As Jack Welch famously said, honesty matters in business. So, let’s start by having a little bit of innovation honesty! As a CEO or senior leader it’s a fair bet you can’t get enough of figures and statistics right? Production figures, sales figures, number of customer calls, income and expenditure… there is something very comforting about figures isn’t there and in our big data age, there is seldom a shortage of numbers to fall back on. After all the statistics can’t lie (okay that’s a debate for another time) but as long as you ask the right questions you can generally get definitive answers.
So, let me ask this; is your organisation genuinely innovating and perhaps more importantly is innovation working for your organisation? Before you answer, let’s look at the statistics:
- I know you understand the importance of innovation; 78.5% of executives see innovation as a top priority for their organisation.
- I know you want to innovate; 79% of you say your commitment to innovation is very high or growing.
- But I also know that 42% of you say innovation is more talked about than actioned and £64.7 billion is effectively thrown away each year in the UK on wasting good ideas.
Turning knowing into doing
Quite frankly, however much weight you think you’re putting on innovation it simply isn’t translating into action. And from my work with organisations and governments across the globe I can tell you that the fault lies squarely at the feet of the executive team. You take the plaudits when things go well, so must take responsibility when things are not. I call it the leaders ‘position of truth’ and it’s about being honest about what you’re actually doing to translate the desire to innovate into real, tangible results that are driving your business forward.
Innovation is tough, especially if it isn’t something that you’ve done before. It’s widely known that around 70% of change projects fail, so we shouldn’t underestimate how difficult becoming innovative is, especially if you already have successful products and services that you might be innovating away from. As most attempts to innovate will give you little but insights to learn from, we need more than merely a declaration of intent that innovation matters. It needs a root and branch level of support to ensure this really works, and we need you on board, even if that requires high levels of bravery to suggest that projects you supported in the past are not the future your organisation needs to take.
We’ve seen above how 42% of executives say innovation is more talked about than actioned and it’s hardly surprising when 53% of board members admit there is little or no consensus on culture. In the book, Building a Culture of Innovation, which I co-wrote with Derek Bishop and Jo Geraghty we explored the idea that “If it’s not on the top team’s agenda, it’s not going to be in culture.” And I’m not just talking here about writing the word innovation on a piece of paper. If executives are going to successfully build a culture of innovation then they have to assimilate the innovation ideal, beliefs and behaviours into their every action and interaction. Come on guys… if you can’t embrace the idea of innovation yourself, how can you expect others to do so? Or are we back to command and control again and do as I say not as I do?
Supporting, not blocking
So when the change starts at the top, the only wonder is the fact that, across a range of surveys only 27% of respondents believed the leadership team were the prime barrier to innovation. I suspect this is largely because most of these surveys distinguished factors such as organisational structure, openness to change and appetite for risk from the leadership team, when of course these are very much leadership responsibilities.
Am I being harsh? Maybe, but Welch famously referred to a lack of candor as the biggest dirty secret in business, so I figured you would rather I was honest with you. The fact is that as a strategic advisor on innovation to CEOs and senior teams in organisations all over the world that’s my job!
The hard reality is that we live in a volatile, unpredictable, complex and ambiguous (VUCA) world which isn’t going to calm down any time soon. In a global, technology-driven marketplace the only certainty is that there is no certainty.
It’s well known that 90% of Fortune 500 companies in 1955 are no longer in the index today, and those winds of creative destruction are growing ever stronger as industries as established as transportation and hotels are disrupted by nimble startups.
Generation Z are starting to make themselves known as consumers, whilst in the workplace they are looking for meaning and collaboration; for genuine solutions to real problems rather than just for products which they can buy. They crave, no demand, purpose and they want organisations to innovate with purpose.
Quite frankly, the time for talking is over and the time for action is well overdue. And I’m not just talking about a couple of lines on the annual report or the nominal appointment of someone with the word innovation in their job title and very little influence. If you are one of the 79% who say they are committed to innovation, then my challenge to you is to embrace innovation as a core, strategic capability and to start to build a culture of innovation.
As CEO, the buck stops with you. You don’t want to be remembered as the boss who presided over being disrupted. Ask yourself, is innovation visible every day in your organisation? If you have successfully built a strong and viable culture of innovation, then according to the statistics you are one of the few. You’re literally gaining your cutting edge, not to mention boosting your share price!
If you look in the mirror and accept that things aren’t working as you’d like them to, that you have startups biting at your ankles, that technology is changing faster than you can adapt to it, then that’s a good place to be. Only once you’ve accepted the need to spruce up your innovation strategy can you start to change it, and you, for the better.