Many companies get by with more of the same—products, processes and game plans. It’s called playing it safe, and it works in many cases.
But the standouts stretch themselves by innovating. They strive for newness and it can really payoff. With the strong economy, more companies have the chance to be innovators, but they need certain attributes.
“Corporations clearly care about innovation, but right now, the vast majority don’t know how to approach it; they focus on incremental ideas, and the process is mostly slow and ad hoc,” Anand Sanwal, CEO of research firm CB Insights, told Fierce CEO.
Sanwal commented on the findings of an innovation study his firm conducted which found most companies are unsure how to structure, approach and enact innovation in a thoughtful way.
Exceptions are top-performing companies that “have a very different view and approach to innovation and that this leads to better performance,” Sanwal said. “They are more risk-seeking and innovation is a CEO-level priority.”
CEO ownership “is a key attribute of highly innovative companies,” Sanwal said. “We saw that high-performing companies have innovation efforts rolling up to the CEO. In other words, high-performing CEOs do not delegate innovation strategy.”
Overall, executive buy-in is necessary to build a culture of innovation across every business function, including HR, finance, sales, product, and marketing,” Sanwal said. “Without this culture of innovation, most companies’ efforts towards innovation tend to be ad hoc and unstructured with a focus on incremental change.”
No matter how innovative the employee, if the leader isn’t encouraging innovation, it will not occur, said Lisa Anderson, president of LMA Consulting Group. “Unfortunately, it is easy to stifle the best of ideas. To be successful, a leader only needs to focus on a few items and innovation will follow:
- Encourage creativity and new ideas—set up an environment conducive to innovation.
- Allow time to test ideas and experiment.
- Celebrate failure—this is key to success. “Somewhere along the line, an idea will backfire and create month-end issues, added cost or another undesirable outcome,” Anderson said. “Instead of beating that person up, you must celebrate the failure and facilitate learning and communication from that failure so it won’t be repeated.”
Doug Ringer, president of Doug Ringer Consulting, said leaders of innovation must have a high tolerance for prudent risk and must be organized for success. “The departments primarily involved in the innovative endeavors must have the right structure and personnel with the right attitudes to create new success,” Ringer said.
Innovators’ efforts should be rewarded even if not successful, Ringer added. “Employees in stagnated firms typically fear how their managers will react to major or minor failure. The fear of reprisal prevents innovation and drives those who can and want to innovate to your competitors.”
“My leadership style evolved to be more open to changes that may not be the ‘typical’ route—instead, I think big picture,” said Collin Holmes, CEO of Chatmeter. “I’ve learned to be bold in proactively shifting the business to distinguish our spot in the market, rather than reactively course correcting after we find something hasn’t been working.”
Holmes encourages his team “to adopt a similar strategic explorer mindset to constantly keep the business on its toes, while carefully considering the best possible paths ahead, even if they’re out of the box.”
“Taking risks is the best way to keep growing and keep your staff challenged and inspired,” said Barbara Bates, CEO of Hotwire. “Committing to a vision—even when it seems like it’s not working—is my guiding light to muster up the courage, energy, intensity to persist until we succeed. Of course, with any aggressive mind-set, it leaves us vulnerable to some uncertainty, but I see it as a challenge for a greater opportunity.”
To steer their company, CEOs must focus on creating an innovative culture with lots of leaders, minimal hierarchy, continuous learning, employees performing at their maximum potential and open dialogue, said Susan Kuczmarski, co-founder of Kuczmarski Innovation.
She said that these new leaders know how to:
- Master six essential qualities of new leadership—humility, compassion, transparency, inclusiveness, collaboration, and values-based decisions.
- Communicate in innovative ways that inspire people to serve others.
- Build strong relationships for a sense of community.
- Create loyalty, build enthusiasm and identify values.
- Encourage personal risk-taking, creativity, and flexibility.
Innovation “is most important at this time,” said Harry Glaser, CEO of Periscope Data. “Every company has to innovate to survive and thrive. To maintain your strong position in the market you have to innovate.”