Five Reasons Why CEO’s Don’t Get Innovation

Five Reasons Why CEO's Don't Get InnovationHere are five reasons why I believe CEOs and other top executives often don’t support innovation, even though the business climate of our time demands it:

  1. The demand for short-term gains nearly always wins the day. Top executives at public companies are under enormous pressure to produce strong financial results each and every quarter. This is the area where they are rewarded for producing results, and their job security increasingly depends on it.
  2. They missed out on innovation education. Many of today’s top executives got their business education before innovation was a significant part of the curriculum at many MBA programs. They could compensate for this with experience, but many also missed on-the-job training, because innovation training usually happens from the top down, not vice versa. They were trained to be problem solvers, not innovators.
  3. Top executives are risk-averse. Innovation, especially open innovation, is scary on many levels. People who make it to the top because of their knowledge of existing businesses aren’t that interested in considering a new business model or going after an amazing yet high-risk breakthrough when that may undermine their own expertise. And who wants to risk having a major innovation effort fail on their watch?
  4. They don’t see why a networking culture is important for open innovation. In a world of open innovation, you need to be an expert at networking and building relationships. This holds true at the corporate level as well as the personal level. So I ask leaders and managers: Where is the strategy, commitment, and structure that you need to create a networking culture? Many of them have not bothered to give this important subject any thought.
  5. Top executives are too far away from the action. It is easy to preach innovation when you do not have to make it happen. I have been in several situations where innovation leaders have to struggle with middle managers who prefer to focus on their day-to-day business rather than support innovation efforts that might contribute significantly to the overall business in the future.

What do you think?

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Stefan LindegaardStefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation

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5 Responses to Five Reasons Why CEO’s Don’t Get Innovation

  1. Philippe Abadie says:

    Hi, thanks for sharing these 5 points I may have a different way of thinking, because I realize that but give me time to think about having to meet many of the points you mention is very innovative and I do not even allows custionarse if what I’m doing in my business is the best way or are there other alternatives

  2. Rafael Favereau says:

    Excellent note, and maybe it’s recomended read it before you go to the doctor when your company don’t want to innovate.

  3. Roy Luebke says:

    Point #2: B-schools are not teaching innovation yet. A few have begun to move in this direction, but the teaching is still spreadsheet focused, cost-cutting focused. Most address entrepreneurship, but that is in the context of start-ups, not in evolving existing companies.

    B-schools focus on teaching the existing rules of business, not how to invent the next generation of business.

    Point #3: Social psychology research has shown that people fear loss more than they covet gain. It is human nature. This is a big hurdle for most people to over come. Research also shows that most people really dislike change, somewhere in the neighborhood of 80% of all people. 10% of people can deal with change but don’t actively pursue it. So 10% of the people are trying to change the other 90%. If I were in Vegas I wouldn’t lay that bet!

  4. The problem is far greater when one looks at the ‘big’ picture and a nation. Indeed innovation is the only bar in town if a company or a nation wishes to exist economically in the long-term.

    The ‘BIG’ problem with the USA and western developed countries in general is that they have no inclusive innovation systems and integrated infrastructure in place. They also do not use the laws of probability and the numbers game. In this respect over 75% of all the inventions that have made the modern world what it is today emanated from the minds of ‘independent’ innovators and not within our universities or advanced corporate centres of research. The Asian economies are now seeing that the most important factor to create future economic dynamism is the ‘ideas’ people – those outside the confines of higher education and corporate research. We in the West have a lot to learn here and where we do not comprehend what the history of S&T tells us. If we read more and understood where the very seeds of economic dynamism come from, we would lead the world again. Unfortunately we are fixed in the mindset of elitism which prevents us from understanding a different system of approach. If we stood back and observed we would see, if our thinking was out-of-the-box, that we should introduce the creative infrastructure for our people so that their world changing thoughts can be liberated. Unfortunately because this will never happen, we despatch ourselves to untold decline over the next quarter of a century as the economic might of the East takes control. The East knows very well indeed now that collective and integrated innovative systems are what really count and they are building them behind our very backs. We have to wake up to reality and what is on the horizon for us if we do not start thinking of the whole and not of the few. For in China’s case, the use of 1,400 million creative minds is far better than just using a mere 5% of their population. They are now building their holistic innovative infrastructure for the masses and we have to wake up to this reality. China’s President Hu has stated to the whole of his country that t will become the first ‘truly’ innovative nation in the 21st century. He says that every creative mind will be involved in this transition to control the global markets of tomorrow. Why cannot we see this and what it means to us in the West?

    Dr David Hill
    Executive Director
    World Innovation Foundation

  5. Craig Martin says:

    Very good points from all. I have seen this firsthand in my last role. All CEO’s/Managers say that innovation is the key to long term sustainability for their organization. They continual provoke the problem which is an imbedded internal culture of “traditional” thinking, the rush to gain a profit quarter to quarter and not staying focused on the “process” on what it takes to innovate. Most have a plan, but seldom follow and stay committed.

    All companies have a desire but not a commitment to ideation. Most have a process, but do not follow. Speed is better than greatness. And most of all, yes lets invest, but only if we can do more than just work on innovation. You need dedicated teams that are working on ideas without being distracted to fires, this never works. The bing bong effect is never a good thing.

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