Leading Transformational Innovation
What does it take to lead transformational innovation? The past CEO of Procter & Gamble, AG Lafley, explains.
We are living and working in a volatile, uncertain, complex and ambiguous world—and that’s not likely to change.
In this VUCA (volatile, uncertain, complex and ambiguous) world, there is more need than ever for business transformation, and particularly for transformational innovation to drive sustainable business growth and value creation.
TRANSFORMATION used to be a one time event in the career of a business leader.
When I began working in business in the 1970’s, we would take the company through a major transformation once every decade or two.
Now, in a VUCA world with disruptive change of the norm, transformation is a continuous challenge that can be turned into a game changing opportunity.
The playing to win strategy can significantly improve the odds of success, and leading to win leadership can make a significant difference. However in my experience, game changing innovation is the surest path to sustainable success and ultimately winning.
Winning of course means delighting customers and delivering sustainable growth and value creation that benefits the company, it’s employees, investors and other important stakeholders.
Game changing innovation adapts and responds to rising consumer expectations, changing consumer demographics and shifting societal trends.
Game changing innovation defends against commoditization and a wide range of competition from inside and outside the industry.
Game changing innovation is your best offense and your best defense.
Game changing innovation goes beyond brand creation and product or service innovation to business model innovation.
Game changing innovation at its best demands innovating how you innovate.
When we were at our best at P&G, we were consistently delivering what we called “360° innovation,” innovation that is open to possibilities not only across all of the businesses and functions inside the company, but also to innovation opportunities and partnerships of all kinds outside the company.
So, what does it take to enable transformational innovation?
1. A compelling purpose. Supporting values.
Broadly shared values and a purpose everyone can embrace are the foundation for transformational innovation.
2. Clear goals.
While the “what” of the goals needs to be clear, the “why” they are the right goals and the “how” we are going to achieve them together are as or even more important.
3. Coordinated, prioritized and sequenced strategic choices.
Choices are critical. The teams must know what’s important and what’s not. What’s in and what’s out and What to do first. Clear choices lead to excellent execution.
4. An empowering, enabling culture that embraces the purpose, goals and strategies which serves as a catalyst for transformative innovation.
5. Inspired leaders who serve as the guiding coalition for transformative change.
Engagement is critical. If your team and your players embrace the purpose, live the values, and go for the goals, then you are more than halfway there.
Culture is a critical enabler. Open and transparent is the foundation. Everyone engaged, everyone respected, everyone listened to, everyone valued. Everyone open to good ideas no matter the source.
Connecting and collaborating are two very important cultural enabler‘s. If the organization has really opened up, and the walls between businesses and between functions have come all the way down, then this “boundary-less”, flat organization can adapt quickly and be as agile, flexible and fast as it needs to be to identify potentially transformative innovations.
The last two cultural characteristics of a leading transformational innovator are curiosity and courage.
The curiosity to seek to understand what customers really want even when they cannot articulate their needs. The curiosity to explore cutting edge technologies. The curiosity to be willing to explore totally new ideas and approaches.
And finally, courage. The courage to place a bet on a new to the world technology, product or service. The teams and the organization will take cues from their leaders.
If leadership inspires an open and transparent meritocracy where the best idea prevails, connects and collaborates with potential innovation partners inside and outside the company and has the courage to make the tough go and no go decisions, then the teams and the organization will embrace the culture and improve the odds of achieving the transformational innovation goals.
Your players and your teams will listen to what you say. And if you say it with conviction, clearly and repetitively, they will come to understand what you say.
But, they will watch what you do, and only begin to change their behavior when they believe you will do what you say because what you do, how you act and behave, is the most important driver of the culture of your company.
