WHY
LEADERS FIND INNOVATION CHALLENGING
Innovation
challenges "current ways" that are not necessarily "Black
Swans," per se, but rather a normal course of commerce in an instantaneous
information-filled business world. In many respects, determining the priorities
of change and executing to value are a CEO's greatest leadership challenge.
And, for Boards who are charged with the responsibility of evaluating their
company's CEO's progress and performance, it remains their most important duty.
We
asked many of our clients why product and process innovations prove difficult.
It boils down to a leader's balance, and courage.
Knowing
that innovation is disruptive to business models, organizational structure, and
a company's traditional culture (note that Peter Drucker once pointed out that
culture triumphs strategy any day), many CEOs, on balance, believe that change
may be too disruptive, "career risky," and regardless, may not be
achievable during their stewardship. And therefore many CEOs "play it
safe." Yet, as challenging as it is to pivot with the velocity of change
ever accelerating, "playing it safe" or not gaining first advantage
rarely results in maintaining or moving toward a market-leading position.
Courageous
leaders recognize this risk and opportunity cost of inaction. They seek to
innovate and execute, and don't hesitate to reinvent their business proposition
to sustain and/or extend their disruptive advantage. These leaders recognize
that the actions undertaken, i.e. disruptive risk, is all things considered a
superior alternative to becoming a laggard, requiring future triage to catch up
and remain relevant.
Sometimes
tune-ups are mislabeled as innovations, for example improving customer care,
while true innovation requires a significantly different path, of broader
dimensions, to accelerate enterprise opportunity. Be careful to know which is
which, and why.
THE
WINNING HAND IS TALENT
Leading
innovation to tangible value is a difficult undertaking, and a truly
"sensitive matter" fraught with complexities. It requires a clear
vision, commitment, and flexibility. It must be planned carefully, resourced,
and executed with care, taking into account unintended consequences will likely
pop up.
The
most successful CEOs recognize that talent wins out, most especially in times
of significant adjustments. And the CEOs interest (and yes, professional
preservation) in carefully attracting and evaluating the best talent for
his/her inner circle is job one. Talent is their "secret sauce"
necessary to shape and guide the economic future of their enterprise, not just
to react to it.
Without
a team of exceptional leaders guiding and "owning" change,
transformation will fall short.
Forward
thinking CEOs continually evaluate whether they have their best players in the
most impactful roles. They view the recruitment of key executives as an ongoing
responsibility, realizing that they oftentimes don't have the time to develop
internally the special skilled talent that they need now.
THE
BOTTOM LINE
We live
in a world of two truisms: a rapidly reforming world, and CEO accountability to
enhance value, taking into account the opportunities and obstacle, foreseen or
not. And with the realities of short term measurements and "Black
Swans," attracting and investing in exceptional, and oftentimes rare, executive
talent is an investment that pays off. In most cases, the best teams claim the
most wins.
It's
what shareholders expect, and activists demand.
