Crowdsourced innovation, conquering commoditization, political CEOs and top teams’ COVID-19 responses at OWP liVe Day 3
IMD’s professors shared insights to help participants enhance leadership skills and cultivate winning performance amid global uncertainty on the third day of OWP liVe.
How quickfire, crowdsourced innovation can help companies stay competitive
Companies must “harness the collective intelligence of crowds” in swift cycles of tech-enabled, open innovation to sustain competitive edge and keep pace in a rapidly-changing world, Professor of Innovation and Strategy Louise Muhdi said.
Muhdi, the architect of IMD’s new Accelerate program, said the boom in digital platforms and the need for rapid evolution demanded a rethink of organizational problem solving.
“Competitive advantage is transient,” she said. “We have to keep trying to build competitive edges to be high performing and to stay relevant.”
Muhdi argued that crowdsourced, open innovation – done at speed – can transform the way companies find solutions for their challenges.
Muhdi highlighted four benefits of this approach:
Harness the diverse wisdom of the crowd
Diversity of thought offers more solutions while driving engagement. “It can be hundreds or thousands of internal and external stakeholders – you can engage customers or suppliers that might have a piece of the puzzle to solve your problems,” she said.
No one has all the answers. Open innovation allows organizations to “try before they buy” with new partners while deepening relationships with existing stakeholders.
Adapt at speed and foster a learning culture
Innovation cycles can take years. Faster, crowdsourced methods can transform the process as well as corporate culture, creating centres of learning and innovation.
The future is human-centric
Technology makes it easier to access the knowledge, experience and resources of the crowd, but it is also a means to the end. Crowdsourcing and open innovation is all about people – engagement, participation and the mobilization of resources to co-create via an increasingly connected world.
Business is political: Here’s what it means for you
CEOs must be ready to speak on divisive political, social and economic issues in a way that is consistent with their own values, while meeting the expectations of key stakeholders, according to Professor of Strategy and Political Economy David Bach.
Why is CEO activism on the rise?
“The expectations of employees and customers are changing, particularly among millennials who expect organizations to take societal stances,” said Professor Bach. “This is leading CEOs to weigh in on disputed issues to affirm company values and influence debate on critical current issues that matter to their stakeholders.”
Which issues should CEOs express an opinion on?
CEO political activism is a divisive issue. Many companies spend time discussing whether their CEO should speak out on hotly debated current issues.
Surveys in the US suggest employment-related issues – such as equal pay and sexual harassment – are safest, while social issues – such as abortion and gun control – are seen as more controversial.
Is CEO activism good for business?
Studies show there is a positive effect on intent to purchase, particularly among those who previously shared the same belief. On the flipside, CEO activism risks alienating consumers who disagree.
“Activism is more of a signalling tool. Companies need to be mindful of the risks such as backlash, boycotts and cynicism” said Bach. “The best protection from risk is to be authentic.”
How to conquer commoditization through distinctive design
In a world of cookie-cutter products, companies that leverage design to improve their offer succeed in product and brand distinctiveness that sidesteps commoditization.
“In the white goods industry it’s really hard to distinguish between products and this puts price pressure on manufacturers. That’s a tough situation to be in,” said Patrick Reinmoeller, Professor of Strategy and Innovation at IMD.
In his OWP session, Reinmoeller outlined how firms could improve the value of their products or services by prioritizing design. If functionality was not an issue, then the emotional and symbolic value of the products or services could be addressed.
Digital data could dramatically impact design distinctiveness, he said. Sensors embedded into products and services create digital feedback loops that allow a customer’s product journey to be monitored. Products can then be refined, segments better defined, and customer engagement enhanced, said Reinmoeller.
“Iteration is no longer one dialogue, but a prolonged interaction. We have moved away from delivery and we have moved towards something that people have come to call co-creation,” he explained.
Finally, Reinmoeller said, firms entering the digital market face a choice on whether to sell products or services, or their customers’ data. While a business, such as Netflix, could continue to use the data it holds on viewers’ watching habits and content choices to improve its offer, it could also decide to sell that data to other parties keen to gain insights that might impact their own revenue streams.
Participants in the session expressed concerns over the idea of their data being sold on, and also raised questions on design convergence with regard to the ubiquity of, for example, Apple and Samsung products. Reinmoeller responded by saying there was always room for disruptors to erode such brand dominance.
Lessons to be learned from top teams’ reactions to the Covid 19-crisis
Participants aligned with research by IMD’s Professor of Global Leadership
Covid-19 has forced top managers to become much more visible and show far greater empathy and humility as big companies struggle to tackle a still largely undefined new foe.
Recent breakthroughs in vaccines suggest the crisis may be approaching an end. But the prevailing mood among top management and staff remains one of anxiety, based on extensive research conducted by IMD’s Anand Narasimhan, Shell Professor of Global Leadership and Dean of Faculty and Research.
Anand’s findings were underlined by participants from around the world at an interactive session of OWP live. The biggest adjustment has the been the rise of what Anand described as “containment” for executives. While traditional considerations, such as operations or budgeting, remain crucial, understanding and dealing with employees’ fears and uncertainties – alongside health and safety – has rocketed up the agenda. “The emotional and psychological task of containment has become a top priority,” he said.
A psychological term used to encompass a range of concepts involving motivation and morale during periods of acute uncertainty, containment includes the need to reassure employees and provide guidance.
That is often accompanied by expressions of humility and empathy, as managers try to show a shared understanding of the difficulties facing many staff and admit that they do not have all the answers. “Leaders have been trying to connect with the suffering of their people” he said.
The need to communicate clearly and honestly – including recognition of ignorance in the face of an unpredictable virus – has become all the more important as many countries have faced a second wave of the pandemic in recent months, Anand observed.
Defining crises as having three phases – emergency, regression and recovery – he noted the current regression phase had been unexpectedly prolonged, putting further pressure on corporate leaders to empathise.