Do You Generally Behave Like an Innovation Leader?

Are You a Front-end or Back-end Innovation Leader?

Innovative companies generally have a number of innovation leaders in the organization, including of course in the C-suite. To succeed and sustain innovation, they need the right combination of front-end and back-end leaders, since the two types are complementary. In pharmaceutical firms, front-end leaders are typically found among the heads of discovery, under the leadership of the chief research officer, whereas back-end leaders tend to be in charge of clinical development, manufacturing, and marketing and sales. It is generally relatively easy to identify these two types of leaders because of their functional orientation and also their general management interests and attitude.

Steve Jobs was undoubtedly a front-end innovation leader at Apple and he exemplifies the profile of these promoters of radical creativity:

• Passion for new ideas, new products, and new designs to meet customers' unarticulated needs or improve their experience.
• A bias toward questioning the status quo and challenging staff with all kinds of questions: why? what if? what else? why not? who? who else? how much? how? how else?
• Adoption of a VC-like philosophy regarding returns, i.e. knowing full well that only a fraction of new ideas and projects will succeed, and thus focusing on those with a big win promise.
• Willingness to experiment and open new paths, which means accepting risk and tolerating failure.
• Ability to promote individual and team freedom and create a climate of mental adventure and excitement that will naturally attract innovators.

Tim Cook, who replaced Jobs at the head of Apple, is an archetypal back-end innovation leader. He is known for having superbly handled Apple's supply chain, manufacturing outsourcing and logistics, thus freeing Jobs to focus on his front-end interests. Cook probably meets several if not all of the characteristics of back-end innovation leaders, who are the proponents of operational discipline:

• Focus on getting products to market flawlessly and cost-effectively by mastering all the operational foundations necessary to go smoothly from concept to launch and roll-out.
• Insistence on planning quality as well as on process discipline and standardization to make innovation replicable.
• Demand for speed to market through a high level of cross-functional integration and a first-time-right philosophy in implementation.
• Flexibility in execution decisions, based on operational knowledge and pragmatic risk management.
• Ability to motivate staff for product battles and promotion of a “launch and learn” approach, possibly leading to product improvements and relaunch cycles.

Besides identifying front- and back-end leaders, their position in the organization and their respective clout, management needs to ensure that the handover between them is smooth, which may not be easy given their very different personalities and leadership styles. In appointing an innovation leader as CEO, boards should be aware of the implications of their choice. If they appoint a front-end innovation leader like Jobs at the helm of the company, who will take care of the disciplined operational side? And if they choose a back-end leader as CEO, like Cook, who will defend an aggressive front-end agenda?

Are You Primarily a Warrior?

Warriors are action-oriented, dynamic leaders. Their philosophy is: To be successful, you have to make things happen! Warriors are proponents of a “just do it” approach, rather than of thorough analysis and planning. They also naturally tend to promote outside-in perspectives and approaches. Because of their qualities – they are typically masterful, confident, persuasive, risk taking, and forceful – they are at their best when the name of the game is taking charge and showing initiative. But these qualities can be pushed to an extreme, thus leading to questionable behavior. They can indeed be domineering in dictating assignments and approaches, instead of being masterful; their confidence can turn to arrogance; they may be coercive with staff instead of persuasive; they may favor gambling rather than risk taking; and they can be seen as pushy rather than simply forceful. So, extreme warriors may not be effective when a situation requires the art of delegating and winning cooperation.

Leaders whose major trait is the warrior are competent in all innovation governance tasks that deal with adopting a bold vision and game plan, spotting new business opportunities, sponsoring high-risk, high-reward projects, launching new products, and creating new ventures. They are also forceful in pursuing acquisitions to complement their company's technology profile or reinforce its market base. On a people motivation side, they typically attract and motivate business-oriented innovators and self-starting entrepreneurs through their dynamism and “go get it” approach.

However, uncontrolled warriors may feel, and give in to, the urge to work against the principles of governance, which at its most basic level demands cooperation and dialogue – and, of course, following the rules. They may trigger resistance and frustration, particularly within functions and units outside their organizational turf, e.g. marketing if they come from the R&D side; R&D if they are from marketing; market companies if they are at headquarters, etc. They may also act more on instinct or gut feeling than through thorough analysis of the facts and careful planning. They may establish key performance indicators but may not always base their actions on indicator trends if these go against their perception of reality. Warriors accept data that confirm their opinion, but they might dismiss facts that go against their vision and mental model. Some of them do not hesitate to artificially generate the kind of data that justify their undertakings. Additionally, they may be inappropriate for leading complex negotiation deals related to innovation partnerships, given their impatience, forcefulness, and lack of diplomacy.

Some of the shortcomings of full-blooded warriors can in fact be reduced by their other, secondary traits. For example, if warriors have a judge element as secondary leadership trait, their reluctance to engage in data analysis and planning may be subdued. If they have a diplomat tendency as a second trait – an infrequent occurrence, though, because the two profiles tend to be incompatible – they are definitely in a good position to lead partnership discussions. If they have a significant mentor overtone in their profile, they may be in a better position to marshal the energies of their staff to achieve their objective and obtain cooperation.

Are You Fundamentally a Judge?

Judges are “no-nonsense” leaders with a bias for solid analysis. Their philosophy is: To be successful, let's base our decisions on facts! In this sense, they are the opposite of the more instinctive warriors. Their qualities – they are practical, economical, tenacious, reserved, thorough, and detail oriented – make them indispensable when important decisions need to be based on thorough analysis, and when pros and cons must be carefully evaluated before acting. But, as for warriors, the qualities of judges, if taken too far, can become detrimental. Their practical sense may lead to unimaginative behavior; their economical bias, if excessive, may make them stingy; their tenacity can turn into rigidity; their reserved behavior may lead to their being perceived as dull; being thorough may cause them to be overelaborate; and their detail orientation could mean they are seen as being data-bound. All of this may prevent them from reacting quickly and improvising in an emergency. In the worst case, judges are at risk of falling prey to the famous analysis–paralysis syndrome.

Leaders with a definite judge style can play an important role in innovation governance. Their bias toward rigorous analysis ensures that important decisions, for example on make-or-break projects, are carefully evaluated, thus limiting the risk of failure. They are also capable of establishing and standardizing complex processes. They are good at organizing functions, defining roles and responsibilities, and streamlining decision procedures. As proponents of the classical saying “Things that cannot be measured cannot be improved,” they naturally tend to establish and monitor performance indicators. Because of their trustworthiness, judges are typically appreciated by the company's controller and CFO – archetypal judges themselves – and they can play a major advisory role vis-à-vis the CEO.

However, their attention to detail may make them unpopular with the more instinctive innovators and entrepreneurs. Overzealous judges may indeed slow things down, particularly in the action-intensive product development and launch phases of the innovation process, which require quick decisions and reactive management. They may also restrain management from taking innovation risks, for example in pioneering a new technology, introducing a totally new product category, and being first in the market.

The above descriptions characterize full-blooded judges. In reality, however, as with the other three styles, leaders operate on the basis of their major trait, but its excesses are most frequently offset by their minor traits. This applies to judges particularly when their minor trait is diplomat or mentor. Either of these dispositions can make them more sensitive to the personal views of their subordinates, thus more effective when challenging projects and decisions. A judge with a warrior minor – an association often found in CEOs, although the reverse is more frequent – combines the best of both worlds, i.e. a realistic approach to risk taking.

Do You Behave Like a Diplomat?

Diplomats are leaders who believe that a harmonious organization performs better than a dissenting one, so they listen to the opinions of their teammates and staff before making decisions. Their philosophy is: To be successful, let's ensure everyone gets a fair deal and is able to contribute his or her best talents. This predisposition makes them more inside-out oriented than warriors. Given their qualities – diplomats can be flexible, willing to experiment, tactful and patient, socially skillful, and to certain extent shrewd – they are at their best when making trade-offs and handling cross-functional conflicts. But, as with the other traits, these qualities can turn into limitations when applied with excessive zeal. Their flexibility, when carried to an extreme, may make them inconsistent; their bias toward experimentation may make them reluctant to commit to a course of action; their tact and patience may make them overcautious; their attention to social skills may turn into indecisiveness; and their shrewd approach to human relations may be perceived as a desire to manipulate people. In short, diplomats may not be good at forcing a decision and sticking their neck out on a given course of action.

On the innovation governance front, diplomats are likely to be effective in establishing what we referred to in Chapter 1 as an innovation constitution, defining unambiguously the roles and responsibilities of various functions and units in innovation. They are talented at solving turf conflicts and ensuring everyone paddles in the same direction. As members of top management, they can facilitate the emergence of a consensus on important decisions on strategy, projects, and funding. Their role is also important in managing open innovation initiatives and partnerships, since they strive to achieve win–win deals.

But overcautious diplomats, particularly if they water down imaginative concepts to please everyone, may lead the company to develop dull products. An urge for consensus can indeed be dysfunctional in innovation. Diplomats may be reluctant to see conflicts emerge on innovation ideas, particularly if these ideas have reached the top management team.

As with the previous profiles, leaders with a diplomat character trait may see the risk of dysfunctional behavior reduced by their secondary leadership style. We have already mentioned that leaders with a strong diplomat style are infrequently associated with warrior characteristics. They can, however, combine common traits with judges and this may make them more practical and decisive. When they combine a diplomat and mentor profile, a frequent occurrence, they are likely to be excellent developers of human resources, notably of future innovation leaders.

Do Your Staff Consider You as a Mentor?

Mentors pay close attention to the personal development of their staff, coach them, and sponsor their initiatives. Their philosophy is: To be successful, we need a team of motivated people whose talents are being used in a right way. Their qualities – they are considerate, somewhat idealistic with regard to the potential of their staff, modest, supporting, and responsive – make them accomplished at working with others and developing team members. They are often seen as the wise leaders whom people go to when they have a problem to which they see no solution, or when they enter into a personal or professional conflict with colleagues. But mentors' qualities, if pushed too far, can have a negative impact on their effectiveness as born leaders. An overly considerate attitude may be perceived by some colleagues as softness; their idealistic view of people's qualities can be interpreted as gullibility; their modesty may make them unimposing; their supporting attitude can be seen as paternalism; their responsiveness may verge on passivity. These excesses make them ill-adapted to promoting an outside-in attitude in their organization and in gearing up their staff to fight tough competitive battles.

Leaders with a definite mentor profile can play an important role in innovation governance, for instance by aligning people behind the company's innovation agenda and promoting corresponding values. Their strong people orientation makes them indispensable to the top management team as advisers when allocating innovation responsibilities or appointing innovation teams. They can also detect opportunities for improvements in the company's innovation climate and identify obstacles that management needs to overcome. They tend to be keen to launch management development programs to fill gaps in innovation-related skills. Finally, they are useful in handling interpersonal conflicts within innovation teams or between functions.

But because of their innate bias toward looking inside the organization, mentors may not be effective in leading their staff into product battles. By focusing their energy on handling internal interfaces rather than becoming immersed in the market, they may miss innovation opportunities. They are therefore dependent on the motivation, external orientation, and self-starting attitude of their colleagues.

If mentors feature a warrior minor, which introduces an outside orientation and a bias for action, many of their shortcomings will be mitigated. In fact, a warrior/mentor combination can be extremely appropriate for leading an innovative organization. Mentors can also have judge overtones, which give them a more analytical – less emotional – approach to managing people, teams, and processes. When combined with a diplomat minor, mentors can be competent at handling complex negotiations, for example with partners.

Why Does Innovation Need to be Governed?

As we have pointed out, innovation is a highly complex corporate activity, which crosses many of the boundaries that exist in most companies.

The kind of governance that emerges naturally in a complex system with many groups that have differing goals, expertise, and interests is typically tribal – each group possesses its own rules and its own judgment of what is important. As sociobiologist Edward O. Wilson put it in a chapter entitled “Tribalism is a Fundamental Human Trait”: “to form groups, drawing visceral comfort and pride from familiar fellowship, and to defend the group enthusiastically against rival groups – these are among the absolute universals of human nature and hence of culture.”⁵

Anyone who has been in the position of managing or leading innovation has no doubt come across the functional tribalism that can defeat innovation – whereby innovators want the most radical breakthrough solution they can imagine, engineers want to spend years perfecting one aspect of the innovation, manufacturers want to preserve the efficiency of their processes, sales just wants something that will please their current customers (e.g. something faster or cheaper or prettier), and so on. These are not simply differences of opinion – these are core beliefs about what is essentially important. This is why innovation needs to be governed.

Why Should Innovation Governance Models be Made Explicit?

As we have just seen, tribalism is one form of governance that emerges in complex companies in the absence of an explicit model. In addition to tribalism, companies may exhibit governance models that resemble democracies, republics, monarchies, aristocracies, plutocracies, dictatorships, and of course the lack of government, or anarchy.

The tacit models of government that large and complex systems adopt do not usually provide the best possible methods of coordination and execution. Corporate democracies are often extremely inefficient. Aristocracies or monarchies, where the senior leadership is automatically chosen from among the elite – be they members of the founding family or of some other inner circle – do not look widely for appropriate leaders and are often subject to conservative and tradition-bound thinking. Dictatorships may become tied to the inspiration, personality, operational style, and judgments of a particular leader, with disastrous consequences when that person retires. Any tacit form of government is likely to be held captive by a limited scope of knowledge, information, and relationships as leaders assume that their knowledge, their world view, is the best one – or perhaps the only one. This is true for corporate governance in general; it applies also to innovation governance.

The alternative, then, as we have argued throughout this book, is to make the company's model of innovation governance explicit, for example in an innovation constitution.

Governing Relates to Knowing What You are Doing

Sometime in the later decades of the 20th century, innovators (then called new product developers) began to ask what would make their work more successful. Would it be useful to gather together teams with members who represented the tribal functions early in the process? Was there a way to outline the decisions that needed to be made and the tasks that needed to be undertaken in order to get an idea to market? How could the likely success or failure of a project be assessed before too many resources were allocated to it, and how might the company be able to align its product strategy with the actual projects that were being resourced?

As these and other fundamental questions were raised, and as companies discovered ways of addressing them that created a discipline around the enterprise of innovating, the boundaries of the activity expanded to include both purposeful exploration of new opportunities and the introduction of innovation partners. The digitization of information and globalization added to the complexity, but also to companies' ability to draw on vast resources while at the same time being able to coordinate means and information.

Corporate leaders and innovators now have access to the world at the click of a mouse. They can gather and communicate critical information in the form of maps and diagrams that reveal not only data but also context. They have designed and implemented processes and practices that foster genuine communication and understanding among their “tribal groups” as well as with partners and customers. And yet, even with all of this in its favor, in many instances innovation seems not to be working as well as we might expect.

Now is the Time to Start Governing Innovation

Happily, there is a better way. First of all, innovation has become governable. That is, top management now has many tools to enable it to set innovation goals and objectives, to measure progress – or the lack thereof – towards these goals, and to assess what is contributing to success or failure. Second, innovation has become, for most companies, an inescapable issue of basic survival in this fast-moving and networked world. Third, innovation, unlike new product development, regularly requires the company to make decisions that challenge its core identity – for example, moving to new business models, partnerships, and new businesses – and this requires the explicit participation of empowered individuals or groups in the company.

Many of the companies we have written about derived their governance model from an understanding of their history and culture – the basis of their innate or tacit models. Some drew on models they were familiar with at other companies. All took into consideration their strengths and weaknesses, and we believe that none of them thought that the model it implemented would necessarily work forever – i.e. they are open to, even committed to, changing and improving the model.

We predict that as governance increasingly becomes an explicit matter of concern, management's ability to set innovation goals and agendas and to move effectively toward accomplishing them will improve markedly. We also suspect that success in governing innovation will open up new areas that cannot now be predicted. But we know that the key ingredients for participating in whatever the new world brings will still be effective governance, leadership, and collaboration.