Don’t Assume Your CEO Shares Your Innovation Vision


Our latest research with InnoLead highlights that the key to successful innovation is alignment between senior leaders and innovation teams. Yet earlier research by KPMG shows a clear disconnect between what most CEOs expect from innovation and how the company’s innovation strategy is executed.1

We found that gaps are prevalent in how CEOs versus other innovation decision-makers view everything from innovation goals and drivers to approaches, owners, and outcomes. Improving alignment around innovation is an urgent priority. It may sound like a lengthy, complex undertaking, but it starts with a conversation. Asking the following six questions of your CEO can be a great starting point.

1. What does innovation mean to you?

Lou Trebino, Audit Chief Technology Officer at KPMG LLP

Disruption? Transformation? Digitalization? Invention? Novelty? Each CEO may have a different perspective on what innovation is and what drives it. One CEO could see innovation as a reaction to external forces, such as technology advancements and emerging use cases from VCs, startups, think tanks, and other industries. Another CEO may have more of an inside-out philosophy, investing in organic growth and building an environment that cultivates bold ideas from all corners of the organization. A third may believe that impactful innovation consists of a confluence of inside-out and outside-in efforts.

Why ask the question? If your team’s definition of innovation differs from your CEO’s, the opportunity to create tangible value or impact will be limited.

2. Why do you want to innovate?

Most CEOs say they want to innovate: to drive efficiency and profitability; make a difference; meet customers where they are; gain competitive advantage; and capitalize on disruption created by new technologies, among other factors. Tying innovation to strategic priorities is critical. However, it isn’t always easy to do, since most corporate innovation programs are decentralized in individual business units. This barrier is supported by recent research from KPMG: Thirty-seven percent of innovators we recently surveyed say innovation comes from skunkworks, and 69 percent say that functional silos cause operational dysfunction that stands in the way of innovation.2

Why ask the question? If you pursue innovation initiatives that are closely tied to strategic imperatives, it will help accelerate your organization’s progress toward its larger objectives, driving greater value sooner.

3. What do your customers expect and demand?

Martin Sokalski, Principal, Advisory, KPMG LLP

Understanding trends in your customers’ behavior and needs is essential for creating an innovation strategy and action plan that drive toward a better future. This insight is like a guiding light toward the best opportunities for innovation. The 2022 KPMG Global Customer Experience Excellence Report3 shows that leading brands invest considerable time and effort in anticipating customers’ future concerns, needs, and pain points and seeking to be present in their customers’ lives when these changes occur.

Why ask the question? The most successful and impactful products, services, and experience are based on unmet customer desires and requirements.

4. Does your organizational culture cultivate or stifle innovation?

Innovation should be integrated into everything an organization does and be supported by a culture that consistently enables it. It is not an activity, but a mindset. Not an event, but a consistent theme behind how you run your business. Not a way to get from point A to B, but an ongoing journey of advancement and improvement. Not one-off, but pervasive.

Why ask the question? Analyzing your company’s innovation philosophy will help you understand where current innovation structures, practices, and capabilities may be falling short.

5. How expansive is your innovation ecosystem?

Innovating with impact requires an ecosystem of diverse tools, people, capabilities, partners, and insights — not a group of technologists operating in a bubble. It requires a network that is both global and local, macro and micro, internal and external. A network that comprises stakeholders and collaborators, with input from industry and functional players, innovation champions, startup communities, academia, customers, and investors, among others. New ideas and solutions, inside and out, must be incubated and accelerated, while the organization provides incentives and opportunities to bring innovative concepts to fruition.

Why ask the question? Integrating a wide variety of external and internal signals will guide your organization in the direction of real transformative opportunity.

6. How do you measure innovation success?

Plotting the right innovation program and staying on track require a shared understanding of what it means to succeed. But metrics used to evaluate innovation outputs do not consistently tie back to innovation goals. Forty-three percent of CEOs say they measure the return on innovation investment by looking at profits, despite 50 percent having a vision for transformational (versus incremental) innovation.4

To make sure your innovation metrics match your innovation strategy, consider what is being measured, qualitatively and quantitatively, as an innovation output (e.g., profit versus customer satisfaction score).

Why ask the question? Metrics that are not aligned with top-line innovation goals may create friction along the journey toward long-term innovation.

Final Thoughts

When you understand your organization’s broad innovation vision, you can map the internal innovation work to match it, making your efforts more valued, meaningful, and ultimately successful. Set your innovation program transformation journey off on the right foot with these six questions for your CEO.

1 Enterprise innovation: The vision-execution gap: (2022 KPMG U.S. Innovation Study)
2 Enterprise innovation: The vision-execution gap: (2022 KPMG U.S. Innovation Study)
3 Orchestrating the connected customer experience: (2022 KPMG Global Customer Experience Excellence Report)
4 Enterprise innovation: The vision-execution gap: (2022 KPMG U.S. Innovation Study)

Martin Sokalski is a Principal in KPMG U.S. and a leader in Digital Strategy, Emerging Technologies, and Innovation. A professional services leader with more than 23 years of advisory experience, Martin helps organizations embrace the “art of possible” and achieve desired business outcomes that are made possible by combining digital and innovation.

Lou Trebino is the Audit Chief Technology Officer at KPMG LLP. He is a technology and innovation leader with a focus on technology-enabled business transformation. Lou assesses business situations and provides insightful strategic planning and execution including technology solutions, executive communications and collaboration. Skilled in creating and leading program and project management organizations for business and technology transformation solutions, he also is an experienced executive and speaker on business technology innovation and collaboration.