What CEOs say drives better innovation … Faster ideas + Smarter decisions + Top commitment + Entrepreneurial sprit

December 5, 2019

Faster ideas drive better innovation

Speed is important for innovation in part because first-mover advantages can translate to market-share dominance. But in an increasingly digital world, speed isn’t merely nice to have, it’s an imperative. Companies that can’t keep pace with fast-changing technologies and consumer expectations run the risk of falling behind nimble competitors. Innovative CEOs prioritize speed in innovation. Their ideas range from not waiting for a “bolt from the blue” to pursue innovation, to moving at “double time” using a test-and-learn approach that enables quick direction changes, to partnering with other organizations to acquire expertise that might take too long to develop internally.

Don’t wait for a “bolt from the blue” says HANS VESTBERG, VERIZON

“Real innovation is usually not a ‘bolt from the blue’ event. The real source of most innovation is iteration—the process of building upon earlier ideas. In fact, I’d say 80% of innovation comes from incremental gains on already begun processes, while 20% comes from wholly new ideas. If you throw away or discount that 80%, you undermine the very foundations of innovation itself.”

Lift and shift the best ideas says JAMES QUINCEY, THE COCA-COLA CO.

“We use a test-and-learn approach that allows us to respond to ever-changing consumer preferences. When we commit to a new product, we quickly move to scale. Our market teams are empowered to innovate based on local preferences, and we work to lift and shift the best ideas across the world.”

Welcome outsiders to accelerate new thinking says MICHAEL SCHLEIN, ACCION

“We have worked hard to become a magnet for innovation from around the world. Our global team finds, supports, and learns from local innovators solving problems that prevent people from realizing their potential. We foster innovation by advising, investing, influencing, and partnering—holistically—to drive progress. We continuously bring on and benefit from new talent who expand and improve our work.”

Smart decisions drive better innovation

Companies can go fast but get nowhere if they don’t have a roadmap to guide them. For many companies, that roadmap is built on data, although intuitive choices are becoming more important too, particularly when looking ahead amidst change and uncertainty. Innovative CEOS put great stock in using data to drive decisions around their innovation initiatives. Many actively seek to capitalize on the latest technology. They use data to better understand their customers—and to measure results. Yet for all their reliance on data, they remain cognizant of the fact that it’s not the only source of innovation insights.

Take smart risks says JAMES QUINCEY, THE COCA-COLA CO.

“Our task is to take a 133-year-old company and position it for the digital future. Data is the key to knowing our consumers— their preferences, their behaviors, and how they want to interact with us. The way we engage a consumer in one zip code may be completely different from our approach in the next one. We are using data to take smart risks, accelerate how long it takes us to go to market, and constantly put the customer at the center of everything we do. We must do all this while also being responsible stewards of their data and respecting everyone’s right to privacy.”

Kill the “zombies” says JAMES QUINCEY, THE COCA-COLA CO.

“We have a formal stages-and-gates process that helps drive our innovation efforts. We’ve also developed a disciplined approach to innovation that includes a leader-challenger- explorer framework, as well as something I like to call ‘killing zombies.’ Killing zombies means getting rid of stuff that’s not working. We analyzed about 2,000 of our beverage product launches over five years and found that 30% contributed only 1% in volume. In 2018, we killed more than 700 zombie products, which allows us to redeploy resources in areas where we see more growth opportunities.”

Don’t forget ethics says MARC BENIOFF, SALESFORCE

“Preserving trust is a prerequisite for innovation. As we’ve innovated with artificial intelligence (AI), we’ve learned that we must guard against the unintended consequences of deploying powerful technologies—such as introducing bias into AI-powered decisions or products that could be used in harmful ways. We realize that the ethical and humane use of technology, especially within the context of the Fourth Industrial Revolution, must be clearly addressed, not only by us, but by our entire industry. We have to make sure that technology strengthens our societies instead of weakening them, and that technology is applied to improving the human condition. To address this concern, we established the first-ever Office of Ethical and Humane Use of Technology, which merges law, policy, and ethics to develop and implement a strategic framework for the ethical and humane use of technology across Salesforce.”

Remember, the customer isn’t a packet of ones and zeros says HANS VESTBERG, VERIZON

“Companies can obviously gain a great deal from a data-driven approach to decision making on innovation. We are trying all the time to sharpen our use of data to improve our understandings of the customer. But we must never lose sight of the fact that the customer is a human being, not a packet of ones and zeros. As we improve our mastery of data, it is imperative that we retain our humility about just how much—and how little—data can actually tell us. That may be especially important in an industry like telecommunications, which is so tightly woven into people’s lives. Our products and services influence how people play, work, flirt, learn, mobilize, and seek help. It’s a uniquely human industry in that regard, and while we should always seek to learn from data, we should never let data fully supplant our own human understandings of how best to serve our customers across an ever-evolving range of needs and expectations.”

Top commitment drives better innovation

An explicit commitment to innovation can go a long way toward making it a reality. Innovative CEOs demonstrate their commitment to innovation in ways that would be hard for their employees to miss, from providing tangible rewards for innovative behaviors to expressly voicing the idea that failure, within boundaries, is not a loss but a learning opportunity.

Lead for today, think for tomorrow says DR. RUTH BROWNE, RONALD MCDONALD HOUSE NEW YORK

“As chief executives, it’s our job to lead and develop senior staff through a process of thinking about innovation—while also keeping our fingers on the pulse of what’s happening internally and externally. My own approach has been to take stock of, and account for, what is required to keep the organization delivering on its current obligations—while also building and institutionalizing the infrastructure that will allow us to get to next steps. We chalk out the future by asking strategic questions. Where does Ronald McDonald House New York live in the future? And personally as CEO, I am building our vision with an intentional eye to the future—and leveraging the talent and technology that can take us and keep us there.

Seek audacity says MICHAEL SCHLEIN, ACCION

“The magnitude of the problem that we’re trying to solve— helping nearly half of the planet left out of or poorly served by the formal financial sector—is immense and humbling. We’re just one organization, and it will take a global effort to create a financially inclusive world. Since the beginning, we’ve attracted people with the audacity to think they can make a difference.”

Go further with fewer says JOHN DONAHOE, SERVICENOW

“As a company that is rooted in innovation, we run the risk of trying to do too much at once. That’s why I push my team to sharpen priorities to focus on what I call the ‘critical few’—and go further with fewer.”

Seize on ideas that scale says GINNI ROMETTY, IBM

“Like many technology companies, IBM has wrestled with finding or creating sufficient skilled workers for in-demand careers. As we approached this challenge, our focus was twofold: Create programs that work and that scale easily. That second part is crucial. There have been many classroom proofs of concept supported by well-known technology companies, but we know from our role as a global innovation company that the efforts withthegreatestimpactarethosethatcanbereplicatedatscale.”

Entrepreneurial spirit drives better innovation

Culture, the saying goes, beats strategy. Having a culture that embraces change, diversity of opinion, and risk-taking can go
a long way toward facilitating innovation. By contrast, a culture wedded to old ways of doing things and leery of experimentation is almost certain not to excel. Innovative CEOs take culture seriously. They prize diversity in the workforce because they know that looking at challenges from different angles and backgrounds can yield ideas and insights that otherwise might be missed. They encourage continuous learning and the sharing of information, both within the enterprise and with external partners. And they know they can’t let their organizations become so rooted in the past that they miss the future.

Reframe innovation as business as usual says MICHAEL CORBAT, CITIGROUP

“For Citi, innovation is business as usual, both in the here and now and looking ahead. We make innovation central to every aspect of what we do and how we do it. By looking at technological advances, regulatory changes, and social and behavioral shifts, our goal is to pinpoint the irreversible, accelerating trends that convey the clearest picture of where the market is heading.”

Break rituals says HANS VESTBERG, VERIZON

“A company as big and successful as ours is inevitably going to build up a lot of habits and rituals and assumptions about what works. Most of those are quite handy. We wouldn’t be a Fortune 20 company if we didn’t have a track record of success and sound practices. But there’s a real risk that such success can make it harder to make the changes we need to make in order to compete in a constantly evolving marketplace. We need to be willing to break rituals, do things differently, and approach our competitive challenges with a mindset that is fundamentally different from what we’ve used in the past.”

Treasure “wild ducks” says GINNI ROMETTY, IBM

“There’s a saying at IBM: Treasure ‘wild ducks’—the independent thinkers. Half a century ago, Tom Watson Jr., our second CEO and the son of IBM’s founder, said, ‘Every business needs its wild ducks, and at IBM we try not to tame ours.’ It means that we are receptive to new and radical ideas—even if we don’t always agree with them.”

Stay hungry, stay humble says JOHN DONAHOE, SERVICENOW

“I ask all of our employees to stay hungry and humble, and to think about being open to learning new things and embracing change, fostering collaboration, learning from failure, and creating an environment that celebrates diversity, inclusion, and belonging. The key to innovation is getting everyone, not just leadership, aligned and committed to our purpose.”

Look afar for potential disruptors says HANS VESTBERG, VERIZON

“The primary competitive challenge Verizon faces is not from any of the other big-name telecom companies. It’s from the next creator of a technology or process that radically upends our entire industry, our entire business model. If anything, the waves of disruption and innovation are becoming stronger and stronger all the time—and our company’s innovation efforts are all about preparing Verizon to ride those waves successfully.”

And what makes an innovative CEO?