I recently caught up with Nancy Shea who shared her expertise on “Leading for Innovation” at the Innovation Leaders Forum in Boston on April 3, 2014. Shea brings over fifteen years of transformational leadership experience, including traditional consumer products with leading B2C players such as Kraft, Pepsi and Ocean Spray, direct to consumer players and B2B firms including Fellowes and Ashland.
As Shea discusses, innovation requires commitment from senior management and alignment from the organization.
“Innovation equals change. I’m committed to helping senior executives understand the role and purpose innovation plays in driving growth and enhanced business results. While successful innovation programs start with CEO commitment, it’s bigger than that. Doing innovation in any size of business goes to the very nature of how work and business get done, and how the business is judged and rewarded.”
Five Principles for Innovation
There are five key principles that Shea has identified in leading for innovation:
- Vision of the business and role of innovation
- Purpose and expected value of the innovation
- Alignment across the company
- Empowered people
- Celebration of learning
Internal and External Alignment
Each of the five principles commands more explanation and discussion. First we’ll dive deeper into the third principle of alignment. Shea explains:
“Alignment equals support for innovation across the entire organization. It’s critical to understand what each business is expected to deliver, both short and long term and how innovation can help the business leaders accomplish their goals. Demonstrating that you understand the business from their perspective helps everyone make the right priorities, allocate resources and financial investment for the innovation portfolio. In addition, alignment requires external support to help you cultivate and tap into a diverse network of contacts and influencers, which will also accelerate the commercialization of ideas.”
Management science and network research supports Shea’s point. Research suggests a greater range of higher-quality solutions from networks with more diversity across job functions, geographies, and organizations. University of Chicago Booth School of Business professor Ronald Burt writes in “Neighbor Networks:”
“The way networks have their effect is not by getting information from people, but rather by finding people who are interesting and who think differently from you. Networks give people a ‘vision advantage’ in terms of seeing and developing rewarding opportunities.”
Wharton Professor Katherine Klein examined organizational barriers to innovation and concluded:
“The organizational challenge is to create the conditions for innovation use: a strong climate for innovation implementation and good innovation-values fit.”
The Alignment Challenge
What stands in the way of alignment?
Innovation Excellence names poor internal communication as a significant barrier to innovation. Similarly, when times are tough, some wary executives might pay “lip service” to innovation even when they aren’t actually aligned. A firm cannot be aligned if ignorance or misinformation prevails.
More specifically, we’ve noted several recent examples of activist outside investors who exert acute, short-term pressure on firms to bring their costs into line with others in their industry, with the goal of unlocking shareholder value. Industry averages may be used, even if the firms in those averages do not have a track record around innovation or driving topline growth. Senior management then makes cuts in ‘discretionary’ areas like innovation or marketing to bring costs into line.
Another possible factor, and one more difficult to address, is the discomfort among many senior leaders (and perhaps their board) with driving the culture of innovation, which requires a tolerance for risk, failure and longer timeframes. The background of the executive team will often tell the story, with financial executives among the most uncomfortable with innovation.
Without alignment in the organization, innovation leadership will fail. When a firm aligns behind a vision and purpose for innovation, a powerful foundation is laid for innovation success. We’ll explore another of the Five Principles for Innovation in a future article.