Charlene Li Part 2: How open should you be?

In this second part of Ben Whitford’s interview (here’s part 1), Charlene Li talks about balancing openness and strategy. How open does your organization really need to be? Here’s what Charlene had to say.

Ben: You write that successful open leadership depends on an “open mindset”–can you elaborate? I’m thinking particularly about your idea that there’s a balance between letting go and maintaining control. What exactly do you mean by “open mindset”, and why does it matter so much?

Charlene: No one is completely open or completely closed. You choose to be more open or closed depending on the situation and your goals. The same thing applies to business, where you must figure out just how open you need to be in order to accomplish your goals. So the open mindset is thinking about being open in a pragmatic, strategic, and disciplined way–where you examine carefully and closely where being open makes sense. And just importantly, you also understand where it doesn’t.

Ben: Is this a one-size-fits-all process? Can companies decide in advance how open to be, or do they simply have to take the plunge? Is it possible to be too open? You mention Apple as a relatively closed company, for instance–what would you say to a CEO who’d rather be like Steve Jobs than, say, John Chambers or Bill Marriott?

Charlene: While there’s something to be said for jumping in and experimenting, you need to move quickly into planning your open strategy so that it is oriented to achieve your strategic goals. For example, if you want to enter a new market, how much information does your new customer need and expect from you? Or if you want to manage a strategic change in your organization, how do you need to change decision making and information sharing to bring that shift about? You have to think through how being open in ten different areas of information sharing and decision making will help you achieve your strategic goals. If you don’t, you run the risk of not being open enough to achieve your goals, or you are being too open and not realizing enough benefit to justify the risk. Your excessive openness may also dampen the organization’s appetite for openness because you’ve moved too quickly for leaders to adapt.

In the book, I describe “The Apple Factor” which is that Apple’s level of openness is appropriate for its business strategy. They are in a highly competitive industry and also benefit from the buzz that comes with its legendary secrecy. Apple has legions of loyal customers who provide insight, marketing, and support for free. And their innovation engine is so strong that they don’t need to go outside. But they are open to allowing developers to publish on the iTunes and iPhone platforms–as long as they stay within the boundaries they’ve set up.

So if you create amazing products, have a fanatical customer base, and can create an ecosystem of partners you too can afford to be less open. The danger is that when (and this is not an “if”) Apple stumbles, they will need to be more open–and they will not have created a culture of sharing that will allow them to easily do this.

When Charlene speaks at the Buzz2010 breakfast on June 16, she’ll elaborate on the ten different areas of information sharing and decision making that organizations need to think through. Register for Buzz2010 and be there to hear from her.