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Do CEOs Have Innovation Fatigue?


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| Broken Promise Fatigue Rather Than Innovation Fatigue.

May 04, 2007

Do CEOs Have Innovation Fatigue?

Bruce Nussbaum

The latest BW/BCG survey of top execs around the world shows that a distinct "innovation fatigue" is setting in. In 2006, 32% of top execs said innovation was the top priority but only 27% said it was their top concern in 07. Why? Last year, 52% of survey respondents said they were satisfied with their return on innovation spending. In 07, only 46% were satisfied.

But what's behind the declining satisfaction? My sense is that the "quick-fix," "get me an iPod!" CEOs and managers suddenly realized this year that innovation is neither simple nor fast. You can't just bring in the clowns, shake up the people and turn into a Nike or Apple. You won't find innovation fatigue at these companies, or at IBM, GE, P&G, Bank of America, Philips, Google, Sumsung, Electrolux and dozens of companies around the world.

Innovation is about changing culture and organization and that takes patience, time and fortitude. Top execs tiring of innovation and turning back to squeezing more efficiency out of operations are playing a short-term, losing game that their Asian competitors are better placed to win.

Clayton Christensen's book "The Innovator's Dilemma" will be ten years old in a month. Think about that and how far we have yet to go to build innovative businesses and design better educational systems, courts and political systems. It is still a nightmare to vote in the 21st century.

Innovation fatigue? Only for the weak and short-sighted.

04:14 PM

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“broken promise fatigue” from Ethnography.com

Well, Bruce Nussbaum has being making me think alot apparently, I posted yet another comment to his recent entry asking if CEO's have “innovation fatigue.” I think that is partly true, but I wonder if it is more about “broken... [Read More]

Tracked on May 6, 2007 04:22 AM

Your comments make me wonder if it is “broken promise fatigue” rather than “innovation fatigue.” Companies that you listed: the Nikes, GE’s, Apple’s of the world have all seen great returns on big bets, and can also stomach the loss they have experienced in the past as well. They know what this Practice of Innovation can offer when done in a disciplined way, and are experienced in working through the failures that are also part of the process. Trying to squeeze out more efficiency is a short term bet that has short term results. The fact is that most of the world-class manufacturing players are pretty blasted efficient already, and there is not much water in that well. Many are already seeing the best efficiencies of scale they can get. Who are the people that are most susceptible to broken promise fatigue? I suspect they are the ones that approach trying to create compelling new opportunities for their companies in the same way, and with the same expectations, as they think of squeezing profits from efficiencies. Rather than being part of a systematic whole, expressed strategically, it is approached on a very tactical level. It would be like building the iPod without iTunes, partnerships with the music industry, and signaling a direction for the entire company.

So this word “innovation” popped up as the next silver bullet to improve revenue streams as the other methods: downsizing, manufacturing, squeezing other people in the food chain, have been tapped out. I suspect that over time, innovation as the primary word for this practice will fade into the background, as it should, to be replaced with a core intellectual competency that is as standard to a modern business as having an HR department. Humans (as opposed to companies, a legal construct with no thoughts or feelings) have been in this business of innovation for hundreds, if not thousands of years. The printing press, the cotton gin, the original walkman, all innovations that somehow changed the landscape.

I think what is tangibly different now is that shift we talked about previously. Now companies are talking about making the practice explicit, rigorous, embedded in the culture so it is far less random. People are realizing the problems of waiting for the company guru, like a Henry Ford or Steve Jobs, to have a eureka moment, or the seemingly scatter-shot approach to R&D of many avenues of research in parallel. Instead, we are drawing the threads of the company together in a conscious and deliberate way to create an approach to increasing revenue that can set a large strategic vision, and has an output of a roadmap of tactical action.

Perhaps the job skill of the future might not be “manager” but “facilitator”. Who cares about your degree, can you help different parts of the company tie diverse activities together in delightful and unexpected ways? Are you able to have draw out and help people expand on their best ideas? Can you prescribe for them the actions to take to go to the next level? That’s how you build revenue in the long term.

Posted by: Mark Dawson at May 4, 2007 09:09 PM

Getting tired of innovation in a matter of a few years is simply evidence that these individuals never comprehended innovation in the first place. Innovation of any kind is inherently risky, unless someone came up with a sure-thing in the business world and I somehow missed it. If any company is serious about new and exciting ideas, they need to accept the fact that some will be failures.

Posted by: Alec at May 5, 2007 07:46 PM

If the old line innovation stream is drying up, new stream must be found. We need to make sure that good people with innovation mind can prosper. If that happends, we will end up much better than the current coporate politics driven R&D that fails to deliver.

Posted by: Yong Liu at May 7, 2007 05:07 PM

Innovation requires more than "... is about changing culture and organization and that takes patience, time and fortitude." Innovation takes funding and confidence. Innovation is not happening at Hewlett-Packard, that's all been outsourced. Innovation occurred at GM in the distant past, but GM management is so completely incompetent that innovation is moth-balled until the the same idea is introduced by the Japanese. IBM, GE, and other American companies are the same, they only have better PR departments.

As corporate America is so willing to dump engineers and technologists, where is the motivation to take risks, which are essential to innovation?

Posted by: Steve at May 7, 2007 06:00 PM

The answer is No, at least not to the small entreprenuer looking to conquer the world through innovation. I actually loose sleep for all the innovation we are deploying in order to make the simplest, easiest and cost effective solution for the mobile contractor who is repairing or remodeling your home. There are over 2 million contractors who fight the business day due to having absolutely "no" business automation. They run their entire business with stacks of forms that they throw onto the bottom of their F150. Unfortunately this is not their fault since the software industry has not matured enough to see the opportunity. The ServusXchange team wants to let the world know that innovation has created MyOnlineToolBox that will be bringing the future of contracting to their front door. We look forward to the day when the average contractor walks to your front door of a home owner with a tablet PC to record his estimate, work order or invoice, or even sending his Purchase Orders to Home Depot or Lowes with one touch of a button. The contractor will be more effeicent, the homeowner will know when someone is coming and not coming, and Home Depot and Lowes will have more efficent associates as a by-product of the business customer's efficiency. It is just a matter of time. Brian Javeline, President & CEO

Posted by: Brian Javeline at May 7, 2007 09:48 PM

Efficient was spelled incorrectly in the previously response in two areas of the 2nd to last sentence. Can you please correct?

Posted by: Brian Javeline at May 8, 2007 12:27 PM

The number one compnay to watch right now is SHOPSTUDIOS.COM They have better ideas than I have seen in decades. It seems like such a sim-ple idea it';s just that no one has everr thought of it. They even coined the phrase "WEBISODE". And how about the FOODREVIEW.TV idea!!! So so smart!!!!! MOve ove Fox, Viacom, CBS, NBC and the rest you have lost your edge!

Posted by: Jacques Rosas at May 8, 2007 05:13 PM

I remember during my apprenticeship at the beginning of my career in engineering, design and innovation being assigned to The Quality Director's team to measure tool wear on machimed components to generate data for a Quality and Reliability Year paper on 6sigma...that was (I think 1965) so on that basis embedding innovation practices that we still don't widely understand will take us a year or two yet. We need to manage our expectations of how quickly we can climb this mountain.. we are still on the foothills!

Posted by: Jim Rait at May 11, 2007 06:39 PM

I see Business Week continue to add fuel to the fire on disillusionment about innovation in recent weeks. Have our leaders in large companies got innovation fatique? As most suffer short-term result deficiency (STRD) what would you expect. Some are old enough to remember when Marketing was establishing itself in the 60s & 70's. Others who are not should reflect. These fundimental changes in business take time and experimentation. Serious experiementation. We need innovation, we need what innovation can produce but we do need the "hearts and minds" of employees and allow them time to learn, grow, experiement and explore innovation. Do CEO's allow this nuturing?

CEO's are not known for their patience as they constantly move on but if they don't wake up to the reality that innovation takes time, beyond the one fiscal year and recognize innovation has three time horizons to evaluate innovation

1. Goals- within the financial period

2. Objectives- attain later that are progressed within agreed time and identifiable segments within the total period

3. Ideals- unattainable within the time period but progress is possible during and after the periods (sometimes) planned as these offer exciting possibilities that can radically alter the present state and need to go across different planning time frames

They need to account for all three when "they" measure innovation and if innovation really does have fatique. When you impose artifical constraints of planning periods you comprimise opportunity.

Thankfully under the larger companies we see emerging the future in smaller more nimble ones, the ones that take time and stay close to understander and translatating the needs of customers, not the needs of the supplier.

Equally many of the major CEO leaders frustrated with progess, who seem certainly less tolerant and impatient, or capable of understanding the uncertainies and complexities of making and embracing the level of change innovation, do not understand the broader needs within the more knowledge exchanging economy and the part innovation will fit.

They perhaps have the fatique and inability to grasp different horizons necessary for innovation

Innovation has a long way to run but not in the faddy way we all seem to like listening to. You need "bigger" picture thinking on innovation to manage its potential

Posted by: Paul Hobcraft at May 12, 2007 07:10 AM


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