When one really looks under the hood at great companies that sustain innovation, it becomes clear that innovation is not usually the result of an accident. It’s usually driven by the CEO and by the following
1) Innovation needs to be nurtured and choices need to be made about which initiatives to triage and which to focus on. Leading development companies regularly review their R&D pipelines with senior management and reassess and reprioritize each project based on it’s revenue and profit potential, the odds of success, the timeline and other key variables to focus their limited R&D resources on the highest return opportunities.
2) R&D are two distinct things and both Research and Development need to be managed to focus on value added outputs. While many small and mid market companies only focus on development projects that will lead to product improvements for existing products, it’s important that you as the CEO consider disruptive technologies that can solve your customers problems better, faster and/or cheaper and consider if your company can be the disruptor.
3) Innovation starts with your Human Talent strategy: who you hire, how you measure and motivate them. Make sure your HR team is looking for the right attributes/attitudes and that you consider bringing in “digital natives” who possess new technical skills, approaches and attitudes that reflect your emerging customers.
4) Innovation touches every department — including accounting, hr, marketing. Have each department reimagine what it’s charter is and how it accomplishes these goals in light of new technologies and processes (e.g., can you leverage cloud computing, mobility or social media for any functions)
5) CEOs need to embed and reinforce innovation in their culture. You need to be the innovation cheerleader.
6) To innovate means to take risks but these risks can be managed and mitigated. Don’t expect to bat 1000, and don’t punish people who work hard and smart but hit a dead end if you want to foster an innovation culture. It’s important to learn from mistakes and dead ends, but the dead ends and failures can’t be avoided in an innovative environment.
To learn more about how other leading CEOs, including the CEOs of Dow, Brocade, Shutterfly and other innovative companies, are transforming their companies and how they would deal with the obstacles and challenges you face in leading your company, join us at this year’s CEO2CEO Summit in San Francisco on October 23rd and 24th. For more information on this important event for CEOs only, visit http://www.chiefexecutive.net/ceo2ceowest