It’s my pleasure to share an edited transcript of an interview I gave with Eugene Hoeven May 2021 with whom shared some thoughts on innovation in a VUCA world in general, and a Corona world in particular.
You can access the podcast in full via Eugene’s website here.
VUCA and CORONA, what are implications for innovation?
Innovation is embracing the path of change to create value. Those are the words of Bettina von Stamm. She’s the founder of the Innovation Leadership Forum, and has written specifically about the crucial need for innovation as a tool of leadership. Today on the VUCA world podcast, Eugene Hoeven explores the art of innovation, as much as the utilitarian outlook with Bettina von Stamm. We’ll hear how the concept of innovation has evolved, and how to successfully implement new strategies into your organisation. Most importantly, Eugene and Bettina discuss the ongoing pandemic and why the values of innovation are needed now more than ever. Welcome to the VUCA world podcast with Eugene Hoeven. enjoy today’s episode with our guests, Dr Bettina von Stamm.
Welcome Bettina, this is a great opportunity for a discussion on VUCA. And what it what it means for innovation.
Thank you very much for this opportunity. It’s always a great pleasure to talk about innovation, especially in these times.
Perhaps to start off, what got you so fascinated in this topic of innovation around which you’ve made a career: from academia and lecturing, to coaching and consulting. What got you going in this direction?
It was definitely not a cost benefit analysis, or writing down the pros and cons to figure out what I should do; I really slipped into it. It started possibly with my first degree in architecture and town planning, which was a compromise gone wrong between fashion design and computer science. Realising that, I finished as quickly as I ever could, and kept my eyes open for something else. I worked in the field for three years before I found something, and that something was an MBA which at the time no one in Germany had ever heard of. I thought it sounded really exciting, because it was opening up, or rather, with all the different topics that the general MBA programme covers, was promising to open up, all kinds of different doorways. I managed to get into London Business School, and during my time there I was exposed to the concept of design management – as it was called at the time, today, it would probably be called design thinking. This got me really interested in corporate identity. The interest in in corporate identity was driven by my understanding that it was about a company’s culture and strategy, and then finding ways to communicate this, externally and internally. So the visual part of corporate identity was a secondary aspect. For me, it was more the strategic and cultural aspects that I was interested in.
When I finished my MBA back in 92, there was yet another economic crisis, and that one had hit the creative industries in particular. This meant the one and only company I would have wanted to work for was laying people off rather than hiring. Not wanting to do something that I did not really want to do again, I decided to set out on my own. And that is basically what I’ve done been ever since.
I guess you’re still waiting for the link to innovation… When I started to do my projects, I tried to focus on things around design, design, management, new product development, as it was called at the time. Being really intrigued by it and liking project based work, I went back to London Business School to do my PhD. And it really was the PhD that got me into innovation. It’s probably also around that time when the shift from talking about new product development to talking about innovation happened.
There were three realisations from my dissertation that still are the foundations of my thinking around innovation. And so it was really my PhD which started me off on my path. Then I got involved in running an innovation-centric networking initiative, I got involved in teaching, wrote a textbook (Managing Innovation Design & Creativity). And so I just got to deeper and deeper into the topic as time went by.
The late Peter Drucker’s quote on innovation is, ‘…the act that endows resources with a new capacity to create wealth’, and that innovation is a specific instrument of entrepreneurship. He also went on to say the purpose of any business is to serve customers and because of this, the business enterprise has two and only two basic functions: marketing and innovation; marketing and innovations produce results, whereas everything else is a cost. Quite profound. You have also developed your own definition of innovation. I think you define it as ‘embracing the path of change to create value’. That’s also quite intriguing. Can you explain a bit more how you came to that?
I came up with that definition, because at the time I was realising that, in my view, there was just too much of a hype around innovation. Everyone was saying, ‘we need to be more innovative’, and ‘we need to innovate!’ And actually, to such a degree that I felt that innovation had become the end in itself. No one seem to be asking the question, why do we actually innovate? What do we want to achieve with it? And indeed, when I would ask these questions, people would look at me rather puzzled; ‘why, everyone is innovating, we need to innovate!’ But why?What is the purpose of your innovation? What are you trying to achieve with and through it. That’s when I came up with this definition.
I’ve been thinking about every word: it is about embracing, because if you want to create a more innovative organisation, or innovative organisation, you need to do this very, very consciously; it doesn’t just happen. If you don’t take deliberate action, you probably achieve the opposite, you create an organisation that excels in operational excellence, thereby possibly killing off any and everything that’s remotely innovative. So it has to be done really consciously, deliberately.
It is a path, it’s not the tick in the box; not ‘we’ve got our certification, now we can sit back and rest on our laurels’. Innovation itself is constantly evolving: when we talked about innovation 20 years ago, it really was mostly about products and R&D. Then we started to talk innovation and meant products and processes; then services crept in; then business model innovation crept in; then social innovation crept in. The landscape of innovation has constantly evolved. So it is a path that continues and is ongoing, and you have to make sure you see where the path path is going.
I always like to say that all innovation is change but not all change is innovation. And so innovation has this inherent element of change; you can’t innovate without creating change, it would be a contradiction in itself.
And finally, the bit about creating value. This comes back to my perception that innovation had become an end in itself rather than a means to an end. For me, the value creation is increasingly important. Back in 2010, I was a little bit hesitant to talk about what I meant by this value; I wasn’t quite ready to stand up for what I really felt. What I really felt was that when we talk about value, it is increasingly irresponsible to only talk about the economic value. We can no longer afford when we talk about value creation to just consider economic value; we have to consider the social and environmental costs, it doesn’t mean that we should or can ignore the economic value, it’s just that we do need to learn to balance it with with the other two aspects of the triple bottom line. In my view, the purpose of innovation today is to help us move towards sustainability. Any innovation that does not take us onto that path is irresponsible.
I agree. And in my view, is it not also a quest for relevancy, that as an organisation you remain relevant in this society?
Yes, absolutely, it is about relevance. It is especially with the crisis we’re experiencing at the moment that customers demand that things are being done in an ethical way, that they’re being done in a way that is more respectful towards nature; the number of consumers who keep an eye on such things is definitely on the rise, at least given the reactions I get to questions around this I ask when teaching, speaking at conferences or running workshops. And there’s a whole movement around purpose, which has grown dramatically over the last few years; this is also connected to the discussion around the war for talent; unless you are an ethical organisation that takes sustainability consideration seriously, you will struggle to attract the brightest talent. And that, for me is a very direct link to what is and isn’t relevant.
How does leadership fit in? And what form should that take?
Leadership is a very, very interesting and very, very critical aspect in the context of innovation. Around the turn of the millennium, I have developed a framework that I use to discuss innovation in organisations which is based on insights where innovative companies do something differently from less innovative companies (see below). Leadership is one of the five areas inside the organisation that is absolutely critical. Another of my premises around innovation is that really to create an innovative organisation, it’s not about doing one thing, you have to align quite a few things inside the organisation in order to shift the needle towards a better innovation performance. And then people always say, ‘Oh, no, do we really have to do all of it?’ And the answer is, of course, yes, you do. Though if there is one element that really makes or breaks it though, it is leadership.
Of course, leadership has got a number of different elements and aspects to it. At one level is it is the leadership of the organisation, it is the leaders in terms of the of the decision makers, and then there are leaders in all sorts of other other ways and levels, all around the organisation; leaders who get other people to do things without having the position of power behind them; leadership is a concept that goes right across the organisation. What I realised at some point is that when we talk about leadership for innovation, that leadership generally refers to senior managers who need to take a leadership role. I was wondering why that is not always particularly easy. And I realised that who is in a leadership position, at least up to a certain level, is very much driven by those people being able to deliver what the organisation requires. And if you think about what most organisations require, and most of the time, you will find that it is improvements of efficiencies and a reduction of costs.
My argument is that this the ability to do that comes with a certain mindset. And so people with a certain mindset, reach decision making positions in organisations; in my view, this mindset is one that excels at reducing costs and improving efficiency. This is almost the opposite to the mindset that you need in order to innovate. When I realised that I started to talk about ‘leading for’ and ‘leading of’ innovation. The difference being that those who are ‘leading for’ innovation are people in decision making positions, who have a mindset that gets really scared when it comes to ambiguity and uncertainty; the important thing is to know that we cannot change this; what is important is for these people to know and acknowledge their particular mindset. So when someone comes to them with a crazy idea – which is often the starting point for innovation – they don’t find excuses not to engage with it. They know that innovation is important for the organisation but, at a personal level, feel highly uncomfortable with it. So what are they supposed to do? They say, ‘Oh, well, let’s talk about it another time’, or ‘We need some more data’, or whatever other excuses it might be. My wish is that these people are aware of their personal preferences and the contribution they make in the context of the organisation. And then when someone comes with a crazy idea, they say, “ Well, Freddie, you know, me. I don’t like anything to do with ambiguity. But Hugo does. So let’s go and see Hugo and the three of us, together, let’s talk about your crazy idea so that I will not kill it because I’m too nervous about about taking any risks, and Hugo is not too gung-ho to just to go ahead because he is excited about everything that’s new. So let’s look at it together and to take a balanced view at what’s best, for the organisation.” For me, understanding what innovation requires, the kind of skill sets, the kind of context, that is the role of leaders ‘for innovations’.
Leadership is absolutely critical in the context of innovation, and when it comes to the context of VUCA, there’s another aspect to leadership. For me, the key element or key aspect of a VUCA context is complexity. I always described the last century as a century that was complicated, but it was not complex.The difference between the two is that a in complicated system you can understand the relationships, you can manipulate the relationships, and by being able to manipulate the relationships, you are able to predict the results with relative certainty. In the complex system, on the other hand, there are connections that you do not know, that you are not aware of, that you don’t understand, and that you cannot manipulate So in the complicated world a hierarchical structure works quite well, in the complex environment, it does not at all. This means for leaders that they need to develop an ability to give up responsibility; they need to, (a) develop an ability to give up, and be comfortable with, giving up responsibility and delegating, and (b) ensure that those they are delegating to actually have both the skill and the mindset that they are able to take on that responsibility. If I’m waiting for the chain of command to make a decision, in the complex world, the opportunity will have gone.
You point out that innovation and collaboration are necessities for organisations in order to not only survive, but to thrive. I agree, in a regular context, but even more so in a VUCA context. Can you explain a bit more about how you see collaboration, and what separates good from bad collaboration?
You are absolutely right, I see collaboration as a key element in order to survive and thrive in the 21st century. In a complex environment we are no longer able to do things in a linear fashion, to do things consecutively. It just takes too long. By the time we have passed the buck from one to the next to the next, the context will very likely have moved on so significantly, that whatever we have done will already be out of date. The only way to prevent that from happening is to do things simultaneously. And of course, doing things simultaneously generally requires to bring a number of different skillsets together to work on something at the same time rather than passing it on from one to another.
For me, it is not surprising that the both the concept of agile and the concept of design thinking have taken off like wildfire in this century, because they are both tools that facilitate better collaboration in a complex context. Design thinking is pretty much about bringing diverse groups of people together; it is helping people to focus on relevance when developing new ideas as it is very much focused on the consumer and the customer.
In terms of good and bad collaboration, I sometimes like to say if you’ve got bad collaboration, then one plus one equals minus one. Whereas the true potential of collaboration means that when you’re bringing different bodies of knowledge together, one plus one equals 10.
In terms of what’s important for innovation, do you consider collaboration externally to be more important, at least in terms of ideation, as compared to internal collaboration?
I think that an organisation’s ability to have permeable boundaries is hugely beneficial because I also think that the challenges that we are facing at the broadest level, as humanity, the kind of solution that are required to address these challenges will never come from within one organisation. If we are coming back to the to the topic of relevance, if we want to create innovation that is really relevant, relevant to our customer base, I think we need to increasingly look beyond the boundaries of our own organisation.
The best thing you can do is (a) to help people become more open minded and open hearted so that they are willing to to listen To take on board, to take seriously, to engage with, things that are outside their experience, their comfort zone, their current understanding of what is and what isn’t possible. To nurture a willingness to engage with whatever comes their way. I believe that we are generally more encouraged to follow than to learn to lead. This comes back to what I said about leadership earlier; more of us need to be able to step up into a leadership role. And again, we need to have both the skill and the will to actually do that.
And then being given the space to do it as well. I think a lot of organisations have become very, very rigid in and what is accepted and what is not.,
I absolutely agree.
In your contribution to the bool Visionary leadership in turbulent world you conclude by pointing out a need for a mindset change, and that this can be enabled by taking a different approach to education; by taking, as you just said, more individual responsibility, and also develop a different kind of leadership. I think that’s cutting across all of what we have just been talking about. That is really quite fundamental, almost starting from square one, if you will.
I do believe that the human being is resilient but there is always an element of fear element, of going into areas that one hasn’t traditionally worked in, and so forth. What is your key takeaway, if you will, for leaders and for any employee in terms of how to thrive in such a VUCA context, in going forward?
From a leadership perspective, for me, it’s the role of a leader to create the environment where people can learn, understand and experience that change isn’t quite so bad and dangerous and frightening as they might have thought. One way to do that is to identify occasions when change has been embraced without fear, or one where change was actually welcomed, and then try to understand what made that change welcome.For example, if someone says, ‘I’m increasing your salary’, that is a change that no one feels particularly threatened by. So what is it about some change that, that makes us so scared? Very often, especially in the organisational context, if a big change is being announced, one of the fears of many people in that organisation will be, “what is my relevance? What does this change mean, for me, and doesn’t mean, I still have a role to play? Am I still wanted and needed in this organisation?” And so when change is being introduced it is important to be much more transparent and inclusive and involving. An ideal scenario would be to involve people to such a degree that they themselves will decide whether they are still needed or not.
Determining what their contribution could be, yes.
Yes. And I think that this might also require to see the person more holistically rather than just look at the job description or the qualifications that are written down on their CV. The contribution they could make might lie in a skillset that they have developed outside work, and that no one at work actually knows about. But it might be highly relevant to ‘the new’ that is being created.
I always like to say that people don’t resist change, they resist being changed.
Certainly, yes. One needs to step back and have have more patience, that’s for sure, observing what emerges, what comes, over time; reflecting on the current – any – crisis, really – what consequences does that have for innovation? As the old saying goes, in every crisis there lies an opportunity. For this particular crisis that we are in, the COVID pandemic, what are some of the implications, and what perhaps are some of the takeaways for leaders in your your view?
First of all, I am a person who definitely see the Coronavirus crisis as a huge opportunity. An opportunity to just think, at a very large scale, of what actually matters and what we want to focus our energy on. A lot of people experience that things that we have taken for granted – the ability to be with friends, the ability to travel, just to be with other people. At least in large parts of the world we are confined to the four walls of our house or flat; and we’re quite lucky if we are in a house rather than a flat. For me it is really an opportunity to reflect and think. I almost feel like Planet Earth is throwing the virus at us because we’ve become faster and faster, and have have taken less and less time to think and reflect and actually ask what we are doing with and in our lives. The interesting thing in complexity is, that because things happening so fast, everyone is running faster and faster and faster. If you just think, fir example, about the speed of communication, and the expectations we have around receiving a reply immediately; who has not experienced the following conversation: ”I’ve sent you an email this morning, and you haven’t replied What’s wrong with you?” Everything is just just got so much faster. The thing is though, in complex systems, if you want to survive, you need to slow down! The virus has really forced people to slow down, and it saddens me that a lot of people seem to use the time becoming in excessive Netflix and whatever consumers. Rather than using the time to think and reflect, they are stopping themselves from doing that by watching one video after another. Maybe I am a little cynical. But I really see it as a great opportunity to think about what really matters, what is really important. Part of me wishes that the situation goes on long enough for people to truly let is all sink in and realise that everything has really changed. For me trying to achieve change is like pushing jelly: if you take the pressure off too soon, the jelly will just wobble back into its original state. You have to put on the pressure for quite a time before the jelly itself actually starts to move.
You can access the podcast via Eugene’s website: