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Innovation and change: When leaders are the problem

Innovation and change: When leaders are the problem

Lack of a ‘21st century leadership’ is hampering innovation across industries today, writes Owen McCall.

For a CEO to say innovation is critical to the future and that one of the major barriers to innovation is a lack of prioritisation is to say, ‘I am not doing my job properly’.

Owen McCall

Innovation is a hot topic around the globe at the moment and given the tight connection between technology and innovation today it is something I am intensely interested in. So it was with great interest that I read this report from a few weeks back.

First things first, congratulations to Chris Paykel and James Hurman for doing the survey and adding some local information to the forever growing literature on innovation.

Overall, the findings of this study are consistent with previous findings around the globe. That is, the vast majority of CEOs view innovation as critical to their organisation’s success. However, an equally large group of CEOs are massively unsatisfied with their organisation’s ability to innovate. Why the disconnect? This article raised two significant barriers to innovation (the report has more) for large established companies. 

They are:
1. A lack of time and priority given to innovation vs everything else that executives need to deal with.
2. Workers resist change making change more difficult.

On face value these issues make sense and I know from the work that I do that these issues are real for many executive teams. But when you delve into the issues, what is revealed is a lack of leadership and specifically a lack of what I like to call 21st century leadership.

Yes, innovation is important and yes, the history of innovation suggests that effective innovation is hard. However, the answer is not to look externally for people and circumstances to blame.

Owen McCall

Allow me to explain.

Let’s start with the lack of time or the inability of an organisation to prioritise innovation over all other things that need to be done. First an acknowledgement.

The workload of a senior executive today is crushing. Long gone are the days of a 40-hour week, if in fact that ever existed for senior leaders. As a result, I have a lot of empathy for the view that we simply do not have the time required to do everything that needs to be done.

The fact that there is more to do than there is time to do it is true for every organisation I have worked in or worked with and I expect it will always be true.

It is also true that in an environment where there is more to do than there is time and money to do it, choices need to be made about what gets done and what doesn't. Whose job is it to make these choices? The CEOs, with support from their executive team.

At a high level, I reckon CEOs and their executive teams only really have three things to do.

They are, set a vision or goal for the future, make choices about how the organisation is going to achieve that goal through resource allocation and inspire and coach the team as you progress together to achieve the goal.

Making choices about how the organisation is going to achieve the goal or vision is core to a CEO’s role.

For a CEO to say innovation is critical to the future and that one of the major barriers to innovation is a lack of prioritisation is to say, "I am not doing my job properly."

There is another potential explanation.

While CEOs publicly say innovation is a priority, in reality perhaps it isn't. Maybe something else is, like hitting short-term performance targets that ensure they continue to have a job and get bonuses paid.

The good thing and the bad thing about measurement and incentives is that it drives behaviour. Sure, CEOs know that long-term viability means innovation is critical but that's not how they are compensated and so that's not where they allocate resources.

In light of these incentives, short-term focus is understandable but for CEOs and boards to say innovation is important and then primarily incent short-term performance is not particularly authentic or honest.

An honest response might be to acknowledge, "My bonus is based predominantly on this year’s profit so while I believe innovation is important for our long-term viability the majority of our resources will be focused on this year’s profit result."

Read more: The 7 habits of highly effective CIOs (part 1)

Uncomfortable isn't it, but maybe, just maybe, it would create a better quality of conversation.

Now let's look at the issue of workers resisting change. As far as the business world goes, this is accepted as truth.

In response consultancies, academics and others have spent millions defining change management plans aimed directly at combating this resistance. While these methodologies have some significant differences to each other, virtually all of them are based on two key assumptions.

The first is that change needs to be imposed on teams from management.

Almost every company has some kind of transformation going. Digital transformation is the transformation of our time and most digital transformations are born in executive meetings and then the rest of the organisation is told that they need to change.

We, the executive, have decided that what you, the teams, have been doing up to now is inadequate or just plain wrong and so you need to change if we are going to survive.

I know, we never say it this bluntly. We dress it up in all sorts of logic and cautionary tales but let's be honest, it is the implicit message in nearly every change.

People are not stupid, they can read between the lines. When executives lament about resistance what they are really saying is, "I wish they would just realise that I'm right and do what they are told."

It betrays a management paradigm of the leaders think and the rest of you do what you are told like good little machines.

The reality is most people don't resist change (Groundhog day anyone?) but they do resist being changed. We need to turn the change process around and stop imposing change.

The second assumption is that the best way to create change is through fear.

When most people consider great leaders, we think about people who inspire us. Yet, when most leaders instigate change they do it through fear. Disruption is coming! You need to change or else. Fear led change.

Most change methods have as their first step the need to create urgency. One of the most powerful metaphors for creating urgency is the "burning platform". You need a burning platform for change.

I don't know about you but when I think about a burning platform I get a sense of urgency all right. I also get a sense of fear and a desire to act, to be anywhere but here. All I really want to do is get off and I don't care much how or to where. Not exactly a great start to the need for coherent directed action.

Add these together and what you have is fear based responses to externally imposed change. Is it really any surprise that you get resistance? It is leaders who impose change and manage change through fear that create resistance. If leaders want to unwind the resistance, they need to look to themselves and their actions for the solution rather than playing victim and blaming everyone else.

Yes, innovation is important and yes, the history of innovation suggests that effective innovation is hard. However, the answer is not to look externally for people and circumstances to blame. In most cases, the answer lies in examining our real motives and actions and changing how we as leaders think and act. If we do this we can create a different work environment and from that different outcomes.

Owen McCall (@OwenMcCall) is an experienced management consultant and CIO, and a member of the editorial advisory board of CIO New Zealand. Reach him through owenmccall.com.

'CEOs know that long-term viability means innovation is critical but that's not how they are compensated and so that's not where they allocate resources...In light of these incentives, short-term focus is understandable but for CEOs and boards to say innovation is important and then primarily incent short term performance is not particularly authentic or honest.'
'CEOs know that long-term viability means innovation is critical but that's not how they are compensated and so that's not where they allocate resources...In light of these incentives, short-term focus is understandable but for CEOs and boards to say innovation is important and then primarily incent short term performance is not particularly authentic or honest.'

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