Are We Becoming Less Innovative?

Stephen DeAngelis

April 18, 2012

Ravi Mattu, editor of Business Life, writes, “No one doubts that innovation is essential or that the companies that do it better will thrive.” [“Innovation clarion call has a familiar ring,” Financial Times, 14 March 2012] Entrepreneur Luke Johnson agrees that “the most desirable quality for any business is to be thought of as innovative” and “that to create jobs and wealth we must generate valuable new intellectual property.” [“Time to fire up the cauldrons of creativity,” Financial Times, 27 March 2012] Johnson worries, however, that instead of firing up the cauldrons of creativity too many companies are letting them simmer. He writes, “Once, innovation was delivered by leading research and development facilities. But the era of such central laboratories appears to be fading. … Perhaps the greatest R&D hub was Bell Labs, started in 1925.” To read more about Bell Labs, read my post entitled Innovation: The Legacy of Bell Labs.

Johnson believes that one reason central labs are becoming rare is because “the pace of change in many consumer markets has accelerated. Long-term research horizons are harder to justify for commercial enterprises.” He continues:

“Corporations tend to suffer from inertia. Their structures and cultures are always hard to reform. Meanwhile, greater scrutiny and accountability of public companies gives them less permission to experiment – and possibly lets them be seen to ‘waste’ resources. Executives all claim they embrace innovation but, in the 21st century, the price of failure within a hierarchy can be too personally expensive. Moreover, why fund research that might make your current products obsolete? Hence few managers are willing to take big risks, so they play it safe instead – and the business gradually ossifies.”

Brenna Sniderman agrees that not all executives are innovative. More than that, she reports that even among those who are innovative there are major differences. [“The Five Personalities of Innovators: Which One Are You?Forbes, 21 March 2012] She reports:

“Forbes Insights’ recent study, ‘Nurturing Europe’s Spirit of Enterprise: How Entrepreneurial Executives Mobilize Organizations to Innovate,’ isolates and identifies five major personalities crucial to fostering a healthy atmosphere of innovation within an organization. Some are more entrepreneurial, and some more process-oriented – but all play a critical role in the process. To wit: thinkers need doers to get things done, and idealists need number crunchers to tether them to reality. Though it may seem stymieing at times, in any healthy working environment, a tension between the risk-takers and the risk-averse must exist; otherwise, an organization tilts too far to one extreme or the other and either careens all over the place or moves nowhere at all. An effective and productive culture of innovation is like a good minestrone soup: it needs to have the right mix and balance of all the ingredients, otherwise it’s completely unsuccessful, unbalanced — and downright mushy.”

Before briefly discussing the five personality types, Sniderman reminds readers, “None of these are bad. All play crucial roles in developing an idea, pushing it up the corporate channels, developing a strategy and overseeing execution and implementation. These are all pieces of a puzzle, arteries leading to the beating heart of corporate innovation.” The five personality types include: Movers and Shakers; Experimenters; Star Pupils; Controllers; and Hangers-On. Despite the fact that Sniderman insists that none of these are bad, there is certainly a pejorative association linked to Controllers and Hangers On. In fact, the order in which she lists them seems reflect a value judgment and relative importance of each kind of personality with regards to innovation. She begins with Movers and Shakers:

Movers and Shakers. With a strong personal drive, these are leaders. Targets and rewards motivate them strongly, but a major incentive for this group is the idea of creating a legacy and wielding influence over others. These are the ones who like being in the front, driving projects forward (and maybe promoting themselves in the process), but at the end of the day, they provide the push to get things done. On the flip side, they can be a bit arrogant, and impatient with teamwork. Movers and Shakers tend to cluster in risk and corporate strategy, in the private equity and media industries, at mid-size companies. … Movers and Shakers can encompass up to one-third of the executive suite.”

The one thing I didn’t read in that description is that Movers and Shakers are creative. They are driven, but are they idea people? My gut tells me that many of them are. The next group, Experimenters, appear to be better suited to that roll.

Experimenters. Persistent and open to all new things, experimenters are perhaps the perfect combination for bringing a new idea through the various phases of development and execution. ‘Where there is a will, there is a way,’ is perhaps the best way to describe them. They’re perfectionists and tend to be workaholics, most likely because it takes an incredible amount of dedication, time and hard work to push through an idea or initiative that hasn’t yet caught on. They take deep pride in their achievements, but they also enjoy sharing their expertise with others; they’re that intense colleague who feels passionately about what they do and makes everyone else feel guilty for daydreaming during the meeting about what they plan on making for dinner that night. Because they’re so persistent, even in the face of sometimes considerable pushback, they’re crucial to the innovation cycle. They tend to be risk-takers, and comprise about 16% of executives – and are most likely to be found in mid-size firms. … Surprisingly, they’re least likely to be CEOs or COOs – just 14% and 15%, respectively, are Experimenters.”

I don’t find it too surprising that Experimenters prefer to keep busy chasing ideas rather than being overwhelmed with the administrative burdens of the front office. I suspect their absence is more often than not self-selected. The next personality type discussed by Sniderman is the Star Pupil.

Star Pupils. Do you remember those kids in grade school who sat up in the front, whose hands were the first in the air anytime the teacher asked a question? Maybe they even shouted out ‘Ooh! Ooh!’ too just to get the teacher to notice them first? This is the segment of the executive population those kids grew into. They’re good at … well, they’re good at everything, really: developing their personal brand, seeking out and cultivating the right mentors, identifying colleagues’ best talents and putting them to their best use. Somehow, they seem to be able to rise through the ranks and make things happen, even when corporate culture seems stacked against them. Unsurprisingly, CEOs tend to be Star Pupils. What’s most interesting about this group, though, is the fact that, at 24% of corporate executives, they don’t seem to cluster in any one particular job function, industry or company size; rather, they can grow and thrive anywhere: IT, finance, start-ups, established MNCs. They’re the stem cells of the business world.”

Recalling that we are talking about personalities associated with innovation, those first three appear to represent the heart and soul of innovation. The next two personality types — not so much. The first type discussed by Sniderman is the Controller.

Controllers. Uncomfortable with risk, Controllers thrive on structure and shy away from more nebulous projects. Above all, they prefer to be in control of their domain and like to have everything in its place. As colleagues, they’re not exactly the team players and networkers; Controllers are more insular and like to focus on concrete, clear-cut objectives where they know exactly where they stand and can better control everything around them. They comprise 15% of executives — the smallest group overall — and tend to cluster on both extremes of the spectrum: either in the largest enterprises (with 1,000 or more employees) or the smallest (with fewer than 10). This makes sense when you think about it: controllers thrive on overseeing bureaucracy (at larger firms) or having complete control over all aspects of their sphere – at the smallest firms, they may be the business owner who has built an entire company around their personality. Controllers pop up most frequently in sales and marketing and finance, and populate the more practical, less visionary, end of the corporate hierarchy: these are the department heads and managers who receive their marching orders and get to mobilizing their troops to marching.”

Controllers may be important for making a business successful, but they can hardly be considered innovative by most accepted definitions. Hangers-On also fit into that category — necessary but not innovative. Sniderman writes:

Hangers-On. Forget the less-than-flattering name; these executives exist to bring everyone back down to earth and tether them to reality. On a dinner plate, Hangers-On would be the spinach: few people’s favorite, but extremely important in rounding out the completeness of the meal. Like Controllers, they don’t embrace unstructured environments, and they tend to take things one step further, hewing to conventional wisdom and tried-and-true processes over the new and untested. When asked to pick a side, Hangers-On will most likely pick the middle. This is not necessarily a bad set of characteristics to have; someone has to be the one to remind everyone of limitations and institutional processes. While they comprise 23% of all executives – the same no matter the company size – they cluster most strongly in the CFO/ Treasurer/ Comptroller role, where 38% are Hangers-On. This makes sense; someone has to remind everyone of budget and resource constraints.”

My guess is that Luke Johnson believes that too many Controllers and Hangers-On are now in charge in the business world. Ravi Mattu, with whose quote I began this post, was writing a book review about Need, Speed and Greed: How the new rules of innovation can transform businesses, propel nations to greatness, and tame the world’s most wicked problems, by Vijay V. Vaitheeswaran. Mattu asserts that from the title of Vaitheeswaran’s book, he is obviously a “glass half full type” of thinker (i.e., problems can be solved if just put our minds to them). Mattu writes that Vaitheeswaran defines innovation as “fresh thinking that creates something valuable,” and that he believes innovation “is the key to surviving in the age of ‘globalization and Googlization’.”

I’m not sure to what “new rules of innovation” Vaitheeswaran refers and apparently Mattu isn’t either. He writes, “The cases, themes, companies and thinkers discussed are well known.” Nevertheless, Mattu reports that the book “is divided into three sections” that correspond with its title (i.e., need, speed, and greed). He continues:

“In ‘Need: Why Innovation Matters’, he says the combined effect of urbanisation, an ageing population, the rise of emerging markets and a global middle class is placing an unprecedented burden on existing systems. This raises questions for countries – how can the US counter the rise of China? – and big, established companies that ‘are facing disruptive threats that could put them out of business altogether’.

“In ‘Speed: Where Innovation is Going’, he posits that these challenges can be met only if those who feel under threat rethink how they innovate. ‘You must be agile, open, and willing to embrace risk,’ he writes. This means throwing out the top-down approach and tapping into new models such as open innovation. He cites approvingly Procter & Gamble’s Connect + Develop project, whereby it collaborated with innovators from outside the organisation.

“In ‘Greed: How to win in the age of disruptive innovation’, he argues that the ‘post-Enron and post-Lehman’ view that capitalism is irrevocably doomed is wrong. ‘Greed is not only good but also can do great good,’ provided ‘there are clear incentives to tackle the wicked problems of society’. He points to social entrepreneurs who are driven by both profit and ethical motives in creating new business models.”

I’m not sure whether Johnson’s “glass half empty” view or Vaitheeswaran’s “glass half full” outlook is the correct one. One thing both agree on, however, is that companies that don’t innovate won’t thrive and might not even survive in the decades ahead.