Vice President, Innovation & Strategy
Bank of the West
What is more impactful? Innovation or leadership? The theme for this e-Bulletin presents a quandary for me. Innovation can definitely serve as a catalyst for leadership and growth, but what motivates innovation to begin with? It’s easy to get caught up in a discussion of great “swing for the fences” technology efforts that led to the first successful moon shot, decoding of the human genome, first self-driving cars, and so on. What is often missed is an examination of what spurred or allowed those and lesser innovations to happen in the first place.
Invention creates possibilities. More often than not, leadership provides the fuel and direction that enable the successful commercialization of invention (i.e., innovation). Neither invention nor leadership by themselves can drive engines of innovation that create and sustain business growth. In successful businesses that experience consistent and sustainable growth, innovation and leadership are intertwined and reinforce each other to ultimately create a culture that thrives on challenges and delivers valuable products and services to its customers.
The most innovative companies foster cultures where leadership and innovation are so intertwined as to be inseparable. From the microcosm of small teams to the macrocosm of entire organizations, these successful innovators understand this self-reinforcing concept. One cannot be sustained without the other. Smart leadership understands that consistent innovation doesn’t normally result from big-bang experiments occurring in isolated “clean rooms” walled-off from the rest of the business. If anything, these leaders understand that sustained innovation is difficult, stressful, and even messy at times. Things break and emotions come into play. However, it is steadfastness in the face of this volatility that separates the greatest innovators and their higher growth companies from the pack of innovation tinkerers; the latter are not willing to put forward the effort and resources required to build and sustain cultures that embrace tolerance of risk and doing things differently. A long history of abandoned innovation initiatives speaks to many businesses’ inability to remain focused and consistent, if not patient, in their desire to realize near-term benefit from innovation-related investments. Irrespective of product or service focus, many organizations cast off innovation efforts when business climates toughen. This speaks directly to the role of leadership, or lack thereof.
There are variants of models and best practices for innovation. Ruling out unproven ones lacking in qualitative and quantitative corroborative data, there is a reason for this. That reason is the richness and diversity of company cultures. These differences reflect any number of characteristics from scale, to core competencies, to adaptability, to identity, and more. Successful organizations understand their inherent culture knowing that their respective innovation and growth trajectory will most likely resemble the zigzag path of a sailboat tacking in the wind rather than the smooth curve of a rocket. They will navigate a path that enables transformation over time while reaping benefits from innovation practices that produce near-term and mid-term successes, even if more incremental than market disruptive.
Absolutely, innovation can serve as a catalyst. It is certainly doing so in my industry. Traditional financial institutions are responding to pressure from emerging fintechs and peers, whether employing alternative credit models in marketplace lending, robo-advisors in wealth management, or machine learning in fraud detection. These are external motivators. They are effective but only to a point. The true measure of success in leveraging innovation for growth is in the application of leadership to help imbue the organization’s DNA with self-motivated innovation, creating a self-sustaining engine of growth.
As a Strategy Consulting Principal at HP, and Director of Ecosystem, Co-Innovation Lab, and Products & Innovation at SAP Mike was instrumental in transforming software design and development methods for innovation and new product development, guiding co-development of an industry-disrupting business model and forging strategic partnerships to realize 100% growth in an innovation lab’s portfolio while securing multi-$M investments.