How Innovative Leaders Maintain Their Edge

(From Forbes) -- This issue marks our second year collaborating with Forbes to rank the world’s most innovative companies based upon an innovation premium. Since last year’s inaugural list was published, we’re often asked: “Why are some companies able to create and sustain a high innovation premium while others don’t?” While still in the early stages of an in-depth analysis of high- versus low-innovation premium companies, our initial results show at least three key things that the innovative companies do to create and sustain an innovation premium. How well companies leverage people, process, and philosophies (what we call the 3Ps) differentiates the best in class from the next in class when it comes to keeping innovation alive and delivering an innovation premium year after year.

On the people front, the behavior of leaders matters—big time. In our initial study on disruptive innovators published with Clayton Christensen in The Innovator’s DNA, we found five “discovery skills” that distinguished innovators from non-innovators. Innovators ask provocative questions that challenge the status quo. They observe the world like anthropologists to detect new ways of doing things.  They network with people who don’t look or think like them to gain radically different perspectives. They experiment relentlessly to test new ideas and try out new experiences. Finally, these behaviors trigger new associations which let them to connect the unconnected, thereby producing disruptive ideas.

We also developed a self- and 360-degree assessment to determine how much individuals engage these skills. Our preliminary look at high (versus low) innovation premium companies found that senior leadership’s innovation skills make a serious difference. In fact, CEOs of high-innovation-premium companies scored at the 88th percentile of the five skills of disruptive innovators. By comparison, CEOs of average companies scored at only the 62nd percentile. From a different angle, innovative leaders spent approximately 31 percent of their time actively engaged in innovation-centered activities compared to only 15 percent by leaders of less innovative companies. Doubling the time a senior leader personally invests in getting new ideas typically delivers significant returns.

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