The Business
Case for
Curiosity
M
ost of the breakthrough
discoveries and remarkable
inventions throughout history,
from flints for starting a fire to
self-driving cars, have something
in common: They are the result of curiosity.
The impulse to seek new information and
experiences and explore novel possibilities
is a basic human attribute. New research
points to three important insights about
curiosity as it relates to business. First,
curiosity is much more important to
an enterprise’s performance than was
previously thought. That’s because cultivating it at all levels helps leaders and
their employees adapt to uncertain market
conditions and external pressures: When
our curiosity is triggered, we think more
deeply and rationally about decisions and
come up with more-creative solutions. In
addition, curiosity allows leaders to gain
more respect from their followers and
inspires employees to develop moretrusting and more-collaborative relationships with colleagues.
Second, by making small changes to the
design of their organizations and the ways
they manage their employees, leaders can
encourage curiosity—and improve their
companies. This is true in every industry
and for creative and routine work alike.
Third, although leaders might say they
treasure inquisitive minds, in fact most
stifle curiosity, fearing it will increase risk
and inefficiency. In a survey I conducted
of more than 3,000 employees from a wide
48 HARVARD BUSINESS REVIEW SEPTEMBER–OCTOBER 2018
FRANCESCA
GINO
Professor, Harvard
Business School
range of firms and industries, only about
24% reported feeling curious in their jobs on
a regular basis, and about 70% said they face
barriers to asking more questions at work.
In this article I’ll elaborate on the
benefits of and common barriers to
curiosity in the workplace and then offer
five strategies that can help leaders get
high returns on investments in employees’
curiosity and in their own.
THE BENEFITS OF CURIOSITY
New research reveals a wide range of
benefits for organizations, leaders, and
employees.
Fewer decision-making errors.
In my research I found that when our
SEPTEMBER–OCTOBER 2018 HARVARD BUSINESS REVIEW 49
SPOTLIGHT THE BUSINESS CASE FOR CURIOSITY
curiosity is triggered, we are less likely
to fall prey to confirmation bias (looking
for information that supports our beliefs
rather than for evidence suggesting we are
wrong) and to stereotyping people (making
broad judgments, such as that women
or minorities don’t make good leaders).
Curiosity has these positive effects because
it leads us to generate alternatives.
More innovation and positive changes
in both creative and noncreative jobs.
Consider this example: In a field study
INSEAD’s Spencer Harrison and colleagues
asked artisans selling their goods through
an e‑commerce website several questions
aimed at assessing the curiosity they
experience at work. After that, the
participants’ creativity was measured
by the number of items they created and
listed over a two-week period. A one‑unit
increase in curiosity (for instance, a score
of 6 rather than 5 on a 7-point scale) was
associated with 34% greater creativity.
In a separate study, Harrison and
his colleagues focused on call centers,
where jobs tend to be highly structured
and turnover is generally high. They
asked incoming hires at 10 organizations
to complete a survey that, among other
things, measured their curiosity before
they began their new jobs. Four weeks
in, the employees were surveyed about
various aspects of their work. The results
showed that the most curious employees
sought the most information from
coworkers, and the information helped
them in their jobs—for instance, it boosted
their creativity in addressing customers’
concerns.
My own research confirms that
encouraging people to be curious generates
workplace improvements. For one study I
recruited about 200 employees working in
various companies and industries. Twice a
week for four weeks, half of them received
a text message at the start of their workday
that read, “What is one topic or activity you
are curious about today? What is one thing
you usually take for granted that you want
to ask about? Please make sure you ask a
few ‘Why questions’ as you engage in your
work throughout the day. Please set aside
a few minutes to identify how you’ll
approach your work today with these
questions in mind.”
The other half (the control group)
received a message designed to trigger
reflection but not raise their curiosity:
“What is one topic or activity you’ll
engage in today? What is one thing you
usually work on or do that you’ll also
complete today? Please make sure you
think about this as you engage in your
work throughout the day. Please set aside
a few minutes to identify how you’ll
approach your work today with these
questions in mind.”
After four weeks, the participants in the
first group scored higher than the others
on questions assessing their innovative
behaviors at work, such as whether they
had made constructive suggestions for
implementing solutions to pressing
organizational problems.
When we are curious, we view tough
situations more creatively. Studies have
found that curiosity is associated with
less defensive reactions to stress and less
aggressive reactions to provocation. We
also perform better when we’re curious.
In a study of 120 employees I found that
natural curiosity was associated with better
job performance, as evaluated by their
direct bosses.
Reduced group conflict. My research
found that curiosity encourages members of
a group to put themselves in one another’s
shoes and take an interest in one another’s
ideas rather than focus only on their own
perspective. That causes them to work
together more effectively and smoothly:
Conflicts are less heated, and groups
achieve better results.
More-open communication and
better team performance. Working
with executives in a leadership program at
Harvard Kennedy School, my colleagues
and I divided participants into groups of five
or six, had some groups participate in a task
that heightened their curiosity, and then
asked all the groups to engage in a simula‑
tion that tracked performance. The groups
whose curiosity had been heightened
performed better than the control groups
because they shared information more
openly and listened more carefully.
► Idea In Brief
► THE PROBLEM
Leaders say they value employees
who question or explore things,
but research shows that they
largely suppress curiosity, out of
fear that it will increase risk and
undermine efficiency.
► WHY THIS MATTERS
Curiosity improves engagement
and collaboration. Curious people
make better choices, improve
their company’s performance,
and help their company adapt
to uncertain market conditions
and external pressures.
50 HARVARD BUSINESS REVIEW SEPTEMBER–OCTOBER 2018
► THE REMEDY
Leaders should encourage
curiosity in themselves and others
by making small changes to the
design of their organization and
the ways they manage their
employees. Five strategies can
guide them.
TWO BARRIERS TO CURIOSITY
Despite the well-established benefits of
curiosity, organizations often discourage
it. This is not because leaders don’t see
its value. On the contrary, both leaders
and employees understand that curios‑
ity creates positive outcomes for their
companies. In the survey of more than
3,000 employees mentioned earlier, 92%
SPOTLIGHT THE BUSINESS CASE FOR CURIOSITY
When we are curious, we view tough situations more
creatively and have less defensive reactions to stress.
credited curious people with bringing
new ideas into teams and organizations
and viewed curiosity as a catalyst for job
satisfaction, motivation, innovation, and
high performance.
Yet executives’ actions often tell a
different story. True, some organizations,
including 3M and Facebook, give employees
free time to pursue their interests, but they
are rare. And even in such organizations,
employees often have challenging shortterm performance goals (such as meeting
a quarterly sales target or launching a new
product by a certain date) that consume the
“free time” they could have spent exploring
alternative approaches to their work or
coming up with innovative ideas.
Two tendencies restrain leaders from
encouraging curiosity:
They have the wrong mindset about
exploration. Leaders often think that
letting employees follow their curiosity will
lead to a costly mess. In a recent survey I
conducted of 520 chief learning officers and
chief talent development officers, I found
that they often shy away from encouraging
curiosity because they believe the company
would be harder to manage if people were
allowed to explore their own interests.
They also believe that disagreements
would arise and making and executing
decisions would slow down, raising the
cost of doing business. Research finds
that although people list creativity as a
goal, they frequently reject creative ideas
when actually presented with them.
That’s understandable: Exploration
often involves questioning the status
quo and doesn’t always produce useful
information. But it also means not settling
for the first possible solution—and so it
often yields better remedies.
They seek efficiency to the detriment
of exploration. In the early 1900s Henry
Ford focused all his efforts on one goal:
reducing production costs to create a car
for the masses. By 1908 he had realized
that vision with the introduction of the
Model T. Demand grew so high that by
1921 the company was producing 56% of
all passenger cars in the United States—a
remarkable success made possible
primarily by the firm’s efficiency-centered
model of work. But in the late 1920s, as
the U.S. economy rose to new heights,
consumers started wanting greater variety
in their cars. While Ford remained fixated
on improving the Model T, competitors
such as General Motors started producing
an array of models and soon captured the
main share of the market. Owing to its
single-minded focus on efficiency, Ford
stopped experimenting and innovating
and fell behind.
These leadership tendencies help
explain why our curiosity usually declines
the longer we’re in a job. In one survey, I
asked about 250 people who had recently
started working for various companies a
series of questions designed to measure
curiosity; six months later I administered
a follow-up survey. Although initial levels
of curiosity varied, after six months
everyone’s curiosity had dropped, with the
average decline exceeding 20%. Because
people were under pressure to complete
their work quickly, they had little time to
ask questions about broad processes or
overall goals.
FIVE WAYS TO BOLSTER CURIOSITY
It takes thought and discipline to stop
stifling curiosity and start fostering it.
Here are five strategies leaders can employ.
1
Hire for curiosity.
52 HARVARD BUSINESS REVIEW SEPTEMBER–OCTOBER 2018
In 2004 an anonymous billboard appeared
on Highway 101, in the heart of Silicon
Valley, posing this puzzle: “{first 10-digit
prime found in consecutive digits of
e}.com.” The answer, 7427466391.com,
led the curious online, where they found
another equation to solve. The handful of
people who did so were invited to submit a
résumé to Google. The company took this
unusual approach to finding job candidates
because it places a premium on curiosity.
(People didn’t even need to be engineers!)
As Eric Schmidt, Google’s CEO from 2001
to 2011, has said, “We run this company on
questions, not answers.”
Google also identifies naturally curious
people through interview questions such
as these: “Have you ever found yourself
unable to stop learning something you’ve
never encountered before? Why? What
kept you persistent?” The answers usually
highlight either a specific purpose driving
the candidate’s inquiry (“It was my job to
find the answer”) or genuine curiosity
(“I just had to figure out the answer”).
IDEO, the design and consulting
company, seeks to hire “T-shaped”
employees: people with deep skills that
allow them to contribute to the creative
process (the vertical stroke of the T) and
a predisposition for collaboration across
disciplines, a quality requiring empathy
and curiosity (the horizontal stroke of the
T). The firm understands that empathy
and curiosity are related: Empathy allows
employees to listen thoughtfully and
see problems or decisions from another
person’s perspective, while curiosity
extends to interest in other people’s
disciplines, so much so that one may start
to practice them. And it recognizes that
most people perform at their best not
because they’re specialists but because
their deep skill is accompanied by an
intellectual curiosity that leads them to ask
questions, explore, and collaborate.
To identify potential employees who
are T-shaped, IDEO pays attention to
how candidates talk about past projects.
Someone who focuses only on his or her
own contributions may lack the breadth
to appreciate collaboration. T-shaped
candidates are more likely to talk about
how they succeeded with the help of
others and to express interest in working
collaboratively on future projects.
To assess curiosity, employers can also
ask candidates about their interests outside
of work. Reading books unrelated to one’s
own field and exploring questions just
for the sake of knowing the answers are
indications of curiosity. And companies
can administer curiosity assessments,
which have been validated in a myriad of
studies. These generally measure whether
people explore things they don’t know,
analyze data to uncover new ideas, read
widely beyond their field, have diverse
interests outside work, and are excited by
learning opportunities.
It’s also important to remember that
the questions candidates ask—not just
the answers they provide—can signal
curiosity. For instance, people who want
to know about aspects of the organization
that aren’t directly related to the job at
hand probably have more natural curiosity
than people who ask only about the role
they would perform.
2
Model inquisitiveness.
Leaders can encourage curiosity throughout their organizations by being inquisitive themselves. In 2000, when Greg Dyke
had been named director general of the
BBC but hadn’t yet assumed the position,
he spent five months visiting the BBC’s
major locations, assembling the staff at
each stop. Employees expected a long
presentation but instead got a simple
question: “What is the one thing I
should do to make things better for
you?” Dyke would listen carefully and
then ask, “What is the one thing I should
do to make things better for our viewers
and listeners?”
The BBC’s employees respected
their new boss for taking the time to ask
questions and listen. Dyke used their
responses to inform his thinking about
the changes needed to solve problems
facing the BBC and to identify what to
work on first. After officially taking the
reins, he gave a speech to the staff that
reflected what he had learned and showed
employees that he had been truly interested
in what they said.
By asking questions and genuinely
listening to the responses, Dyke modeled
the importance of those behaviors. He
also highlighted the fact that when we
are exploring new terrain, listening is as
important as talking: It helps us fill gaps
in our knowledge and identify other
questions to investigate.
That may seem intuitive, but my
research shows that we often prefer to
talk rather than to listen with curiosity.
For instance, when I asked some 230
high-level leaders in executive education
classes what they would do if confronted
with an organizational crisis stemming
from both financial and cultural issues,
most said they would take action: move to
stop the financial bleeding and introduce
initiatives to refresh the culture. Only a
few said they would ask questions rather
than simply impose their ideas on others.
Management books commonly encourage
leaders assuming new positions to
communicate their vision from the start
rather than ask employees how they can
be most helpful. It’s bad advice.
Why do we refrain from asking
questions? Because we fear we’ll be judged
incompetent, indecisive, or unintelligent.
Plus, time is precious, and we don’t want
to bother people. Experience and expertise
exacerbate the problem: As people climb
the organizational ladder, they think they
have less to learn. Leaders also tend to
believe they’re expected to talk and
provide answers, not ask questions.
Such fears and beliefs are misplaced,
my recent research shows. When we
demonstrate curiosity about others by
asking questions, people like us more
and view us as more competent, and the
heightened trust makes our relationships
more interesting and intimate. By asking
questions, we promote more-meaningful
connections and more-creative outcomes.
Another way leaders can model
curiosity is by acknowledging when they
don’t know the answer; that makes it
clear that it’s OK to be guided by curiosity.
Patricia Fili‑Krushel told me that when she
joined WebMD Health as chief executive,
she met with a group of male engineers
in Silicon Valley. They were doubtful that
she could add value to their work and,
right off the bat, asked what she knew
about engineering. Without hesitation,
Fili‑Krushel made a zero with her fingers.
“This is how much I know about
engineering,” she told them. “However,
I do know how to run businesses, and I’m
hoping you can teach me what I need to
know about your world.” When leaders
concede that they don’t have the answer
to a question, they show that they value
the process of looking for answers and
motivate others to explore as well.
New hires at Pixar Animation Studios
are often hesitant to question the status
quo, given the company’s track record of hit
movies and the brilliant work of those who
have been there for years. To combat that
tendency, Ed Catmull, the cofounder and
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SPOTLIGHT THE BUSINESS CASE FOR CURIOSITY
president, makes a point of talking about
times when Pixar made bad choices. Like
all other organizations, he says, Pixar is
not perfect, and it needs fresh eyes to spot
opportunities for improvement (see “How
Pixar Fosters Collective Creativity,” HBR,
September 2008). In this way Catmull gives
new recruits license to question existing
practices. Recognizing the limits of our
own knowledge and skills sends a powerful
signal to others.
Tenelle Porter, a postdoctoral scholar in
psychology at the University of California,
Davis, describes intellectual humility as
the ability to acknowledge that what we
know is sharply limited. As her research
demonstrates, higher levels of intellectual
humility are associated with a greater
willingness to consider views other than
our own. People with more intellectual
humility also do better in school and at
work. Why? When we accept that our
own knowledge is finite, we are more apt
to see that the world is always changing
and that the future will diverge from the
present. By embracing this insight, leaders
and employees can begin to recognize the
power of exploration.
Finally, leaders can model
inquisitiveness by approaching the
unknown with curiosity rather than
judgment. Bob Langer, who heads one of
MIT’s most productive laboratories, told
me recently that this principle guides how
he manages his staff. As human beings,
we all feel an urge to evaluate others—
often not positively. We’re quick to judge
their ideas, behaviors, and perspectives,
even when those relate to things that
haven’t been tried before. Langer avoids
this trap by raising questions about others’
ideas, which leads people to think more
deeply about their perspective and to
remain curious about the tough problems
they are trying to tackle. In doing so, he
is modeling behavior that he expects of
others in the lab.
54 HARVARD BUSINESS REVIEW SEPTEMBER–OCTOBER 2018
3
Emphasize learning goals.
When I asked Captain Chesley “Sully”
Sullenberger how he was able to land a
commercial aircraft safely in the Hudson
River, he described his passion for contin
uous learning. Although commercial
flights are almost always routine, every
time his plane pushed back from the gate
he would remind himself that he needed
to be prepared for the unexpected. “What
can I learn?” he would think. When the
unexpected came to pass, on a cold
January day in 2009, Sully was able to
ask himself what he could do, given the
available options, and come up with a
creative solution. He successfully fought
the tendency to grasp for the most obvious
option (landing at the nearest airport).
Especially when under pressure, we
narrow in on what immediately seems
the best course of action. But those who
are passionate about continuous learning
contemplate a wide range of options
and perspectives. As the accident report
shows, Sully carefully considered several
alternatives in the 208 seconds between
his discovery that the aircraft’s engines
lacked thrust and his landing of the plane
in the Hudson.
It’s natural to concentrate on results,
especially in the face of tough challenges.
But focusing on learning is generally more
beneficial to us and our organizations, as
some landmark studies show. For example,
when U.S. Air Force personnel were given
a demanding goal for the number of planes
to be landed in a set time frame, their
performance decreased. Similarly, in a study
led by Southern Methodist University’s Don
VandeWalle, sales professionals who were
naturally focused on performance goals,
such as meeting their targets and being
seen by colleagues as good at their jobs,
did worse during a promotion of a product
(a piece of medical equipment priced at
about $5,400) than reps who were naturally
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SPOTLIGHT THE BUSINESS CASE FOR CURIOSITY
focused on learning goals, such as exploring
how to be a better salesperson. That cost
them, because the company awarded a
bonus of $300 for each unit sold.
A body of research demonstrates
that framing work around learning goals
(developing competence, acquiring skills,
mastering new situations, and so on) rather
than performance goals (hitting targets,
proving our competence, impressing others)
boosts motivation. And when motivated
by learning goals, we acquire more-diverse
skills, do better at work, get higher grades in
college, do better on problem-solving tasks,
and receive higher ratings after training.
Unfortunately, organizations often
prioritize performance goals.
Leaders can help employees adopt a
learning mindset by communicating the
importance of learning and by rewarding
people not only for their performance
but for the learning needed to get there.
Deloitte took this path: In 2013 it replaced
its performance management system
with one that tracks both learning and
performance. Employees meet regularly
with a coach to discuss their development
and learning along with the support they
need to continually grow.
Leaders can also stress the value of
learning by reacting positively to ideas that
may be mediocre in themselves but could
be springboards to better ones. Writers and
directors at Pixar are trained in a technique
called “plussing,” which involves building on
ideas without using judgmental language.
Instead of rejecting a sketch, for example,
a director might find a starting point by
saying, “I like Woody’s eyes, and what if
we...?” Someone else might jump in with
another “plus.” This technique allows people
to remain curious, listen actively, respect the
ideas of others, and contribute their own.
By promoting a process that allows all sorts
of ideas to be explored, leaders send a clear
message that learning is a key goal even if it
doesn’t always lead to success.
4
Let employees explore and broaden
their interests.
Organizations can foster curiosity by
giving employees time and resources to
explore their interests. One of my favorite
examples comes from my native country.
It involves Italy’s first typewriter factory,
Olivetti, founded in 1908 in the foothills
of the Italian Alps. In the 1930s some
employees caught a coworker leaving the
factory with a bag full of iron pieces and
machinery. They accused him of stealing
and asked the company to fire him. The
worker told the CEO, Adriano Olivetti, that
he was taking the parts home to work on a
new machine over the weekend because
he didn’t have time while performing his
regular job. Instead of firing him, Olivetti
gave him time to create the machine
and charged him with overseeing its
production. The result was Divisumma,
the first electronic calculator. Divisumma
sold well worldwide in the 1950s and
1960s, and Olivetti promoted the worker
to technical director. Unlike leaders who
would have shown him the door, Olivetti
gave him the space to explore his curiosity,
with remarkable results.
Some organizations provide resources to
support employees’ outside interests. Since
1996 the manufacturing conglomerate
United Technologies (UTC) has given as
much as $12,000 in tuition annually to any
employee seeking a degree part-time—no
strings attached. Leaders often don’t want
to invest in training employees for fear that
they will jump to a competitor and take
their expensively acquired skills with them.
Even though UTC hasn’t tried to quantify
the benefits of its tuition reimbursement
program, Gail Jackson, the vice president of
human resources when we spoke, believes
56 HARVARD BUSINESS REVIEW SEPTEMBER–OCTOBER 2018
in the importance of curious employees.
“It’s better to train and have them leave
than not to train and have them stay,”
she told me. But according to the Society
for Human Resource Management’s 2017
employee benefits report, only 44% of
organizations provide or support crosstraining to develop skills not directly
related to workers’ jobs.
Leaders might provide opportunities
for employees to travel to unfamiliar
locales. When we have chances to expand
our interests, research has found, we not
only remain curious but also become more
confident about what we can accomplish
and more successful at work. Employees
can “travel” to other roles and areas of the
organization to gain a broader perspective.
At Pixar, employees across the organization
can provide “notes”—questions and
advice—that help directors consider all
sorts of possibilities for the movies they
are working on.
Employees can also broaden their
interests by broadening their networks.
Curious people often end up being
star performers thanks to their diverse
networks, my research with the University
of Toronto’s Tiziana Casciaro, Bill McEvily,
and Evelyn Zhang finds. Because they’re
more comfortable than others asking
questions, such people more easily create
and nurture ties at work—and those ties
are critical to their career development
and success. The organization benefits
when employees are connected to people
who can help them with challenges and
motivate them to go the extra mile. MIT’s
Bob Langer works to raise curiosity in his
students by introducing them to experts
in his network. Similarly, by connecting
people across organizational departments
and units, leaders can encourage employees
to be curious about their colleagues’ work
and ways of doing business.
Deliberate thinking about workspaces
can broaden networks and encourage the
Leaders can stress the value of learning by reacting positively
to mediocre ideas that could be springboards to better ones.
cross-pollination of ideas. In the 1990s,
when Pixar was designing a new home for
itself in Emeryville, across the bay from
San Francisco, the initial plans called for a
separate building for each department.
But then-owner Steve Jobs had concerns
about isolating the various departments
and decided to build a single structure with
a large atrium in the center, containing
employee mailboxes, a café, a gift shop,
and screening rooms. Forcing employees to
interact, he reasoned, would expose them
to one another’s work and ideas.
Leaders can also boost employees’
curiosity by carefully designing their teams.
Consider Massimo Bottura, the owner of
Osteria Francescana, a three-Michelinstar restaurant in Modena, Italy, that was
rated the Best Restaurant in the World in
2016 and 2018. His sous chefs are Davide
di Fabio, from Italy, and Kondo Takahiko,
from Japan. The two differ not only in their
origins but also in their strengths: Di Fabio
is more comfortable with improvisation,
while Takahiko is obsessed with precision.
Such “collisions” make the kitchen more
innovative, Bottura believes, and inspire
curiosity in other workers.
5
Have “Why?” “What if…?” and
“How might we…?” days.
The inspiration for the Polaroid instant
camera was a three-year-old’s question.
Inventor Edwin Land’s daughter was
impatient to see a photo her father had just
snapped. When he explained that the film
had to be processed, she wondered aloud,
“Why do we have to wait for the picture?”
As every parent knows, Why? is ubiqui
tous in the vocabulary of young children,
who have an insatiable need to understand
the world around them. They aren’t afraid to
ask questions, and they don’t worry about
whether others believe they should already
know the answers. But as children grow
older, self-consciousness creeps in, along
with the desire to appear confident and
demonstrate expertise. By the time we’re
adults, we often suppress our curiosity.
Leaders can help draw out our innate
curiosity. One company I visited asked
all employees for “What if…?” and “How
might we…?” questions about the firm’s
goals and plans. They came up with all
sorts of things, which were discussed
and evaluated. As a concrete sign that
questioning was supported and rewarded,
the best questions were displayed on
banners hung on the walls. Some of the
questions led employees to suggest ideas
for how to work more effectively. (For more
on the importance of asking good questions
before seeking solutions, see “Better
Brainstorming,” HBR, March–April 2018.)
In one study, my colleagues and I asked
adults working in a wide range of jobs
and industries to read one of two sets of
materials on three organizational elements:
goals, roles, and how organizations as a
whole work together. For half the workers,
the information was presented as the
“grow method”—our version of a control
condition. We encouraged that group to
view those elements as immutable, and
we stressed the importance of following
existing processes that managers had
already defined. For the other half, the
information was presented as the “go back
method.” We encouraged those employees
to see the elements as fluid and to “go back”
and rethink them. A week later we found
that the workers who’d read about the “go
back method” showed more creativity
in tasks than the workers in the “grow
method” group. They were more open to
others’ ideas and worked more effectively
with one another.
To encourage curiosity, leaders should
also teach employees how to ask good
questions. Bob Langer has said he wants
to “help people make the transition
from giving good answers to asking good
questions” (see “The Edison of Medicine,”
HBR, March–April 2017). He also tells his
students that they could change the world,
thus boosting the curiosity they need to
tackle challenging problems.
Organizing “Why?” days, when
employees are encouraged to ask that
question if facing a challenge, can go
a long way toward fostering curiosity.
Intellectual Ventures, a company that
generates inventions and buys and licenses
patents, organizes “invention sessions” in
which people from different disciplines,
backgrounds, and levels of expertise come
together to discuss potential solutions
to tough problems, which helps them
consider issues from various angles (see
“Funding Eureka!” HBR, March 2010).
Similarly, under Toyota’s 5 Whys approach,
employees are asked to investigate
problems by asking Why? After coming up
with an answer, they are to ask why that’s
the case, and so on until they have asked
the question five times. This mindset can
help employees innovate by challenging
existing perspectives.
IN MOST ORGANIZATIONS, leaders and
employees alike receive the implicit message that asking questions is an unwanted
challenge to authority. They are trained to
focus on their work without looking closely
at the process or their overall goals. But
maintaining a sense of wonder is crucial to
creativity and innovation. The most effective leaders look for ways to nurture their
employees’ curiosity to fuel learning and
HBR Reprint R1805B
discovery.
FRANCESCA GINO is the Tandon Family Professor of
Business Administration at Harvard Business
School and the author of the books Rebel Talent:
Why It Pays to Break the Rules at Work and in Life
and Sidetracked: Why Our Decisions Get Derailed,
and How We Can Stick to the Plan.
SEPTEMBER–OCTOBER 2018 HARVARD BUSINESS REVIEW 57
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Ind
Leadership
Lessons from
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How the best Indian companies drive
performance by investing in people.
by Peter Cappelli, Harbir Singh, Jitendra V. Singh, and Michael Useem
V
ILLUSTRATION: JACQUI OAKLEY
ia
1012 Mar10 Cappelli.indd 91
Vineet Nayar, CEO of the Indian IT
services giant HCL, likes to rock
the boat. Asked what he wished his
greatest legacy to be in five years, Nayar responded without missing a beat:
“That I have destroyed the office of the
CEO.” He led the charge that gave rise to
the company’s bracing motto, “Employee
first, customer second”—an idea that
would give many managers hives. And he
invited employees to evaluate their bosses and their
bosses’ bosses; then he posted his own review on the
firm’s intranet for all to see, and urged others to follow his lead.
What’s Nayar up to? Pressed to explain, he told
us that he sought enough “transparency” and “empowerment” in the company that “decisions would
be made at the points where the decisions should be
made”—that is, by employees, where the company
meets the client. Ideally, he said, “the organization
would be inverted, where the top is accountable to
the bottom, and therefore the CEO’s office will become irrelevant.”
Nayar might be dismissed as a loosely tethered
idealist except that his company, with nearly 55,000
employees and a market cap of $24 billion, is growing
even faster than India’s red-hot economy. He’s doing something right, and, as we found in a yearlong
study of Indian executives, his leadership approach
is closer than not to the norm among India’s biggest
and fastest-growing companies.
To discover how Indian leaders drive their organizations to high performance, our research team
interviewed senior executives at 98 of the largest
India-based companies. (See the sidebar “How We
Did Our Study.”) In conversations with leaders at
Infosys, Reliance Industries, Tata, Mahindra & Mahindra, Aventis Pharma, and many others, a picture
emerged of a distinctive Indian model. None of the
people we interviewed suggested that their companies had succeeded because of their own cleverness at strategy or even because of the efforts of
a top team. They didn’t mention skill in financial
markets, mergers and acquisitions, or deal making—
talents that Western CEOs often claim underpin their
March 2010 Harvard Business Review 91
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LEADERSHIP LESSONS FROM INDIA
companies’ performance. Almost without exception,
these leaders, like Nayar, said their source of competitive advantage lay deep inside their companies,
in their people.
That may sound like posturing, but our research
puts hard numbers on the characteristic ways Indian
leaders invest in people. Far more than their Western counterparts, these leaders and their organizations take a long-term, internally focused view. They
work to create a sense of social mission that is served
when the business succeeds. They make aggressive
investments in employee development, despite tight
labor markets and widespread job-hopping. And
they strive for a high level of employee engagement
and openness.
This is not to say that Indian firms and their
leaders are inordinately virtuous. Corruption and
malfeasance can be found in the Indian business
community as surely as in any other. (Note, for instance, the scandal involving Satyam Computer and
its chairman and founder, Ramalinga Raju, who was
jailed on charges of misleading investors.) Not all Indian executives are saints or sages, just as not all U.S.
CEOs single-mindedly pursue shareholder value
while ignoring social concerns. Still, the leaders of
the most successful Indian companies do engage
with their country, culture, and employees in a characteristic way, and this is an important factor in their
performance. Their approach is used often enough
that, we believe, it constitutes the centerpiece of
a clear model—one from which Western leaders
can learn.
Although India’s competitive environment is
relatively new, company leaders have brought to
it a long-standing tradition of business largesse—a
commitment to social goals fueled by enlightened
self-interest. That mind-set is embedded in Hindustan Unilever’s Project Shakti, for example, which
applied microfinance principles to create a sales
force in some of the subcontinent’s most remote and
economically challenged regions. And it’s revealed
in hospitals, grade schools, and virtual universities
built across the country by leading businesses.
Leading the India Way
Our survey revealed an important difference between Indian and Western company leaders in how
they focus their energy. When we asked Indian leaders to prioritize their key responsibilities, this is how
they ranked the top four:
1. Chief input for business strategy
Skills Indian
Leaders
Value Most
When asked which
qualities had been most
critical to their exercise
of leadership over the
past five years,
%
61
of Indian leaders
said envisioning and
articulating a path to
the future; strategic
thinking; guiding change
%
57
said being inspirational, accountable,
and entrepreneurial
52
%
said supporting careful
talent selection, grooming, and practices that
advance business goals
43
%
said optimizing organizational structure and
articulating core values
22
%
said understanding
competitors and
markets; managing
outside relations
2. Keeper of organizational culture
3. Guide, teacher, or role model for employees
4. Representative of owner and investor interests
It’s striking that they put shareholders in fourth
place, since U.S. executives are all but required to
say that shareholder interests are their number one
concern. This low ranking held for even the most
global of the companies we studied, which are exposed to international capital markets and in some
cases listed on U.S. stock exchanges. And it held for
leaders such as Anand Mahindra, Sunil Bharti Mittal,
and Azim Premji, who are huge shareholders in their
own companies.
The higher priority these executives place on
keeping the culture and guiding and teaching employees underscores their focus on human capital
development. As the exhibit “Skills Indian Leaders
Value Most” shows, this focus also emerged in their
responses to our question “What are the top two
leadership capacities most critical to your exercise
of leadership over the past five years?”
Given their intense focus on culture and human
capital, it may be surprising that the Indian leaders
cited strategy as their top priority. But strategy also
emerged as important in another of our surveys,
which explored changes in U.S. and Indian top executives’ allocation of time over the past five years. As
the exhibit “A Stark Difference in Focus” shows, U.S.
executives became increasingly attentive to external demands—regulatory concerns, the board, and
shareholders—whereas fewer than half of the Indian
executives gave additional attention to these, and
the overwhelming majority said they spent more
time on setting strategy.
It’s important to understand how Indian leaders see their role in strategy development. Whereas
Western leaders often leave it to profit-center heads,
Indian leaders are likely to own the strategy function, setting the agenda and taking a visible role in
shaping the strategies their managers bring to them.
They tend to focus less on Western-style planning
and analysis and more on creating the incentives, organizational structures, and culture that will enable
an improvisational approach to strategy. They view
strategy as a set of enduring general principles for
competing, such as developing competencies, embracing social purpose, and taking the long view—an
approach to business that they personally encode in
the company’s culture. This model both enhances
a company’s agility in the marketplace and allows
Indian leaders to develop their top managers. Thus
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Idea in Brief
The leaders of India’s
biggest and fastest-growing
companies take an internally
focused, long-term view and
put motivating and developing employees higher on the
priority list than short-term
shareholder interests.
strategy and “guiding and teaching” are complementary priorities.
Ratan Tata set a new strategic course for the Tata
Group when he took it over, in 1991. At the time,
it was doing virtually no business outside India.
Against some internal opposition, he asserted that
the company had to go global, in part to reduce the
risk of dependence on a single country’s economy.
Beginning in 2000, he led the conglomerate’s 96
companies on a wave of acquisitions, using a caseby-case, trial-and-error approach to acquire, for ex-
A STARK DIFFERENCE IN FOCUS
Over the past five years, Indian leaders began
spending more time on internal issues, while
U.S. CEOs spent more time on external affairs.
CEOS WHO
ARE DEVOTING
LESS TIME
CEOS WHO
ARE DEVOTING
MORE TIME
REGULATORY ISSUES
2%
24%
1%
17%
4%
U.S.
CEOS
INDIAN
CEOS
REPORTING TO THE BOARD
78%
41%
SHAREHOLDER RELATIONS
58%
31%
9%
0%
11%
17%
27%
55%
98%
41%
41%
SETTING STRATEGY
47%
93%
MEDIA RELATIONS
31%
31%
DAY-TO-DAY MANAGEMENT
28%
24%
To engage employees, these
leaders create a sense of social
mission that is central to company
culture, encourage openness by
developing and personally modeling
systems that provide transparency,
empower employees by enabling
communication and pushing decision
making down through the ranks, and
invest heavily in training.
These individual practices aren’t
new, but Indian leaders combine
them in a coherent package and
give them consistent emphasis. The
authors advise that Western leaders
adapt this managerial approach to
their own circumstances, pursuing
in particular two readily achievable
goals: investing in training, and
strengthening social mission.
ample, the Tetley Group, the Daewoo Commercial
Vehicle Company, and Boston’s Ritz-Carlton hotel
(now the Taj Boston). Half the Tata Group’s revenue
comes from other countries. This globalization was
accomplished not by an explicit, careful strategy but
by Ratan Tata’s personal vision for how to compete
across international markets.
Consider the development of the Nano. For this
affordable car, the decision about pricing and, therefore, market positioning (a typical focus of Western
strategy) came about by accident: A reporter asked
about price, and Tata’s off-the-cuff guesstimate that
the Nano might cost 100,000 rupees ($2,000) made
headlines the next day. So Tata decided that 100,000
rupees might as well be the goal, and the company’s
managers and engineers set to work, unsure exactly
how they’d meet the target. Persistently improvising around obstacles, an approach captured by the
Hindi word jugaad, they cut costs at every turn—for
example, by repurposing scooter parts and eliminating extras such as power windows.
Motivating Employees
To get some hard data on Indian leaders’ style, we
asked the directors of human resources at our executives’ companies to assess their top bosses using the
Multifactor Leadership Questionnaire (MLQ), the
most widely applied such tool in the United States.
Perhaps not surprisingly, the executives scored high
on “transformational” or charismatic leadership
designed to encourage employees to care about the
goals of the leader and the organization. When we
compared these data with MLQ data for U.S. CEOs, we
found that the latter were more likely to use “transactional” styles—motivating employees to act in the
interests of the business by striking deals with them
(If you want a promotion, meet these sales targets).
The leaders we surveyed typically attributed the
success of their companies to employees’ positive
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LEADERSHIP LESSONS FROM INDIA
In India, CSR is a reputational asset. Obtaining industrial
licenses and environmental clearance can depend on
being known for public responsibility.
Achieving
CSR Targets
Our research revealed
striking differences between
Indian and U.S. companies
in attention paid to this goal.
ROUTINELY MONITOR
PROGRESS
INDIAN
COMPANIES
40
%
17
%
U.S.
COMPANIES
RARELY MONITOR
PROGRESS
INDIAN
COMPANIES
15
45%
%
U.S.
COMPANIES
attitudes, persistence, and sense of reciprocity,
which the executives inspire in four specific ways.
Creating a sense of mission. As we’ve observed, Indian leaders have long been involved in
societal issues, preemptively investing in community services and infrastructure. Mallika Srinivasan,
the director of Tractors & Farm Equipment, told
us that almost everywhere companies operate in
India they are encircled by throngs of destitute
people, needs are stark, and government intervention is inadequate. Like Infosys and many other big
companies, Tractors & Farm Equipment maintains a
first-world, campuslike facility within sight of thirdworld slums. “Corporate social responsibility and
good governance are related to the state of the development of the country,” she told us. “We are all
seeing these islands of prosperity surrounded by so
much poverty.” Echoing a sentiment we heard from
many executives, Srinivasan explained that her company feels duty bound to step forward.
Some of this CSR is driven by necessity, of course;
national well-being and investment in social goals
and human capital are essential to companies’ competitiveness. The rapid growth of the Indian market
and the inadequate scale of health and education
systems have forced companies to develop and help
care for their own talent.
Social investment pays off in other ways, too. For
B. Muthuraman, the managing director of Tata Steel,
CSR is a reputational asset. “Our history in corporate social responsibility,” he acknowledges, “has
enhanced the group brand.” And for some, acting
responsibly in the eyes of regulators is essential: Obtaining industrial licenses and environmental clearance in the United States can be a straightforward, if
technical, process, whereas in India it can depend on
being known for public responsibility.
Unlike the feel-good statements that Western
companies make about, say, improving customers’
lives, the social missions of Indian companies are integral to their strategy and often the route to profits.
A case in point: The hospital group Narayana Hrudayalaya was founded by Devi Shetty to help the thousands of Indian children who need cardiac surgery
but can’t afford it. The group soon discovered that
the only way to provide quality operations cheaply
was to standardize them, so it set about learning to
perform them at scale. It now performs more than
twice as many cardiac surgeries as the biggest U.S.
hospital, with outcomes at least as good and at about
one-tenth the cost, and its profit margins are slightly
above those of its U.S. peers. Prathap Reddy, the
founder of Apollo Hospitals, a leading private health
care provider, conveys a similar mission-as-means
orientation in his comment “Our first responsibility
is to our patients; second, to people who work for us;
and then to our lenders and investors.”
Other Indian companies similarly interweave
strategy and social mission. The telecommunications provider Bharti Airtel sees its mission as getting
cell phones into the hands of the hundreds of millions of people in India who otherwise have no way
to communicate with one another. Max India’s new
insurance product, Max Vijay, combines life insurance with savings in a model that allows people with
erratic incomes to pay whatever they can, whenever
they can. IT companies such as Cognizant and Infosys describe their social mission in part as showing
the world that India and Indian companies can compete and win on the international stage.
Finally, more so than most Western companies,
the best Indian companies have a social mission
and a sense of national purpose because that helps
employees find meaning in their work. Missions
motivate by tapping into what organizational psychologists call task significance—a satisfying feeling
that small tasks link to the bigger goal. U.S. President
Lyndon Johnson loved to tell a story about asking a
truck driver who worked at NASA in the 1960s what
his job was. The driver’s response: “I’m helping to
put a man on the moon.”
Engaging through transparency and accountability. Indian leaders also build employee
commitment by encouraging openness and reciprocity. They look after the interests of employees
and their families, and implicitly (or sometimes explicitly) ask employees to look after the company’s
interests in return. HCL’s “Employee first, customer
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second” policy, supported by initiatives designed to
make employees feel more personally responsible
for the company’s offerings and give them a voice
with upper management, does exactly this. Vineet
Nayar’s public 360-degree reviews for managers is
another example.
The software company MindTree posts accounts
of its employees’ ethical failures and violations of
company policy on the internet and discusses the resulting lessons. The company’s executive chairman,
Ashok Soota, tells employees in an introduction to
the company’s booklet All About Integrity: “This
book is placed in your hands as a rite of passage….
adherence to the Integrity Policy becomes the basic
social contract of our mutual existence.” There they
can read about “some of the dark, difficult moments
that were created by people who breached Integrity”: the lying accountant, the inside trader, the senior executive who misused his company cell phone,
and the dozens of employees caught falsifying prior
work experience—all of whom were asked to leave.
The motivational message is clear: Employees are
accountable to management, and management is
equally accountable to them.
Empowering through communication. So
that engagement will translate into action, Indian
leaders go to considerable lengths to empower employees, although this challenges the traditional Indian deference to hierarchy. At HCL, for example, an
online system allows employees to create qualitycontrol “tickets,” much like those on an assembly
line. These can flag product-quality problems or
even personal issues related to management, such
as “I have a problem with my bonus” or “My boss
sucks.” Employees can also post comments and
questions on the company’s “U and I” website; Nayar himself publicly answers some 50 questions
a month. Tata Consultancy Services has a similar
system whereby employees can submit grievances
about management, which may be settled through
arbitration.
In his comments about empowering employees
by helping them find their own solutions, Jagdish
Khattar, the former managing director of the automaker Maruti Udyog, echoes a sentiment common
among Indian leaders: “Throw issues to them, let
them examine and come back to you with solutions.
I have done it again and again.…85% of their solution would be what you have in mind….Let them
go back with the impression that 100% of the solution is theirs. The implementation would be quick
and smooth, and they will feel very proud of it, but
it serves your purpose.” This management strategy
helped revitalize Bank of Baroda, one of the oldest
government-controlled banks, which was increasingly seen as a socialist relic in postreform India.
Well-paid, longtime employees were highly resistant
to change, and the bank found itself eclipsed by nimbler private-sector competitors. Enter Anil K. Khandelwal, who took over as chief executive in 2005 and
immediately created a sense of mission. He met with
branch managers, showed them financial analysts’
reports advising investors to avoid the bank’s stock,
and then appealed both to their pride (it should be
embarrassing to work in an organization of which experts think so little) and to the broader goal of India’s
well-being, to which the bank was not contributing
enough.
To better meet customers’ needs, management
decided that the bank must stay open longer. Khandelwal called all the employees of the branches involved in a pilot program to headquarters for a meeting—“from manager to messenger,” as he put it—and
asked for their help, letting them determine how to
execute the new program. They agreed to staff their
branches from 8:00 AM to 8:00 PM without overtime
pay and designed their own marketing events to announce the new schedule. Khandelwal wrote letters
to the employees every week, explaining goals and
describing progress, and often met with them at local branches to make the case for change. The program was a huge success. The bank has since added
around-the-clock staffing at several locations. Along
the way, Khandelwal introduced such empowering
innovations as a direct line to his office for employees seeking his input on problems.
Investing in training. Finally, both our qualitative and our quantitative data show that Indian companies invest heavily in employee development—often more so than Western companies. This is partly
to ensure that employees have the tools to do their
best work, but it’s also designed to strengthen their
commitment to the company.
When we asked Indian leaders an open-ended
question about their human resources development, their responses consistently touched on four
themes: managing and developing talent, shaping
employee attitudes, managing organizational culture, and internationalization. By far the majority of
responses fell into the first category. The most commonly used term in this context was “employee retention,” followed by “recruiting.” These executives,
Taking HR
Seriously
Twice as many
Indian leaders as
U.S. leaders think
that human capital
drives business
success.
Consequently, the HR
function in India has high
visibility with senior management, and its strategy
is closely integrated with
the firm’s overall strategy.
The HR departments of
Indian companies do more
measurement than U.S. HR
departments on virtually
every aspect of their field,
while outsourcing basic
tasks such as benefits and
employee administration.
They also have more sophisticated systems—such
as workforce planning and
succession management—
than are common in the
United States.
Among the Indian firms
we studied,
81%
of the heads of HR reported
that the learning function
(training and employee
development) was essential
to building competitive
organizational capabilities,
whereas, according to a
2006 survey by the American Society for Training
and Development, an
astonishing
4%
of U.S. chief learning
officers held that view of
their own operations.
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LEADERSHIP LESSONS FROM INDIA
Roots of a New Approach
The explosion of the Indian economy following the
economic reforms of the early 1990s is well known.
Liberated from a stifling regulatory environment and
exposed to international competition, Indian firms
were forced to rapidly develop world-class capabilities. Companies that had built their advantage on
low-cost labor abruptly found they had to compete
on quality. Although at first Indian companies imported technologies, foreign managers, and global
consultants to take advantage of the new opportunities, many learned in time how to do so on their own.
“After having been shackled for a couple
of decades by overly suppressive and
retrograde government policies, our
businessmen had their first real shot at
competing on the basis of relatively freemarket principles.” Amit Chandra, managing director
of Bain Capital Advisors in India
by and large, see no trade-off between recruiting and
development, and they expect their firms to pay attention to both.
U.S. companies have largely abandoned investment in employees, especially in developing managers, for fear that it will be lost if they leave. Statistics suggest that about a quarter of new hires in the
United States received no training of any kind in their
first two years of employment. In contrast, Indian
companies take an aggressive approach to training,
despite—or perhaps because of—a competitive labor
market in which employee turnover is estimated at
How We Did Our Study
Our project began with the National
Human Resource Development
Network, arguably the most influential business group in India. The
network helped arrange interviews
with the leaders of India’s largest
publicly listed companies by market
capitalization.
We conducted structured interviews with 105 leaders from 98
companies. Relatively few of these
companies use the CEO model. At 71
of them the top executive is called
the managing director. Leadership is
shared at seven of them, so there we
interviewed two leaders. We asked
what qualities these executives saw
as most vital to their success, how
they worked with their boards, and
where they perceived convergence
and divergence with Western prac-
tices. We asked how they recruited
talent and managed teams, and
what legacies they hoped to leave
behind.
We also gathered survey data
from the heads of HR at these companies. We compared the responses
with those in a series of surveys
of U.S. CEOs and HR executives.
The most important data on U.S.
CEOs come from a New York Stock
Exchange survey, and most of the
comparative data on HR practices
come from surveys conducted by
the Society for Human Resource
Management.
We supplemented these data with
information from previous studies
and descriptive information and case
studies about the practices in these
companies.
close to 30%. Skilled workers are in short supply in
India; major investment in employee development
pays off because it helps ensure the quality of the
workforce that remains. Consistent with this starkly
different attitude toward training, three times as
many Indian as U.S. companies measure and track
their skill-development efforts.
A recent Kauffman Foundation study indicates
that the Indian IT industry provides new hires with
about 60 days of formal training. Some companies
do even more: Tata Consultancy Services has a
seven-month training program for science grads
who are being groomed for business consulting
roles. In addition, all TCS employees receive 14 days
of formal training each year. Even relatively low-skill
industries, such as business-process outsourcing
and call centers, typically provide 30 days of training, and retail companies require about 20 days. Programs like these are not limited to entry-level workers. India’s second-largest pharmaceutical company,
Dr. Reddy’s Laboratories, puts outside hires through
a one-year training program that includes 10 weeks
of assignments abroad and culminates in a crossfunctional project presented to top executives. Infosys managers are assessed on the basis of how many
of their groups’ recent hires achieve an “A” on tests
of their new knowledge, how many achieve various
competency certifications, and how many outside or
lateral hires are rated as “good” in their first review.
In addition, senior managers are evaluated on their
employees’ job satisfaction and the percentage of
leadership positions that have an identified internal
successor.
Employee investment continues with leadership
development; almost twice as many companies in
India as in the U.S. formally track leadership training.
In Wipro’s sophisticated program, each of roughly
1,000 managers and executives is scored on 12 leadership measures, and individual scores are com-
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“Indian leaders … have been trained or groomed in
extremely fluid, dynamic, uncertain environments.
[Thus they have] a much greater ability to cope with
uncertainty, they don’t get disturbed by uncertain
events, they keep an even keel….They also tend to be
more creative as a result, because they have to face
these sorts of untoward situations almost on a daily
basis.” Hindustan Unilever’s former CEO Manvinder Singh Banga
pared with company averages. The top 300 leaders
are reviewed by Wipro’s chairman, Azim Premji, in a
process that extends over five days. Following those
reviews, the company draws up a development plan
for each candidate that includes coaching, training,
and rotational assignments. The process creates a
pool of candidates to fill anticipated vacancies. This
may sound similar to some U.S. “academy companies,” but Wipro adds other features, such as tracking
possible hires outside the firm with an eye to when
vacancies at Wipro will create an opportunity to recruit them.
MindTree’s cofounder Subroto Bagchi, whose
title is vice chairman and gardener, spends much
of his time coaching the company’s top 100 leaders.
Dr. Reddy’s managers all receive training in coaching and are required to coach as well as evaluate employees. As S. Ramadorai, the former head of Tata
Consultancy Services, said of his company’s success,
“It’s all about human capital at the end of the day.”
Is the India Way Transferable?
Just how much leadership practices contribute to
the overall success of these large Indian companies
is not easy to sort out. Does the focus on employees
reflect the limitations of context? In other words,
must these firms invest heavily in human capital in
order to cope with heavy turnover? Are Indian firms
successful not only because their leaders personally
drive strategy but because they’re sailing on the Indian economy’s rising tide? Is their emphasis on social mission as important to greasing the wheels as it
is to motivating employees? The answer in each case
may be yes, in part; nevertheless, these practices
confer advantage in and of themselves by enhancing the value of human capital.
The Indian leadership approach arose from the
unique circumstances of the Indian economy and
society (see the sidebar “Roots of a New Approach”),
Indian leaders’ approaches often
grew out of their long experience
with surmounting obstructionist
bureaucracies; crumbling, antiquated
infrastructure; and inadequate
schools, health clinics, and other social services. Growing up in hardship
and uncertainty gave many an ability
to persistently improvise around
obstacles.
but unique roots do not mean that lessons cannot
translate, as we know from management practices
that started in the United States or Japan and have
spread globally. The practices that define Indian
leadership are not new; individually, they’ve been
seen as effective in a range of circumstances. Indian
leaders simply combine them in a coherent package
and consistently give them high priority.
That said, it would be well nigh impossible for
U.S. CEOs in particular to announce that shareholder
value was no longer a top priority, given expectations in the investment community. And it would
be difficult for them to sustain these practices over
the long term—to spend time and attention on managing culture and developing employees while the
siren call of mergers and acquisitions beckoned or
the financial community tempted them with shortterm restructuring deals. But some practices, such as
measuring and tracking training and development,
are straightforward. Creating a real sense of social
mission, whereby employees can feel that their
work has impact, is a harder but achievable goal—
as is becoming a role model for employees. Western
leaders would do well to understand the managerial
approaches that have fueled the rise of India’s largest
companies, and mindfully adapt them.
HBR Reprint R1003G
Peter Cappelli (cappelli@wharton.upenn.edu) is the
George W. Taylor Professor of Management and the
director of the Center for Human Resources at the Wharton
School. Harbir Singh (singhh@wharton.upenn.edu) is the
William and Phyllis Mack Professor of Management and a
codirector of the Mack Center for Technological Innovation
at Wharton. Jitendra V. Singh (singhj@wharton.upenn.
edu) is the Saul P. Steinberg Professor of Management at
Wharton. Michael Useem (useem@wharton.upenn.edu) is
the William and Jacalyn Egan Professor of Management and
director of the Center for Leadership and Change Management at Wharton. They are the authors of The India Way:
How India’s Top Business Leaders Are Revolutionizing
Management (Harvard Business Press, 2010), from which
this article was developed.
March 2010 Harvard Business Review 97
1012 Mar10 Cappelli.indd 97
1/28/10 2:18:28 PM
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Harvard Business Review and Harvard Business Publishing Newsletter content on EBSCOhost is licensed for
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in academic institutions nor as corporate learning or training materials in businesses. Academic licensees may
not use this content in electronic reserves, electronic course packs, persistent linking from syllabi or by any
other means of incorporating the content into course resources. Business licensees may not host this content on
learning management systems or use persistent linking or other means to incorporate the content into learning
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innovation
Nathan Furr
Assistant professor
of strategy, INSEAD
Jeffrey H. Dyer
Professor of strategy,
Marriott School, Brigham
Young University
Kyle Nel
CEO, Uncommon
Partners
112
Harvard Business Review
January–February 2019
NASA
When Your Moon
Shots Don’t Take Off
How science fiction and
other unconventional
tools can fire the
imagination and lead to
breakthrough growth.
innovation
R
ecently, the head of innovation at a major industrial conglomerate set up 10 cross-functional
teams and gave them an audacious
goal: to completely reimagine
their businesses. To encourage
fresh ideas and approaches, the
company had the teams apply a
design-thinking lens to customer
research and prototype solutions
using lean start-up techniques. The
innovation leader expected 10 transformational proposals to
come in. What he got instead were suggestions along the lines
of adding a connected data stream to an industrial tool. He was
dumbfounded. Where were the radical new concepts? Had no
one even considered creating a digital platform, or flipping the
business model, or reinventing products?
The tendency toward incremental thinking plagues
companies of all sorts—in spite of our increasingly sophisticated arsenal of innovation tools. And though incremental
innovations do have a place in a growth portfolio, they won’t
sustain a business over the long term. How can firms come
up with something bigger and more meaningful? What’s
constraining creativity? Why can’t every company achieve
what Google calls “10x thinking”—ideas that lead to 10-fold
improvements rather than the more typical 10% ones?
It’s tempting to point to technology, competition, or
regulation as the culprit, but those barriers are much more
permeable than we imagine. After all, people once thought
that a moon landing was impossible, that instant photography was impractical, and that reusable space rockets were
simply insane. Then John F. Kennedy inspired a nation,
Edwin Land introduced the Polaroid camera, and Elon Musk
launched SpaceX.
The real limits to 10x ideas are biases that distort our perceptions and prevent us from seeing possibilities. Cognitive
114
Harvard Business Review
January–February 2019
science has started to unpack those biases and the ways that
we are “predictably irrational,” and in many fields—such
as economics, marketing, and strategy—a more behavioral
approach has overturned the dominant paradigm. But the
behavioral revolution hasn’t taken hold in the domain of
innovation, where we’ve yet to systematically adopt the
perspectives and tools that help us take big leaps.
When considering new avenues to pursue, most of us fall
into cognitive traps that reinforce what researchers call local
search, such as availability bias, the tendency to substitute
available data for representative data; familiarity bias, the
tendency to overvalue things we already know; and confirmation bias, the tendency to think new information proves
our existing beliefs. As a result we see only the opportunities
related to the status quo, rather than more-valuable opportunities just out of view. The purpose of this article is to share
some approaches that are helping companies sidestep those
traps. They differ from popular frameworks like lean start-up
and agile development, which—while valuable—aren’t
intended to combat biases that prevent true breakthroughs.
In fact, in a recent field experiment at Harvard Business
School, researchers found that agile methodologies actually
reduced divergent thinking. Ask yourself: Will customer
observation, A/B testing, or sprints really lead to the next
transistor, iPhone, or SpaceX? Probably not.
The tactics and tools we’ll describe all challenge our powerful instinct to avoid risk and choose the easy path. We have
either used them to get organizations to see bigger opportunities or come across them in our research on radical innovators.
Our list is by no means exhaustive; it represents just some of
the ways that creative organizations are reaching for 10x ideas.
The intent here is simply to shine a light on how businesses
can overcome the forces limiting their possibilities.
Science Fiction
The late novelist Ursula Le Guin once said she wrote science
fiction to dislodge her mind—and her reader’s mind—“from
the lazy, timorous habit of thinking that the way we live
now is the only way people can live.” Science fiction helps
us engage in mental time travel and allows us to dream
about what may be possible. Consider some life-changing
breakthroughs science fiction has envisioned or inspired: cell
phones (which were based on the officers’ communicators
in Star Trek), credit cards (a feature of a futuristic society in a
19th-century novel by Edward Bellamy), robots (conceived in
one of Karel Čapek’s early-20th-century plays), self-driving
cars (foreseen by Isaac Asimov), earbuds (a fictional invention of Ray Bradbury), and atomic power (imagined by H.G.
Wells in 1914). Phil Libin, the former CEO of Evernote—who
says the concept for that note-taking software came directly
from augmented intelligence in the novel Dune—puts it this
way: “Science fiction can provide a kind of rigorous optimism.…There’s no magic. Science fiction just provides the
inspiration and then you make a rigorous plan and go for it.”
In our consulting work, we have seen science fiction
help large, established companies visualize a new future for
their businesses. Indeed, at Lowe’s, where Kyle was head of
innovation, this approach got the executive team members
to understand how they could revolutionize retail with
augmented reality, robotics, and other technologies.
And that was back in 2012, before Oculus Rift or Pokémon
Go even existed. The process simply involved giving customer and technology data to a panel of science fiction writers and asking them to imagine what Lowe’s might look like
in five to 10 years. We then gathered their ideas, noted where
their perspectives converged and diverged, and integrated
and refined the stories. Finally, we shared our “speculative
fiction” in comic book form with the Lowe’s executives.
As a result of that project, Lowe’s became the first retailer
to deploy fully autonomous robots for customer service and
inventory, created some of the first 3-D printing services, and
helped place a 3-D printer for making tools on the International Space Station. It also created exosuits (external robotic
skeletons) for employees unloading trucks and moving goods
Idea in Brief
THE PROBLEM
Incremental thinking plagues
organizations that are really
looking for breakthrough
innovation.
onto the store floor, and came up with the first augmented-
reality phone for planning remodeling work (which initially
sold out in four days). Not only has Lowe’s achieved financial
success (3-D imaging capabilities have boosted its online
sales by up to 50%), but in 2018 it was named number one in
retail innovation in Fortune’s Most Admired Companies ranking and number one in augmented reality on Fast Company’s
Most Innovative Companies list.
Although technology features heavily in the Lowe’s
example, innovation isn’t about technology. We have used
the same process even when no technology was involved—
for example, to help Pepsi imagine how to create healthful
products and Funko to envision how to expand beyond the
collectibles business.
Analogies
One evening, as the Nobel Prize–winning physicist Werner
Heisenberg was walking through a park in Copenhagen, a
fundamental insight about the nature of energy dawned on
him. The path he was on was very dark, save only for occasional circles of light cast by the street lamps. Ahead of him,
a man appeared in a pool of light under one lamp and then
disappeared into the night until he reemerged in the next pool.
Suddenly, it came to Heisenberg: If a man, with so much mass,
could seem to disappear and reappear, could an electron, with
almost no mass at all, similarly “disappear” until it interacted
with something else? According to the author and physicist
Carlo Rovelli, that insight into how packets of energy interact—
which later became Heisenberg’s famous “uncertainty principle”—struck him because he applied an analogy, comparing
the man walking between lampposts to an electron.
Analogies have led to breakthroughs in business as well
(as Giovanni Gavetti and Jan Rivkin noted in a 2005 HBR
THE REASON
Cognitive biases too easily distort
our perceptions and prevent us
from seeing possibilities.
A SOLUTION
An assortment of tactics and
tools can challenge our powerful
instinct to avoid risk and choose
the easy path.
Harvard Business Review
January–February 2019
115
innovation
article, “How Strategists Really Think: Tapping the Power
of Analogy”). Charlie Merrill revolutionized the brokerage
industry by applying the analogy of a supermarket, which lets
shoppers choose among a host of products and brands. Circuit
City, which introduced the superstore approach to electronics
retailing in the 1970s, transformed the automotive industry
by applying a similar logic (wide selection, low fixed prices
with no haggling) to used-car sales, creating CarMax. Though
Circuit City went bankrupt after the shift to online retailing,
CarMax is now the largest used-car retailer in the world.
Analogies from different domains can sometimes help
us make big leaps. The rapid growth of Uber and Airbnb, for
example, certainly foreshadowed the emergence of similar
“sharing economy” businesses, from recreational vehicles
(RVshare.com), to storage (Neighbor), to grocery delivery
(Instacart). Another way to jog your thinking is to use an analogy involving how not to do something: How would Google
never do it? You can also draw on lessons from failures: What
approach did a company that missed the mark try?
First Principles Logic
Regeneron Pharmaceuticals is renowned for developing new
treatments at a small fraction of its competitors’ costs. At the
core of its innovation process is a “first principles” approach,
which questions the status quo by reexamining the foundational principles about something and then redesigns it from
the ground up. “We challenge everything—every concept,
every scientific principle—and we argue about it amongst
ourselves,” says George Yancopoulos, Regeneron’s president
and chief science officer. For example, the firm questioned
the dominant paradigm for testing new treatments—trying
them first on mice and then on humans, which often leads to
high failure rates because mice and people are so different.
Yancopoulos and his team sought to reinvent the process by
developing a mouse implanted with human genes to more
closely simulate human reactions. The modified mouse has
enabled Regeneron to develop new drugs for less than 20% of
the average $4.3 billion cost of developing new therapies.
SpaceX’s reusable rocket emerged from a similar first
principles approach. Founder Elon Musk wanted to buy
116
Harvard Business Review
January–February 2019
castoff rockets from the Russians but was rebuffed. As Ashlee
Vance recounts in Elon Musk: Tesla, SpaceX, and the Quest for
a Fantastic Future, Musk was furiously crunching numbers in
a spreadsheet on a flight back from Russia when he turned to
Mike Griffin, a future NASA administrator, and Jim Cantrell, a
founding executive at SpaceX, and said, “I think we can build
this rocket ourselves.” Cantrell recalls, “We’re thinking, ‘Yeah,
you and whose army?’” But after reading up on the fundamentals of propulsion, aerodynamics, thermodynamics, and gas
turbines, Musk had broken rockets down to their basic principles in his spreadsheet. With that analysis, his team came up
with a way to develop affordable, reusable rockets by using
simpler commercial-grade, rather than space-grade, components in a smaller architecture. Today SpaceX has performed
more than 60 successful flights and 29 successful landings
and saved NASA, its major customer, hundreds of millions
of dollars. “In most cases people solve problems by copying
what other people do with slight variations,” Musk told us. “I
operate on the physics approach of analysis by first principles,
where you boil things down to the most fundamental truths in
a particular area and then you reason up from there.”
Exploring Adjacencies
Using Exaptation
As you search for breakthroughs, the set of available opportunities is always determined by the elements you begin with—
a concept that the biologist Stuart Kauffman described in his
theory of “the adjacent possible.” But we tend to see only the
uses or recombinations of those components that are obvious.
The key is to discover completely different uses. In evolutionary biology, this happens in a process called exaptation—in
which a characteristic that evolved for one purpose is adapted
laterally for another use entirely. For example, feathers,
whose initial function may have been to provide warmth or
attract mates, became the key to flight. Similarly, the complex
jawbones of early fish evolved as those creatures became
land dwellers, developing into ears. If exaptation works in the
biological world without any human agency, then in a world of
choice and imagination, its possibilities are infinite.
How can would-be innovators tap the power of exaptation?
They can begin by asking why we use something for one
purpose and not another. For example, after Van Phillips lost
his leg in a waterskiing accident, he studied biomedical engineering to learn how to design prosthetics. He was surprised to
discover that prosthetic design had changed little since World
War II. When he explored why, he learned that designers
focused on aesthetics—making the prosthesis look like a foot.
But Phillips asked, Why does it have to look like a foot? What
if instead it acted like a foot? Drawing ideas from pole vaulting, diving boards, and the feet of cheetahs, he created the
Flex-Foot, a prosthetic that looks nothing like a foot but gives
wearers far greater freedom of movement. (Most Paralympians use versions of it.) By reexamining the purpose of artificial
limbs, Phillips revolutionized the field of prosthetics.
Jeff Bezos applies a similar kind of thinking at Amazon,
where he encourages teams to look broadly for new uses of
their existing capabilities or new ways to solve the problems
of existing customers. “If you’re talking about how do you
decide what adjacencies to move into, we do it two ways,”
he says. “We do it customer-needs-backwards, and we do
it skills-forward.” Amazon Web Services (AWS), one of the
company’s most profitable businesses, emerged from the
skills-forward method. “With AWS we had to recruit a new
set of customers, but we had extraordinary skills inside the
company on distributed computing,” says Bezos. The Kindle
was the product of the other method. “With Kindle we had
no hardware experience, so we didn’t have the skills,” says
Bezos. “But we had a customer need.”
the point of these four innovation approaches is to shake
up our thinking and get us past our natural inclination to stick
with what we know—to sidestep our cognitive biases. There
are certainly other techniques. Amazon, for instance, asks
employees to write press releases that introduce an imaginary
new product to the market; this encourages them to envision
what new offerings could be in a few years. That tactic can
even help you with your career. In the month of January, you
can write Christmas cards describing what you’ll have accomplished by December. There are also tools to help you make
progress. For example, you can create an “artifact trail”—a
set of small wins leading up to your vision, which you can
begin acting on immediately—or apply experimental design
processes to see whether you’re heading in the right direction.
Whatever frameworks or approaches you use, the goal is
to focus on what could be. Too often would-be innovators get
bogged down in details of what happens to exist today and
tone down ideas to make them sound more palatable. But to
achieve 10x thinking we have to break free of incrementalism
and face down the fear of failure. You need to dream big.
Consider Einstein. While racing against David Hilbert,
a brilliant mathematician, to articulate a general theory of
relativity, Einstein struggled to frame up the specific mathematics to describe his theory. He presented his thinking every
week, and every week the calculations were different. As Carlo
Rovelli recounts it, Hilbert was struck by Einstein’s difficulties
with the details, noting: “Every boy on the streets of Göttingen
understands more about four-dimensional geometry than
Einstein.” Yet, as Hilbert himself pointed out, Einstein solved
the problem first. Why? In Rovelli’s opinion: “Because Einstein
had a unique capacity to imagine how the world might be
constructed, to ‘see’ it in his mind.”
We don’t claim to have identified all the ways to generate 10x insights. But we do believe that firms need new
approaches to reach such discoveries more effectively, and
we’ve described several of them here. We also believe it’s
time for a behavioral revolution in the field of innovation.
By taking the cognitive sciences seriously, we can become
better at breaking the bonds that limit our vision. Why is that
so important? Because there is no objective future out there
that we will arrive at one day. There is only the future that
HBR Reprint R1901H
we create.
NATHAN FURR is an assistant professor of strategy at INSEAD.
JEFFREY H. DYER is the Horace Beesley Professor of Strategy at
Brigham Young University’s Marriott School. KYLE NEL is the CEO and
cofounder of Uncommon Partners, a behavioral transformation
consultancy, and the former executive director of Lowe’s Innovation
Labs. Furr and Nel are the coauthors (with Thomas Zoëga Ramsøy)
of Leading Transformation: How to Take Charge of Your Company’s
Future (Harvard Business Review Press, 2018).
Harvard Business Review
January–February 2019
117
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Harvard Business Review and Harvard Business Publishing Newsletter content on
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intended for use as assigned course material in academic institutions nor as corporate learning
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reserves, electronic course packs, persistent linking from syllabi or by any other means of
incorporating the content into course resources. Business licensees may not host this content
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contact permissions@harvardbusiness.org.
cRUCIBLE 118
Lessons learned
from a hospital bed
CASE STUDY 121
The good and the evil
of an angel investor
SYNTHESIS 126
Three ways to
explore globalization
LIFE’S WORK 132
Norman Foster
on effective office
architecture
Experience
MANAGING YOURSELF
Zoom In, Zoom Out
The best leaders know when to focus in and when
to pull back. by Rosabeth Moss Kanter
A
fter an explosion on a BP oil platform in the Gulf of Mexico in April
2010 killed 11 people and caused
the biggest oil spill in U.S. history, the
company’s CEO at the time, Tony Hayward, zoomed in on the implications for
his career. He appeared preoccupied with
the incident’s impact on BP’s management
and, particularly, on himself. About a week
after the explosion, Hayward was quoted
as saying to executives in his London office, “What the hell did we do to deserve
this?” Despite PR coaching, a month later
he told reporters, “I’d like my life back.”
112 Harvard Business Review March 2011
Hayward, who was forced to resign
in July, had numerous opportunities
to acknowledge the bigger picture: the
human devastation and public consternation in the Gulf region. But even though
BP deployed thousands of engineers to
contain the spill, he could not, in public,
rise above a 10-foot view; it was as though
the crisis were his own personal devil.
Hayward repeatedly focused on the small
picture—trying, for example, to shift the
blame to supplier Transocean, which had
run the rig that exploded. His zoom button
seemed to be stuck on the closest setting.
The lens through which leaders view
the world can help or hinder their ability
to make good strategic decisions, especially during crises. Zoom in, and get a
close look at select details—perhaps too
close to make sense of them. Zoom out,
and see the big picture—but perhaps miss
some subtleties and nuances.
Zoom buttons on digital devices let us
examine images from many viewpoints.
They also provide an apt metaphor for
modes of strategic thinking. Some people
prefer to see things up close, others from
afar. Both perspectives—worm’s-eye and
bird’s-eye—have virtues and pathologies.
But they should be vantage points, not
fixed positions. Leaders need multiple
perspectives to get a complete picture.
Effective leaders zoom in and zoom out.
I’ve come to this conclusion after more
than 25 years of observing how leaders set
strategic direction, interact with constituencies, and respond to unexpected events.
I’ve worked with thousands of executives
and conducted systematic studies of innovation, alliances, change, and transformation in hundreds of organizations. I’ve
seen how organizational structures, processes, and cultures can direct the gaze of
leaders close in or far out, and how levels
of analysis can become default positions
that limit effectiveness.
The zoom framework offers a dynamic
model that can help current and aspiring
leaders increase their own range of vision
and establish conditions that enable others’ success. In this article, I will identify
the behavior and decision modes associated with zooming in and contrast them
Illustration: Grady McFerrin
Managing Your Professional Growth hbr.org
hbr.org
with those for zooming out. I’ll consider
the structures and cultures that trap
people in dysfunctional default positions,
and I’ll conclude with ideas on developing
capabilities for zooming to all levels.
Zooming In
Zooming in brings the details into sharp
focus. Any opportunities look large and
compelling, though they may lack some
context.
A CEO I will call “John Jones”—who
owns a midsize retail chain started by his
father—works primarily in close-in mode.
A classic entrepreneur who combines
hustle with retail-is-detail know-how,
Jones expanded the chain successfully
from two to 30 locations by continually
seeking the next prime site, merchandise
item, or website tip. His discoveries came
mostly through his personal connections
rather than analysis. Jones disdained
strategic plans and management theories.
He removed a well-regarded banker
from his advisory board, for instance,
because the banker would ask for plans—
orderly goals, with timelines—when
Jones simply wanted to concentrate
on specific operational ideas that were
easy to implement.
Thanks to his industry knowledge,
wide personal network, and intuition,
zooming in served Jones well for a decade.
But when the economy soured, his good
instincts felt insufficient. Family members
and key employees began to question
his decisions. Jones had no succession
plan—nobody had been groomed for the
future. He made acquisitions on the basis
of his own taste or just because an owner
wanted to sell, and gave little thought to
cost, whether the acquisition was a good
fit, or what else was on the horizon. He
had no broad theory about which opportunities to pursue and no industry map.
Zooming in was limiting his company’s
growth prospects.
Close-in managers look for immediate
benefits and make ad hoc decisions. They
often favor one-on-one conversations over
group meetings. They want to address
Are You
Stuck in
A Perspective That’s
Too Close In?
Telltale
signs
Questions
that will help
you zoom out
You get overWhat is the conwhelmed by count- text? What matters
less details
most?
You take things per- What larger
sonally, finding the purpose is being
“me” angle first
served? What is at
stake for others?
You trade favors,
hoping others will
“do it for me”
Why is the task or
mission worthy of
support?
You make exceptions or special
deals based
on particular
circumstances
Will the circumstances recur?
What policies or
decision frameworks could be
used?
You jump on any
good-looking offer
that pops up
Does this fit the
goal or destination? What else
might be on the
horizon?
You treat every
situation as unique
Are there other
similar situations?
What categories
or groupings make
sense?
details by doing whatever occurs to them.
Faced with a problem, they look for quick
fixes rather than stand back to seek underlying causes, alternatives, or long-term
solutions. They prefer to contact someone they know rather than search more
widely for expertise. These tendencies are
exacerbated in organizations that restrict
information flow, reward quick hits, and
confine people to their roles.
A close-in perspective is often found in
relationship-intensive settings, where human talent is the primary asset. Consider
another executive, whom I’ll call “Sam
Lee.” He ran a well-regarded professional
services firm during a decade of incremental growth. Known as a benign leader,
Lee could talk about strategies with
external constituents, but he operated
best when zooming in. He liked to confer
in a clublike huddle in his office rather
than discuss issues in open meetings. He
was unfailingly helpful with individual
requests (including one-off favors). In
other words, he liked to make exceptions instead of policies. As a result, his
organization had an abundance of private
deals with individual staff members (such
as off-calendar budget allocations, vacation privileges, sabbaticals, and extended
family leaves).
In a time of prosperity with few external threats, a personal approach may
be acceptable. Toward the end of Lee’s
tenure, however, the firm found itself in
an increasingly competitive environment
with greater regulatory pressure. It was
becoming untenable to treat each situation
as unique. Even as policy exceptions accumulated, the logic behind these decisions
remained unaddressed. Junior professionals were left to wonder and worry about
the rules and fairness. Whispered concerns
about favoritism ran through the corridors.
The organization was running on a patronage system of personal credits and debits,
with a market for favors substituting for
principle-based decision making. Morale
and productivity declined, jeopardizing
the company’s reputation and making it
harder to attract the best talent. When Lee
March 2011 Harvard Business Review 113
Experience
retired, his successor immediately zoomed
out, stating a few broad strategic priorities.
He created clear formal policies to replace
informal exceptions and began discussing
them all openly in large meetings.
One of the traps of zooming in is
that policies and systems are based on
internal politics. Close-in people tend to
talk about their personal lives, as though
self-disclosure will beget the same from
others, turning organizational actions into
an exchange of favors based on special
relationships. They often resist change
because it disrupts the social equilibrium.
Sometimes their personal approach is
valuable, because people respond faster
to individuals they know than to abstract
appeals. But “do it for me” is a weak basis
for corporate decisions. It also means
that employees cannot easily stand in for
one another, because relationships are
“owned” by specific people. And it can put
ego above institution.
Relying heavily on personal instinct
and interpersonal deals without a wider
perspective or a long-term rationale can
prove perilous. An overly personal approach can also make managers quick to
perceive slights, whether or not they’re
real. The CEO of one technology company,
though known as a great strategist, still let
zooming in drive some decisions. He was
personally offended by how a prominent
magazine had portrayed him, so the company stopped advertising there. Employees took this as a warning to tread carefully
when providing him with unfavorable
information. In another case, a corporate
middle manager pored over e-mails to see
whether he was being treated appropriately, and complained immediately if he
perceived any suggestion of offense. His
focus on status over substance cost him a
higher-paying position; the plum promotion went instead to a manager with a
grasp of the bigger picture.
Zooming in can obscure the big picture,
leading managers to overlook important
issues. Decisions become based on who
you are and whom you know, not on
broader goals.
114 Harvard Business Review March 2011
Zooming in can also lead to turf
protection. When managers use territorial language, it reveals that they have
fallen into this trap. One division CFO, for
instance, always used the first person
when referring to budget numbers, as
in “I have x dollars,” even though it was
the organization’s money, and ignored
repeated requests from other members of
the executive group to stop this manner of
speaking.
Personalizing is not the same thing
as self-reflection—indeed, it might be
the opposite. Self-reflection is a learning
process that requires a distant perspective
on one’s own behavior, in context. An ob
session with self is reinforced by zooming
in, but self-awareness stems from zooming out.
Zooming Out
Zooming out is essential to big-picture
decision making. When people are far out,
they can map the whole territory before
taking action. They see events as examples of general patterns rather than as
idiosyncratic or personal incidents. They
put things in context and stress principles.
The former CEO of Garanti Bank, Akin
Ongor, led it from a middle-of-the-road
bank in Turkey to global prominence by
setting up processes that replaced poor
performers and upgraded talent. When
his announcement of layoffs provoked
union protests and even death threats,
Ongor refused to take the attacks personally or get drawn into ad hominem
battles. Instead, he went to the media and
elevated the discussion to the principles
behind the bank’s actions. By zooming out,
he helped his employees, the public, and
government officials see the layoffs in the
context of a transition in the economy and
as a move that would save an important
institution so that it could create more
jobs in the future. The protests ended, and
Ongor continued to lead successful change
at the bank.
Zooming out helps people see the
map and stay focused on larger principles.
Consider Procter & Gamble CEO Robert
McDonald, who rose through the ranks
to head a global public company with
a long-established culture. Even while
seeking current profits, he constantly
asks questions about what will support
the sustainability of the company and
keep its values intact. He can generalize
about geographies and lines of business
while appreciating cultural differences.
He is personable but doesn’t personalize
issues, repeating often that he is a steward of an institution that must endure
beyond him.
Zooming out helps people
see the map and stay
focused on larger principles.
But it also has traps.
Zooming out is appropriate for top
leaders. But it also has traps. For one thing,
key stakeholders might want to see immediate results and know that the details
are right before they support long-term
big-picture thinking. That’s why broad
visions need to be matched by small wins
that demonstrate feasibility. For another,
leaders who like to be far out may operate
so high above the fray that they don’t
see emerging threats and opportunities
(which, ironically, is a danger for closein leaders too) or recognize competing
theories that are better...
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