process. It's why I often talk about innovation and change in the same breath, because every innovation is going to imply change. And you're going to have to unlearn new habits, do something differently, and if people aren't willing to do that, then you don't have an innovation. I like to contrast sometimes the smart phone which just took off, the Apple iPhone, revolutionary in many ways, with Microsoft's unfortunate attempts to get people to use Windows 8. Great leadership actually empowers many people to try new things, to experiment, to create innovation. And in fact, that's when leaders matter the most, when you need change, they don't matter so much if you're just poking along with the status quo, but they matter when you're really trying to solve a problem and get something new to happen.

BK: If I'm a business leader who is stuck in a company that is mired and mired down and not innovating, what's the first thing that I should do?

RMK: Besides leaving?

BK: Besides leaving.

RMK: Yeah, well, because that's not bad. I mean you can't, it depends on your level of course. I mean if you're too low there isn't necessarily something you can do to change it but there are three things you can always do from any position. One is you can educate. You can begin--almost anybody can start a brown bag lunch series and bring in ideas and you just flood the company with ideas, surround it with ideas. Brainstorming sessions, nobody has to make a commitment to do anything, but it opens people's minds. The second thing you can do is collaborate. You can find people in your company that feel the same way you do and you can get together and you can think of productive solution to a problem that everybody acknowledges is a problem. And the third thing you can do is demonstrate. You can take your own piece of the company and you can work on making it as excellent as possible, add the latest ideas. You can make it a prototype. And yes, there's always the question I get about well, what if the boss doesn't let me? Well, you have to have a little courage to be innovator. You have to, you're always taking a little risk. You're always out ahead of the pack. If you don't have that courage, then maybe keep your job.

BK: Yeah, you're in the wrong business. So we’ve got a US Competitiveness project that has been going on at the school for a few years and you’ve been very involved in that. And a lot of what we’re looking at in that project is the inertia that exists within government. We’ve stuck. How can innovation help to drive some change there and what’s the kind of leadership we would need to really spur that forward?

RMK: So there is inertia in any big established systems. There’s inertia in a lot of businesses too. So I don’t think it’s just government right now, it looks like the United States has a lot of government gridlock and it can stand in the way of innovators marching forward with new investments. And also, there are some areas in which you just can’t count on entrepreneurs with a new idea because at some point those ideas are going to bump up against regulations and not just in negative ways but sometimes in helpful ways. So let’s take all the car sharing innovations, which I think is very exciting. It’s responding to a cultural trend and entrepreneurs are doing it. They can start companies and in some cases, without licenses. So, now there’s a lot of unlicensed, essentially unlicensed taxies on the street. Is that safe? What about driverless cars? Is it going to careen toward me and how do I override that? I mean the vision; talk about visionary entrepreneurs and leaders. Jeff Bezos of Amazon delivery drones and I am thinking do I want those drones in the sky carrying boxes of books that they might accidently drop on a kid I know walking home from school. So, you need a willingness to reexamine things in both business and government in order to move forward.

BK: It sounds like you're also saying that innovation is good. The speed at which we apply innovations needs to be kept in check to a certain extent because not every innovation is going to have a positive outcome.

RMK: Yeah, well, we hope they'll have positive outcomes. You know, I use it in a positive way but I also like to remind people that innovation is only a good thing in retrospect, after it's happened. Before that it's just somebody's wild idea that competes with every other wild idea. Can you imagine they were looking at the Wright Brothers and people on the ground said to Orville and Wilbur Wright, “That will never fly.” You know, but that's what people say to new ideas all the time. So you have to, so here's where leadership, and advanced leadership, which is my definition of going beyond just leading in your profession or your business, advanced leadership is much more about setting the climate in which new things can happen and that's what you need. You need action on a lot of fronts simultaneously. It's why some of the new companies, the startups in new technology areas, new service areas, tend to succeed more readily, if they have partners from the beginning, you know, like, the iPhone having all those app developers. If you don't have partners in the beginning, so a lot of stuff is going on at all fronts. So it's a myth to stay innovation is just an isolated thing that an entrepreneur does by themselves. It requires leadership to change the entire context around it. For the US competitiveness project, initially I called that enriching the ecosystem. You need to a rich supportive environment to make it possible to use the new ideas.

BK: Let's talk about advanced leadership. I'm going to read another quote from Brainy Quote. You said, "The boomers biggest impact, meaning the baby boomers, the boomers biggest impact will be on eliminating the term retirement and inventing a new stage of life, the new career ark." Can you talk a little bit about what we're doing in that initiative and some of the great ideas that are coming out of it that really are, again, at the apex of innovation and leadership?

RMK: We never use the R word, because it's not appropriate anymore. People do have 20 to 30 productive years ahead of them after they reach the career pinnacle and have decided they don't have to be in the race for money anymore, they would rather be in the race for significance. And so, we're tapping into that interest, experience matters in leadership. And so, advanced leadership is for accomplished leaders transitioning from their income earning years to their next years of service. We've just started our sixth group of distinguished leaders who want to make a difference. And we're oriented toward projects, there have been some great projects coming out of it. One is a new concept that combines food recovery, wasted food in major retailers with hungry people in inner cities that are sometimes called food deserts and who need more nutritious food. So it's called Daily Table and it's taking recovered food that's still usable and preparing it, healthy meals, so people can take home in the inner city, and it's just being prototyped. So I feel like what these leaders are doing is they're taking a problem and they're deciding to solve the problem, rather than being in one kind of company and just doing more in that company. It's very inspiring. We have other examples of water projects in Africa. There's another Africa project where they're selling affordable solar lighting to poor people, again, who pay a little bit for it, but what they're getting is a source of energy that they hadn't had before. We have one that's about teaching writing and it's a former financial executive, but this was always a lifelong passion. So what's interesting to me, and it's back to this innovation idea too, is that if you let smart people loose on problems, they will have innovative solutions in a supportive environment where there's a peer group. And we're teaching them that it takes a little bit more to do these kinds of projects than to just do something within a company. So you know that old phrase about that it takes a, an African phrase it takes a village to raise a child? Our mantra is it takes a cross sector, multi stakeholder coalition. And while that doesn't trip off the tongue exactly, it's more accurate and it's true of just about everything. I mean I talked a little bit about transportation and infrastructure, which is an effort I'm leading at the school because the US Competitiveness definitely needs an upgrade. And you're only going to get those upgrades and those innovations and those applications if technology with a multi stakeholder coalition behind it. And the new thing for leaders to learn, this is something that we have to teach more of it HBS, we're starting to, is you're not just leading your own team, and that's what advanced leadership is. It's leading, not just your own team, it's leading lots of groups that don't report to you, that don't work for you, that have their own independent basis, that may be in different industries. And what leaders have to know is how to create a coalition out of all of that diversity. And when they do, then they can accomplish really great things. They can get new airports. They can, you know, fix anything. They can get a food recovery program giving healthy food to people in the inner city.

BK: Professor Rosabeth Moss Kanter. Thank you for joining us today.

RMK: My pleasure, Brian. Thank you so much.

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