Every CEO Wants A Self Sustaining Culture Of Innovation

Recently, the CEO of a leading financial institution asked us, "How do we kick-start innovation throughout the organization and how do I make it self-sustaining?" This CEO seemed to be 'done' with hiring companies or consultants to do one-off innovation projects only to find that the momentum stopped the day they walked out of the door. And clearly she did not believe that one specific outside company could change the corporate culture by themselves.

So how do you create the momentum internally? Here's our response to the CEO:

Based on our work in a variety of industries, and having witnessed numerous innovation successes and failures, we posit four steps that you, the major corporate CEO, must be willing to take to create a culture of innovation. These are:

1. Engender the values of innovation throughout the organization -- starting at the top.

No delegating here, senior management, beginning with you as innovation champion, must be visibly and strongly supportive of the entire process if you hope to create a culture of innovation.



However, this alone, is not enough. The best way to accelerate change within the organization is to adopt a philosophy of "Open Innovation" which weaves outside-in thinking into the process.

We suggest creating:

  • An Advisory Board for Innovation with members from inside and outside the company
  • A Senior Management Steering Committee, with a full-time employee responsible for Innovation
  • An internal skills development program.

2. Identify 5 - 8 Mission-Critical Innovation Platforms that are must-win territories over the next 3 - 5 years.

These platforms can be based on recognized customer needs or technology. In either case they must be heavily driven by the voice of your customer. Importantly, once these platforms are defined, they will set the organization's agenda for innovation for the next 3 - 5 years, enabling the company to deliver on its growth strategy. These platforms should be used to identify and prioritize action-oriented projects, on an annual basis, with success measured in terms of the number of projects launched and incremental revenue generated from them.

3. Identify and cultivate core capabilities.

While we strongly believe that companies must develop internal innovation capabilities, we also believe that capability needs can vary significantly based on the Mission-Critical Platform and project. As a result, we believe the organization needs to create an Open Innovation process, which actively encourages reaching out to the right partners, (i.e. technology, business insight, data collaboration, predictive modeling capabilities, ASPs, etc.). For each Mission-Critical Platform, the best-in-class team must be assembled through a combination of outside and internal resources.

4. Outline a skeleton innovation process with the flexibility required for your industry.

These steps include such areas as Open Innovation Networking (e.g. accessing input and knowledge via Customers, Partnerships, Experts, Collaborators, etc.), Insight Generation, Opportunity Mapping, Rapid Prototyping, Building and Refining and Roadmapping. The process should be flexible enough to be adapted to the needs of any project, customer or technology.

In the interest of accessing best-in-class resources to guide you through this process, you will need to call on more than one external innovation partner to kick-start the process of creating a culture of innovation. A good innovation partner must be willing and flexible enough to collaborate with other outside specialist firms and agencies (e.g. advertising, management consulting, tech etc.) to help clients achieve their goals. Many outside partners just want to be the client gate-keepers and this can stifle innovation.

Above all else, an in-depth understanding of the customer, whether small business owner, manager in a larger corporation, or a mom with kids in tow -is the cornerstone that insures the voice of the customer remains integral to the process. Specifically, the voice of the customer must be central to creating the outside advisory panel, defining the Mission-Critical Platforms and insuring that projects are customer-driven.

In summary, your desire to foster a culture of innovation within your company is laudable, indeed necessary to assure your continued success in an ever-more competitive market. However, the simple fact of the matter is, that a culture of innovation will not bloom without careful nurture, including a good dose of outside fertilization.

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1 comment about "Every CEO Wants A Self Sustaining Culture Of Innovation ".
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  1. John Ribbler from Media Pro, Inc., July 8, 2009 at 7:42 p.m.

    A company's culture has a life of its own. In 95% of companies, the company's culture drives the CEO, not the other way around.

    If innovation is not a part of that DNA, changing it is mission almost-impossible. It can be done, but relying on consultants in any way shape or form completely negates the credibility and competence of company leadership in the eyes of employees. No matter what your financial institute CEO says, everybody knows that once the consultants are gone, everything goes back to normal.

    Besides, if this guy has been CEO for more than six months and is still wondering how to "kick-start" innovation, he is clearly part of the problem. Those companies do enable consultants to pay the rent.

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