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dispatches from the MIX's moonshot guides
stefan-lindegaard's picture

Open Management: The Idea of Our Time

Open Management: The idea of our time depends on the most eternal values. "Open" just might be one of the most crucial ideas for the future of business. This is very evident with the focus (not to mention, hype) on open innovation in which companies in a systematic way combine internal and external resources in order to get more diversity and speed in their innovation process.

As companies really begin to embrace this new paradigm shift, we will see that the idea of open will spread to all business functions and thus "infect" the entire organization.

The paradigm shift is led by fast moving consumer good companies such as Procter & Gamble, General Mills and Unilever, but everyone seems to be going open today and this will change the basis of doing business and making innovation happen from transactions to relationships.

Such relationships require trust, but unfortunately trust is a word a lot of people throw around but few people deserve or cultivate (much less organizations). This has to change.

I hope we can have a great MIX discussion on this topic and I can start by stating that trust is first and foremost established between people and then perhaps between organizations.

Trust is a personal thing, and people who understand this are in a much better position with regard to making things happen and creating an interesting and challenging career.

The key to acquiring trust is to deliver on your promises. If you say you will do something, do it. And if you say you will create specific results, get it done. This is also where it becomes interesting. Although we have the best intentions, things can go wrong. How you handle this can have great impact on the kind of relationship you build with others. If you are open and upfront about why things did not work out and if the reasons are fair, you can earn respect and respect is a cornerstone for trust.

When we begin to engage people outside our organizational boundaries more often, we will experience that trust and respect will play a bigger role. Of course, this is also an issue within our organization, but to a lesser extent since colleagues almost per definition are more trusted and respected than those of people outside our organization.

I argue that in this new era of open management, we need to earn the trust and respect of others to a much higher degree than what we see today in order to be able to energize and enlarge the pool of resources we can work with. Some will learn the hard way that their management style is outdated and they will see how others get plenty of new opportunities. The big question is how you will respond.

"Open" is in many ways a good thing, but we need to remember that there is no way you'll get "open" without going back to basic, eternal values such as trust and respect.

This is my first post on how we can retool management for an open world. This is a great challenge that is perfectly suited for the MIX community as no one can solve it by themselves. We need to act collectively on this and I hope you will join us.

I look forward to be your Moonshot guide and I really look forward to interacting with you.

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jeff-mackanic's picture
Stefan, after reading your post I read this interesting article about Dries Buytaert, the founder of Drupal: Six Secrets of Open Source Community Building.
Secret number 5: Make money but pay with trust.
"Trust is the currency of open source -- it is the currency of Drupal."
Wow, trust is critical.
It is fun to see the Open Innovation community and the Open Source sommunity discussing some of the same principles.
stefan-lindegaard's picture

@Paul, I like the notion on the fourth quadrant. This is very much what open source is about and the more I interact with this community, I see reasons that open innovation and open source should learn more about and from each other. If you come from the open innovation community and want to learn more about open source, one good place to start is www.opensource.com.

@Deb, I fully agree with the ideas you and Jackie are working on. It is my experience that trust starts with people and then has to develop between organizations. The latter can be quite difficult. I think trust will be an interesting topic at some of the upcoming innovation conferences.

@Mohamed, I think a key element for consistent output is to have the right structure and processes in place. This not only goes for producing output, but also for learning. I often see that companies forget to establish processes for learning. Besides getting the right structure and process in place, management also needs to set the scope and keep focus.

@Ellen, the key issue is whether the executive team is really committed to making these changes. I know this is a cliche, but I just had another encounter where this issue became very clear. Nothing happens without a true commitment from the top. One of the biggest problems here is that it is not enough with just one leader; the entire executive team needs to get this.

If this is in place communication will become another key issue. Once the vision and strategy is in place, you need to communicate extensively internally as well as externally. There is often a big gap on how executives view things and how the employees see this and better communication can help solve this. This is to some extent also an education issue in which the organization need to develop not only a different mindset, but also new skills.

I could continue with another key issues. I often see that innovation leaders get a bit worried once they really understand the scope of the challenge that they have at hand, but the benefits are worth the effort. One more thing to communicate...

Stefan

raj-kumar's picture
Hello Stefan,

You have said :

"When we begin to engage people outside our organizational boundaries more often, we will experience that trust and respect will play a bigger role. Of course, this is also an issue within our organization, but to a lesser extent since colleagues almost per definition are more trusted and respected than those of people outside our organization."


Perhaps the critical issue is trust and teamwork within the organization. If it exists within it can be generated without. If it is lost within then it will degenerate without.

The concept of  'trust within' only describes a desired end effect. Unfortunately, the word 'Open', by itself, only confuses an understanding of the trust process. I suggest we progres the word 'Feedback' instead. It is the process of Feedback that leads a team or an organization to get what it wants. Feedback requires a Collective committed to the goals of the organization. Unless there is trust and meaningful collaboration amidst the members of a Collective the Feedback will be poor. Feedback is Free-flow of Knowledge in context. Only an 'Open' organization can engage in  Free-flow of Knowledge.

My hack 'Achieving the ends of Knowledge with Feedback' explains the importance of Feedback and represents that the immense energy to organize and drive the discipline it needs on each event is perhaps beyond the capacity of busy administrators. Besides, cultural factors like reluctance to share Knowledge align to prevent the culture needed for trust from taking root. The connectivity of technology in its present form fails as a service because it is only a tool that totally depends on personnel to organize and drive the discipline needed for Feedback. My hack ‘Compelling Energy for a quantum jump in organization performance with the same resources  introduces my proven solution that converts IT from a tool to intelligent energy for creating a constructive Collective to assure Feedback on each decision event.

Your post here has motivated me to progress a hack on the specific nature of Knowledge that makes Feedback essential for productive use of Knowledge. Simply sharing of Knowledge at the discretion of personnel risks leading to the ignorant diagnosis.

Regards,

Raj Kumar

paul-hobcraft's picture
I have just been reading an article by Stephen Johnson claiming "innovation isn't a matter of right or left"  but in his view where it is more to do with understanding different quadrants for breakthroughs.

In this and his research for his book he has identified the “fourth quadrant”: the space of collaborative, nonproprietary innovation, exemplified in recent years by the Internet and the Web,  both groundbreaking innovations, that were not owned by anyone.

He is suggesting the fourth quadrant turns out to have generated more world-changing ideas than the competitive sphere of the marketplace. This forth space creates new platforms.

He asks the question "Why has the fourth quadrant been so innovative, despite the lack of traditional economic rewards? The answer, he believes, has to do with the increased connectivity that comes from these open environments. Ideas are free to flow from mind to mind, and to be refined and modified without complex business development deals or patent lawyers. The incentives for innovation are lower, but so are the barriers

He goes on

"BUT the problem is that we don’t have a word that does justice to those of us who believe in the generative power of the fourth quadrant. My hope is that the blurriness is only temporary, the strange disorientation one finds when new social and economic values are being formed.

The choice shouldn’t be between decentralized markets and command-and-control states. Over these last centuries, much of the history of innovation has lived in a less formal space between those two regimes: in the grad seminar and the coffeehouse and the hobbyist’s home lab and the digital bulletin board. The wonders of modern life did not emerge exclusively from the proprietary clash between private firms. They also emerged from open networks"

Steven Johnson is an author and entrepreneur. His new book, “Where Good Ideas Come From: The Natural History of Innovation,” and has been published this month.

 

deborah-mills-scofield's picture
Stefan! I'm so glad you're moderating this moonshot!

Trust is the critical element.  At the 2nd Annual Open Innovation Summit in August, Jackie Hutter (thank you for that intro into what is now a great friendship - because I 'trusted' your recommendation to get in touch with her) and I did a workshop on the cultural issues/barriers around open innovation.  We talked a lot about Trust as the fundamental building block - both within the organization (between marketing-R&D-product mgmt-operations-production-sales, etc.) in order to start sharing ideas and between the open innovation partners.  We created the term "Redundant Trusting Relationships"  - you can have 1 very trusting relationship between 2 key people from each organization, but to assure success (and sustainability), you needed 'redundant' ones at various levels up, down and across the organizations so the entire relationship isn't dependent upon the relationship between just 2 people (e.g., the what if one is hit by a bus theory).  In my discussion with John Bartolone, Director of Open Innovation for Unilever 's Skin & Hair Care division and in Gail Martino's (Unilever) talk at the Summit and our subsequent discussions, they both said that trust was critical to open innovation's success at Unilever

At the fabulous BIF-6 conference, the overall theme coming from virtually all the stories about innovation was Trust! and what hit me was the continuum of Optimision-Hope-Trust-Innovation in the stories that were shared across industries, sizes, continents, etc.

I've been using the classic virtues (prudence, courage, temperance, justice, faith, hope, love) with clients as tools to help nurture/grow/develop a culture of innovation and it's amazing how well it works -- because what it really fosters is trust - and until you have trust, people are not willing to open up and become vulnerable which is so important to sharing ideas that others may think are stupid.

The command-and-control management style from the 19th, 20th and still in the 21st centuries has created a level of superficial trust based on constructs, structures, and 'history' - to have the deep level of trust required to sustainably innovate tho will require many of the new management constructs we are discussing at MIX - this means trying to trust, to maintain and reinforce trust which means consistent behavior - these are not trivial, but vital.

Comments? And again - Stefan i'm so glad you're doing this!!!! thank you!

deb

mohamed-mahfooz's picture
Stefan
Quite an interesting thought, from my personal experience, and pushed by the challenges in the economy, I was forced to be more adaptable in my organization to open management and innovation, I always feared that my company will lose its competitive edge if I embrace others from outside the organization and bring them closer, but as I was struggling to keep a team on this tough economics, I built a stronger team with professional people, and organizations, from outside my company.

The trust factor was and still is a challenge, but that is just part of the willingness to have a wider and more open team structure. To solve the trust challenge by having thick agreements and more frequent meetings is another challenge.

How to handle a consistent output through open management? What are the key aspects in the management that need the focus and attention.

Mohamed Mahfooz

ellen-weber's picture

Stefan, welcome to this new area, and what a delight to see you here! Thanks for the wonderful way you have already facilitated so many terrific discussions in the area of open management.  Great post, and I look forward to reading more of your work here, and of learning more from your experiences in this key area.

I do have one question, Stefan: You stated: "As companies really begin to embrace this new paradigm shift, we will see that the idea of open will spread to all business functions and thus "infect" the entire organization."

What advice would you give to leaders who are trying to renew their workplaces in this way, and who work hard to get buy-in - but who still face many in their org. who seek rewards from past paradigms and resist renewal?"

Again thanks - and great to have you here, Stefan!