In the innovation field, the closest thing we have to a professional association is the InnovationNetwork and its annual Convergence conference (produced in partnership with the Institute for International Research), which just took place in Minneapolis. I'm on a plane heading home to California as I write this, and I have to say, this was the best conference I've attended in quite some time.
The talk in the hallways was about the up-tick in the number of companies launching innovation makeupovers. Just as some of us predicted, as the global economy has improved and CEOs get past their hunker down / cut costs / survival mentality, the question of how to drive growth begin to dog them. But getting senior management to take action on innovation often needs a catalyst.
To address this issue at Convergence, I led a CEO / Senior Management Panel titled "How to Present Innovation in a Way That Gets to Yes". We jettisoned the traditional panel discussion draped table and moderator podium and replaced it with a more dynamic talk show format. It went well, and was very well received. Guests on the lighthearted program included Carol Pletcher, Cargill Innovation Officer; Stephen N. Oesterle, MD, Senior Vice President Medicine and Technology, Medtronic, Inc.; Virginia Albanese, Vice President of Service, FedEx Custom Critical; and Alex Cirillo, head of 3M Commercial Graphics.
Championing innovation as a driver of growth
In my opening monologue, I noted that each time another company says yes to innovation, you can be sure there was a champion at work behind that decision. And quite often a team of committed people as well. They did their homework. Amassed the evidence. And made the case for embarking on a new approach to innovation as a way to drive growth.
With PriceWaterhouseCoopers and Accenture surveys showing that innovation has risen to the top of CEO priorities, you might think this would be easy. It is not. CEOs know there is a great need to master innovation. But there's a lot of trepidation.
Top-line vs. bottom-line growth
As a result, companies have long favored interventions and initiatives that promise immediate returns: lean manufacturing, TQM, reengineering, Six Sigma and scores of others. These process improvements, none of which are easy to implement, have the benefit of showing short-term cost-savings, and elimination of inefficiency, the need for fewer staffers. They are, therefore, easier for consultants from outside and / or advocates on the inside to sell to the guys in the head shed. But here's what is not often clear: they do nothing to create top-line growth. They only improve the bottom line, and after awhile you run out of places to cut.
Oh sure, you can achieve growth from mergers and acquisitions, then the M & A boom of the1990s. Guess who did a phenomenal job of selling CEOs on that strategy? Banks, lawyers, accounting firms, M & A consultants, etc. The only problem: study after study demonstrates this is a strategy fraught with problems of integrating incompatible cultures, and turf battles. But the big aha is that they just do not create shareholder value, as longitudinal studies by McKinsey and others Clear demonstrate. Again: innovation is the only way to unlock organic growth, and the only way to sustain it is with an innovation strategy that has metrics, is comprehensive, involves the whole enterprise and is cross-functional and cross-silo.
Innovation initiatives require patience, commitment
Innovation will never be an easy sell because it can not promise a quick payback. It took agribusiness giant Cargill, for example, almost a year of internal debate and study of best practices in innovation before folks there got clear on how they even should define it. With almost 100,000 employees, they knew it was a journey, but that they had to start somewhere if they were going to transform the organization. And as the feisty and outspoken Carol Pletcher, Cargill's innovation maven, told the audience at Convergence, now they are on their way.
Cargill has the advantage of being a privately-held company. Many CEOs of publicly-traded firms, with Wall Street ever more impatient for steady quarterly earnings, are apt to be gun shy. Innovation conjures up sinkholes of investment and missed earnings – and too soon the ax. So if you're in an organization that has not yet gotten to yes, you're going to have to get a lot of what professional salespeople call objections, both real and imagined.
Building a winning case for innovation
How can you make a stronger case for innovation? How can you present innovation in a way that gets to yes? By doing your homework. By keeping current on this ever-evolving field and knowing what works and what does not. By constant benchmarking of what other innovation-adept companies are doing, and finding out. And by selling benefits (growth, transformation, talent retention), not features (it works like this, is not this clever, etc.).
Most important of all, it's essential to identify and reference companies that are enjoying the fruits of their systematic approach to innovation. Whirlpool, for instance, added a whopping $ 100 million in top line revenue during the first 12 months of launching its now-famous innovation initiative. Deloitte-Touche Tomatsu of South Africa doubled the size of its enterprise within two years of launching InnovationZone, its idea capture system. And companies like 3M and Medtronic cite innovation for their success year after year. By building the case for innovation, it will not be long before other firms come to you, wanting to know how you did it!