What makes a growth leader?
Today, what distinguishes growth leaders from growth laggards is ‘innovation prowess’ – a mix of strategic growth-seeking discipline and innovation ability. Growth leaders get ahead of the laggards and stay ahead. The laggards are always trying to catch up – and rarely succeed.
At growth leaders such as Samsung, GE, Amex and LEGO, innovation is carried out in a context of high uncertainty – the bigger the innovation, the more uncertain the outcome.
By embracing uncertainty they say they are willing to take risks and put resources behind them, but are clear they will learn from their experiments. They don’t feel they have all the answers, but will try a lot of different things. They live by the mantra: start small, think big, learn quickly and scale fast.
Growth leaders also start from the outside in. They stand in the shoes of their partners, customers and competitors and ask questions such as: ‘Where will our customers be in 10 years and how can we help them succeed?’ They keep in mind the customers’ experience: satisfying their latent needs and trying to anticipate them is crucial.
They are great networkers and open to diverse views. They have strategic foresight, and when they are presented with a challenge, they start to identify what’s behind it. They also create a culture that permits discovery – giving people the time to pursue their own interests.
How can you develop your innovation prowess?
There are four things that you as a leader can do:
1. Invest heavily to develop and retain talent in innovation activities. The willingness to do this on a sustained basis is the big discrimination between growth leaders and laggards.
2. Nurture a culture that learns from disappointment and failure. In healthy, growth-oriented cultures, there’s a syndication of risk – there’s not just one person to blame, which can be devastating for an organisation.
3. Acknowledge that consistently above-average growth cannot be achieved entirely through your own resources. Growth leaders support collaboration and partnerships and recognise the strength that can be leveraged from these. This is another source of scarce talent.
4. In innovative organisations, leadership ties rewards and recognition to innovation results. This includes a dashboard that focuses on the effectiveness of innovation activities. For example, measuring innovation methods (inputs such as R&D, spending), those that deal with effectiveness (did we achieve targets?) and outcome measures (e.g. percentage of sales to come from new products in the past three years).
Average firms tend to say they will support growth investments, but often short-term issues take priority and resources are pulled away. In the recession, there was a survival mandate but growth leaders did not cut those programmes dramatically. They showed a steady commitment to growth.
The highest priority for you as a leader is to show a steady commitment to an innovation agenda that will deliver superior organic growth. This is demonstrated in three ways:
Engagement: Leaders have a growth strategy with clear aims, and ensure these are understood. In many firms, most staff don’t understand the growth strategy. Leaders also insist on accountability for hitting growth targets.
Support: Ensure there’s enough resources to hit growth targets. If you want to grow by 3% faster than GDP, follow this up with the right resources.
Protect: Once you have committed to investments in long-run growth initiatives, stick with them. People are averse to risks from major innovation and will not engage in a growth agenda unless they know you stand with them.
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