How can you keep innovating while you grow?27 September, 2016 / Articles
Leadership in the modern commercial environment focuses too often on managing rather than creating, on quarterly earnings rather than ambitious moon shots. As companies grow, leaders all too often forsake longer-term innovation efforts and focus on the short term. Ambitious moon shots are set aside in the drive to maximise quarterly earnings. But in an era of disruption it is star-gazing, not shoe-gazing, that delivers the goods.
Leaders of ‘disrupter’ companies do not just come up with an idea and hire a team to follow their lead. They find people who are passionate about the organisation’s purpose and give them the freedom to drive it forward. That is more natural in the start-up phase, where early success hinges on taking risks, working fast and trusting people to make decisions. Preserving that atmosphere as the business grows is more difficult.
As companies grow, they develop an environment less conducive to change and staff lose the freedom to explore new ideas in an uninhibited way. New silos, bureaucracies and decision-making hierarchies make it impossible to move quickly, says Jesse Robbins, founder of Orion Labs, a wearable accessories company. “The differentiator of disruptive organisations is that people can make constant small changes without having to slow down,” he says.
At Orion Labs, every employee is encouraged to share ideas, and engineers brainstorm, beta test, and roll out new features before Robbins even knows there is a project going on, he says. That’s how Orion introduced its echo-bot tool, which gives new users an automated robot to talk to when they first set up their device. “It was a great idea that has become core to our product, and our engineers did it in less than 10 days,” he says.
Most large organisations would find that hard to replicate. As staff numbers grow and departments and divisions multiply, new layers of management are created to coordinate the sprawling organisation. This in turn leads to new bureaucracies, and protocols that can slow down such autonomous, impromptu innovation. The fact that ideas can come from anywhere gets lost in the bureaucratic shuffle.
Mr Robbins is not alone in touting the benefits of empowering employees to move autonomously. Research conducted in 2013 by the US-based Center for Talent Innovation shows links between inclusive leadership and innovative output. Inclusive leaders who empower their workers through a ‘speak-up’ culture are able to incite more innovative ideas. Staff at every level who know that their ideas will be heard have all the incentive they need to invest time and energy in thinking creatively.
Ears to the street
Leaders who embrace disruptive ideas also pay attention to what customers say, not just employees, argues Anthony Tan, CEO and co-founder of Singapore-based Grab, a ride-hailing service in Southeast Asia akin to Uber or Lyft.
Mr Tan and his Harvard Business School classmate, Tan Hooi Ling, launched Grab after their plan to revamp the Malaysian taxi industry won second place in Harvard’s Business Plan Contest in 2011. Grab grew rapidly in the next five years, and now offers services in Singapore, Indonesia, the Philippines, Malaysia, Thailand and Vietnam.
“By building local and listening to our customers, we’ve been able to respond to their needs quickly,” Mr Tan says of his company’s rapid success. When customers complained about the three-hour average commute in Jakarta, Grab introduced motorbikes to their service, cutting 30 minutes from the drive time. “That’s life-changing for people,” Mr Tan says. The company is now beta testing courier services, food delivery and carpooling to respond to customers’ needs. This localisation and sensitivity to consumer preferences has been a huge factor in the rise of many emerging market disrupters, such as e-commerce companies Alibaba and Flipkart.
This iterative approach, which adapts disruptive ideas to local conditions, can be just as disruptive as the original (such as Uber in the case of Grab). But it requires leaders who know how to let it happen, continuously. Without constant iteration, the nimblest company can fall behind. “Ride-booking apps are now commonplace,” says Mr Tan. Continually adapting the Grab model to improve the way customers access rides, shorten their commutes and feel safe in transit is what makes Grab different. “My role is to continue to disrupt the established ways of doing business, and prove that a home-grown Southeast Asian company can lead bigger global brands.”
That also means conceding that his answer won’t always be the right one, and that he may not have an answer at all. To avoid a “personality cult,” Mr Tan is hiring a broader leadership team, and is always on the lookout for leaders with innovative ideas whom he can empower to make decisions to drive the company’s goals. “I believe in creating a safe environment where my team can challenge each other’s thinking and offer fresh perspectives.”
Leaders who want to embrace such a disruptive philosophy but don’t have the luxury of starting from scratch can still drive change, even in a big, bureaucratic corporate environment, Robbins says. He urges them to start with projects that are ‘off the radar’ or neglected, then apply ‘fast development’ principles, and give their teams the freedom and support to safely make decisions on behalf of the project goals. Once they secure a few early wins, they should find some champions and tout their successes to the rest of the company, he says. “If you can make a lot of little positive changes quickly, you can start a disruptive leadership movement, and soon people will want to come over to your side,” he says.