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  • 84% of the World Hates Innovation - This Is Why

    The prolific American innovator Charles F. Kettering once said: “The world hates change. Yet it is the only thing that has brought progress.” Innovation means change. Ergo, the world hates innovation, one might conclude. Let’s investigate Kettering’s statement to understand why, and what it means for us as innovators.

    Innovation means progress

    Let’s first take a look at the second part of Kettering’s message. Change means innovation, and innovation means meaningful changes that improve our lives and make the world a better place. So, innovation means progress.

    What has brought humanity out of caves into comfortable homes full of appliances and modern technology? The accumulation of many innovations that unfolded in several waves over thousands of years. Would you go back to living in cold, damp, smoky cave? Maybe that’s too radical, so let’s make it easier: Would you give me your mobile phone and go back to having only landlines at home and at work and pay phones on the street? Or if this proposition is still too extreme, would you swap your smart phone for a dumb phone? You’re likely to decline these offers.

    Clearly, Charles Kettering was right in saying that innovation or change is the only thing that has brought us progress. But what about the first part of the sentence?

    The world hates innovation and change. Is this really true?

    In 2005, Alan Deutschman wrote a fascinating article for Fast Company, titled “Change or Die”, on an interesting real-life decision scenario: What if you were given a choice by a well-informed, trusted and benevolent authority: You have to radically and enduringly change your life — or you have to die. Which option would you choose?

    Clearly, almost all people say they would choose to make significant changes in their life to avoid death. But when we contrast this proclaimed intent with the actual number of people who follow through, nine out of ten people choose to die. Why?

    The scenario relates to patients who had undergone heart bypass surgery and were told by their cardiologist to shift to a healthy lifestyle to avoid a relapse. Yet very few did. Statistics show that two years after surgery, 90% of the patients have not changed their lifestyle — and within a few years, they died after a new heart attack.

    Why is it so difficult for most people to change?

    People differ in their response to change because of their personality and their preferred cognitive styles. Few people have what Good to Great author Jim Collins calls “psycho- dynamic” minds, which relish or even drive change. However, many people have “psycho-static” minds that give them distaste change.

    Why do most people hate change?

    First, humans are creatures of habit. Many behaviors are ingrained into our brains, and because they served us well in the past (or did no noticeable harm), we are reluctant to do something radically new. People with psycho-static minds in particular relish their habits and cherish rules and traditions.

    Second, most people are afraid of the unknown, and every change is a departure from the status quo. Third, when people do try something new, they run the risk of failure and —especially in some cultures— the related risk of losing face. Sticking with what’s familiar is a safer option.

    Lastly, many people feel comfortable in their established ways, and some are really lazy. Every change means more work, new challenges, new learnings, and temporary discomforts. Why bother?

    Change needs an impetus and a positive frame

    Every change initiative needs a powerful motivation to succeed permanently. As the life coach Tony Robbinsnoted, people are motivated to make changes either by moving away from pain or moving towards pleasure. But isn’t the fear of death one of the most powerful motivator there is? Why then do nine out of ten people still choose death?

    Alan Deutschman suggested that a powerful impetus to change alone might not be good enough, but the odds of success increase when we use a positive frame of reference. More bypass patients stick with healthier lifestyles when their doctors reframe the challenge from a negative (“change to avoid death”) to a positive frame (“change to enjoy life”). Moving towards pleasure seems to motivate more people to make lasting changes than moving away from pain.

    In addition, humans need support groups and mechanisms as well as fast visible successes (“quick wins”) to stick with new behaviors long enough to embed new habits.

    From “change or die” to “Innovate or die”

    To recap: when confronted with the threat of early death, ten out of ten bypass patients say they’re ready to make healthy lifestyle changes, but only one in ten follows through. Isn’t this just like many executives in mature corporations with declining revenues and margins approach innovation? Everyone is talking the innovation talk, but few are walking their talk in earnest.

    When roughly a decade ago, innovation started to become a hot topic in business, some innovation experts and consultants marketed their services using the “innovate or die”-frame. Truth be told, we all die eventually, and they should really say: “Innovate or die sooner”.

    But why are more struggling corporations not motivated to avoid “sudden death” by making serious innovation efforts? Perhaps, just like the bypass patients, “innovate or die” doesn’t motivate enough people in an organization to make the necessary sacrifices for a creative change succeed.

    So, use a positive frame (“Let’s change to lead innovation in our industry”) and move towards pleasure. Then, link this positive frame with a compelling vision of a bright future. Finally, carefully design the stages of creative change to give the people the support structures and wins needed to hang in and see it through to success.

    Steve Jobs did this when he returned to Apple in 1997 and saved the company with a focused series of new computers (including the colorful iMacs) and his “Think Different” campaigns. More recently, Jeffrey Immelt renewed General Electric by stimulating new creative growth with a focus on clean and green technology through the “Ecomagination” initiative.

    Conclusion: The world hates change indeed

    Charles Kettering was right: although it brought so much progress that everyone enjoys and won’t want to live without, “the world hates change”, the world hates innovation. We can even quantify this uncomfortable truth. How many percent of people hate innovation or change? According to Everett Rogers’ “diffusion of innovation theory”, it’s 84 percent. Luckily for all, the remaining 16 percent of people have enough creativity, energy and guts to drive meaningful new innovations into the early majority, so that eventually, anyone who hates innovation can enjoy progress. Rogers calls these change drivers “innovators” and “early adopters”, and if you read these lines, chance are you’re one of them.

    “The world hates innovation. This is why” is one of 64 sections of a new book that I am currently writing, The Executive’s Guide to Innovation (targeted for publication in 2H.2019). Understanding the various facets of change and innovation is also a key aspect we touch upon in “The C-(reative) Class. The Executive Innovation Brief”, Thinkergy’s innovation training for busy executives. Contact us if you’re interested to learn more about our trainings or my upcoming book.

    © Dr. Detlef Reis  

  • How Generational Shifts will Impact Business and Innovation (Part 1)

    In the coming decade, major generational shifts will take place in the workplace. Today and in two weeks, let’s understand more about the concept of social generations, how the socialization of different generational cohorts impacts the way they think, work, decide, communicate, manage and lead, and how generational shifts will affect the ways we do business and innovate.

    Background: Training a group of global nomads

    In April 2017, I had the pleasure of training a fascinating group of highly successful businesspeople in our creative leadership method Genius Journey. Led by an impressive young Briton, the training group entirely consisted of an accumulation of global nomads, who flew in from all-around-the world to Phuket, Thailand, for a joint gig and team holiday. Together, the group operates an online platform for business coaches to host an annual international online coaching conference and to disseminate quality contents for a global coaching community.

    All Millennials in their late 20s or early 30s, the fourteen delegates came from eight diverse nationalities (UK, US, Australia, New Zealand, Austria, Croatia, Romania and India); with one exception, none of them actually lived in their home country. Moreover, while the group has a hub connecting all spokes, both are “moving targets”: the hub (= “head office” where the core team has pitched tents for the time being) only recently shifted from Costa Rica to Croatia, and most of the “spokes” (= individual team members) are frequently traveling between countries. Nevertheless, all collaborate together seamlessly and successfully across different time zones using the Internet and modern communication solutions.

    Why do I tell you this story? Training this group of international global nomads —and witnessing them working in the evening after our training with other colleagues who couldn’t make the offsite — made me realize the huge differences in work styles, work-life aspirations and educational backgrounds of Millennials (also known as Generation Y) compared to those generations who still tend to run or influence most businesses today.

    For the first time, I fully understood the importance of appreciating the style differences between social generations, and I began investigating and pondering how the impending generational shifts in the workplace will affect business and innovation.

    Introducing the concepts of social generations

    In social science, the concept of social generations describes cohorts of people born within a specific time period (ranging between 15 to 30 years) who jointly experience significant historical landmark events and witness the emergence of certain iconic technologies and trendy cultural phenomena during their formative years and while coming of age.

    Because the shared social marker experiences within a single generation differ from those of previous or later cohorts, generations tend to vary from each other in their values, aspirations and motivations, the ways they work, communicate, make decisions, interact with certain technologies, etc. As a result, when one generation starts to retire, other generations take over, and a new generation enters the work place, these generational shifts tend to have major impacts on the economies and businesses.

    Introducing the present generations and their sociological background

    Let’s gain an overview of what generations are presently still alive, and gain an impression of the landmark events, technologies and cultural phenomena that shaped them (here note that the time spans between different generations is indicative only and varies in the literature, and the terminology follows the most common one developed in the USA):

    • The Lost Generation (1883-1900) describes the cohort who grew up in the culturally and scientifically rich period of the late imperialistic era and fought in World War I, a traumatic experience that led to their name coined by Gertrude Stein and popularized by Earnest Hemingway. At the point of writing, there is a sole survivor of this generation.
    • The G.I. Generation (1901-1924) includes those who lived through WWI in their younger years. Because they had to master the Great Depression and fought in World War II, they are also called the “Greatest Generation” in the USA.
    • The Traditionalists (1925-1945) includes most of those who were born or growing up during the Great Depression and World War II, and who fought the Korean War and in some cases during the Vietnam War. Also called the Silent Generation (or “Silents” because they were socialized at a time of conformity to authority), they grew up with Jazz and Swing (Glen Miller, Frank Sinatra), flocked to “Gone with the Wind” in the cinema, and saw the advent of TV.
    • The Baby Boomers (1946-1964) got their name from the baby-boom following World War II. They are a large demographic cohort and due to the long time-span, they are sometimes distinguished in early boomers (1946-1955) and late boomers (1956-1964). They grew up during the early Cold War era with the Cuban Missile Crisis and the Vietnam War, and witnessed the moon landing and the civil and women’s rights movements that challenged the established order. Rock ‘n’ Roll (Elvis, Beatles, Rolling Stones, Woodstock) and the Boomtown Disco period, the movies “Easy Rider” and “The Graduate”, and the arrival of Color TV were important cultural phenomena shaping the boomers.
    • I am a member of Generation X (Gen X, 1965-1980), the “baby bust” generation characterized by a drop in birth rates following the invention of the birth control pill. We experienced a series of negative landmark events and social markers, such as the AIDS crisis, a renewed nuclear arms race in the late Cold War era, the Challenger explosion and the Chernobyl nuclear disaster, but also the sensational fall of the Berlin Wall and lifting of the iron curtain in Eastern Europe. Sometimes called the “MTV generation”, we enjoyed watching pop videos (Madonna, Michael Jackson) and listening to new wave and house music. Movies such as E.T., Star Wars or Alien made an impact on us, too, and the Walkman, VCR and in particular Personal Computers (IBM PC, Macintosh) were iconic technologies for us.
    • The Millennials (Generation Y, 1981-1994) grew up during the Dot-com boom, enjoyed the turn of the Millennium and suffered from the 9/11 terror attacks. Being mostly the offspring of the demographically large baby-boomers. they are also a huge cohort that has just surpassed the number of the Baby Boomers in the US. Millennials witnessed in their youth a series of major technological shifts such as the advent of the Internet, mobile phones, email, SMS, and the DVD. Cultural phenomena that shaped Millennials were hip hop (Eminem, Puff Daddy) and singers like Britney Spears or Jennifer Lopez, the movie “Titanic”, the emergence of Reality TV and Pay TV, and fancy gaming playing consoles (Playstation, XBox).
    • The Post-Millennials (1995-2010) witnessed the wars in Afghanistan and Iraq, the Asian tsunami and the global financial crisis as landmark events. Also known as Generation Z or Gen 2020, they grew up with the iPad (and other tablets), social media (Facebook, Google, Twitter, Snapchat) and mobile apps. Culturally, Post-Millennials often have a thing with musical interpreters such as Justin Bieber, Rihanna, or Taylor Swift, and got greatly influenced by the movie “Avatar” and other 3D movies.

    Interim Conclusion: Generational shifts and developments —hopefully— never stop. Some sociologists suggest the next generation has already emerged: Generation Alpha (people born from 2011 onwards — and my newborn daughter Zoë is a recent addition to Gen α). After introducing the different generations in today’s article, come back in two weeks time to learn more about the generational differences in the workplace (work aspirations, behaviors and styles), and how the generational shifts in the labour market in the next decade are likely to change business in general and innovation in special.

    This article is one of 64 sections of an upcoming book that I am presently writing, The Beginner’s Guide to Innovation (targeted for publication in 2Q.2018 by Motivational Press). 

    © Dr. Detlef Reis 2017.


  • Innovative companies vs. in-NO-vative companies: Who’s who?

    Take a moment to think about the following questions: What innovative companies do you know? What companies do you consider to be highly creative and innovative? What factors have made these firms become innovation leaders? Would you want to work for one of those innovative companies? Why or why not?

    What innovative companies do you know?

    When we train or consult organizations at my innovation company Thinkergy on how to build more innovation-friendly companies, we ask these questions as a warm-up exercise. While the smaller creative ventures and local innovation heroes vary in different countries, some well-known firms appear on the delegates’ list of innovative companies, with Apple, Google, Amazon often featured first.

    Many businesspeople also intuitively have a good understanding of organizational and cultural factors that differentiate innovative companies from normal organizations. And while a few delegates dare to admit they rather would not want to work for an innovative company (either because their cognitive style favors efficiency and adaptation over creativity and innovation, or because they dislike working in a firm that constantly wants to push the boundaries forward), a vast majority of workshop delegates would sign on at an innovative firm if they got the chance.

    What in-NO-vative companies do you know?

    We also ask workshop delegates the exact opposite set of questions: “What companies do you consider NOT to be innovative? What factors prevent these firms from becoming innovation leaders? Would you want to work for such an in-NO-vative company? Why or why not?”

    Interestingly, the energy levels rise when the delegates list examples of in-NO-vative “Me Too” companies — and of the cultural factors that stand in their way. Laughter, cheers. and a bit of disgust mixed with “Schadenfreude” fills the room, indicating that the delegates had their fair share of negative customer experiences with the blacklisted firms and their poor products and services. Having worked in such an in-NO-vative copycat company before, some delegates are even intimately familiar with what’s wrong with these companies.

    What can we learn from the exercise?

    Most businesspeople and customers intuitively grasp what innovative companies do right — and what in-NO-vative companies do wrong. They are able to pinpoint many of the striking differences in “the ways we do things around here” in innovative versus in-NO-vative companies. So, if not only highly paid consultants but normal people can distinguish poor from best practice and identify what wrongs we need to right, why isn’t every company innovative?

    Changing an established organizational culture is a very hard thing to do. It typically takes at least 2-3 years of focused effort to make a successful transition towards a more creative culture, and those inside the organization who benefited from the old culture may resist change or even sabotage it. 

    What companies lead global innovation rankings?

    A few well-known business magazines and global consulting firms regularly release lists that rank the world’s most innovative companies. The different rankings vary in the methodology and metrics used to rank innovators, thus producing variations in the firms listed as innovation leaders, but also having some names appear in every ranking.

    Boston Consulting Group (BCG)’s annual list of the world’s top innovative companies is my favorite ranking. Because it has been done consistently every year since 2005, it allows us to see shifts and trends in the populace of innovation leaders over time. BCG has steadily evolved its ranking methodology, adding over time objective financial metrics (such as total shareholder premium, revenue and margin growth) and cross-industry ranking to its initial approach to having executives subjectively rank the most innovative companies inside their industry.

    In 2006, BCG’s ten top innovators read (in rank order): Apple, Google, 3M, Toyota, Microsoft, General Electric, Procter & Gamble, Nokia, and. Starbucks. Ten years later, Apple, Google, Microsoft, and Toyota have managed to stay in the top 10, but are now joined by new top innovators that have emerged in the past decade (such as Tesla Motors, Netflix, and Facebook) or have moved up in to the top 10 (Amazon, Samsung, and IBM).

       

    In recent years, other business magazines such as Forbes and Fast Company released their own innovation rankings:

    • href="https://www.forbes.com/sites/innovatorsdna/2017/08/08/how-we-rank-the-most-innovative-companies-2017/?ss=innovative-companies#76e7d5045c46">ranks a firm’s innovativeness based on sales growth and their “innovation premium” (defined as the difference between their market capitalization and the net present value of cash flows from existing businesses(based on a proprietary algorithm from Credit Suisse HOLT)) they achieved. Thereby, Forbes only considers firms with seven years of public financial data and USD 10 billion in market cap. Moreover, Forbes only focuses on industries investing in innovation, excluding non-R&D intensive industries such as banking and financial services or energy and mining.
    • In contrast, Fast Company ranks innovation leaders overall and in many different business segments based on the impacts of recent innovative contributions that they’ve made. Thereby, Fast Company blends subjective editorial judgment with objective artificial intelligence that mines and topographically maps out millions of innovation-related news articles, blog posts, company profiles, and patents across more than 40 sectors to identify trends and the companies that drive them. Due to the different ranking approach of Fast Company, many smaller creative agencies and tech firms (that don’t size up to the BCG or Forbes lists) achieve top ranks alongside the usual suspects.

    Lessons and trends from the global innovation rankings

    When we compare the movements within the BCG ranking over a decade, and also factor in innovators names of other global innovator lists using different ranking methodologies (Forbes, Fast Company), we can discern a few general rules of thumb as well as emerging trends related to the world’s top innovative companies:

    1. Sustainable innovation leaders seem to live by one of Steve Jobs’ mottos: “Innovation distinguishes between a leader and a follower.” Ten companies have managed to stay on the BCG list for more than a decade, earning them the title of “steady innovators”: Apple, Google, Microsoft, Amazon, Toyota, IBM, Hewlett-Packard, BMW General Electric and Nike. Consistent presence in the BCG list indicates that these companies have cultivated innovation-friendly cultures that are unswayed by top managers and management fads coming and going.
    2. In fast-moving industries such as technology, today’s Innovation leaders may lose their relevance and drop out of the rankings quickly if they miss out on emerging technologies (Blackberry, Motorola, Nokia).
    3. Innovation seems to increasingly be moving to Asia: In the past, innovation leaders mainly originated in the US, Europe or Japan, Recent rankings indicate that dynamic innovation increasingly takes place in Asian Emerging Markets (most importantly China and India, but also in smaller countries like Indonesia, Malaysia and Thailand).
    4. Innovation shifts from industrial to digital: Ten years ago, many innovation leaders were industrial companies (3M, Toyota, GE, BMW, Honda), while recent rankings are increasingly dominated by new the “digital innovators” that create, market and operate digital platforms (e.g., Amazon.com, Salesforce.com, Facebook, etc.).
    5. Innovation leadership doesn’t equate anymore with being big. In the same strand, while innovative Multinational Corporations (MNC), used to dominate rankings in the past, newer rankings are a blend of MNCs, new up-and-coming Emerging Market Corporation, as well as many smaller ventured in the tech or digital space that were or are about to get listed. This shift supports John Naisbitt’s view that “We’re shifting from a managerial to an entrepreneurial society.”

    Conclusion: “Continued innovation is the best means of defeating competition,” noted the famous innovator Thomas Edison. What was already true more than a hundred years ago is even more true today. Whatever company leads innovation in an industry today, it has to continue innovating with a focus on making meaning and on making the world a better place — or otherwise, it will rather sooner or later loose its relevance and will be replaced by a new class of innovative companies.

    This article is one of 64 sections of an upcoming book that I am presently writing, The Beginner’s Guide to Innovation (targeted for publication in 2Q.2018 by Motivational Press). Contact us if you’re interested to learn more about our innovation training courses or how we may help your company to do the cool change from in-NO-vation to innovation.

    © Dr. Detlef Reis 2017

  • How Innovation Affects Financial Performance

    Does innovation really deliver tangible financial results a company? Do investments in innovation yield a positive return? Does innovation pay? And if yes, how much positive impact does it have on financial performance?

    Tracking the innovation premium

    In 2006, BusinessWeek magazine and Boston Consulting Group (BCG) jointly devised a ranking of the world’s 25 most innovative companies. The list was led by Apple, Google, and 3M, and also included Toyota, Microsoft, General Electric, Procter & Gamble, Nokia, Starbucks, IBM, Virgin and Samsung, among others. Then, they compared the profit margins and stock prices of these Top 25 innovators with the median for all companies in the Standard & Poor’s Global 1200 index over a 10-year time period.

    The Top 25 innovators delivered median profit margin growth of 3.4% a year from 1995-2005, compared with 0.4% for the S&P’s Global 1200. This striking difference, which BW attributed “in large parts to innovation”, also showed when comparing the median annual stock returns of both groups: The Top 25 innovators yielded 14.3% over the 10 years, a full three percentage points better than the S&P 1200 median. No wonder that BusinessWeek titled the article “Creativity Pays. Here’s How Much”.

    In a follow-up study in 2009, BCG found a similar result: Innovative companies achieved significantly higher total shareholder return premiums  — 4.3% higher over three years and 2.6% higher over 10 years — than their less innovative industry peers. Interestingly, the figures for Asia-Pacific were much higher, at 17.7% over three years and 5.5% over 10 years, suggesting that it pays even more to lead innovation in traditionally less innovative environments.

    One of the most dramatic examples of superior stock performance by an innovator is Apple. When Steve Jobs returned to Apple on July 9 1997, the firm was on the verge of bankruptcy and its stock closed at $0.49 (in today’s prices after various share splits in between). Ten years later, the share price had soared to $18.62, a multiple of 38 times. Twenty years later, the price had skyrocketed to $145.06, a multiple of nearly 300. Had you purchased two Apple shares for one dollar on the day of Steve Jobs’ return, they were now worth nearly $300.

    So, 20 years of fanatical focus on innovation at Apple led to tremendous value, not only for consumers who benefited from groundbreaking innovations such as the iPod, the iPhone and the iPad, but also for Apple shareholders who reaped massive wealth gains. 

    Investing in design pays too, as several studies have confirmed:

    • A 2007 study by the British Design Council found that design-focused firms didn’t need to compete on price as much as their peers. Every £100 they invested in design increased turnover by £225, and their shares outperformed key stock market indices by 200%.
    • In a 2014 Harvard Business Review article, Jeneanne Rae introduced the Design Value Index, a new tool to track the financial performance of design-centric companies against those that are not. When comparing the stock performance of 15 design-focused companies it showed that over 10 years, shares of design-centric firms (such as Target, Walt Disney or Nike) beat the S&P index by 228%.

    To summarize, all the aforementioned study findings suggest that investing in innovation and design pays huge dividends for companies and their shareholders alike.

    Why do innovative firms perform better financially?

    BCG found that innovative companies tend to grow faster, have richer product mixes than their peers, expand into adjacent or new categories (especially if these promise higher margins), and produce more patents than less innovative companies.

    Innovative companies also enjoy higher profit margins because customers are willing to pay higher prices for more innovative products perceived to offer more value than ‘plain vanilla’ products.

    Innovative companies can charge even higher prices for their more innovative value offering (products, services, solutions and experiences) if they also invest in standout design, which further magnifies the perceived value in the eyes of their customers.

    Ergo, they enjoy considerably higher operating profit margins — and the best innovators even amplify those further through operational innovations (such as optimized processes and innovative structures) that allow them to produce superior value at a lower cost base than their peers.

    Moreover, innovative products sell faster and more frequently than normal ones, thus boosting revenues further, especially if the top innovators also multiply revenues through the leverage innovation types.

    Mapping out the financial dynamics and implications of innovation investments

    We can sum-up the financial performance implication of investing in innovations as follows:

    1. Innovative value offerings sell at higher prices and in higher volumes, both of which increase revenues. The higher the value differential, the higher the revenue growth driven by both price and volumes.
    2. Firms that magnify the perception of value of their products (and other value offerings) through design can achieve higher prices, which again boosts revenues and increases (operating) profit margins.
    3. Likewise, companies who make operational innovations typically can produce their value offerings at lower costs, which also increases profit margins (albeit to a much lower degree).
    4. Companies that market a value proposition through innovative channels, networks, platforms, partnerships and business models can multiply their revenues even further.
    5. Strong revenue and profit margin growth increase the demand for a company’s stock and its share price, and may trigger a positively reinforcing loop. If the innovative company shares part of its superior profits with its investors in the form of dividends, the share price and demand for the stock rise even further. A rising share price increases market capitalization, and over time the company shifts from being a potential acquisition target to being a dominant player with amble opportunities for strategic acquisitions.

    Conclusion: Embrace innovation and invest in innovative firms, as innovative firms deliver a noticeably better financial performance compared to the market average. It’s seems to be a safe bet to increase your wealth in the long run. As Warren Buffet put it: “Value is what you get.”

    Contact us to let us know how we can help you improve your financial performance with our innovation solutions.

    © Dr. Detlef Reis 2017. 

  • Creative Leaders and Innovation Managers: Same but different

    Do creative leaders and innovation managers perform the same innovation role? A few months ago, I had an interesting conversation related to this question with the global head of idea and innovation management of a tech multinational. When we talked about the responsibilities related to his role, my counterpart revealed to my surprise that he sometimes has to key in ideas into his organization’s idea management system. Now know that this particular innovation executive is a strategic big picture thinker who is ideally suited for creatively driving major innovation initiatives across his organization. Sweating the small stuff is a waste of his time and talent, if you ask me.

    Many organizations seem to interpret the role of the executive spearheading corporate innovation function as a “Mr. Know-it-all-do-it-all”. I believe that’s wrong, and how I believe we must make a distinction between the role of a creative leader and that of an innovation manager. Let me elaborate by discussing the responsibilities of each role and, with the help of my innovation-people profiling method TIPS, make a case for why these roles suit fundamentally different personality types.

    Creative leaders: driving innovation from the front

    Creative leaders run the “innovation front-office” of their organization:

    • They set or influence the innovation agenda by identifying new trends and technologies to focus on.
    • They spearhead or participate in innovation initiatives of business units or dedicated innovation teams, such as new product development or product design teams.
    • They participate in innovation events and conferences to promote innovation within and outside of the organization.

    Creative leaders inspire and drive innovation teams towards excellence to bring truly novel, original and meaningful ideas to life in the form of new products, new services, new solutions or new customer experiences. They look for new business models, strategic partnerships, networks and channel solutions to multiply revenue from innovation. Finally, they drive campaign, packaging and branding initiatives that magnify the innovation in the eyes of customers.

    Creative leaders ought to be at the very top of the executive structure, whether as CEO or chief innovation officer (CIO). This allows them to drive or at least influence the top management agenda, and to intervene and remove any internal barriers preventing innovation. Famous CEOs who exemplify the role of a creative leader are Thomas Edison, Walt Disney, Steve Jobs (Apple), Jeff Bezos (Amazon) or Jeffrey Immelt (General Electrics), among others.

    Innovation managers: driving innovation from the back

    Innovation managers run the “innovation back-office” of their organization. They take care of certain internal responsibilities related to innovation, such as:

    • organizing and administering the formal innovation management system (how innovation is organized and formalized within the organization);
    • managing the corporate innovation pipeline (top ideas earmarked for activation);
    • administering and maintaining an online idea submission and evaluation system;
    • organizing and coordinating innovation events and project initiatives;
    • developing and fine-tuning an innovation measurement system; and
    • measuring and controlling innovation performance and efficiency.

    The innovation manager heads a dedicated administrative innovation team that supports and directly reports to the creative leader. A good example representing the systematic, reliable mindset of an innovation manager is Tim Cook, who took care of Apple’s “back office” to support Steve Jobs before rising to CEO when the latter passed away.

    Why does the innovation function benefit from two separate lead roles?

    Thinkergy’s Innovation Profiling System TIPS (Theories, Ideas, People, Systems) helps us to understand why it is beneficial to separate the two roles of a creative leader and an innovation manager: They draw upon diametrically opposite base energies, and should be staffed by different profiles:

    • Creative leaders are all about the TIPS base “Ideas”. Ideas people innately drive change, innovation and progress. They are strategic visionaries who enjoy focusing on boosting corporate performance, profitability and margins through innovations. TIPS profiles that naturally cater to this energy —and thus qualify to be a creative leader or be developed into a future one— are Ideators, Conceptualizers, Promoters and Imaginative Experimenters.
    • In contrast, innovation managers draw on the TIPS base “Systems”. Systems people enjoy managing, organizing, directing, coordinating and controlling internal activities. They take pleasure in setting-up and administering an innovation management system, including defining measures that allow them to check-on innovation performance and efficiency (How to increase our innovation outputs? How to more efficiently employ internal and external resources for innovation?). TIPS profiles that innately operate on Systems energy —and thus make dependable innovation managers— are Systematizers, Organizers, Technocrats, and Systematic Experimenters.

    But what if you insisted on keeping the two roles together? One compromise would be to staff the role of a “creative innovation manager” with a balanced Experimenter or an All-Rounder, both of whom can bridge the divide between the two polar energies “Ideas” and “Systems”. But, as with most compromises, you end up with a suboptimal result, because one person will be less effective than a real S-based innovation manager supporting a real I-based creative leader.

    Conclusion: Not either or, but both 

    Both creative leaders and innovation managers care for driving innovation in an organization. But they do it by different means and by focusing on different ends. Both roles support and complement each other by letting each person play to their strengths while compensating for the weaknesses of each others’ shadow-side. So, separate the two functions of the creative leader and the innovation manager of your organization. And consider using TIPS to find out how to out the right person in each role.

    Contact us if you want to learn more about how TIPS may help you getting the people side of innovation right in your organization — or if you’re curious to find out what’s your TIPS innovator profile. Our TIPS online personality test is going live soon.

    © Dr. Detlef Reis 2016. This article was published in parallel in the Bangkok Post under the same title on 4 August 2016.