Use distributed leadership to grow your business innovation

There are some surprisingly simple methods that managers can use to support innovation and agility in their teams.

Organisations can better respond to a complex and ever-changing environment by improving business innovation. CPA Congress speaker Steven McCrone outlines how they can move in this direction.

By Jessica Mudditt

With disruption a frequent feature of today’s business climate, the concepts of agility and innovation have emerged as a solution for survival. Yet despite the hype around these buzzwords, many organisations struggle when it comes to implementation.

“Organisations acknowledge that the future is inherently complex,” says Steven McCrone, a management consultant at Cornwall Strategic in New Zealand.

“However, many are locked into a way of working that constrains them from responding to a constantly changing environment.”

McCrone will use his address at CPA Congress in New Zealand to outline some surprisingly simple methods that managers can use to support innovation and agility in their teams.

Create a sense of space and empathy

Organisations that value efficiency above all else may become rigid and are less likely to be agile and innovative.

“If you’ve got a calendar that makes it impossible for someone to get a meeting with you, or if you haven’t got space to just think or do something where you create serendipitous good fortune, then you’re going to be myopic,” McCrone says.

In addition to making yourself available to your staff and stakeholders, it’s important for individual team members to build in time to decompress.

“Everyone needs time to not be task-focused. Otherwise you can’t consider different ways of working, or form relationships with people who aren’t directly working with you,” he adds.

Knowing a wider section of colleagues and stakeholders creates empathy, and ultimately leads to better ways of dealing with complex scenarios.

“There are very few decisions that affect just us. So we need to get really good at understanding the effect it has on those around us. Wherever possible, bring in your stakeholders and co-create the solution. Don’t develop something and impose it on others,” McCrone says.

Abandon a permission-seeking work culture

Concentrating too much decision-making power in the hands of too few individuals leads to a slower, more risk-adverse mode of doing business. This is at odds with being agile and innovative and it also tends to stifle motivation.

“People need to be able to make real decisions, meaning resource-commitment decisions that are within their span of control,” explains McCrone.

“Otherwise there’s a lack of trust and people don’t feel valued. Constantly having to seek permission means that someone else is effectively thinking for you.”

He adds that a reliance on old methods of top-heavy decision-making processes prevents organisations from being able to explore and exploit new opportunities.

A better alternative is what McCrone calls distributed leadership, where power is dispersed.

Isn’t it risky to let people make decisions and spend money?

No, says McCrone. If it feels that way, “you’ve either got the wrong people in place or there are trust issues in the organisation”.

Of course, there do need to be some constraints.

“I’m not talking about giving people unconstrained budgets. That would of course lead to chaos, with everyone funding their pet projects.

“But so long as people are moving in the right direction and at the right tempo, they should be free to make decisions that affect their span of control,” McCrone says.

Mistakes are OK (within reason)

With individuals empowered to make decisions and try new ideas, mistakes will be inevitable. This should be encouraged as part of what McCrone calls “safe-to-fail experimentation”.

“I’m not talking about making catastrophic errors. It’s about taking small actions to learn how we impact the strategic environment. If we get a positive impact, we can amplify it by repeating it, or adding more resources to it. If we get a negative impact, we learn. Either way, we are interacting with the environment in order to better understand it.”

In fact, McCrone believes that making mistakes is a cornerstone of innovation, but that few organisations have the appetite for it.

“Everybody wants to be innovative, but nobody wants to take a risk.”

He says that organisations tend to cherry-pick their most significant innovations to celebrate and ignore the thousands of small steps along the way. However, without those small steps, it’s near impossible that the innovative result would exist.

“What you’re doing with safe-to-fail experimentation is constantly trying new things,” says McCrone. 

“Innovation is a consequence of it: you’ll look back and say, ‘Hey, that was innovative.’”

Mistakes and even complete failures must be acknowledged rather than concealed for a culture of innovation and agility to thrive.

“Often, mistakes are made and no one talks about it. No one benefits from that. You see this a lot in health and safety. People get hurt the same way because we are too embarrassed to talk about our accidents.”

McCrone says that people should be rewarded for the process of risk-taking, as opposed to only when there is a successful result. 

Or as the champion American tennis player Arthur Ashe once said, “The doing is often more important than the outcome”.

Learn more about CPA Congress in New Zealand.

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