What it takes to build “genius at scale”

Welcome to McKinsey Talks Talent, featuring McKinsey leaders and talent experts, Brian Hancock and Brooke Weddle. I'm Lucia Raheli. The leaders who are really good at building organizations that can innovate no matter what level they're at, our leaders who basically say this is not about followership, it's about me creating an environment in which people are going to be willing to collaborate experiment and learn with me to create the future. This Linda Hill, she's a professor at Harvard Business School and author of the new book Genius at Scale. New technology is forcing fast innovation. Professor Hill joins us to talk about what leaders must do to inspire their greatest talent to forge new ways of working. Linda Hill, welcome to McKinsey Talks Talent. Thank you to be with you. I'm Brooke and Brian, welcome back. Thanks, Lucia. It's great to be back. And congratulations on your new book, Genius at Scale. I have to say I found that title immediately compelling, but I'll also say it. It sounds almost like an oxymoron. What does Genius at Scale mean? So what we found in our research is that everyone has a slice of genius and the role of the leader is to figure out how to unleash and harness that slice of genius for the collective good. Genius at Scale is about the fact that what we've learned over the course of almost 20 years of research, that yes, it is very hard to generate innovative solutions. But in some ways, it's even harder to scale those innovative solutions, to launch them, commercialize them, have the impact you want with that idea. So Genius at Scale was really focusing on how do you make sure that that great innovative solution becomes reality and inherent in the tension of how you go about building an innovative organization is this tension between the individual genius and what the collective needs or wants. And in the book, you introduce the ABCs of innovation leadership, the architect, the bridge or the catalyst. Can you explain the model and why these three roles matter? The architect role is really a role in which you are thinking as a leader, how do I build an organization that can innovate time and again, which is about building the right culture and capabilities necessary for that organization to be able to collaborate, experiment, and learn. The bridge is really become critical that you have bridges, now that we have to have all of these digital capabilities and data. So if you want to be able to innovate at Scale and with any speed, you actually have to build partnerships. The catalysts are the leaders who know how to actually build out whole ecosystems. So in fact, what we see for lots of innovation, think electric cars, one of the leaders of Renault at the time said to us, so even if we make a fabulous electric car here at Renault, we still need to have private, private partnerships of different sources to really accelerate the development of batteries. We need to work with government to get enough charging stations. We need to work with NGOs to make sure people are upscaled so they can actually do the work necessary to produce an electric car. So the ABCs of innovation are the architect, the bridge or in the catalyst. These are three very interrelated roles, but it really is something, the bridge or role in particular, we're hearing lots of organizations tell us we don't have bridges. And what are we going to do about that? Tell me a little bit more about why organizations don't feel like they have bridges, because presumably many bridges come from middle management. And we hear across many organizations, we've got too many, not too few middle managers. So what's the missing unlock to creating more bridges across organizations? Well, I think the first thing to say is it's a little bit different. The bridges can be really, can be at various levels in the organization. So one of the things we know is most leaders, their mindset is, you know, my formal authority is very important and really the source of power I'm using to get things done. Well, formal authority doesn't really matter very much, because in fact, what we see in those kinds of situations, you cannot tell people to innovate. You cannot force someone to share their slice of genius with you, their talents and their passions. You can only invite them. The leaders who are really good at building organizations that can innovate, no matter what level they're at, are leaders who basically say, this is not about followership, it's about me creating an environment in which people are going to be willing to collaborate experiment and learn with me to create the future. We don't see it a lot, which is why we see that so many organizations, particularly incumbents, have trouble innovating time and again. In our research, we make sure to study people, middle managers, individual contributors, being your managers, who actually are quite good at thinking about how I use myself as an instrument to create the kind of environment that will allow people to be willing to do the hard, risky work of innovation. You have the model, the ABCs, right? That's the what? Talk us through the journey, right? The assessment upfront, you know, how do I actually understand that ABs and Cs in my organization, and then what are the steps to actually building this out in your culture? So, the architect, Bridger, and catalyst, these roles are very interrelated, so I'm talking about them as if they're quite separate, but they're not so much. It's really about what I would say in terms of the roles, so one is you need to think about what is the mindset of the leaders, how do they think? One of the other situations we were able to write about was we studied Kathy Fish who at the time was the head of research and development and innovation at Procter and Gamble, and what she's realized, they weren't growing at the pace at the market, expected them to grow, so part of what they needed to work on was this experimentation and learning piece. The collaboration piece a bit too, but really how to experiment and learn, so they put in lean innovation. So, the first thing she did when she wanted to do this, though, is she said, you know what we need to define what success looks like differently. So, one is she said, we are only going to pursue those things that are going to be irresistibly superior, that would truly differentiate us, and to figure out what that meant, she went back and did research on when did they win big, and it turned out they won big when it wasn't simply about the product, but it was about the whole end-to-end experience. So, they all begin to talk about for a long time what is irresistibly superior, what does that mean, what does it look like, and she did it based on research because it's a research-based organization. So, then we spend a lot of time looking very specifically in their environment about what were the barriers to innovation, and it varies a bit, I mean there's some commonalities for sure, but it varies a bit. So, when you ask me where you start, it really is we know organizations or systems. One thing that I want to point out that Kathy and the group had to do is they actually had to really look at their own behavior as C-suite executives. So, they got a coach who counted how many times did they ask questions and how many times did they make statements when they were talking to people about, you know, topics that related to innovation, and guess what that ratio was, right? You can only imagine. So, they all practice inquiry, it's the whole C-suite had to get better at inquiry because this micro behavior, okay, you make all these changes in the system, but then they come in front of you, they present what they're working on, and you only make statements and don't ask questions, guess what, you kill it right there. So, it really is from the macro through the micro, so when they started asking questions as opposed to making statements, there was a lot more psychological safety when you were coming to talk to the C-suite about these innovative solutions you would come up with. Are there some industries where it's more naturally set up for this kind of collaborative innovation? I don't think there's some industries. One thing that is true is we decided to over sample regulated industries because those are the industries that everyone says are really the hardest, financial services, pharmaceutical airlines. So really, we over sampled there because, again, people would say, with collective genius, the first chapter was about Pixar, and everyone says, well, I'm not Pixar, we're not Pixar, yeah, of course, they can do that. So okay, let's look at how was it that a middle manager was able to lead the team that actually ran those trials for COVID vaccine in 266 days. What did he do to prepare that group to do that? And when he first stepped into that group, believe me, they did not think they were innovators. They thought they were the executors. Linda, how do you think about designing a performance management system to really incentivize learning, and of course, by extension, innovation? What have you seen work well? We all know you can't design the perfect system. So one of the other companies or organizations we studied was Cleveland Clinic. One of the things they did at Cleveland Clinic is they moved from KPIs to OKRs, where in fact, no, there is that stretch, and if you get 80 percent, if you will, of a real stretch goal, it's sort of better than getting 100 percent of something that wasn't so much of a stretch. I'm saying that rather simplistically, but they actually, it wasn't so much the changing to OKRs, it was the whole way they actually deployed them, and the conversations that had to be had all along the way to encourage people. They also were extremely transparent about their logic. So I think again, when you're talking about building innovative culture, you want to think about the how you're doing it and the why. So I would say that that's one thing that I've seen is sort of somehow building in an understanding when you make those shifts, you're actually trying to change culture. So one of the other organizations we studied, how they assessed innovation over time, shifted based on sort of where the organization was in its own maturity. So at first, it was just, are you engaged in any activities? Are your employees engaged in any activities that might lead to innovation? Are you holding hackathons? Are you doing this thing that eventually it moved to another very, the second set of measures included, are you killing projects? If you kill yourself. own project, I will give you a bonus. Killing projects is a big deal. To get them killed, if you will, they need to be. And then it moved to eventually it moved to sort of like a number of patents, and finally it moved to something that was more, you know, return on investment and sort of vitality indices. But it really was over time. It became more specific, more financial, I guess, I would say, in how they did it. So a number of the examples that you've shared in the book, go back to the era of COVID. And that brings to mind, for me, a bit of attention between speed of innovation, getting things done, the shared urgency, and the time it often takes to build trust, and to build the social fabric that's critical for innovation. Perhaps pulling on some of the examples and learnings you had from COVID, how can companies kind of speed to getting the trust and getting the environment set so that they're able to innovate more quickly? Trust is very fundamental. So one of the things we see, in even the architect role, bridge role, and catalyst, you have to build mutual trust. You rarely build mutual trust if there's not mutual influence. What you need to do, it really does come down to we are social learners, and trust really matters. So I think that one of the things we know, and I presume you tied it to COVID in part, is that many leaders really shared their vulnerabilities more during that time frame, than they would normally have. Because frankly, some of them, they were in shock that they got sick and almost died themselves, some so many people who are very sick or died in their organizations. So I think that you as a leader have to really think about creating an environment and co-creation. Now, Neelis to say, if you're a person who thinks that everybody has a slice of genius, and believe me, these leaders are very tough leaders, they don't think everybody has the same slice. They're quite willing to be very top-down when they need to be, so I don't want people to think they're something soft, if you will, about how they need. But what I say, the way you start that, is you actually begin to look at what evidence you're providing for people of two things. You want to provide evidence of your competence, but you also want to provide evidence of your character. It is a collective activity, and it's not going to be your vision, that helps the organization really be more innovative. It's going to be how you build that culture and capabilities, and we have very specific framework about what capabilities and what needs to be in that culture. Now, until you get that that's your role, and you actually understand how your behavior impacts that, as well as all the choices you make about structures and systems, etc. I don't think these organizations aren't going to shift. So, trust is, are you behaving in ways that people are aware that you not only are competent, you know what the right thing to do is, and more importantly, you want to do the right thing. They are looking for signals that you want to do the right thing. Plus, people need to know that you can deliver. That's what makes you credible as a leader. Do you know how to be supportive of the individual and let that individual express their slice of genius at the same time as you're making sure you're getting done with your stakeholders need you to get done? Because innovation is about something that is new and useful. If it's new, it can be creative, but if it's not useful, it's not an innovation. Linda, you have such a body of research that you've led over time. Are there just a couple of things that really rise to the top in terms of key learnings? Because I have Ed in my mind. Ed Catmo, he came to class one day and the students talked about why Pixar was able to innovate so much. And on so many dimensions, you know, our technology, and they have financial success too. And the students were saying, well, maybe you're just lucky, and then they said, no, no, no, no, you have more talent than most. And Ed said, yeah, we do have talented people because once you start, you know, they're attracted, et cetera. But he said, I don't think it's our talent. I think it's our teamwork. I think it's how we work together. So I think again about the how. So you do need the talent. But it's really about how that talent works together. It's really about how people develop their judgment and how you develop your judgment has a lot to do with who you hang out with. And the points of you, you actually allow yourself to be exposed to even uncomfortable ones. So we have been doing a survey of C-suite executives around the world for five years now. We have over 8,000 responses. The same characteristics keep coming out. What kind of organization do you need to actually be able to use all these technologies? Data informed, not data driven. What kind of leadership capabilities? What really matters? They're five for the leadership. The first one, which is not surprising, is adaptability. Interestingly enough, the second one is creativity, which I think is the way they're sort of back to somewhat to vision. Vision does matter. Curiosity, comfort with ambiguity. This is really coming up in every year. And what came up after it, we didn't come up a whole lot in the first three years we did this. But once Gen.A.I. came data sabbiness, those organizations where people perceive the senior management to be more tech savvy are making much more progress. Those leaders who said data informed, basically two things happened. There was less resistance to the acceptance of the technology and the data. Because when you say data driven, it sounds like the data knows more about what I do than me with all my experience and all my expertise. And that just makes people crazy. But the other reason it matters is, and it really matters now with Gen.A.I. and Agenda.G.I. You need to use your judgment. You do not want to assume. You need to ask all kinds of questions about the data. So I think we really need to move from data driven to data informed. Because judgment, judgment, and how do people develop judgment, is what I think we need to worry about no matter what level of the organization we're looking at because organizations are going to become somewhat more decentralized, I think, as we use these technologies. What bridges have that really makes the difference is they have contextual intelligence. They know how to go into a situation and read what really matters, what's salient for us to pay attention to as we're trying to work with this other group. If you're a CEO, incredibly driven to innovate in particular in an AI world, what is the one thing you would have sheer he prioritized? The development of bridges, do you have enough people who know how to build robust partnerships built on mutual trust, mutual influence and mutual commitment to some shared intention? Love it. Fantastic. Linda Hill, thanks so much for joining us today. Thanks so much. Thank you. My pleasure. Thanks so much for listening. I'm Lucia Raheli with Brian Hancock and Brooke Weddle. Follow McKinsey Talks talent wherever you get your podcast.