Innovating Across Three Horizons

Innovating Across Three Horizons

I will be the first to admit that numbers matter. It matters that you set them, pursue them and achieve them. As leaders, we need to be across the numbers – from revenue targets to cost centers, investments to acquisitions, and everything in between. But not all numbers matter in the same way. I was reminded of this recently, reading startup entrepreneur, Steve Blank’s article on the challenges facing chip manufacturer, Intel. Like most large enterprises, Intel is building and optimizing its business based on its past successes. As one of the most successful technology companies of the past century, Intel has been at the forefront of tech-driven innovation. How many of us remember the “Intel inside” stickers emblazoned across our computers, servers and laptops? But there has been a shift recently. Intel’s last two CEOs delivered outstanding numbers – both in terms of profit and R&D investment. They optimized and executed at scale, with assured expertise. Yet, at the same time, Intel also missed two significant technology trends. As Blank points out, the first was the shift away from desktop computing and the second, was the opportunities presented by collaboration and licensing of technologies. While Intel has recently announced layoffs to the tune of about 11% of its workforce, it’s not yet the end of the road. It’s chip architectures still dominate data centers the world over, it has deep expertise, capability, intellectual property and leadership. But can it look to a different type of number to drive its future performance? The Three Horizons model of innovation provides leaders with a framework for managing current and future growth...
Innovation – It’s Like Juggling Chainsaws

Innovation – It’s Like Juggling Chainsaws

Hands up who has an ideas platform. Hands up who has an innovation team or a lab. What about email? How many new business ideas would your receive in your email each week? Or month? What about informal and formal chats, hackathons or pitching competitions? There’s an abundance of ideas, right? Almost every leader I know has an “innovation backlog” – a collection of great ideas, opportunities and plans that never get implemented. Time is too short. Implementation takes too long. Or our focus on quarterly goals narrows our ability to accelerate and incubate new projects. There is always a reason – or excuse – to file an innovative idea away for later. But I firmly believe that leadership is about decision making and action. Applying lean startup principles to the business of being a leader will help us to a certain extent, but how do we go about exercising judgement? When we are inundated with information and ideas, judgement can be clouded. What we need is a way to find clarity. Prioritizing the Aha Moment One way of prioritizing your innovation backlog is to assess each idea  in terms of the “Aha moment”. By quickly scanning each of the ideas, you are looking for a moment of “realization, inspiration, insight, recognition, or comprehension”. Those that don’t make that first cut can be ignored. Yes, ignored. Or better yet, deleted. As leaders we must actively trust our experience and capability. We can’t second guess our decisions each and every time. We need to back ourselves. In doing so, remember, you are not making this decision in isolation. You are...
Culture Beyond Equality

Culture Beyond Equality

The Lilly Ledbetter Fair Pay Act marked a significant milestone in advancing equal pay for all workers. Seven years later, the median wage of a woman working full-time year-round in the United States remains only 79 percent of a man’s median earnings. And while this marks an improvement (back in 2008, the ratio was approximately 75 percent), it’s also a clear indicator that there is more work to be done. President Obama’s announcement of additional measures to close the gap will bring much-needed focus and attention on work that needs to be done. In particular, I am excited to learn that the White House is to host a summit on “The United State of Women” on May 23rd. For many years, I have championed a focus on women leaders, gender diversity and the way that leveraging female talent can drive innovation and profitability. I firmly believe that while equality is important, it is just one element in a broader mix of initiatives that needs to be addressed in parallel. Equality is not just the right thing for people, it’s the right thing for business, innovation, and profitability. Recent research by Silvia Anne Hewlett reveals a remarkable correlation between inclusive leadership, innovative output, and market growth – what she calls a “speak up culture”. We find that at publicly traded companies with two-dimensional diversity—where the senior leadership team has both inherent diversity in terms of gender, age, and race,and an acquired appreciation for difference based on experience and learning—employees are 70% more likely than those at non-diverse publicly traded companies to report having captured a new market in the last...
The Five Principles of Lean Leadership

The Five Principles of Lean Leadership

When it comes to innovation, there is much that we can learn from the lean approaches taken by startups. There is the rapid iteration, hypothesis testing and measurement, that builds a dynamic, responsive organization. There is the focus on releasing products and services as part of an iteration cycle. And there is the relentless focus on customers that I have long been an advocate for – what I refer to customer oriented thinking. But in a world where change is accelerating, and where the needs of our customers, the competing demands of our stakeholders, shareholders and competitors cry out for decisions, action and differentiation, we need to find ways to react faster. To produce faster. And to create strategy on the fly. It’s no longer about customer oriented thinking but customer oriented doing. We need to find ways to apply the “thinking and doing” approach of startups to leadership. McKinsey have long argued that we need to find ways to integrate short, medium and long term strategy into our leadership capabilities. But I believe this shift in leadership is less about process and more to do with the qualities of leadership, approaches to teams and the strategic use of data to help inform decisions. For it is the rapid making of decisions – and the ability to respond to changing conditions – that’s when lean leadership comes into its own. Where the lean startup approach focuses on ideas, coding and data, lean leadership sets the conditions for maximum acceleration. This means that the leader looks to the organization, the teams and the capabilities required to deliver and execute strategy....
For the Innovation Leader, It’s Time to Get Social

For the Innovation Leader, It’s Time to Get Social

I have to admit that I was skeptical about social media in the beginning. I could see there was potential connecting directly with customers, partners and other business leaders, but many of my colleagues and customers had not yet made the plunge. So rather than investing heavily into social media, I kept a “watching brief” on its progress. I dabbled and read. And I arranged meetings with experts who were actively experimenting with social media as a business tool to learn first hand what value they were finding. Many years down the track, social media has become a powerful way for businesses and business leaders to communicate, share information, make announcements and build communities. Richard Branson, CEO of the Virgin Group has actively cultivated a powerful online following that includes his LinkedIn blog posts, Facebook page likes and over 6.5 million followers on Twitter. It is a direct line of communication between one of the world’s leading innovators and his most engaged advocates. Do you think this impacts on the Virgin brand? Does it promote trust and connection? In a recent study, Forbes investigated the social media habits of CEOs from the Fortune 500, and found that while social media is a growing trend among CEOs, it is not pervasive. Of the 160 CEOs from the Fortune 500 with social media profiles, 79% only use LinkedIn. And only 8.3% use Twitter. Given that Twitter is fast becoming the “pulse of the planet”, I fully expect to see some shift here. Especially from leaders who are setting an innovation agenda. Leaders like Elon Musk, CEO of SpaceX and Tesla Motors...
Accelerating the Speed of Innovation

Accelerating the Speed of Innovation

Over the last 100 years or so, we have become experts at wrangling efficiencies and optimizing processes for large enterprises. The enterprise resource planning (ERP) software that emerged in the 1980s and accelerated through the early 2000s created the digital architecture that has allowed large organizations to consistently scale, optimize and improve the way they manage their businesses, people and customers. It’s the vital backbone for national and global businesses – and when I worked with SAP, we would proudly explain that 74% of the world’s transaction revenue touches an SAP system. But there are three things we can be certain of in life – death, taxes and change – and change has swept through the business world with an unrelenting fury. The sturdy, dependable, scalable systems that ERP implanted into our organizational DNA have given us a platform to connect – but rarely does that platform allow us to innovate. And with leaders facing an increasing need to innovate, we are finding that what worked in the 1990s and 2000s no longer works for the world we now find ourselves in. In the recent Cap Gemini / Altimeter report on Innovation Centers, it was revealed that 90% of companies believe that they are too slow to market with new products and often over budget. The structures, silos, teams and even remuneration packages for most organizations are geared towards optimizing what is, not innovating around what will be. The result is that large enterprises struggle to respond to changes in the market and global conditions – allowing startups and smaller, more nimble businesses to out-compete at speed. In the...