Rethinking leadership and management to drive innovation

Leadership &
Management
Rethinking
to drive innovation

We ran an interactive event for
CIPD Coventry & Warwickshire Branch
that looked at...
‣ Understanding innovation and business as usual
Both activities are vital, so why do they conflict?
‣ Organisational Ambidexterity
The ability to both explore and exploit—is your firm a
Zombie or a Conqueror?
‣ Rethinking leadership and management
5 top tips to rethink leadership and management for
innovation and ambidexterity
‣ Rethinking leadership and management for your firm
How does your firm stack up and what could you do differently?

understanding
innovation
and
business as usual

©StockerPartnershipLtd2016
STOCKER
PARTNERSHIP
Spot the difference
Business as usual Innovation
How many
differences can
you spot?
A
3
w
orksheet

Innovation is all about
thinking differently
Controlled chaos
Creative destruction

Open minded
Imaginative
Visionary
Playful
Expansive
Curious
Exploratory
Experimental
Creative and analytical
Iterative
Responsive
Challenging
Provocative
Respectful and disrespectful
Brave
Adventurous
Determined
Mindful
Empathic
Attentive
Emotional and objective
Holistic
Multi-disciplinary
Patient and impatient
Open to serendipity
Insightful
Comfortable with paradox
Solution focused
I’m thinking of... by Davide Restivo on Flickr https://ﬂic.kr/p/4Enhme

Business as usual
is all about
the normal execution
of operations

Backyard Hair Cut by Sean Hobson on Flickr https://flic.kr/p/7CHGWX
Ordinary
Maintenance
Steadfast
Status quo
Smooth flow
Seamless
Low fuss
Normality
Everything just works
Operational
Incremental
Efficient
Continuous improvement
Ongoing momentum
Constant
Effective
Routine
Productive

so why do innovation
and business as usual
conflict?

we’ve misled you slightly...

business as usual
is about innovation too
Ladies Ride on Mower by Leonard J Matthews on Flickr https://ﬂic.kr/p/pqTkMF

Anything can be innovated!
Business model
Customer experience
Communications
Employee productivity
Management style
Markets
Ofﬁce hours
Organisational structure
Partnerships
Pricing
Processes
Products
Recruitment
Revenue model
Risk management
Route to market
Salary models
Sales
Services
Sources of ﬁnance
Staff holidays
Strategy
Supplier relationships
Supply chain
Technology
Value proposition
Waste products
And much more....

so what is the real source
of the conflict?

Exploration Exploitation
Pioneering
Disruptive
New
Unknown
Experimental
Formative and original
Challenges the status quo
High risk
Uncertain returns
Real risk of failure
Radical innovation
vs
Efﬁcient and effective
Aligned and productive
Continuous improvement
Built on existing knowledge
Focus on implementation
Repeatable and predictable
Safeguards the status quo
Lower risk
More certain returns
Marginal gain
Incremental innovation

Piano ﬁngers by seriousbri on Flickr:
www.ﬂickr.com/photos/seriousbri/4148739768/
ORGANISATIONAL
AMBIDEXTERITY
An organisation’s ability to
both explore and exploit

EXPLOITATION
EXPLORATION
Low High
LowHigh
ZOMBIE
ADVENTURER CONQUEROR
MINER
Organisational Ambidexterity Matrix
© Stocker Partnership 2012

WBS Execu*ve Educa*on
The Miner
The Miner
Exploiting but not exploring
Superpower Fatal Flaw
Shies away from
the future and
disruptive change.
Vulnerable to
market shifts and
innovative
competitors.
Keeps head down
and stays focused
on the immediate
task at hand,
regardless of
distractions.
Stocker, M. 2012. Ambidexterity: the skill every conqueror needs to master. Stocker Partnership [online]
http://www.stockerpartnership.com/blog/ambidexterity-the-skill-every-conqueror-needs-to-master/

The Adventurer
Exploring but not exploiting
Struggles to put
ideas into practice.
Much strategic
intent but little
effective action.
Weak on driving
day-to-day
performance.
Seeks out out
new ideas like
nobody’s
business. Ninja at
spotting market
shifts. Unafraid of
risk.

The Zombie
Neither exploring nor exploiting
AKA the
walking dead.
Lives in denial and
on borrowed time.
Without signiﬁcant
action may cease to
exist at any
moment.
Keeps going
despite the odds.
Makes other
businesses look
amazing by
comparison!

The Conqueror
Exploring and exploiting
Can sometimes
overstretch
in both directions at
once without
the strength or
resources to support
this strategy.
Explores the
unknown while
wringing every
last drop out of
today. Does both
with equal
dexterity.

?So what are you

Your turn!
STOCKER
PARTNERSHIP
Organisational Ambidexterity: where are you?
EXPLOITATION
EXPLORATION
Low High
LowHigh
ZOMBIE
MINER
© 2012 Stocker PartnershipThe Organisational Ambidexterity Matrix
In the pursuit of new knowledge and opportunities, you
venture into the unknown. You search for new ideas and
possibilities. You learn and experiment. You adapt quickly
to change. You are proactive, innovative, and comfortable
with uncertainty. You are always looking for something fresh
and new. Critical conversations are encouraged.
Your activities are aligned and efﬁcient. You are effective
at managing today’s business demands. You use, extend
and reﬁne your existing knowledge. Existing products,
capabilities and competences are exploited. Existing
advantages are reinforced. Continuous improvement
builds upon and enhances value for today.
A
3
w
orksheet

?How are you going
to become an
ambidextrous
organisation

EXPLOITATION
EXPLORATION
Low High
LowHigh
ZOMBIE
MINER
Organisational Ambidexterity Matrix
© Stocker Partnership 2012

5top
tips
to rethink your leadership and management

Embrace
contradictions1
Yin &Yang Martini by Andrew Magill on Flickr https://ﬂic.kr/p/itHVT

...innovativeness may conflict
with operational efficiency, but you
can’t be efficient unless you are
innovative at some point—and you
won’t be around to be innovative
unless you know how to be
efficient.
“
“
Source: Smith,W., Lewis, M. &Tushman, M. 2016.“Both/And” Leadership: don’t worry so much about being consistent. Harvard Business Review, May 2016, pp.62-70.

‣ Bring tensions to the surface and make them explicit
‣ Talk about contradictions as a balance (not a choice)
‣ Adopt a both/and leadership approach
For example, short term results and long-term objectives; shareholder value and social
responsibility; safety and risk; discipline and passion; innovation and productivity.
‣ Ensure all dimensions are represented at board level
‣ Foster a state of creative conflict within management
‣ Dare to pursue multiple (conflicting) strategic agendas
As humans, we tend to dislike contradictions and conflict,
seeking to either resolve or avoid the two. In reality,
both/and leadership that embraces paradox is needed.
Embrace contradictions

Create a
common foundation2
Orienteering by Luigi Mengato on Flickr https://ﬂic.kr/p/djvPZE

‣ Ensure your organisation has a clear purpose,
authentic values and an agreed vision
‣ Weave this story throughout everything you do
‣ Ensure that the story you’re telling and the experience of
your ﬁrm is congruent
—from vision to strategy to performance management to culture
‣ Make decisions in the context of this broader narrative and
use this foundation to guide your actions
‣ Articulate an innovation strategy
To avoid chaos from contradiction, a common foundation is
needed. This foundation provides strategic alignment and
allows you to effectively manage both continuity and change.
Create a common foundation

Source: GE Capital, 2012.The GrowthValues: how GE aligned its culture with its growth strategy [PDF] http://cohort.gecapital.com/newsletter/2012/08/27/GEC_The_GE_Growth_Values.pdf

Having become CEO of General Electric in
2001, five years later Jeff Immelt set an
ambitious target of sustaining an average organic
growth rate of around 8%. Historically, GE had
been known for its culture of productivity; now
he wanted it to move to a culture of growth.
This required fundamental change.
A common foundation
‣ In 2003, Immelt assembled an executive team
to revisit GE’s core values. Senior leaders
from every area of the company were
consulted in an extensive research process.
Two years later, the GrowthValues were
articulated and teams began to integrate
them into every aspect of GE’s operations.
‣ A six-part ‘Execute for Growth’ process was
also outlined and used to explain how
specific initiatives fitted into the wider growth
process.
‣ The annual strategic planning process was
renamed the ‘Growth Playbook’ and its focus
refined.
Sources: GE Capital, 2012.The GrowthValues: how GE aligned its culture with its growth strategy [PDF]
http://goo.gl/lFGyG4; Stewart,T. 2006. Growth as a process. Harvard Business Review [online] https://
hbr.org/2006/06/growth-as-a-process/ar/1 Jeff Immelt by Gage Skidmore on Flickr https://flic.kr/p/FbJYPj

Use the
right metrics3
Leroy the Ruler by kevin.pelrine on Flickr https://ﬂic.kr/p/7ksvqf

‣ For exploration and innovation, create performance
measures that reward learning and experimentation
‣ Understand the failure spectrum—build in multiple failsafes
where needed; do not punish “intelligent failure”
‣ Make innovation a strategic priority at board level
‣ Monitor exploration and exploitation throughout the
organisation and include both appropriately in
performance appraisals
Exploration and exploitation should not be measured using
the same metrics. Tight controls and traditional performance
measures choke innovation.
Use the right metrics

Measuring both social and ﬁnancial performance

DDD (Digital Divide Data) delivers
business process outsourcing solutions to
clients worldwide.The firm’s innovative
non-profit social model employs talent
from underserved populations in four
operations centres (Virginia, US; Kenya;
Laos and Cambodia) and provides a
comprehensive programme of training,
employment and higher education. Its
social mission and financial sustainability
are intricately linked but can also conflict.
Using the right metrics in DDD
‣ To ensure that both the social
mission and business mission are
strategically represented, executives
have created two sets of financial
statements, each with its own metrics.
‣ In board meetings, CEO Jeremy
Hockenstein routinely asks,“How
does this decision impact our social
mission?” followed by “How does this
decision impact our business?”
CoffeeTalk by Anna Levinzon on Flickr https://flic.kr/p/4wAz5r
Sources: DDD, 2015.Annual Report [online] http://www.digitaldividedata.com/about/
annual-report; DDD, Creating a world of digital possibilities [online] http://
www.digitaldividedata.com/sites/default/files/case_study/
DDD_US_Brochure_Individual_Pages.pdf; Smith,W. et al. 2016. “Both/And” leadership.
Harvard Business Review [online] https://hbr.org/2016/05/both-and-leadership

Enable
innovation
with people
and process
4
Queue by Hernán Piñera on Flickr https://ﬂic.kr/p/pGvQbe

‣ Embed the process of innovation within your ﬁrm
—with clear steps and objectives
‣ Design your organisation—structurally, culturally and
spatially—for both exploration and exploitation
‣ Consider giving dedicated time and budget to innovation
‣ Hire both people with entrepreneurial skills (adventurers)
and people with managerial skills (miners), and create
innovative teams
‣ Train leadership, management and staff in innovation skills
Innovation is not an event, it is a process—of turning ideas
into reality. Both entrepreneurial and management skills are
needed for staff to recognise and execute opportunities.
Enable innovation with people and process

Increasing exploration and sales in a Pharma company
—the secret was in the coffee!
CoffeeTalk by Anna Levinzon on Flickr https://ﬂic.kr/p/4wAz5r

In an HBR article, Ben Waber, Jennifer
Magnolfi and Greg Lindsay tell the story
of a pharmaceuticals company with 50
executives responsible for nearly $1 billion
in annual sales.The researchers found that
when a salesperson became more
exploratory by increasing interactions
with colleagues in other teams by 10%, his
or her sales also rose by 10%.
The secret was in the coffee
‣ As a result, the company invested
significantly to rip out the existing
coffee machines (at the time, roughly
one coffee machine per 6
employees, which was used by the
same people each day) and instead
built fewer, bigger coffee stations—
just one for every 120 employees.
‣ They also replaced the small cafeteria
used by few employees with a large
cafeteria for all employees.
‣ In the quarter after, sales rose by 20%
or $200 million.
Source:Waber, B et al. 2014. Workspaces that move people. Harvard Business Review
[online] https://hbr.org/2014/10/workspaces-that-move-peopleCoffeeTalk by Anna Levinzon on Flickr https://flic.kr/p/4wAz5r

Foster an open
can-do attitude5“I Can Do It” by Bridget Coila on Flickr https://ﬂic.kr/p/arx1oD

Source: Richard Reed, Innocent Drinks, Part 1 (Inspiring Entrepreneurs:The Secret Ingredients). British Library Business & IP Centre
What not to do—the opposite of can-do
As told by Richard Reed, co-founder of Innocent Drinks

‣ Create a culture that values new ideas
‣ Empower individuals to initiate change and to innovate
—‘can-do’ shouldn’t be limited to a select few
‣ Seek to grow resources (instead of accepting that resources
are limited)
‣ Look outside your own walls and seek inspiration from new
sources
‣ Be open to collaboration—both internally and externally
Ideas are fragile—they need to be treated with care and
nurtured. Nothing kills creativity and innovation faster than
a closed mindset that ﬁnds problems at every turn.
Foster an open ‘can-do’ attitude

Get inspired by Kickbox
Image source:Adobe Systems Incorporated. How to make a redbox v2
https://upload.wikimedia.org/wikipedia/commons/f/fb/How_to_make_a_redbox_v2.pdf

http://blogs.adobe.com/conversations/2015/02/kickbox-open-sourcing-makes-
innovation-easily-accessible-for-all-companies.html
Kickbox is an innovation process that Adobe
developed for its own internal use and then open-
sourced for anybody to use. It empowers any
individual within an organisation to innovate, test
their idea and pitch it for further funding.
Putting innovation in many hands
‣ Kickbox begins with an ‘innovation-in-a-box’ kit.
Each red box contains a pre-paid $1,000 credit
card; reference cards with instructions,
innovation tools and frameworks; stationery; a
Starbucks gift card and a chocolate bar—
because innovation requires caffeine and sugar!
‣ Anybody qualiﬁes for a red box but they pick it
up by attending a 2-day workshop where they
learn about the innovation process and how to
use the Kickbox tools. Employees are then free
to use the box to prototype and test their idea
—any idea!
‣ Once the idea has been validated by
consumers, an employee pitches it to any
number of executives, any number of times. Just
one executive needs to say yes for the
employee to receive a coveted ‘blue box’,
which enables them to take their project from
initial support to further funding and execution.
Sources:Adobe Life Blog. Adobe is encouraging innovation in a whole new way. Meet Kickbox
[online] http://blogs.adobe.com/adobelife/adobe-life-magazine/v1/innovation-revolution/;Adobe
Kickbox. Discover Kickbox [online] https://kickbox.adobe.com/what-is-kickbox;Adobe Kickbox.
Kickbox at your organisation [online] http://kickbox.adobe.com//kickbox-at-your-organization;
Adobe Kickbox. How to make a redbox v2 [PDF] https://upload.wikimedia.org/wikipedia/
commons/f/fb/How_to_make_a_redbox_v2.pdf

?How does your
organisation
stack up

Your turn!
STOCKER
PARTNERSHIP
Rethinking Leadership and Management: Becoming Ambidexterous
1 Embrace
contradictions 2 Create a common
foundation 3 Use the
right metrics 4 Enable innovation
with people and process 5 Foster an open
can-do attitude
Bring tensions to the surface and
make them explicit
Talk about contradictions as a
balance (not a choice)
Adopt a both/and leadership
approach For example, short term
results and long-term objectives;
shareholder value and social
responsibility; safety and risk; discipline
and passion; innovation and
productivity.
Ensure all dimensions are
represented at board level
Foster a state of creative conflict
within management
Dare to pursue multiple (conflicting)
strategic agendas
Ensure your organisation has a clear
purpose,
authentic values and an agreed
vision
Weave this story throughout
everything you do
Ensure that the story you’re telling
and the experience of your firm is
congruent —from vision to strategy
to performance management to
culture
Make decisions in the context of
this broader narrative and use this
foundation to guide your actions
Articulate an innovation strategy
For exploration and innovation,
create performance measures
that reward learning and
experimentation
Understand the failure spectrum—
build in multiple failsafes where
needed; do not punish “intelligent
failure”
Make innovation a strategic priority
at board level
Monitor exploration and exploitation
throughout the organisation and
include both appropriately in
performance appraisals
Embed the process of innovation
within your firm—with clear steps
and objectives
Design your organisation—
structurally, culturally and
spatially—for both exploration and
exploitation
Consider giving dedicated time and
budget to innovation
Hire both people with
entrepreneurial skills (adventurers)
and people with managerial skills
(miners), and create innovative
teams
Train leadership, management and
staff in innovation skills
Create a culture that values new
ideas
Empower individuals to initiate
change and to innovate—’can do’
shouldn’t be limited to a select few
Seek to grow resources (instead
of accepting that resources are
limited)
Look outside your own walls and
seek inspiration from new sources
Be open to collaboration—both
internally and externally
“I Can Do It” by Bridget Coila on Flickr
https://flic.kr/p/arx1oD
Queue by Hernán Piñera on Flickr
https://flic.kr/p/pGvQbe
Leroy the Ruler by kevin.pelrine on Flickr
https://flic.kr/p/7ksvqf
Orienteering by Luigi Mengato on Flickr
https://flic.kr/p/djvPZE
Yin & Yang Martini by Andrew Magill on Flickr
https://flic.kr/p/itHVT
A
3
w
orksheet

If you would like a copy of any of the A3 worksheets
or would like support to rethink leadership and
management in your organisation, just drop us a line.
+44 (0)24 76 100 193
hello@stockerpartnership.com
Looking for worksheets or support?

Sources & Further Reading
Adobe Systems Incorporated, 2016. Adobe is encouraging innovation in a whole new way. Meet Kickbox.
Adobe Life Magazine Careers [online] http://blogs.adobe.com/adobelife/adobe-life-magazine/v1/
innovation-revolution/
Adobe Systems Incorporated, 2016. Adobe Kickbox: Kickbox at your organization [online] https://
kickbox.adobe.com/kickbox-at-your-organization
Barsh, J., Capozzi, M. & Davidson, J. 2008. Leadership and innovation. McKinsey & Company [online]
http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/leadership-
and-innovation
Skillicorn, N. 2014. Five ways HR can develop innovative cultures in large companies. HRZone [online]
http://www.hrzone.com/lead/culture/five-ways-hr-can-develop-innovation-cultures-in-large-companies
Smith,W., Lewis, M. &Tushman, M. 2016. “Both/And” Leadership. Harvard Business Review [online]
https://hbr.org/2016/05/both-and-leadership
Waber, B. Magnolfi, J. & Lindsay, G. 2014. Workspaces that move people. Harvard Business Review
[online] https://hbr.org/2014/10/workspaces-that-move-people

STOCKER
PARTNERSHIP
The Stocker Partnership
is a strategic innovation
consultancy
We help organisations to
create and exploit new
opportunities
024 76 100 193
hello@stockerpartnership.com
Matt Stocker
Debbie Stocker
www.stockerpartnership.com
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