Innovate Or Die - How COVID-19 Has Widened The Leadership Skills Gap
Welcome to our new normal. Industries and technologies are changing faster than ever before and we are witnessing a crucial moment in time for organizations to adapt, pivot and embrace change in order to survive. COVID-19 has created a tidal wave of uncertainty, leadership and organizational challenge and opportunity. Companies are being forced to quickly adapt to new consumer, employee and technological demands in order to survive let alone thrive. So we thought we would share some of our insights into this incredible time of change for C-Suite and Executive teams who are in the hot seat of opportunity, to either set a new course of innovation and growth or face the consequences of standing too still and dying on their sword.
Resistance To Change
Innovation is now a must for companies to adapt to our new normal and grow. Yet too many organizations and leaders still cling to the past based on their belief systems, traditional org structures, and mindsets. This resistance to change has been ranked by Harvard Business Review as the number one barrier and challenge towards managing disruption that companies face.
The active innovation leaders within a company are put in a very challenging position. Even if they are working towards re-inventing the company’s processes and culture, their initiatives can be bottle-necked or stopped altogether by others who have a difficult time imagining a different path forwards. These leaders are tasked with shaping the future of their business, yet often aren't given the authority or the resources to make decisions. The pandemic has changed industries and consumer behaviour overnight and leaders who resist change and new ideas and approaches will be putting their company’s brand in a possibly irreversible state of complacency and declining market share.
Future-first Approach To Data
There are organizations with a willingness to change, but only in an effort to adapt and catch up with competitors who have disrupted their industry. This method offers short term sustainability but is ultimately a long term losing proposition. With every competitor you choose to follow instead of outpace, you sacrifice brand equity, market share, and profit margin.
Companies should make data-driven decisions. And yes, this mean looking at what’s worked recently, whether led by you or a competitor, to adopt and scale changes that have proven to improve performance. Over the past decade, analytics and measurability have reached unseen heights and leadership teams have been adapting to new levels of data-backed decision making. However we’re entering a new age of leadership that not only requires an analytical approach to strategic decisions, but also a fearless one.
What does that mean? Leaders should use data not only to measure performance, but to identify where they can take leaps of faith. Innovation requires substituting predictability for possibility, and the best way company’s can do that is by leveraging the world’s current data-overload to identify the biggest opportunities to innovate across their company, operations, and industry.
This level of innovation and agility cannot be achieved with a mindset focused on small variations and eliminating ambiguities. And quite frankly, the recent changes have cut a very thick line between the past and the future, forcing leaders to invent new ways of working. Leaders must not only lead their company through the unknown - they have to be the ones to take it there. This new future-first approach to using data and strategic decision making will differentiate those who lag behind and those who lead in long-term competitiveness.
Putting All Your Eggs In The IT Basket
Many CTO's and CIO's are looked upon as the most knowledgeable technologists in the company and optically it would make sense that they play a leadership role in defining innovation and growth. The reality is these executives have their hands full implementing, enhancing, and improving technologies and systems to run their business and are at a distance from where the innovators and disruptors sit. In many cases they do not have the skillsets and business vision to be the sole agent of innovation and change, nor the mandate to build out new disruptive business models.
“Chief anything doesn’t mean you have the ability to spearhead the innovation transformation of a whole organization.”
Companies not only need the right people to lead their business, they also need the right people to lead innovation in their business in order to accelerate growth. This requires companies to take a closer look at their leadership and executive teams to determine if they have a diverse group of innovators on their board and c-suite to leverage the collective wisdom to move the company forward. Innovation is not a process isolated to a department, it’s the responsibility and life force of the entire organization.
Managing From A Glass Room
All too often leadership teams are focused on monitoring, and not listening, to their teams. This has always been a common weakness in the executive level of organizations and the impact has been further amplified by COVID-19. Having open lines of communication across the organization, and especially from the leadership team, is critical to a company’s ability to predict and respond to challenges and opportunities. You’ll get the fastest visibility into emerging issues by having communication that reaches all the way to the most junior team members on the ground floor. Failing to create open lines of communication through the entire organization slows innovation and momentum.
The reality is that your best ideas may come from your product engineer or data analyst. But you’ll never be able to tap into this diversity and breadth of ideas if you limit the responsibility and empowerment for innovation to a select few managers.
“Building innovation into your culture means cutting off the boundaries to where innovation lives, giving mobility to ideas, and rewarding contributions.”
Remember that new ideas don’t form in an echo chamber. Effective communication requires an openness to feedback and a drive towards constant improvement at both an organizational and personal level. Leaders should welcome and actively seek out new ideas and constructive feedback. They should also seek out input and perspective from outside of the organization to create a more complete picture of their personal and organizational blind spots. Your prioritization of communication, feedback, transparency, and diversity of thought largely impacts your ability to create and react to a major disruption such as the global pandemic we are living through.
Innovation Starts At The Top
Every employee can contribute to the innovation discussion to improve their product or service. However, large scale changes need more than the willingness, resources, and authority of a single level or division of the company.
“Innovation requires strategic, organizational, and budgetary alignment - and that starts at the top.”
The challenge is many leadership teams are not equipped with the skills, diversity of thought and backgrounds that are fundamental to reinventing their organization. When looking at many c-suite profiles around the world, how many are truly innovative, entrepreneurial, digitally plugged in leaders? How many still lead with traditional business models and business practices? When you look at a seasoned board or c-suite's track record, you will find plenty of examples of leadership experience, fiscal responsibility, operational expertise, marketing and technology acumen from highly educated and well-connected leaders. How can we determine which of these executives are true accelerators and not decelerators of innovation in their respective businesses?
Companies who intend to remain or become market leaders following the massive changes from COVID-19 must hire and measure leaders based on their ability to adapt and re-invent the business. Companies must make innovation part of their DNA, which is primarily shaped by their leadership team and executive board members. How you select and evaluate your leadership should align with the ways your company intends to operate and compete in this new world.
For innovation to thrive, companies need:
A board and C-suite made up of multiple technology and innovation leaders. Innovation can't rest on one person's shoulders and leaders must be drivers, not decelerators of change.
Recognition that innovation is about taking risks with the help of data and predictive analytics. Being agile and nimble requires the ability to move quickly and fail fast.
A culture of innovation across the company, with input from employees at all levels. Innovation and ideas come from every corner of your organization including where you least expect it.
Outside-party and organization-wide lines of communication with an openness to feedback. Don’t rely on incomplete information and miss blind spots.
An inclusive board and C-suite includes gender and culture diversity without prejudice of age or race. Future CEO and leaders won’t necessarily be those who have worked for a company the longest. Tenure and loyalty are important, but every executive from CFO to CDO will have to demonstrate a high degree of agility and entrepreneurial spirit to foster a culture of innovation and change to earn their jobs back every year.
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