If you’re a CEO reading the headlines in 2017, things aren’t terribly reassuring. Many of the companies named above were already investing heavily in innovation—Target and GE, for instance, each had several initiatives focused on working with startups, tapping into outside expertise, and attracting new kinds of talent.
So is the message to CEOs that they should make bigger, bolder bets? Or turn to strategies that are guaranteed to deliver a return, like cutting staff, raising prices, shutting down underperforming stores, and outsourcing non-core operations?
We wanted to explore how CEOs think about innovation-driven growth—and the costs of investing in projects that may not have a clear payoff. So we spoke with current and former CEOs of companies like Google, Staples, Crate & Barrel, and UPS, as well as leadership professors at Harvard Business School and Stanford University.
Our big questions: what role should the CEO play in fostering innovation? And how can corporate innovators best work with the CEO to identify and pursue sources of future growth?
We also worked with the design firm L-Dopa to create a set of four playing cards (see below) that represent the different roles that CEOs can play, from cost-cutter to innovation advocate. Do any of them resemble someone you’ve worked for?
The Visionary sees himself as the source of all innovation, and doesn’t worry about getting too deep into the weeds when new products and services are being designed. The upside? Everyone at the company knows innovation is a priority. The downside? Listening to him repeat the same Steve Jobs anecdotes over and over.
The Streamliner gravitates to new ideas that will cut costs, reduce complexity, or speed up processes. Got a plan to save money by moving terabytes of data into the cloud? Swell. But good luck trying to pitch her your ambitious project to connect with a new customer segment.
The Cheerleader likes to say the word "innovation" a lot in presentations to Wall Street analysts and dole out innovation awards to employees. He likes to take customer on tours of the shiny new innovation lab. But when it comes to corralling resources or helping the innovation team blow away obstacles, he's often too busy to get involved.
The Advocate understands the importance of investing in innovation over the long haul. She works hard to make sure that everyone from board members to middle managers to front-line employees know that they’re expected to be supportive of experiments and open to new ideas—rather than defending the status quo.
Professor Leonard Schlesinger of Harvard Business School talks about how CEOs think about Box 1, Box 2, and Box 3 innovation — and offers advice for innovation and new ventures leaders inside large companies on working to support their CEO. Schlesinger has previously served as President of Babson College, and Chief Operating Officer at Limited Brands and Au Bon Pain.
Steve Blank is an entrepreneur, writer, and teacher who helped kickstart the lean startup movement. He is the author of several books, including “Four Steps to the Epiphany: Successful Strategies for Products that Win.” Blank has taught entrepreneurship to both undergraduate and graduate students at U.C. Berkeley, Stanford University, Columbia University, NYU and UCSF.