Can Leadership create Innovation?
In a story on "Connecting the Dots between Innovation and Leadership" published by Knowledge@Wharton, Wharton management professor Michael Useem asked an important question at the roundtable: "How are Innovation and Leadership linked?", "How do we lead in a way that generates Innovation?" The panelists were asked to describe a single factor that is critical to innovation.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
Here were the ten answers by the panelists on what drives Innovation at their companies:
1. Marketing
According to C. Robert Henrikson, chairman and CEO of global insurer MetLife, the focus is on marketing. According to Henrikson, Innovation happens because of true marketing, not merely sales support; for example, executives beyond the sales team, such as lawyers and financial officers, need to meet with customers regularly. "All parts of the organization must have a sense of the customers' business to anticipate their needs and reach out with innovative ideas," he said. Henrikson observed that most insurance companies have no marketing and are simply followers of innovation established by competitors. He further emphasized that: "I can't wake up and say, 'It's good to be a fast follower.' You have to get out in front of consumer behavior. That is what will be the differentiator in our industry."
2. Size
Alex Gorsky, head of Pharma North America and CEO of Novartis North America, indicated that "It's really important not to confuse size with true innovation. Research shows big is not necessarily better." Gorsky noted that all the mergers have made drug companies big in size, but not big on innovation. Rather, the smaller biotech companies or divisions are causing real innovations according to Gorsky.
3. Culture
According to Seth Waugh, CEO of Deutsche Bank Americas, culture is a critical factor in promoting innovation. Business leaders stimulate innovation by offering incentives to workers, creating an environment, and setting expectations. Waugh noted: "You must have people with that hunger to always learn, who are always open and who think about things in a different way. You always have to reinvent yourself tomorrow."
4. Technology
Retired partner and managing director at Goldman Sachs, Connie K. Duckworth talked about the important role of technology driving innovation. "The advent of desktop information technology transformed the financial services industry on Wall Street in the 1980s and 1990s," she noted. Duckworth observed that "new computer technology allowed companies to analyze the role of risk and to track risk in financial services, which changed the dynamics of the business."
5. Passion
Patricia Danzon, Wharton professor of health care systems and a consummate researcher on pharmaceutical industry mergers, identified passion as critical to innovation. Although passion is difficult to quantify, Danzon elaborated that passion may be linked to workers who have a stake in the business, either financially or in small firms where there is clear authority and little bureaucracy. Danzon stated, "So much innovation in the pharmaceutical industry is coming from the small firms ... and it seems to come from the passion and the involvement of being master of your own destiny."
6. Active Participation
Jeffrey Katz, CEO of Sherwood Equities, a New York City developer, and a major investor in Times Square, said business leaders must remain open and receptive to what comes their way in the form of new deals in order to capitalize on opportunities, and then seize these opportunities. He observed that "the marketplace, at least in New York, is extremely [fast-changing]. Unless you are sensitized and able to react right away, you will be reading about a deal next week rather than doing it."
7. Hard Work
Peter Linneman, Wharton finance professor and founding chairman of Wharton's real estate department, had a more real world perspective. He said there is no magic "Aha!" moment in most innovation. According to Linneman, "It's just all hard work -- showing up everyday in the morning, studying plans, walking around seeing what other people are doing. If you wait for 'eureka,' you are never going to have innovation."
8. Internal Development
Seth Waugh observed that it is preferable to create new businesses within the company first, because a homegrown enterprise is likely to fit better in the existing corporate culture. And he noted that this has the advantage of keeping the organization flat. Henrikson also believes in internal development as the passport to innovation. Henrickson emphasized, it’s talented managers -- not necessarily acquisitions -- that drive innovation. Katz is in the build-from-within camp. In order to grow, he encourages contrarian thinking. He noted that "if a developer waits to see what the crowd is doing, it's too late."
9. Targeted Acquisitions
Waugh believes that highly targeted "rifle-shot" acquisition, when an opportunity integrates well with the parent company's overall portfolio, is a strategic approach to stay ahead of the competition. Henrikson believes otherwise. Gorsky observes, "The area where it (acquisition) does make sense is in complementary technology with new technology partners." For example, Novartis' acquisition of Chiron Corp., a biotech firm with a specialty in vaccine development and production, as an example of an acquisition that fits well with Novartis' broader strengths.
10. Agility
Katz emphasizes the importance of agility to reshape development plans. He believes agility can create new ways of efficient and effective development that can span over months and years for completion.
Some of the panelists observed that leaders remain intently fixed on customers to uncover clues to innovation, realize and achieve the need for balance in quantitative skills and people skills, possess emotional intelligence and sensitivity to multi-cultural and multi-generational issues, demonstrate persistence in sticking with a goal although with flexibility, and execute on great ideas.
Download Apple's Innovation Strategy and Learn how Steve Jobs made Apple the #1 Innovative company in the world.
Download Now
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
If you enjoyed reading this Innovation best practice, I recommend the complete list of Creativity Innovation Best Practices.
Acknowledgements:
"Connecting the Dots between Innovation and Leadership", Knowledge@Wharton. Click here for the complete story.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
Here were the ten answers by the panelists on what drives Innovation at their companies:
1. Marketing
According to C. Robert Henrikson, chairman and CEO of global insurer MetLife, the focus is on marketing. According to Henrikson, Innovation happens because of true marketing, not merely sales support; for example, executives beyond the sales team, such as lawyers and financial officers, need to meet with customers regularly. "All parts of the organization must have a sense of the customers' business to anticipate their needs and reach out with innovative ideas," he said. Henrikson observed that most insurance companies have no marketing and are simply followers of innovation established by competitors. He further emphasized that: "I can't wake up and say, 'It's good to be a fast follower.' You have to get out in front of consumer behavior. That is what will be the differentiator in our industry."
2. Size
Alex Gorsky, head of Pharma North America and CEO of Novartis North America, indicated that "It's really important not to confuse size with true innovation. Research shows big is not necessarily better." Gorsky noted that all the mergers have made drug companies big in size, but not big on innovation. Rather, the smaller biotech companies or divisions are causing real innovations according to Gorsky.
3. Culture
According to Seth Waugh, CEO of Deutsche Bank Americas, culture is a critical factor in promoting innovation. Business leaders stimulate innovation by offering incentives to workers, creating an environment, and setting expectations. Waugh noted: "You must have people with that hunger to always learn, who are always open and who think about things in a different way. You always have to reinvent yourself tomorrow."
4. Technology
Retired partner and managing director at Goldman Sachs, Connie K. Duckworth talked about the important role of technology driving innovation. "The advent of desktop information technology transformed the financial services industry on Wall Street in the 1980s and 1990s," she noted. Duckworth observed that "new computer technology allowed companies to analyze the role of risk and to track risk in financial services, which changed the dynamics of the business."
5. Passion
Patricia Danzon, Wharton professor of health care systems and a consummate researcher on pharmaceutical industry mergers, identified passion as critical to innovation. Although passion is difficult to quantify, Danzon elaborated that passion may be linked to workers who have a stake in the business, either financially or in small firms where there is clear authority and little bureaucracy. Danzon stated, "So much innovation in the pharmaceutical industry is coming from the small firms ... and it seems to come from the passion and the involvement of being master of your own destiny."
6. Active Participation
Jeffrey Katz, CEO of Sherwood Equities, a New York City developer, and a major investor in Times Square, said business leaders must remain open and receptive to what comes their way in the form of new deals in order to capitalize on opportunities, and then seize these opportunities. He observed that "the marketplace, at least in New York, is extremely [fast-changing]. Unless you are sensitized and able to react right away, you will be reading about a deal next week rather than doing it."
7. Hard Work
Peter Linneman, Wharton finance professor and founding chairman of Wharton's real estate department, had a more real world perspective. He said there is no magic "Aha!" moment in most innovation. According to Linneman, "It's just all hard work -- showing up everyday in the morning, studying plans, walking around seeing what other people are doing. If you wait for 'eureka,' you are never going to have innovation."
8. Internal Development
Seth Waugh observed that it is preferable to create new businesses within the company first, because a homegrown enterprise is likely to fit better in the existing corporate culture. And he noted that this has the advantage of keeping the organization flat. Henrikson also believes in internal development as the passport to innovation. Henrickson emphasized, it’s talented managers -- not necessarily acquisitions -- that drive innovation. Katz is in the build-from-within camp. In order to grow, he encourages contrarian thinking. He noted that "if a developer waits to see what the crowd is doing, it's too late."
9. Targeted Acquisitions
Waugh believes that highly targeted "rifle-shot" acquisition, when an opportunity integrates well with the parent company's overall portfolio, is a strategic approach to stay ahead of the competition. Henrikson believes otherwise. Gorsky observes, "The area where it (acquisition) does make sense is in complementary technology with new technology partners." For example, Novartis' acquisition of Chiron Corp., a biotech firm with a specialty in vaccine development and production, as an example of an acquisition that fits well with Novartis' broader strengths.
10. Agility
Katz emphasizes the importance of agility to reshape development plans. He believes agility can create new ways of efficient and effective development that can span over months and years for completion.
Some of the panelists observed that leaders remain intently fixed on customers to uncover clues to innovation, realize and achieve the need for balance in quantitative skills and people skills, possess emotional intelligence and sensitivity to multi-cultural and multi-generational issues, demonstrate persistence in sticking with a goal although with flexibility, and execute on great ideas.
Download Apple's Innovation Strategy and Learn how Steve Jobs made Apple the #1 Innovative company in the world.
Download Now
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
If you enjoyed reading this Innovation best practice, I recommend the complete list of Creativity Innovation Best Practices.
Acknowledgements:
"Connecting the Dots between Innovation and Leadership", Knowledge@Wharton. Click here for the complete story.
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