Avainsana-arkisto: vision process

When visionary leadership works or does not work?

Key variables and aspects of change management and real-life implementation of strategic visions


Jari Kaivo-oja:

In politics and economics, the aim is to strive for visions and for a high level of strategic excellence. Whether it is managing climate change, managing the coronavirus crisis, dynamic industrial policy, political parties or business models of firms and corporations, we have to pay attention to visionary leadership and the operating styles that are in line with it.

Most of organisations in business and society are interested in change management and implementation. In the field of futures research, there has always been interest in visions, missions and strategies. The aim has been to identify visions, targets, goals and means to achieve these.  Goal rationality and instrumental rationality are central to all human activities. How goals and means are combined determines value rationality of organisations and all human agencies in political, commercial and social life.

Niccolò Machiavelli noted a long time ago:

“It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them.”
(Niccolò Machiavelli, The Prince, year 1513).

One key aspect of future oriented change management is to understand that there are push and pull mechanisms of change processes. Steve Morlidge (Satori Partners ) and Director, C.P.A. Steve Player (Beyond Budgeting Round Table, BBRT) have presented the Change Equation:

D x V x S > R,

where D stands for dissatisfaction, V stands for vision, S stands for first steps and R stands for resistance. We must think about V, D, S and R together as interrelated variables.

V = Vision for the future
D = Sense of dissatisfaction with the present
S = Knowledge of first steps, and
R = Sources of resistance.

This Change Equation is interesting in the sense that it contains a strong statement of the basic prerequisites for the success of visionary leadership. Visionary leadership literature has placed quite a lot of emphasis on the design of the vision itself, as it has been seen to act as a resource magnet and facilitate the mobilisation of tangible and intangible resources for the desirable future. Less attention has been paid to the basic variables of visionary leadership defined in the Change Equation.

Defining the Change Equation is perhaps more important than previously understood in the field of management sciences. The Change Equation states that dissatisfaction, vision and initial steps should be able to reverse the forces of resistance so that the desired vision itself can be realised with some time delay. Poorly defined vision, misjudged initial steps, poorly understood level of dissatisfaction and misconceptions about resistance to change prevent visionary leadership goals from being achieved.

Perhaps increasingly important it would be to be able to assess the relative weight of the three critical variables to the left of the change equation, because if one of the three variables has a high weight in relation to other variables, it should be invested more in management and in visionary leadership than other less weighty variables.

A good definition of vision alone is therefore not enough as a preconditional term for successful visionary leadership. In general, it is therefore important to understand that the vision itself does not yet determine a full success of the visionary management model alone. Dissatisfaction and initial steps are really relevant variables in visionary management process of organisations, whether we discuss about leadership models in companies, political parties or other social organizations.

It is time to rethink the processes of futures orientation and foresight.  

Jari Kaivo-oja

Research Director, Adjunct Professor, PhD
Finland Futures Research Centre, Turku School of Economics
University of Turku

Manufacturing 4.0 – strategies for technological, economic, educational, and social-policy adoption (MFG 4.0) & Transition to a Resource Efficient and Climate Neutral Electricity System (EL-TRAN). Both projects are funded by the Academy of Finland’s Strategic Research Council .

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Background literature

Holstius, Karin & Malaska, Pentti (2004) Advanced Strategic Thinking. Visionary Management. Publications of Turku School of Economics and Businss Administration. Serie A-8:2004. Turku. Web: malaska (utupub.fi)

Kotter, John P. (1996) Leading Change. Harvard Business School Press: Boston, MA. Web: Leading Change – Book – Faculty & Research – Harvard Business School (hbs.edu)

Machiavelli, Niccolò (1513) The Prince. (Orig. De Principatibus / Il Principe). Web: The Prince | Treatise by Machiavelli, Summary, & Facts | Britannica

Manyika, James (2008) Google´s View of the Future of Business. An Interview with CEO Eric Schmidt. The McKinsey Quarterly. September 2008. Web: (5) Google’s view on the future of business: An interview with CEO Eric Schmidt (researchgate.net)

Morlidge, Steve & Player, Steve (2010) Future Ready. How to Master Business Forecasting. John Wiley and Sons. Chichester, United Kingdom. Web: Future Ready: How to Master Business Forecasting | Steve Morlidge, Steve Player | download (b-ok.cc)

Welch, Jack & Byrne, John A. (2001) Jack: Straight from the Gut. New York: Warner Business Books. Web: Jack: Straight from the Gut by Jack Welch (goodreads.com)

Picture: Jan Vašek in Pixabay 

Co-creating Futures in New Value-driven Economy: Foresight, Co-creation and New Value Creation Thinking

Jari Kaivo-oja, Mikkel Stein Knudsen & Theresa Lauraéus

Co-creation is nowadays a key concept of participatory foresight. The definition of co-creation is not easy or and the issue not self-evident, at least not in scientific discussions. Typically, co-creation is associated with service design and development of new services and goods. Co-creation methods and tools can also be used in organizational strategy and vision processes. Nowadays innovation management includes proactive use of co-creation methods and tools, especially when end-users, lead-users and consumers are taken into innovation processes.

Co-creation is everywhere

The approaches of open business models, collaboration with users, customization of products, consumption, co-production, service exchange, retailing, business solutions with knowledge sharing, and participatory roles of consumers, communities and crowds are linked to co-creating processes. All these approaches are based on the fact that human beings are social creatures. We can also link these diverse approaches to emerging trend of the sharing economy.

We can claim that co-creation is not something new and fresh in the field of innovation management. Co-creation has always been a part of idea creation and innovations. The history of innovation cannot be understood without understanding co-creation as a part of innovation processes. Co-creation is also an elementary part of value creation in business life.

For example, David Teece´s classical Sensing-Seizing-Transformation -business model does not work without some forms of co-creation and foresight. Dynamic capabilities are fully utilised only with co-creation tools and methods. As we know dynamic capability is “the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments”.  David Teece’s mentor was Nobel laureate Oliver Williamson. David Teece’s work, in turn, influenced management strategy theorist Gary Pisano and business innovation expert Henry Chesbrough,  who were his students and collaborators. In a way, we can claim that Open Innovation paradigm was a result of co-creation by these grand economists and business modelling thinkers, even if Henry Chesbrough is sometimes credited alone as ‘the father of Open Innovation’. Co-creation of various experts and scientists is often in the background of scientific and business breakthroughs.

From creation to co-creation

Orchestration of excellency in business life requires nowadays novel tools of co-creation. Value creational systems do not work without interactive co-creation processes, especially when we talk about more and more digitalized world. In analogical reality creation was more simple and less complex issue. Today the trend is: We are moving from creation to co-creation and driver is digitalization. There are many reasons for the big change from creation to co-creation.

Today technology and digitalization had changed how hyper-individualized persons and things affect each other. Things are today connected and smarter than before. Globally, Nokia´s “Connecting People” slogan is now more real than before. Also discovery processes are today more complex than before. Process of justification in innovation process is in many ways more complex than before. For example, nowadays, Service Dominant Logic (SDL) is more demanding principle than old Service Logic (SL). This means that process of justification in innovation process is more demanding and complex. This means also that foresight activities should take SDL more seriously in the business world. Interactional creation, co-creation has become to be practiced with dynamic interactions of artefacts, persons, processes. and interfaces. Dynamics of co-creation is a different and more complex challenge than just dynamics of individual creation.

Interactional creation and APPI drivers

Today interaction is not “one-way street”. Progress in innovation processes is based on “two-way” or “multiple highways”. Arrangements are “put into motion” through interactions, which include elements of “upward causality” and “downward causality”.  Interactive platforms of digital economy have changed the nature of interactions. Typical platform includes the components of Artefacts, Persons, Processes and Interfaces (APPI).

All the elements are drivers of change in the digitalized network economy. For example, Industry 4.0 challenge includes dynamic development of APPI drivers. Corporations, which can develop dynamic APPI systems and platforms are the winners in the global economy. Everybody knows who are these global growth giants, who master the most successful APPIs.

From Collaboration to New Value Creation Thinking

Manufacturing 4.0: Navigation journey in the conditions of disruption and co-creation

The MFG4.0 project´s main goal is to produce academic publications and elaborate new innovative products and services, business models and entrepreneurship ideas for Finnish society, researchers and enterprises. Finland has invested a lot in developing new technologies, but what the most important innovations, intelligent products and services for citizens are, is an issue not too much discussed. The adaptive and renewal capacity of Finnish innovation ecosystem management will be tested during coming years of global disruptive technological transformation. The list of ”the next big things” has gradually grown longer and longer during last years. Various technology foresight studies indicate that disruptive technological changes will be a key element on changing global economic and social environment. Final outcomes of disruption are not self-evident.

Between now and 2025 disruptive technological transformation will be considerable. The so-called GRIN-waves (Gene technology, Robotics, Informatics and Nanotechnology) contain some key technologies that have great disruptive impacts on economies, business models, and everyday life of people. From this disruptive and risky technology perspective it is important, and we aim to develop new approaches to these disruptive technologies and innovations. We can claim that co-creation is key element of disruption management in business. Already very influential McKinsey study (2013) identified 12 potentially disruptive technology waves, but in reality disruption will be realized in different markets and global value chains and networks. Technologies do not alone co-create anything. There are broad ways of co-creations like submitting, co-designing, tinkering, collaborating etc. Humans do this part of development, not AI, robots or other digital solutions alone.

In Figure 1 relevant scientific framework of ongoing research is figured out. There are thematic elements in the project: Academic basic research, applied research and collaboration. The academic research provides the backbone and analysis framework for the project. The special added value of the framework will include following issues: (1) New research findings relevant for joint public-private partnerships, (2) effective knowledge sharing of research outputs with private and public sector organizations, (3) co-creation of an interactive and digitalized innovations.

Figure 1. Scientific framework of the research project. The logic of creating special added value with the partners (Saarinen 2006)

It is important to integrate theoretical knowledge and practical communication with collaborators to better understanding of socio-technical transition (see e.g. Saarinen 2006). The research project will collaborate and disseminate the results widely through large collaborator and institution networks. We do collaboration with 40 institutional and company co-partners. Co-partners take part in surveys, collaboration, dissemination and utilization of research results and reports.

Also, adaptive mechanisms of socio-technical regimes and niche micro management of SMEs and corporations will be developed towards more agile and flexible practices. The MFG 4.0 research project includes various interactive and participative foresight processes for Finnish industries and business communities. The on-going research is tailored for improving competitiveness and smartness of Finnish economy in the long-run. Some of the new innovations may offer solutions to today´s social problems, ageing, health care, usage of renewable energy, traffic problems in the future. As a recent Open Innovation case study on how an online voluntary community contributes to medical record-keeping in developing countries succinctly puts it, “Write code, save lives” (Sims et al., 2018). The starting point for Finnish business may be very different, but the example shows the valuable co-creative potential of involving consumers, end-users and outsiders in innovation processes.

 Co-creation – So what?

Today innovation management includes many co-creation processes of new ideas. Co-creation is a management initiative, or form of economic strategy, that brings different parties together (for instance, a company and a group of customers), in order to jointly produce a mutually valued outcome for all partners. In a recent article of Venkat Ramaswany and Kerimcan Ozcan (2018), co-creation was defined in a new way. Their fresh definition of co-creation is:

Co-creation is enactment of interactional creation across interactive system-environments (afforded by interactive platforms), entailing agencing engagements and structuring organizations.”

This definition of co-creation means that every co-creation framework (CCF) involves a particular combination of APPI components that are implicated through the respective environment of nodal entity in a network.  This definition can imply radical changes in business thinking. “Old fashioned thinking” of Business-to-Consumer (B2C) and Business-to-Business (B2B) are now changing to more complex direction, towards multiple linked I2S2I (system environments of platformed interactions) kind of business thinking.

So what? We can always claim that co-creation is nothing new under the sun, but it in current form of thinking can change thinking and action in the business world dramatically. If we think futures of business world from co-creation perspective, co-creation research requires much more attention also in Finland. In future industrial manufacturing systems with dynamic information exchange between the full value chain from suppliers to end-users, understanding how to best organise and optimise co-creation of value can be the determining factor for developing a business advantage or withering away.

Almost needless to say, co-creation can provide a lot of value-added for the public sector, too. Public organizations and agencies are not working in a vacuum of simple creation. Public agencies are also connected to global CCFs and APPI systems, where the perspective of individuals as experiencing actors with their co-creation experiences plays a central business role and has its own relevance. Already two co-creative thinkers can change the world. Futures business models are co-created with individualized immediate feedback loops, with new cooperating structures and platforms and with a new organizational logic.

Jari Kaivo-oja
Research Director, Adjunct Professor, PhD, Finland Futures Research Centre, Turku School of Economics, University of Turku

Mikkel Stein Knudsen
Project Researcher, Finland Futures Research Centre, Turku School of Economics, University of Turku

Theresa Lauraeus
Senior Researcher, PhD, Finland Futures Research Centre, Turku School of Economics, University of Turku

 

> Background literature

 

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