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[Inventions That Changed the World] AT&T's Theodore Vail: The Secret to a Long-lasting Company

[Inventions That Changed the World] AT&T's Theodore Vail: The Secret to a Long-lasting Company

KIM Jae-Yun

July 29, 2011


Welcome to our video program. I'm Jae-Yun Kim from the Industry and Strategy Department I.

Due to growing uncertainty in the business environment, organizations that act en masse and uniformly to achieve predetermined goals are reaching limitations. For these organizations, the time has come to consider “emergent leadership” that encourages employees to generate ideas on their own and act autonomously.

Emergent leadership means encouraging an organization's members to voluntarily make changes that enhance the organization's adaptability and sustainability. The role of an emergent leader is to create conditions for employees to pursue the right task rather than wielding direct control over them.

Emergent leaders need to guide their organizations to be creative and evolve on their own. The first thing an emergent leader needs to do is to create intentional chaos in the organization. By constantly applying stimulus to the organization and inviting tension and conflicts of opinions, a variety of ideas can be produced. To achieve this chaos, a leader should raise issues that leverage the imagination of employees and prompt them to take risks so that they can take a different approach to their goals.

Fujio Cho, former chairman of the Toyota Motor Corporation refused to accept the goal of “50% improvement in fuel efficiency” as proposed by the company's development team. Instead, he set a daunting goal of “100% improvement in fuel efficiency.” The development team recognized that this new target was unattainable with their existing ways of working.incremental improvements in fuel efficiency. Accordingly, they took a new approach and introduced a brand new concept, the “hybrid” electric car. This led to the birth of the hugely successful Prius, the bestselling car in Japan for two years in a row.

Bringing greater openness and diversity to an organization is one of the common ways of creating productive chaos in an organization. Openness can be expanded to ensure employees remain sensitive to changes among their customers at all times and be ready to respond in kind. Another way of creating chaos is recruiting people with different backgrounds and encouraging them to express different ideas.

Sejong the Great, the fourth king of the Joseon Dynasty picked talented people regardless of their class. For example, Jang Young-Sil, a prominent scientist of the time, was born to a low class family, while Hwang Hee, a prime minister, had a mother of humble birth. He also picked talented people from diverse ideological backgrounds such as Huh Jo of the Legalist school, as well as people of different spiritual backgrounds, including Maeng Sa-Seong, a Taoist, and Byun Gye-Ryang, a Buddhist. Despite the Confucian orthodoxy of the Joseon court, King Sejong trusted them and delegated his authority to them. He also held discussion forums five times a month. Such efforts bore fruit, including Hangeul, Korea's native writing system, and “Cheukwoogi,” Korea's first rain gauge.

The second role of an emergent leader is to provide an “attractor,” a set of guidelines comprising the shared values of an organization adhered to by employees while working on their tasks. It is important to determine shared values, and develop a common identity for all employees, establishing them as general rules of conduct, rather than providing instructions to control every detail from prepackaged manuals.

The case of Tokyo Disneyland, when a massive earthquake hit Japan earlier this year provides a perfect example. There were about 70,000 people in the amusement park when the earthquake hit the nation. Not a single person, however, suffered injury. How was this possible? Tokyo Disneyland emphasizes that all employees are leaders and not simply reading from a manual, and must do things that are helpful to customers first.

Employees learn by themselves the company's “SCSE” values, meaning safety, courtesy, show, and efficiency. As a result, employees were able to protect the safety of 70,000 visitors by doing what they themselves knew to be right even as a natural disaster struck the nation.

What is important is to develop shared values within an organization of overlapping knowledge systems. Even though it may be inefficient to some degree, it is necessary to spread knowledge systems so they overlap at some points. Practical methods for this would be personnel rotation and field training for new employees. The last role of an emergent leader is to generate synergistic effects from diverse ideas through positive feedback. Positive feedback serves as fuel for ideas to prevent them from being buried by a loss of momentum. For this, leaders need to activate communication networks and forums in and outside their organizations as well as consider even office floor arrangements seriously.

One major motion picture company in the US, Pixar put emotion-based story and animation teams and intelligence-based technical teams in one space and removed office partitions between them. This gave rise to more frequent discussions among employees as well as greater synergies of ideas. In addition, there is a need to establish a “Know-where” system that enables employees to effectively utilize internal and external resources and promote informal employee groups. P&G retains 70 personnel devoted to looking for new products and technologies worldwide. They regularly update the list of new products, technologies and experts through the company's “Know-where” system. On occasion, the company discloses corporate issues to be tackled on its official website to directly find someone who can

deal with them. By utilizing this system, P&G successfully implemented its “C&D” or “connect and develop” strategy focused on open innovation.

Businesses today need to practice emergent leadership and find roles for emergent leaders. One critical point regarding the three roles of emergent leaders is that there is no priority among them and they are not selective. All three must be achieved in a balanced way. Without shared values in place, creating chaos is highly likely to lead to self-indulgence not autonomy.

At a time when stability, balance and efficiency are commonly accepted, businesses need to re-recognize such values as chaos, imbalance and adaptation as new opportunities. Exercising emergent leadership to attract diverse ideas and produce greater effects can be a great advantage in this uncertain business environment.

Thank you for watching. I'm Jae-Yun Kim.

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