Articles & Research

It is, perhaps, the oldest of human traits – the skill we have been developing for thousands of years. Or, possibly, the most modern business obsession – the panacea for all of our troubles. Whichever way you look at it, innovation is all around us: whether it is a short-term need for inventing our way out of the global economic crisis, or a long-term necessity for daily re-discovery of business models and solutions, innovation is fast becoming front and central to the life of a modern manager. It is not surprising that the recent survey by the European Foundation for Management Development shows that among key business challenges leaders are facing today innovation has a leading place – second only to revenue growth, and far ahead of economic factors and management of costs, the standard issues of difficult times. What is surprising, however, is how rarely successful innovation actually happens - despite the high priority on executives’ agenda, inventing new business opportunities inside and outside of an organization is no easy matter.

During the last decade, the idea of Corporate Social Responsibility took the world of business, media, and public dialogue by storm. A beautiful concept in theory, social responsibility demanded for businesses to take a proactive role in society, and approach its relationship with social needs in a more systematic and strategic way. In practice, however, the idea of responsibility did little for line managers of most corporations, and many CSR reports later, a ‘normal’ business person still looks at it as a marginal but time-consuming PR effort, an annoying expense, or an irrelevant and unrealistic caprice of top management. In the meantime, an amazing transformation in the world economy started to happen. As the natural resources such as oil, water, and food continue to decline, and the expectations of consumers, employees, and investors continue to rise, companies have suddenly discovered that environmental and social concerns are no longer an issue of responsibility, but rather of significant business opportunity.

Hear the word "poverty", and the image of a bright-eyed child with an extended hand staring at you from the TV screen appears in your mind. Put the word "business" next to it, and the mental screen turns off, failing under the pressure of the oxymoron. Business and poverty are almost mutually exclusive; the affluence and life force of one is incompatible with the misery and lifelessness of the other. Or is it?

It is hard to imagine what a caterpillar must feel waking up one day in its cocoon and finding huge wings attached to its back. I might not be a butterfly yet, but I think I know how it feels: after 15 years of working on designing high-performance organizations, I suddenly find myself amidst a very drastic change. If I was to sum up the nature of this transformation, it would come to a simple phrase: organizations are not what they used to be. And the ability of managers to recognize this change is at the core of the long term business success in the 21st century. So, what does our emerging butterfly looks like?

Leadership is about subtle messages of hidden reality Some research indicates that the good performers are good also because they receive faith, trust and support from their bosses, while the bad performers are bad because of lack of faith, mistrust and lack of support from their bosses. When the good and bad performer face the problem, the conversation with a boss in the case of good performer is typically focused on the problem and how the boss can help there, whereas in the case of bad performer the same type of conversation carries along also a subtle communication of “How can you let this happen?” and such inquisitions people normally try to avoid. What sort of subtle messages leaders send to their employees in consequence impact the performance of his/her employees and also their own performance.

When trying to understand the patterns, which appear in the reactions of senior executives to the change of economic conditions in which their companies operate, one can look at an endless combination of factors. If the ambition is to link that understanding to the notion of strategy, traditional academic approach would call for a decision: should we focus on the strategy design in response to the new setting, or to the actions taken, i.e. the strategy implementation? While in the past these two dimensions were most often explored separately, looking at them from a holistic perspective may reveal more about the observed patterns and their effectiveness in a given situation.