This equation is very simple. In the marketplace of today—where innovation is accelerating and disruption deepening—the winning leader needs to connect with his or her stakeholders on three levels: with intellect, emotions, and aspirations.
Let’s look at each of the three keys that add up to innovation success:
1. Intellect
Here we’re talking about the pragmatic parts of the job. Things like project timelines and budgets and product rollouts. These are the things that directly generate profits, and you cannot ignore them. But these important decisions must be made by a CEO who is well informed. For example, in 2001 GM CEO Rick Wagoner killed the EV1, GM’s innovative entry into the fledgling electric car market. The company actually recalled all 1,117 cars it had produced and destroyed them. It was a terrible decision made by a CEO who was out of touch with reality. It wasn’t until late 2016 that GM got back into the electric car segment with the well-reviewed Chevy Bolt.
The innovation leader knows the practical aspects of the business. Not every engineering detail, but the broad strokes. Remember, in a big company you need to know how to delegate. You need to hire innovative, knowledgeable people who will provide honest opinions and data. But you also need to know enough to question them and ask for evidence to back up their opinions. If your logistics manager says, “We need to buy fifty more trucks,” you need to know enough to ask, “What’s our average down time for our fleet? How many hours per day do our current trucks spend sitting idle? How many are out for repairs, and for how long?”
Innovation leaders don’t always know the answers, but they always know what questions to ask.
2. Emotions
Innovation leaders know that people aren’t robots. People have feelings, opinions, dreams, illusions, and fears.
Stick-in-the-mud leaders view this emotional quality of human beings as a nuisance and an expense. They would prefer their employees come to work, keep their mouths shut, do their jobs, and clock out at the end of the day without making waves.
There’s one big problem with this mindset.
Not logic, but human emotion drives business. It drives your business.
People make major life decisions based on emotion. They take a job at a company based on emotion. They quit a perfectly good job at a company because of an emotional response or incident.
How many times have you heard an employee say about a teammate, “He’s a jerk! I wouldn’t lift a finger to help him. If his project fails, I’ll be happy.”
Or, “My boss? He’s clueless. He just sits in his office all day while everyone else puts out fires. This place is going downhill. I can’t wait to find a better job somewhere else.”
Or the other side of the coin: “She’s amazing! I’d do anything to help her. She really appreciates when you bring her a new idea.”
Or, “He gave me great advice about my project. He’s such a nice guy! I wouldn’t want to work anyplace else.”
3. Aspirations
Imagine one of your employees came to you and asked, “Why are we in business?”
Or, “Why do we sell pizzas?”
“Why do we operate a bank?”
“Why do we rent cars?”
If you were asked a question like this, what would you reply?
I hope you wouldn’t say, “To get rich.” That’s probably the worst answer imaginable. While it’s important for your company to earn a profit, it’s not what separates your company from thousands of others.
The pizza maker wants to earn a profit.
The bank wants to earn a profit.
The car rental company wants to earn a profit.
Earning a profit, and wanting to get rich, is a given. It’s in the DNA of every company. Therefore, if you say, “Our goal is to earn a profit,” you might as well say, “Our goal is to breathe air,” or “Our goal is to eat dinner every night.”
As an innovation leader, you show them that what they do matters—to themselves and to their community.
You sell pizza because you want to help people enjoy quick and easy nutritional foods.
You operate a bank to help people save and safeguard their money, and to provide loans for building houses and buying cars.
You rent cars to help people get where they need to go quickly and conveniently.
Ideally, the mission of the company will be in alignment with the personal interests of your leadership team, investors, and employees. A clear and powerful mission makes a big difference—as Deloitte reported in February 2015, mission-driven companies have 30% higher levels of innovation and 40% higher levels of retention, and they tend to be first or second in their market segment.
As an innovation leader, it’s up to you to hire people who are passionate about what they do. In fact, passion is more important than skills. You can teach any intelligent person a skill, but you can never teach them to have a passion. You can only help unlock the passion they already have within themselves.
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