Sector News

R&D Won’t Succeed If It Ignores the CEO’s Vision

April 30, 2015
Borderless Leadership

After a morning innovation workshop at the bucolic R&D campus of a top-tier but tradition-rich technology giant, the lunchtime conversation with the Lab’s leadership turned strategic. A charismatic CEO, imported from outside the industry, was making bold, expensive investments in new markets. As a result, Labs management was being asked to do more with less. What should they do? How should they better prioritize innovation?

I answered their obvious questions with my own: What new innovation initiatives had they launched, and what dedicated team had they organized, to explicitly support their CEO’s high-profile moves toward diversification?

Silence. With the exception of the firm’s venture arm looking at a few external start-up options, no formal or informal Lab groups were directly working on their CEO’s newly declared priorities. “We’re really not budgeted for that,” the leadership team explained.

These Labs were filled with talented technologists and innovators. But nobody owned the challenge — and opportunity — of aligning them with the CEO’s ambitions.

When CEOs publicly communicate new directions and priorities for their enterprises, that needn’t marginalize existing R&D and innovation efforts. But it strongly suggests resources be dedicated to making those CEO visions achievable.

Ensuring that the company’s innovation culture and pipeline reflect the CEO’s vision and priorities poses few problems for companies like Apple, Amazon, Google, or Tesla. The challenges are tougher for more established organizations where CEOs may publicly value consistent incremental efficiencies over new value creation and new markets. There, innovators need to be better attuned to the tone at the top.

Take Boeing. After a series of expensive problems with its Dreamliner development, its CEO, Jim McNerney, revised the company’s innovation ethos, declaring its era of boundary-pushing “moon shots” over. “Airlines,” he concluded, “don’t want to pay more for advanced technology.”

“It’s not to say you don’t innovate,” explained Raymond Conner, Vice Chairman of Boeing and President and CEO of Boeing Commerical Airplanes. He wants engineers “innovating more on how to [design jets] more simplistically, as opposed to driving more complexity… How do you innovate to make it more producible? How do you innovate to make it more reliable?”

Whether they agree or disagree, Boeing engineers and innovators would be wise to focus on innovations instantly recognizable as simpler, easier to produce, and more reliable for commercial aviation. And that needn’t eradicate the company’s technical prowess and reputation as an aerospace pioneer.

Quarterly calls are good opportunities to ensure alignment. What would inspire the CFO or CEO to talk to investors about a major innovation underway? How does the project make tangible an idea the CEO raised a quarter or more ago? How might it enhance executive credibility even as it provokes disruption in the marketplace?

Smart innovators know how important it is to make their CEOs look smart.

By Michael Schrage

Source: Harvard Business Review

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