Monday, December 31, 2012

The Asian Innovation Century, Again - Scott Anthony - Harvard ...

Over the last three years I have consistently stated my belief that Asia was emerging as a global innovation powerhouse. It's one of the primary reasons why I moved to Singapore in early 2010. In late 2011, I even wrote, "The overarching trend I continue to see is a shift in the world's innovation energy to the east."

While my long-term optimism remains, I think the region must overcome some very real hurdles before it can realize its potential. Some of these, like creaky infrastructure and a lack of a fully functioning risk-capital market, are straightforward and don't require further detailing. More pernicious and harder to address are three critical mindset shifts that need to happen.

First, there needs to be substantially higher tolerance for failure. The lack of failure tolerance can be rooted in laws ? long-lasting penalties for bankruptcies lead people to avoid risk. But it also can be from pressure from peers, family, friends, and co-workers. It can set early when children are in school. Innovation isn't random, but it isn't perfectly predictable either. Any success will have its twists, turns, and false starts. Some of history's most world-changing ideas were in fact accidental discoveries. A fear of failure can choke off innovation.

Second, hierarchical decision-making approaches need to shift to approaches that favor good ideas wherever they might come from. I remember vividly one experience at a large Asian company. We were working with a young middle manager that was developing a business plan for a new idea. It was quickly clear the idea stunk, and the middle manager knew it. I said, "If we all know this is a dog, why are we working on it?" The unsurprising answer was, "The boss likes it." The argument that the boss would ultimately be happier to not waste time on an idea that was destined to flop fell on deaf ears. Innovation can't be a largest-title-wins game; it has to be a legitimately best-idea wins. Senior leaders with wisdom and institutional knowledge can certainly spark great ideas, but so too can 20-somethings that lack preconceived notions and are living tomorrow today.

Third, companies, particularly large ones, need a dose of humility. Many executives in Asia are appropriately proud of their role in building world-class companies in relatively short periods of time. That success has come from discipline and focused execution. Unfortunately, those skills are less helpful in guiding innovation or leading a company through transformation. Some organizations display deep humility. For example, many executives in the Singapore Government have a deep curiosity, honed by spending time living overseas. They are always on the lookout for a good idea, wherever it might be. Other organizations, however, that lack appropriate humility will find the fall from greatness surprisingly swift and punishing.

These mindsets won't change overnight. Focused work by policymakers and corporate leaders in three areas can help:

  1. Encouraging intersections. Just as cross-breeding changes populations, cross-breeding can change mindsets. The more Asian leaders that spend time overseas, the more Asians educated in the West return home, the more Westerners spend time in Asia, the more historical mindsets will shift in some ways.
  2. Role modeling. Many Asian success stories over the past few decades involve heavy government intervention, family legacies, or founders that muscled into resource-intense industries. The more these success stories are balanced by innovators ? both in startups and large companies ? the more mindsets will shift.
  3. Balancing education. Many Asian countries have top-flight education systems. Yet, the overwhelming focus on facts and rote memorization can blunt students' creative edge. Singapore Prime Minister Lee Hsien Loong shocked many Singaporeans earlier this year when he urged parents, "Please let your children have their childhood." The essence of the Prime Minister's argument is that encouraging free play and more balanced upbringing would ultimately lead to adults that had the curiosity, creativity, and willingness to fail that are so necessary in today's uncertain world.

Asia is as far from a monolith as you'll find in the world. Its people, cultures, heritages, religions, and customs are breathtakingly diverse. Imagine this diversity replicated in the business world. With the right mindset shifts, the vast well of innovation potential still lying dormant in Asia has the potential to change the world.

Source: http://blogs.hbr.org/anthony/2012/12/the_asian_innovation_century_a.html

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