Three Tensions That Emerged from The CEO Forum’s Latest CEO Summit
Purple Strategies is the thought leadership and polling partner of The CEO Forum Group and Transformative CEO Summit. The CEO Forum convened its sixth quarterly Transformative CEO Summit on June 21, 2022, featuring many CEOs of leading companies discussing creative ways to solve today’s most pressing challenges.
Charged with fostering breakthrough innovation for their organizations amidst an ongoing pandemic and a range of other global stressors, CEOs at the June Transformative CEO Summit shared their experience harnessing a force core to building a culture of innovation: tension.
Developing an innovation culture is a multi-faceted and complex process, these leaders agreed, requiring a dynamic of healthy tension. Moving too fast can overwhelm an organization’s capacity for producing an innovative product or idea, for example, and moving too slow can render even the best idea obsolete. Acknowledging the conditions required for breakthrough innovation, Transformative CEO Summit participants highlighted three key tensions critical for leaders to fine-tune and foster.
Tension #1: Rewarding Success and Welcoming Failure
Employee behaviors and motivations are a key driver of an organization’s culture of innovation. For CEOs to develop a sustainable environment in which their employees continually generate new ideas or improve upon existing processes, leaders must balance rewarding breakthroughs in innovation while welcoming – if not encouraging – failure.
Transformative CEOs celebrate innovative ideas at all levels, not just the ones with the largest impact to a company’s P&L. They build a culture of innovation that pervades the entire company rather than making innovation the purview of just one product development team or a single innovation-focused business unit. Small improvements in efficiencies or solutions to long-standing issues start with those employees on the ground feeling empowered to innovate without asking permission. By proactively engineering and rewarding a diversity of thinking and ultimately results, CEOs can encourage and celebrate innovation happening throughout their organization. And everyone has a chance of being rewarded.
Focusing only on rewarding innovation successes can have unintended consequences of employees feeling pressured to inflate their results or hide serious complications and obscures the reality that trying new ideas is fraught with false starts, test drives, and at times, outright failures. Transformative CEOs openly acknowledge that experimentation that does not always (or at first) yield the desired end result. This gives employee innovators a safe space to be creative as well as fosters the development of flexible processes and technologies that enable people to pivot, connect the dots, and improvise.
Tension #2: Having Patience and Moving Fast
While a culture of innovation is one in which company leaders and their employees never stop developing new ideas, breakthrough innovation comes when companies optimize the tension between moving quickly and waiting for the right moment. Transformative CEOs balance both short-term and long-term innovation goals, driving urgency around near-term opportunities in which timeliness is critical to success, while also finding the space, time and resources for longer-term investments to develop.
Transformative CEOs pace their organization’s progress while pursuing innovation. For example, executives in the Supply Chain Agility and Health workgroup discussed the trade-off of going after incremental improvements and so-called low-hanging fruit, noting that when organizations commit resources to quick innovation wins for short-term gain, they need to carefully consider their readiness and capability to also make investments in the types of longer-term projects and innovation that can lead to structural improvements and transformative ideas. In agreement, several summit participants shared how they directed their organizations to take advantage of temporary COVID-19 shutdowns to rethink and rebuild entire aspects of their business.
Patience may be a virtue when it comes to innovation, but Transformative CEOs continually face the tension of needing to act, fast, to avoid losing out on important business opportunities, potential hires, and losing out to the competition. Summit attendees credited the role of data in enabling them to respond to change quickly, and to fuel rapid innovation when needed. Transformative CEOs at the summit stressed the importance of using all of the data leaders have at their fingertips to better attract customers, appeal to key stakeholders, meet employee needs, and experiment with products and services to quickly modernize and/or bring new offerings to market.
Tension #3: Simplicity and Scalability
Many organizations represented in the Transformative CEO Community are global companies that face tension between keeping things simple and managing the complexity required to scale when meeting multiple and often different stakeholder needs. CEOs need to solve customers’ problems in a quick, intuitive and data-driven way that scales for broader impact, yet manages to feel localized and personalized for each customer.
Transformative CEOs believe that innovation, at its most simple framing, must make things easier for the end user and solve a problem. In their view, priority characteristics of a successful innovation are practical, intuitive and simple. This requires innovators – at the organization, business unit and individual-contributor level – to identify their core value proposition and commit to that, without tacking on extraneous elements that may become distracting or too complex.
The need for businesses to scale can be at odds with the push for simplicity. In the age of customization and personalization, organizations are required to meet the demands of not only all their customer and stakeholder groups but also each of them individually, in order to deliver a meaningful experience to each stakeholder. To scale, Transformative CEOs go beyond simply understanding customer needs and thinking of the customer as a transaction, and take the next step of engaging with the customer as part of the organization’s community. From loyalty programs to virtual reality product launches, companies can create meaningful experiences for each stakeholder. Keeping the idea simple, but scaling a meaningful experience, is the third tension CEOs have to manage as they innovate on processes, products and services.
While Transformative CEOs represent a variety of industries, backgrounds and geographies, most navigate the same three tensions – rewarding success and welcoming failure, having patience and moving fast, and simplicity and scalability – to drive breakthrough innovation in their organizations.