“Innovation has nothing to do with how many R&D dollars you have. When Apple came up with Mac, IBM was spending at least a 100 times more on R&D. It’s not about the money. It is about the people you have, how they’re led and how much you get it.” – Steve Jobs
I am just returning from Australia where I was part of leading the first phase of an executive development program for a group the high potential executives of a large national industrial company; you know, the brightest ones who are believed to be the future of the company. They all currently have responsible, influential senior middle management positions within sight of the C-suite. Under new leadership, the company emerged from virtual insolvency a few years back and since then has achieved solid top and bottom line growth, but are now having to weather some storm clouds on the horizon.
The company finds itself at a challenging intersection where some trade-offs to their growth trajectory are required. Unexpected negative export market factors, plus significant shifts in the requirements of some customers is causing pressure on their operating income and working capital. This is coming at a time when they are mid-way through some necessary and long overdue capital investments in their infrastructure for which they have taken on some debt. To further complicate matters they are challenged to meet the insatiable appetite for returns from their shareholders who have been with them during the growth years. All in all, this is requiring them to focus on cost management for the short to mid-term in order to eventually return to their growth agenda.
One of the key elements of this phase of the executive development program is mobilizing these high potential executives into action learning teams with projects focused on new top and bottom line growth. Here lies a potential dilemma for these executives. Senior management has clearly adopted a strategy to batten down the hatches and take sustainable cost out of the organization to shore up short term shareholder value. Simultaneously, we leading the program are asking their leaders to focus on new innovation for value creation which will require investment and won’t deliver returns for a few years. I am happy to report that there is intelligent and enlightened senior leadership in this company, who had fully endorsed this approach, unbeknownst to the program participants. On the final day of this phase of the program the action learning teams had to meet with their respective executive sponsor, also a senior leadership team member, to review their thinking about their project. While we were asking the teams to be bold in their views, understandably they were nervous and apprehensive given their respect for some of the most senior officers in the company, and given their awareness of the strategy on cost management. I am delighted to report that the senior executive for each of the three teams not only endorsed the thinking they heard from their respective team, but actually challenged them to take their thinking farther and be even more innovative in their thinking. Needless to say all the participants were thrilled and extremely motivated at this response.
Innovation and new thinking needs to be protected and supported if it is to thrive. While your company’s high potential, next generation executives are undoubtedly smart and savvy, unless they possess extraordinary courage and perseverance, they will still do what senior management dictates if they want to keep their jobs. The situation I described above was a great example of senior executives playing their role to protect and nurture the future – both the bold innovative ideas to come through these projects but also the spirit and motivation of the future leaders who harbour them. Too many times I have seen such situations go the other way — senior executives squashing motivation, innovation and fresh thinking in their top talent by shackling them to today’s short-sighted prison instead of entertaining tomorrow’s possible future. This is done at the company’s peril in my belief. Yes, there are immediate requirements to be met, however great executive leaders have 20/20 bifocal vision. They accept and manage through the tyranny of meeting short-term market, customer and shareholder demands – that is only being responsible – however, they also embrace innovation and protect the tender new shoots of growth as well as the leaders who steward these until they take root in the soil of the company’s day to day operations. Take a look in the mirror and ask what are you doing when one of your best and brightest top talent floats an idea by you that challenges the status quo? You signal a whole lot about your company’s future in such moments.