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Leadership Innovation

Today, fast growing organizations are built on leadership innovation, that is, they are not built by product visionaries but by social visionaries — those who invent entirely new ways of organizing human effort.

This is how Wal-Mart stores are putting their competitors out of business. Wal-Mart’s competitors tried to copy their management style, yet, efficiency evades them. Leadership innovation styles are almost impossible to copy, because they are based on the vision of management and its mindset.

Following is a composite of true stories that tells how Mr. Smith found opportunity, using leadership innovation, while working on the computer assembly line.

Developing a Visionary Concept

Widget Data Systems manufacture personal computers. The CEO, Mr. Smith, is considered a visionary and his company is extremely profitable. A few years ago, one would consider him a dead-end employee.

As a teenager, Mr. Smith had difficulty adjusting to the world he had to live in. He dropped out of high school and became one of fifty-five workers on a computer assembly line. He noticed a lot of ignored talent because of company policy. Workers had ideas on ways to improve methods, but they had no authority and besides, the company wanted warm bodies not thinkers. The management system worked in harmony with managements' desire for control, but against the workers desire to be heard.

As Mr. Smith assembled computers, he was organizing a company in his mind that would tap workers talent. He visualized a management style where assembly line workers were involved with the decision making process. Spending eight hours a day on the line, he became aware of countless ways to improve the current procedures, but no one with authority had any interest in his ideas. This was Mr. Smith's window of opportunity, "Develop a management system where assembly line workers are involved with the decision making process."

Everyday Mr. Smith put creative thinking into high gear and analyzed different methods that would allow workers to be involved. He presented some of his ideas to management who did not listen, after all, Mr. Smith is only a production worker, what does he know, he is suppose to be dumb. This is social prejudice at work, ignoring possibilities from people with firsthand experience.

Whenever there was a malfunction on the assembly line, the production people went to the lunchroom and two engineers with three maintenance personnel came out to service the line. At this time, there were 60 people doing nonproductive work. Mr. Smith observe the five maintenance people trying to analyze what went wrong while there were workers in the lunch room who knew what went wrong. In addition, these workers had ideas on solving the problem and possible ideas on how to prevent it from repeating. Mr. Smith could not help but observe the tremendous waste of talent, plus non-productive work, and he wanted to be involved.

Fred was the production engineer. Liberal instructors taught him, "Most people can’t think for themselves and must be controlled." The control concept appeals to man's natural desire to be in charge and make all the decisions. The assembly line is the ideal environment for control. Maximum control requires large assembly lines and maintenance personnel to keep things running.

Large assembly lines, plus control, have a major disadvantage, people and machines are difficult to change, because everyone wants to maintain the status quo. In the computer industry, where trends change overnight, status quo attitudes is a killer.


Mr. Smith realized he needed to make changes in his life, and that was not going to happen under current conditions. At this time, he had no resources, but he could become involved in projects in his spare time.

Projects do several things:

1. They offer an outlet of frustration caused by the work environment.

2. Create hope for a more satisfying life style.

3. Attract new opportunity.

4. Develop persistence to overcome discouragement.

5. Prepare one for greater responsibility.

6. Teach one how to finish what they start - One cannot succeed at big projects if they cannot finish small projects.

Mr. Smith joined a speakers club where he could present his visionary ideas to a small group of people and get feedback. At first, members did not understand what he was trying to do, but they praised him for trying. Concepts were clear in Mr. Smiths head, but he did not present his vision in a way that others could comprehend. A successful visionary leader must be able to explain new concepts so others can understand them. Speakers clubs offer that type of training.

Mr. Smith also researched inventory problems associated with production lines. Technology was changing at a rapid pace and inventory was stacking up with outdated technology. The problem was, managers were slow to acknowledge fundamental changes were taking place. When inventory was not moving, they realized an assembly line changeover was unavoidable and production workers would be laid off. When workers return, new training programs used up more time.

Mr. Smith wrote a business plan, outlining his concepts. He showed it to people who would return constructive comments. He also realized his ideas were radical and not too many would respond with a go-for-it attitude.


Mr. Smith’s goals were...

  1. To manufacture computers where employees had opportunity to be creative, have authority to make changes in production methods, and feel what they were doing is important.
  2. To create an environment that can adjust to changing technology, replace the assembly line with island workstations. A team of five, at a workstation, would be responsible for the product from start to finish.
  3. To implement a concept of job ownership that turns workers into craftsmen. The results should inspire creativity, pride, responsibility, and motivation.

Management will not hesitate to experiment and will accept new methods if a change affects only a small percentage of workers. With workstations, only one station needs to change at a time. Production workers can do the change over themselves, limiting the need to bring in engineers and maintenance people. If workers discover a better way of doing tasks, they have automatic authority to do it. Production numbers will not measure performance; attitudes will measure performance. Positive attitudes increase production by working smart, not hard. Performance based on daily quotas prevents employees from working smart or doing preventive maintenance, because the daily quota has priority, it does not allow for creativity. What is measured has priority.

The company will need an advertising campaign that sells computers. There are highly talented people on the front line, some with serious hobbies such as photography or little theater experience. Let them design and create the ads. Let front line workers be the models in the ads. Let them be involved with the success of the company.

There will be people, like Mr. Smith, working for competitors. Create an environment that will attract and keep competitors talented people. They will strengthen Widget Data Systems and weaken their competitors.


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