The Two Most Important Innovation Priorities for CEOs
To understand CEOs’ most important innovation priorities, during 2014-15, we amassed a vast body of knowledge on innovation to determine the key elements that companies view as highly important to their innovation success.
We studied thousands of pages of material from the most important books, research and publications. We participated in innovation conferences and listened to over 100 presentations from Fortune 500 Chief Innovation Officers and other experts. In addition, we studied the science of innovation to see if our research supported what we read and heard.
From our research, we extracted the ten most important key levers for successful innovation that the best companies use to systematically drive performance.
These key levers are: governance, ideas, collaboration, resources, methods, strategy, learning, initiatives, organization and performance.
We then used this information to determine which of these were the highest priorities for CEOs using a system that gave each lever a rating out of 10 total points.
Surprisingly, the results didn’t point to better ideas or brainstorming. And even more surprising was that innovation governance, which is the framework that top innovators create and communicate to inspire, steer and sustain innovation, came in last.
What are the top two key priorities for CEOs?
1. Creating innovation strategy – scored an 8.6/10
2. Managing innovation performance – scored an 8.4/10
These were the highest scores in our analysis, indicating that CEOs are tightly aligned on these imperatives. This makes perfect sense because strategy and performance are the bookends of a "systematic" or "disciplined" approach to planning and managing innovation. Top innovators manage innovation just like they manage sales or operations. They expect consistent performance and they achieve consistently higher results than their not so disciplined peers.
A challenge for most companies is that their strategic planning is diluted and compromised by discussions on current constraints and internal challenges.
Top innovators, on the other hand, shed these distractions during strategic planning, and focus on developing strategies that drive the business towards a future state of ideality in the market. After focusing on what can happen in an ideal world, they then work backward to figure out how to make it happen.
To manage innovation performance, customer-centered methodologies using tools like customer value maps, are enacted to align customer segments.
One other thing to note in our findings is that all of the other key levers, including idea generation, scored below an 8/10. Most people believe that great ideas are essential for innovation. Critical thought should be put into the feasibility and potential success of an idea, but the idea itself does not make or break the innovation process.
This flies in stark contrast to the current trend of installing innovation “idea management” systems, but again supports the case for the more successful systematic innovation approach where ideas are not the primary focus.
While the generation of ideas is important, they are not the key to successful innovation - and not the most important to a CEO.
To create an impactful innovation strategy and manage innovation performance effectively you need a disciplined, systematic approach. You can do this without an extensive innovation department, but it will take careful planning to set up the discipline correctly.
Using an innovation management software platform is extremely helpful and recommended to make sure that your innovation goals drive your strategy, your goal setting is kept on track and that your strategy is communicated effectively.