2 Senior Corporate Roles that hurt a firm

Right now I am reading this book on innovation by Scott Berkun. ‘The Myths of Innovation’. A great little primer on debunking the many myths surrounding innovation. He uses the myths to help illustrate just how innovation happens. He also delves into some of the reasons for just why these myths are popular and then proceeds to provide some insights on how to approach innovation without falling prey to these myths. As Apple Inc and the rest of the mobile and PC industry demonstrate on the opposite spectrums, you can either live by innovation or die a thousand deaths by commoditization. I have long been a part of the Business Process Outsourcing Industry that is primarily based in India and I am also a standard product of the schooling system there. My industry needs innovation like a car accident victim needs blood. Which is very badly indeed. But the BPO industry is not alone in its desperate thirst for innovation. Many other industries across the board need fresh thinking and innovation to prevent themselves getting caught in a vicious race with China to the bottom, where the ugly margins start from the right of the decimal point.   While the reasons for this thin rain of fresh thinking are many, two people in most firms are currently and unknowingly aiding this aborting of innovation by just doing their jobs the way they are expected and trained to. These two incumbents hold enormous power over the firm, both overtly and in the mindset they instill among the people in their function. They meaningfully impact the results the CEO reports every quarter.


These two culprits are (gasp!) :

  1. The Chief Technology Officer (CTO)
  2. The HR Director

How the Chief Technology Officer sabotages: The CTO is expected to, in the general bout of needless paranoia and overkill that we are prone to, lock the firm down informationally. It’s probably there in his Job description. This hermetically sealed pot is now expected to be a fountain of innovation. Because the mindset is that there should be no need for outside exchanges. ‘Innovation must and can grow from within!’ If that sounds like a plug from a cheap North Korea pamphlet, you’d be mistaken. This is the naïve juvenile socialistic philosophy that underpins most management mindsets. So everything is locked down. We proudly boast to clients just what a tightly walled garden it all is. But then someone needs to realize we have thrown the baby out with the bathwater. Innovations do not breed in a walled garden. With all the firewalls and communication and access restrictions we are only sealing ourselves IN. Bathing in the same bathtub of ideas and people within your IT designed walls day in day out. Everything is jealously guarded and the ‘Not Invented Syndrome’ seeps from every pore. This is not the soil for innovation to blossom. This is 2013 AD. ‘Cooptition‘ is a actual word in the business world. There are a bazillion websites, apps and widgets, mostly free and publicly available, that can help any firm today be more efficient and fast and innovative in the way it functions and helps itself and its clients. But the KGB mindset that is instilled in the CTO downwards only helps ensure the tools are all locked out of the reach of all but the most senior politburo members. And there you’ll glimpse another fatal error in thinking. The thinking is that innovation flows from the top down on the great unwashed in the trenches because, ha!, who can believe the lowly front line staff are worthy of the unwalled freedom and so capable of innovation. The best firms on innovation have the exact opposite mindset. Read up on how 3M stumbled into post it notes or how amazon works to make its website so brilliantly convenient. I can assure it it’s not Bezos who is driving the innovations there.


How the HR Director sabotages: This party apparatchik is expected to play it safe for the firm in all her dealings. HR has, across the world, never been the function where the sharpest arrows in the firm aim to land. Those who can’t do, teach. Within a company, those who can’t do, HR. But that in and of itself does not overtly harm innovation (only covertly). The real cyanide it administers to innovation is in its hiring practice, by playing it by the book. And by the book is the opposite of innovation. The recruiters within the department are trained to weed out all and any résumé that remotely suggests a deviation from standard template. But then someone needs to realize : here again we have thrown the baby out with the bathwater. That résumé of that guy with the year gap that you just threw out. He wasn’t sitting all day in the couch watching The Wire. He decided to take a break year and travel the world or start his own firm. Something that has now made him very very good on the EQ front, just perfect for leading a diverse team tasked with coming up with an innovative idea. That guy who walked in with a tattoo and ponytail. He is a born contrarian and whip smart to boot, who will question each process and design something better from the ground up if allowed. Red Flags are not Red Lights 100% of the time. You need to proceed with caution. Not walk away. But then HR is trained to hire sheeple. And sheeple don’t challenge the status quo, challenge established authority and so tread new ways to doing something. HR is loath to take a risk on the hiring front and risk takers are what we need both in the function and in the hired pool. It is incredibly difficult to be an innovative firm when all the staff there are hired from a ‘safe’ template. Think how Will Smith was hired by Tommy Lee Jones in ‘Men in Black’. TLJ nailed it in his approach to hiring and got the best agent for the agency. That’s the mindset that needs to percolate down the line.

The bottom line is these two people have a tremendous opportunity to deviate from the herd and take the firm on a trajectory that can, just possibly, take the firm to the peak of innovation instead of the pit of being ‘just another firm that does it a bit cheaper’

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