Leadership in today’s business environment requires not just responding to challenges but thinking strategically. That’s why Christian Rangen, a Norwegian business expert, specializes in teaching strategic thinking to business leaders.
Rangen will lead a strategic simulation workshop on Thursday, September 19, from 8:30 a.m. to 12:30 p.m. at the Johnson Education Center at the D&R Greenway Land Trust, 1 Preservation Place in Princeton. Tickets start at $350. The event will present participants with unexpected challenges and familiarize them with modern tools of strategy and innovation. For more information, visit www.strategytools.io.
Rangen is the founder of Strategy Tools as well as Engage // Innovate, a global strategy and innovation consulting company. He is also a faculty member at a Norwegian business school and has consulted with companies and governments all over Europe.
Some of his work focuses on the idea of “Innovation Superclusters.” In a recently published paper, Rangen described how companies are collaborating with one another to innovate faster than ever before:
Over the past four years we have had a chance to work closely with policymakers, visionary governments, national transformation leaders, and innovation cluster leaders in Asia, Europe, and the Nordics. Our work has taken us to prime ministers, remote cluster outposts, and inside more than 40 innovation clusters, all intent on building new industries for the future. While the underlying principle of an innovation cluster largely remains the same, there is a small but growing category of larger, stronger, globally oriented clusters. We call them Innovation Superclusters.
The leader is a networker. Merete Daniel Nielsen was firm in her statement “the leader is a networker.” We were halfway into our conversation with Merete, as she repeated the statement. Merete, president of the global cluster network TCI and co-founder of Danish Cluster Excellence Denmark, has observed cluster leadership for over a decade. Working across the Danish and global cluster landscape, Merete has had a front row seat to the development over the past decade.
The leader, in any cluster today, is first and foremost a networker, a facilitator, and an influencer. Merete’s statement completely echoes our findings in interviews and observations.
As we shift from a company-based leadership perspective to a cluster-based leadership perspective, a fundamental shift occurs. The leader no longer holds the formal role of leadership, with its traits, perks, and formal decision-making authority. Instead, networked, influencing, and shaping become key traits. These findings also go far beyond the notion of servant leadership and challenge us to rethink how we describe leadership at the ecosystem and cluster level.
Cluster leadership is nothing like ordinary leadership. Arild sighed, with a big smile. As a long-time IBM sales manager, he had grown his leadership skills within IBM’s Big Data Analytics unit. With a deep passion for the intersection of technology, society, and healthcare, Arild had found a unique opportunity to build and lead the emerging cluster, Norwegian Smart Care Cluster. Under Arild’s leadership, the cluster had grown from a handful of companies and academically minded research projects to an internationally-oriented growth cluster with over 120 members and active business development projects in Europe and North America.
A thriving startup community, a growing investor network, successful market entry collaborations, and the Norwegian Smart Care Lab were some of the early wins for the cluster.
But one thing was clear in observing the rise of the smart care innovation cluster; leading and building an innovation cluster across sectors, domains, and stakeholder groups was nothing like traditional leadership in action.
Network, influence, and a razor-sharp member-focus were suddenly key drivers and key leadership traits for Arild and his team. (Initially, most members don’t know what an innovation cluster is or how they can benefit from it, so building a new innovation cluster from the ground up is a little bit like Henry Ford’s statement about customers and horses….)
From five to eight leadership levels. Long-time faculty and leadership expert Morten Emil Berg at BI Norwegian Business School is a national brand in the field of leadership. His books, easily accessible and focused on the reader (i.e. the leader), not fellow researchers, have underpinned the leadership development and training of thousands and thousands of Nordic leaders over the past 20 years.
Central in Berg’s writing are the five levels of leadership. Berg defines these as:
Visionary: the leader as shaper of the long-term vision, mission, and key cultural pillars of the company and its narrative internally and externally.
Strategic: the leader as a strategist, thinking ahead, seeing strategic moves, disruptive industry changes, and building new transformational business models for the future.
Administrative: the leader’s role in building processes, workflows, administrative systems, and internal policies.
Operational: the leader as a coach, people developer, and manager.
Self-Leadership: the leader’s ability to lead herself, manage time, handle pressure, use positive language, and deal with self-weaknesses.
Building on Berg’s framework, we find leaders in Innovation Clusters work across not five, but eight levels of leadership.
Visionary: The leader must build a large coalition of industry leaders, government leaders, politicians, ecosystem builders and unite them around a strong vision for the cluster. With the distributed decision making across cluster landscapes, the leader has to build a massively compelling vision to a large number of different stakeholders, all with different needs, wants, and agendas.
The visionary cluster leader will be able to unite these behind shared ambitions and shared problems they are trying to solve, problems that can only be solved by working together.
Networked: In our research we find all successful cluster leaders to emphasize the importance of the network and having access to the right networks. Either directly or through their key stakeholders (often the board of directors at the cluster level), the leader fully recognized the critical importance of working in and across personal networks to build and scale the cluster.
A great cluster leader will focus on building and expanding her personal network to cover both cluster members, policy makers, international partners, investment community, accelerators, national innovation agencies, and a number of organizational entities far outside the bounds of the cluster’s operational membership.
The chairman of an emerging global energy Supercluster spent the first six months of his role working in and across his personal network, rekindling relationships, connecting with fellow industry chairmen and CEOs to build interest and support for the emerging Innovation Supercluster.
Strategic: “A good cluster leader has to be strategic — always.” The statement came from the CEO of one of Norway’s largest innovation clusters. The cluster had a roadmap to 2050, with a target to 5X the industry’s value impact. To achieve this mission the CEO knew that strategic thinking, sensing the landscape across the entire industry, from CEOs, policymakers, educators, researchers, startups, investors, corporate innovators, and regulators, was of the outmost importance.
But with limited organizational resources, staff, and funding, a cluster CEO will always struggle with the balance between short-term and long-term focus. In our research we generally find that most cluster CEOs easily get sucked into a busy, operational role, neglecting or at least struggling with the strategic leadership role. This is a fundamental challenge that must be addressed by boards and national cluster programs.
A great cluster will develop a bottom-up long-term strategy, define strategic areas and targets, future business models (critical), KPIs, roadmaps, and a culture of execution at all levels.
Influential: How strong influence does the cluster leader have in her network? With hundreds of members, many of them industry CEOs, professors, and policymakers, the leadership role changes fundamentally from “boss” to “influencer.” Soft power, diplomacy, nudging, and invisible influence can be far more important than any formal decision making.
In our research we found that few cluster leaders were fully aware of this area, acting rather like they were operating within formal, hierarchical leadership structures. Our findings are very clear; they don’t.
Administrative: Fully in line with Berg’s writings, we find that the administrative leadership tasks simply “must get done” within the innovation clusters. Most leaders struggle through this, experiencing an overload of reporting, systems, and reviews, often caused by the financing and requirements by the national cluster programs. Surprisingly, a number of cluster leaders do not use the administrative supporting tools and reporting platforms, designed to ease their job.
Member-Focused: “We work to serve our members” is a common statement found in our interviews. While this is obviously true, it is also a dangerous trap to fall into. If the cluster leader overly spends his time and resources on serving the existing cluster members, he is unlikely to achieve the larger, strategic goals of the cluster.
A successful innovation supercluster will have hundreds of members, spread across capital, entrepreneurship, academia, industry, and government. Any leader, too member focused, will easily be running himself to the ground trying to please everyone.
The right Supercluster leader will focus on the architecture and structure, building an organization that can serve the members, not trying to do everything himself. This proves to be a challenge, as few clusters have a professional organizational model in place and understood across its key stakeholders.
Operational: In traditional companies, business units, departments, and teams, people are organized in a hierarchical and largely formal manner. We expect to find mostly full-time employees and clear manager-employee relationships.
This is not the case in most innovation clusters.
On average, an innovation cluster will often have a CEO and 3 to 4 employees.
In our data set, the range is from 0 full time employees to 45, with a single outlier with 85 employees.
With our definition of EC (Emerging Clusters), GC (Growth Clusters) and SC (Superclusters) we generally find 10 to 45 people in the Supercluster segments.
But we find that most cluster leaders lead, organize, and manage a large number of employees, interim staff, interns, part-time project managers, working groups, special projects, research initiatives, and business development groups.
While the number of formal employees tends to be small, the number of people and staff that fall under the operational management is large, and in some cases very large. This creates highly complex leadership structures and challenges.
In our interviews we find a clear and repeatable pattern that management has clearly shifted from hierarchies to managing ecosystems. Our observation is clearly, for clusters, the age of traditional hierarchical leadership is over.
Yet few cluster leaders have the tools, training, or deep understanding of how to navigate and succeed in this new world.
Self-Leadership: The importance of self-leadership has been on the rise since the 1980s. The ability to set goals, focus on personal performance, strength-based development, self-imposed positive psychology in practice, and a positive developmental belief system are all key pillars of self-leadership.
They also echo many of the criteria cluster leaders mention in their own talks about leadership and leadership challenges in clusters.
Many cluster leaders describe a situation where they mostly work alone, have to set their own goals and targets. They describe a situation of both being busy, but at the same time experiencing a sensation of everything taking much longer than expected. Despite having a large number of members, stakeholders, and board members, most describe a sensation of “working alone.”
These findings fall in the category of self-leadership, or rather leaders applying self-leadership to navigate their new leadership paradigms.
In our work we have been privileged to gain access to board rooms, national transformation leaders, cluster leaders, academics, and well-respected industry CEOs. Through observations, surveys, interviews, conversations, and reflections, we continuously attempt to make sense of new social structures. We believe a growing number of countries will move towards building innovation superclusters and national cluster programs. But we are also aware that the overall understanding of key leadership traits in these cluster structures is generally low to non-existing. Rather, a traditional, top-down, hierarchical mindset is applied to what fundamentally requires a new perspective on leadership.
In our work, and in collaboration with leading academics and experts in the field from California to Copenhagen, from Singapore to Vienna, we hope to contribute to an emerging understanding how we develop a generation of new leaders, leaders who naturally thrive and succeed in the age of ecosystems, networks and Innovation Superclusters.