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Top Ten Innovation Mistakes.


We have a survey of surveys done by the big consulting firms on innovation showing that CEOs believe innovation is critical to their companies?performance but don’t really know how to optimize its execution.

BCG, McKinsey and Booze Allen each have insightful analyses about how to make innovation work.

I’ve been thinking about how hard it really is to implement innovation, how complex and frustrating it is in reality. So here are my top ten innovation mistakes. In no particular order—except No. 1 which is by far the worst mistake made most often with the most impact.

1-CEO sloth. There’s no pretty word for failure to focus on innovation by top management. Every major innovation index, including the new one coming out by Business Week in 08, shows significantly higher rates of return for companies that innovate. Yet CEO’s consistently mouth the word without providing the leadership and

resources to make it happen. CEOs need to make the time to lead the innovation movement in their companies.

2- Adding, not transforming. Most corporations today will allow innovation to be added to their structure. They will add a new innovation pipeline, a new social networking process, a new customer focus group, a new product or service. But companies usually don't scale or leverage the innovation to transform the entire corporate culture--so the innovation remains isolated. In the end, the old pushes back and erodes the new, the best talent leaves, and managers wonder why innovation doesn't work.

3- Choosing Metrics over talent. You must run a global corporation with a system of metrics in place. But measuring efficiency doesn't make a company creative. You need talented people for that. Creative talent is rare in business culture. B-Schools are only beginning to produce them. Getting your efficiency metrics grid down is critical to success but doesn't guarantee it anymore. Swimming in the global talent pool to get creative people for your company is just as critical to success today.

4- Failing to use design thinking strategically. Most companies employ innovation and design consultancies at the midlevel to foster culture change. That underestimates the power of design thinking to guide companies through this unusual period of constant and unexpected change. Innovation consultants and coaches should be used at the top of the executive pyramid.

5- Underestimating Crisis. We don't live in a world of change, we live in a world of crisis. It's "change" on steroids" and its impact on us is greater than at any other time in a century. We are living through an energy crisis, a technology crisis, a political crisis, an economic crisis, a food crisis, a demographic crisis, a terrorist crisis--all overlapping and happening at the same time. How to manage in constant crisis mode is the critical management problem of our era.

6- Neglecting the power of culture. The term "globalization" blinds many top managers to the influence of local culture. There is a tendency to level everything out--to boost efficiencies. Make similar products and services around the world, sell them through similar retail systems, deal with consumers in similar ways, treat employees in similar fashion, etc. Look to India to see how Indian companies operate differently in villages and cities, at the top and bottom of the pyramids.

7- Failing to maximize the new distribution of genius. The rise of global distributed networks of talent and creative people changes the game for business. Thanks to huge investments in education in Asia and Europe, especially in ex-communist countries, the distribution of genius around the world is radically altered. Many top managers are failing to use collaborative networks to tap this talent. Managing these networks is a key skill for the future.


Steve Ballmer, Power Forward
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