Why CEOs Don't Get Innovation

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That's when the top business schools began to give innovation a higher priority in their MBA programs. The people educated in these programs are now reaching the top executive level.

A positive sign of change is that innovation leaders of this generation are beginning to reach the C suite. I know of several innovation leaders who have advanced to the top level when they transferred to companies in need of an innovation strategy. They started as innovation leaders, but they were quickly promoted when their new bosses saw the potential of their mindset and skills.

• Top executives are risk-averse. Innovation, especially open innovation, is scary on many levels. People who make it to the top because of their knowledge of existing businesses aren't that interested in considering a new business model or going after an amazing yet high-risk breakthrough when that may undermine their own expertise. And who wants to risk having a major innovation effort fail on their watch?

People who truly understand innovation embrace failure as an inherent part of innovation. They realize that big lessons that lead to success often come from the biggest failures. An attitude that doesn't allow for failure is contrary to an innovation culture, yet that's the kind of attitude that too many company leaders possess.

• They don't see why a networking culture is important for open innovation. In a world of open innovation, you need to be an expert at networking and building relationships. This holds true at the corporate level as well as the personal level. So I ask leaders and managers: Where is the strategy, commitment, and structure that you need to create a networking culture? Many of them have not bothered to give this important subject any thought.

They may come around, however, after hearing about adroit companies that have prospered by creating networks of partners and collaborators, inside their company and outside.

• Top executives are too far away from the action. It is easy to preach innovation when you do not have to make it happen. I have been in several situations where innovation leaders have to struggle with middle managers who prefer to focus on their day-to-day business rather than support innovation efforts that might contribute significantly to the overall business in the future.

The problem is that top executives reward middle managers for getting stuff done and executing flawlessly. This can be counterintuitive to innovating. But top executives are often too far away from the action to understand how this compensation structure makes it harder for innovation leaders to succeed. Most leaders are more wedded to rewarding the core business rather than pursuing something new and untested.

Stefan Lindegaard is a Copenhagen-based speaker, network facilitator, and adviser on open innovation and intrapreneurship. He is the author of the book, The Open Innovation Revolution.

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