4 Examples Of Innovative Companies That Work And 1 Example That Doesn’t (Part I)
As I start to wrap up the research phase of my book writing process, I want to give practical examples of some theoretical concepts I have been sharing. I have mentioned many times the idea of a "human CEO." In this type of leadership, CEOs and other organizational leaders cultivate open and transparent work environments based on trust, respect, recognition, gratitude, and autonomy. They commit to cooperation, listening to employees, distributing leadership across levels and functions, and helping employees reach their full potential.
Organizations must become more innovative in order to stay relevant in the rapidly changing world. Research has shown that to stimulate innovation, leaders should delegate a part of their decision-making authority to the team and divide big units into small ones, keeping operating units to fewer than 50 people. One of the essential elements of a successful serial innovation company is an agile innovation system that can quickly identify the best opportunities.
Do companies that adhere to these values and business practices exist? If they do exist, is working at these companies as extraordinary as it sounds? Is it possible for any company to transform into a powerful organization that operates with human leadership, creates meaningful work, and consistently produces innovative products and services? The answer is yes.
In his new book Always Day One: How the Tech Titans Plan to Stay on Top Forever, Alex Kantrowitz, a technology journalist, reveals how some of the best-known companies in the world – Amazon, Facebook, Google, and Microsoft – have maintained their innovative spirit and how their unique leadership practices have contributed to their long-lasting success. In contrast, Apple might be reaching the end of its mesmerizing climb unless the organization transforms and adopts some of the principles we have been discussing.
Two types of work
When analyzing the type of work we do, we can separate it into two different categories: idea work and execution work. Idea work involves imagining new products and services, figuring out how to develop them, and then actually creating them. Execution work deals with supporting those products and services once they go live, from ordering parts to inputting data to maintaining financial books.
Kantrowitz contends that almost all work in the industrial economy was execution work. In the knowledge economy we have today, idea work is equally important, but most people are overburdened with execution work, leaving them no time to develop new products and services. With limited time spent on innovation, companies continue to refine existing products, lacking any new ideas.
The answer to this challenge is technology, or, more precisely, artificial intelligence (AI). AI can free people to do more creative, meaningful, "human," and inventive work. AI can take on most of the execution work, allowing humans to create new ideas and turn them into reality. In such an innovative culture, companies can devote most of their effort to invention, not refinement.
Amazon, Facebook, Google, and Microsoft have been incorporating AI and machine learning into their products and services and their internal operations. Technology has reduced the amount of execution work their employees have to perform and has increased the time they can spend on creating new ideas.
Kantrowitz recognizes a pattern at companies with inventive cultures, and he calls it the Engineer's Mindset. It is common to assume that an innovative company must have a visionary leader who comes up with all the brilliant ideas no one had ever thought of before. Steve Jobs and Elon Musk are examples of such visionaries.
However, when we look at Jeff Bezos at Amazon, Mark Zuckerberg at Facebook, Sundar Pichai at Google, and Satya Nadella at Microsoft, we do not see visionaries. We see facilitators. Bezos, Zuckerberg, Pichai, and Nadella are trained engineers who ask questions, listen, and learn. They do not pretend to have all the answers. They do not pitch or dictate. Instead, they allow their employees to develop new ideas and help them bring those ideas to life. Bezos, Zuckerberg, Pichai, and Nadella have uncovered a new model of leading that is necessary in the world of constant change.
Kantrowitz describes three critical elements of the Engineer's Mindset. The first one is a democratic invention. He acknowledges that engineers are always building and inventing. They know that inventive ideas can come from any place at an organization, and they must develop systems to get these ideas to the company decision-makers.
Another element of the Engineer's Mindset is a constraint-free hierarchy. Unlike traditional hierarchies with rigid chains of command, engineers usually operate in flat organizations. The multitude of management levels commonly present at companies does not restrict engineers as they have access to the highest-ranking person to present their thoughts and ideas.
The final ingredient of the Engineer's Mindset is collaboration. Engineers are used to communicating and collaborating with other teams across the entire organization, not just IT. "This type of mentality is well suited for bringing disparate parts of a company together to create new things," says Kantrowitz.
One does not have to be an engineer to embrace the Engineer's Mindset. It is a way of thinking, not a computer skill. Kantrowitz suggests that this mindset will become standard for all leaders who want to channel ideas and help organizations bring these ideas to life. The Engineer's Mindset will be essential to creating inventive cultures and making companies successful in the future.
Part II to follow…
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