Irving Wladawsky-Berger

Fostering an Innovation Culture: Talent, Discipline and Leadership

Innovation has been a hot topic for the past few decades.  Companies all over the world have integrated innovation into their overall strategies and marketing campaigns.  Nations and regions have launched innovation initiatives in an attempt to attract such companies and their accompanying well-paying jobs.  But, as I have learned over my long career, managing innovation initiatives is actually quite hard, much harder than it may at first appear.

I was reminded of this point as I read The Hard Truth About Innovative Cultures, an article in a recent issue of the Harvard Business Review (HBR) by Harvard professor Gary Pisano.  “A culture conducive to innovation is not only good for a company’s bottom line,” writes Pisano.  “It also is something that both leaders and employees value in their organizations.”

Most everyone agrees that such a culture entails five key behaviors: tolerance for failure, willingness to experiment, psychological safety, collaborative, and non-hierarchical. “But despite the fact that innovative cultures are desirable and that most leaders claim to understand what they entail, they are hard to create and sustain.  This is puzzling.  How can practices apparently so universally loved - even fun - be so tricky to implement?”

The reason, answers Pisano, is that these much-liked behaviors are only one side of the coin, which must be counterbalanced with some tougher behaviors.  People love solving problems that seem impossible to everyone else and creating something qualitatively different from anything that came before.  But they will rarely perform at the necessary levels if they’re relaxed and happy.  True innovation is, in fact, not all that much fun.  In order to reach inside yourself and find that something extra needed for true innovation, you have to feel the stress that comes when you know that what you’re doing is absolutely crucial.  In the end, necessity is the mother of true innovation.

Despite All the Bad News that Surround Us… Is the World Actually Getting Better?

The World is Getting Quietly, Relentlessly Better is the title of a recent WSJ article by its chief economics commentator Greg Ip.  “If you spent 2018 mainlining misery about global warming, inequality, toxic politics or other anxieties, I’m here to break your addiction with some good news: The world got better last year, and it is going to get even better this year,” writes Ip in his opening paragraph.  “Poverty around the world is plummeting; half the world is now middle class; and illiteracy, disease and deadly violence are receding.  These things don’t make headlines because they are gradual, relentless and unsurprising.”

Ip’s article is mostly based on data insights from Our World in Data, a comprehensive website that quantifies the evolution of our global living conditions over the past few centuries.  Our World in Data (OWID) is an initiative of the Oxford Martin Programme on Global Development, led by economist Max Roser at the University of Oxford.

OWID analyzes longitudinal data on how the world has been changing over decades and centuries, as well as explaining the causes and consequences of those changes in its accompanying articles. It makes extensive use of visual aids, including interactive graphs and maps, to present its analyses and insights.  Its content is organized into 15 main sections:  population, health, food, energy, environment, technology, growth & inequality, work & life, public sector, global connections, war & peace, politics, violence & rights, education, media and culture, -  each of which further includes a number of subsections.

Let me summarize just a few of the key trends in the OWID website.

The Business Value of Resilience

The Industrial Revolution was “as much about process innovations that reduced waste and increased productivity as it was about the application of new technologies,” wrote Roger Martin in a recent Harvard Business Review (HBR) article, - The High Price of Efficiency.  Martin is professor and former dean of the Rotman School of Management at the University of Toronto, as well as an accomplished writer.

The belief that efficiency is fundamental to competitive advantage has turned management into a science, - taught in every business school on the planet, - whose objective is the elimination of waste, - whether of time, materials, or capital.

“Why would we not want managers to strive for an ever-more-efficient use of resources?,” asks Martin.  Of course we do.  But, an excessive focus on efficiency can produce startlingly negative effects.  To counterbalance such potential negative effects, companies should pay just as much attention to a less appreciated source of competitive advantage: resilience,  - “the ability to recover from difficulties - to spring back into shape after a shock.”

“Think of the difference between being adapted to an existing environment (which is what efficiency delivers) and being adaptable to changes in the environment.  Resilient systems are typically characterized by the very features - diversity and redundancy, or slack - that efficiency seeks to destroy.”

The Current State of AI Adoption

AI is seemingly everywhere.  In the past few years, the necessary ingredients have finally come together to propel AI beyond early adopters to a broader marketplace: powerful, inexpensive computer technologies; advanced algorithms; and huge amounts of data on almost any subject.  Newspapers and magazines are full of articles about the latest advances in machine learning and related AI technologies.

Two recent reports concluded that, over the next few decades, AI will be the biggest commercial opportunity for companies and nations.  AI advances have the potential to increase global GDP by up to 14% between now and 2030, the equivalent of an additional $14-15 trillion contribution to the world’s economy, and an annual average contribution to productivity growth of about 1.2 percent.

Over time, AI could become a transformative, general purpose technology like the steam engine, electricity, and the Internet. AI marketplace adoption will likely follow a typical S curve pattern, - that is, a relatively slow start in the early years, followed by a steep acceleration as the technology matures and firms learn how to best leverage AI for business value.

To get a better sense of the current state of AI adoption, McKinsey recently conducted a global online survey on the topic, garnering responses from over 2,000 participants across 10 industry sectors, 8 business functions and a wide range of regions and company sizes.  The survey asked about their progress in deploying nine major AI capabilities, including machine learning, computer vision, natural language text and speech processing, and robotic process automation.