CEOs as Leaders of People – Innovation Culture

By Fran Chuan & Agustin Ramos
Revolutions start with people. Cultures start with Leaders. All great leaders have an empowering and motivating vision. A vision is like a lighthouse that guides the people through the journey, also in stormy weather, transmitting to them a desire to make the journey, arrive to the desired end and become part of a winning team. Developing and communicating this vision is a critical first step in the journey towards innovation, and then defining the focus and the rules, allowing experimentation, rewarding learning (also from failures), not allowing mediocrity, holding the people accountable and providing them the tools that will make the journey more effective and enjoyable.

An academic approach to learning from previous experiences in other companies will help set up the base. Involving consultants to provide supporting seminars on creativity, on enrolling the organization into the journey to a new culture, providing personal and group coaching if needed, are tools within the reach of the CEOs and Management Teams to increase the effectiveness of the change in culture. CEOs can therefore provide these tools to take along the journey to change.

In conclusion, many companies claim that people are their most valuable asset. At the same time, many of them also forget about people when making the commitment to become innovative. Leading people into a motivating journey towards creative ways of working, treating them with respect, making them accountable for results and providing them the tools to make the journey fascinating will help CEOs bring the discipline of innovation into their companies and achieve better business results in a faster changing world.

Innovation as a discipline – creating a culture

Innovation is a choice, a strategy. Converting the desire into action requires an intentional initiative, systematically planned and organized like any other important management activity. At the same time, there are still many executives that consider innovation a peripheral or luxurious activity.

Innovation must be understood as a discipline in its double meaning. Discipline is a field of knowledge (like Finance Marketing or Six Sigma), which requires “discipline” or rigor in the approach. It is not magic but deliberate, it is systematic and with some degree of predictability. Unfortunately, our under-standing of innovation lags thirty years behind that of, for example, quality. The good news is that it can be learnt, practiced and fine-tuned with a rigorous approach through continuous experimentation.

Creating a culture of innovation in the company gives the CEOs an opportunity to exercise leadership, showing their desire with actions rather than with words only. Walk the talk. How much time is committed in their calendars to innovation or devoted to innovation in the Management Team meetings? What is the message that their Management Teams receive consistently from them? Then, how is this commitment communicated to the organization?

Many organizations approach innovation with the same left-brain elements as any other discipline, dedicating resources, processes and measures to track the progress. They are all needed, but not enough as they forget critical right-brain elements. The difference between success and failure of the innovation initiatives lies in having strong company values to create an environment that generates entrepreneurial behaviors.

Assessing the current situation in which the organization is at present under the perspective of these six left and right pillars will give the CEOs and the Management Team an understanding of the key gaps between the current and the desired situation, allowing them to first design and then implement the changes required to create the necessary culture of innovation amongst the people in the organization.

How to set a Leadership Agenda for Innovation

A good plan requires a rigorous thinking process and a significant base of insights into customer needs, company capabilities, and changes in the competitive landscape. The organization also needs time to reflect and absorb the opportunities and options.

These steps can ease the process:

1. Start with the customers

Start the process by creating a good base of insights into customer needs and contextual changes and forces that might influence your industry in the future. It can be extremely rewarding for top managers to spend time on understanding their customer’s daily life and to use that to identify discontinuities and anticipated changes from today’s world. Many times we have found that the discussions in a management group becomes much more inspiring and valuable when you place your customers’ everyday life at the center of the discussion. This allows you to challenge the basic assumptions in your industry and open discussions about entirely new business opportunities.

2. Detect patterns and think like a good journalist

Mapping future needs and opportunities can make you feel like a kid in a candy store: There’s so much to choose from and everything looks delicious. It’s tempting to choose a little of each. Because a good leadership agenda is about prioritizing and choosing your future it requires bold choices. The trick is to detect patterns in the data and find the vectors that best align with your company’s capabilities and culture. The hard part is to choose a direction and deselect all the other options that look so tempting. In most cases the pattern recognition process will reveal some very clear options and some surprisingly simple answers on where the future value lies. A good rule is to think like a journalist who is writing a headline for his or her story. There can only be one headline and you’d better make sure you put the most important stuff up front.

3. Involve your organization—but only when you’re ready

An African proverb wisely states: “If you want to go fast, you can always walk alone, if you want to go far, walk together.” Creating an innovation agenda requires both walking fast and walking far. In the beginning you need to walk fast. That’s when you create insights and set the intent. If you involve too many people in the discovery process you risk compromising and allowing corporate politics to destroy what may be some very clear thinking. It is best when the CEO selects a small group of the best thinkers to lay the groundwork and help set the intent. Once that’s done you need to walk far. This is the phase where the intent in translated into challenges and projects in the organization. The task of top management here is to change the traditional downward communication style to an upward communication stream of new ideas coming from the entire organization.

4. Work fast and be determined about implementation

The full pay off from a new innovation agenda will come when you implement changes swiftly and firmly. Very often the new agenda will have rather big consequences for how you prioritize R&D investments, how you organize innovation projects, what capabilities you need to build, and how you reward entrepreneurs inside your organization. These changes have to be mapped before you launch the intent for a broader audience and should be part of the message itself. If possible make the changes as simple and understandable as possible. Prioritize interventions that cut complexity and free cash—for example, cut away investments that aren’t aligned with the intent or remove procedures that slow your time to market. Implementing the innovation agenda should feel liberating and not like somebody is occupying your company.

5. Learn from the politicians—tell the story again, again and again

Most people will meet a new innovation agenda with a good deal of skepticism—with good reason. They need to see your commitment in action. But they also have to feel that this not just another weird campaign that will blow over in two weeks time. The best way to convince people about the seriousness of your intention is to be consistent and determined. Politicians know they can win voters by repeating their message again and again. You need to practice your inner politician and repeat the story again and again.

An effective way to show strong leadership is to commit to a big idea on why, how, and where the company is expected to develop and grow.

Leadership Agenda for Innovation

The critical ingredient is to have the entire organization on the same page on why, how, and where the company needs to innovate and to do that in a way that motivates people, energizes the teams, and leaves lots of initiative to the organization. The innovation agenda doesn’t need to be complicated. But it needs to be rich in content and to be consistent and inspiring.
Setting a leadership agenda for innovation has benefits:
• It becomes easier to prioritize and focus your innovation investments on fewer, more significant projects.
• You can free cash and cut complexity by eliminating conflicting innovation agendas internally.
• You can speed up your time to market considerably because your teams are better in sync from R&D to marketing.
• It becomes easier to measure innovation impact.
Many of the highest performing innovators in the world all seem to follow this logic. Top 50 companies have introduced products, services, and customer experiences with a very strong and coherent idea—or governing principle—behind them. It becomes clear that most of these companies are on a quest to achieve something very specific and special whether it’s transforming business services (IBM), redefining how people access information (Google), creating the next-generation green vehicle (Toyota), or pushing the performance boundaries of athletes (Nike).

What leaders need to bring to innovation

1. Resources and commitment. Leaders need to commit resources to open innovation. Any excuses around innovation should just not cut it.

2. Being prepared to be misunderstood. Good innovation leaders are prepared to be misunderstood while the market catches up with them. They take the long view and stand up for it.

3. Humility and avoiding the favorite baby syndrome. A senior executive can screw up the world of innovation folks by having a favorite project, one that gets the resources and fattens up its staffers. Some humility from leaders, to let the internal crowd have its say is important.

4. Living with more chaos. The most difficult part of innovation for leaders is often knowing that their people are on a problematic course but knowing also they need to find this out for themselves. The new buzzword is “setting the guide rails”, so as long as people are inside the rails there are times, even difficult times, when leaders need to stand back.

5. Lean. Lean innovation is a way round the challenge of getting leaders to take innovation seriously, so it’s not quite a quality of leadership but in time a commitment to lean processes might be.

Innovation Cultures Start with the Right People and the Right Process

By Thomas Lockwood

Connecting the right people with the right processes can be key in developing cultures of innovation, lets consider how.

Every innovation starts with an idea, which starts with people, and some people excel at this capability. People are what make the creative sparks fly, and without tapping into the creativity of your employees your innovation efforts are doomed. But encouraging employee creativity goes far beyond the basic white board and brainstorm sessions, it’s more about leadership, empowerment, perspective, a journey into design thinking, embracing risk, and focusing on the end user experience. Rather than relying on technology or R&D for innovation, many savvy companies today are igniting their creative power with internal design and innovation leaders very successfully. But frankly there is a shortage of experienced talent. It seems that today most everyone claims to be in the “creative class”, and while we all truly can be very creative, few people have the experience or ability to manage creative teams, scale creative processes, and lead an organization through the necessary change. Formal innovation and design leadership functions are a very effective model, and this can also lead to distributed and empowered innovation. The innovation and design leadership team can engage many employees by using design thinking methods which can scale, and can significantly influence corporate culture.

The second foundation is the right process. This is also challenging, because traditional business-centric processes and innovation processes are often at odds. Most companies still rely on a business-based waterfall process, but innovation tends to thrive in an Agile process, and business process tends to be ISO or standards focused, while innovation that matters is more user-focused. What’s more, rather than seeing technology or time-to-market as the problem or opportunity, better ideas usually emerge by seeking to solve the right problems. Great innovation processes work with the problem in mind, not the technology. In innovation cultures, even in the midlevels of the organization, it needs to be acceptable to discover and work on solving the real problems. That’s not easy. Employees need to be empowered to ask big questions, challenge the status quo, fail early and often, and focus on solving the underlining issues, regardless of the problem “owner”.

What kind of people and processes do you think are best at building cultures of innovation?

How To Be An Innovative, Not Just Business Leader

By David Magellan Horth

 

Today’s managers are full of ideas, theories and information. They have extraordinary knowledge and expertise. They are highly skilled at traditional business thinking. Yet many feel uncertain and unmoored. They continually ask themselves what is the new process, the innovative product, the game-changing service, the compelling vision.

Being an innovative leader holds the key to discovering what’s new, what’s better and what’s next.

Truly innovative leadership means fostering new thinking and collaboration that produces new business opportunities. It means building a capacity for innovative thinking and using it in concert with business thinking.

Innovative thinking doesn’t rely on past experience or known facts. It imagines a desired future state and figures out how to get there. It is intuitive and open to possibility. Rather than identify right answers or wrong answers, the goal is to find a better way and to explore multiple possibilities. Ambiguity is therefore an advantage, not a problem. It allows us to ask, what if? Business thinking comes into its own after we discover new opportunities through innovative thinking, when we then seek to implement and commercialize those opportunities.

Everyone can develop and use innovative thinking skills. Getting started, however, can be intimidating. Whether your focus is operational or involves your own practice of leadership, you can experiment with innovation in three key ways.

Reframe the challenge. Innovative thinking can be used to redefine, or reframe, a problem. Often the problem we are focused on isn’t the important problem. Or the challenge we’ve selected is too big, or too small. By looking at the problem in a different way, you gain clarity and insight. By reframing problems, you uncover new places to innovate, or new angles to take. To reframe your challenge, ask powerful questions, challenge assumptions and bring in multiple perspectives. .

Focus on the customer experience. Innovation begins with really deep, empathetic understanding of the customer. Even the most sophisticated market research operation can’t replace first-hand understanding of what goes on in the customer’s life and how it is affected by your product, process or service. Get out and watch your customers (or suppliers or employees) work, live and play.

Practice rapid prototyping. A hands-on try-it-out approach is invaluable to innovation. Rapid prototyping–building and testing new things fast–jumps past endless analysis to quickly provide the kind of feedback and knowledge that typically takes months or years.

Embedding Innovation in Leadership

By Vijay Govindarajan

As we start a new year during a slow recovery, innovation will be at a premium as organizations strive to uncover new opportunities for growth. Yet many leaders have trouble thinking about (let alone driving) innovation when they’re focused on managing through the still-challenging present.

Keep intact teams together for development.This is one of the simplest yet most differentiating aspects of teaching innovation. Leadership development programs often fall short of driving real change because managers don’t go through the learning process together. Bringing together an entire team for a few days helps build consensus more quickly and fosters a greater commitment to applying new strategies across the operation.

Secure leadership support. GE views ongoing learning as part of the job, and it reinforces the message from the top down, with Chief Executive Officer Jeffrey Immelt participating in LIG and other development programs. Without the company’s full commitment to providing its leadership bench the necessary time, resources, and ideas, workers will see management programs as a waste of time.

Leverage actionable frameworks. GE applies a “three-box” framework to strategic planning that helps leaders balance managing through the present, which is largely about driving efficiencies, and creating the future, which is about innovation. Translating a concept like innovation into a workable framework enables leaders and their teams to apply new strategies with consistency and rigor across the organization.

Create a common language. Similar to making actionable frameworks for innovation, constructing a common vocabulary team members can easily understand and adopt greatly improves chances that they will use what they learn.

Conduct extensive follow-up. This might seem obvious, but all too often development programs end once people leave the classroom. You can increase the impact of training by retaining various touch points to see how participants integrate innovation strategies into everyday operations. Follow-up can take various forms, whether through workshops or ongoing consulting and guidance, but they should all focus on equipping leaders with tools and a framework they can easily apply.

Sharing best practices. As successes emerge, leaders should encourage teams to share them—both to maintain the momentum of what’s been learned and drive further adoption across the organization.

Company leaders have two jobs to do. The first is to make money, but the other—and perhaps more challenging—is to invest in the future. Leadership training programs should encourage leaders to think far beyond driving today’s efficiencies. Innovation, especially in a slow-growth world, won’t happen solely through R&D investment in technology; R&D also means investing in people, to equip them to position their business for the future.

The Secret of Innovative Companies: It Isn’t R&D

In rejecting the limiting belief that innovation is R&D’s job alone, leaders of highly innovative companies work hard to instill “innovation is everyone’s job” as a guiding organizational mission. Innovation is the lifeblood of our global economy and a strategic priority for virtually every CEO around the world.

Innovation starts at the top

The code for innovation is embedded in an organization’s people, processes and philosophies. The behavior of leaders matters – tremendously. In fact, innovative leaders weave a code for innovation deep into the world’s most innovative—and often most valuable—companies.

Innovation continues through all levels of the organization

By creating organizational processes that mirror their individual discovery behaviors, such leaders build their personal innovator’s DNA into their organizations. They also understand the critical need to attract creative people if the company hopes to build a cadre of innovators at all levels. Clearly, if companies want innovative ideas from employees, they should screen for innovation potential in the hiring process. For example, Virgin describes its people as “honest, cheeky, questioning, amusing, disruptive, intelligent and restless.”

Invest in innovation

Almost everywhere we go, we hear executives and professionals complain about having “no time” to innovate. Other leaders highlight factors such as short-term pressures from investors, talent deficiencies, the challenge of implementing innovation-friendly rewards structures, the still fuzzy nature of innovation, and in candid moments, their own discomfort with the different mental frames required to lead innovation. But in the end, innovation is an investment, in leadership and the team.

It’s time for leadership to step up. Top executives who value innovation need to point their fingers not at others but themselves. They must lead the innovation charge by understanding how innovation works, improving their own discovery skills, and sharpening their ability to foster the innovation of others. Moreover, they must actively populate their organizations with enough discovery-driven innovators to make innovation a team game that translates into tangible and sustainable innovation premiums.

Qualities of Innovative Leaders

By – Bill George

Organizations need innovative leaders at the top willing to sacrifice near-term financial results to support their innovators through success and failure. The characteristics of great innovative leaders are dramatically different from traditional business managers. Here are five essential qualities they must have to lead innovation: 

1. Passion for innovation. Innovative leaders not only have to appreciate the benefits of innovation, they need a deep passion for innovations that benefit customers. Just approving funds for innovation is insufficient. Leaders must make innovation an essential part of the company’s culture and growth strategy. 
2. A long-term perspective. Most investors think three years is “long-term,” but that won’t yield genuine innovation. Major innovations can change entire markets as the iPod and iTunes did, but they take time to perfect products and gain adoption by mainstream users. Leaders cannot stop and start innovation projects as if they were marketing expenses; they must support innovation regardless of the company’s near-term prospects. 
3. The courage to fail and learn from failure. The risks of innovation are well known, but many leaders aren’t willing to be associated with its failures. However, there is a great deal to be learned from why an innovation has failed, as this enhanced understanding can lead to the greatest breakthroughs. At Medtronic, our failures with implantable defibrillators in the 1980s led to far more sophisticated approaches to treating heart disease in the 1990s. 
4. Deep engagement with the innovators. Innovative leaders must be highly engaged with their innovation teams: asking questions, probing for potential problems, and looking for ways to accelerate projects and broaden their impact. That’s what HP’s founders Bill Hewlett and David Packard did by wandering around HP’s labs and challenging innovators. 
5. Willingness to tolerate mavericks and defend them from middle management. The best innovators are rule-breakers and mavericks who don’t fit the corporate mold and are threatening to middle managers following more typical management approaches. That’s why innovative leaders must protect their maverick’s projects, budgets, and careers rather than forcing them into traditional management positions.