Are you an 'innovative leader'?

Are you an 'innovative leader'?

Gerry Davis, the regional managing partner of executive search firm Heidrick & Struggles in the Asia Pacific, fields some questions on the buzzword du jour - innovation.

CIO Asia: What would you say are key attributes of an innovative enterprise leader? What's different about an innovative leader's management style? Gerry Davis: Innovative leaders seek insight and first mover advantage through the development and application of new ideas, and improved processes. They are also gifted communicators, not just in getting their message out, but in soliciting and acting on feedback from employees and clients. They also have a clear vision to guide their company's direction; they are therefore able to accommodate storms and reduced visibility by continuing to focus on their strategic direction and goals.

Innovative leaders 'stand out' through the performance of their company and its employees. CEOs are required to be increasingly visible to all stakeholders, but getting noticed doesn't equal getting the job done, as Carly Fiorina discovered as CEO of HP. In a sense, great leaders are less 'seen' rather than 'heard' by their ability to shepherd and align their company, attract and retain talented staff, and create superior value for customers as well as shareholders.

A leader's management style must fit that company in that particular industry and market at that point in time. However, across industries and markets, innovative leaders have the ability to release the pent-up creative force within their organisation, unleashing the desire within each of us to contribute and improve what we do.

One quality we are seeing is Courage - moral courage, self-courage and the courage to act - often breaking protocol and rules in the process, in the spirit of innovation and progress.

How would you describe the state of innovative business leadership in Asia? How does this region compare with the US and Europe?

We are living in an age where the companies most associated with 'innovation' emerged with technology companies in North America. The pendulum historically swings both ways-it wasn't so long ago that best business practices in manufacturing were emerging from Japan, and the West was clamoring to catch up.

The awareness of the importance of innovation among Asian companies has never been higher. Heidrick & Struggles recently sponsored a conference with the Asia Society in Tianjin, China, where participants were polled on this subject. Results show that a corporate culture that fosters innovation is vital for long-term financial growth, leadership development, employee morale, retention and recruitment.

What can Asian business leaders do to become more innovative?

As one participant at the Tianjin conference said, "innovation should be focused on meeting market needs-current and emerging-and targeted at `changing the game'." The participant survey said the best way to encourage innovation is through employee initiatives, ensuring that employees at the coalface are heard and recognised. Interestingly, twice as many business leaders said this approach was far better than relying simply on financial incentives.

How has the leadership model changed for the 21st century? How different do business leaders of today need to be from their counterparts in the late 20th century? What's changed to make innovation more important?

Technology and globalisation have opened rich new veins of opportunity for new and existing products and places where they can be sold. The playing field has become increasingly global and level across borders. Technology has changed the way business is done and customer expectations have dramatically increased.

It is also interesting to note that more chief executives are now emerging with a finance background-in the past, marketing and sales executives were the usual source of corporate leaders. For the 21st Century CEO, a strong understanding of economics and value drivers is critical. Also, in the wake of the scandals earlier this decade, CEOs are dealing with many more compliance and control issues, and company board members demand more access and understanding to what's happening in the business.

How difficult is it for business leaders in Asia to transform themselves to become more innovative?

The current business environment demands innovation. Business leaders who don't constantly look for ways to change and improve will become conspicuous by their absence, as will the companies they lead. The Darwinian reality is that failure to innovate will guarantee underperformance.

How can a senior executive determine if they are innovative? What is the basic test and how can innovative leadership be quantified?

If you have to ask, you probably aren't. That's the difficulty with 'innovation'. This is because it means different things in different contexts for different companies or industries. Innovators aren't just the people who are technically gifted in designing and producing new products, new ways to deploy technology or creating new technology itself. I think the most useful definition of 'innovation' was given to us by post World War II Japanese companies when pursuing Total Quality Management-the philosophy of 'kaizen', or constant improvement is necessary and integral to the development of any innovation.

There's no real metric to judge this, except the most essential: an executive's track record. Scratch the surface of any successful CEO today, and you will find relentless curiosity and the capacity to learn and grow.

What examples can you give of innovative leadership in Asia, particularly relating to information technology issues? What enterprises and which business leaders stand out? What do they have in common?

There is no shortage of examples across Asia. Take just one, N.R. Narayana Murthy-he and his fellow co-founders of Infosys Technologies practically invented off shoring or outsourcing of computer programming and technology. He started with six others and $250 in 1981 and built a $4 billion company. The chain of value created by off shoring technology and service providers is immense, and are characterised by their ability to quickly react to opportunities and competitive pressures. The first generation who focused on call centres and applications maintenance have moved on to focus on process outsourcing often deploying their capability in many global locations, now the concept has extended beyond IT services and processes with radiologists, newspaper editing and stock trading also addressed by off shoring and outsourcing.

In China, particularly in areas near Hong Kong whose economies first opened, you are seeing an evolution away from an original equipment manufacturing base to high value goods and services. Two Shenzhen companies born in the boom-ZTE Corp and Huawei-are now global technology leaders in their own right.

These companies and their leaders are hungry, smart and been quick to react to the global market-a dangerous combination for their competitors in the West.

*What advice would you give to the leaders of today's major global enterprises about becoming innovative in their management approach and encouraging innovation in their businesses?

Look, listen and learn. Understanding best practices of your industry and across industries is essential, but even more important is to have an intimate understanding your own company and employees, their strengths and weaknesses, the 'points of pain' for the company. An innovative culture nurtures and stimulates employees to look for ways to improve what they do, no matter the industry, no matter the job.

What are the major benefits of being an innovative leader as opposed to being a leader from the old school of centralised control?

Again, we run the risk of being prescriptive here: one size-or management style-does not fit all. There are cases where centralised control may be the right model for a particular company at its particular stage of growth. However, a common danger for large companies with strict hierarchical control is they cannot respond at the 'speed of business'. Autonomy within business units allows greater alacrity granting authority to quickly react to changes in market and competition.

Is there anything else that you believe that today's business leaders should bear in mind considering innovation?

Innovation is a journey not a destination. Focusing on identifying and realising opportunities for improvement and value creation requires an ongoing commitment and this commitment must be embedded at all levels of an organisation-not just among its senior leadership.

CIO Asia, Fairfax Business Media

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