Why Top Down Innovation is a Terrible Idea

I was leading a Senior Leadership Team workshop for a publicly-traded firm recently when one of the participants became prematurely attached to a (very) specific project.  I have seen this happen over and over in my work, and left unchallenged, it always leads to lost time, money and talent.

There are two categories of leadership pathology that destroy stakeholder value. The first is clinging to an outdated business model too long (think Kodak, Nokia and HP), and the second is a project driven from a C-leader who believes their insight trumps that of everyone around them (such as with Iridium and Chevrolet Volt).

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In this case, we had a well-intentioned member of the team who thought an anecdote from one of her engagements had opened up a new product category.  Anecdotal information is useful, however always needs to be tested objectively to make sure that the proposed product or service would truly serve the needs of a large enough base of clients to support the investment. (for more on this, click here and here)

We were in the process of working on the “Right Project” portion of my Right Project, Right Team, Right Plan process, which I have specifically set up to find the right project by using the whole of the organization to avoid just what was about to happen.  A key process tennant is to use the senior team to develop the key attributes and areas to be shortlisted, and then allow a group of cross-functional subject matter experts to complete the specifics and risk assessments.

Why does a senior leader’s “over sponsorship” create negative outcomes?

1. It is almost always based on an outdated customer avatar.  In today’s very fast paced world, customer preferences shift quickly.  It is nearly impossible for a busy operations leader to have the insight that a skilled cross-functional team will have to provide clear targeting for the product or service.
2. It shuts down the objective challenge to issues regarding the product and service.  In his book Creativity Inc, Ed Catmull of Pixar fame makes the statement that every film they have done stunk at the beginning.  It is only through intense peer review and open challenge that films get great.  The same is true for your products and services…by over sponsoring, the senior leader shuts off the process that moves ideas from ok to amazing.

The best leaders hold the big idea, and build a process that equips that big idea with insightful and empathetic detail that makes it a success.  The senior team should set the guardrails and the quality levels, and let the best of the best hone the project specifics.

Here’s how to use your Senior Leader Super Power to Create Robust Growth:

1. Create opportunities to generate insights.  Set up a process that surfaces good insights from those closest to value delivery.  This includes peer visits to new customers as well as “established” customers.  It includes sending people to look at new things in great companies not in your peer group.  Don’t overlook some underutilized assets in your own firm like customer service, and customer-facing talent in the finance group.
2. Use those insights to form a “container” for the team to go to work and find the real product or service.  A well-facilitated annual strategy session will help you develop a clear framework for your team.  By “making wide the narrow road,” you will allow for creativity, and also have focus and alignment.  For more on key elements of a good strategy session, look here and here.
3. Make sure you activate some new growth work in every business cycle.  Businesses that do this have a cadenced process that pulls the creativity of the group forward every year.  By doing this, management sends a powerful signal that it is committed to keeping the portfolio fresh and vibrant.

The best senior teams have a robust camaraderie that allows for peers to challenge one another, and by activating this team’s strengths, I was able to help them move to a robust selection.  If while reading this you’ve had some areas that you would like to explore, feel free to give me a call at my direct line (847-651-1014) or drop me an email and we’ll set up a 20 minute call.

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