The ability to balance exploitation and exploration for continued business growth is often undervalued in leadership roles.
Strategic thinking is a classic business buzz word and a staple management skill.
While strategic thinking is indeed an important skill and is integral to innovative and effective decision-making, the 2018 KPMG New Zealand CEO Outlook report looks further, stating that, “growth is as much about mind set as it is about market conditions.”
That’s a reminder that to keep growing is to keep moving. This is an overlooked quality of the very best leaders – the ability to simultaneously exploit existing resources and explore new horizons.
For the past 10- to-15 years, organizations have directed most of their attention to making the most of what they have and improving on their existing products and processes, for short-term profits and to deliver results to shareholders and the boardroom.
This mentality is particularly evident during times of crisis, when companies look to see where they can cut costs and tighten up what they’re doing.
But this isn’t enough to keep up with an environment and context that is full of uncertainty and disruption.
Leaders need to be always preparing for the unexpected and to make innovation and new ideas integral in the way they operate.
Leaders who can balance the tension between exploiting their resources to return short-term profits for shareholders and constantly scanning the horizons for new opportunities will outpace their competitors.
The ability to present this perspective as a business case for long-term sustainability in the boardroom is the shade of difference between a good leader and a great leader.
This requires an organisational culture and board relationship that are open and innovative, oriented towards change even in the face of uncertainty and risk.
Innovation is key to navigating shifting sands, which is why it is one of three key themes woven into the Waikato MBA curriculum.
It will only become more important as the business environment becomes more
uncertain.
The opening of the new University of Waikato campus in Tauranga will see the Waikato Enterprise Innovation Unit collaborating closely with the Bay of Plenty business community and Tauranga MBA cohort.
Dedicated to catalysing entrepreneurship and innovation, this means the programme’s content and delivery will incorporate cutting-edge research, regional business cases and industry expertise.
Crisis preparation begins yesterday
When the American market dipped in 2008, businesses scrambled to mitigate the impact of the external chaos.
Many large companies tightened their purse strings and kept eagle eyes on cash flow, afraid to make a move that would sink the ship in rocky, unpredictable waters.
However, the companies that explored new ways of doing things and pushed themselves to find different ways of survival emerged better-placed, more resilient and more agile after the storm had calmed. These management teams responded to challenges as an opportunity, rather than merely battening down the hatches when crisis hit.
The best leaders not only perform well on a day-to-day basis, but prioritise creating space to explore in R&D, and infuse a mind-set of experimentation throughout their business.
We need to stop thinking of innovation as grand, barrier-busting breakthroughs. The reality, as Facebook designer and author Tanner Christensen notes, is that “innovation is a long, arduous, and often invisible process to improve existing systems.”
The organisation that has many little ideas in the pipeline with the potential to germinate is the one that will emerge ahead of the pack when volatility derails existing processes, operations and resources.
Innovation doesn’t happen overnight. It happens when a company and its board commit to recognising that truly visionary leadership comes from cultivating the mind-set of exploration.
That’s how you grow leaders and businesses that advance through adversity.
To learn more about the Waikato MBA programme visit exec.waikato.ac.nz/mba.
Dr Heather Connolly is an experienced management, risk, compliance and assurance consultant with clients ranging from large listed companies and government agencies to SMEs. In her role as Academic Director, she is responsible for the Waikato Master of Business Administration course content and design.
DR HEATHER CONNOLLY
