The Importance of Culture and Leadership in Innovation

Posted by cbonner on October 13, 2011 @ 11:42 am

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Note: this is the first of several posts covering topics discussed at the TopCoder Open Innovation Summit, which featured presentations by Dean Kamen, Karim Lakhani, and Nick Donofrio. Subscribe to the TopCoder Blog (top right).

vikings Around 980 AD Viking colonists landed on the earth’s largest island. The (in)famous Erik the Red gave the island the name “Greenland” to help attract more settlers to the island from other Viking territories. For the next several hundred years, Greenland was the far outpost of European civilization. Greenland society was connected economically to the Scandinavian homelands in Norway and Sweden via trade, and spiritually through their churches to the Vatican in Rome. Despite thriving for several hundred years, by 1400 the Greenland society was struggling. In his book Collapse, Jared Diamond outlines five causes for this collapse. The first two are environmental – damage done to their environment by climate change (a mini ice age) and their own farming practices. The second two are tied to other societies – trade with Europe ceased and their relations with the Inuit in the north of Greenland were, shall we say, frosty. The fifth reason is what prevented them from surviving. Their culture was blind or even hostile to adapting available technologies for survival. They didn’t develop animal skin boats, they didn’t eat fish, they didn’t use blubber for heating oil. They did keep farming, raising animals and crops ill suited and destructive to the harsh Greenland environment. In short their values demanded a lifestyle that ensured their demise.

Lesson 1: Leadership is Critical

Both Nick and Dean viewed leadership as a critical component to creating an innovative organization. In the front end of innovation the challenges are unpredictable and thus management cannot adequately address them. Instead what is required is the leadership to persevere through the tough times, to look failure in the face and try for the 1000^th time to invent the light bulb. On the back end – it’s not enough for a leader to pull people along through a forced march. Instead leadership has to articulate a clear vision of where things are going and why they matter, only that empowers the workforce to continue to innovate around products and services.

In both cases, leadership is critical in overcoming the four letter word “risk.” Only with real leadership can teams that are not afraid to fail take the necessary risks to innovate. A team that is risk adverse, cannot affect the changes needed to drive innovation at any level.

Lesson 2: Bottom Up is Surprising

Karim Lakhani’s research on how to optimally structure contests lead to two keen observations about the TopCoder Community – which have serious ramifications for an organization trying to create a culture of innovation.

Self selection is critical to getting “extreme outcomes” in TopCoder.
Collaboration occurs between peers in the community autonomously, even when it appears to be counter productive.

The first point relates directly to the reason leadership is more powerful than management for innovation. Management almost always entails deciding how to staff resources, but people are their most motivated when they choose their own projects. This is probably the reason programs like Google’s 20% time allow employees to chose where to spend their time. When shaping a model for innovation it’s essential that leaders retain as much self selection as possible, even though it’s probably counter intuitive to a manager.

The second point is more intricate. TopCoder members routinely help each other during and after contests in ways that would seem to be counter productive. This collaboration certainly improves the innovative capability of any given competition and of the members that take part. However it’s not counter intuitive when you factor in that human nature is collaborative and competitive. By enabling this collaboration and then staying out of the way, TopCoder has enabled it to thrive. Leaders should seek to create environments where collaboration is the result of similar organic roots and not force fed.

Lesson 3: Making Hard Choices

Innovation requires changing the outside world. It’s not enough to invent new technology; you have to create change amongst the users of that technology. If your company doesn’t bring those ideas to market, it’s not innovating. Innovation requires changing the consumers of technology as much as changing the technology itself. That change in turn demands that the innovator takes risks. Those risks can take you to unpredictable and sometimes dark places on the project plan. One speaker illustrated this point by quoting Churchill: “If you’re going through hell, keep going.”

While leadership and positive bottom up enablement are critical – if the culture doesn’t embrace this risk taking, the company has little chance of innovating. And just like the Greenland Vikings, the company that doesn’t innovate, won’t last.

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