The other day, my 10-year-old daughter, Anna, told me she wanted to write a book. I was thrilled. I immediately saw this as a bonding opportunity; one of those great teachable moments about how to turn her idea into real action. Easy, right?
As executives, we do this all the time. We develop ideas, set strategy, convene planning meetings and lead budget sessions. We ask and answer questions about value propositions, target markets, distribution costs, projected sales, etc. But these foreign concepts to my 10-year-old would likely dampen any creative spark for her new book idea. That realization ignited a question of my own: how many ideas suffer the same preemptive bureaucratic death in the corporate world? This is not a theoretical question.
Today, our ability to turn real ideas into action is arguably the most critical role we play as leaders. And this is not a new pursuit; it has dogged innovators for centuries. Thomas Edison faced the same challenges, often saying, “Ideas without execution are just hallucinations.” We all know new ideas are critical to moving the world forward, but ideas themselves aren’t worth anything without solid execution. So how can leaders do a better job of driving ideas to completion?
Think about it. There are stories upon stories of companies that had a dynamic idea or proprietary technology, but fell off the map after they failed to execute or innovate. As leaders, we need to learn from these examples and do a better job turning ideas into action, or risk the same fate. So, partially inspired by my daughter, here’s the new leadership agenda, comprised of the five building blocks of effective idea activation.
Building Block #1: Dream Without Fear
All innovation begins with a dream. Whether it’s from a 10-year-old or a CEO, a dream creates energy and excitement. A dream keeps everyone excited and focused on helping the company change and grow in a unified direction. A good dream comes to life for those around it. Dreams are more than just words like “make money” or “we want to grow the business.” Consider Walt Disney. Perhaps one of the most visionary leaders in American history, he had a remarkable ability to talk about his company and ideas tangibly, visually and viscerally. When he spoke, people around him felt his words. They saw what he saw. They were excited and engaged – like a child at one of his parks.
Next time you speak to your company as an executive, make sure you articulate your vision so everyone can feel it. Do not be afraid to share your dream. Let those around you feel and see the future you see. Most importantly, let them help you shape it. Stop analyzing and start dreaming.
Building Block #2: Cultivate a Culture and Provide New Measures
In 2013, the U.S. Patent and Trade Office received 610,000 applications for patents – more than double the number just 15 years earlier. On average, fewer than half of those patents are granted. In other words, there’s a 50-50 chance at relative “failure.” But that clearly doesn’t sway any of today’s inventors from trying. They have deeply held passion for their ideas, which drives their desire to innovate. But where is this same level of commitment in the corporate environment? Innovation grows from ideas, which are sparked by the passion felt by engaged employees. The culture of a company can make or break those feelings.
As leaders, we must create a company culture that facilitates engagement and allows for new ideas to be developed by any employee, even if that idea does not apply to an employee’s specialized role. Today, one of the foremost technology companies in Silicon Valley credits this practice with the development of new, popular ideas and widely-used platforms. This concept was actually developed almost 75 years ago by a company that saw incredible results from encouraging employees to step beyond their own core responsibilities and work “off task.” Consistently named among the world’s most innovative companies, this corporation promotes a “15 percent time” program allowing employees to spend company time and resources working on their own projects. Imagine how the financial industry could benefit from something like “15 percent off-task time.” Because ideas can come from anywhere, at any time, financial executives need to devote more time to qualifying and supporting this phase of development – while also knowing when to pull the plug if an idea loses too much momentum.
Building Block #3: Provide Resources, Not Just Dollars
True leaders need to put the proper resources into the hands of the right people so they can innovate – initially in a low-risk, low-pressure environment. In his book Great by Choice, Jim Collins calls this the “Fire Bullets, Then Cannonballs” principle. It’s about course-correction. To a ship at sea, bullets are low-cost, low-risk and low-distraction. Bullets give the crew a chance to test new firing strategies without crippling the ship’s resources and the opportunity to fine-tune those strategies. Then, they are able to bring out the big guns – the cannonballs.
Like an initial investor (a “friends and family round of funding”), you see promise in the idea. You may not see the final idea. You might not be able to put your finger on the key to success, but you’re excited enough about the idea to put “some” of your money at risk.
You’re able to sink more resources comfortably or attract other funding as long as you continue to see progress. The resources are not just the dollars; they also include the crew. The crew is not just one person on a corporate ship. When we talk about using company time and resources for independent projects, we also must acknowledge the importance of allowing innovators to build a team that utilizes individuals’ strengths to get an idea off the ground. After all, you would never want the ship’s master gunner to take on the role of sailing master – you’d be going in circles directionally!
Giving your people the flexibility to create their own development crews around promising ideas allows captains and crew members to formulate and tweak execution plans, so that when the time comes, the company has cannonballs at the ready.
Building Block #4: Recognize the Small and the Large Successes
It takes time to amass scale. Not all evolution is revolution. Even the smallest innovation – maybe a small change in process to increase efficiency – should be recognized and celebrated. Some changes start small but become large.
Case-in-point: SEI. Al West, who started the company in 1968, heard about a seemingly small problem involving how trusts report to different clients. In response, he created an automated trust and accounting system. He saw that as a “pain-pportunity” and a chance to make an incremental improvement. From there, the idea snowballed and became so valuable to the industry that now nearly half of the top-20 largest banks in the country use this software. Almost everyone is capable of making an incremental innovation like Al, and some might even snowball into a financial revolution. Think of it like this: where would we be today if all 77 million financial professionals made one incremental improvement? Several small innovations to policy, process or customer experience can create as much value as one big idea; executives should encourage both.
Growth is driven by change and change takes time. Celebrate the wins along the way; don’t just wait to celebrate when you reach the finish line. You need to have milestones en route to the final destination, otherwise the team may lose its way or, worse, lose its energy and belief in the dream.
Building Block #5: Revisit Your Metrics of Success for New Ideas
You cannot hold a new idea to the same metrics of the established business, or you will never fund it and it will never seem successful. Your culture must allow for the planting of new ideas and have the patience to see them grow. There’s an inherent fear in the C-suite of not understanding how to measure innovation, especially in early-stage ideas. Many times, a new program doesn’t necessarily fit into the short-term P&L, and therefore dies before it has a chance. Executives should face this fear to find a way to measure and track the value of an idea to the business. To do that, we must use more forward-looking measures to evaluate whether the company is truly turning ideas into action.
These metrics may initially be less financial and more operational. You want to focus initially on getting the idea off the ground. Some key performance indicators (KPIs) that might fit your business include: building a prototype, finding a beta customer, developing a pricing model, etc. These KPIs are examples; each executive should determine what works best with the processes already in place, and how they will eventually align with the bottom line.
Bringing this back to my daughter, Anna is the creative mind. She is the passionate innovator, the idea person. I don’t want to stunt that creativity or passion by taking the fun and excitement out of the idea. I instead need to find a way to motivate, support, and nurture her and her passions consistently.
This is the same innovation mandate for today’s leaders. Experimenting with employees’ ideas sends a message that the company is willing to do whatever it takes to improve, and can serve to spark untapped innovation and energy in surprising parts of your business. As for Anna, I don’t know if she’ll ever write a book. She hasn’t yet. But she’s already made me think about how to be a better leader. How many published or unpublished books can make that claim?
Al Chiaradonna is senior vice president, North America Private Banking, for Oaks, Penn.-based SEI and author of SEI’s Front and Centered blog, which focuses on the intersection of life and leadership. He can be reached at [email protected].