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Feb 4, 2021

As 2021 continues to unfold, more and more companies are shifting from asking, “What do we do now?” to “What do we do next?” Whatever path the Covid-19 recovery takes, companies have to keep adjusting to a reality of increased uncertainty. For HR leaders, that means helping to build their organization’s ability to learn, innovate, and adapt — that is, they must boost their organization’s “adaptive capacity.”

Our research and fieldwork on how to strengthen adaptive capacity suggests three pieces of advice for HR leaders.

1. Support Your Aliens

One of the most persistent findings in innovation literature is that magic happens at intersections, when different mindsets and backgrounds collide. As Harvard Business School Professor Linda Hill notes, “You don’t get innovation without diversity and conflict, and that means leaders need to build a capability for creative abrasion.” 

For example, research shows that children beat CEOs in the marshmallow challenge, a timed contest to build a structure out of spaghetti sticks and tape with a marshmallow on top. Unless, that is, the CEOs are paired with their executive assistants. The combination of people who look at problems in different ways creates possibilities that individuals, no matter how smart and creative, often miss.

Therefore, HR leaders should seek to support the aliens in their organization. 

Who exactly are aliens? Software entrepreneur Donna Auguste used the term when we worked together helping a newspaper company formulate new growth strategies. She said the people at the fringes of the core business can often be the best sources for creative ideas. They don’t quite fit the establishment — and that’s exactly what you want. 

Aliens often are…alienated. To increase your adaptive capacity, hug the aliens you have, and bring more into your organization.

Additionally, augment your aliens by finding ways to have your organization spend more time at creativity-enabling intersections. Beyond traditional mechanisms like job-rotation programs, consider ways to facilitate learning. 

For example, DBS, a leading Singapore bank, offers a “Gandalf Scholarship,” where anyone at DBS can get S$1,000 (about $750 USD) to study anything they want, as long as they agree to share what they learn with the organization. Teach-backs are recorded and put on a central website, with some submissions garnering thousands of views. 

Alternatively, consider what HubSpot does. If you work at HubSpot and are curious about a particular book, you are in luck! Any employee can request any book (well, within reason) through a form and HubSpot will send them an electronic version or hard copy for free within a week or two without the need to seek approval or submit expenses.

2. Make It Safe to “Dare to Try”

Watching my four children grow up over the past 15 years, I didn’t have to teach them to follow behaviors that drive innovation success. Like all humans, they are naturally curious, collaborative, and love to experiment. Yet organizations, filled with people that once followed these behaviors naturally, struggle with innovation.

Why? At the most basic level, established organizations focus on doing what they are currently doing better. But innovation is doing something different. Ingrained habits constrain innovation energy. Even worse, companies can actively punish people who take well-thought-out risks that fail. If you want to encourage innovation, you need to support people who dare to try.

The phrase “dare to try” is consciously stolen from a high prestige prize given out every year by the Tata Group, India’s largest conglomerate. Every year the company holds a celebration honoring innovation accomplishments across its sprawling collection of business units, which range from tea to IT consulting to automobiles. 

One of the most coveted awards given at that gathering is called Dare to Try. As the name connotes, it goes to a team that failed but learned something from its failure. In the company’s words, “Showcasing a growing culture of risk-taking and perseverance across Tata companies… [Dare to Try] recognizes and rewards most novel, daring, and seriously attempted ideas that did not achieve the desired results.” Dare to Try is a substantial program, attracting hundreds of applications annually.

The idea of daring to try does not mean blindly encouraging failure. When people take stupid, poorly thought-out risks, they absolutely should be punished. Imagine a doctor performing a routine operation that kills a patient. No one celebrates this outcome! Rather, celebrate what Harvard Business School Professor Amy Edmondson calls intelligent failure, where people smartly experimented to learn what they couldn’t otherwise have known. This helps to build psychological safety, a key enabler of adaptive capacity.

3. Help Leaders Walk the Talk 

One of the most impressive cultural transformations in recent times has been at Intuit, a financial software and services company. Over the past decade, the company has developed a deep innovation capability. A research report by our company, Innosight, highlighted Intuit as a one of the 10 best transformations of the past decade. 

As Co-Founder and Chairman Scott Cook reflected on his company’s journey, he stressed the importance of leaders actively learning new behaviors. “The top execs have to change,” Cook said. “It is their habits that drive the company, and it is their habits that are the barriers to change.” 

How can you help seasoned senior leaders learn new skills? Cook’s advice: “Learning by doing, by everyone.” It is well-documented that passive learning is not an effective way for adults to learn, an idea that calls to mind the Mark Twain quip that a lecture is the quickest way to transfer information from the instructor’s notes to the student’s notes without passing through the brain of either.

Cook learned that the best way for leaders to make the transition was to get them to experience innovative behaviors firsthand. So Intuit‘s top 25 leaders formed groups of three and performed foundational research on predetermined topics such as changes in finance in China, artificial intelligence, and young people’s interactions with computing. 

“The leaders in the case were actively driving the discovery process,” Cook noted. “They couldn’t delegate it. A number of them wanted to delegate to their teams because that’s what they do. But not in this case. You had to do it yourself, which means you had to be on the plane to China.”

HR leaders should look for ways to help their top executives live Cook’s advice and learn innovative behaviors by doing. Consider holding a “hackathon,” where leaders spend 24 to 48 hours to develop innovative ideas, running a “culture sprint” where people develop ways to encourage innovation habits or creating rituals like regularly visiting customers. These kinds of approaches can help to build a top leadership team’s adaptive capacity.

4. Innovating to the New Better

Navigating today’s disruptive uncertainty requires that organizations continue to up their innovation game. Of course, they need to churn out game-changing products and services, but they also need to recognize the potential everyday innovation heroes in their midst. These heroes need to be unleashed, harnessed, and amplified. 

But not so that we can get to the new normal. That’s depressing! And certainly not so we can manage the new abnormal. That’s even worse! No, it is time for organizations to harness their full innovation potential to lead them to the new better.

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