 From Boston, Massachusetts, it's theCUBE. Covering LiveWorks 18, brought to you by PTC. Welcome back to Boston, everybody. This is theCUBE, the leader in live tech coverage. We're covering day one of the LiveWorks conference. It's hosted by PTC. I'm Dave Vellante with my cohost, Stu Miniman. Professor Linda A. Hill is here. She's the Wallace Brett Donham Professor of Business Administration at the Harvard Business School. Professor Hill, welcome to theCUBE. Thanks so much for coming on. Thank you for having me. So innovation, a lot of misconceptions about innovation, where it stems from, people think of Steve Jobs. Well, the innovation comes from a single leader and a visionary who gets us in a headlock and makes it all happen. That's not really how innovation occurs, is it? No, it is not. Actually, most innovation is the result of a collaboration amongst people of different expertise and different points of view. And in fact, unless you have that diversity and some conflict, you rarely see innovation. So this is a topic that you've researched. Yes. So this isn't just an idea that you had. You've got some kind of proof and documentation of this. So tell us a little bit more about the work that you do at Harvard. So really over 10 years ago, I began to look at the connection between leadership and innovation because it turns out that like a lot of organizations, the academy is quite siloed. So the people of innovation were very separate from the ones who studied leadership and we look at the connection between the two. And when you look at that, what you discover is that leading innovation is actually different from leading change. Leading change is about coming up with a vision, communicating that vision and inspiring people to want to fulfill that vision. Leading innovation is not about that. It's really more about how do you create a space in which people will be willing and able to do the kind of collaborative work required for innovation to happen? And then sometimes I get confused. Maybe you can help me between invention and innovation. How should we think about those two dimensions? So innovation and invention. Well, the way I think about it is an innovation is something that's both an invention, i.e. new plus useful. So it can be an innovation or it can be creative, but if unless it's useful and addresses an opportunity or a challenge that an organization faces, for me, that's not an innovation. So you need both and that is really the paradox. How do you unleash people's talents and passions so you get the innovation or the invention or the new? And then how do you actually combine that or harness all of those different ideas so that you get something that is useful, that actually solves a problem that the collective needs solved? So there's an outcome that involves changing something, adoption is part of that innovation. So for instance, one of the things that we're doing a lot right now is we're working with organizations in incumbents, I guess you'd call them, that have put together these innovation labs to create digital assets. And the problem is that those digital assets get created, they're new, if you will, but unless the core business will adopt them and use them and they get implemented, they're not going to be useful. So we're trying to understand how do you take what gets created in those innovation labs, those assets, if you will, and make sure that the organization takes them in and scales them so that you can actually solve a business problem. Professor Held, a fascinating topic, I love digging into here, because you see so many times startups are often people that get frustrated inside a large company. I've worked for some very large companies, some which have had labs, a research division, and even when you have, you know, you carve aside time for innovation, you do programs on that, there's the kind of corporate antibodies that fight against that. Let me talk a little bit about that dynamic. Can large companies truly innovate? Yes, large companies can truly innovate, we do see it happening, it is not easy by any means. And I think part of the dilemma for why we don't see more innovation is actually our mindset about what leadership is about and who can innovate. So if I could combine a couple of things you asked, invention, often when we talk to people about what is innovation, they think about technology, and they think about new, and if I'm not a technologist, and I'm not creative, then I can't play the game. But what we see in organizations, big ones that can innovate, is they don't separate out, if you will, the innovators from the executors. They tell everybody, guess what, your job no matter who you are, of course you need to deal with making sure we get done what we said we deliver. But if we're going to delight our customers, or we're ever going to really get them to be sticky with us, you also need to think about not just what should you be doing, but what could you be doing? And in the literature, in the research, that's called how do you close an opportunity gap and not just a performance gap? And in the organizations we look at that are innovative, that can innovate time and again, they have a very democratic notion, everybody has a role to play. So our work Collective Genius is called Collective Genius because what we saw in Pixar was the touchstone for that work, is that they believe everybody has a slice of genius. They're not equally big, whatever, but everybody has a contribution to make and you need to use yours to come up with what's new and useful. A lot of that will be incremental, but some of it will be breakthrough. So I think what we see with these innovation labs and these startups, if you will, is that often people do go to start them up, of course they eventually have to grow their business, so part of what I find myself doing now is helping startups that have to scale, figure out how to maintain that culture, those capabilities that allowed them to be successful in the first place. And that's a tough one for startups, right? Yeah, it's fascinating. I think Pixar is only about a 1500 person company and they all have creativity in what they do. I'm wondering if there's just some basic training that's missing. I studied engineering and I didn't get design training in my undergraduate studies. It wasn't until I was out in the workforce that I learned about that. What kind of mindset and training do you have to do to make sure that people are open to this? So one of the things that I did related to this is about five years ago, I told our Dean of Harvard Business School that I needed to join the board of a company, I mean, of an organization called Art Center. I don't know if you're aware of Art Center in Pasadena. It's the number one school of industrial design in the US and people don't know about it because I always laugh at them. Some of the man who designed the Apple Store is a graduate there. There's a lot of the man who designed Tesla car and et cetera. So they're not so good at it but one of the things that we've all come to understand is design thinking, lean startup. These are all tools that can help you be better at innovation but unless you create an environment around that, people are going to be willing to use those tools and make the missteps, the failures that might come with it, know how to collaborate together even when they're a large organization. I mean, it's easier when you're smaller but unless you know how to do all that, those tools of lean startup or digital or design thinking or whatever because I'm working with a lot of these people who do that and deep respect for them, nothing gets done. And so in the end, we are human. We all need to know first off that it's worthwhile to take the risk to get done whatever it is you want to get done. So what's the purpose of the work? How's it going to change the world? The second thing is we need to know, we need to share a set of values about learning because we have to understand as you well know, you cannot plan your way to an innovation, you have to act your way. And with the startup, you kind of act as fast as you can, right? So somebody will give you enough money before you run out of money. Same similar process you have to do in a large company and incumbent, but of course it's more complicated. The other thing that makes it more complicated is companies are global. And the other part of it that makes it more complicated that I'm seeing like in personalized medicine, you need to build an ecosystem of different kinds of nanotechnologists, biotechnologists, different group, different expertise to come together. All of this, frankly, I don't know if you don't learn any of it in school. What I've actually, I remember learning that no one, you can't teach anyone how to lead. You actually have to help people learn how to lead themselves. And technologists will frequently say to me, I don't know why, you're a leadership professor. Well, this is a technical problem. We just haven't figured out the platform right. And once we get it right, all will be, you know, no, once you get it right, humans are still going to resist change and worry about, and not necessarily know how to learn together to get this done. Yeah, I wonder if, are there any special leadership skills that we need for digital transformation? Really, kind of the overarching theme of the show here, help connect the dots for us. Yeah, so the leading change piece is about having a vision, communicating it and inspiring people. What it really does turn out, when we look at exceptional leaders of innovation, and all of us would agree that they've done wonderful things time and again, not just once, they understand that it is collective. So they spend time building a culture and capabilities that really will support people collaborating together. So the first one they build is, how do we know how to create a marketplace of ideas through debate and discourse? So yeah, you can brainstorm, but eventually we have to abrade and have conflict. So they know how to have healthy debates in which people are taught in terms of skills, basic stuff, not just listening and inquiring, but how to actively advocate in a constructive way for your point of view. These leaders have to learn how to amplify difference, whereas many leaders learn how to minimize it. And as the founder of Pixar once said, you can never have too many cooks in the kitchen. Many people believe you can. It's like, today you need as much talent as you can get. Your job as a leader, what are the skills you need to get those top cooks to be able to cook a meal together, not to reduce the amount of diversity or reduce, you got to be prepared for the healthy fight. Okay, and you've pointed this out in some of your talks is that you've got to have that debate. Yes, you have to. And that friction to create innovation, but at the same time it has to be productive. Yes. Or it can be toxic to an organization. Maybe talk about that a little bit. Well that is, I think one of the challenges. What skills do people need to learn? One is, how do you deal with conflict when people are very talented and passionate? I think many people avoid conflict or don't know how to engage that constructively, just truly don't, and they avoid it. So I find that many times organizations aren't doing what they need to do because the leader is uncomfortable. The other thing, and I'm going to stereotype horribly here, but I'm an introvert, just you know, the book quiet is wonderful, but one of the challenges you have if you're more introverted or if you're more technical and you tend to look at things from a technical point of view in some ways is that you often find that people with that kind of, that's what drives them, there's the right answer, there's the rational answer we need to get through or get to as opposed to understanding that really innovative ideas are often the combination of ideas that look like they're in conflict initially, and by definition, you need to have the naive eye and the expert kind of working together to come up with that innovative solution. So for someone who's a technologist to think they should listen to someone who's naive about a technical problem, I mean, just the very basic mindset you have about who's going to have the idea. So that's a tricky one, it's a mindset, it's not even just a skill level, it's more who do you think actually is valuable? Where is that slice that you need at this moment going to come from? It may not be from that expert, it may be from the one who had no point of view. I heard a story that I was collecting my data and apparently Steve Jobs went to see Ed Land, we're here in Boston, over Polaroid, which is one of our most innovative companies, right, in the history, and he said, what's the one, what do I need to learn from you? And what Land said to him is whenever my scientists and technologists get stuck, I have some of the art students or the humanity students come in and spend time in the lab, they will ask the stupid question because they don't know it's stupid. The expert's not going to ask the stupid question, particularly the tech expert, right, who think, not going to ask it, they will ask the question that gets at first principles. And I think, but I wouldn't want to be held to this, the person who was telling me this story, that's partly how they came up with the instant camera. Some naive person said, why do I have to wait? Why can't I have it now? And of course, oh, you know, silly so-and-so, you don't know it takes this, that, and the others. Like, then someone else thought, why does she have to wait? I think it was really a she who asked the question, the person who's telling me this, and they came up with a different way. Who said it has to be done in a dark room in that way? So I think that there's certain things about our mindset independently of our skill, that get in the way of our actually hearing all the different voices we need to hear to get that abrasion going in the right way. Listening to those Colombo questions is sometimes a lead to an outcome that is radically different. What do you think about, you know, there's a lot of conversation in our industry, the technology industry about, we call it the quarterly shot clock, that companies are on a quarterly reporting mechanism or requirement from the SEC. A lot of complaints about that, but at the same time, it feels like, at least in the tech business, that U.S. companies tend to be more innovative. But again, you hear a lot of complaints about, wow, they can't think for the long term, but can you help us square that circle? Yes, you know, it's funny. So one thing is you very rarely get innovation without constraint. It's not, if you actually talk to people who are trying to innovate, there needs to be the boundaries around it in which you're doing the constraint. It's not, to be completely free, rarely leads to. It is the constraint. Now we did do a study of boards to try to understand when is a board facilitating innovation and when is a board interfering with it? And so we interviewed CEOs and lead directors of a number of companies and wrote an article about that last year. And what we did find is many boards actually are seen as being inhibitors. They don't help management make the right decision. Now management, then of course the board would say management's the one that's too conservative. But this question about how the board, with guidance and all of these issues that come up when you're looking at research analysts knew you played to and I've been on corporate boards. One thing is that the CEO needs to know that the board is actually going to be supportive of his or her choices relative to how you communicate why you're making the choices you're making. So there is pressure and I think it's real. We can't tell CEOs, no, you don't need to care about it because guess what, they do get in trouble if they don't. On the other hand, if they don't know how to make the argument for investing in terms of helping the company grow, so in the long run innovation is not, not innovation for innovation's sake. It's to meet customer needs so you can grow. So you need to have a narrative that makes sense and be able to talk with people, the different stakeholders about why you're making certain choices. Now you may in fact, I don't think, I mean I must say I think that many times companies may be making the right choice if you will for the long haul and get punished in the short run. For sure that happens. But I also think there are those companies that get away with a lot of investment in the long haul partly because they do over time deliver. And there is evidence that they're making the right choices or have built a culture where people think what they're saying might actually happen or be delivered. I mean what's happening right now because of the convergence of industries is I think a lot of CEOs, it's a frightening time. It is difficult to sustain success these days because what you have to do is innovate at low cost. So going back to some other piece about the boards, one of the things we found is so many board members define innovation as being technology. Even when they're not, I mean technology has a very important enabling role to play and otherwise but they have such a narrow definition of it in a way that again they create a culture to let the people in the innovation lab innovate if you will but not one where everybody understands that all of us together need to innovate in ways that will also prepare us to execute better. So they don't see the whole culture transformation, digital transformation often requires cultural transformation for you to be able to get this stuff done and that's what takes a long time. Takes a long time to get rid of your legacy systems and put in these new or get that balance right but what takes even longer is getting the culture to be receptive to using that new data capability they have and working in different ways and collaborating when they've been very siloed and they're paid to be very siloed. So I think that unless you show as a CEO that you are actually putting all of those building blocks in place and that's what you're about that you understand it's a transformation at that level you're just talking to the analysts about we're going to do X and there's no evidence about your culture or anything else going on and how you're going to lead to attract and retain the kind of talent you need. No one's buying that right? I think that that's the problem. There's not a whole story that they're telling about how this goes together and they're going to move forward on it. Well to your other point, do you have, is there data to suggest can you quantify the relationship between diversity and innovation? So there are some data about that I don't know that I don't have it and I find it's very funny as you can see I'm an African American woman so what I often go into companies my work is on leadership globalization and innovation I do a lot of work on how you deliver global strategies so I often find when I'm working with senior teams they'll sometimes ask me would you help us with our inclusion effort? And I think it's partly because of who I am and diversity comes up in our work right? And if you actually build the environments we're talking about they tend to be more inclusive about diversity of thought, not demographic diversity. Those can be separate as we well know because we know Silicon Valley is not a place where you see a lot of demographic diversity but you might see diversity of thought. So I have been asked, it's interesting I have had some invitations by governments too. Japan which has womenomics which is a part of their policy if they need to get more women in the economy frankly otherwise they can't grow as an economy. I did it turns out that the innovation story is the business case that many businesses or business people find one that they can buy into doesn't feel like you're doing it because it's the right thing or I mean not that you shouldn't do the right thing but helping them understand how do you really really make sure that the minority voice is heard if you will and I mean minority of thought is an independent demographic but if you create an environment as a leader where you actually run your team so that people do feel they can speak up as you all know, I mean so often I'll talk to people afterwards and they'll say I didn't say what I really thought about those ideas because I didn't want to be punished or I didn't want to step in that person's territory so people are making decisions based on very incomplete information everyone knows what often happens is it gets escalated up so we had this one senior team complaining everything is so slow here, a very big bank right not the one I'm on the board of another very big bank we're working with everything's so slow people won't do anything so when we actually ask people so what's happening why aren't you all making decisions? First off decision making rights are very fuzzy in this organization except for at the very top so what they say is all decisions actually they're made on the 34th floor, we escalate because if you make a decision they're going to turn it over anyway so we backed off right or we don't say what we think because I don't want them to say what they think about my ideas because we don't really we actually have very separate business units here you might get shot, you might get shot right so that's the reality that many people live in so we're not surprised to see that not very many organizations can innovate time and again when we think about the reality of what our contacts are the good news for us is that I mean in part millennials won't tolerate some of these environments in the same way which is going to be a good thing I think they're marvelous to work with I'm not one of them obviously but I think a lot of what they're requesting the transparency, the understanding the connections between what they do and are they having impact the desire to be developed and be learning the wanting to be an organization they're not ashamed of but in fact they're very proud to be a part of what's happening there I think that that requires businesses and leaders to behave differently I mean one of the businesses we studied if the millennial wants to know who's on the front line he or she is making a difference they had to do finance differently to be able to show to draw the cause and effect between what that person was doing every day and how it impacted the clients work that ended up being a really interesting task or a supply chain leader who really needed them to think very differently about supply chain so they could innovate what he ended up doing is instead of thinking about our customers being the pharmaceutical company I mean the CVS or the big hospital chain or whatever it is think about the end customer what would we have to do in supply chain to ensure that that end patient took his or her pill on time and got better and when they shifted the whole meaning of the work to that individual patient in his or her home he was able over time to get the whole supply chain group organization to understand we're not doing what we need to do if we're really going to reduce diabetes in the world because the biggest problem we have is it's not when they take, you know go to, do they go and get their medication is whether they actually use it properly when they're there so when he switched it to that being the purpose of the work the mindset that everyone had to have that's what we're delivering on everybody said oh this is completely inappropriate we need a digital we need different kind of data to know what's going on there so don't get me started on human health okay yeah but Professor Hill for an introvert you're quite a storyteller I really appreciate you sharing your examples and your knowledge thanks, thanks so much for coming to theCUBE it was great to meet you it's been my pleasure, glad to know you thank you okay keep it right there everybody Stu and I will be back right after this short break you're watching theCUBE from LiveWorks in Boston we'll be right back