Here’s my lastest column from Retail Banking Review…

Thou shalt not be any other colour except green. How could anyone disagree with that these days? Ever since Al Gore put his PowerPoint slides to music, companies the world over have taken it upon themselves to go green; banks are suddenly carbon neutral. But it’s not as though we didn’t know about environmental issues before;so what’s going on?

Personally, I think it’s the madness-of-crowds meets risk aversion. People tend to swing from one so-called crisis to another. Last year, it was flu pandemics (a dead certainty according to experts). A few years previously, it was deep vein thrombosis on long-haul flights. And before that we had acid rain, rouge asteroids and terrorism. Only, mostly, we didn’t. Most of these so-called threats have failed to materialise, and when they have they’ve been much less of a threat than we thought.

September 11? Yes that was a black day, but the fact of the matter was that more Americans died on public roads escaping the ‘threat’ of airline highjack in the few months following September 11 than died in the twin towers themselves. This is not is not a widely reported fact, but it’s a fact nevertheless.

If there’s a trend buried deep within all this it’s that we are increasingly taking worst-case scenarios to be most likely outcomes. We are frightened rabbits, focussed on, and frozen by, the oncoming headlights of change, and consequently unable to do anything about problems much closer to home.

Yes climate change is an issue but the score on the door is that global temperature has increased by 0.76°C between 1850 and 2005 and any other figure is a speculative projection (i.e. it hasn’t happened yet). This is not to say that it won’t happen and neither am I saying that we shouldn’t worry about the possibility of it happening, but, perhaps we should also worry about things that are more certain, more immediate and more actionable.

It’s nice to hear that banks are going carbon neutral. Doing something is better than doing nothing at all, but where were the banks ten years ago when virtually all the current data about climate change was available? Either banks are jumping on a green bandwagon because everyone else is (risk aversion), or else we have all lost our collective minds.

Here’s an analogy to prove my point. In the UK the Ministry of Defence is proposing quieter warheads that reduce noise pollution and grenades that produce less smoke? Holy smoke! There are even experiments to see if explosives can be turned into farm manure. To me this is nuts, but to Dr Debbie Allen, director of corporate social responsibility at BAE systems, it is important to consider the environmental impact of weapons. Oh my god, I’ve entered a parallel universe where black is white and green is absolutely everywhere.

Sure, there’s no reason not to look after the ‘glocal’ environment, but let’s also not forget that there are some pretty big issues much closer to home. For example, Macquarie Bank has been quietly supporting the Cape York Institute to develop indigenous education programs. They’re not alone either. Some other Australian banks are similarly supporting indigenous issues and should be loudly applauded. But I’m going off track.

Green is good. So is greed in certain circumstances. Greed, or more accurately the search for investment opportunities will sort out these and other problems. A mixture of capitalism and climate change will create a heady blend of investment in alternative technologies and innovation. In other words we’ll solve it. There will also be shifts in customer attitudes and behavior but legislation will probably be the single largest driver of change both locally and globally. Banks can play their part in all of this but it would be nice if they actually got in front of the parade once in a while

Here’s my latest number for Fast Company magazine…
‘Crowd of One: The Future of Individual Identity’ is an interesting book by John Henry Clippinger — a senior fellow at the Beckman Centre for Internet & Society at Harvard Law School. One of the central thoughts of the book is that people only become themselves through their relationship with others. If we become isolated our growth becomes stunted. This seems like a great idea although, being rather busy this month, I haven’t actually read the book myself so I can’t actually tell you for sure.
According to a snapshot review that I did manage to read on my way to work, technology is changing our territorial and psychological boundaries. This point is somewhat picked up in a recent essay by another thought-leader, Sherry Turkle, who is Professor of Social Studies of Science and Technology in the Program in Science, Technology, and Society at MIT and the founder of the MIT Initiative on Technology and Self. She argues: “what people mostly want from public spaces these days is to be left alone with their personal networks” and that a new “state of self” is now developing whereby people can transport themselves somewhere else at the touch off a button.
I think I’ve witnessed this first hand very recently. First on holiday last month where numerous couples were sunbathing next to a swimming pool, each of them on some kind of portable electronic device. What were they doing? I have no idea but they certainly weren’t talking to each other. They were undoubtedly connected to something but I couldn’t tell you whether their ‘self’ was developing or not.
The second instance was when I took my brother’s kids to an indoor playground last Christmas. Soon after I sat down a couple in their late twenties sat down next to me with a girl aged perhaps six years of age. The girl was dispatched into the safe play area and both parents took out Blackberries and proceeded to check email. They did this for over sixty minutes without once speaking to each other or acknowledging the presence of their small daughter. Again, they were certainly connected but to what and for what reason I’m not sure.
It’s the same at work. Ten or fifteen years ago people didn’t take calls in the middle of meetings. Today it’s commonplace. I was in a meeting last year with News Corp when someone from their ad agency took a call and the rest of the room was put on hold for almost ten minutes until the call had ended. You can see this teleportation process in operation in countless restaurants too where couples are talking to each one minute and then divert to receiving phone calls or checking emails the next. In my day this would have been considered rather rude and people would have switched these devices off or hidden them under the table. These days it’s just considered normal and these devices are proudly and openly on public display.
In short, we are becoming so tethered to our electronic devices that we never entirely switch off and escape from the presence of others. Now this may be a very good thing in terms of the development of individual identity, because we are constantly connected to other people, but I wonder what it’s doing to the quality of our thinking.
Firstly, our connectedness to others through digital networks means that a culture of rapid response has developed in which the speed of our response is sometimes considered more important than its substance. We shoot off email mails that are half thought out and long-term strategic thinking is constrained by a lack of proper thinking time. We are always responding to what’s urgent rather than what’s important. I could have probably put all that together a lot better but I’m pushed for time and really can’t be bothered.
This connectedness is constant but our full attention is only partial as a result. If I can mention just one more thought leader then it needs to be Linda Stone, an ex Microsoft researcher, who has coined the term Constant Partial Attention to describe the fact that we feel some kind of need to scan electronic and digital environments to ensure that we are not missing out on something more important. We don’t want to be left out of the loop. As a result, nobody feels secure enough to leave these electronic devices off for an hour during a meeting, let alone for a week when they are sitting next to a pool on holiday.
But it’s not necessarily the speed thing that worries me. There is evidence that many of our best decisions are made when we have little or no time to think. What concerns me the most rather is that we just don’t switch off. Ever. We are now so connected, available and never alone that we have left ourselves no time to properly reflect. We scroll through our days without thinking about what we are really doing or where we are ultimately going. We can probably get away with this for a while, especially when the decisions that need to be made are at a fairly low level, but sooner or later I suspect our lack of aloneness and reflection will catch up with us.

Here’s a little something (actually rather long) that I’ve just written for a magazine called Future Orientation (F/O) in Denmark – www.cifs.dk.

Back in 1987 I worked with a company that was trying to convince the citizens of Europe that what they needed to be happy was a salami stick and some ice cream. Twenty years later and I was back working with the same company, this time helping to sell the idea of eternal youth via Italian pasta sauces.

A lot has happened between the salami and the pasta sauce, not least the fact that the company has changed how it connects with its employees. So what are the changes and what else is happening when it comes to management and leadership trends?

1. Going feminine
In the US not a single woman held a top management job in the Fortune 100 in 1980. However, things have started to change. Female Chief Executives are now running many of America’s largest corporations including PepsiCo, Xerox, eBay, Kraft, Sara Lee and Avon and the same is broadly true in many other countries.

Why has this happened? The reasons are legion and varied. First of all, over the last twenty years we have seen women entering the workforce in greater numbers and they have slowly but surely worked their way up the corporate ladder. Thus a more feminine ethos has infiltrated many organizations and organizations have become more attuned to the needs of women, be it employees or customers. For example, Procter & Gamble now runs a reverse mentoring scheme whereby newly recruited female graduates mentor older male employees about how to manage women.

2. Instilling a sense of community
There is still a very long way to go but I believe that we have more or less reached the use-by date for the old patriarchal style of management. Leadership that is macho or combative and based on the idea of discipline doesn’t work anymore. As a result leaders are now becoming facilitators and motivators whose job it is to instill a sense of community and inform people about the wider mission and meaning of their work. Thus leaders are developing soft coaching skills instead of hard control skills, which is something that intuitive and empathetic women are especially good at.

3. Putting innovation centre stage
But what else is happening? One of the biggest changes over the last two decades has been the way that innovation has moved centre stage. Previously, innovation (if it existed at all) was a department. Moreover, it was very often a small department staffed by outcasts from marketing and R&D and what it did and how it did it was more or less a ‘state secret’. As a result it was virtually impossible for anyone outside of the department to contribute. Not anymore.

The result is that failure is now not only tolerated but is widely encouraged (within limits) and free spirited employees that previously struggled to fit in to corporate life now feel slightly more comfortable due to the informality of their new surroundings. The food company in question even has artwork alongside the staircases to encourage creative thinking and has an internally run venture capital fund and a new ventures unit to invest in employee ideas. Indeed, it’s now virtually impossible to tell who works for the company and who doesn’t because people drift in and out much as they please and dress-down. Friday casual clothing rules now apply all week.

4. Listen and trust
Back at our food company innovation has become the holly grail. It is an open process involving all stakeholders from staff and suppliers to customers. Moreover, decision-making responsibility has moved to the frontline and control is now achieved with very limited supervision. This is obviously quite difficult because leaders must give workers the opportunity to develop decision-making skills and, most importantly, workers must learn to trust management and management must learn to trust the workers. Crucially, both sides must also learn to listen to and trust their customers even when what they are saying is inconvenient or unpalatable.

5. Gaining buy-in from the people around the organization
Of course, running an organization where everyone has a say and where consensus building is a key function of management can be a recipe for anarchy and paralysis. But not always. Mozilla Corp. is the company that’s behind Firefox, which is a suite of Internet applications including the Internet browser. The company has 70 employees and almost 200,000 volunteer helpers. Firefox itself has a 15% share of the global browser market and has been downloaded around 200 million times. In other words this is a large corporation whose main product is free and that relies largely on unpaid workers.

If you haven’t already guessed Mozilla Corp. is run as an open-source corporation. As you’d expect its successful existence raises a whole host of questions about everything from the definition of a corporation to the interplay between a company and its community. It has also, along the way, had to invent or reinvent many of the ideas and assumptions about how companies operate. You might think that leadership within such an organization would be easy, but it appears that it’s actually more difficult than within for-profit organizations. For example, if workers are unpaid bullying or incompetent managers are not tolerated. Nether are unfair conditions. Instead workers simply walk away. A clearly articulated vision, clear communication and meaningful work are therefore essential. The rules of the game therefore include the fact that the ‘best’ decisions are not necessarily the best ‘strategically’ but those that gain the most buy-in from the people that one way or another work for the organization.

6. Being responsible
Another significant shift in the way that organizations operate is that leaders have started to think about the wider social and environmental impacts of their actions. Corporate Social Responsibility (CSR) is hardly a new idea but whereas previously it was a paragraph in the annual report it is now, in many cases, forming the bedrock of corporate strategy.

For example, Wal-Mart recently pledged to transform itself from the world’s largest retailer into the world’s greenest company. Wal-Mart (revenues US $312 billion per year) has laid out a plan to turn itself (and by default its suppliers, staff and customers) green. The aim includes increasing the fuel and emissions efficiency of its vehicle fleet by 25% by 2009 and doubling this by 2016. The company also plans to reduce energy use in-store by 30% and lower solid waste (e.g. packaging) in its American stores by 25% by 2009. Total investment in sustainable and environmental projects will be close to half a billion US dollars.

Again, having to think about the wider impacts of actions on employees, local communities and the global environment is hardly news, especially in the Nordic region where interest in ethical investment principles has been high for many years, but it is moving centre stage thanks to everything from scandals like Enron to climate change. This clearly links with other trends like globalization, connectivity, transparency and the breakdown of trust in institutions but it also connects with the attitudes of Generation Y and the looming shortage of skilled workers.

7. Companies as employee brands
In the future strong company personalities (brands) will attract and repel certain types of individuals. This has always been the case but whereas previously corporate branding was either created by accident or targeted at the media and financial institutions, in the future it will be deliberately created and targeted at existing and potential employees. The reason for this is twofold.

First Generation Y (roughly people born between1980 and 1999 (i.e. people currently aged 8-27)) are starting to enter the workforce for the first time and they are very interested in ethical standards and behavior. Moreover, money alone is not a reason to work for an organization. Financial ambitions and concerns tend to disappear quite quickly once satisfaction and self-realization is achieved through social integration through work and whilst job security is important, short attention spans mean that Generation Y employees tend to move on quickly once a job disappoints or the learning stops.

Historically this wouldn’t have mattered very much because an employee could easily be replaced, but in the future there will be a severe shortage of workers thanks to the declining fertility rate and the leaders of organizations will have to work very hard indeed to create and maintain environments where people want to come to work.

Here’s something I wrote for Fast Company magazine last week.

Open source or distributed innovation is all the rage at the moment, but the hype glosses over one important fact — most open source projects are total failures. But this fact is precisely why the open source innovation movement is so important.

Within traditional innovation models, the cost of failure is very high. As a result, stage gates, red lights, and funnels are introduced to control the number of new ideas that are developed and introduced in to the market. And that’s the problem.

Nobody can ever know for sure what will work and what won’t, until an individual makes a leap of faith and a surge of innovation is unleashed. Moreover, nobody can tell what’s silly and what isn’t without the benefit of hindsight. But with open innovation, researching and worrying about whether something will work or not is unnecessary because of the low cost of trying. Just do it and you’ll find out.

My own experience of open innovation within large organizations is relatively modest. The reason for this is that the idea is too new and unproven. Organizations like the sound of it in theory, but in practice relinquishing control to scores of unknown individuals scares the pants off them. Business, after all, is about order and control.  But if they’re right then why do only 40% of major technical innovations come from large corporations?

Anyway, I’ve been playing with the idea myself of late. My first experiment was a little online trends newsletter called What’s Next. This isn’t openly created, because I create all the content myself, but I do receive a tremendous amount of user feedback so the business model is openly filtered. As a result the idea has been revamped several times, and while the current version isn’t perfect, it’s one hundred times better than when it started.

The key learning here is that the innovation process has been inverted. Previously, I would have worked up a handful of promising ideas and put them into focus groups to establish which concept was ‘right.’ I would have then polished up the winning concept and put it on the market. In other words, I would have created something, edited it, and then ‘published’ it.  But these days you can also do it the other way around. You can create, then publish, and then let your customers edit the concept for you, especially if your product is digital or if it’s a service innovation.

My latest collaborative experiment in home-brewed innovation is something called Homepage Daily, which is an online newspaper.  Will this work? I have no idea but the users will undoubtedly let me know. The point here (and most large organizations outside of the US at least really don’t get this) is that there is no lasting humiliation in giving it a go. You can fail like crazy and still keep going until you eventually stumble on success. Of course this presents big organizations with something of a problem. How can they fail like crazy without looking like idiots? The answer, in open innovation terms, is to facilitate and empower every employee, customer and stakeholder to become part of the innovation team and to then encourage them to perform small experiments.

For example, Mozilla Corp is the company behind Firefox, the wildly successful Internet browser. The company has 70 employees and almost 200,000 volunteer helpers. Moreover, Firefox 1.0 was developed, not on purpose, but by two renegade young programmers that went off in the wrong direction just because it felt right.

The idea of open or distributed innovation obviously links with other ideas like the wisdom of crowds, but the link I like the most is with James G. March’s idea of foolishness in organizations. March is a professor emeritus at Stanford Business School and one of his key insights is that companies need to mess around more.

What I think he means by this is that people should try more things out even if rationally they seem like silly ideas. For example, people should incorporate more ideas from outside their domain, or even make mistakes on purpose just to see where this takes them.  It’s a bit like going on holiday. You can follow the guidebooks but often the most interesting and useful experiences come when you put the guidebook down and walk down an unknown street for no particular reason.

Of course, the idea of setting up an innovation process focused on making deliberate mistakes is itself a silly idea. At the moment, most organizational innovation strategies and processes are too sequential and too rigid. But moving to some kind of ‘anything goes’ system would be equally disastrous.

What’s needed is a balance — a combination of tight and loose, where 85-90% of internal resources are spent on internal innovation that is tightly planned and controlled. The remaining 10-15% of time and money should then be spent on unplanned ideas that are developed by simply releasing them into the wild and seeing what happens.