By: Chuck Frey
At many organizations, innovation projects are often assigned to young, ambitious junior executives. But these efforts tend to be doomed to failure, according to Paul Sloane, writing in his new book, The Innovation Leader: How to Inspire Your Team and Drive Creativity.
At many organizations, innovation projects are often assigned to young, ambitious junior executives. But these efforts tend to be doomed to failure, according to Paul Sloane, writing in his new book, The Innovation Leader: How to Inspire Your Team and Drive Creativity.
Why isn’t this a good idea? Paul says that junior executives often get stymied by process and political obstacles that innovation projects usually face. An experienced manager with more political clout within the organization is more likely to be successful under these circumstances. Paul cites the example of IBM, whose culture used to be overwhelmingly focused on generating short-term results, which tended to short-circuit promising new products and services. To reverse this trend, CEO Lou Gerstner and senior VP in charge of strategy J. Bruce Herrold reassigned their most experienced and talented executives to emerging business opportunity (EBO) units. The mission of these executives was to find new areas for IBM that could yield profitable billion-dollar businesses in five to seven years. This initiative was overwhelmingly successful, resulting in additional annual revenues of over US$15 billion and growth of over 40% per year.
“The lesson from IBM is clear. If you want to change the culture of an organization so that ir values innovation and new business start-ups, then get your most senior and best people involved in these activities. Don’t delegate to work to lower-level staff and hope for the best.”
I think Paul is onto something here. Conventional wisdom says that if you have an established line of business, a cash cow that is generating millions of dollars a year in revenues, the last thing you want to do is move that person into a new business venture that may take years to turn a profit. But these are the very people that have the contacts and the clout within the organization to get things done, to build consensus and to overcome hurdles. Of course, you will need to select senior-level people who also have an entrepreneurial spirit and who are open to new ideas, because the skills needed to successfully launch a new business are significantly different than those needed to manage an existing one.
So who’s in charge of your company’s innovation initiatives?