Leading Successful Innovation

George B. Weathersby

Chairman & CEO, Genesys Solutions, LLC

The innovation dilemma confronting corporate leaders today is that, on the one hand they have identified "innovation" as the most significant driver of their future growth that is controllable internally, while simultaneously two-thirds of leaders of global organizations report that their organizations are not internally effective at innovation. What is essential for their future success does not come easily and naturally to their organization. If a senior leader cannot foster significant acceleration in the rate of innovation in her or his unit, there is less likelihood of improved performance, of agility in response to changing market conditions, or even of job security. The focus of innovation is and should be broad: ranging from new consumer products to new business processes, from imagination to implementation, from new messages to new methods. To be successful, innovation has to become a central focus and priority of the whole organization. Why is this so difficult? Why do two thirds of senior leaders tell McKinsey that they have little confidence in their organization's ability to execute in terms of innovation?

Innovation can begin anywhere in the organization

The vast majority of senior executives appreciate the fact that innovation can occur throughout their organization, not just in the executive offices. Their challenge is to engage individuals at all levels to embrace the need for innovation and to take independent action to develop new ideas and ways of operation, to support their peers and subordinates in their quest for potentially competitive innovations, to willingly adopt the proven innovations of others, to willingly abandon our own outdated practices in a timely manner, and to be open to learning from every encounter, even from what some might call "failure".

Innovation is not about a "job description" or a separate unit of the organization that does research or development. Innovation is not about "young" people who understand all of the new technology or "brilliant" people who follow advanced disciplines. Innovation is about the factory worker who noticed that the sorting line for fresh lettuce led to many lettuce leaves being pulled off or lost on the floor. Why not select lettuce leaves and sell in sealed plastic bags after they are washed and prepared for immediate use? (This is now a multi-billion dollar market that did not exist before.) Innovation is when a plant manager asked, "Why not use flammable solvents that some industries pay to dispose of as fuel in making cement?" (Some plants now have a negative energy cost after creating a new business to collect and process flammable waste in an environmentally innovative and superior way.) Innovation is when a choir member (and 3M engineer) saw a way to use semi-adhesive pieces of paper to tab a music score for easy access. The now ubiquitous "post-it notes" was born and quickly became a multi-billion dollar business.

Orchestrating spontaneous innovation

To lead successful innovation, we at Genesys have found in our engagement with over 300 business units employing over 300,000 individuals that it is necessary for leaders at every level to accomplish five things with respect to innovation — at the same time and in the same people. These five items are:

Leaders must enable employees to know what attributes of innovation the organization is seeking and valuing. Innovation is not a separate activity unrelated to the mission and objectives of the enterprise. Unless the results of adopting the innovation improve the ability of the organization to achieve its key objectives, the innovation is largely without value. Success for innovation in any organization is achieved when the effectively implemented innovation enables the enterprise to achieve its objectives faster, generating more value than the additional resources consume, and with less risk of failure than previously experienced by the organization. In this context both the concepts of "innovation" and "resources" must be construed broadly. The innovation may deal with brand concept and the key resource is the existing brand equity that enables an organization to adopt the new concept. Recall the great reluctance to introduce Diet Coke for fear of diluting the brand equity of Coca-Cola, only to discover after several false starts that the brand equity of Coke enormously enhanced the acceptance of the innovative Diet Coke. Do the senior leaders understand and have they made clear the criteria by which every employee should judge the value of an innovation and the extent to which it enables the organization to better achieve its objectives?

Leaders must enable employees to know the role they are being asked to play in fostering innovation, in addition to the formal description of the jobs they hold in the organization. This differentiation is often a source of both confusion and frustration. In dealing with a potential client do you want a sales person to conceive of and promote a new innovative solution, or do you want the sales person to push the overstocked inventory whether or not it is best for the client. If an employee sees a clear improvement to the business process of another unit, do you expect her or him to recommend to a new manager how to improve her or his performance? Is it legitimate for any employee at any level to suggest an innovation? To spend some time discretionarily and on the clock to develop the innovation? To advocate a specific business plan or proposal for the use of resources independent of his or her supervisor's approval? To apply for and accept money from higher levels of the organization to implement the innovation independent of the budget of his or her own unit? What are the normative behaviors and actions for innovation that are desired, expected and supported by the senior leadership? If leaders are not clear about the desired actions and behaviors - and clearly communicating them to all employees - they should not expect employees to adopt these actions and behaviors.

Leaders must consistently demonstrate their priorities for innovation by their actions. Grand ideas and creative new initiatives are often seen as the province of CEO's and senior leaders. Many long term employees have learned from experience that if one just waits a while, the latest management fad will pass away just as all of the previous fads have faded. Over two-thirds of all new programs and initiatives fail to achieve their stated objectives. Why would an employee think that any attention given to innovation would be different? In fact, given the fact that innovation need to be implemented to be of value presents two major barriers: the natural inertia of most organizations in resisting change of any type; and the historic difficulty of implementation of a new initiative of any type. To overcome this often very legitimate skepticism, leaders have to very visibly walk their talk, to consistently and repeatedly advocate the desired policy of increased innovation, to guide people to low hanging fruit and to personally celebrate every initial success. Jack Welch while CEO of GE was exceptional at persistently focusing on a single initiative consistently for several years (improving quality through six sigma, being 1st or 2nd in one's market, leveraging the internet, "boundarylessness", to give several examples). After several years of a CEO relentless focusing on innovation in every business review, every budget decision, every executive personnel review, every employee communication, every speech to the broader community, etc. people will know that you are serious. If innovation is not your passion as a leader, why would you expect anyone to have the desire to follow you on the path to innovation?

Leaders must provide the tools, information, and resources for individuals to excel in their roles in innovation. While creativity, intelligence, insight, imagination, etc. are broadly distributed among individuals throughout an organization, most individuals do not have the training, information, tools or resources to succeed in the role in innovation you may have asked them to play. Once an individual has an idea that may be a useful innovation, how does the organization quickly assess the viability of the idea, develop a business plan for its value creation, identify the barriers and enablers for its implementation, provide the resources to prove its efficacy and widely disseminate its application, etc.? There are examples of firms that support a web-based submission, review and approval process globally for innovative proposals. Other firms operate an internal "venture fund" to support innovative proposals through pilot implementation. By whatever means chosen, has the leadership established a process by which ideas are encouraged, vetted and transformed into action? If not, there is a very low likelihood of innovation occurring in a sustainable way and being adopted and implemented in a manner that accelerates the achievement of the organization's objectives.

Leaders must provide the recognition and, when appropriate, rewards to individuals and teams that create and implement innovations which further the achievement of organizational objectives. The inner drive for creativity is a powerful motivator for some individuals. Their choice to apply their creativity to opportunities that would benefit their organization, as opposed to other applications of their creativity, can be affected by their expectation of recognition by their peers, their supervisors and their company. In addition, highly visible recognition reinforces the awareness and perception of most employees of the previous four elements - understanding the company's strategy of innovation, understanding their individual roles in innovation, believing the importance senior management attaches to innovation, and accepting the tools, resources and information essential for effective development and implementation of innovation.

Indicators of leading innovation

The old adage that can manage only what one can measure is also true about leading innovation. Each of the five elements of executing initiatives of innovation cited above is the responsibility of the senior leaders of the organization. One cannot legitimately blame any of the employees if any one of these five elements is missing or incomplete. These five elements must apply throughout the organization from the boundaries to the center, far beyond the vision and awareness of the senior leaders. To be successfully led, there needs to be (and there are) metrics of how well the organization is able to execute its specific initiative to foster innovation.

All five of these essential elements for execution need to be present in each of the individuals upon whom leaders rely for implementation. For the last five years it has been possible to measure empirically the percent of every group within an organization that has a high capacity in each and all of these five elements of execution. Our studies have shown that initially less than 10% of an organization's employees have the capability of executing the initiative, and the barriers to successful implementation are clearly identified by the one or more elements that are missing from the employees' experience. Once leaders focus on the actual barriers to implementation and take action, it is not surprising that a substantial proportion of employees devote their creative energies to innovation that benefits the enterprise. Leaders can significantly increase the proportion of their people with the ability to execute the organization's initiative for innovation. The metric for "ability to execute the organization's initiative for innovation" is quantitative and repeatable, equally applicable throughout the organization, transparent to all employees and leaders at every level.

The use of a clear, transparent, credible metric on the ability to execute the organization's initiative for innovation changes both the expectations and the accountability of both leaders and employees. The description of the actions and behaviors by which one assesses the presence of each of the five key elements communicates to and informs all employees of the substance of each of the five elements. Measuring the ability of the organization to execute creates an accelerated learning environment for all employees and increases their understanding of and willingness to adopt the actions and behaviors desired by leaders. In addition, knowing that the same transparent measurement will be repeated periodically creates an expectation of accountability by every leader at every level. When informed by reliable and specific information, in the vast majority of cases leaders act in an effective and responsible manner. When the information is focused on the ability of various groups within an organization to execute the initiative for increased innovation, the metrics align individual actions and accountability.

The power of many

All aspects of an enterprise are subject to improvement, to a greater ability to execute and thereby achieve the organization's objectives more rapidly, more efficiently and with less risk. The mind set of innovation is to openly solicit these executable improvements from throughout the organization, as well as from suppliers, customers and all stakeholders. The scope of innovation includes all management practices, all aspects of products and services, all elements of finance, design, manufacturing, sales, marketing, distribution, customer service - everything that better enables the organization to create value for both its clients and itself.

The power of leading an effective innovation initiative is in the exponential number of creative interactions that occur within the engaged community. Expanding the number of individuals actively engaged in innovation not only casts a wider net for good ideas and processes but also increases the number of people interacting with each other, sparking ideas off each other, seeing connections and possibilities across organizational boundaries. Creating seamless sharing of information as well as focusing on the five key steps of effective execution together enable individuals to lead successful innovation.

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