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Nick Boulter, MD of Hay Group, presents the secrets of success to innovation and sustainability at at London Business School's China Business Forum on 10 November 2012. In a world where there is an abundance of ideas, Boutler identifies the obstacles to executing innovation. Watch the video footage of the event at: http://bit.ly/innovationCBF
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Innovation and sustainability: Secrets of success
10 November 2012
2 © 2012 Hay Group. All rights reserved
World most admired companies in 2012 Source: Fortune/Hay Group
Most admired Most innovative in sector
1 Apple 1
2 Google 2
3 Amazon.com 1
4 Coca-Cola 1
5 IBM 1
6 Fedex 1
7 Berkshire Hathaway 1
8 Starbucks 1
9 Procter & Gamble 2
10 Southwest Airlines 5
14 BMW 1
15 General Electric 3
23 Singapore Airlines 1
3 © 2012 Hay Group. All rights reserved
Break-through ideas are often not the problem – leadership and
deployment or execution are the issues
4 © 2012 Hay Group. All rights reserved
Different types of innovation
New-to-consumer products and services that do not currently exist
New products and services for existing customers and new customers
Changes to existing products, services and processes
including cost reduction efforts
5 © 2012 Hay Group. All rights reserved
94 90 90
49 4753
0102030405060708090
100
My company runsunprofitable projects to try
new things
Employees spend muchtime discussing customers'
future needs
Leaders are effective athelping frontline employeesunderstand our long-term
strategy
Per c
ent o
f res
pond
ents
Top 20All others
Setting the stage for innovation
BCLs allow people to innovate smartly
Source: Hay Group 2011 Best Companies for Leadership study
6 © 2012 Hay Group. All rights reserved
100 10090 90
66 6863 62
0102030405060708090
100
To solve problems,leaders gather points of
view from multipleperspectives
My company providesstructured opportunities
for younger employees topromote innovative ideas
If you have an excellentidea you may bypass thechain of command with
no negativeconsequences
Ideas that come fromsubsidiary leaders are
just as likely to beimplemented as those
from headquarters
Per c
ent o
f res
pond
ents
Top 20All others
Broader perspectives – creating room for new ideas to be heard
The BCLs expand the pool, casting a wide net for ideas
Source: Hay Group 2011 Best Companies for Leadership study
7 © 2012 Hay Group. All rights reserved
95 95 9585
5161 61
39
01020
3040506070
8090
100
Balanced mix of localand international talent
in senior leadershippositions
Leaders are culturallysavvy and have the skillsto work effectively with
diverse teams
An appreciation of globalissues is a key jobrequirement in this
organization
Company recruits culturalminorities
Per c
ent o
f res
pond
ents
Top 20All others
Broader perspectives – ensure difference is valued
BCLs actively ensure cultural breadth and flexibility
Source: Hay Group 2011 Best Companies for Leadership study
8 © 2012 Hay Group. All rights reserved
“The basic problem confronting an organisation is to engage in
sufficient exploitation to ensure its current viability and, at the same time, devote enough energy to exploration to ensure its future
viability” (Mach)
9 © 2012 Hay Group. All rights reserved
“If I have listened to customers, I will be providing them with faster
horses” (Henry Ford)
10 © 2012 Hay Group. All rights reserved
Being large and successful at one point in time is no guarantee of continued survival: - life expectancy of firms in S&P 500:
1935: 90 years 1975: 30 years 2005: 15 years (Foster and Kaplan)
11 © 2012 Hay Group. All rights reserved
“It is not the strongest of the species that survive, nor the most intelligent, but the one that is most responsive to change”
(Charles Darwin)
12 © 2012 Hay Group. All rights reserved
n Leaders embrace both “exploitation” and “exploration”
n Articulate a strategic vision n Top team combines both, works together, and has
dynamic capabilities n Values, structures, processes to support n Open eco-system n Learning organisation
13 © 2012 Hay Group. All rights reserved
Ambidextrous organisations
Janus is a Roman god: he had two sets of eyes, one pair focusing on what lay behind, and the other on what lay ahead