The Challenges of Innovation
Indifference, hostility, and isolation are among the major obstacles to a healthy innovation environment
by Irving Wladawsky-Berger
August 22, 2008, 2:57PM EST
http://www.businessweek.com/innovate/content/aug2008/id20080822_832405.htm

This is a fabulous article that really sums up how management/leadership can help or hinder innovation and growth.

In most companies, just about all the cards are stacked against the nurturing of innovation, especially the kinds of new ideas and disruptive innovations that generally lead to major changes in the marketplace and within the business.
Following are some of the behaviors I have observed in companies throughout the years that have convinced me how difficult it is to create an environment in which innovation can flourish.

Indifference

While just about every CEO and senior executive of a company pays lip service to innovation, many do not really mean it. They mouth the words—it would be politically incorrect not to embrace innovation—but they do little beyond that.

That's not because they are not good, smart, and highly competent people. It's just that innovation is not a part of their DNA. The majority of executives make it to top positions by being very good operational managers: meeting sales objectives, improving products and services to keep up with competitors, supporting existing customers and acquiring new ones, managing mergers and acquisitions, achieving the required financial results quarter after quarter, and so on. (This often leads to what we call a Congealed Leadership Mindset that is a huge barrier to growth) These management jobs are very tough and getting tougher, given our rapidly changing, fiercely competitive, global business environment. Being a good manager takes very hard work, attention to detail, and organizational discipline.

But as executives rise up in the organization, other skills become increasingly important. They need to transition from being a manager to being a leader.

Management is about business results and processes. Leadership is about people. The key quality you need in good leadership is passion—the urgency to attack and solve the complex problems that all organizations face. To do so, you need to be surrounded by highly talented people, and you need to find a way to transmit your passion to them, so they will buy into your vision of the future, perform at the highest possible levels, and come up with innovative solutions to the challenges of achieving the vision.

When skies are blue, a company might be able to cruise along with top managers who are indifferent leaders. Such managers are typically executing tactical, incremental strategies where the critical ingredients are good, disciplined management as well as operational excellence. But once the skies begin to darken, (they are very dark today)as they inevitably do, such managers will get into deep trouble, and often end up taking a business down with them. Their most talented innovators and strategists, those whose skills are now badly needed to help set the business on the proper course, have either long departed or become so disenchanted that they have nothing left to give.

Hostility

In general, managers who do not actively encourage new ideas and innovations in their organizations do so because of indifference. They will typically listen politely to your new idea, provide some encouragement, and offer good advice. If they are being honest, they will tell you they barely have the time, energy, and budget to help much beyond a pat on the back now and then.

But some managers go beyond indifference. Their initial reaction to any new idea is negative, if not downright hostile. This is particularly true if the idea comes from someone outside their own organization.

Some of them also exhibit characteristics that many of us would associate with being a bully. Typically, the corporate bullies I have met have achieved their high management positions because, despite their poor interpersonal skills, they are very good at other parts of the job. Sometimes, they are excellent innovators themselves, but given their autocratic tendencies, innovation for them is a one-man or one-woman show. They tend to be poor team players: Collaborative innovation is not for them.

Such hostile behavior is hugely detrimental to a healthy innovation environment. People championing new ideas, especially if they are potentially disruptive new ideas, are going against the grain of what the business is currently doing. Rejection is painful, especially coming from people in positions of authority. Senior managers can nurture those new ideas through positive words and actions, or they can stop them on their tracks by being overly negative and combative.

Isolation

I strongly believe innovation is a team sport. The 2004 National Innovation Initiative report observed that innovation "is multidisciplinary and technologically complex. It arises from the intersections of different fields or spheres of activity." That is why it often takes a group of people who are not only highly talented but who bring together diverse skills and points of view in order to successfully tackle the kinds of complex problems we face in the 21st century.

But perhaps even more important, a collaborative approach to innovation helps provide the energy and emotional support that new ideas need in their very early stages. New ideas are almost always rough and ill-formed at first. In my experience, nothing works better than bouncing ideas off other, supportive people. This back-and-forth dialog is crucial in helping to shape the idea into something more concrete, understandable, and actionable. Then it is more ready to face the tougher challenges and criticisms from line management and others in the organization.

That is why isolating people in organizational silos is one of the biggest obstacles to innovation. Companies that are serious about innovation do everything possible to break down silos and encourage communication and collaboration across the organization and beyond. (We have found this to be one of the biggest barriers to growth within companies. Most companies are not organized around customer needs or outcomes. They are organized around functions, technologies, product lines, brands, major customers, etc.. Thus, when trying to innovate to bring new outcomes to customers, innovation requires leveraging the skill base across the silos as well as going outside the company.)

Fostering innovation is very hard, especially if the innovation is disruptive in nature. A spirit of innovation and collaboration does not come naturally to an organization. For such a spirit to take hold, it must become an integral part of the company's culture. None of this is easy, but it is what a company must do if it truly wants to create a healthy environment in which innovation can flourish.

Irving Wladawsky-Berger retired from IBM last year after a 37-year career at the company. He is presently working on technology and innovation with IBM and Citigroup, and is a visiting professor at MIT and Imperial College.