I used to think that if I just yakked long and loud enough, I could convince CEOs to embrace transformational innovation. It took me 25 years as a road warrior consultant, author, and accidental government bureaucrat to realize that proselytizing doesn’t work. If leaders don’t want to change, all the consulting jargon and fancy PowerPoints in the world won’t convince them to.
In those situations, no matter what lofty rhetoric the CEO uses in public or at company retreats about “creating an innovation culture” and encouraging everyone to think outside of the box, the best result will be incremental innovations to improve the performance of today’s business model.
If you work for this kind of leader, or if you partner with the company, you will never get the chance to develop transformational new business models — and you'll always be frustrated if you were hoping for bolder change. The only way transformational innovation will happen is if a company's leaders want transformational change, and if they are willing to take the steps and the risks necessary to move beyond tweaks to transformation.
After learning this lesson the hard way over many years, I no longer try to convince CEOs who don’t want to change, and instead try to find those CEO’s who do. How do you know your CEO is really serious about transformational innovation?
Here's what you need to know:
- Does your CEO agree that transformational innovation goes beyond breakthrough products to include business model innovation — entirely new ways to create, deliver, and capture value?
- Will your colleagues tell me that failure is a career-limiting move, or will they tell me that the company celebrates experimentation?
- How much time does your CEO spend strengthening and protecting the current business model, versus designing the next one?
- Does your CEO have clear and discrete objectives for both incremental and transformational innovation? Do you organize differently for each?
- Does your organization invest in R&D for new business models as it does for new products, services, and technologies?
- Is your CEO prepared for the organization to disrupt itself? Does your CEO have a vision for how that might play out?
- Do internal ideas and projects that threaten to cannibalize the current business model get squashed — or nurtured?
- Does your CEO have a process for allocating resources for transformational innovation projects that lies outside of the control of business units?
- Do executives with responsibility for exploring transformational business models report to the CEO, or to another line executive responsible for today’s business?
- Is your CEO willing to create a sandbox to explore transformational business models, even if it means carving out a part of the current business/market to serve as an ongoing real-world innovation lab?
A few words of advice about using these questions in the real world….Tread lightly, since no CEO likes to be put on the spot and drilled with a laundry list of questions. Go down this path only if you want to discern how well (or not) the leader of the company you work for, are thinking about working for, or with, shares your appetite for transformational innovation. If so, then pick a few of these questions and ask them in your own words.
After all, it's better to know in advance what kind of environment you’re going into than to learn painful lessons later.
Renee Hopkins contributed to this article. A revised version was published on Innovation Leader.