“Collective Genius” Summary

and Review

Chapter 1: What Collective Genius

Looks Like
Pixar Animation Studios produce one blockbuster after another.
And their success is no accident. They’ve been doing this for
years, and no other studio comes close to matching their record.
Understanding how Pixar gets it right can help us learn how any
company can compete and succeed in an environment of
change. Why do some companies thrive in an era of innovation
and rapid change while other companies fail and fade away?

Pixar is an organization that uses a complex process which

results in elegant and nice products. The end product is
seamless; a Pixar film almost feels like it was done by one
person. In reality, hundreds of people cooperate to make a Pixar
animation. Other groups can function like Pixar in this way.
Masses of people can work with such close coordination that the
result is a unified, coherent product. This is how innovative
organizations work.

Innovation is usually a group endeavor, despite the myth of the

lone genius slaving away in isolation in his laboratory. More,
better, ideas emerge when people with different points of view
can bounce ideas off one another. At Pixar, unlike other studios,
the entire staff gathers to watch the dailies (footage of the film
in progress that was shot that day). This way, everyone can
participate in providing feedback.

Innovations are usually discovered after a lengthy process of

trial and error. It normally involves lots of experimentation, and
mistakes will be made along the way. Sometimes you have to
attack the problem from a different angle. It can be very time
consuming work.

Good leaders foster this type of discovery driven learning. (It’s

important to have talented people doing the work, but more
important than that are leaders who seek innovation.)

Leaders should also work to ensure their organizations are

collaborative and make integrative decisions. They should help
with conflict resolution instead of imposing a solution on an
unwilling group. Good leaders encourage multiple opinions: it
keeps more options available longer. At Pixar, if a good idea
emerges halfway through film production, the team will go back
and revisit the previous work to integrate the new idea into the
film. This creates extra work, but it’s worth it. Pixar’s primary
goal is to create a high quality animated picture, and they’ll
gladly go the extra mile to reach this goal.

Successful creation requires talent, certainly, but talent alone is

not enough. (There are plenty of talented people in Hollywood
whose movies turn out to be flops.) The talent must be in the
right context, which is not always easy.

The most important way to succeed as an innovative

organization is to have leadership that fosters innovation and
collaboration.
Chapter 2: Why Collective Genius
Needs Leadership
Innovation has many paradoxical aspects. For example,
innovation needs both freedom and restraint. Innovation
requires that we both unleash and harness resources like talent
and ideas. Collaboration is similarly paradoxical because,
although there is often harmony in the team, sometimes conflict
is necessary to the creative process. A good leader guides the
group through this. And while leaders should know when to
allow debate, ultimately it’s the leader who makes the decision.

Leaders should encourage people to be different, as a wider

variety of viewpoints yields better ideas. They should support
individuals and create an environment where people feel
comfortable contributing their ideas. Pixar is a shining example
of a company that functions well as a team while also respecting
and valuing the individual. It’s important to create an
environment where people can speak their minds and where
others will listen to them. However, the team should also
challenge ideas. It’s a tricky balance.

The kind of planning and implementation that we usually

undertake in furtherance of a goal doesn’t work so well for
innovation. No one knows ahead of time where innovation will
lead, so instead of marching steadily toward a goal, the objective
is to learn through experimentation. It is a time consuming and
messy process. Let’s face it — innovation requires a lot of work
and effort.

Good leaders encourage their people to experiment, iterate,

learn and start over again. Learning, however, should be
tempered with a firm’s need for performance. Ultimately, the
team will have to follow some kind of schedule and produce
something tangible.
Innovation is easier to invoke in an improvisational
atmosphere. Change should be a given. To temper all this
creative freedom, however, you must have boundaries.
(Deadlines inspire us.) Constraints (such as schedules, budgets,
rules and procedures) are inevitable, anyway, so we have to deal
with them whether or not we like it. But sometimes these
constraints can stifle creativity. Keep in mind, however, that
these constraints are just tools — don’t confuse them with goals.

Creativity can take time, so be prepared to be patient. Don’t

make premature decisions, even if there is pressure to do so.
Nevertheless, patience should be balanced with urgency.
Urgency is motivating. There’s nothing like a deadline to light a
fire under people.

Chapter 3: Recasting the Role of

the Leader
Traditional models of leadership tend to squelch creativity. In
these paradigms, the boss comes up with the ideas, dictates the
direction and tells everyone what they should do in order for his
or her vision to be realized. But this approach doesn’t work very
well when the goal is to create something new. Even leaders
don’t know what the outcome is going to be, so they won’t be
able march people toward that outcome.

The right kind of leadership is essential to cultivate innovative

conditions. A leader’s job is to create an environment where
people can get their work done, an environment where people
can be creative.

Vineet Nayar was CEO of HCL Technologies, a large Indian

Computer company. He assumed that role in 2005 at a time
when HCL was losing ground: it ranked fifth among its
competitors, customers were canceling contracts and employee
turnover was high. When HCL was founded in 1976, it was a
pioneer in the field. However, when the rest of the industry was
refocusing on software, HCL continued to prioritize hardware.

By the late 1990s, the error of this strategy was understood. The
company split into two units: HCL Infosystems, which stayed
with the hardware focus, and HCL Technologies, which
provided software led IT solutions. HCL was late to the party
and struggled to keep up with the competition.

When Nayar became CEO, he wanted to do things differently.

He thought about where the value zone was located. In most
traditional companies, value was created for the customers by
product designers, inside the company. HCL had become a
service company, and Nayar was quick to see that this shifted
the location of the value zone. Value was now situated at the
periphery of the company, where employees interacted with
customers. The relationship between HCL and its customers
was where value was generated.

None of the competitors had come to this insight yet, so Nayar

had a good opportunity for innovation. HCL, however, was a
traditional company with a traditional management hierarchy.
Nayar knew this wouldn’t work for cultivating innovation; a new
style of leadership was required.

Nayar established a new team, dubbing them “The Young

Sparks.” He put this team next to the executive offices in the
company’s headquarters. He increased transparency to build
employee trust. He made management more accessible and
accountable by setting up a system where employees could flag
problems within the company. He also set up a channel so that
employees could ask him questions directly (and he devoted
hours to answering hundreds of questions). He started many
programs and built an infrastructure that put the employees
ahead of the managers. As employees became more empowered,
they began taking the initiative in more ways. New projects were
started and new markets were discovered. The company
prospered.

There are some important lessons to be learned from Nayar’s

work at HCL. It takes people some time to get used to working
in a new way. There needs to be a cultural shift for people to
understand that the boss isn’t the key driver of change. People
have to be able to collaborate, to fail sometimes, to test ideas
and to make decisions. The leader isn’t the visionary; the leader
enables innovation.

PART I: LEADERS CREATE THE

WILLINGNESS TO INNOVATE

Chapter 4: Creating a Community

Luca de Meo was head of sales and marketing at Volkswagen.
Volkswagen was a thriving company, but they wanted more, and
De Meo was aligned with this goal.

At the time, marketing at Volkswagen was decentralized.

Headquarters established the parameters, but the different
markets developed their own strategies. Sometimes
relationships between local marketers and headquarters were
perfunctory and bureaucratic. Departments across the company
were siloed, each tending to their own concerns, and
communication between and across departments was limited.
There was no cohesion throughout the company, and especially
not across the fragmented markets.
De Meo felt the company should do better at speaking in a
single, unified voice, but because marketing was fragmented, it
wouldn’t be easy to get the kind of collaboration that innovation
requires. De Meo used the brand to unify and motivate his
employees. Focusing on the brand was a key factor, not only in
marketing to customers, but also in leveraging employee pride
and a sense of unity toward a common goal.

He established a lab where employees from different

departments could work together researching and developing
important projects. They also worked on strengthening the
brand. As they worked together, their collaboration skills
improved. They also began finding innovative solutions to the
problems they worked on.

De Meo created a cross functional team to handle a product

launch. He gave the group little direction and nearly complete
autonomy. Ultimately the team was assigned a leader, but only
after they had a good chunk of work completed. They put
together a great launch plan, and the board was pleased with the
results.

He led many initiatives to draw people together and inspire

them to find innovative solutions, and Volkswagen enjoyed
stellar success during De Meo’s tenure. Profits soared and the
company grew, even as other European automakers were
closing factories. The company was the subject of glowing
articles in leading magazines such as The
Economist and Forbes; and in 2012, they won the CLIO award
as the 2012 Global Advertiser of the year.

De Meo was successful because he understood some important

things about being a leader. Leaders create the space for
innovation. Leaders foster an environment in which people
want to do the work and in which people are able to get the work
done.
People need to feel like they’re part of a community, working on
something bigger than themselves. But cultivating this
atmosphere is easier said than done. Community is important
because it’s part of identity. When people care about the group,
they will work hard to maintain it and do the work. “We”
becomes as important as “I.” The group needs a sense of
purpose, a sense of why. Purpose is what creates communities.

Chapter 5: Beyond Purpose: Values

and Rules of Engagement
Pentagram was a collective of designers. Pentagram designers
had autonomy with their projects and the staff they employed,
but they also worked together to function as a community. The
company serves as a useful example of how people can come
together with a common purpose and how they can create an
innovative community.

The purpose of the group was innovative solutions for their

customers. They believed design has an important social
element, that it can improve people’s quality of life. And
Pentagram designers wanted their designs to have a positive
impact on society. Having a collective purpose helped bind them
together as a group.

At the retirement of Pentagram’s founder, it was decided that

the chairman’s job would have a two-year limit. The role came
without any added power, so the chairman acted more as a
facilitator than anything.

Pentagram exhibited the features that a group must have in

order to stay cohesive and survive over the years. Shared
values — sometimes implicit and sometimes explicit — are really
important. Values define what matters to a group; they shape
the group’s priorities. Innovative groups can have a wide range
of values, but they all share four core values: bold ambition,
collaboration, learning and responsibility.

A group with bold ambition isn’t afraid to take on big

challenges. A desire to solve problems leads them to look for
projects that will have maximum impact. Bold groups want the
world to be a better place, and they feel that they have the power
to improve it.

Innovative companies value collaboration, and they

intentionally build collaboration into their methods and
strategies. Innovation is sparked by the synergy of diverse
people with different outlooks working together. At Pentagram,
partners were not only collaborative with their fellow partners
and their work teams, but also with their clients.

Learning and a willingness to uncover information is crucial to

innovation. There are many mistakes to be made when you’re
trying something new. A sense of curiosity is vital for staying
engaged with the process.

Finally, a sense of shared responsibility is critical. Group

members need to feel collective ownership for outcomes.

In any group, the way that people act is important. To be

collaborative, people should trust each other and respect each
other. They should listen to each other and be able to influence
one another. The way people think is also important. People
should question everything. They should be driven by data. It’s
important that they can see the bigger picture.
PART II: LEADERS CREATE THE
ABILITY TO INNOVATE

Chapter 6: Creative Abrasion

Good ideas are produced by discussion and debate, so people
need to be good at disagreeing if they want their groups to be
creative and innovative. Creative abrasion comes from the
friction of ideas rubbing against each other. There’s an element
of conflict. It’s a process of creating and exploring ideas through
discussion and disagreement.

The first step for creative abrasion is to generate a lot of ideas.

This isn’t the same thing as brainstorming — it’s more
disciplined and focused. With brainstorming, ideas are
generated without judgement or criticism. Creative abrasion has
the supportive elements of brainstorming, but is also includes
confrontation.

Diversity means more than demographic diversity (race, gender,

class, etc.). Diversity also includes intellectual diversity, people
who think differently and people who have different skills.
Diversity of thought is important for the group. Different voices
add to the mix. Diversity attracts creative people who are
stimulated by exposure to a mix of ideas. At Pixar, they hired a
wide range of different people who all came to respect each
other. Despite their differences, they all treated each other as
equals.

Conflict is a valuable tool. Intellectual conflict is nothing to fear.

In fact, it’s good. But when conflict becomes personal and
people turn on each other, it’s destructive. Leaders must point
out destructive conflict when it arises; it shouldn’t be tolerated.
It can be hard not to take offense when people don’t like your
ideas. It can feel like a personal attack, and things can spiral out
of control quickly. Some people will withdraw from the process
rather than risk conflict.

Productive conflict is a lot of work, and doing it right requires a

lot of trust between team members. The feeling of community is
important for the group to survive the conflict. If everyone has a
deep sense of common purpose, they won’t take it too
personally when their ideas are critiqued. Community makes
people feel safe offering their ideas, even if people disagree with
them.

It is the leader’s job to remind people of the group’s purpose and

values. The leader encourages people when they become
frustrated with the process, the leader keeps the group working
by asking questions and the leader strives to keep people
stimulated and thinking. It’s important to keep people with
diverse ideas talking to each other. It’s also important to
connect different parts of the organization that might not
otherwise be in communication. Leaders should avoid imposing
solutions on the team. Instead, they should ask probing
questions that motivate the team to generate their own
solutions.

Creative abrasion is a skill that can be learned and practiced.

Chapter 7: Creative Agility

Creative agility is the ability of a group to repeatedly try to find
out what works. Learning and development are important, but
so is getting the job done. Ultimately the process should have
tangible results, because at the end of the day, performance is
what really matters.
Too much structure stifles innovation, but not enough structure
will result in chaos and lack of progress. Finding the right
balance is tricky, and the leader must always monitor the
situation and adjust the structure accordingly.

Constant experimentation fuels innovation. Innovation, after

all, comes from discovery rather than planning. Trial and error
is the best way to explore when the path forward isn’t fully
known, and good leaders encourage important creative
activities. They support the pursuit of new ideas; they foster
reflection and analysis; and they promote adjustments based on
lessons learned. These activities take place repeatedly to work a
problem until a solution emerges. Each cycle incorporates the
lessons learned from the last cycle. How long it takes depends
on how complex the problem is — sometimes it only takes a few
iterations to find a solution, but sometimes experimentation can
continue for years.

New ideas should be pursued quickly and proactively. Keep your

options open by testing several solutions. Don’t try to define
what the solution will look like ahead of time. Spend as little
time as possible in planning; instead, make prototypes, test
them and repeat. Groups that spend most of their time planning
are less successful than groups that are immersed in
experimentation.

The faster a group can test ideas, the faster the group will learn.
And the faster it learns, the quicker it can figure out what does
and does not work. Of course, this isn’t license to be sloppy —
 speed should be balanced with patience and a measure of rigor.

In any group, a certain amount of failure is inevitable, so leaders

must learn to tolerate it. Making mistakes is an important part
of learning. If your group isn’t experiencing some failure, the
team probably isn’t trying enough options. They are likely
taking a low risk approach which will not result in innovative
discovery. But while failure should be tolerated — and to a
certain extent even cultivated — don’t try experiments that could
damage the company or people if they fail.

When failure occurs, don’t punish or try to assign blame. If you

hunt out the guilty parties every time something goes wrong, no
one will want to risk making mistakes. Everyone will try to play
it safe. This will kill innovation.

Sometimes people think that experiments are like pilot projects.

They are not. Pilots are the first step in taking a new course of
action, the first step in implementing an idea that has already
been decided on. The goal of a pilot isn’t to learn new things, but
to make sure the plan works. The goal of an experiment, on the
other hand, is to explore.

A valuable step in the experimentation process is to spend some

time reflecting on the outcomes. This is where experiments pay
off. Gather the data from the experiment, get feedback from
participants and analyze the information. The whole team
should be involved in the process.

Then, take what you have learned and decide on next steps.
There might be strong indications of what the next round of
experiments should entail, you might conclude that you’ve
solved the problem on which you were working, or you might
find that the entire approach is unworkable and the project
should be abandoned.

Chapter 8: Creative Resolution

Ideas for new solutions are generated through discussion and
conflict, and solutions are tested via trial and error. The next
step in the process is creative resolution.
At this stage of the game, it’s important to balance perseverance
with endurance. Try to maintain a sense of urgency, while at the
same time cultivating patience. The flow of ideas should be
bottom up, not top down. Leaders establish the boundaries and
conditions for the work, but for the most part, innovation comes
from below. The leader is the “social architect” who makes
innovation possible.

Leaders should remind people to avoid either-or thinking. This

mentality can prevent people from seeing possible alternatives.
It’s important that the group doesn’t get locked into simplistic,
binary thinking patterns. Part of the leader’s job is to help
people hold several ideas at once. This isn’t easy to do: the
instinctive reaction is to simplify things and gravitate toward
one of the ideas. But the leader should help people avoid that
mentality.

Many leaders think their role is to make decisions, to act boldly,

and they will be tempted to rush to a decision. But it’s important
to resist the pressure to make quick decisions. The more patient
a leader can remain in the face of complexity, the better the
solution. It’s vital to trust the process.

Leaders don’t tell people what direction to take, but they should
be ready to tell the team to go back and search for a better
solution. It’s OK to cultivate indecision in order to allow more
time for ideas to develop. Eventually, though, a decision must be
made. (Even then, unused ideas should be recognized for their
value to the process.)

Rules are tools that provide structure to the group effort. When
rules are prized for their own sake, organizations can become
rigid and inflexible. Instead, rules should be adapted to suit the
needs of the team. Schedules, assignments, even seating
arrangements are all tools that should facilitate rather than
impede progress. But these structures should all be flexible, so
they can be changed as the needs of the group change.
Leaders should stay engaged with the group, asking difficult
questions, raising issues that might otherwise be overlooked
and sharing information that the team may need. They should
require teams to show how their ideas could work in the real
world. Giving the team autonomy and allowing the team to take
risks, however, doesn’t mean the leader can disengage.

Creative abrasion, creative agility and creative resolution are the

organizational abilities that comprise a team’s ability to
innovate. They are closely tied, working to help groups generate
ideas. But the group must be willing to work together using
these abilities. The leader has to ensure that these elements are
all at play within the group.

PART III: COLLECTIVE GENIUS 2.0:

INVENTING THE FUTURE

Chapter 9: Cultivating an Innovation

Ecosystem
Some challenges are so large and complex that they don’t fit
within the bounds of a single organization — there are no
traditional ways of dealing with them. Solutions must come
from several disciplines; innovative ecosystems must be created
across organizations. This is collective genius 2.0, and it is
growing throughout society.

There are challenges to maintaining innovative ecosystems, and

competing goals and culture clashes can contribute to failure.
Researchers are currently investigating how to build these kinds
of ecosystems and make them thrive, and the leader’s role in all
of this has yet to receive much attention. Clearly, innovation
across organizations creates even more challenges for leaders
who must bring together people from different groups and
backgrounds and turn them into a collaborative team.

Governance and structure is important here. There should be

clear boundaries, and everyone should understand the basic
ground rules. The real challenge, however, is to foster
willingness among groups that may feel competitive, or even
hostile, to one another. Unlike innovative teams that are
contained within a single firm, teams that cross organizations
often don’t begin with any sense that they are playing on the
same side. And while leaders in these circumstances may focus a
little too much on the rules and setting boundaries, it’s more
important to foster participants’ willingness to engage.

It’s vital to build community in the innovation team, and the

first step is to get everyone to agree on the goal of the effort.
Once they have decided on the purpose, the group itself should
set the rules for working together. This can nurture a sense of
community.

A leader should model the behavior he or she expects from the

team: inclusive, noncompetitive and tolerant of failure. (This
might be new behavior for some people.)

Creating community is sort of a mystery, an art form if you will.

It’s not really something a leader can force; sometimes you must
step back and let the process take care of itself. Nevertheless, it
is important for the leader to create the conditions in which
community can develop and flourish. A sense of community is
essential to the process of innovation.
Epilogue
Many organizations’ assumptions about leadership hold them
back from achieving innovation. Great leadership isn’t about
barking directions; it’s about creating and maintaining an
environment where creativity and productivity can flourish. To
help organizations recognize potential leaders, there are some
key leadership traits that you should look for.

Great leaders share certain personality traits, and like the

innovation process itself, many of these traits are paradoxical.
For example, leaders are idealistic but pragmatic. They take on
difficult problems and push the bounds of possibility, confident
of their success. At the same time, they are levelheaded and
understand that it takes hard work to overcome the challenges
that are sure to arise.

An ability to appreciate the complexities of a problem is another

sign of a good leader. Leaders can think holistically and
understand the multiplicity of factors at play in an organization.
Even so, they are action oriented. They will experiment and test
solutions, going beyond theory to find real world results.

Leaders should be happy to share credit for success. They are

secure enough in themselves that they don’t mind sharing
power. Nonetheless, they are also demanding. They hold people
accountable for their work; they expect results. Because their
priority is the work, they are willing to fire those people who are
unable to perform at the needed level of competency.

Like everyone, good leaders are only human. They have their
faults, anxieties and fears. They make mistakes and they get
defensive. But no matter how many times they may fall down,
they pick themselves up again and again. They are resilient,
which gives them the ability to accept their own failings and to
stay calm when people around them are feeling overwhelmed.
Great leaders aren’t necessarily born that way; rather, they have
learned from their life experiences. Organizations can also help
people to develop their leadership skills.

Sometimes potential leaders aren’t recognized because of

preconceived notions that leaders should know more than
everyone else, or that they should be assertive, or that they
should be tough. But these things aren’t really helpful traits for
leaders of innovation.

Another reason that some people are bypassed for leadership

roles is because they are “demographic invisibles.” They may
have great potential, but they are overlooked because of their
ethnicity, gender, height or other traits. Managers might have
unconscious biases, such that when they look at these people,
they don’t think of tomorrow’s leaders. To overcome the
potential for biases to interfere in identifying good leaders,
managers should have specific criteria and should take a hard
look at people in their organization to identify those who should
take leadership roles.

Leadership is the key to innovation. Leaders create the

conditions for innovation, they foster willingness for change,
and they nurture the ability to discover new ways to do things.
Leaders know their organizations must have the capabilities of
creative abrasion, creative agility and creative resolution.

You can be one of those leaders. It begins with self-reflection.

Take a deep look at yourself, and take the first steps towards
innovation