More than words
Most senior management teams understand that they've cut just about everything there is to cut, other than their pay packets, so there's not a lot more room for cost cutting. That means profits will flatten or get worse, since there is some inflation in some inputs like energy. So, to hold profits steady or grow them, there's got to be some new products and services offered that command higher prices and margins.
But with all the talk about innovation - how can you tell if your management team is serious? What's going to keep them from coming around next quarter and reading you the riot act for that one penny miss on the forecast? Well, really not much is going to change that.
Here are a couple of key indicators to tell you how serious your CEO and senior executive team is about innovation:
- They actively encourage risk taking and meet regularly with people who are innovators, to demonstrate support for the innovators. This demonstrates that the senior team is willing to spend their time on innovation.
- They change the compensation structures and metrics on their reports to reflect an urgency around innovation. Has the way you are evaluated and compensated changed? Jack Welch once said - show me a sales person's time card and I'll tell you how they are compensated. What's your motivation to innovate?
- They spend money on innovation initiative and projects and encourage broad participation to gather and evaluate ideas.
- They celebrate and recognize successes and failures from innovation
- They create specific, measurable goals for the firm - eg 30% of our revenue will come from products introduced in the last 3 years or 50% of our new products will be the result of ideas or technologies from outside the firm.
If you are confused about the real purpose of innovation in your company, simply look at what your senior team says and does when it comes to innovation. The folks who are really on board will be doing these things and many more and it will be visible and meaningful. If your senior team is not doing these things, they don't really mean what they say about innovation or don't understand innovation at all.