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‘I can’t make your employees more entrepreneurial … only you can’

Editor’s noteThis is the fourth installment in The Globalists, a regular series by global managers discussing international management issues, innovation and solutions. You can see other Globalists posts here.)

“Please make my employees more innovative and entrepreneurial.”

As a human resources development consultant, I get this request from Fortune 500 C-suite executives at least once a month.

“I can’t do that – only you can do that, “ I answer without fail.

And that’s when the argument starts.

There seems to be a common misconception among many management types that innovation and entrepreneurialism, or intrapreneurialism in the case of large enterprises, can be magically taught in a one-day soft skills seminar.

In reality, innovation and intrapreneurialism are fostered much more so by company culture than any particular skill set.

The fact that a corporate leader is looking to improve the creativity of his/her subordinates more often than not indicates organizational stasis at the top of the org chart rather than at its center.

Before there was Apple, there was Sony

Everyone wants to be the next Apple.

But before Apple there was Sony, one of the most innovative companies in history. And before Sony there was RCA (Radio Corporation of America), which in its heyday was to telecommunications then what Amazon is to e-commerce today.

Just as Apple upended Sony from its perch atop the consumer electronics industry, Sony had previously upended RCA.

RCA took consumers from print media to broadcast media. Sony took consumers from broadcast media to packaged media. Apple, among a handful of companies, has taken consumers from packaged media to networked media.

All three of these transitions were revolutionary. Disruptive innovation at its finest.

Sadly, RCA long ago departed from the business world, with its remnants now – ironically – owned by Sony. Sony, on the other hand, is still with us fighting for both relevancy and survival. Apple is apparently on its way to taking over the world.

Beginning in the late 1940s and continuing through the mid-1990s, Sony had an unparalleled run of consumer product innovations. From the miniaturization of the transistor radio to the home-use tape recorder to the VCR to the Sony Walkman to the Sony PlayStation, the company fundamentally altered the way the general public consumed media content, particularly entertainment.

Until Sony shook things up – and thanks to RCA’s influence – media was primarily consumed via broadcast to terminal devices. Families sat around their living rooms listening to the radio. By mid-century, televisions replaced radios as the center of home entertainment, a different product but largely the same business model.

Sony gave consumers portability and accelerated a shift toward packaged media content. Again, fundamental changes in the way supply interacted with demand. RCA was soon an afterthought.

Yet since the late 1990s, Sony has been in a non-stop nosedive.

No risk, no reward

While the reasons are too complex for a deep dive in this column, it is safe to assume that all 125,000-plus employees did not suddenly lose their innovation mojo overnight.

Rather, something within the internal environment changed. It could have been anything from groupthink to a reprioritization along the process-outcome continuum. Somehow the organization became more risk averse and less disruptive … and ultimately stopped innovating.

As media consumers raced into the networked era led by the likes of Apple, Sony dumped hundreds of millions of dollars into a next-generation DVD battle with Toshiba and fought a fruitless war with lower-cost television manufacturers in developing countries.

Rather than reflecting poorly on the lack of innovativeness amongst Sony employees, these were simply poor strategic decisions on which Sony’s leaders kept doubling down. Instead of pursuing disruption, Sony embraced the familiar.

A company that once drove change now resisted it; a company that once created consumer trends now failed to acknowledge them.

As companies become comfortable, others are there to replace them. However, the root causes of demise often lie within the incumbent organizations themselves and cannot be chalked up solely to the new kids on the block.

Founder Masaru Ibuka was surely rolling over in his grave as Sony squandered its resources fighting 20th century battles in the 21st century.

After all, the founding purpose of the company was to “establish an ideal factory that stresses a spirit of freedom and open-mindedness” symbolizing Sony’s spirit to challenge “what has never been done before.”

It’s as if Ibuka were channeling the yet-to-be-born Steve Jobs. To his credit, Sony followed through on his grandiose vision by producing a string of “world’s first” innovations.

Innovative leaders do not need to come up with innovations themselves. However, they do need to foster a company culture that values it. Companies must be willing to encourage disruption, embrace risk and accept failure.

Innovation isn’t taught within the middle layers of an organization, it’s enabled from the top.

About the author:

Albrecht Stahmer is a Paraguayan-born German-American who grew up in the United States. He has lived and worked in New York, Miami, Hong Kong, Guangzhou and Tokyo and currently calls Singapore home.

As a senior trainer and management consultant, he helps clients solve talent-development challenges across Asia-Pacific.

Albrecht considers himself a management guru – bad management, to be precise, having worked for five companies that declared bankruptcy. These experiences have given him keen insights on management misalignment, which he writes about in this column.

When not musing on management issues, he scours the globe in pursuit of the world’s best bourbon bars.

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