Good points that hit reality quite good. The point are also aligned to various industry studies, so no doubt that your conclusions are right. Of course there are exceptions in many industries but fact is that in most organisations innovation starts and ends with top management – key reasons are your bullet points.

BR Svend

The board sets the tone for the CEO.

It seems to me, we the shareholders, are to blame for a CEO's short term decision tree. Given all of the modern tools of a wired connected global society, we still have not figured out how to join together and drive change within corporations.

If Obama can do it, why can't the rest of us?

The whole logic of a board of directors should be reevaluated. In fact if the boards of all the major banking institutions where retooled and operated on a complete transparency to their shareholders, I doubt we would be selling off trillions of bad debt.

We could rally around the companies that we care about, purchase the stock while it is low, band together and force the boards to reinvent the process with a long view on innovation as the primary objective.

This is why the latest trend is to take a company private, retool it and then reintroduce a new leaner meaner corporation. It's impossible to retool while the stock is traded.

I don't see any other way to offset the short term survival of a publicly traded corporation.

The biggest problem we have is in the fact that people no longer want to take risks. They all think that having a lot of dashboards, excel files will help them to make decisions but all the accounting data you have in hands are always showing what it happened, it is the reason why economists ar so good at explaning us why the forcast they made yeasterday is wrong today.
Moving to innovation assumes we accept the risk attached to this endeavour. Executives have to understand as well that failure is an integral part of the success. there is no succes without failure where you learned something. As said by A. Einstein " someone who never failed never tried to innovate"
I strongly believe it is time to reinstall entrepreneur at the head of companies in place of finance driven managers for which the only tool they are able to use is cost cutting which very often transforms in disaster generator.

I've worked as an innovator at one of the largest consumer electronics companies in the world. From 2002 till 2007 I managed a group of very enthusiastic researchers and engineers that worked on a new consumer electronics product. The outside world (including university relations, industrial colleagues, and our target customers) praised our results. We were even Time Magazine's "Coolest Invention 2005". However, the big battle to win was at the inside world, within the company, not the outside world.

The main problems were:

1. Management did not "see" or understand the future. Every time the challenge is to convince management of the relevance of your work. However, the intuition and insights that you as innovator start building up by actually working in the middle of the innovation for years, cannot be communicated within the 10 minutes you get on the management's agenda.

2. After the initial idea, innovation quickly starts to cost money and returns are not expected on a short term. This was a key issue for my project, as research budgets were shrinking. Simple management logic is to make a priorization on all running projects by the funding the projects gets from direct customers. These direct customers were product divisions whose only concern was to come with a new product feature the next year, not a new disruptive product.

3. Our innovation did not fit into the company's product portfolio at that time. This led to a situation that there was not a common shared believe or responsibility for the topic. Also mid-level management plays an important role here. The personal ambitions of a manager in the middle is to get higher in the hierarchy. Easiest thing to do for realizing this is to support the visions and programs of the higher level management, who decides on the mid-level manager's career. This makes the budget situation only worse, as sharing your ideas with high-level management is even more difficult.

After this experience I encountered many more innovators with the company (and other companies) who had the same experience. In the end, these innovators were seen as "difficult persons", "not inline with the company's objective" and "not realistic". Most of them left the company and tried to do their own thing and startup a company. I have to admit, one of the first things that hit them all in the face was: "were do I get my money to work on the innovation", and all of them realized that suddenly more time was spend at finding money then actually working out the innovation.

Best lesson I got out of this all was: don't assume as an innovator within a company that management immediately understand your vision and ideas and that you will get your support. While defining steppingstones to penetrate new markets in your business plan is a common technique to do, also make a steppingstone plan to "penetrate" your management and get them on your side! Slow and easy, take your time

Albert

In addition to what you say, to which I sort of agree, because the late and great Herr Prof. Peter Ferdinand Rucker wrote a paper in the mid 80's with the title of The Discipline of Innovation and that is before Prof. Chistensen's time, however I truly believed that a lot of the issues associated with Innovation is the narrow way in which it is defined.
For the bulk of the people has to do with work done in the R&D labs or of highly technical nature although that is true it is not the only source of innovation. From the point of view of business innovation is anything that allows you to be more competitive, even if that means to do things just in a different way and/or optimize existing technology or procedures. If all the Board of Directors and upper management were going to understand the definition that Dr. Christensen gives to innovation then all the funny games associated with Innovation will be put to rest and then CEO's performance will be measure in an objective way and Innovation will be one of the key parameters to judge if a CEO is doing his/hers job or not here is his definition.

What is Innovation?
It is the process to find ideas for new products and the challenge to uncovering new markets. But in addition it includes the organization’s planning methods, the systems through which manager’s performance is measured and rewarded and the formal and informal mechanisms used to allocate resources across competing projects. Thus influencing the types of ideas that get surfaced, pushed forward and adopted

Prof. Clayton M. Christensen. Harvard University.
Innovation and the General Manager

So if a CEO is not able to find new products, markets or able to allocate resources or establish planning methods to reward people who are doing their job. Or influence ideas to be adopted. What is the benefit that the organization derives of such person?

Rogelio

Most managers and execs do NOT understand innovation, since it disrupts their organizations, budgets and knowledge base – it creates a threat to them (and many of the worker bees), and actually invokes a "corporate immune system" response to attack, destroy and discredit the group trying to develop/implement the innovative solution (also known as "protecting the rice bowl"). I have personally witnessed this in multiple cases from a setting that was actually designed to fund, encourage and stimulate innovation, and had, in many cases, the opposite reaction. Very sad (the program was discontinued, in large part, due to lack of measurable short term results).

Good insight. Cheers, R. Obom

To your post, I say, "Here, here!"

Innovation requires working hard and being open to changing things. How many leaders who made it up the ranks in corporations are interested in doing either of those things?

To help leaders learn about innovation, I have provided books, one-page summaries, articles, and presentations to individuals, who are simply not interested in learning about innovation. Unfortunately, most leaders in organizations still think of innovation as fluff – important but not urgent. It's reading they'll get to the next time they're stranded in a snow storm.

I have been working as an innovation professional inside organizations for the past ten years. Like most innovation professionals, I often work against a strong tide of leaders who hold on to their authority and cling to the old world order of the company hierarchy. I have witnessed leaders time and again say that innovation is important yet miss out on the wealth of creativity and problem-solving ability lying dormant in their employees and customers. When setting strategy and problem-solving, managers tend to include only the usual suspects and exclude those without the right job title. Those excluded feel confined in their roles and give up on contributing to the organization. This way of doing business is on its way out the door and I will be happy to see it go.

I have found that creating a groundswell of support for innovation from open-minded individuals throughout the organization can get the attention of its leaders. I offer workshops, facilitation, inspiration and an open door to those who express interest in innovation because they want to – not because they are required to. However, it requires the three Ps – passion, patience and persistence.

Thank you for your article.

I love your mission and core belief regarding the need to focus on people. People innovate, systems and processes don't. I think that executives also would rather deal with creating a new system, call it "innovation," and forget that without addressing the people side…talent, initiative, access to resources and tools, etc., they won't really get the results they envision.

Also, I think it's interesting that Jack Welch has recently admitted that the previous executive focus on short-term results for stockholders, which he championed, was a big mistake. Better late than never, Jack!

All the Best, Stefan!

Val