Imagine yourself as a new executive leading an organization that struggled to see growth similar to those of bigger, more effective organizations in your industry. If you’re like many other leaders in that position, you turn to poaching from your competitors. Sometimes, if you want to grow like your competitors you need to have the kind of leaders your competitors have.
This is the context many newly-arrived executives find themselves in. An organization usually brings in an outside executive to get access to new thinking. To meet the needs of their new organization, an executive’s first mission is typically to articulate a bold vision and agenda that propels a business into a new strata of success.
Consider that articulating a bold agenda is the easy part. The hard part comes in implementing that agenda. Using one’s expertise and outside perspective to design a new strategy is often done without regard to the realities of what it takes to implement that strategy inside the host organization. Challenges arise when that strategy is implemented by people across an organization that doesn’t share an outside leader’s expertise, commitments, or concerns.
The challenge that innovation teams have mirrors the challenge that an executive faces when they are new to an organization. Both set out with big visions: new markets, new products, explosive growth. Both must contend with an organization’s formula-for-success if they want to make lasting change. By understanding how successful innovation is brought to large, well-entrenched organizations, we can also illuminate what makes an executive successful in their mandate.
Innovation is typically thought of as bringing something new to the market through out-of-the-box thinking. We are frequently told to ‘think big’ or to envision a future unconstrained by what we currently consider to be our organizations’ strengths and weaknesses. Much of what we are told works about creating innovation encourages us to put aside everything we know and begin from a blank slate.
That is not the only way to innovate. Among the many disciplines of innovation out there, it’s one of the weak ones—as illustrated by the following two-part exercise. First, think of a few ways you could innovate your business. Before moving forward, identify a few answers to this question.
Next, think of a few ways to innovate your business in such a way that your average customer changes the frequency of their payments to your company. Imagine, for example, that if they purchase your company’s products once a month they instead purchase them once a year, or even once a decade. They’d very likely be buying a different kind of product, or at least buying in a fundamentally different manner. What would they be buying?
Whatever it is, your answer to the question is innovation.
Chances are, you found it easier to create an innovative idea from the second set of questions. The addition of the purchase price in the innovation challenge is a constraint. Constraints orient our thinking by giving us a familiar place to start. We can combine and manipulate two things we know well—your current line of products and your customers’ average purchase price—and create something new. Innovation is made much easier by imposing constraints, exploring possibilities, and repeating until an exciting idea emerges. The clearer and more defined the constraint, the easier it is to innovate.
The problem is many people in large organizations take for granted the constraints in front of them and spend little time exploring alternative constraints; they simply create innovation from the same set of constraints. Companies in the consumer goods companies have faced the same constraints for decades— limited shelf space being the most pressing. As a result, these companies have mastered the art of exploiting shelf space. It has become a formula for success (an approach that works inside of a given set of constraints) for many industry players. But what good is that formula for success in a world where selling products online means a completely different set of constraints? To truly innovate we must not simply ask what new product our organization can develop, but what new constraint can we impose that will stimulate disruptive thinking. Without stepping back and working on the constraints to our thinking, no one—be they product innovation teams or new executives—can innovate disruptively.
There’s a deeper irony in the preceding thought experiment. We are far better suited to generate innovation when we are already intimate with the current business. To think in an unconstrained manner, we first need to be informed by our current constraints. It’s hard to know how to change the frequency of a customer’s payment schedule if we don’t know what the current payment schedule is now. This is the lesson for leaders joining an organization: to generate something new for your organization you first must ground yourself in your organization’s formula for success.
New executives are asked to bring outside ideas into their new organizations or to challenge their group’s thinking. At the core of every executive’s mandate is to shift the direction of their organization. Whereas innovation is typically thought of as the art of bringing something new to the market, the art of executive leadership is bringing something new to their organizations. Unless a leader specifically articulates historical formulas for success, the people of the organization will continue to frame their thinking in terms of the constraints they’ve used for years.
New executives don’t have it easy. They are expected to perform and show their impact quickly. Rushing into a new role armed with the insights of what worked elsewhere does not mean those strategies will work in their new organization. By first grounding oneself in how people think about innovation—in short, the constraints they employ in their thinking—can a new leader quickly stimulate the thinking and skills necessary for a breakthrough.