23
ENCOURAGING INITIATIVE AND INNOVATION
THE PACE OF BUSINESS CONTINUES TO accelerate. Technology has made the faster pace possible while intense domestic and global competition has made it necessary. Amazingly, it was not that long ago that email, mobile phones, text messaging, video conferencing, and even overnight delivery did not exist. These are just some examples of tools that have quickened the speed at which business is conducted. It is only in the last few decades that companies have had to learn to compete effectively with foreign competitors.
Older, more layered, and gradual management structures and methods worked fine when all organizations used them. But as technology and communications tools have supported faster decisionmaking, the old methods have had to be updated. As you continue in your career as a manager, you will see the pace at which decisions are made and actions are taken continue to quicken. It is important that your leadership style keeps pace as things move faster.
A structure and culture that requires centralized decisionmaking is no longer sustainable. To be responsive to the challenges of the ever faster pace of business, good decisions need to be made at lower levels. Your organization needs to be agile. Stated simply, you and your team will not be successful if you create a structure in which you make all the decisions.
RESPONDING TO FLAWED DECISIONS OR ACTIONS
When you establish clear organizational goal clarity, it will improve the quality of the decisions your people make. Even with that done, will your people always make the same decision you would? No. Will your people at times make inferior decisions? Yes. Will they at times also make superior decisions? Yes.
So, here is the question: Assume you are on a plane with no Wi-Fi, on vacation on a scuba boat, or cannot be interrupted in a meeting with a client. The specifics are not important. The point is that you are not available. Better yet, you are available but one of your team members is doing exactly what you have encouraged him to do and taking initiative. He makes a decision that seems to be a good one at the time based on the available information. Soon after, circumstances change and it turns out to be a bad decision. Not only is it a bad decision, it is going to be a costly decision that reflects poorly on you. The question is, how will you respond?
Will you call the person into your office and tell him that he really messed up? Will you suggest that he was off base by even trying to make the decision? Will you tell him to make sure he comes to you next time so you can make the decision?
If you do any of these things, how do you think he will respond the next time he is presented with an opportunity to take initiative? Almost certainly, he will not take action or make a decision on his own. Is that really your intent? Do you want to discourage him from taking initiative for a long time to come?
If your response to what turns out to be a flawed decision is to chastise, berate, or criticize, you are undercutting yourself. All the encouragement you give your team to take initiative, be resourceful, think like business owners, and be entrepreneurial will be wasted. Not only will your encouragement be wasted on the team member who made the flawed decision, but every other team member who becomes aware of the situation will also be more reluctant to take initiative.
When this happens, as it inevitably will, you need to bite your tongue and keep the long-term view in mind. To continue to encourage initiative-taking and the decentralized decisionmaking that will make your team more agile and effective, you need to take these steps:
1. Review the circumstances of the situation with the team member(s) involved.
2. Do not be critical.
3. Explain that your goal is to make sure everyone learns from the experience and that the mistake is not repeated.
4. Drive the conversation toward what can be done differently next time to get a better outcome.
5. Make it clear that while the team members cannot afford to make the same mistake again, you appreciate their willingness to take initiative and want to encourage them to continue to do so.
When you follow these steps, you will send the clear message that you are serious about empowering your people. You will benefit from your ability to restrain any anger that may have surfaced when you first learned of the flawed outcome.
You may be wise to explain the situation to your supervisor so she understands the bigger picture behind the flawed outcome. Emphasize that the team member did what they were asked to do and the training value that you have gained from the situation. While the less-than-ideal outcome is undesirable, it was created by an uncommon situation and is part of helping a team member grow.
PROMOTING INNOVATION
In addition to the ability to be agile and able to move quickly, intense competition requires organizations to be innovative, such as by devising new products, services, or methods that allow a company to be more successful. Innovation can be dramatic, as in the introduction of new products like smart speakers or self-driving cars. These are certainly innovations, but they are the exception. Most innovation is much more gradual and incremental. Every time you find a better way to do something, you are being innovative.
At its core, innovation is important because very few organizations can continue to exist, let alone be successful, if they are not continually improving. Look back at how your company's methods, services, and product offerings have changed in just the last five years. All of these changes were a form of innovation, necessary to preserve or increase your company's ability to compete successfully.
Innovation involves risk. By definition, risk means uncertain outcomes. Put another way, if the outcomes were certain, it would not be a risk. So, how do you encourage your team members to be innovative knowing that their ideas will not all be successful? The answer is by rewarding the effort as much as the outcome. If you reward only successful outcomes, you will get very little, if any, innovative effort from your team. When the outcome is disappointing, you need to follow steps similar to those used to handle flawed decisions or action:
1. Review the circumstances of the innovative effort with the team member(s) involved.
2. Do not be critical.
3. Explain that your goal is to make sure everyone learns from the experience and that the outcome is better next time.
4. Drive the conversation toward what can be done differently next time to get a better outcome.
5. Make it clear that while the effort was not as successful as desired this time, you appreciate their willingness to be innovative and creative and want to encourage them to continue to do so.
Why the focus on negative outcomes? Because responding to the positive outcome is easy. All involved will be congratulated and rewarded. It is how you respond to the negative or less-successful outcome that will determine the climate for innovation in your organization.
REWARD INITIATIVE THE SAME AS OUTCOME
The challenge with any form of incentive is that you will get what you incentivize. Ask any sales manager what happens when you pay extra commissions on a certain product. The sales team will sell more of them. It is the same with innovation. The problem is that the process of innovating is inherently imperfect. If you reward only success, you will get a lot less initiative because of the fear of failed outcomes.
The solution is to have a system of rewards and awards that recognizes initiative whatever the outcome. This may sound odd and even a bit disquieting. The whole idea of business is to reward the winners. That's true, but creating a culture that yields innovation requires a different and perhaps even counterintuitive approach. You have to recognize and reward a well-founded and executed effort that for some reason did not achieve the desired outcome in the same way you reward the innovations that did.
If this idea is making you feel uncomfortable, think about this. How many times have you seen a person or team succeed in large part due to luck while a person or team that actually did a better job was not successful due primarily to circumstances beyond their control such as changes in market conditions or the competitive environment? Almost certainly examples come to mind. Can you see how rewarding only the person or team that was successful this time will discourage innovation next time? It will.
In practice this means you have to treat a well-conceived and executed effort that was not fully successful the same as a successful effort in terms of performance appraisals, bonuses, rewards, and awards. If you have an award program for innovation, you need to have two tracks of awards. Those involved in the successful efforts may receive something you call the Innovators Award. Those who are a part of the well-conceived and executed effort that was not fully successful may receive something such as the Strivers Award.
This does not mean that you treat poorly conceived and executed efforts the same as successes. If the effort was unsuccessful due to poor decisions or performance, it should be treated as such. It is the efforts at innovation and initiative that were unsuccessful due to factors largely beyond the control of the team that deserve recognition equal to successes. Examples of such circumstances would be funding canceled midway through a project or sudden, unexpected external changes.
Will this approach upset the members of teams that have been successful when they are treated the same as less successful teams? Perhaps. Should that occur, simply remind them that they may be on one of the teams that is less successful next time through no fault of their own.
Encouraging initiative and innovation requires you to send the clear message that you value both even though they do not always yield the desired outcome. Done well, you will enjoy a lot more progress than setbacks and your team will have more fun and be more engaged in its work.
24
IMPROVING OUTCOMES
A BIG PART OF YOUR RESPONSIBILITY as a manager is to find ways to do things better—faster, cheaper, and more efficiently. And you need to be successful much more often than you are not. This means you have to always be mindful of opportunities for improvement. It also means you need to be able to execute well.
To use a shooting metaphor, you will not be successful if you shoot before you aim nor if you aim forever and never pull the trigger. You need to aim well, then shoot. Now think about how many more times you would hit the target if you could improve your aim even after you've pulled the trigger—the entire time the bullet is traveling from the gun to the target. This is the purpose of intelligent risk taking.
INTELLIGENT RISK TAKING
Risk taking suffers from a spotty reputation because it can lead to bad outcomes. There is a big difference between risk taking done well and risk taking done poorly. Since the goal is to be successful as often as possible, you need to risk intelligently. This is the idea behind the concept of intelligent risk taking, which is also drawn from the book The Power of Risk.
Since a risk is any action with an uncertain outcome, that means most of what you do in your work involves risk. The secret is to steer the risk skillfully—the effort, the initiative, the idea, the process—to a successful outcome.
Intelligent risk taking centers around increasing the chances of a positive outcome and decreasing the chances of a negative outcome.