Navigating Disruptive Change - Advice for Leaders from Polly LaBarre

A CONVERSATION WITH POLLY LABARRE

What’s the big challenge for leading in disruptive times?

The design of the broad majority of our organizations puts leaders at the center—all activity spins around them, the big decisions emanate from them, rules, policies, and direction cascade out from them, ideas must flow through them to see the light of day, and on and on. The problem is: the future doesn’t unfold center-out or top-down, so much as edge-in and bottom-up. Leaders tend to get buffered from all of that action at the fringe—they’re shielded from all of the signals coming from the external environment and protected from what’s emerging (and especially what’s challenging) by layers of management, process, and protocol.

Here’s the thing: all change is, by definition, against the rules. Creativity is fundamentally subversive in nature. Inventing the new is an act of rebellion against the status quo. In this creative and disruptive economy—it’s the creative and disruptive individuals and organizations that win.

One of my presentations is called “Maverick Rules.” I could have just as easily called it “Mavericks Rule!” That’s because the future belongs to the mavericks, the misfits, the rebels, those crazy ones who are immortalized in Apple's iconic “Think Different” campaign.

Now, this doesn’t mean hiring a bunch of weirdos (although that’s one productive practice, according to my friend and creativity guru Bob Sutton). Rather, it means expanding everybody’s capacity to contribute creatively—and doing everything you can to make sure the organization doesn’t get in the way of that. In other words, your organization’s capacity to adapt and change along with all of the changes in the external environment is a function of:

1. Unleashing human potential—all of those sources of ingenuity and originality (curiosity, imagination, audacity, playfulness, resourcefulness). The more you have of that on your side, the more opportunity you’ll capture.

POLLY LaBARRE: Building the Capacity to Adapt to Change

Okay, so how do you actually tap into all of that productive human energy and imagination?

The work of leadership today is less and less about directing, planning, and “visioning,” and more and more about INVOLVING people—designing friction-free channels for collaboration and contribution. Call it: “architecture of contribution.”

Innovation is a fundamentally social process. Even what looks like the greatest “Aha!” moment is arrived at through a long chain of insight, sparks, and connections. Novel solutions grow out of the mixing and mashing of diverse perspectives, leaps across realms, and iterative builds. The job of the leader is to cultivate those connections, to create mechanisms and forums and channels for individuals to share ideas, build on one another’s work in progress, make connections across those organizational boundaries that tend to blind people to new opportunities.

POLLY LaBARRE: Design an Architecture of Contribution

Got a good example?

A leader that I've gotten to know over the years who absorbs that logic kind of more intuitively than most is a guy named Jim Lavoie. Jim is a founder of Rite-Solutions. It's a software company based in Middletown, Rhode Island. They make complex systems for the Department of Defense, first responders, and large gaming and casino operations. He spent most of his career as an executive in big defense companies.

When he went off to start his own company, he did so with sort of refreshing intellectual humility. He said to me, "You know, the one thing I know is that the best, the freshest, the most relevant ideas tend not to come from senior management. How could I design an organization based on that insight?" The design question behind Rite-Solutions was: “How do I create an organization where everyone feels relevant to the future of the company?”

And, in many ways, the company is a portfolio of approaches and systems and practices that try to answer that question. The cornerstone is a stock market-based game called “Mutual Fun.” It's an online platform that, in its original incarnation, looks like the marriage of a Bloomberg terminal and a Monopoly board. The idea is not to trade stocks but to generate, develop, and invest in new ideas.

Here’s how it works: Every employee at Rite-Solutions gets $10,000 of “opinion money.” Anyone can fill out a detailed profile and become an “Intellectual Capitalist.” If you have a new idea to float, you write an “Expect-us” (instead of a prospectus), and then you list it on the “Bow Jones” or the “SPAZDAQ.” You can see the company’s personality coming through here—it’s a little kitschy but it speaks to them. Once your idea goes up on Mutual Fun, it gets a ticker and a page with all of the detail on the activity around it. An algorithm dynamically determines the value of stocks and portfolios and generates leaderboards.

Very importantly, anybody working on an idea can post requests to ask their colleagues to help assist in developing it (they call these “Budge-It” items). You can say, "Hey, does anybody have 20 hours to do some coding work or 30 hours to do some research?" Your colleagues essentially vote with their feet to work on the ideas they think have the most promise. I that hit the Top 20 on the platform get a small bucket of resources—money, support, and time to test and iterate on the idea. And any idea that is adopted and generates cost-savings or new sources of revenue—the team involved share in those rewards. Very, very quickly, this became the conversation inside, Rite-Solutions—a kind of dynamic heat map of where all these young, talented, brilliant people thought the future was.

SUPPLEMENTAL READING: A CHEAT SHEET FOR INVESTING THE FUTURE and NEW PATHS TO ORGANIZATION CONTROL: POLLY LaBARRE, TOP INNOVATION SPEAKER

Opening up an organization in this way seems like a recipe for chaos. How do you open without losing control?

Expanding autonomy and giving everyone a voice doesn’t equate to loss of control. And let's face it, the one thing organizations do not need more of is control. We’re living in a world where we have all experienced such an expansion of freedom in our own lives. Every one of us has the freedom to connect with anyone we want at anytime, anywhere in the world. We have the freedom to contribute based on our hobbies and our passions rather than our job description. We have the freedom to create using all the available tools and platforms and share those creations with the world. We have the freedom to challenge. We can speak out, we can meet up, we can join causes and communities we believe in. And yet, the workplace lags so far behind when it comes to that expansion of individual autonomy. Just try coloring outside the lines of your next T&E report! Or try securing a little budget for something that isn’t on the road map. Too many people in too many organizations are afflicted daily by bureaucratic controls, both small and soul-crushing.

So, the pendulum definitely needs to swing the other way. The question is: how do you expand autonomy and increase voice without losing control? You rethink the means of control.

Take, for instance, Stockholm-based bank Svenska Handelsbanken. This is a bank with some 800 branches across Europe, 12,000 associates, and just three layers of management. Operating decisions are almost entirely decentralized—the mantra is “the Branch is the Bank.” Each branch has P&L responsibility, makes loan decisions, sets pricing on loans and deposits, plans its operations using a very inclusive process, makes all hiring and compensation decisions, controls its own marketing budget, and serves every kind of customer in its geographic area—from a young couple looking for a mortgage to a global corporation.

All of that local autonomy is regulated with a few simple mechanisms: widely shared norms and values; one simple shared goal (to achieve higher return on equity than its peer group—which it’s done for nearly 50 years running!); and extensive transparency (it shares a dashboard of real-time, granular performance metrics with every branch so they can always see how they’re doing relative to their peers and make informed decisions about how to act in the interests of the business and the customer). By inviting everyone in the organization (especially front line branch employees) to help run the business—and equipping and supporting them to do so—they’ve created a culture rich in accountability, initiative and autonomy.

A lot of this tracks back to our assumptions about people and their capacities—what would our organizations look like if we truly believed that every person in them had the capacity to make important decisions, generate critical insights, experiment with new ideas, act in the interest of the business and customers, and suggest new directions?

POLLY LaBARRE: Handelsbanken: Principles, Autonomy & Transparency Unleash Performance

What’s one powerful thing leaders can do personally to create an organization fit to navigate the disruptive future?

The imperative for leaders today is to remain open, hungry and humble. The most powerful strategy for cultivating those qualities is simple—but not easy: Can you ask more questions than you give answers? Why? Why does inquiry beat certainty? Questions are a powerful antidote to hubris, which is a great creativity killer.

Questions unleash humility, empathy, even vulnerability. And in this world of increasing complexity and constant change where no one person, however brilliant, can have all the answers, they offer up a real advantage because you can enlist more support, more perspectives, more help when you're open with questions rather than closed off by certainty.

POLLY LaBARRE: Questions Help You Find the Future

So how do you lead with questions?

Well, I have a really simple suggestion, which is to develop your own list of stretch questions—whether it’s about a particular problem you’re working on, a big shift in the world you want to figure out, or your approach to leading and managing. Write them down, put them up in your meeting room or office, carry them with you on your phone.

If you're having trouble getting started, start with the basics: Why? Why not? What if? Anyone who spends any amount of time with a young child as I do, knows that those are really easy questions to ask and to keep asking, relentlessly. And that's exactly the point! Children are blown open by questions. They're experiencing the world for the first time every single day. They have the ultimate fresh eyes. That’s what we need to get back to.