CHAPTER 1
A New Leadership Innovation Model
There is nothing more difficult to take inhand, more perilous to conduct, or moreuncertain in its success, than to take the leadin the introduction of a new order of things.—Niccolo Machiavelli
About 50 years ago, President John F. Kennedy presentedthe nation with a historic challenge: to land a man on themoon and return him safely to earth. That challenge was metwithin a decade. This bold challenge, coupled by the pressuresof the cold war, ushered the United States into an area ofunprecedented technological innovation to master the complexitiesof a manned moon landing and confirmed America's status as theworld's industrial leader.
Everyone today comes in contact with the vast array of technologiesand products spawned by innovations in the space program. Thesespace inventions have helped to make our lives easier, safer, andmore comfortable. Examples include research that led to thedevelopment of sunglasses that block damaging blue and ultravioletlight (Space technology spinoffs ultraviolet sunglasses) to imagingtechnologies that are the basis for all cell phone cameras andsophisticated medical HD (high definition) imaging devices (Spacetechnology spinoffs cellphone camera)
Today's leaders need to challenge themselves to open new vistas ofknowledge, spark innovation, and fuel economic growth. Althoughthe concept of leadership has been around for many centuries,in the 1930s, more significant studies began to attempt to definewhat allows an authentic leader to stand apart from the rest.Simply stated, a leadership model is literally a theory on howto influence and govern individuals toward the attainment of agoal. Numerous leadership models currently exist and some of themodels that would have been adequate several years ago are nolonger appropriate for these changing times. Looking at the globalstage, there are signs of geopolitical and geo-economic shifts inthe world order that can have a significant impact on leadership.It takes, vision, communications, collaboration and persuasionto deal with the new realities. Leaders need to be out of the boxthinkers adept at collaboration, vision, strategy, and value creation.In order to compete in the new global economy, we need a newleadership model that was exemplified by President Kennedy thatwill help us prepare with the prerequisite skills needed to succeed.
Business Drivers
Business drivers are the resources, processes or conditions thatare vital for the continued success and growth of a business andthe achievement of business goals. Business drivers are also basedon the type of products or services offered by the organization. Akey business driver is something that has a major impact on theperformance of your specific business. At a high level, the generallyrecognized key business drivers are the financials (e.g., cash flow &liquidity, profit), assets (e.g., equipment, facilities, inventory, andpatents), growth, and people. Each driver is totally dependent onall of the other drivers.
Other business drivers can be either internal (e.g., strategies, goals)or external (e.g., regulations, weather factors, economic conditions)to a business. An example of a strategic business driver might bedealing with cyber threats on the organization. As the numberof attacks and intrusions on organizations networks has grownexponentially, so has the cost of cyber-security and support staff.
A quandary is to create systems that are safe as well as usableespecially with the many Bring Your Own Device (BYOD) mobiledevices and applications that being brought onto the network. Thecyber-security approach selected must be balanced between easeof installation and the ability to meet business and societal needsof the user community.
There will always be outside business drivers that a companycannot influence, but through good leadership, it will be preparedto handle them. A company must identify its business drivers andattempt to maximize the response to any that it can control. Therules of business have changed and demands leadership at the speedof thought and the capacity to establish decisive and inventiveteams.
As American scientist, inventor, printer, philosopher, statesman,and businessman, Benjamin Franklin once stated, "Drive thybusiness or it will drive thee".
Every day, a business is exposed to risks and challenges that aleader must deal with. Constant change is a reality in today'sbusiness environment, and innovation and growth are two waysto handle it. Failure to adequately and timely respond to businessdrivers can put a company at a disadvantage. As organizationsincrease in size and scope, identifying business drivers becomesmore difficult. Leaders have to look at these key drivers and needto know about generating cash as well as how to leverage it wiselyto spur growth.
Although American industrialist Thomas J. Watson Sr. was notthe founder of the Industrial Business Machines Corporation(IBM), he was the inspirational driving force that catapulted thecompany from a nondescript manufacturer of business equipmentand furnishings to the world's dominant computer company. Uponbecoming CEO of the Computing-Tabulating-Recording (CTR)Company, Watson's first act was to change the company name toIBM. He was known for his motivational and organization skillsand posted the now famous slogan "Think" in company offices.While pursuing an aggressive research and development program,in 1937, Watson made the risky decision for the building of theMark I – an Automatic Sequence Controlled Calculator, whichgave the company the grounding and reputation as a leader in thisnew industry. According to Watson, "To be successful, you have tohave your heart in your business, and your business in your heart."
Technology innovation is another key business driver and is oneof the trends shaping the business world of tomorrow. Expect newbusiness models to emerge based upon technology advances andthe respective changes that will need to be made to organizationalstructures. Businesses that fail to keep pace with these changes willlose their competitive edge. The use of IT is leading the way withtechnology-led innovation. The four forces within InformationTechnology that are considered to be both innovative and disruptiveare: Cloud Computing, Big Data, Social Media, and the Internet ofThings. Technology disruption will continue and likely accelerate.
Consider some of the definitions of disruption:
• To throw into turmoil or disorder
• To interrupt the progress of
• To break or split (something) apart
With our fast paced society, disruption is happening at a fasterrate and having far more impact. Disruption can be based on bothBusiness and or Technologies. These new forces are destroying oldbusiness models and markets while creating new ones. Considerthe new business models that have been formed through the digitalinter-convergence of the traditional broadcasting and print mediawith the Internet or that of the financial services industry betweenbanking and insurance. Do you believe that your business will notbe disrupted within this decade?
The concept of "disruptive technology" refers to drasticinnovations in current practices such that they have the potentialto completely transform a currently existing area, as it currentlyexists — ultimately overtaking the incumbent technologies inthe marketplace (Christensen, C, 2011). This term is sometimesused congruently with "disruptive innovation" which describesinnovations that improve a product or service in ways that themarket does not expect such as by designing for a different set ofconsumers in the new market.
Examples of this would include:
The innovation of the telephone disrupted the Western Uniontelegraph company when they did not see the significance ofpurchasing the patents to Alexander Graham Bell's telephonetechnology. Another more recent example being digital camerashas disrupted film-based cameras along with such iconic brands asKodak. These are cases of new technologies replacing existing ones.
The same disruptive technological change can also be seen inalternative energy sources that replace oil, synthetic biology andgene therapies that advance medicine, and "smart" software andsystems that automate routine jobs.
Other forms of disruptive innovation are based on existingtechnologies merging into new forms. Examples of this technicalconvergence include the cellphone, whose beginnings were for simplevoice communications, and now evolving to a communications'Swiss army knife' with voice and text communications, multimediaplayer, Internet browser, digital camera, and software applicationsplatform.
Disruptive technologies may sometimes be difficult to recognizeand may take a long time before they are significantly disruptive toestablished companies or organizations. Sometimes business leadersdo not want to recognize that the light at the end of the tunnel isactually from the headlight of a train speeding toward them.
Disruption is something that keeps business and technology leadersup at night. Consider Risk of Innovation quadrant in Figure 1.Ever business model comes inherent with their own risks. It isdifficult to manage innovation and growth in a traditionally risk-averseclimate. Safe incremental innovation hinders competitiveopportunity. Incremental innovation is defined as "a series ofsmall improvements to an existing product or product line thatusually helps maintain or improve its competitive position overtime. Incremental innovation is regularly used within the hightechnology business by companies that need to continue to improvetheir products to include new features increasingly desired byconsumers". (incremental innovation, n.d.)
The core mentality of many organizations is the resistance tochange. Maintaining status quo and sustaining your currentbusiness model may be the most cost effective in the short termbut to the ultimate peril of the business. Organizations can expandtheir current base by leveraging what they already do well throughthe incorporation of new technologies or uses. In moving out oftheir comfort zones, many companies may not act prudently andtake on more innovation risk than they can handle. Disruptiveand transformational innovation occurs with breakthroughs orcompletely new offerings. Innovation is all about change that canbe driven from many sources. Without true risk, there can be noinnovation and with highest risk comes the highest reward.
These are forces that leaders face if they fail to adapt to strategictechnological change as well as reach for leading edge opportunities.As the technology life cycle shortens, it requires rapid and decisiveleadership to remain at the forefront of disruptive innovation.
An understanding of information technology is now considered acore competency among leadership. It is easy for leaders to makebad choices when lured with promising technology that could resultin wasted time and money, all the while causing undue frustrationto the organization. The foremost key business drivers of course arethe staff and their related talents that drive the execution of criticaldecisions and constant innovation to move the business forward.Today, a working knowledge of computer hardware and software,a basic understanding of scientific and mathematical principles andthe problem-solving skills are necessary for most good paying jobs.
The Risk of Innovation
In the United States, there is a broad consensus that the long-termkey to continued U.S. competitiveness in an increasingly globaleconomic environment is the adequacy of supply and the quality ofthe workforce. While a whole range of internal and external factorsaffects the performance of every business, a good leader needs tofocus on a handful of key drivers that:
• Reflect the performance and progress of your business.
• Are measurable.
• Can be compared to a standard
• Can be acted upon.
Turbulent change is the new norm in the business climate ofthe 21st century. Even though the book is dated, the conceptsin Michael Porter' Competitive Strategy, remain strong. Leadersneed to be constantly aware of the changing dynamics of potentialcompetition that can be summarized in the five forces:
1. Threat of new entrants
2. Intensity of rivalry among existing competitors
3. Pressure from substitute products
4. Bargaining power of buyers
5. Bargaining power of suppliers
(Porter M., 1998)
Today's cutting-edge innovations can become next week'stechnological white elephants. Gone are the days when a businesscould maintain a competitive advantage for a long period of timewithout changing their business strategy. Businesses that representestablished technology may be the least likely to perceive the threatrepresented by radical innovation. Consider Kodak and its myopicfocus on film.
Sometimes innovation is accidental by stumbling onto a solutionto a problem that the business didn't realize that they had ora totally new approach to something. Although numerousaccidental innovations exist, consider the most notable one thatwe probably use daily. The microwave oven was invented byaccident by Raytheon engineer, Percy Spencer. While working ona radar research project, he was testing vacuum tubes known asmagnetrons, when he noticed that a chocolate bar in his pocket hadmelted. Raytheon filed a patent in 1945 for the microwave ovenand named it the Radarange. However, it was over twenty yearslater that Raytheon manufactured the first countertop microwaveovens, which forever changed how we cook.
Companies that can identify new and innovative opportunities forgrowth and rapidly adapt to new situations and rapidly capitalizeon them will prosper. This needs to be a key business driver for21st century organizations and leaders. This innovative spirit mustbe coupled by having a talented, imaginative, and experiencedworkforce that can drive the most innovative companies.
Innovation is not exclusive to only some of the large companies orbrands that make up the FORTUNE list. Each year, FastCompanyalso ranks what it considers as the most innovative companies.(The world's 50 most innovative companies, 2013) While some ofthe companies are the same, FastCompany looks across the boardat many smaller companies and some of the innovation that theyhave brought to the table. Looking at a portion of the list:
#5 Square cuts through the complexities of the credit card paymentsindustry. For small businesses that are too small to justify themonthly fees and confusing rules and rates of a traditional creditcard swipe machine, Square provides a tiny swipe reader that plugsinto the headphone jack of an iPhone or iPad. Square mails this freedevice to anyone who requests it and collects a flat 2.75-percent feefrom all transactions.
#9 Life Technologies is a global biotechnology tools companydedicated to improving the human condition. An example of thisis its innovative system for speeding up genetic sequencing thatshowed its value during the latest flu outbreak. This $3.6 billioncompany has introduced 2,000 products since 2009.
#10 Solar City – According to SolarCity CEO Lyndon Rive, "ofthe more than 5,000 solar companies in the U.S., many of thesecompanies will go out of business." But last year, while high visibilitycompanies like Solyndra went bankrupt, SolarCity expanded andadded 12,000 projects, all without a dollar of government funding.The key was being in tune with customers that are not familiarwith the technology. Rather than just make the panels, Solar Cityis a full-service operation--designing, installing, financing, andmaintaining every system.
#13 Tesla Motors is an innovative car company that emerged fromnowhere. Consumer Reports is calling the Tesla Model S the bestcar it has ever tested. The Model S, an all-electric plug-in car,earned a score of 99 out of a possible 100 in the magazine's testsand was also named Motor Trends 2013 Car of the Year.
