Yuri van Geest is co-author of Exponential Organizations, a book about the fundamentally new ways startups and corporates are organizing internally and externally to deal with disruption, exponential technologies and accelerated change, published by Singularity University Press. Van Geest worked for corporates for six years, for agencies for four years, for central government for two years and for startups for two years. He now runs ExOxo.co, a digital and corporate tranformation agency with offices in New York, Amsterdam and Shanghai. Van Geest is the initiator, ambassador and founder of Singularity University in the Netherlands and a member of the faculty of futur/io, a new European education and research institute focused on exponential technologies and how Europe might use them to create desirable futures. He recently spoke with The Innovator about how the leadership of companies must change in order to keep up with exponential technologies.
Q: What type of leader is needed to run an exponential organization?
YVG: We are moving from linear to exponential change and technology is a driver of that so to have an impact the leaders of companies have to become exponential leaders. In order to be exponential you have to have a background of disrupting yourself over the last 10 years. If you don’t you won’t be credible. If you are the type of CEO who insists on never making a mistake and then tries to champion disruptive innovation it won’t work because it will be incongruent.
Q: Most leaders of companies today were trained in a very different era. How do they suddenly become “exponential leaders?”
YVG: The first step is alignment and coherence inside your body, to open up your senses to become more effective and more authentic and more productive. The second step is to visit innovative hotspots to understand what is going on. You can’t just read a book. You have to go there to understand the energy and ideally play with the technology and really experience it. Then you have to embrace curiosity, creativity, resilience and collaboration. All of these things become more important but they are difficult to spread throughout the organization without humility, openness and a certain amount of vulnerability. You have to figure out what is your company’s purpose in order to enable or facilitate change and become an enlightened dictator to make things work. If you are only enabling you will move too slowly. And you have to give your company the capability to succeed, which means creating open APIs, and open ecosystems, having good partnering skills, understanding communities and creating win-win relationships.
Q: What should leaders due to overcome resistance to change inside the company?
YVG: Start with the top level — the C-suite and the board — by working on goals and purpose. The next step is to figure out how to engage middle management. Identify change agents through human resources and different surveys in order to avoid the naysayers or the doubters.
Involve the people you identify in the program as facilitators to help drive the change. The key is to make middle management part of the program, give them ownership and feel respected and in control.
Q: What other advice do you have for leaders of corporates tackling innovation?
Start with something that is fully independent — with a different culture and different methods –and only integrate it when it has started to succeed — otherwise the corporate immune system will kill the innovation. The hard part is how do you make sure you are aligning the interest of the core with the interest of the edge. When you start these initiatives on the edge some people in the company will be jealous and envious because they are not part of it and will try and block it. For example, if you are my manager and we are both in the core an I am taken to work on the edge you are losing a good person and will feel frustrated. So you need to figure out a way to compensate the managers at the core if someone from their department is successful on the edge. You should give them a bonus, or allow them to have a career move or give them stock ownership. The only way to solve the issue of civil war is if there is skin in the game on both sides. Another important thing is if you are pulling people out of a department to work on the edge you need to make instant replacements with great people.
Q: What are some of the biggest mistakes corporations make?
YVG: The biggest mistake companies make is to go too fast. It makes sense to have a lot of discussion about culture and KPIs before you start. It takes about half a year to get everyone on the same page. Then you can move fast but at first you have to go slower then normal.
ING Bank is an example of a company that moved too fast. They took the approach that innovation itself is a key KPI and everyone needs to innovate. They had a lot of ideas but did not think through ‘how do we align those ideas, what are the key methods and how do we standardize on the KPIs?’ Their effort was very fragmented, people became overwhelmed and became disengaged because there was no compatible way to measure success. It is important to develop a lightweight innovation architecture and standardize activities to make them comparable and more effective.
Another big mistake is developing incremental ideas on the edge. Companies think they can innovate themselves but they can’t. They only come up with incremental ideas which they believe are disruptive but aren’t. When you try to tell them ‘guys, this is been developed five years ago’ they are surprised because they live in the bubble of an internally focused environment. This does not mean all companies need to work with startups but leadership does need to spend a few weeks a year traveling to China, Silicon Valley and Mumbai to really get a sense of what is happening.