Collective Genius: The Art and Practice of Leading Innovation

Instead, leaders of innovation need to build a unique environment in which employees feel willing and able to put in the effort that innovative problem solving requires. They need to create a context that encourages people to throw their ideas into the mix without fear of ridicule or of being shot down. And, they need to shape a culture that fosters true collaboration towards a shared purpose. In short, they need to set the stage, not perform on it.

If that sounds like the kind of leadership your organization needs, "Collective Genius" will show you the way. This book offers a road map for leaders who want to harness the slices of genius found across their organization and wrap them into one effective, innovative whole.

So, who's this book for? "Collective Genius" is for leaders everywhere, no matter what rank or industry. You could be heading up a multinational, running a small entrepreneurial group, or leading teams in non-profits or government agencies.

This book has a broad appeal because, at its core, it's about people – allowing them space to be their unique, talented selves, to work to their potential, and collaborate in a way that benefits the organization as a whole.
So if you want to build a creative environment that resembles Pixar, Volkswagen, Google, or eBay, where employees feel engaged, motivated, and excited about innovating, this book's for you.

The four authors have a wealth of experience working in leadership and innovation. Linda A. Hill is the Wallace Brett Donham Professor of Business Administration at Harvard Business School and faculty chair of the Leadership Initiative. She wrote "Becoming a Manager" and co-authored "Being the Boss" with Kent Lineback.

Lineback has been a manager and an executive for more than 25 years, working as a consultant and creator of management development programs before that. Greg Brandeau is the long-time head of technology at Pixar Animation Studios, and is a former executive vice president and chief technology officer at The Walt Disney Studios. And Emily Truelove is a researcher and PhD candidate at the MIT Sloan School of Management.

So, keep listening to learn how to navigate the paradoxes of innovation, to hear what values innovative companies share, and to learn why agility is key to creativity.

The authors define innovation as something new and useful, which explains why it's so crucial in today's competitive marketplace. Change is a constant. If businesses don't move with the times and find ways to meet consumers' ever-shifting needs and rising standards, they won't cut it. But if they can get their offer right, they could follow in Pixar's footsteps.

This isn't an easy task, but the authors offer a recipe for success. They sought out organizations from California to Korea, across industries ranging from e-commerce to luxury goods, asking leaders and their colleagues what worked and what didn't.

In this book, they profile the best of the best, including an Indian high-tech firm, a Korean luxury goods business, and the German division of eBay. It's good to hear from organizations outside the United States, and we like the fact the authors include these examples. But we should note that Pixar dominates this book, so if you've read Ed Catmull's "Creativity, Inc." – one of our recent Book Insights – you'll find "Collective Genius" a bit repetitive.

We'd also question the authors' suggestion that many people still believe innovation arises from a solo genius having an "Aha!" moment. A great deal has been written about the collaborative creative process in recent years, so we think this myth has already been busted.

But the authors do a great job of breaking down the essential characteristics of great leaders of innovation, outlining the challenges and contradictions those leaders face, and suggesting how best to navigate a path that can be strewn with obstacles.

So let's start by looking at some of the paradoxes of innovation.

Leaders need to unleash the talents of individuals so they can come up with great ideas. But they also need to harness those talents in order to shape those great ideas into a solution that benefits the organization.

This fundamental paradox can be broken down into a set of smaller contradictions leaders must address. They need to affirm the individual and the group, support and confront, foster experimentation and performance, show patience and urgency, and encourage bottom-up initiative while intervening from the top down.

So, leaders are walking a tightrope, and they have to constantly check their balance and make tiny adjustments to stay on track. It's a process of continual recalibration that requires them to be perceptive, flexible, and versatile.

But how can leaders get good at this? The authors suggest taking a leaf out of Ed Catmull's book on creativity at Pixar.

Pixar's leaders have created a work environment that affirms the individual and the group, and supports staff while also challenging them. It does this through daily review meetings of work in progress where everyone is encouraged to share ideas and offer feedback, and where contributors feel valued even if their suggestions are rejected.

Creative tension is vital. Imagine how much talent could go to waste if employees didn't speak up for fear of being shot down.

Pixar also has a policy of open communication – any employee can talk to anyone else in the company without going through official channels. And its offices are designed to foster spontaneous interaction between teams and departments, breaking down the silos that block collaboration.

At Pixar, experimentation is highly valued. The leaders know great movies don't appear in a flash of genius. They encourage a discovery-driven approach, where ideas are tested, adjusted, and allowed to evolve. They understand there'll be missteps and dead ends. The Pixar culture is all about try, learn, and try again.

But leaders also know the importance of constraints such as deadlines, release dates, goals, budgets, and boundaries. The creative process needs a cutoff, and a sense of urgency can take creativity to new heights.

At Pixar, leaders have learned to balance space for improvisation with the need for structure. And they've understood creativity can't be rushed, but nor can it have an open-ended time frame. They've also created a democratic organization and a sense of shared responsibility, but they know when it's time to step in and lead.

Pixar is a hugely successful company, and emulating its unique culture may seem an unrealistic goal. But the authors offer a detailed breakdown of the paradoxes of innovation and a model for addressing them that leaders can apply whatever the scale or resources of their own organization.

Let's now look at the principles and values innovative organizations share, by turning to the world of design.

Pentagram is the world's largest independent design consultancy, with offices in London, New York, San Francisco, Berlin, and Austin. Three graphic designers, an industrial designer, and an architect founded Pentagram in the 1970s. Today, it's owned and run by 19 partners who are all leaders in their individual creative fields – they're like rock stars of design. The firm has an impressive portfolio of clients: Kodak, Pirelli, United Airlines, IBM, Penguin, the Guggenheim Museum, and the Savoy Hotel, to name a few.

Pentagram was built on the principles of equality and generosity, and they remain in place today. There are no junior or senior partners – all are equal shareholders. And each partner in an office earns the same salary and bonus, regardless of how much they personally make for the company. All decisions are made by consensus.

A hierarchy does exist within individual teams – partners are responsible for hiring, firing, and paying their employees, but they're required to follow good working practices, and not act in a way that reflects badly on the partnership as a whole.

Pentagram partners also share four basic values, which the authors say underpin all successful, innovative organizations: bold ambition, collaboration, learning, and responsibility.

Their ambition goes beyond solving their clients' problems. Their greater purpose is to improve society through good design. That's why partners choose to give up the glory of running their own companies to join Pentagram – they recognize they can achieve more together than they can alone.

The desire to be stretched, to make a mark, and to produce the best individual and collective work possible are hallmarks of innovative companies.

Collaboration is another pillar of Pentagram, fostered by a sense of community. One partner noted when she joined there was no "them" and "us" at Pentagram, only "us." This absence of hierarchy among the senior leadership, along with equal pay, regular meetings, and an atmosphere of trust, encourages collaboration. Partners are autonomous, but they share clients and projects when the opportunity arises.

Learning happens in regular meetings where, like at Pixar, partners offer feedback on each other's projects. We can see how presenting your work to a group of experienced, elite designers would definitely inspire you to raise your game.

There's also a sense of shared responsibility, since each partner's work reflects on the organization as a whole. Partners must deliver high-quality work, but they're also responsible for generating new projects, staying personally engaged in the projects as they unfold, leading teams efficiently, and engaging with clients throughout a project. Pentagram also expects partners to pull their weight financially – they may be asked to leave the partnership if they post losses year after year and their financial performance reflects badly on the group's reputation.

Pentagram represents the creme de la creme of the design world, but we see how leaders everywhere can apply its values, principles, and processes. The authors really get readers thinking about how they can incorporate elements such as peer-to-peer review or shared responsibility into their organizations.

Fostering the willingness to innovate is one thing, but leaders also need to give individuals the ability to do so. One way to do this is through creative agility – enabling employees to act fast and switch course when necessary, without too many rules or limits.

Creative agility helped the German branch of the e-commerce pioneer eBay become one of the most successful auction sites within its global empire. As eBay expanded around the world, it bought a German auction website called Alando for $47 million dollars.

Alando was known for its quirky campaigns, competitions, giveaways, and fun promotions, like free Big Macs or selling a Ferrari for one euro. But it began to lose its momentum once it became part of the complex, global, eBay platform. Employees no longer felt they had the autonomy or flexibility to move quickly and seize potential opportunities with timely promotions. eBay had moved the website from local servers in Berlin to its global server in California, since all eBay sites needed the same technology for international trades to happen smoothly. But this made changing the German content a complicated process.

eBay Germany decided to go under the radar. A young product manager and some of his colleagues came up with the idea of an online treasure hunt to generate publicity and attract more users to the site over Christmas. Protocol required the Germans to put the promotion and the site changes it required through corporate headquarters. But the holidays were fast approaching and they had no time to spare. One team member realized they could get their treasure hunt up and running by using the computer servers from Alando's start-up days.

This went against corporate procedure and was a potential security risk, but when the leaders at headquarters found out, they didn't shut the campaign down. Instead, they took it as evidence that the German team was willing and able to try new, untested ideas, despite their four years under the eBay umbrella. They wanted to encourage this and bring the spark back to the German operation.

The treasure hunt attracted 10 million contestants, but it wasn't without its problems. The local servers crashed and hackers broke in. But the German engineers responded fast to keep the site live and the hackers out.

The promotion wasn't perfect, but it was a great success, and it was the first in a series of small projects launched by eBay Germany. These "micro-projects" increased traffic to the site, and confirmed to eBay's leaders in Germany that their employees needed the autonomy to pursue new ideas without going through a lengthy corporate development process. Leaders put some systems and processes in place to manage risk and address problems, but just enough to improve the micro-projects without hampering creative agility.

The authors aren't advocating breaking rules here. They use this example to show how much can be achieved when employees have the freedom and autonomy to brainstorm new ideas and implement them quickly.

This eBay example, along with other in-depth case studies, help bring the authors' theories to life. We think they could have cut out some detail – some of the case studies are very long. But they're still important, because they show how to replicate the systems and processes that have helped the likes of Pixar and Google grow into giants of innovation.

So, we think "Collective Genius" is a great read for any leader who's walking the fine line between the various innovative paradoxes so clearly described in this book.

"Collective Genius" by Linda A. Hill, Greg Brandeau, Emily Truelove, and Kent Lineback is published by Harvard Business Review Press.

That's the end of this episode of Book Insights. Thanks for listening.