The Idea in Brief
Balancing the needs of core businesses and innovation efforts is a central leadership task.
Unfortunately, most CEOs cede that responsibility to core-business heads, because innovation efforts are typically embedded in their units. The result is that competition for resources and attention usually gets resolved in favor of the established business.
On the basis of an in-depth study of 12 top-management teams at major companies, the authors suggest that CEOs take a very different approach. Specifically, they should:
- engage the senior team around a forward-looking strategic aspiration,
- hold the tension between the demands of innovation units and the core business at the top of the organization, and
- maintain multiple and often conflicting strategic agendas.
When leaders take this approach, they empower their senior teams to move from a negotiation of feudal interests to an explicit, ongoing debate about the conflicting interests on which the future of the business depends.
In the fall of 2008, Mike Lawrie, the CEO of the London-based software firm Misys, asked his senior executives to prepare a plan for weathering the global economic crisis. When they reported back, at the top of their list of recommendations was to cut the company’s annual $3 million investment in Misys Open Source Solutions, a venture aimed at developing a potentially disruptive technology in the health care industry.
