7/6/13 Pedro Baranda of Otis Elevator, on the Push for Innovation - NYTimes.

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July 4, 2013

Pedro Baranda of Otis Elevator, on the

Push for Innovation
By ADAM BRYANT
This interview with Pedro Baranda, president of the Otis Elevator Company, was
conducted and condensed by Adam Bryant.

Q. What was your first management role?

A. I studied a lot in my 20s — a six-year program in Spain, and then a Ph.D. here in the United
States. So my first management role was when I was about 30. I was a research engineer and I
had to hire two people.

Q. And was it an easy transition for you?

A. I probably made quite a few mistakes and learned from them. The main mistake I tended to
make — and probably still do sometimes — is that because I’m an engineer, I like to get into the
details of things. So I got some feedback about it early on, such as, “Let me do my job.”

That was an important lesson, because if you want to develop leaders and not followers, one of
the key things you have to learn to do is delegate. One of my bosses once told me: “You’ve got
to delegate because there are only three possible outcomes. You tell them what your
expectations are, and if their solution is better than yours, that’s fantastic. If the solution is the
same as yours would be, then it’s fantastic, too, because at least you didn’t have to do it. And if
it’s not as good as you expected, you can always take the time to teach them why and what to
do differently. That way, you will have learned about the person and the person will have
learned from you.”

That lesson about delegation is fundamental if you want to develop leaders and not followers. I
heard an expression from one of my business professors — that talent flow is the best predictor
of future cash flows — and that has stayed with me.

Q. What is some other feedback you’ve heard over the years about your management style?

A. When you do 360’s with your team, you learn that the perception people have about your
skills might be different from yours. When I took over a role in Portugal, my big concern was
whether I knew the business well enough. When I had the 360, the feedback was just the
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opposite. They said: “You understand the business pretty well. What you’ve got to do is not
intimidate people at meetings, to be more open to things that may not be right, and listen.”
That was a big lesson — you have to learn to be tolerant of failure, because if you are intolerant
of failure, your company will retrench and not be innovative. You have to encourage people to
take calculated risks. If you punish people who take risks and don’t succeed, they will never
take a risk again.

Q. How do you foster innovation?

A. The spark of innovation can be difficult to manage. We have a more structured process, even
though some people might think processes are kind of a straitjacket for innovation. But in our
case, they’re for guiding the thought process. We decide where to focus on innovation, and we
call them our innovation thrusts, which are based on what we’re hearing from customers,
architects, consultants, general contractors — everyone in our industry.

We want to know what is going to be important for their business five to 10 years out.
Sometimes they don’t know, but you can sense what’s going to be important for them. At any
given time we have five or six innovation thrusts. Once you have those, then you structure the
process around those themes, and you guide the sparks in areas where they would have a big
impact.

Then we do two things. We bring together teams of people from around the world, because I
believe that diversity is fundamental in the thought process. I really appreciate the importance
of diversity as a catalyst for creation and innovation. It matters not just in product development
and technology — I think it happens in many other aspects of the enterprise. But for innovation,
it’s fundamental.

We also have an internal Web page where people can post their ideas about innovations. We
have 62,000 employees, and they can vote on the ideas — thumb up or thumb down — or build
on them. It also helps you to see people who have this innovative spirit. Those are the people
we want to invite to meetings to develop ideas.

Q. How do you hire? What qualities are you looking for?

A. First, does the person smile? Is there a positive feeling when you talk to somebody, or are
they an energy drain? That’s important. Then you try to find out the raw material and the
competencies. There are techniques to try to find out their competencies, but I think it’s
become like an arms race, with interviewees knowing the tools you use to learn their
competencies, and they prepare for them. So I think you have to just let the conversation flow.

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Q. And what if you had only enough time to ask someone a few questions?

A. I would probably ask them what they like about what they do, just to get a general sense of
whether they are capable of loving what they do. And then the difficult question I ask when
people are looking to change jobs is, “Why do you want to change if you like it so much?” We
want people who want to have a longer-term career with us, and we want people who like what
they do. And so if they like what they do, then why are they looking to move somewhere else?

Q. What advice would you give a graduating class of college students?

A. I think you have to try to follow your passion with some flexibility to adapt to reality and
enjoy every bit. Life is short. So the one thing I always insist on is making sure that you like
what you do.

And I always recommend that you focus on what you have in hand today. If you’re thinking too
much about what your next job is going to be, you will not do your current job well, and then the
next job will never come because companies tend to be meritocratic.

So I always tell people, first, focus on what you do today. Make sure you like what you do,
because if you don’t, you’re not going to succeed. You cannot always do what you like, but you
can get to like what you do. So it’s good to follow your passion, but then you have to make an
effort to adapt yourself, to make sure that you love what you do.

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