Innovation of Business

and the
Business of Innovation™
Innovation and Leadership

Innovating Leadership and Leading Innovation

All innovation is change innovation. Think about that for a moment. By both definition and the heart of practice, innovation is all about introducing new value to markets, whether serving external serving customers or internal stakeholders.

All leadership is change leadership. Savor that flavor. If we aren’t going somewhere new, management can handle the job. Leadership is all about opening doors to new opportunities and finding new doors to existing opportunities. Every business needs innovation. Study after study confirms the competitive edge of innovators over status-quo operators. Though most often oriented to industry, study conclusions also apply to government, education, military, and the arts. Quite literally, we either innovate or die.

Every business needs leadership. A vast literature informs us that without leadership, business fails to make transitions required to keep up with external and internal change. Leaders develop and apply new business models that ensure both survival and profitability. Quite literally, we either lead or fall behind.

Untapped Opportunities

All true leaders are innovators.
All true innovators are leaders.
Leaders can’t lead without innovating.
Innovators can’t innovate without leading.

If these bold assertions are true, then we’ve discovered a paired set of marvelous opportunities. Not all leaders see themselves as innovators, and vice versa. Productive innovators may settle for managing projects. Promising leaders may not focus on value to stakeholders. Potential innovators sometimes fear challenging the status quo. Potential leaders may not understand market dynamics.

What would happen if we cross-bred our innovators with our leaders? Obviously, both would become better at what they do, yet that’s just small stuff. In the big picture, this combination might be our very best hope for keeping our businesses ahead of the exponential rate of global change.

Let’s compare concepts.
Leadership: The capacity to initiate change through influence.
(“Influence” here implies potential affects on both the character and actions of people and organizations. Both who they are and what they do. Leaders may be individuals, teams, organizations, nations, alliances, etc.)

Innovation: Development of ideas into “products” in use, for the first time anywhere, that create compelling value for customers.

(For “product”, also read at least: Idea, technology, research result, service, process, tool, event, strategy, campaign, facility, business model, functional department, market, business within a company, and company. For “product in use,” also read at least: “Process in application”, “business in service,” etc. For “customer,” also read: Stakeholders of every type, within the organization or out in the marketplace.)
Note first that that there are no limits to the application of innovation or leadership. Both are needed in a very wide range of environments and situations. Second, “development of ideas into products” is development of change. We could define innovation as “development of change that creates compelling value.”

Third, an innovation must reach markets, or it is just an invention. Leadership must initiate a change, or it is just posturing. Fourth, both have stakeholders of several types. Value to stakeholders is explicit in innovation and implicit in the term “influence” in leadership. Leadership initiates change, then may rely on management to sustain the change. Innovation completes development all the way through launch, then (for commercial products) may rely on marketing and service functions to sustain ongoing customer satisfaction. In both cases, key individuals may stay closely involved after transition.

Synergy awaits! … … … If… … … we can use innovation processes to develop change initiatives. If we can use leadership strengths to drive innovation. If we can do that in all parts of our business and for every type of business in every type of market.

Can we? Of course we can.

Innovating Leadership

Leadership involves at least: choosing desired change, clarifying a vision, building commitments and investments by others, and initiating change while removing barriers to success. Choice, clarity, commitment, change. The Four Cs™. Where does innovation fit? Simple. Any change can be treated as a “product” amenable to the tools, skills, and mindsets of innovation.

Choice: New ideas thrive in innovation environments, and many businesses have formal processes for evaluating ideas for investment. These six proofs are used for Stage-Gate decisions about products entering and moving through innovation pipelines. When innovators understand the tests, both their ideas and presentations are much more powerful.
Technical proof: We can do it!
Safety proof: We are free of liabilities!
Control proof: We own the legal rights!
Value proof: Stakeholders will want it!
Economic proof: We will earn sufficient return on investment!
Attractiveness proof: It fits our business!

At choice level, proofs will be preliminary at best. Still, even rough estimates of answers to these questions provide powerful tests. If an idea clearly fails one or more proofs, the leader’s best efforts probably won’t succeed. If the idea passes, then it’s time to invest in clarity. Formative ideas not yet ready for proofs must be fleshed out.

Clarity: Innovation is driven by detailed, multi-faceted, and marketable visions developed in context of stakeholder needs. Formal visioning expands options. Rough ideas are grown and polished. Odds of success improve dramatically as ideas engage the complex context of markets. Such visions establish requirements for change initiatives that satisfy the six proofs.

The value proof alone considers “product” features and functions, stakeholders served, needs met, benefits delivered, competitive factors, uniqueness with respect to alternatives, desired perceptions, and sense of mission. That knowledge then enables statement of a value promise as the core of an innovation’s (or change initiative’s) brand.

Leaders may assume that visioning is their personal responsibility. They may not realize that team-based visioning increases both clarity and confidence.

Commitment: Innovators of businesses (new or re-engineered) must persuade investors to invest. Innovators any type of product must first gain development funding, then convince customers to buy. To succeed, they either team with marketing or adopt and apply marketing processes.

Unfortunately, few leaders fully grasp what marketing is and how to use it well. Marketing is often misunderstood as advertising and PR. PR polishes messages. Before that, someone needs to decide what to say.

Innovators know that marketing is a powerful business science. Strategic marketing defines businesses, brand concepts, and core business messages. Product marketing does the same for products. Market research develops knowledge about markets and stakeholders. Opportunity marketing builds commitments for funding. Internal marketing grows buy-in from internal stakeholders. Tactical marketing leverages the other disciplines for brands, core messages, and strategies for persuading specific target audiences. Imagine the effectiveness of leaders with such a robust toolkit.

Change: The hard work of change is always achieved by coordinated actions. Indeed, leaders are often characterized as action oriented. The questions are… What actions? What coordination? An action taken to achieve an objective is a strategy. Coordination of several strategies increases both the odds of success and the costs.

Classic product innovation uses a “value chain” of strategies, including research, prototyping, engineering, manufacturing, distribution, and launch. Each step increases the value and market readiness of the innovation.

Innovators outside the classic scenario strategize new value chains. They know they must learn what it takes to mature an innovation into readiness for market. (Of course, innovating value chains is a classic leadership focus.) Nominally, leaders are the most strategic people in any business. Some, however, completely misunderstand strategy. They need both the innovator’s mindset and toolkits for developing integrated strategies.

Overall, the native tools and processes of innovation can turn ordinary leadership into strategic, value-driven, stakeholder-centered leadership. Key benefits include better choices, greater clarity, more committed followers, and higher likelihood of successful change.

Leading Innovation

Innovators are agents of change… natural leaders in themselves. Leading such leaders is no small challenge. On the other hand, every business needs leadership of innovation. Indeed, that job may be the least likely to be outsourced.

Managed innovation is a machine out of the industrial age, plugged into a power grid, and consistently cranking out wonderful new products. Not so bad. Leader-activated innovation is an engine generating its own power from the energy of people and ideas, and consistently leading change. Orders of magnitude better.

Choice: The decision to lead innovation implies change initiatives. What initiatives would you choose? My top three…

1. Grow the population of innovators and empower them as agents of change. Individuals, teams, functional departments, business lines, programs, and projects in every discipline from deep science to finance and sales. That’s right. Increase your leadership challenge! As fast as you can.

2. Initiate an ethos. With empowerment comes responsibility. Develop a highly strategic focus, then build a powerful momentum within which innovators naturally produce changes that benefit the business. Make the ethos theirs, not just yours. Build ownership of their innovation culture, not just followership of your visions.

3. Innovate or re-innovate your business. Innovation fails from the start if the business model can’t support aggressive change.

Clarity: A shared vision is critical! Not for your ego, but for their ethos and sense of efficacy. If you have the slightest doubts, re-develop your business vision. Include identity (who the business is and wants to become), goals and objectives (where the business wants to go), strategies (how the business intends to reach its goals), and culture (what the business values and how it intends to behave).

Who will you involve in visioning? Your agents of change. Of course! Yes, the VP Finance may play a role, yet leading innovation is all about liberating the energies and talent of your people. Annual planning won’t do. You need to innovate your future, including yourself.

Your innovators own responsibilities to surprise you and energize parts or all of your business. Experience gained in your visioning will play through in other innovation visions, with all the same benefits.

Commitment: Reality of resources can kill innovation. To gain innovator commitment, you may need to change that reality. Indeed, this is the real test of innovation leadership… building innovation momentum and productivity while growing required resources and environment.

The stress of carrying that load alone can be enormous. So don’t. You have a resource of change agents motivated to gain those resources. Enlist them. Give them a sense of direction, and empower their contributions.

Your very best leadership tool is relationships. Identify the win-win value of exchanges over time that will best motivate your agents of change. Create opportunities for your change initiatives by developing opportunities for your agents of change. Your wins become theirs, and vice versa in a virtuous cycle that need have no end.

Change: This is the ongoing process of leading a change-based organization. Develop strategies to ensure you can keep your promises; make your promises boldly and with great clarity; and then never ever do or say anything that contradicts your promises.

When reality changes the game, don’t whiff the opportunity. Remain a leader, even when you are leading agents of change.

A Powerful Combination

Leadership and innovation are logical allies. Each leverages and enhances the strengths of the other. Those who manage to integrate both skill sets will thrive, even in these times of chaotic rates of change.

The time for leadership is now, and it always will be.


57. Creative thinking may mean simply the realisation that there is no particular virtue in doing things the way they have always been done. (Rudolph Flesch)

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