Innovation's leadership and alignment gap
The Innovation and Alignment gap
How do we know a gap exists? That's the easy part. Typically, on any survey of executives, innovation is identified as a top three priority by CEOs. Surveys run by the top strategic consulting firms, small boutique firms, university professors all demonstrate the same result. CEOs are constantly prioritizing innovation as a top priority. But here's the rub - the results suggest that something is going missing. A recent study by the NSF in the United States indicated that less than 20% of manufacturing firms, and less than 8% of services firms, reported creating an interesting new product or service. While close to 70% of CEOs rank innovation as a top three priority, less than 20% of manufacturing firms (which represent only 30% of businesses) and 8% of services firms (which represent the majority of firms) are reporting that they delivered innovation. There is a huge gap between executive demands and expectations, and actual delivery of innovative new products and services.
Why does the gap exist
If the gap exists, as I've explained above, the interesting question is: why does this gap exist? Clearly, CEOs want innovation. Most employees would rather work for companies that they think are innovative. Everyone wants innovative new products or services that drive growth and differentiation. Who doesn't want to do to their industry what NetFlix did to Blockbuster, or have the impact of the iPad on the computing market? Yet innovation struggles in most organizations.
We stipulate that the reason the gap exists is that executives haven't done enough to establish a strategic innovation framework within which the rest of the organization can work effectively. Even though executives ask for innovation, in many cases the goals aren't clear, the tools and methods aren't obvious, the culture is resistant to change, governance is lacking, common language and context are absent and the motivations and rewards are hazy at best. Innovation is uncertain, unusual and risky. Only clear goals, clear frameworks and definitive motivations will accelerate innovation, and these need to come from a committed executive team reinforcing a strategic innovation framework.
Defining a framework
Paul Hobcraft and I have developed, and will release next week on Innovation Excellence a strategic innovation framework meant to define important innovation roles and activities that help executives bridge the saying-doing gap. We believe executives must fill several important roles that unfortunately haven't been well-defined. This lack of definition and awareness means that executives ask for innovation but fail to provide tools, metrics and frameworks for innovators in their organization. We've defined seven "domains" that form a strategic innovation framework, which executives must sustain in order for innovation to succeed. Note that we aren't saying that executives must generate ideas or evaluate ideas - that work should be distributed throughout the organization. We are saying that executives must sponsor innovation and create a strategic framework for innovation that allows anyone in the organization to generate and manage ideas.
We believe you can make your own luck, create your own destiny through purposeful innovation. That means a program defined and reinforced by executives that engages the entire organization. After years of right-sizing and a focus on efficiency and effectiveness, only a purposeful, strategic approach to innovation, reinforced by executives, will result in the change you need.
Please watch for our articles next week on Innovation Excellence, and please engage with us in a dialog about the importance of executive involvement, and the need for a defined strategic innovation framework. Your thoughts are welcome, and we look forward to the dialog that the framework we'll unveil will create.