People Are the Core of Sustainable Innovation

by Heidi J. Musser

I have spent much of my career leading and advising businesses on designing new operating systems and engagement models to drive transformation and achieve enterprise agility. From a C-suite position, I’ve done this through the adoption of fundamentally different ways of working, thinking, and being to achieve sustainable innovation.

Every industry I’ve worked in has faced—and continues to face—technological advances that drive disruption and innovation. We live in a world of constant change and none more so than in the field of technology. Accelerated and accelerating rates of technology innovation continue, driving both customers and employees—people—to continually interact with organizations in new and unique ways. Advances in language-based artificial intelligence (AI) are ushering in a new era of disruption at an incomprehensible pace. Everything from science to business to society itself will be transformed. The positive impact on human creativity and productivity will be massive.

Gary Hamel, one of the world’s most influential and iconoclastic business thinkers of the 21st century, asked this question in 2009: “How in the age of rapid change do you create organizations that are as adaptable and resilient as they are focused and efficient?” (Hamel, 2009). This question is more relevant than ever. When COVID-19 hit in March 2020, this further accelerated the evolution of digital business models and the digital transformation of work. Post pandemic, leadership teams of companies throughout the world began transforming their companies more than ever, and faster than ever before!

Rapidly adapting to constant change may be the single greatest competitive advantage in the 21st century. Peter Drucker observed years ago: “An established company which, in an age demanding innovation, is not able to innovate, is doomed to decline and extinction” (Drucker, 2014).

Building resilient, sustainable, and adaptable business, organizational, and leadership capabilities will play an integral role in determining the winners and losers in this next economic revolution. Companies will need a strong digital core and investments in people to survive and thrive, to reap the value of technology innovations such as AI in a responsible way. Companies will need to radically rethink how work gets done. The focus must be on training people as much as on technology.

Sustainable innovation matters because it is the key to building the capabilities that allow people-focused and product-driven enterprises to operate at market speed—the speed of technology innovation—as a matter of routine. It not only is the competitive advantage, but it also ensures enterprise sustainability in the 21st century.

To thrive in the world of technological disruption, we must embrace change.

And it begins with people.

People are the core of enterprise sustainability.

People are the core of business agility.

People are the core of digital transformation.

People are the core of sustainable innovation.

Peter Drucker and Innovation

I graduated from Michigan State University in 1981. Most of the fundamental breakthroughs in management that I studied occurred dozens of decades prior to that. The foundations of “modern management” were laid in the early 1900s by the likes of Henry Ford and Frederick Taylor. I learned very little that prepared me for today’s rapidly accelerating pace of change. With one very notable exception: Peter Drucker’s guiding principles of management. He was right about virtually everything!

Peter Drucker believed that organizations should be designed and managed for innovation: “Since we live in an age of innovation, a practical education must prepare a person for work that does not yet exist and cannot yet be clearly defined”(Drucker, 1996).

I began my career in the public sector, as the assistant finance director for Ingham County, Michigan, USA. During this time, I attended the Government Finance Officers Association Conference in Detroit, Michigan, USA, my hometown. The keynote speaker was Rear Admiral Grace Murray Hopper. She had not yet retired—although she was over 75 years old. Commodore Hopper spoke about new technologies, satellite communications, and why computers had to be small to be fast. Yes, she talked about speed. Keep in mind, this was 40 years ago.

She described how fast light travels. If light travels 186,000 miles per second, then it travels about a foot—11.8 inches to be exact—in one nanosecond. She illustrated this with a piece of wire. After her talk, she invited us to the stage where she handed out "nanoseconds," contrasting them with a coil of wire nearly 1,000 feet long, representing a microsecond.

I met Commodore Hopper that day. She not only gave me her business card, but four nanoseconds and, ever since, I have always carried a nanosecond in my portfolio. Why do I carry the nanosecond? Inspiration. I was so inspired by Commodore Hopper that shortly after I left public sector finance and

began my career in IT.

Rear Admiral Grace Hopper influenced me in several ways. Believing I could have a successful career in computing was a part of it. But a bigger part of it was this: During her talk, she said, “The most important thing I’ve accomplished is training young people. They come to me and ask, ‘Do you think we can do this?’ and I say, ‘Try it.’ And I back them up. They need that. And I remind them throughout their careers to take chances.” She deeply cared about people, even more so than technology. Grace Hopper was an

amazing technologist and an amazing leader.

People Are More Important Than Technology

Fast forward to January 1986. I was on my first business trip ever—to Douglas County, Nevada, USA. I was the chief product officer for a startup software company. My mission was to assist the county with  closing their books using our new financial management software. It should be noted that in 1986,

implementing new business systems happened once every 5–10 years.

After several days of setup, testing, and training, the new system successfully closed the county’s books. The only thing the treasurer had to do was select the designated options on the green screen from the “dumb terminal.” The technology worked—the jobs executed successfully, and all the expected journal entries were created in a matter of hours, not weeks!

Unfortunately, the treasurer was not elated. In fact, she was frightened. The new system provided her with a fundamentally different way of performing her role. Despite the training, she was not prepared for this. She realized that she would need to change what she was doing, but she lacked both the skills

and confidence to work in this fundamentally different way. She also didn’t understand how the technology worked and did not have assurance in the results.

This was the very first lesson I learned about technology: People are more important than technology. It’s also when I learned about how most people respond to innovation. Most people first react to the disruption before they embrace the innovation.

Disruption, Innovation, and Feedback Loops

Think about a time that you encountered something unexpected—an impediment on the path, a disruption on your journey. How did you react? Over the years, I have experienced and observed many reactions:

• Oblivion. I do not see it; I walk right into it. The force knocks me down and leaves me dazed, confused, embarrassed, and afraid. 
• Fear. I do see it; it scares me. I turn and run away fast, hoping that no one sees me!
• Ego. Another hill to take, mountain to conquer! I charge ahead with grit and determination and very little preparation!
• Shame. I should have seen this coming, but I didn’t. I maneuver my way around it, perhaps tunnel underneath it so that I will not be seen.
• Curiosity. This path appears to be blocked; I wonder what beauty and opportunity is lurking around the corner? Who would like to explore this with me? This is the reaction that takes me down the path of innovation.

Disruption demands courage and compels us to take risks, to try something new. Which reminds me of this sentiment, commonly attributed to Peter Drucker, reflecting on his views on the need for change and innovation, "If you want something new, you have to stop doing something old." Furthermore, as Drucker noted during the 20th century: “The enterprise that does not innovate ages and declines. And in a period of rapid change such as the present, the decline will be fast” (Drucker, 2014).

We live in a world of constant change. We must radically rethink how work gets done. We not only need to embrace change; it’s imperative that we radically rethink how we detect and respond to change.

According to Peter Drucker, “Innovation requires us to systematically identify changes that have already occurred in a business—in demographics, in values, in technology or science—and then to look at them as opportunities. It also requires something that is most difficult for existing companies to do: to 

abandon rather than defend yesterday” (Drucker, 2012). The deluge of change makes this particularly difficult, so people naturally retreat to oblivion. We must not regret or hold on to the past. Rather, we must invest in the ability to innovate. Quickly. As each new disruption presents itself, we must rapidly

respond with innovation, which will necessarily generate more disruption.

Because of this accelerating cycle of disruption and innovation, “The only skill that will be important in the 21st century is the skill of learning new skills.

Everything else will become obsolete.” Yes, Peter Drucker also noted this decades ago.

Another consequence is the need for feedback loops. As organizations learn how to rapidly detect change, it’s the feedback loops that will enable innovative responses to that change.

Over 20 years ago, Kent Beck published Extreme Programming Explained: Embrace Change. One of the key principles he espoused was, “Do the simplest thing that works” (Beck, 2004). This principle advocates simplicity. It also demands feedback. Rapid feedback. Based on rapid feedback, “Do more of what works, less of what doesn’t.” Feedback loops are the foundation of sustainable innovation.  Ironically, they are also the core of learning.

The Agile Mindset

The person and/or organization that has both the curiosity and courage to look around the corner in the face of disruption is not afraid of change, nor do they fear irrelevance. Rather, they are excited about the new opportunity that awaits them, the new idea to explore, the skill to be mastered! They have an agile mindset.

An agile mindset is required for people to effectively respond to change, to “create organizations that are as adaptable and resilient as they are focused and efficient.” An agile mindset begins with meeting people where they are and intrinsically includes the dimensions of understanding, comprehension, and

imagination.

The first dimension, understanding, involves “being present” so that you can develop an understanding of “what it is.” People are not very good at this—it’s easier to tell you what we think we are doing than what we’re actually doing, or more importantly, why we’re doing it. Understanding requires us to be

relentlessly focused.

The second dimension, comprehension, is understanding how we got here—or the ability to comprehend “why it is.” A wise colleague taught me: “Things are the way they are because those who are in power desire it to be that way.” While this may be true, it’s still important to ask why. It’s not until we ask why at least five times that we get to the essence of the thing, to understanding “why it is.” Once we understand “why it is,” we can effectively develop a positive response to change. Comprehension requires that we listen to understand.

The third dimension of the agile mindset is imagining what is possible, or the ability to “think really big.” Early in my career, I began the practice of asking the question: “Who can tell me ... ” and rewarding the person with the correct answer with dinner for two at the restaurant of their choice. I’ve done this

dozens of times without offering limitations as to location or cost. The winner has never chosen a 3-star Michelin restaurant in any city. The winner usually chooses their favorite local lunch spot. Most of us don’t think big enough. We think within our experience and our comfort zones. We think small. We think

safe. Thinking safe doesn’t require change. Imagination requires courage.

The agile mindset—understanding, comprehension, imagination—is a fundamentally different way of thinking and being. It is what people and organizations need to sustainably innovate and thrive in the world of constant change.

The Agile Mindset at Work

We are all capable of becoming agile—relentlessly focusing, listening to understand, acting with courage—and embracing this fundamentally different way of thinking and being. We are not powerless—we never really are. We always have a choice.

With this new agile mindset, we have the power to effectively adapt to change if we are willing to adopt three simple practices:

1. First, are you willing to ask for help? This is the key to humility. To be successful, you don’t need to have all the answers or know everything, but you must be willing to say these three words: “I don’t know.” Asking for help is the core leadership discipline. Ironically, once we become willing to ask for help, it becomes easier to help others. People with an agile mindset are both humble and selfless.
   
   
2. Second, are you willing to make mistakes? This is the key to curiosity, resilience, and confidence. Lorraine taught me this in my first management job. She was learning how to use our new accounts payable system. At the end of each day during the month of parallel processing, she brought me the stack of invoices she had entered and a list of all the mistakes she made, circled in red. When she finished presenting her work, she would proudly say, “Well, at least you know I’m learning, because I’m making mistakes!” 
   
   This reminds me of another Peter Drucker quote: “We now accept the fact that learning is a lifelong process of keeping abreast of change. In addition, the most pressing task is to teach people how to learn” (Drucker, 2006). People with an agile mindset learn from their mistakes. 
   
   
3. Third, are you willing to recognize others? This is the key to compassion. Several years ago, I visited the Taj Mahal during a business trip to India. It was an amazing experience! During this trip, I was invited to bless the construction of a water supply system for the Kannagi Nagar  Government School in Chennai. It’s been a community of slum board tenements since 2004, when over 15,000 fishermen and their families were relocated here after the tsunami. Dhanalakshmi, the head schoolmaster, and her students, greeted us with a series of dances and a display of martial arts. After the program, the blessing ceremony, modeled on the idea of Puja, commenced.

The Taj Mahal was magnificent, but that afternoon in the schoolyard forever changed by life.  Dhanalakshmi’s students were extraordinary—respectful, curious, present, filled with an unimaginable amount of joy! They were so proud to host us in their schoolyard—their red-dirt schoolyard that had been lacking even the most basic water supply system for nearly 10 years. And what did we do? We met them where they were, we shared in their ceremonies, we recognized them. Dhanalakshmi taught me the real value of recognition. Without recognition, there can be no compassion. People with an agile

mindset are compassionate.

People Matter

My experience suggests that truly innovative organizations that have adopted and embraced an agile mindset not only have a healthy ecosystem, but display these three behaviors as cultural norms:

• Asking for help. This is the key to humility.
• Making mistakes. This is the key to curiosity.
• Recognizing others. This is the key to compassion.

Not coincidentally, these behaviors are also core attributes of teams that display high levels of  autonomy, mastery, and purpose. The most valuable resources we have as human beings are those we cannot see: creativity, trust, compassion, imagination, endurance, determination, vision, and courage.

The emerging truth is that people ARE the competitive advantage. Talent is the key differentiator for organizations to sustainably innovate.

Deloitte’s 15th Annual Tech Trends Report: Tech Trends 2024, noted that a new focus is evolving for organizations that are dedicated to attracting and retaining the best tech talent: developer experience. According to the authors, it’s one of the “grounding forces,” represented by “the business of technology,

core modernization, and cyber & trust, that companies will need to integrate well with pioneering innovations so that businesses can seamlessly operate while they grow” (Bechtel et al., 2023).

In Rewired to Outcompete, published by McKinsey (2023), the authors noted: “How companies navigate the technology world to achieve sustainable competitive advantage is the defining business challenge of our time.” (Lamarre et al., 2023). The article goes on to describe that one of the six enterprise capabilities critical for successful digital and AI transformations is talent—ensuring companies have the right people with the right skills and the right capabilities to innovate and execute.

Conclusion

The most important strategy for doing well while doing good is to invest in people. Investment in people is always a good bet and always the right thing to do, because people are more important than technology. In the age of generative AI (GenAI), it’s more important than ever for those organizations 

that don’t have strong core innovation capabilities to build these competencies or they will likely be left behind in this next economic revolution.

After all, as Peter Drucker famously noted: “The purpose of an organization is to enable ordinary people to do extraordinary things” (Drucker, 2012).

Embrace change. Embrace people.

References

• Original from Chapter 24 of the book: Driving Sustainable Innovation - https://www.brightline.org/resources/driving-sustainable-innovation/
  

• Bechtel, M., & Briggs, B. (Eds.). (2023). Tech trends 2024. Deloitte Insights.
• Beck, K., (2004). Extreme programming explained: Embrace change. Addison-Wesley.
• Drucker, P. F. (1996). Landmarks of tomorrow: A report on the new “post-modern” world. Routledge.
• Drucker, P. F. (2006). Classic Drucker: Essential wisdom of Peter Drucker from the pages of Harvard Business Review. Choice Reviews Online, 43(11), 43–6632.
• Drucker, P. F. (2012). Managing in the next society. Routledge.
• Drucker, P. F. (2014). Innovation and entrepreneurship. Routledge.
• Hamel, G. (2009, February). Moon shots for management. Harvard Business Review.
• Lamarre, E., Smaje, K., & Zemmel, R. (2023, June). Rewired to outcompete.
• McKinsey Quarterly.

About the Author

Heidi J. Musser is a board member, board advisor, and C-level executive who advises and leads businesses on digital transformation and enterprise agility. She has successfully created and scaled resilient and sustainable organizational structures, business, and governance models that can 

withstand rapidly and dynamically changing market conditions and achieve competitive advantage in this next economic revolution.

A lifelong learner with insatiable curiosity, she’s achieved extraordinary results and transformational outcomes in complex, regulated environments. Heidi speaks and writes frequently on the topics of leadership, agile, and people. In addition to her TED Talk, she has edited numerous books and most recently wrote the introduction to Wild West to Agile.

Heidi has been at the forefront of championing women in leadership and technology throughout her career and speaks frequently on DE&I, LGBTQ in Tech, and women in STEM. In 2014, she was nominated to

STEMconnector’s® list of 100 Diverse Corporate Leaders in STEM. She fervently believes that people are more important than technology.

Key Takeaways From Brightline®

• To thrive in the world of technological disruption, we must embrace

change. And it begins with people.

   o People are the core of enterprise sustainability. 

   o People are the core of business agility.

   o People are the core of digital transformation.

   o People are the core of sustainable innovation.

• An agile mindset is required for people to effectively respond to change, to "create organizations that are as adaptable and resilient as they are focused and efficient." The agile mindset begins with meeting

people where they are and developing a fundamentally different way of thinking and being. It is what organizations need to sustainably innovate and thrive in the world of constant change.

• The emerging truth is that people are the competitive advantage. Talent is the key differentiator for organizations to sustainably innovate. The most important strategy for doing well while doing good

is to invest in people.

Reflections Powered by Brightline®

Take a few minutes to reflect on the following questions, and use this space to write down your answers, action items, or follow-up questions to consider as you pursue your sustainable innovation journey.

• How would you compare an agile mindset to the current mindset of people in your organization? Is there a gap, and what could you do about it?
  
  
• “The purpose of an organization is to enable ordinary people to do extraordinary things.” How can your organization better leverage the talents and creativity of its people to drive sustainable innovation, ensuring their roles are both recognized and empowered?
  
  
• Consider the rapid technological advancements in your industry, how can you leverage the power of people to become a more resilient and adaptable organization?