Excerpted from DDI’s CEO’s Guide to: Driving Innovation.
Being a CEO is a frenetic exercise in juggling priorities, but it’s an exercise guided by one objective: balancing the demands of the present with the needs of the future. CEOs must focus on meeting short-term sales and financial goals, outmaneuvering the competition, keeping product rollouts on target, managing costs, and navigating the regulatory environment, while at the same time shaping and reinforcing the organization’s future by formulating a vision, anticipating the emergence of future markets, setting long-term strategy, and growing the talent the organization needs for tomorrow.
Innovation falls into the latter category. It’s a future-focused strategy that exists on an even plane of importance with other critical demands. In fact, the raft of conflicting priorities and the perpetual impatience of investors and other key stakeholders seem to get in the way of innovation.
What also makes innovation especially challenging is that the decisions made and the actions taken to instill and sustain innovation can have a large-scale impact on the organization.
CEOs need to focus on both long-term and short-term priorities, keeping the company profitable now while driving the right innovation strategy needed for the future. We refer to this complex reality as the Innovation Paradox. Charles Holliday, Jr., the former CEO of DuPont, accurately captured one of the most vexing aspects of the Innovation Paradox when he told the author of an article in The New York Times Magazine that “the stock market pays you for what you can do now,” and that “it’s tough to get investors to think more than two years ahead.”
The Challenges of the Innovation Paradox
In addition to the struggle between the short and long term, the Innovation Paradox encompasses struggles that a CEO must grapple with:
How to mobilize the company—and its people—to embrace the new and different.
How to build a pipeline of new ideas and ensure that the most promising ones are explored.
How to invest adequate manpower and resources in “non-core” projects while still getting the everyday work done.
How to promote innovation without putting the company’s financial viability and competitive position at risk.
How to balance the need to give people freedom to innovate while maintaining organizational control.
How to bring process and discipline to innovation.
The full impact of the Innovation Paradox comes into sharper focus when you consider the many things you must actually do to drive innovation, many of which appear to be counterintuitive, or otherwise fly in the face of your typical leadership style.
Kick off your innovation imperative from the top of your organization. Download The CEO’s Guide to Driving Innovation to share with your senior leadership team.