LEADING THOUGHTS

Does age have an impact on having and offering ideas at work? According to the “deficit model”, older people are less likely than younger people to be a source of innovation due to deficits from the aging process. Up to now, there is more evidence for a decline in innovative work behaviour and creativity during older age than for no age effects, though the findings are not conclusive.

To test this assumption, Birgit Verworn (HTW Dresden, Germany) studied the suggestion systems used at two German locations of a large European company, focusing on a sample of 633 submitted ideas. In these systems, suggestions were rewarded depending on their quality; quality was assessed by the resulting potential revenues or savings.

The surprising finding: the over-55 age cohort scored highest. “In contrast to our assumptions, older employees submitted more valuable ideas than younger employees,” Vermorn writes in the journal Creativity and Innovation. “The most and the most valuable ideas came from employees older than 55, who also achieved the highest average value per employee of that age group of EUR24,918.”

“Does Age Have an Impact on Having Ideas? An Analysis of the Quantity and Quality of Ideas Submitted to a Suggestion System,” by Birgit Verworn; Creativity and Innovation Management (Vol. 18 No. 4, 2009, pp. 326-334)

photo credit: Adam Melancon

One of my favourite interviews over the past few months was an exchange between Tim Brown, IDEO CEO, and Art Kleiner, author of The Age of Heretics. The Q&A in strategy+business focused on “design thinking” — why it leads to better innovation and how to encourage it in our organizations.

In the genius versus process innovation debate, Brown falls on the side of process. His point is that you don’t have to be creative to practise “design thinking,” which he defines as a combination of intuition and rational thought.

Here are the landmarks along the path of design thinking”:

• Produce the design brief: What question will you address?
• Observe the world in new ways: It’s not a question of getting a great idea  out of your head. “The wonderful ideas come from noticing things and exposing yourself to the world in different ways.” The more you observe, Brown says, the more interesting your questions become.
• Find a systematic process for developing your insights. That might involve deliberate discussions on what comes out of your initial rough of thinking.
• Visualize your ideas. That means taking the time to make prototypes and redesign based on what you learn. According to Brown, “We need to get much more comfortable with building to learn, that is, making things to figure out what they should be, rather than to show how good they are.” Key indicator: how often are your senior managers looking at rough prototypes to see how ideas are evolving?

In his Q&A, Brown references examples from Amtrak, Virgin Airways, Shimano, IDEA, and Bank of America.

The Thought Leader Interview: Tim Brown, by Art Kleiner; strategy+business (Issue 56, Autumn 2009)

photo credit: mp_eds

When it comes to fostering innovation in organizations, does less leadership lead to better results? After all, creative people have a high degree of “achievement motivation” and exhibit strong characteristics of autonomy, flexibility, cognitive complexity, self-confidence, dominance, and introversion. Given the nature of creative people, say researchers Byrne, Mumford, Barrett, and Vessey (U Oklahoma), “it is often thought that leadership influence is not always necessary.”

In fact, leadership has a substantial impact on the innovation process. Writing in the journal Creativity and Innovation Management, Byrne et al review the literature on leadership of creative efforts and advance a model of core leader functions tailored for creativity.

What do effective leaders of creative people look like?

They have substantial knowledge of the area in which they work and have creative problem-solving skills. According to the researchers, “Expertise allows the leader to: effectively represent the group; communicate clearly with the group; assess the needs of followers; and cultivate and encourage less experienced followers.”

They define the mission, providing structure and goal orientation. “Creative people are likely to respond better to concrete goals that guide project selection and evaluation, rather than idealized end states that rely on affective appeal.”

They provide support for ideas, the work, and social needs. “A leader’s role is to buffer her/his creative followers from the negative contextual influences that are often associated with large mechanistic organizations, while simultaneously capitalizing on the available resources and expertise provided by that organization.”

They have a broad understanding of their organization. “This understanding will allow the leader to tailor the creative ventures pursued
to the organization’s strategy, which in turn will make these ventures easier ‘to sell’ to top management.”

The authors suggest that leadership training should focus on creative problem-solving skills and reshaping the common assumptions often held about creative work. “Leaders must be able to recognize and respond appropriately to original ideas,” they write, “as well as be able to provide a direction for their followers’ problem-solving activities.”

“Examining the Leaders of Creative Efforts: What Do They Do, and What Do They Think About?” by  Cristina L. Byrne, Michael D. Mumford, Jamie D. Barrett, and William B. Vessey; Creativity and Innovation Management (Vol. 18 No. 4 2009; 256-268)

If you cannot find this journal is your local library, email me for a copy of the article at Alan [at] AlanMorantz.com

photo credit: jeanbaptisteparis

For organizations to be highly innovative, they must be skilled in creativity (R&D) and production (operational execution), with the two sides working together effectively. Seems simple but in most companies, the two capabilities are difficult if not impossible to integrate, say Booz & Company consultants Zia Khan and Jon Katzenbach.

Writing in Strategy+Business, Khan and Katzenbach refer to the two parts of an organization: the formal side with its codified processes, reporting structures, and decision rights (where production mostly sits), and the informal side, with its social networks, shared values, and mutually understood rituals (where the creative work flows).

Organizations tend to favour one side or the other. As a result, there is either wasted effort in chasing too many ideas or an arid environment in which innovators cannot plant roots.

Khan and Katzenbach offer advice on how achieve the production-creativity balance.

“Figure out ways to shape the formal and informal structures together, integrating them from the beginning.” One way is by mapping informal networks to identify patterns in how information flows. Then plant creative and socially adept people in these positions and make use of their networking talents to sharpen ideas and win support.

“Capture budding ideas from the widest possible net and collect them centrally.” Use formal structures to harvest ideas that come up at the water cooler. Example: Starbucks.

“Involve multiple perspectives in ‘go/no-go’ choices from the outset, and thus make them stick.” Find ways to get marketing, finance, and engineering together at the same table for “rigorous and synchronized debate.” Focus the debate on a new idea with these three questions: Will customers want it? Can we produce it? Will we be able to make money from it?

“Motivate the right behaviours.” Celebrate failure as well as success. Use informal communications and formal incentives to support focus and cohesion. Apply the lessons of failed projects to other projects.

The article includes a short case study of Bell Canada as an example of a company getting the creative-production balance right.

“Are you killing enough ideas?” by Zia Khan and Jon Katzenbach; Strategy+Business (Issue 56, Autumn 2009)

Link to Strategy+Business

photo credit: kana76

It is a classic wedge issue in worker-friendy jurisdictions: do tough labour laws protect the powerless or create inefficiencies by limiting an employer’s ability to negotiate or terminate labour contracts? In the world of public and academic opinion, the latter wins out.

But in a working paper, Viral V. Acharya (London Business School, NYU-Stern, and CEPR), Ramin Baghai-Wadji, and Krishnamurthy V. Subramanian argue that stringent labour laws can actually spur innovation because they make it hard for companies to punish employees for short-term failures.

Using patents and citations as proxies for innovation, they provide empirical evidence that laws governing dismissal of employees motivate firms to pursue value-enhancing innovation.

They find that while the overall effect of stringent labour laws is to dampen economic growth, laws that govern dismissal of employees are an exception: stringent laws governing dismissal actually promote economic growth.

“We know from the tenure-track system for academic appointments that there is a trade-off between promoting innovative research by granting faculty a certain period over which their job is guaranteed and entrenching them for too long,” they write. “This paper showed that this relationship between innovation and ease with which employees can be dismissed by firms exists even in the corporate sector.”

Those who decry the use of stringent labour laws still have plenty of academic evidence to support their cause. Researchers have found, for example, that heavier labour regulations dampen labor market participation, investment, productivity, and output, and increase the likelihood of value-reducing major asset sales.

Labor Laws and Innovation, by Viral V. Acharya, Ramin Baghai-Wadji, and Krishnamurthy V. Subramanian, NYU Working Paper No. FIN-08-034

Email me for a copy of this paper: Alan [at] AlanMorantz.com