Top 10 Reasons Why Some CEOs Sabotage Innovation
There’s a huge gap between CEOs saying they want their companies to innovate and actually acting in a way consistent with what they say.
This lack of congruence drives internal change agents crazy, catatonic, or out the door. At the very least, it makes them cranky and unwilling to go the extra yard required to turn their inspired ideas into reality.
And so, as a public service to all of you out there whose CEOs are not walking the talk, here’s my TOP TEN reasons why not.
Choose one, align with some fellow change agents, and kick start the process of actually doing something about it.
- Innovation sparks dissonance and discomfort.
- Innovation is all about increasing variability. Most CEOs want to decrease variability and increase predictability.
- Results only show up long-term — not next quarter.
- CEOs conserve resources. Innovation requires more resources.
- Innovation flies in the face of analysis.
- Imbalance of right-brain and left-brain thinking.
- It’s not in the job description.
- Over-reliance on cost-cutting and incremental improvement.
- Inability to enroll a committed team of champions.
- Insufficient conviction that innovation will really make a difference.
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Mitch Ditkoff is the Co-Founder and President of Idea Champions and the author of “Awake at the Wheel”, as well as the very popular Heart of Innovation blog.
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We have found that these is much more prominent below the “CEO” level. Because of the wide diversity of middle management these characteristics show up in spades across the organization. Getting alignment on innovation goals is tough work.
Great list – thanks
Great piece Mitch. The biggest fault of CEOs is that they are expected to produce immediate results. This flies in the face of innovation. Hence the reason your list is perfect. #3 and #4 are the fundamental reasons why CEOs are rarely innovators.
Keep up the great work!
I would love to add another dimension to the author’s intelligent observations.
Real innovation, game-changing innovation, is hard. If it was not the case we would not be listing the same organisations when asked what companies we think are innovative (at this fluid world https://www.thisfluidworld.com/ we travel around the world, as part of our innovation programmes, and always get the same answers to this question, Google, Apple and IKEA).
As Mitch very well describes a lot of it is down to the CEO. The CEO who is risk averse, the CEO who fears change, the CEO who can’t motivate and inspire, the CEO who spends his days counting beans and looking for ways to please the financial markets. I’m rarely the one to defend this type of person (as we know they can be find throughout an organisation, in different roles and at all levels) but I feel the need to bring up one word in their defence.
One little word that makes innovation and change impossible, one little word that when said out loud should send shivers through the business world…and that little world is legacy.
I have seen legacy kill off the most creative and powerful ideas. Recognise these? “The IT system cannot handle itâ€, the data base is not set up to deliver on such a solution, it’s the role and responsibility of another department, it’s not the business we’re in, we do not have the capabilities internally to deliver on a solution like thisâ€.
I have seen legacy squash the spirit of the most promising leaders. No matter how good your intentions are, and how much you want to drive innovation and the internal change it often requires, fighting legacy is a worthy enemy, one you can rarely beat. A true entrepreneur, a real innovator would for this reason not accept the role of CEO. Innovators want to spend their days creating, not fighting a legacy system – this is why innovation will continue to come from start-ups rather than incumbents.
And finally, I have seen legacy ensure organisations disappear into a cloud of irrelevance! Who remembers Singer? Yet Singer was, once an organisation with a market cap of Google-like proportions back in the 50s.
You could argue that the CEO has the power, even the responsibility and the duty, to change this. I would agree with the latter, as for the power… if only the CEO was the person with the real power in an organisation – the business world may look very different (assuming, of course, the right person is sent to do the job).
Thank you Mitch for allowing me to express myself on your blog.
CEOs watch the bottom line. Simple. That’s their job and they’ll be fired if they fail to do this successfully.
You can’t blame a CEO for this fact.
From a CEO perspective, and by extension the board, any innovation process or venture needs to demonstrate the value of its output(s) to the business in a measurable way.
The key reason, in my experience, why innovation can be problematic at CEO level is the uncertainty that it brings, and it is worth noting that this uncertainty actually peaks at the heart of the development cycle, before bottoming out.
This ‘peak of uncertainty’, as I call it, is often the point at which many executives simply bail out.
So the successful innovator is one who can provide a means of managing uncertainty in an acceptable way from a board perspective.
This places the responsibility, in the first instance, not with the CEO, but with innovation team, whose role it is to demonstrate how the risk that uncertainty brings can be managed.
If this can be done, then the CEO is far more likely to come on board and ultimately own that risk.
I recently published an e-book entitled “The Tribal Knowledge Paradox (Amazon and B&N).” It documents my experiences in leading Innovation Initiatives at over 150 companies over the last 25 years. I wrote it as a story and created my alter ego in a book character. If you read the book, you will find every issue that you raised at the top as the basis of the CEO’s difficulties during the initiative. My reason for reacting to this blog was an observation that I made several years ago when guiding CEOs after I had completed the initiative. The initiative was a 6 to 8 week engagement where I led employees in a training program the War on Waste based on Toyota Production System principles. I added a twist by making teams of 5 employees (mixed across work groups) and gave them a goal of finding $100,000 of annual waste with a solution cost of less than $2,000. Here is what makes this approach interesting is that for every 6 ideas, one is what I call a Big Idea. So the process gives both incremental and disruptive innovation (because most of the Big Ideas are disruptive). And I make the CEO attend classes to see the progress of ideas. Employees only have 3 to 4 weeks to get their idea in a form to present to the CEO and then 3 to 4 weeks to get it implemented. The speed of this process gets CEOs excited and they see value for their investment right away. So many of the issues noted above go away. But it starts with convincing the CEO that this works and I have lots of references. Thanks for letting me babble a bit.
Best,
Len Bertain
To be ready to suffer uncertainty and danger a person needs to feel: either enough discomfort with the current situation as to be ready to risk to improve it or the prospect of a future situation which advantage and comfort levels are increased enough as to yearn to get it and sufficiently attainable as so that the effort is worth while.
It’s what Pascale, Millemann and Gioja name in a quite dramatic way “the threat of the death†and the “promise of sex†(Surfing the Edge of Chaos).
In this sense and although the 10 points seem very guessed right to me, I think that the origin of the “sabotage†is in the points 1 and 10. If we include the 2nd one inside the 1st one and the 3rd one inside the 10th one we will see that all the rest can be solved if the CEO previously has felt Creative Tension enough (points 1st and 10th).
Regards,
Juan Cano-ArribÃ
Great observations;-)
I wrote a bit on this on our blog a while ago, describibg some of the CxO`s that I have met “out there”;
1. The ivory tower CXO
– Talks the talk – but barely backs up the efforts, and won`t let anything pass without his/her approval. Puts up a lot of control mechanisms, and allows “over management†to kill the innovative culture. Total stranger to OI, keeps ideation and staging in control via only using small groups and outside “experts†– or close inside ones. Downsides are…obvious. Upside are….he will probably be up for retirement soon.
2. The “short term results†CXO
– Engages and cultivates the efforts well – but are only focussed on short term results. This can be quite good if efforts are put in innovating on processes, improvements, cost reductions ect. – but a pitfall if going for new products and services. Typically a Lean practitioner – without the knowledge of conducting longterm innovation. Upside are…great short term results. Downside…no space/backup for longterm efforts.
3. The “closed circuit†CXO
– Backs, engages and cultivates innovation – however nothing ever comes into play! By creating a “closed circuitâ€, ideas and innovations circuit within, being tested rigorously, discussed at countless brainstorm sessions, dragged through endless spreadsheet maneuvers only to get from a good idea to; †I just think something better has come upâ€â€¦Upsides are…at least he`s enthusiastic – and will probably listen to critics. Downsides are…maybe he is just enthusiastic – and not a listener.
4. The “Traditionalistic†CXO
– Every year for 14 days, employees competes for “Innovative Employee of the Yearâ€â€¦it´s a tradition, and have been for many years. Believes that one short period every year, employees will cast everything aside to partake in winning that awesome silver plated trophy and the Ipod! Creativity, collaboration and ideation on demand! Upsides are…right intentions are present. Downsides are…tradition is hard to break.
5. The “silent†CXO
– Backs innovation with funding, staff, outside consultants, software – the works!…then slips out the backdoor, letting “the system†run without fueling it with repeated presence and interest. Upsides are…you are in innovation heaven – for a while…Downsides are…hell is just around the corner.
These are just a few “types†that I have stumbled upon – but they are quite typical and representative of what I still meet out there. There are probably more “types†– so feel free to add to the list – or do let me know if I am all wrong;-)