Leading Innovation: Insights From the Real World

Leading Innovation:Insights From the RealWorldBy Craig Perrin and Chris Blauth

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Innovation. Business conditions demand it, and senior leaderssay they must have more of it. Still, for all the talk, theinnovation results these challenging times call for remainelusive. So, how do you make innovation happen?AchieveGlobal set out looking for answers by conductingmore than �� one�on�one interviews with senior leaders andmanagers from a cross section of industries both in theUnited States and internationally. Each respondentrepresented an organization with a proven track record forinnovation success. Here’s what we learned.

Innovation Defined: Big, Small, New, orImproved?While some may argue that it’s the most important word inorganizations today, what does innovation really mean?Having a shared definition�a common language to describeinnovation�is an important first step.

Is innovation big, bold actions or incremental improvements?Does it mean brand new or value adds to existing products orservices�the new and improved laundry detergent or a wholenew way to clean clothes? Revenue building or efficiencygenerating?

Leaders define innovation in terms of two broad categories:

• Breakthrough�something new that no one hasexperienced before

• Advances, enhancements, incremental improvementsto, or different applications for existing products,services, and processes

Executives with acute awareness of what it will take to sustaintheir organizations are more likely to describe innovation interms of breakthroughs as opposed to incrementalimprovements. Their manager counterparts echo theimportance of new advances, speaking less aboutbreakthroughs and more about innovations that are differentand unique.

Although the quest for breakthrough ideas is exhilarating andpotentially game�changing, it cannot be the sole focus. Amanager from Toshiba stressed the importance of a balancedapproach, explaining that “People tend to believe the terminnovation always means ‘value innovation’ �creating totallynew value and process�, but pursuing nothing but valueinnovation would not help achieve sustainable profit andgrowth. Much of our business success depends upon whetherwe can improve our existing products.”

“Innovation is themost importantword in thevocabulary.”

—Toshiba AmericaInformation Systems, Inc.

executive

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Whether defined as breakthrough or incremental,three fundamental themes are loud and clear.

• Customers are at the center.

• Creativity is one part of the equation;implementation is the other half.

• Innovation means change.

Innovation and customers are inextricably linked.The creation of customer or client value is at thecore of any definition. Innovation, after all, isabout growth, and what better way to grow thanto get and keep customers�lots of them.

An innovation doesn’t exist until it is in the handsof those customers or end users who will benefit.References to creativity are frequently paired withreal world practicality�words like applied andexecution. Leaders know that creativity, althoughcritical at every stage in the process, isn’t enoughto ensure results.

And whatever the definition, one thing is certain:Innovation sparks change.

Breakthrough innovations change customerbehavior and the nature of the market. These boldinnovations create the need for new structures

and systems to support them, sometimesimpacting or conflicting with the way currentproducts and services are managed.

Innovations that alter existing products andservices can cause ripple�effect changes insideorganizations, as expectations, job roles andresponsibilities shift. These changes need tohappen fast, requiring team and individual agility.

For some organizations, innovation will requiredeeper change�a changed mindset, a rebalancingof priorities, a shift in leadership style, and,perhaps, even organizational structure.

Change capable organizations and the peoplewithin them would seem to have a built�ininnovation advantage.

Challenges: An Innovation Reality CheckChange is at the center of what makes innovationso filled with possibility and, at the same time, sochallenging. Two clear winners emerge in thechallenges category, where managers andexecutives strongly agree. Both relate to thechallenge of change: integrating innovation intothe existing environment.

• Time

�One of the challenges we�re faced with today inbusiness is that every business has beenrestructured, and there is more work than thereare people. So we got our head down on theground trying to get all the stuff done, and thereisn�t a lot of time spent on innovative types ofthinking and trying things differently. We�re justtrying to get the things that are sitting on ourplates.� Xerox executive

• Existing Organizational Structures

�If we didn�t have to navigate all of the layers ofmanagement and departments within anorganization and could do things more nimbly,boy, watch out!� Huntington executive

Time is an ever�present dilemma for managers andexecutives. Both groups struggle to makeinnovation a top priority, even when its value andstrategic importance is crystal clear.

An Informa executive netted it out by saying,“There is a tension between the requirement offulfilling the existing product, the needs of

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Business Conditions that DemandInnovation:

• Globalization and intense and unpredictablecompetition

• Industries in flux as industries converge andnew ones are created

• A buyer-driven economy, changingcustomer needs and unpredictable demand

• Shorter product life cycles as competitionaccelerates the pace of imitation

• The rising power of the customerexperience

• Pressure for growth, not just cost control

• Workforce and regulatory concerns asorganizations prepare for an uncertainfuture

• Demanding financial markets

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existing customers, hitting monthly targets,hitting budgets�it is a challenge to make surethat innovation is not something that isn’t sort of… well, if we’ve got time left on Friday afternoon.”

Others look at the challenge of time from adifferent angle. Some leaders, particularly those inR&D, feel intense pressure to deliver innovationsunder tighter and tighter timeframes. A Takatamanager expressed the concern that, “Insufficienttime generally yields very similar products.”Executives cite the big picture need forinnovation speed. They are keenly aware that tostay ahead you must innovate faster than yourcompetitors.

Managers and executives alike are frustrated bythe need and effort it takes to maneuver throughorganizational layers, paperwork, and bureaucracyto make innovation happen. Governance,compliance, and strict guidelines are givens thatmust be managed. Functional silos spark internalcompetition for success and resources. Navigatingthe organizational politics that result is both achallenge and a chore. These issues hit innovationimplementation speed hard. The big questionseems to be this: What structures facilitatemeeting the goals of the current business whilealso facilitating innovative thinking and action?

For executives, funding rounds out the trio of topinnovation challenges. Executives describe thetough budget decisions about appropriateallocation of money to support current productsand services vs. innovation experiments andprojects. Several executives mention that whatadds to the challenge is the very nature ofinnovation itself and the inherent varying degreeof uncertainty and financial risk, which is

particularly tough in a business environment withan intense focus on short�term profits and gains.

The third challenge for managers is insufficienttop�down support for innovation. Managers citeseemingly insincere “corporate speak” from seniorleaders about the commitment to innovation.Given the challenges associated with makinginnovation happen, failing to lead by example is areal deal breaker.

Innovation Success Factors: What DoesIt Take to Win the Game?There is strong advice for those who want toseriously invest in turning innovation talk intoaction. Five factors seem to play the greatest rolein helping to deliver innovative results:

• Make innovation a strategic priority.

• Demonstrate leader commitment.

• Create a culture that supports it.

• Align systems and processes.

• Collaborate broadly.

Make Innovation a Strategic PriorityGiven the degree of innovation success of theorganizations involved, it’s no surprise that thecall to innovation has been heard loud and clear.Leaders have internalized that innovation is a corepart of their organization’s business strategy forcontinued success, growth, or even survival.Innovation is seen as essential to movingorganizations from a defensive to an offensiveposition in the marketplace, being ahead ratherthan continually playing catch�up.

An executive from Blue Cross/Blue Shield statedthat innovation is now an explicit part of theorganization’s strategic plan.

A manager from Brady Corporation said iteloquently, �In this ever-increasing global economy,being innovative is critical to the sustainability andlong-term growth of any organization to helpdifferentiate that organization from the competition.�

It’s clear that a key factor in innovation success isconsistent messaging that innovation is critical to

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the organization’s strategy, not a fad or a passingpet interest of a select few individuals. Innovationis a priority and, as such, it should be takenseriously.

Demonstrate Leader CommitmentSaying innovation is important is not the same asshowing it. Demonstrated executive engagementmakes up another essential element of innovationsuccess�some even call it passion. Someorganizational initiatives can take hold at thefront�line and generate results from a modestgrassroots start. Innovation, although it mayindeed begin that way, requires a differentapproach. To gain needed momentum and sustainit, top�down support is a widely acknowledgedprerequisite.

�Without that, you can�t do anything.� Galemanager

It’s imperative for the senior team todemonstrate that innovation is a priority.Without that level of commitment, thechallenges working against innovation will winout and business as usual will reign�and itdoesn’t stop with executives. Leaders throughoutorganizational levels must be prepared todemonstrate their commitment. Staying thecourse and properly allocating time and resourcesare actions that speak volumes.

�Having that passion for it, that sells it at leastfor me. That�s something I really look for, thatsomebody�s committed that they really believein it.� Mettler Toledo manager

�It�s necessary that all the decision makers …believe in what you are doing, and they are ascourageous as you are.� Stabilo executive

Create a Culture that Supports itAlign Systems and ProcessesThese days, winning the innovation game requiresequal attention to two elements that might in yearspast have brought success alone. Leaders must createan environment that nurtures innovation, while alsoestablishing the systems and processes that facilitateresults. One manager explained that it’s a

�… balance of that loose environment on thefront end and tight environment on the backend that helps the products to go through.�Takata manager

Innovation can only flourish in a fear�free zone�aculture that promotes customer focus andadvocacy, constructive questioning and curiosity,as well as individual initiative. Experimentationmust be encouraged as a primary means forlearning and advancing ideas to the next level.

�On the softer side of things, it was creating anenvironment that really was different and


Creating a Culture of Innovation Leaders are pivotal in creating cultural norms.Innovative workplaces share the following culturalcharacteristics:

Context rich—Information feeds innovation. Leadersensure free-flowing communication so that innovatorscan draw on a richness of background and perspective.

Customer close—Creating customer value is central toinnovation. Doing so requires a deep commitment toconnecting with customer expectations, needs, andwants.

Confidence building—Innovative ideas are not broughtforward or executed by individuals who are fearful,

tentative, or waiting for confirmation. Leaders whobuild confidence build innovators.

Curious—Encouraging people to think in terms of“why?,” “why not?,” and “what if?” leads to newunderstandings and business opportunities.

Challenging—Resting on past success does not driveinnovation. Environments that encourage employees toreach for new heights inspire and enable innovativeresults.

Collaborative—Innovation is a team sport. People mustwork together in a variety of structures—from informalnetworks to officially sanctioned teams—to generate,advance, and implement new ideas.

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allowed people to think differently andencouraged different thinking in the earlystages, particularly as we kind of went throughthe first design of these new processes.�Physicians’ Mutual executive

The environment must contain an element ofchallenge.

�A strong culture that pushes people to feel thatthey need to be successful in their mission.�Toshiba America Information Systemsexecutive

�…failure tolerance but also they have to bedemanding. They have to push their people andreally make innovation a part of theobjectives.� SGL Carbon manager

Clearly, innovation does not just happen byattending to the “softer side of things,” or bychance. Smart people, good ideas, coolenvironments, even flashes of brilliance fall shortof business results in the absence of disciplined,yet flexible systems and processes to enableinnovation. Executives and managers consistentlyreferred to “gates,” “checkpoints,” “objectives,”“targets,” and “metrics” in their discussions ofwhat makes innovation happen. Innovation needsto be treated like the serious business that it is.

Collaborate BroadlyInnovation is an “all hands�all hearts�all minds”effort. Everyone’s strengths and talents need to bedeployed whether it is for creative idea generation orrigorous implementation. Everyone has a role to play.

�Innovation needs to be driven from all areas.It can�t come from a think tank somewhere orfrom upper management. The companies thatfoster that do much better.� Mettler Toledomanager

�Everyone owns innovation.� Vista manager

Effective collaboration both across theorganization and outside it creates the synergiesrequired for breakthrough thinking and soundexecution.

�There is almost nothing you could achieve justby your own knowledge or expertise.� Toshibamanager

Information sharing, idea exchange andgeneration, implementation planning, and follow�through must occur within groups, betweendepartments, functions, divisions, brands, plants,and even among countries. Customers, suppliers,and outside experts offer insights that spark newthinking.

Central to this innovation brand of collaborationis diversity. The richness of perspectives thatexist among those with highly technicalexpertise, as well as those with nearly none,those who have a depth of historical knowledgeor years on the job and the newcomers, thosewho think analytically and those who thinkimaginatively, varied educations andbackgrounds�all those differences need to becelebrated and leveraged.

In fact, “diverse” is a word that was spoken bynearly every business leader interviewed.


The Leader’s Role in InnovationAt the center of the leader’s role in innovation is thecapability to manage and facilitate a process that willbring results to a new level. A process creates acommon language and serves as a critical focal point forappropriately prioritizing and deploying the effort andenergy of all involved.

Innovative leaders:

• Commit to take definitive action to supportand make innovation happen by speaking

genuinely and backing up their words withaction.

• Generate the greatest quantity of and qualityof ideas possible by optimizing diversity andsparking new thinking.

• Shape and select promising ideas andopportunities.

• Enable execution by leveraging teamseffectively, managing change and problemsolving.

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�The more diverse a group you have … oftentimes … the greater amount of innovation youcan spark.� Unisys executive

Leading the Way: LeadershipCapabilities for SuccessAlthough every employee has a role in innovationsuccess, the leader’s role takes on particularsignificance. Given the challenges and potentialopportunities innovation represents, theimportance of developing innovation’s essentialcapabilities across leader levels can’t beoverstated. Executives and managers prioritizethe following key skills and behaviors as mostcritical to any innovative effort:

• Effective communication

• Thinking skills, strategies, and approaches

• Team formation and leadership

• Employee performance development

Effective CommunicationExecutives and managers resoundingly agree thatleaders must possess a range of communicationskills to effectively lead innovation.

�…our communication skills are weakening. Weoften just exchange e-mails instead of havingdirect conversation. The chances for innovationunder such circumstances will be minimal.�Toshiba manager

The ability to present and persuade acrossorganizational levels to diverse audiences receivedsignificant attention from managers andexecutives alike. Leaders must master both thecore skill of listening through to complexfacilitation of groups, at the same time managingmultiple issues, cultures, and ideas. They must beable to generate specific and targeted messagingthat is clear and consistent, as well as craft globalexpressions of the vision, and the big picture ofwhat innovation really means. They will need toshare information on plans and negotiate forresources, hold effective one�on�one meetings andmake group presentations, persuade internalstakeholders and communicate convincingly withcustomers and others in the marketplace.

Thinking Skills, Strategies, andApproachesExecutives and managers agree that innovationrequires a lot of different kinds of thinking. Thecapacity for strategic thinking, in particular, is ahighly prized commodity. A leader’s ability toobserve, analyze, interpret, make decisions, andact on complex data is frequently called intoaction. This skill set is essential when evaluatingand selecting ideas to pursue, as well as makingthe tough call to stop innovation projects at justthe right time. Business grounding and acumenprovide leaders with the baseline and contextneeded for their unique contributions to theinnovation process.

Team Formation and LeadershipGiven the make�or�break nature of collaborationto innovation success, it’s critical that leaders behighly skilled at encouraging high levels ofinvolvement, team chartering, facilitatingunderstanding, resolving differences, and teamdecision making.

Leaders must also be able to intelligently assembleteams capable of a range of activities, fromcreative idea generation to testing and evaluating,and fast and seamless execution. Today, leadersmust know how to carefully select the right mix ofteam members for each stage of the innovationprocess, being sure to consider such factors asexperience, technical expertise, geography and/orculture, discipline, and tenure to create a teamwith just the right mix of individuals capable ofdelivering innovative results.


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Employee Performance DevelopmentTo deliver innovative results, leaders must behighly skilled at supporting high levels ofemployee and team performance. Skills related toempowerment, creating a supportive environment, leveraging strengths, recognizing,redirecting, and holding people accountable go along way toward making innovation a reality.

�Innovation needs care and feeding.� ToshibaAmerica Information Systems manager

Executives expressed that leaders must excel atunleashing employee potential, curiosity, creativity,and openness to new ways of thinking. Managers,by contrast, emphasized the critical ability to setthe structure necessary for innovation. Defininggoals, objectives, and expectations, providingguidelines, establishing timelines, and providingfollow�up are all front of mind for implementation�oriented managers.

Individual Contributors: Partners inInnovation SuccessIn the spirit of true collaboration, the skillsrequired of individual contributors to makeinnovation happen mirror those required of leaders.

Executives and managers agreed thatcommunication is among the most critical skills thatindividual contributors must possess. Listening,sharing ideas, engaging in dialogue, and seeking tounderstand others form a needed foundation. Theability to persuade and educate diverse and variedaudiences across multiple levels within and outsidethe organization build on that foundation.

Individual contributors must develop and drawupon flexible, inquisitive, creative thinking stylesbalanced with analysis and logic.

�Folks who really think outside the box andpeople, yet who at the same time, can have their feet on the ground and understand what�sgoing on organizationally.� Physicians’Mutual executive

Paralleling the leader’s need to assemble and leadteams, individual contributors must have the skillsto collaborate effectively and make the most of

differences as they contribute to these carefullyselected teams. Discipline and excellence inexecution against individual and team goals rounds out the ideal profile.

ConclusionInnovation is a high stakes game with enormouspotential for gain and equally enormouschallenges. Organizations wishing to remainvibrant and viable must take the steps necessary toinstill and sustain the culture, systems, structures,and skills for innovation success.

Ask the following questions:

• How does our organizational culture support connecting with customers inmeaningful ways?

• Do we have the organizational diversity tospark new thinking?

• Do we have the discipline, resources, andskills to successfully execute innovation allthe way to the goal line?

• How change�capable is our organization?

Your success lies not only in your answers, but alsoin what you are prepared to do if you don’t like theanswers.


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About the ResearchAchieveGlobal identified a need to investigate theconcept of innovation in the workplace. Theobjective of the research was to understand thecomponents of innovation and its behavioraldeterminants and individual competencies necessaryto bring about business results.

A preliminary literature review provided valuableinformation to guide our understanding ofinnovation. In order to properly explore the topic inpractical terms, we conducted in�depth interviewswith individuals from a variety of organizations. Weengaged discussions among executive level membersof organizations, as well as mid�level members.Interview guides were used to focus the conversationon issues surrounding how innovation is defined,supported, and practiced in organizations.

We used our internal database of prospects andclients, our professional networks, and ourinternational partners to identify possible candidatesfor the research. To ensure we only includedorganizations who excelled at innovation, we usedBoston Consulting Group’s �� list of the “Top ��Most Innovative Companies” as a filter.

Our final sample of �� interviews includedrespondents from a broad range of organizations andindustries across the globe.

During the research, we spoke with a diverse groupof individuals from a wide array of industries in avariety of locations. Industries include �but are notlimited to�:

Dry Pasta Mfg; Direct Health and MedicalInsurance Carriers; Prefabricated MetalBuilding and Component Mfg; Sign Mfg;Photographic and Photocopying EquipmentMfg; Medicinal and Botanical Mfg, ComputerSystems Design Services, WiredTelecommunications Carriers; Search,

Detection, Navigation, Guidance,Aeronautical, and Nautical System andInstrument Mfg.; Offices of Bank HoldingCompanies; Periodical Publishers; PrecisionWeighing Instrumentation;Telecommunications Resellers; Dry,Condensed, and Evaporated Dairy ProductMfg.; Direct Property and Casualty InsuranceCarriers; Crude Petroleum and Natural GasExtraction; Lead Pencil and Art Good Mfg;Iron and Steel Mills; Motor Vehicle PartsManufacturing; Book Publishers; TravelArrangement and Reservation Services;Communications Equipment Manufacturing;Computer Systems Design Services; andWireless Telecommunications Carriers;Photographic and Photocopying EquipmentMfg.

Interviewees were located in the following countries:Canada, Germany, Indonesia, Italy, Japan, Malaysia,Philippines, Singapore, Switzerland, Thailand, UK,and USA.


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Books and Professional ArticlesAmabile, Teresa M., Regina Conti, Heather Coon,Jeffrey Lazenby and Michael Herron. ��.“Assessing the Work Environment for Creativity.”Academy of Management Journal. �� , ��.

Amabile, Teresa M., Karl G. Hill, Beth A. Hennessey,and Elizabeth M. Tighe ��. “The WorkPreference Inventory: Assessing Intrinsic andExtrinsic Motivational Orientations.” Journal ofPersonality and Social Psychology. � �, � ��.

Axtell, C.M., D.J. Holman, K.L. Unsworth, T.D.Wall, P.E. Waterson and E. Harrington. ��.“Shopfloor Innovation: Facilitating the Suggestionand Implementation of Ideas.” Journal of Occupationaland Organizational Psychology. ��, � �� .

Choi , Jin Nam. ��.“Individual and ContextualDynamics of Innovation�Use Behavior inOrganizations. Human Performance. ��, ��.

Cooper, Dr. Robert G. ��. Stage�Gate System.http://www.prod�dev.com/stage�gate.shtml. Accessed�/��. Product Development Institute.

Drazin, Robert and Claudia Bird Schoonhoven.��. “Community, Population and OrganizationEffects on Innovation: A Multi�Level Perspective.”Academy of Management Journal. �� , � ��.

IBM Global Business Services. ��. “Expandingthe Innovation Horizon: The Global CEO Study��.” IBM Corporation.

Isaksen, Scott G., Kenneth J. Lauer, Goran Ekvall,Alexander Britz ��. “Perceptions of the Best andWorst Climates for Creativity: PreliminaryValidation Evidence for the Situational OutlookQuestionnaire.” Creativity Research Journal. ��,��.

Jex, Steve M. ��. Organizational Psychology: AScientist�Practitioner Approach. John Wiley & Sons,Inc. New York, NY.

Joy, Stephen. ��. “Innovation Motivation: TheNeed to be Different.” Creativity Research Journal.��, ��.


Mathisen, Gro Ellen and Stale Einarsen. ��. “AReview of Instruments Assessing Creative andInnovative Environments Within Organizations.”Creativity Research Journal. ��, ��.

McLean, Laird D. �� . “Organizational Culture’sInfluence on Creativity and Innovation: A Review ofthe Literature and Implications for Human ResourceDevelopment.” Advances in Developing HumanResources. ��, ��.

Nohria, Nitin and Ranjay Gulati. ��. “Is SlackGood or Bad for Innovation?” Academy ofManagement Journal. �� . �� .

Potosky, Denise and H.V. Ramakrishna. ��. “TheModerating Role of Updating Climate Perceptions in the Relationship Between Goal Orientation, Self�Efficacy, and Job Performance.” Human Performance. ��, ��

Scott, Susanne G. and Reginald A. Bruce. ��.“Determinants of Innovative Behavior: A PathModel of Individual Innovation in the Workplace.”Academy of Management Journal. ��, ��

Zairi, Mohammed and Majed Al�Mashari. �� .“Developing a Sustainable Culture of InnovationManagement: A Prescriptive Approach.” Knowledgeand Process Management. ��, ��.

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About the AuthorsCraig Perrin, Director of SolutionDevelopmentAs AchieveGlobal’s Director of SolutionDevelopment, Craig is a thought�leader who workscross�functionally and with clients to guide creationof a range of responses to market needs. Since ��,he has played a central role in developing thecompany’s flagship programs in leadership, sales, andcustomer service; co�authored two best�sellingbooks; written many articles and position papers;and produced eLearning and video that have earnedscores of national and international awards. In ��,Craig was named Times Mirror Editor of the Year.Craig’s positions before AchieveGlobal includecurriculum designer, stand�up facilitator, collegeinstructor, and art curator. Craig holds a B.A. andM.A. from San Francisco State University.

Chris Blauth, Director of Product StrategyChris spearheads AchieveGlobal’s efforts to developand maintain products that will prepare leaders at alllevels of an organization. He has also been involvedwith Web�based learning, launching an asynchronousWeb�based tool to reinforce the skills taught inAchieveGlobal’s flagship sales program, ProfessionalSelling Skills®. Prior to joining AchieveGlobal, Chrisspent seven years with Leica Microsystems, Inc.,where he was a financial analyst and productmanager. Chris holds a B.S. in Accounting andFinance from the University at Buffalo, and an MBAin Marketing from Canisius College. He is a memberof Beta Gamma Sigma Honor Society and theAmerican Management Association.


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About AchieveGlobalIn the �st century, the level of human skills will determine organization success.AchieveGlobal provides exceptional development in interpersonal business skillsgiving companies the workforce they need for business results. Located in over ��countries, we offer multi�language, learning based solutions�globally, regionally, andlocally.

We understand the competition you face. Your success depends on people who havethe skills to handle the challenges beyond the reach of technology. We’re experts indeveloping these skills, and it’s these skills that turn your strategies into businesssuccess in the �st century.

These are things technology can’t do. Think. Learn. Solve problems. Listen. Motivate.Explain. People with these skills have a bright future in the �st century.AchieveGlobal prepares you for that world.

World Headquarters8875 Hidden River Parkway, Suite 400Tampa, Florida 33637 USAToll Free: 800.456.9390 www.achieveglobal.com

© 2009 AchieveGlobal, Inc. No. M01265 v. 1.0 (08/2009)

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