By: Augustin Ramos / Fran Chuán
This article shares two strategies that are proving most effective for CEOs that aim to make their companies more innovative: developing a creative culture (people’s behaviors) and applying new processes and technologies.
The summary of The 2012 Conference Board CEO Challenge reveals that the top two concerns for CEOs are innovation and human capital, while the top two CEO strategies to cope with them are creating a culture of innovation and applying new technologies (product, process, information, etc.).¹
Today’s market expectations, competitive pressures and pace of change make the CEOs look at innovation as “the” solution. CEOs tend to do it however in an episodic manner, without discipline and without clear expectations on return. Executives would like to move boldly with big and discontinuous choices rather than with incremental innovations, but they miss clear strategies, structures and procedures. This results in most ideas going to the drawer without ever seeing the market light. Consequently, the company retreats to more familiar territories, and the cycle of people’s frustrations repeats itself. ²
Innovation as a discipline – creating a culture
This is a good starting point for the company, as it generates a desire for change, and there is no action without desire. Innovation is a choice, a strategy. As Deming said, nobody forces a company to become innovative. Converting the desire into action requires an intentional initiative, systematically planned and organized like any other important management activity – strategic planning, implementation of ERP systems, etc. 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?
The difference between success and failure of the innovation initiatives lies in having strong company values to create an environment that generates entrepreneurial behaviors.
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.³
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.
CEOs as leaders of people
Revolutions start with people. Cultures start with Leaders. How many of the 5Es of leadership are shown in this communication?⁴ 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.
Emerging trends and technological changes are having a significant impact on the ways of doing business. Cloud computing, enterprise mobility devices as doorways, fluid collaboration technology, the conversation economy via social computing and the commoditization of analytics will make data and decision making key competitive differentiators. ⁵ ⁶
Online collaboration tools are becoming critical in managing the company development and the change process, especially in those cases where the teams are geographically distributed.
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. The Forrester report shows that on line collaboration tools are becoming critical in managing the company development and the change process, especially in those cases where the teams are geographically distributed. There is a growing trend to make use of the new technologies and collaboration tools/platforms. Similarly, there is still some questioning on feasibility amongst IT leaders. At the same time they report that SaaS helps to improve the business agility.
We can see many of these tools becoming available to companies at different levels of complexity, offering different versions for different company sizes – for example Chaordix⁷, a unique methodology and expert services with advanced technology to harness the power of crowdsourcing for companies; or easycrit©⁸, an innovation management platform that helps companies systematize a continuous, broad and multidimensional approach to business innovation. Heavy IT platform investments are not required, with Cloud computing reducing the entry barrier and facilitating the implementation⁹. It is critical for employees to see these collaboration tools as something that makes their job more efficient and their life easier, rather than as one more task to perform on top of their daily duties.
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.
About the authors
Agustin Ramos is an executive-level innovator with over 30 years of experience in driving forward momentum for global consumer goods companies. His previous positions include an R&D Director role at Procter & Gamble Research & Development (Baby, Feminine, Adult, Hair), a Workshop Director role at the same company (i.e. Mastering Organizational Effectiveness Corporate Training Program) as well as a chief Innovation and Development Officer position in The Colomer Group.Currently, Mr. Ramos is a consultant at Dicere, a company that brings innovation to action in organizations, generating innovation cultures by transforming people and designing innovation processes.
Fran Chuán is an engineer fascinated by the latent human attitudes and passionate about innovation. He is the founder partner of Dícere, an innovation specialized consultancy; member of different advisory boards; contributor to IESE, the Babson College in Boston and UEM; and coauthor of the book “Innovation 2.0”. With a professional experience of more than 25 years, he has worked in technological environments leading high performance teams in the management of technological projects. Previously, Chuán also contributed nationally and internationally to companies like Pyrenées Group, Bertelsmann Group, SAP, CSC and ALTOS (Germany, Sweden, USA).
1. The Conference Board, CEO Challenge 2012 Report. www.ceochallenge.org
2. HBR Magazine May 2012. Managing Your Innovation Portfolio. Bansi Nagji and Geoff Tuff (Monitor Group)
3. Innovación 2.0 / Jay Rao and Fran Chuán – Why do we forget about people when we talk about innovation? (Spanish) www.profiteditorial.com
4. We are referring to 5E Leadership Model from P&G: Envision (a clear articulation of the company’s innovation ambition and the strategy to achieve it), Engage (connect with the organization generating a collaboration culture), Energize (show enthusiasm for the business and the people), Enable (create capacity – balance present and future – and capability – culture, processes, training and tools) and Execute (challenging but realistic action plans, accountability and responsibility)
5. Everything Elastic. Accenture Technology Vision 2010. Technology Labs. Don Rippert. Kishore Swaminathan
6. Deloitte. Tech Trends 2012
9. The Forrester WaveTM: Cloud Strategies Of Online Collaboration Software Vendors, Q3 2012 by TJ Keitt, August 16, 2012