Monday, December 31, 2007

Innovation in Leadership

Everyday, the Wall Street Journal emails me a "Morning Brief." This year's close out column by Joseph Schuman highlighted the futility of making specific predictions, reminding readers that the concerns that seemed so pressing and immediate exactly a year ago did not prove to be as important as one might have thought:

"Economists were predicting modest economic fallout from a housing slump, a stock-option-backdating scandal at Apple fed qualms about the future of Steve Jobs, and doubt was being cast on the make-or-break troop surge planned for Iraq -- which was also the undisputed key issue for the 2008 presidential race.

"Optimism, pessimism or both were off the mark for those three scenarios....It wasn't the downturn in the building and buying of homes that slammed global finance this year so much as a domino effect from defaulting risky mortgages intricately woven into investment portfolios around the world. The surge in Iraq now seems responsible for a lower level of violence in Baghdad and elsewhere -- allowing the war to fade on the campaign trail -- but it hasn't produced the political progress that was its ultimate goal....As for Mr. Jobs, well, the iPhone is Apple's latest hit, the company's stock is at record highs and his legal jeopardy on the options scandal seems a thing of the past."

Schuman then goes on to argue that innovation (or its absence) is the common denominator of all of these stories:

"With Apple, the company's blockbuster engineering and marketing reputations are based on out-innovating its technology and media rivals. With the credit crunch, the clever banking folks ... didn't foresee the wave of collapsing values that would return to swamp their institutions. And with Iraq, military strategists may have found local solutions for local versions of insurgency, but a countrywide design for the kind of Iraq envisioned by President Bush has yet to appear.
 Even the most pressing global issue this past week -- a Pakistan further destabilized by the Bhutto assassination -- is at heart a problem gone unsolved by the U.S. for years: How do you get out of supporting a strongman whose nuclear-armed state and frontline status in the terror wars?"

The Brief cites surveys, as reported in Business Week, by major consulting firms emphasizing that "the art of creative problem solving and finding new dynamics to replace the old" is key to the true success of any organization or society.
The surveys "reflect a broad belief that most companies don't have the leadership, systems, or tools to successfully and consistently innovate.

The underlying Business Week article emphasizes the importance of listening to the "voice of the customer" and enforcing a rigorous stage gating process to successful innovation, and certainly many of us in the strategic planning professions have been introduced to these approaches.
(I have found the International Association for Product Development, which has been taking a multidimensional look into the innovation process, including such tools as VOC, for many years to be a particularly excellent repository of information and insight.)

But, the Brief closes with a warning and a call to action by business leaders that I believe has a special urgency as 2007 concludes. Cited in the January/February issue of Foreign Affairs, Klaus Schwab, founder and chairman of the World Economic Forum exhorts the private sector to realize that:

"The limits of political power are increasingly evident. The lack of global leadership is glaring, not least because the existing global governance institutions are hampered by archaic conventions and procedures devised, in some instances, at the end of World War II. Sovereign power still rests with national governments, but authentic and effective global leadership has yet to emerge. Meanwhile, public governance at the local, national, regional, and international levels has weakened. Even the best leaders cannot operate successfully in a failed system. As state power has shrunk, the sphere of influence of business has widened," with companies becoming "integral to the survival of governments and the political stability of nations and regions.

"International business leaders must fully commit to sustainable development and address paramount global challenges, including climate change, the provision of public health care, energy conservation, and the management of resources, particularly water. Because these global issues increasingly impact business, not to engage with them can hurt the bottom line."

To me Schwab's words constitute a challenge to expand my own definition of private sector strategic planning to encompass innovations that yield a new kind of leadership mind, i.e., one that habitually and easily sees self-in-system and makes choices that are beneficial to both. And, in 2008, I resolve to do just that.

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