Reflection has long been recognised as one of the cornerstones of great thinking, yet it is one of the rarest commodities available to business leaders. Wendy Montague explains the critical role of reflective thinking in driving innovation
When Prime Minister Malcolm Turnbull made his recent pitch for an innovation-led Australia, he introduced a raft of new policies and promised one billion dollars in programs designed to encourage new ideas.
It was a wide-ranging pledge that included everything from technology investment, tax breaks for start-ups and improving technology literacy in schools1.
Yet there was one element central to the role of innovation that the Prime Minister didn’t, or more actually couldn’t, deliver on-time.
Reflection has long been recognised as one of the cornerstones of great thinking. Newton pondered under his apple tree, the scientific world owes much to Einstein’s violin recitals and countless amounts of business breakthroughs owe their existence to long walks and daydreams.
Yet ‘thinking time’ is also one of the rarest commodities available to business leaders.
A study by the London School of Economics2 found that most business leaders had precious little time for reflection. Researchers mapped the working days of almost 100 CEOs and found that less than only 15 per cent of their time was spent working alone.
In 2009 Yale Professor William Deresiewicz told the prestigious West Point military academy that “solitude is one of the most important necessities of true leadership”. Professor Deresiewicz described it as a “crisis of leadership” and went on to explain that “for too long we have been training leaders who only know how to keep the routine going. Who can answer questions, but don’t know how to ask them. Who can fulfil goals, but don’t know how to set them. Who think about how to get things done, but not whether they’re worth doing in the first place.”
The long-term, short-term problem
One of the reasons so few business leaders have time for reflection is the increasingly shortened business cycle.
An always-on generation of Australian CEOs are finding it harder and harder to think beyond the following business quarter. Driven by shareholder pressure, operational demands and a raft of other constraints, efficiency and effectiveness has long replaced inspiration and innovation in the executive suite.
Australia’s short-term thinking is often incorrectly attributed to risk aversion or complacency, but from our work at Hay Group we know this is rarely the case. Even the most bullish and driven CEOs can fall into a pattern of short term-ism.
Like other notable vices, many of these executives fully understand the negative impact this behaviour could have on their organisations. Every day there are numerous examples of the toxicity of short-term corporate thinking, including increased CEO turnover and organisational instability.
There’s also little upside for the organisation, even those whose demands may be reinforcing this managerial approach.
Interestingly it seems that even investors – for whom computer-driven trading has reduced short-term thinking to in milliseconds – have little to gain by pushing such an agenda. A survey by the Australian Investor Relations Association3 found that the performance companies who focused obsessively on immediate goals (as measured by issuing repeated updates on financial performance and other reporting) rarely enjoy a share price advantage over those with a longer term view.
The leadership impact
However, the impact on the individual may be greater than just a small flutter in the share price. This approach could be short changing both out of some critical leadership skills.
Hay Group’s Leadership 2030 global study found the focus on short term, continuous improvement can kill off a leader’s desire to develop 21st century skills required for success such as contextual awareness, intellectual curiosity and emotional openness, concern for diversity, meaning making and bounded autonomy.
Held up against the Prime Minister’s vision for more innovation, many Australian executives will need to change their approach if they are able to help their business achieve sustainable success into the future.
Business leaders need to be ambidextrous in the sense that they must deliver today’s business goals (continuous improvement of a known process or product) while at the same time having an eye on the future, working out how to reinvent their business (destroying the current business model and replacing it with something new).
Indeed the Prime Minister’s call that Australian businesses must be “ready to fail” in order to move forward, is simply unobtainable when fixated on short term priorities.
The focus on reflective learning will be critical to success for companies as they try to leverage the collective capacity of their people to innovate their business.
This means leaders need to create space for their people to learn new ways of working. This takes more time and does not deliver results in the short term but is the only way to ensure that they don’t sell the future short and only work on today’s business. It also means, as mentioned by the Prime Minister, that leaders today need to become more comfortable taking risks and making mistakes that they then learn from. This is called failing forward fast.
Of course, learning new skills is not only required of leaders but of all employees in the organisation. The nature of all roles is changing as the less complex work is being delivered by new technologies. It is anticipated that more than 50 per cent of the jobs in business todays will not exist within 20 years. This means that employees need to learn new skills and ways of working if they are to continue to be successful in the business. This leads to the rise in the call for a focus on life-long learning where workers are compelled to continue to learn long after they have left formal education.
None of these important innovation needs – reflection, failing forward or life-long learning – can be achieved when the business horizon is counted in days or months. Like Newtown’s apocryphal apple tree, Australia’s business leaders need to make time to grow.
Right now we are stifling learning in the workplace by focussing too much on short term outcomes and the task of delivering today’s business to high degree of effectiveness and efficiency.
Taking time out to think about the future might be the best investment any Australian executive has ever made.
In Australia’s Most Respected Companies for Corporate Culture 2015, innovation was highlighted as a valued cultural attribute. Read Henriette Rothschild’s article on how to improve your culture to become more innovative