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CEO Test: Are You Serious About Innovation Or Just Playing Theatre?

Alexander Osterwalder

It’s not enough for CEOs to initiate innovation and strategy activities inside the company. The CEO has to participate in the process, with enough face time and involvement, or else it’s just innovation theatre. Here’s how that can change.

The idea for this post was inspired by a meeting I had with the business model innovation team of a large tech company. The organization has its tentacles in a few major industries that amount to tens of billions of dollars in revenues. The team leader tried to convince me that their CEO was fully committed to creating new growth engines.

I asked, "How much face time with the CEO do teams focused on new growth engines get  every quarter?". I was actually tempted to ask how much time they get every week or month, but didn’t want to frustrate them too much. The response  was something like three hours. Three hours! To quote Steve Blank, my friend and initiator of the Lean Startup movement: “That sounds like innovation theatre to me.”

Don’t get me wrong: CEOs are hard pressed for time, but if they are serious about growth innovation in their organization, then they need to do more than just lip service. Rita McGrath, another friend and professor at the Columbia School of Business, likes to say “I can tell how much you prioritize innovation just by looking at your agenda.”  

So what can be done?

I’ve put together a calendar for CEOs to coordinate a series of meetings and interactions their organization’s innovation engine. These meetings will help the CEO stay up-to-date on the progress of new business ideas, but also lend his support and weight to resources from the existing business that can help move along the exploration and validation of new business models and value propositions. It’s important to note that the calendar allots a minimum of eight hours each week dedicated to innovation meetings.

Meeting with the Chief Entrepreneur

The CEO’s first meeting will be with the Chief Entrepreneur--the person who is responsible for building new growth engines while the CEO manages the existing business. This meeting will provide an opportunity for both executives to discuss the company’s innovation portfolio: what initiatives are emerging, how much evidence has been gathered for new ideas, etc. If the CEO does not meet with the Chief Entrepreneur at least once a week, then it clearly shows that growth innovation is not an important topic for the CEO.

Meeting with the company’s entrepreneurs

The second meetings will be with the company’s entrepreneurs who run some of these growth initiatives, and are doing the hands-on work of exploring and validating new ideas. These meetings will help the CEO where there is potential for new business ideas, and how the execution engine can support these initiatives. Ideally, to prioritize and declutter time, the CEO would mainly meet with the most promising new growth engines to throw his or her support for further growth.

Meeting with potential customers of new growth engines

The third type of meeting is with potential customers of potential new growth engines to understand, first hand, some of the evidence from the market. This will help the CEO understand where the world is going. Meeting with potential new customers, talking to shareholders, talking to existing customers. The information that’s been investigated here, along with the company’s entrepreneurs, allow the CEO to hear what customers want straight from the horse’s mouth.

Meeting with the Chief Internal Ambassador

In our org chart of the 21st century, the Chief Internal Ambassador (CIA) is the bridge between the execution and innovation engine inside companies. He or she has a neutral view, with the best interests of both sides of the company, who can give a good picture of progress, champion for resources, budget, and even collaboration between both sides of the business. In this meeting the CEO and CIA can discuss how the collaboration between the two worlds is working out. Are people inside the execution engine providing sufficient resources to help the innovation engine succeed? Is the innovation engine careful to not attack the execution engine? Is the existing business at risk by the innovation engine?

Quarterly Innovation “Summit”

Lastly, there should be a meeting every quarter to review the entire portfolio with the Chief Entrepreneur, the hand-on entrepreneurs, the Chief Internal Ambassador, and a selection of key execution engine roles. The Chief Entrepreneur will cover the innovation portfolio on a whole--the different initiatives and the progress being made, and the entrepreneurs will talk about the business models and value propositions being tested, and how they are validating them. Finally, the Chief Internal Ambassador can update the all attendees on the collaboration between the execution engine and the innovation engine. This way, everyone is up-to-date and aligned with what’s going on across the full spectrum of the company.

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