How To Ignite Creative Leadership In Your Organization - Navi Radjou, Jaideep Prabhu, Prasad Kaipa, Simone Ahuja - Harvard Business Review

IBM just released its 2010 Global CEO Study based on face-to-face interviews conducted with over 1,500 CEOs spanning 60 countries and 33 industries.

Here are some key points from the study:

1. Even if the recession is over, 79% CEOs expect the business environment to become even more complex in coming years.
2. More than half of CEOs doubt their ability to manage this escalating complexity.
3. Western CEOs anticipate economic power to rapidly shift to developing markets, and foresee heavier regulation ahead.
4. A majority of CEOs cite creativity as the most important leadership quality required to cope with growing complexity.

Creativity in this context is about creative leadership — i.e., the ability to shed long-held beliefs and come up with original and at times radical concepts and execution. And this requires bold, breakthrough thinking. We believe, however, that this isn't about having a lone creative leader at the top but rather about creating a "field" of creative leadership, by igniting the collective creativity of the organization from the bottom up. In essence, creative leaders excel at creating creative leaders.

The report identifies a group of standout organizations which delivered solid business results even during the recent downturn. Their revenue growth was six times higher than the rest of the sample and they plan to get 20% of revenues from new sources in the near future.

How do these firms succeed? These top performers focus on developing creative leaders across their organizations, deepening partnerships with employees and customers and achieving operational agility. Creative leaders in these firms are more prepared and willing to make deeper business model changes to realize their strategies. To win, they take more calculated risks and keep innovating in how they lead and communicate. They are ready to upset the status quo even if it is successful and are committed to ongoing experimentation with disruptive business solutions.

Changing the work culture, unlearning and selectively forgetting past success formulas, and co-creating future products and services with employees, customers, and external partners are hallmarks of the creative leaders we have worked with in organizations from the US, Europe, and Asia. These firms out-performed their competition during the recession.

Take, for instance, Best Buy, a firm where creative leaders facilitate bottom-up participation and flexible thinking. Inspired by Jeffersonian principles, Best Buy's former CEO Brad Anderson set the foundation for current CEO Brian Dunn and other senior executives to empower employees to generate new ideas that yield more value at less cost for more people across the firm's global community of customers and partners. For instance, its ROWE (Results-Only Work Environment) program, which promotes flex work and telecommuting, was entirely designed and piloted as a grassroots effort by Best Buy employees before it was deployed across the company. Such nimble-mindedness is all a part of Best Buy's non-stop fight against complacency, which it believes could lead to the fall of any corporation. That's why Best Buy strives to build humility in a confident organization and constantly experiments with new business models (e.g., in energy and healthcare sectors) even if these models threaten to cannibalize existing ones.

Another exemplar of creative leadership is the State Bank of India (SBI), India's largest and oldest bank with over 200,000 employees and 20,000 branches across India. When OP Bhatt became SBI's chairman in 2006, he immediately recognized the creative potential of SBI's vast employee base. But since SBI is partially owned by the Indian Government, Bhatt realized he couldn't either "get the right people on the bus or get the wrong people off the bus." Nor could he financially incent his managers to take risks and lead innovative projects (Bhatt's own take home salary is less than US$1000 a month!).

So, Bhatt used a creative approach to ignite the genius within SBI. Through effective communication, he tapped into the pride employees feel about SBI, steeped as it is in an illustrious 200-year old history. He helped develop new faith and pride in SBI through home grown Parivarthan (transformation) training programs. As a result of these programs, employees at different levels are now demonstrating creative leadership and developing ever closer bonds with customers. For example, Mr. Sivakumar, chief general manager of SBI's operations in Hyderabad recently introduced an SMS based customer complaint unit of four people who addressed 7000 complaints within five months, thus creating a loyal customer base for further marketing and promotions.

By unleashing the creative genius within all its employees, SBI's market share grew from 16.5% to 19% market share in the past four years, while it doubled its stock value and boosted customer satisfaction. The SBI has also won many global awards for its performance.

Based on our 50 year collective experience working with creative leaders worldwide, here are some questions we believe you should address if you wish to develop creative leaders who can help your organization cope with increasing complexity:

1. What cultural, political, organizational and technological barriers should your organization overcome if it has to develop a cadre of creative leaders?
2. What structures, reward systems, processes, metrics and goals do you have in place to support creative leaders?
3. How do you encourage risk taking and learning from failure? How do you measure it?
4. Do you simply adopt best practices learned from industry leaders or do you shape "next practices" that will make your organization the leader in the future?
5. How effective are you in partnering with customers, suppliers, employees and even your competition to improvise "good enough" solutions?

Dr. Prasad Kaipa is a CEO Coach and head of Kaipa Group; he has worked with over 100 CXOs and 30 Fortune 500 companies in the areas of innovation and leadership. Navi Radjou is Executive Director of the Centre for India & Global Business (CIGB) at Judge Business School at the University of Cambridge where Dr. Jaideep Prabhu is the Jawaharlal Nehru Professor of Indian Business and Enterprise. Dr. Simone Ahuja is the founder of Blood Orange Media and advisor to CIGB.