5 big questions on innovation

First, the organization must be managed by strong leaders that know where the organization is heading, and have a clear purpose and clear goals. Second, in order to make the changes happen, the organization needs a management that “walks the walk”, adheres to its values and lives by them. Essentially, an organization needs management that believes in the necessity of change, and is willing to be committed to the change and its implications. Third, rolling out the change depends on management’s ability to lead and inspire its employees, to empower those who come up with ideas, nurture them and activate them as advocates.  In order to execute change, the employees must be involved. This is why the management should have an “open door policy,” encouraging an open flow of communication and demonstrating high levels of accessibility. Fourth, another critical parameter for rolling out innovation and change is trust. In an atmosphere of trust, innovation and speed reach their full potential. 

Based on my experience, the biggest obstacles to change and innovation are as follows:

Short term-ism: A short-term managerial attitude includes management that is focused on short-term gain rather than long-term growth, management that finds it difficult to balance the need for long-term strategy with short-term results demanded by the market, and management that doesn’t communicate a long-term vision for the business.

A continuously decreasing Chief Executive Officer tenure: CEOs and senior executives with short tenure seem to have few incentives to embrace long-term oriented behavior. They find themselves facing an intriguing ethical dilemma between optimizing their financial pay-off within their own tenure and securing the longer-term well-being of the organization. According to a 2014 report released by The Conference Board, the average tenure of a departing S&P 500 company CEO has decreased in recent years, from roughly 10 years in 2000 to 8.1 years in 2012.

The innovation process should start from the CEO and the management team in order to give it the focus and the priority it deserves. A special committee for innovative change should be appointed with representatives from all relevant departments. Employees should feel they are involved as well. In order to examine the effectiveness and the results of the process, a ‘before and after’ survey should be conducted. It is recommended to plan a kick-off session with all relevant employees in order to create involvement and engagement and build their commitment.  

Given the erosion in customer trust towards organizations and brands due to a history of over-promising and under-delivering, not only do we find more and more customers who arm themselves with as much unbiased information as possible but also more and more consumers who trust what their peers say. In this reality, I believe new technologies should focus on the ‘social customers’, those customers that are constantly engaging with one another in order to seek out advice and opinions from their peers. Engaging these powerful, trusted voices has become even more important considering that 92 percent of consumers around the world say they trust earned media, such as recommendations from friends and family (Nielsen’s Global Trust in Advertising Report).  Another area that challenges new technologies lies in the proliferation of communications channels. The challenge is to create a seamless, omni-channel solution that will provide a single, seamless experience for the customer across all channels. The customer views the company as being one company no matter how many channels it has. Each platform needs to have awareness of the other. This means a lot of coordination between IT and marketing. 

I have two examples of trustworthy leaders who embody the innovation mindset in the way they lead.

Tony Hsieh, the inspiring widely-admired founder and CEO of Zappos.How often do we see a company where most of its efforts towards customers happen after they’ve made the sale? How often do we see a company that has reps who are trained so that when a customer is looking for a specific pair of shoes, if they’re out of stock (for example, they don’t have their size), they will look on at least three competitor web sites and refer the customer to that competitor if they find the shoe the customer is looking for? Hsieh has innovated the way Zappos treats its employees, its customers, and its suppliers. Hsieh is an inspiring example of a leader who believes that being true to your own values is fundamental to how others will perceive you.

Peter Aceto, the President and CEO of Tangerine—formerly ING Direct Canada. How often do we see a CEO who measures his employees’ views about his leadership after his first year as CEO? After his first year as CEO, Peter Aceto decided to send a company-wide email, inviting everyone to vote on whether they wanted him to remain in charge. He was prepared to leave the position if the employees weren’t inspired by his leadership. The response rate was 95% and of those who responded 97% said he should stay.