Innovate or die. Whether you are in B2B or B2C, people always want something new. While it is the lifeblood of an organization — driving topline and improving the bottom-line — too many organizations wait too long to prioritize and promote innovation throughout the company. But, by that point, it may be too late as the infrastructure for change is not in place. This is when our phones ring from clients seeking the quick-fix management to build innovation into their businesses. Raines’ new Executive Assessment process, which analyzes candidates against six criteria, prioritizes a candidate’s innovation capability.
An organization and its leaders must create and abide by a strategy and operating plan for innovating and high-powered team building. When this happens, unparalleled product, service and operating excellence follow, generating more growth and value creation. Raines sought the views of numerous innovators in multibillion dollar global organizations. From these discussions, we were able to identify four core pillars for ensuring a company or organization has an operating system to support innovation, growth and sustained relevancy to customers and investors.
1. Innovation Leaders Listen & Learn
2020 leveled many playing fields. The best leader isn’t just strong and forward-thinking, but also agile and ready to dive in to direct the innovation. “Most of the really good, modern day CEOs have a penchant for getting their hands dirty,” says Glenn Sanford, CEO and Founder of eXP, the fast-growing digital platform that virtually operates a giant global real estate brokerage without any real estate itself. Current market value for the virtual-first company has shot to more than $10 billion almost overnight from a billion in early 2020, with current revenues of more than $1.5 billion.
“Innovative CEOs are willing to get in and play with the tools and be in the trenches with their teams,” says Sanford. “If you’re not in the trenches, actually figuring out what really works and what doesn’t work, there’s no way you can accurately innovate. You might occasionally get lucky, but if you’re hands on, you’ll be able to bring a decision-making toolset.”
Equally important is the fit and culture of the leader and organization. Innovation isn’t a line on a resume. Elon Musk, the PayPal, Tesla and SpaceX entrepreneur, would not thrive in most organizations. But in his own company and with a team he hand-picked and assessed for its ability to run with him, Musk was able to reach for the stars—literally—and has. “Innovation is driven out of curiosity and listening, and at the same time, it’s critical you are surrounded by the right people,” says Jack Bamberger, Chief Commercial Officer of Amobee, the global advertising technology company and wholly owned subsidiary of telecommunications giant Singtel. “Innovation doesn’t happen in a silo or by one individual,” Bamberger adds “It can be ignited by an individual…but ultimately to build it, innovation is a team sport.”
And it is a sport for which every element of a business or organization must be dialed in. “Innovation needs to be embedded and be made to permeate the organization and culture,” says Michael Frankel, who leads the Deloitte New-venture Accelerator, which drives the innovation and creation of new technology businesses in Deloitte to help bring cutting edge hybrid (technology and services) innovations to Deloitte clients. “You need to build a team so that you have innovators wrapped around the Innovation Leader and so innovator seeds can be planted throughout the business.” That team can include finance, product, marketing, analytics, technology experts, and other subsets, working together to execute and enable the innovation leaders. Leaders must have both vision and creativity for not just the big picture, but also the myriad of elements that must come together to ensure great execution.
2. Customer Obsession Counts
To identify how to drive an organization forward, leaders must prioritize listening, understanding, and obsessing over what customers need and want. Innovation is a “practice driven in purpose, meaningfulness, and value,” notes Bamberger. “That is where you start. Hopefully, you get innovation. The marinating process is ultimately how you get there — listening, asking questions, being curious.” Being customer-obsessed enables leaders to know what problems exist, what improvements can be made, and what new territory to explore.
3. Try New Things, But Don’t Ignore the Core
Balance sectors of experience with innovation, ideas and goals, great customer experience, and great revenues so you can pull ahead of competitors to create edgy, but well-rounded offerings. Google famously allows employees to spend 20% of their time on innovating and side projects, but at the end of the day, they are still spending 80% on existing, working initiatives. “The idea is to continue to lean in and eventually you find out what works, what doesn’t,” says eXp’s Sanford. “Then you leverage the heck out of the things that work.”
Justin Parnell, who runs the iconic Oreo brand at Mondelez, notes that while the original Oreo remains the crown jewel, the company experiments with limited edition or seasonal Oreos to refresh the brand with consumers on a regular basis, thus keeping the core brand top of mind with the consumer. Today there is even a gluten-free Oreo. The idea is to “continue monitoring what’s important to our current consumers” and that their love remains for the brand.
4. Be Daring!
Innovation and risk are not mutually exclusive. Innovators must make bold decisions and may need to try three times before getting board or CEO approval. Similarly, acknowledge that ideas can sometimes get lost in organizational bureaucracy. “All the bureaucratic elements of a large organization can stifle innovation before the innovation can get started,” notes eXp’s Sanford. Create checks and balances to ensure you can “Always Be Innovating.”
2020 made this clear: Agile leaders must be willing to try new things, quickly. Be willing to re-write plans and take a different approach to execute great ideas. Having an innovative finance leader onboard can be instrumental to helping “sell” the costs of innovation says Deloitte’s Frankel. That person can help solve the questions of “how do we price creatively to build an innovative offering or accurately calculate and recover the costs associated with the innovation or innovative new offering so that you can build a profitable growth business.”
Remember: Innovation may not always be sexy or have sizzle, but it should always have substance. A tremendous money-making innovation may be administrative or something small or that consumers never notice, but which helps make the plumbing better and save the organization millions or more. Case in point: By recategorizing its product lines, The Kraft Heinz Company expects to save $2 billion, while also growing its business.
Finally, innovation should be tied to outcome and viewed as a lever to deliver growth. Often “a thousand little ideas” leading to “the Big Idea” is the real innovation, Deloitte’s Frankel has found. The Innovator must bring vision, systems thinking and be a great conductor in making it all work. In our work for clients, Raines’ Innovation Practice prioritizes the critical factors to identify innovators, builds teams to support, and advises organizations on how to best support and promote innovation, all in the name of growth.
John J. Keller, Managing Director, leads Raines International’s CEO and Board Practice and Innovation & TMT Practice.