I used to think that if I just yakked long and loud enough, I could convince CEOs to embrace transformational innovation. It took me 25 years as a road warrior consultant, author, and accidental government bureaucrat to realize that proselytizing doesn’t work. If leaders don’t want to change, all the consulting jargon and fancy PowerPoints in the world won’t convince them to.
In those situations, no matter what lofty rhetoric the CEO uses in public or at company retreats about “creating an innovation culture” and encouraging everyone to think outside of the box, the best result you can hope for are incremental innovations to improve the performance of today’s business model. You never get transformational new business models — and you always get frustrated if you were hoping for bolder change. If you want transformational innovation, you have to find leaders who want transformational change and are receptive to organizing differently for tweaks than for transformation. After learning this lesson the hard way over many years, I no longer try to convince CEOs who don’t want to change, and instead try to find those CEO’s who do.
Here’s my list of 10 questions you can ask a CEO to tell if they are really serious about transformational innovation:
- Do you agree transformational innovation goes beyond breakthrough products to include business model innovation — entirely new ways to create, deliver and capture value?
- Will your employees tell me that failure is a career-limiting move, or that the company celebrates experimentation?
- How much time do you spend strengthening and protecting the current business model, versus designing the next one?
- Do you have clear and discrete objectives for both incremental and transformational innovation? Do you organize differently for each?
- Does your organization invest in R&D for new business models as it does for new products, services, and technologies?
- Are you prepared to have your organization disrupt itself? How do you see that playing out?
- Do internal ideas and projects that threaten to cannibalize the current business model get squashed — or nurtured?
- Do you have a process for allocating resources for transformational innovation projects that lies outside of the control of business units?
- Do executives with responsibility for exploring transformational business models report to you, or to another line executive responsible for today’s business?
- Are you willing to create a sandbox to explore transformational business models? Would you carve out a part of your current business/market to serve as an ongoing real-world innovation lab?
A few words of advice about using these questions in the real world… Tread lightly, since no CEO likes to be put on the spot and drilled with a laundry list of questions. Pick a few of the ten to put into your own words to help you discern whether the company you work for, or are thinking about working for (or with), has a leader who shares your appetite for transformational innovation. Better to know what kind of environment you’re going into in advance than to learn painful lessons later.
Kaplan is the host of the annual Business Innovation Factory conference in Providence, on Innovation Leader’s list of must-attend events. He’s also the author of The Business Model Innovation Factory: How to Stay Relevant When the World is Changing.