Blocking breakthrough innovation

The announcement of Steve Ballmer’s retirement as CEO of Microsoft has been accompanied by the recital of a sad list of major innovations created by that company, but rejected by the management during his term of office and exploited successfully by competitors – notably by Apple.

The list includes the iPhone and the iPad. And they are probably just the tip of the iceberg. What’s more, the company did launch a stream of new products that failed.

Poor Ballmer [?] is by no means alone. He’s just more famous than the other CEOs who routinely block breakthrough ideas.

The central problem in innovation isn’t coming up with ideas, nor with implementing them. It’s with recognising and supporting them. After all, the more disruptive the idea, the less likely it is that consumer research will pick it out as a winner, and the more likely it is that it will contravene an existing mindset.   

Distressingly there’s no evidence that senior managers are any better at picking breakthrough winners than my mum.

Gaius Petronius or Charlton Ogburn Jr?

If we must make a choice, who carries the greater weight? The Roman author of Satyricon, Gaius Petronius (c. 27 to 66 AD), or a forgotten American obsessive believer that all of Shakespeare was written by the Earl of Oxford, Charlton Ogburn Jr?

All over the internet, there is a challenging and well-composed sentence about change management attributed to Petronius. Here it is:

We tend to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization.

I think it’s brilliant. So good that it should perhaps be on the wall of every CEO in the world.

Trouble is, it was never written by the legendary Roman. In reality, it was part of an article in Harper’s Magazine written by Ogburn in 1957.

My own belief is that reorganizing is the last thing you do.

Leaving Saatchi

At thirty-one, I’d come to the conclusion that, to get experience as a CEO in the advertising business, I needed to leave Saatchi and Saatchi, the hottest agency on the planet at that time.

I had found another, smaller, agency that was looking for someone to succeed the dashing Rupert Chetwynd as MD. And they wanted me to do that.

Back at Saatchi, I was quite surprised, when I told Tim Bell of my plans, that they didn’t follow my reasoning at all. In fact they wanted me to stay. And so I found myself in the presence of the legendary Charles Saatchi (above, right).

What would it take to keep me at Saatchi’s? The offers came thick and fast. Salary increases, trains, boats, planes. Anything you like. Oh, and we’d like you to be managing director.

The problem with that offer was that the agency already had a whole raft of people called chairman, deputy chair, managing director, deputy MD and so on. I couldn’t see that becoming MD would have any reality to it. So I declined his kind offer as graciously as I could.

As I was leaving his office, Charles stopped me: “I’d just like to say one thing to you… It won’t be as easy out there.”

How right he was. Winning business at Saatchi’s was a walk in the park.

But how was I to know that?

CEOs and innovation training

A recent study by PwC/Accenture shows that globally 80% of CEOs believe that innovation will drive efficiencies and lead to competitive advantage.

Percentages very close to this come up in most surveys of top managers, time after time.

The problem of course remains that the majority of CEOs themselves have very limited training or hands-on experience in the field of innovation. Most of them attended business school and grew through the ranks at a time when specialised training was not widely available, and many have not actively worked in an innovation function.

It would perhaps be OK if several of them recognised this and went about fixing it. But in my experience that very rarely happens.

So classic problems remain within organisations as barriers to successful innovation – problems not only of climate and culture and inappropriate personal behaviour, but also the belief that having a standardised innovation process is the primary route to glory.

Many organisations would benefit from an honest, root and branch review of their innovation capabilities, coupled with the open-mindedness to deal with whatever issues emerge, starting with the CEOs themselves.

Throughout my time in innovation, I’ve found that CEOs think that innovation training is important, but only for THEM, not for ME.

Support for Creative Leaders - I don't think so

Our Centre for Creativity at City University yesterday held a “Creative Leadership Summit” at Cass Business School – a select group of leaders assembled to explore the implications arising from IBM’s recent global study of Chief Executives.

That survey revealed for the first time that “creative leadership” is now the number one requirement from CEOs around the world, 60% of them naming it as their top priority. It is an extraordinary rise in the perceived importance of creativity to leadership, quite unprecedented.

But how well equipped are British organisations to recruit and support creative leaders? The meeting concluded that Britain is at risk in two key areas that effect creative leadership.

First, current research conducted by Social Science colleagues at City makes it clear that less than a third of British organisations (29%) include innovativeness or creativity in their recruitment selection criteria. Yet the vast majority of our businesses (78%) recognise that innovation is vital to their future survival and success.

And second, less than one in three British organisations build innovation and creativity into their appraisal and reward programmes. This is quite tragic! Every company’s appraisal and reward processes need consistently to enhance creative potential.

In short, unless these issues are addressed, we will simply not have the creative leaders and innovation needed to get Britain moving decisively out of the current economic doldrums. CEOs in both the public and private sectors need to understand these issues and take decisive action to remedy the situation.

But not only CEOs. Government can also play a much more dynamic role in re-shaping attitudes and behaviours.

Creative Leadership is It

The latest IBM Global Chief Executive Officer Study, published a few weeks ago, has a rather extraordinary finding. The quality most cited and sought by CEOs around the world is CREATIVE LEADERSHIP.

This is not some small-sample, quick-fix survey. They interviewed over 1,500 CEOs all over the world and in all sectors – industry, services and public sector.

What’s more, it’s the fourth such study, and creativity has never been close to the number one previously. In fact, this time it ranked way ahead of the field at 60%, followed (at some distance) by integrity, global thinking, influence and openness.

There are several questions that arise in my mind:

What has pushed creative leadership to the forefront in CEOs minds? What is driving the dramatic rise in its importance? What do they really mean by creativity in leaders? How would they know when they've got it? And what are they doing to recruit, promote and support creativity and creative leaders?

One more question: Why has this rather dramatic shift not received more media attention? I think the answer to that is contained in the way the study has been packaged up by IBM. It’s entitled, for some reason, “Capitalizing on Complexity”, and you have to get to page 23 before you get to the important news.

I’ll be tackling all the issues surrounding creative leadership at the masterclass we’ll be running at Cass Business School on Thursday 9 September. More info on that here: http://www.perdiemprojects.com/news.php?subaction=showfull&id=1276792934&archive=&start_from=&ucat=2&