Recently I received an advance copy of “The CEO’s Innovation Playbook” – the latest white paper from Mastercard and Harvard Business Review Analytic Services. For the effort they interviewed a dozen CEO’s highly innovative companies including Citigroup, Lyft and Coca Cola.
The paper spends most of its real estate on captured quotes straight from the mouth of CEO’s, distilling their inputs into a few key themes, several data points from their broader research effort “Innovators Become Leaders” and some key insights for leaders to consider.
So, what should be in the innovation playbook of a CEO?
Well, the subtitle says it’s 50 actions to spark innovation accelerate growth.
Here are some of the highlights:
Five Distinct Traits Foster Successful Innovation
- Data-Driven Decision Making
- Leadership Commitment
- Entrepreneurial Culture
- Relentless Focus on the Customer
In the introduction Ajay Banga, the President and CEO of Mastercard, argues for a sixth trait – Diversity.
I think most of our community would agree that moving at the speed of innovation is important, and their research found that:
“96% of innovation leaders say their organizations bring new ideas and solutions to market quickly.”
Whether you believe in first-mover advantages or not, I think nobody would disagree that once you’ve proven that a potential innovation is desirable, feasible and viable YOU MUST be able to quickly scale it, BUT NOT BEFORE. They don’t speak to the fact that going big too soon is a problem, but it is definitely something that can burn through millions of dollars needlessly.
2. Data-Driven Decision Making
The key point here is that smart companies make use of data to better understand where opportunities lie with their customers and use data to understand which opportunities are most promising and worthy of scaling. The research highlight for this section was that:
“Nearly three-quarters of innovation leaders use multiple internal and external data sources and advanced analytics to inform decisions around innovation.”
The key thing to remember of course is that you only can leverage the data that you choose to collect, so choose wisely. You need data that can be turned into useful information that can be turned into valuable, actionable insights.
3. Leadership Commitment
According to the report, three-quarters of leaders agree that innovation is a contributor to their financial performance.
“CEOs interviewed for this report demonstrate their commitment to innovation in ways that would be hard for their employees to miss, from providing tangible rewards for innovative behaviors to expressly voicing the idea that failure, within boundaries, is not a loss but a learning opportunity.”
4. Entrepreneurial Culture
Successful innovation leaders recognize the importance of encouraging productive conflict, creating a culture of curiosity and courage, and building a management team that is comfortable with employees challenging the status quo.
“84% of innovation leaders say their organizations test a broad pipeline of ideas with the expectation that many will fail.”
5. Relentless Focus on the Customer
Because innovation is all about identifying and delivering new sources of value that are unique and capable of replacing the existing solution. In order to understand what new sources of value are needed or how to increase existing sources of value in a meaningful way, you must also understand your customers sometimes better than they understand themselves.
“72% of all the executives surveyed agree that consumer insight is a vehicle for innovation.”
Knowing your customers is different than asking them what they want. Innovators always walk this delicate line successfully without falling off.
Let’s close with a series of questions for your to ponder:
Is your organization running fast enough to keep pace with the innovation expectations of your customers?
Are you gathering the right data to help you find the right insights to create the right range of potential innovations and select the right ones to scale?
Are you as a leader signaling clearly your commitment to innovation not just with your words, but reinforcing them properly with your actions and the actions of your team?
Are your demonstrating that an entrepreneurial culture is necessary, valued and supported in your organization?
When was the last time that you spent time with a customer? Do you catch yourself when you start to pretend that you’re the customer WHEN YOU ARE NOT?
And finally, are you injecting the right level of diversity in people and perspectives throughout your innovation process?
Click here to download “The CEO’s Innovation Playbook” to read it for yourself.
If you’re serious about building a continuous innovation structure, you can read all about how to do it in my first book Stoking Your Innovation Bonfire, available at libraries and fine booksellers everywhere.