INNOVATION LEADERS

How Senior Executives Stimulate, Steer and Sustain Innovation

Jean-Philippe Deschamps

PART 1
The Leadership Imperative
The Leadership Imperatives outlined in the context of innovation strategy emphasize the crucial role
of structured, formal processes and governance to effectively manage and foster innovation within
organizations. These imperatives can be broken down into three main categories: Formal Process
Management, Innovation Governance, and Mobilizing Innovation.
1. Formal Process Management: This aspect focuses on treating innovation as a formal corporate
process that requires dedicated management to ensure its success. It involves:
- Process owners and coaches: Assigning responsibility to specific individuals who oversee
the innovation process, ensuring that ideas move smoothly from inception to
implementation.
- Cross-functional teams: Utilizing teams that span across different departments within the
organization to bring diverse perspectives and expertise to the innovation process, thereby
enhancing the potential for breakthrough ideas and solutions.
- Performance indicators: Establishing clear metrics to measure the progress and impact of
innovation initiatives, allowing for adjustments to be made as needed to improve
outcomes.
2. Innovation Governance: This area deals with the structural and organizational aspects that
support innovation, including:
- Innovation officer roles: Creating positions within the organization, such as Chief
Technology Officers (CTOs) and innovation officers, who are tasked with leading and
coordinating innovation efforts across the company.
- CTO and innovation boards: Forming boards or committees that include CTOs and other
innovation leaders to provide strategic direction, allocate resources, and oversee the
innovation portfolio of the organization.
3. Mobilizing Innovation: This category emphasizes the importance of engaging the organization
and its resources to support innovation efforts:
- Innovation steering groups: Setting up groups tasked with guiding innovation projects,
making decisions on prioritization, and ensuring alignment with the organization’s strategic
objectives.
- Defining processes and diagnostics: Developing clear processes for innovation
management and employing diagnostic tools to identify areas for improvement, ensuring
that the organization’s innovation efforts are as effective and efficient as possible.

Organizational Creativity
The segment on Organizational Creativity outlines several strategies aimed at fostering a culture of
innovation within an organization. These strategies focus on leveraging diverse perspectives, external
insights, and individual creativity to drive innovative outcomes. Here’s an in-depth look at each
strategy:
1. Promoting Diversity: This strategy emphasizes the importance of cultivating a workforce with
varied backgrounds, experiences, and viewpoints. A diverse team is more likely to generate a
wide range of ideas and solutions, enhancing organizational creativity. The concept of 'corporate
DNA' underlines how fundamental values, often embedded in a company's history and makeup,
benefit from the richness brought by diversity in staff profiles, thereby boosting creativity.
2. Encouraging External Contacts: External contacts serve as a vital source of new ideas, market
insights, and technological trends that can stimulate internal creativity. Organizations should
encourage staff to engage with external entities and networks to bring fresh perspectives and
knowledge into the company. This external interaction is seen as an essential stimulant and
amplifier of internal creativity.
3. Hiring Constructive Mavericks: Constructive mavericks are individuals who challenge the status
quo and think differently. Their presence in an organization can prevent 'groupthink' and foster a
culture where radical, sometimes brilliant, ideas are welcomed. These individuals are essential
 for pushing the boundaries of conventional thinking and encouraging innovative problem-
solving.
4. Stimulating Bottom-Up Innovation: This approach involves empowering all employees to
contribute ideas and participate in the innovation process. It includes setting clear innovation
targets, establishing mechanisms for idea collection, and providing rewards and recognition for
contributions. This strategy aims to tap into the innate creative potential of the workforce,
making innovation a collective effort rather than a top-down directive.

- Setting innovation targets: This involves establishing clear goals and benchmarks for
innovation, helping to focus efforts and measure progress.
- Idea collection and rewards: Implementing systems to systematically collect ideas from
employees and rewarding those that contribute valuable inputs encourages a continuous
flow of innovation. It's about creating an environment where innovation is recognized,
valued, and incentivized.

Top-Down vs. Bottom-Up Innovation

The comparison between Top-Down and Bottom-Up Innovation approaches highlights the different
strategies and methodologies organizations use to foster innovation and creativity within their
operations. Each approach has distinct characteristics and requires specific actions and attitudes from
leaders and employees to be successful. The key aspects of these innovation strategies include:
1. Building Awareness and Commitment: For both top-down and bottom-up innovation, creating a
culture that supports and encourages innovation starts with building awareness of its
importance and securing commitment at all levels of the organization. This involves
communicating the strategic value of innovation and ensuring that everyone, from top
executives to operational staff, is aligned with the innovation goals of the company. Leaders play
a critical role in modeling this commitment and fostering an environment where innovation is
valued and pursued.
2. Focused Breakthrough Projects: In a top-down approach, management identifies and initiates
focused breakthrough projects based on strategic objectives, pushing these projects down
through the organization for implementation. Conversely, bottom-up innovation encourages
employees at all levels to generate and develop ideas that could lead to breakthrough
innovations, with management then supporting the most promising of these projects. Both
approaches require a clear process for selecting and focusing on projects with the potential to
significantly impact the organization.
3. Innovation Trophies and Rewards: Recognizing and rewarding innovation is crucial in both top-
down and bottom-up strategies. Innovation trophies, rewards, and other forms of recognition
can motivate individuals and teams, encouraging further innovation. Such rewards highlight the
organization's commitment to innovation and serve to celebrate successes, big or small,
reinforcing the value placed on creative efforts and achievements within the company.
4. Customer-Centric Cultures: Both innovation approaches benefit from a customer-centric culture,
where understanding and meeting customer needs are at the heart of innovation efforts. In a
top-down strategy, leadership drives the organization towards innovations that align with
customer demands or anticipate future needs. In bottom-up innovation, employees are
encouraged to bring forward ideas that enhance customer satisfaction and experience,
leveraging their direct insights and interactions with customers.
5. Role of Innovation Leaders: Leadership plays a distinct yet critical role in both approaches. In
top-down innovation, leaders are the visionaries who set the direction and mobilize resources to
achieve specific innovation goals. They must communicate the vision clearly and inspire the
organization to follow. In bottom-up innovation, leaders act as facilitators and supporters of
grassroots ideas, identifying and nurturing promising innovations and ensuring they receive the
necessary resources and attention to develop.

CTO and CIO Roles

The roles of Chief Technology Officer (CTO) and Chief Information Officer (CIO) have undergone
significant evolution, adapting to the rapidly changing technological landscape and the strategic
demands of modern organizations. Their responsibilities, while distinct, overlap in areas concerning
the strategic management of technology, the enhancement of Research and Development (R&D)
performance, and the leadership qualities necessary to drive innovation and technology-driven
transformation.
1. Evolving Responsibilities: The responsibilities of CTOs and CIOs have expanded beyond
traditional boundaries. CTOs are increasingly involved in strategic technology management,
focusing on leveraging technology to drive business growth and innovation. CIOs, while
traditionally focused on managing IT infrastructure and operations, are now also seen as
strategic partners in the business, contributing to decisions that affect the organization's
competitive position in the market. Both roles require a deep understanding of how technology
impacts the business and the strategic use of technology to achieve business objectives.
2. Strategic Technology Management: CTOs and CIOs are tasked with managing technology more
strategically. This involves aligning technology and business strategies, particularly for the long
term. It requires an understanding of the strategic implications of technology choices and how
these choices support the company's overall strategy and impact the bottom line. Strategic
technology management is critical for driving innovation, achieving competitive advantage, and
ensuring the company's technology investments deliver value.
3. R&D Performance Enhancement: Enhancing the performance of R&D is a key responsibility,
especially for CTOs. This includes introducing a stronger business focus within R&D, building a
seamless innovation process that integrates R&D with other functions such as marketing or
manufacturing, and leveraging corporate technology resources effectively. The goal is to ensure
R&D efforts are aligned with business objectives and that R&D investments lead to competitive
new products and features.
4. Leadership Qualities: Effective leadership is essential for CTOs and CIOs to fulfill their evolving
roles. This includes:
- Credibility and Networking: They must be credible as senior executives and have a
successful track record in R&D and technology management. Networking with external
sources and being well-connected are crucial for staying abreast of technological trends and
opportunities.
- Tenacity, Passion, Diplomacy: Tenacity is needed to overcome challenges such as
fragmentation of effort and resistance to change. A passion for innovation and technology is
essential to inspire and motivate teams.

Innovation Process
The innovation process can be broadly divided into two critical phases: the front-end, focusing on idea
generation and concept development, and the back-end, which is centered around the execution and
commercialization of those ideas. Each phase requires distinct leadership styles, attitudes, and
approaches to effectively manage the unique challenges they present.
1. Front-End and Back-End Leaders: The front-end of innovation is characterized by creativity,
where ideas and technologies are generated and turned into validated concepts. This phase
benefits from leaders who excel in asking the right questions, fostering an environment of
exploration and open-ended inquiry. On the other hand, the back-end of innovation focuses on
turning a concept into a finished product or service and successfully launching it in the market.
Leaders in this phase are typically problem-solvers who navigate through the complexities of
product development, manufacturing, and marketing to bring the idea to fruition. Both
leadership styles are complementary and necessary for the successful implementation of the
innovation process.
2. Idea Generation and Execution: Successful innovation requires not only the generation of
creative and customer-oriented ideas but also their effective execution. The front-end phase
involves brainstorming, research, and the development of potential solutions, emphasizing the
need for a diverse and inclusive approach to idea generation. The back-end phase, however, is
where these ideas are tested, refined, and transformed into tangible products or services. This
transition from idea to execution underscores the importance of a systematic process that can
manage this transformation efficiently.
3. Encouraging Customer-Centric Innovation: A customer-centric approach to innovation ensures
that the ideas generated and executed are aligned with customer needs and preferences. This
involves integrating customer feedback and insights throughout the innovation process, from
the initial idea generation phase to the final execution and market launch. Focusing on the
 customer ensures that the innovations developed are not only novel but also valuable and
relevant to the market.
4. Importance of a Systematic Process: Implementing a systematic process for innovation is crucial.
Such a process ensures that ideas are not only generated but are also evaluated, developed, and
commercialized in a structured manner. This includes defining clear stages and milestones, roles
and responsibilities, and criteria for progression from one stage to the next. A systematic process
helps in managing the inherent uncertainties of innovation, enabling a more efficient and
effective transformation of ideas into successful market offerings.
Characteristics of Innovation Leaders
Innovation leaders possess a unique blend of characteristics that enable them to drive the innovation
process effectively. These characteristics include a balance of creativity and discipline, adeptness at
managing risks, a profound passion for innovation, and the ability to build and lead teams towards
achieving innovative outcomes.
1. Creativity and Discipline: Innovation leaders exhibit an unusual combination of creativity and
process discipline. Creativity allows them to generate novel ideas and spot opportunities,
essential at the innovation process's front end. Discipline, on the other hand, is crucial for
executing these ideas, turning them into viable products or services, and bringing them
successfully to market. This blend of traits ensures that innovation leaders can navigate the
entire innovation process, from ideation to commercialization, effectively.
2. Risk Management: Acceptance and management of uncertainty, risks, and failures are central to
innovation leadership. Innovation, by its nature, involves venturing into uncharted territories,
which inherently comes with risks and the potential for failure. Innovation leaders stand out for
their courage to take risks and their ability to encourage their teams to learn from failures,
thereby creating a culture where calculated risk-taking is viewed as a step towards innovation
rather than something to be avoided.
3. Passion for Innovation: A high degree of passion for their mission and for innovation is a
hallmark of effective innovation leaders. This passion is not just a personal trait but something
they actively share with their staff, infusing their teams with enthusiasm and motivation. Passion
acts as a driving force that propels the innovation process forward, helping overcome obstacles
and fostering a persistent pursuit of innovative solutions.
4. Building and Leading Teams: The ability to nurture, challenge, and empower teams is crucial for
innovation leaders. They are supportive of their teams, providing guidance and resources, but
also know how to keep the focus on realistic goals. Effective innovation leaders are adept at
assembling and leading multidisciplinary teams, ensuring that diverse talents and perspectives
are harnessed towards the common goal of innovation. They understand the importance of
maintaining an uninterrupted chain of leadership throughout the innovation project, adapting
leadership styles as necessary to meet the project's evolving needs.

Innovation Culture
Creating an innovation culture within an organization involves stimulating innovation at all levels,
fostering an entrepreneurial climate, enabling leadership that supports bottom-up innovation, and
effectively steering innovation from the top down.
1. Stimulating Innovation at All Levels: To stimulate innovation throughout the organization, it's
crucial to tap into the creative capabilities of all employees. Managers play a key role by
removing obstacles to innovation and facilitating the collection and implementation of ideas.
This approach relies on the belief that every employee has the potential to contribute innovative
ideas if given the right environment and encouragement.
2. Entrepreneurial Climate: Establishing an entrepreneurial climate is essential for nurturing
innovation. Innovation leaders work diligently to create and sustain an atmosphere of
adventure, challenge, and self-fulfillment. This climate encourages employees to take initiatives,
experiment, and embrace risk-taking, which are fundamental for innovation. The innovation
climate within a company is significantly influenced by management attitudes, policies, and
processes that either enable or hinder innovation efforts.
3. Leadership for Bottom-Up Innovation: Bottom-up innovation is characterized by ideas that
spontaneously originate from operational levels within the organization. These ideas are
developed openly and require management's support for funding and implementation. This type
of innovation thrives in an entrepreneurial culture that encourages individual initiative and risk-
 taking. Leadership in this context involves creating conditions that allow such innovation to
flourish, by supporting internal entrepreneurs and promoting a culture that values
experimentation and innovation.
4. Top-Down Innovation Steering: While bottom-up innovation is critical, top-down innovation
steering is equally important. This involves senior executives providing a clear sense of purpose,
direction, and focus for the organization's innovation efforts. By doing so, leaders can mobilize
the organization towards achieving significant leaps in innovation effectiveness. Formulating an
innovation vision and strategy that aligns with the organization's goals and market opportunities
is a key aspect of top-down innovation steering. This approach ensures that the organization
remains focused on strategic innovation priorities and leverages management's ability to steer
the company towards new market spaces or disruptive technologies.

Challenges and Opportunities

The intersection of challenges and opportunities within the realm of innovation leadership, especially
concerning the constant reappraisal of value, managing risk and spotting opportunities, and aligning
technology with business objectives, underscores the necessity of maintaining a strategic focus.
1. Constant Reappraisal of Value: Innovation leaders must continuously reassess the value that
their technologies and projects bring to the market and the organization. This involves a vigilant
approach to understanding how shifts in market demand, competitive landscapes, and
technological advancements could impact the perceived value of their innovations. Constant
reappraisal ensures that resources are allocated efficiently and that the innovation portfolio
remains relevant and impactful.
2. Managing Risk and Spotting Opportunities: Effective innovation leadership involves balancing the
inherent risks of new ventures with the potential for groundbreaking opportunities. Leaders
must develop strategies to contain risks, such as technology fragmentation or overextension of
resources, while also being agile enough to seize emergent opportunities that align with the
company's strategic goals. This balance is crucial for sustaining growth and maintaining a
competitive edge.
3. Aligning Technology with Business Objectives: A strategic focus requires that technology
development is not pursued in isolation but is closely aligned with broader business objectives.
This alignment ensures that technological innovations contribute directly to the company’s
success, supporting overall business strategies and delivering measurable value. Innovation
leaders play a key role in bridging the gap between technological capabilities and business
needs, ensuring that investments in new technologies are both strategic and purposeful.

Strategic Focus
A strategic focus within the realm of innovation encompasses several critical aspects: developing a
coherent technology vision, engaging in external collaboration, and fostering an innovation leadership
network. Each of these components plays a vital role in steering an organization towards successful
innovation outcomes.
1. Technology Vision and Focus: A well-defined technology vision and focus are paramount for
guiding an organization's innovation efforts. This involves identifying the scope of the company's
technology coverage and pinpointing the competencies critical for the organization to master.
The Chief Technology Officer (CTO), along with other senior leaders, is responsible for
recommending areas of research and development that should be pursued, as well as
advocating for the necessary funding levels to support future technology endeavors. A clear
technology vision ensures that innovation activities are aligned with the organization's strategic
goals, facilitating effective decision-making and resource allocation.
2. External Collaboration: The significance of external collaboration in the innovation process
cannot be overstated. As companies recognize that not all expertise and technological
advancements originate within their walls, engaging with external entities becomes a strategic
imperative. By appointing 'technology gatekeepers' and establishing connections with
universities, industry experts, and other organizations, companies can access a wider array of
knowledge and accelerate their innovation processes. This approach leverages the collective
intelligence beyond the company's boundaries, enriching its innovation ecosystem and
enhancing its competitive edge.
3. Innovation Leadership Network: Beyond individual leadership, the creation of an innovation
leadership network within the organization is crucial. This network, composed of leaders at
various levels and across different functions, works collaboratively to promote and support
innovation. Such a network ensures that the innovation culture permeates the entire
organization, facilitating a collective effort towards achieving innovation goals. It also plays a
critical role in channeling the organization's creative energy towards strategic innovation
priorities, thereby maximizing the impact of innovation activities.

PART 2
Innovation Strategy and Leadership
The importance of leadership in innovation cannot be overstated, as leaders play a pivotal role in
driving the innovation process forward.
1. Stimulating change to support innovation is one of the primary responsibilities of innovation
leaders. They are tasked with creating an environment that not only welcomes but actively
encourages change, breaking away from traditional processes and mindsets that may hinder
innovation. This involves challenging the status quo, encouraging risk-taking, and fostering a
culture where new ideas are valued and explored.
2. Market immersion, opportunity search, and system thinking are also crucial components of
leadership in innovation. Leaders must ensure that their organizations are deeply immersed in
the markets they serve, which involves understanding customer needs, market dynamics, and
emerging trends. This deep market immersion enables leaders to identify opportunities for
innovation that others might miss. Additionally, opportunity search is not a passive activity but a
proactive effort to find new ways to create value for customers. It requires a systematic
approach to thinking about problems and solutions, often necessitating a departure from linear
thinking to embrace system thinking. System thinking allows leaders to see the bigger picture,
understand the interconnections within systems, and identify leverage points that can lead to
significant improvements or innovations.

Innovation Phases and Leadership Imperatives

The phases of innovation and corresponding leadership imperatives reflect a comprehensive
framework for guiding an innovation from idea to market success. Each phase has distinct challenges
and requirements for leadership to address effectively.
1. Invention and Proof of Concept: This initial phase is where the underlying technology or product
concept is developed and validated. Leadership imperatives include providing vision,
encouragement, and support for creative problem-solving. Leaders must foster an environment
where innovative ideas can flourish and be tested, ensuring that the team remains motivated
and focused on turning the concept into a viable prototype or proof of concept.
2. Commercial Takeoff: Once a concept is proven, the innovation moves into the commercial
takeoff phase. This is where the first commercial customer relationships are established. Leaders
must now shift their focus towards guiding and challenging the team as they fine-tune the
product and prepare for market entry. This phase requires a balance between maintaining the
innovative spirit and beginning to confront the realities of business, including market demand,
competition, and scaling production.
3. Business Growth: As the product gains traction in the market, the emphasis shifts towards
sustaining and expanding business growth. Leadership must demonstrate adaptive persistence,
pragmatic learning, and flexible professionalism. This means being persistent in overcoming
obstacles, learning from the market and adapting strategies accordingly, and maintaining
professional standards and processes to support growth. Leaders need to navigate the
challenges of scaling up the operation while continuing to innovate and respond to market
feedback.
4. Adaptive Persistence, Pragmatic Learning, Flexible Professionalism: These qualities are essential
throughout the innovation process but become particularly critical as the innovation matures.
Adaptive persistence refers to the ability to stay the course despite challenges, making
adjustments as needed. Pragmatic learning involves continuously gathering insights from both
successes and failures, using these lessons to inform future decisions. Flexible professionalism
embodies the balance between maintaining high standards and being willing to adapt processes
 and approaches as the situation demands. Together, these imperatives enable leaders to steer
their teams through the complexities of bringing new innovations to market and sustaining their
growth over time.

Developing New Business Models or Systems

Developing new business models or systems is pivotal for organizations aiming to achieve a
sustainable strategic advantage in today's competitive landscape. This approach involves a thorough
reevaluation and remodeling of how a company creates, delivers, and captures value, potentially
leading to a significant transformation of its market position and operational efficiency.
1. Sustainable Strategic Advantage through Business Remodeling: Business remodeling is a
strategic process that can lead to a 'winner-takes-all' market position, especially if the new
system or model is first to market, flawlessly implemented, and rapidly becomes the established
standard. This process often requires a cross-functional and analytical approach, similar to
business process reengineering, focusing on leveraging the company's unique capabilities and
those of its suppliers or partners in areas where competitors have weaknesses. By reinventing
their business model, companies can create a sustainable strategic advantage, making it difficult
for competitors to catch up or replicate their success.
2. Customer-centric Culture and Intelligence Networks: At the heart of successful business system
innovation is a customer-centric culture, underscored by the deployment of intelligence
networks. A customer-centric culture ensures that the organization's strategies and operations
are aligned with customer needs and expectations, fostering a more intimate understanding of
the market. Intelligence networks, which include both internal and external data sources, play a
critical role in sensing and responding to market trends, customer preferences, and competitive
dynamics. These networks help organizations detect early signs of change, identify unmet or
latent customer needs, and develop innovative solutions that fully satisfy those needs. Managed
intelligence networks, organized around specific customer segments or product applications, can
provide valuable insights that drive the development of new business models or systems. By
promoting a culture of customer intimacy and empathy, companies can enhance their market
immersion, enabling them to build more effective and satisfying customer solutions.

Challenges in Creating New Business Systems

Creating new business systems presents a range of challenges that can significantly impact the
success and feasibility of such endeavors. Two primary challenges are collaboration with external
partners and the inherent long timelines and uncertain success associated with these ventures.
1. Collaboration with External Partners: Forming and maintaining productive collaborations with
external partners is a critical challenge in developing new business systems. This process often
involves complex negotiations and strategic deal-making, requiring top management's
involvement and a high degree of coordination among all parties. Each partner brings a piece of
the final system or supports it, making the integration of these components a delicate and
sometimes cumbersome process. The necessity to align different organizational cultures,
objectives, and working methods can introduce significant complexity into the project.
Moreover, reliance on external partners adds layers of uncertainty and can complicate decision-
making processes and timelines, potentially leading to conflicts or misalignments in strategic
goals and execution plans.
2. Long Timelines and Uncertain Success: The conception, development, and implementation of a
totally new business system or model introduce a major element of uncertainty. This uncertainty
is not only related to the need for collaboration with other companies but also to the
technological, environmental changes, and competitive pressures that generally require
frequent reappraisals of the assumptions on which the system or model has been built. The path
to creating a new business system is characterized by long timelines, during which success
remains elusive and fragile. Even well-conceived business models can face challenges as market
conditions evolve or as new competitors emerge. This uncertainty and the time it takes to
achieve success, if it comes at all, are inherent in all types of radical innovations. The process
demands patience, resilience, and a readiness to pivot or adapt strategies in response to
emerging insights and market feedback.

Different Innovation Thrusts

 Different innovation thrusts require distinct approaches and leadership characteristics to effectively
navigate the challenges and opportunities each presents. Understanding these thrusts and the
associated leadership requirements is crucial for driving successful innovation within organizations.
1. New/Improved Product, Process, or Service: This thrust focuses on incremental improvements or
extensions of existing products, processes, or services. The aim is often to enhance competitive
advantage in the market by offering something better or more efficient than what's currently
available. Leadership in this area requires a focus on a seamless product creation process,
emphasizing cross-functional collaboration and strategic decision-making to streamline
development and bring enhanced offerings to market efficiently.
2. Totally New Product Category or Service: Developing a totally new product or service category
represents a radical innovation move, introducing offerings that open up new markets or
redefine existing ones. This thrust is high-risk but also high-reward, demanding leadership that is
visionary and capable of navigating unknown territories in technology and market demand. Such
leaders must focus on setting up corporate venturing or new business development initiatives
that can explore and capitalize on these new opportunities.
3. New Business Model or System: Innovating a new business model or system involves rethinking
how the organization creates, delivers, and captures value. This thrust can significantly disrupt
existing markets or create entirely new ones. Leadership here requires a different breed of
innovation leaders, those who can imagine and orchestrate a comprehensive overhaul of the
business model

Case Studies and Examples

The cases of Philips and Senseo, Tetra Pak and Tetra Recart, TiVo, and Medtronic offer valuable
insights into the dynamics of innovation, leadership, and strategic collaboration in the corporate
world.
1. Philips and Senseo: highlight the power of partnership and collaboration for innovation. Philips,
a global leader in electronics, collaborated with Douwe Egberts, a coffee roasting company, to
develop the Senseo coffee brewing system. This partnership successfully overcame cultural and
organizational challenges, integrating Philips' expertise in electronics with Douwe Egberts' coffee
knowledge. A significant outcome of this collaboration was the joint ownership of intellectual
property and the brand, creating a strong market presence and a new consumer product
category.
2. Tetra Pak and Tetra Recart: showcase the creation of a new product category through innovation
in packaging solutions. Tetra Recart represented a significant shift in packaging, offering a
carton-based alternative to canned foods. This innovation faced initial challenges, including
leadership changes and market acceptance. The success of Tetra Recart was largely attributed to
the continuity of leadership and the establishment of a focused steering group that guided the
product through its development phases to market acceptance, illustrating the importance of
consistent vision and execution in innovation.
3. TiVo: revolutionized the way people watch television with its Digital Video Recorder (DVR)
technology and subscription services. The visionary leadership at TiVo identified an emerging
consumer need and developed a technology that allowed viewers to control their TV viewing
experience. TiVo's success can also be attributed to strategic partnerships, such as those with
cable providers, which helped adapt its business model to industry changes, demonstrating the
importance of flexibility and collaboration in the tech industry.
4. Medtronic: through the leadership style of Mike Stevens, emphasizes the importance of
discipline, accountability, and process improvements in driving innovation within established
companies. Stevens' approach to leadership at Medtronic's Pacing Business was characterized by
a strong focus on challenging the status quo, setting clear goals, and measuring performance
rigorously. This leadership style, while controversial to some, led to significant improvements in
Medtronic’s market share and innovation output. Stevens' case also underlines the necessity of
balancing different types of innovation leaders to sustain growth and adapt to changing market
conditions.

Leadership Styles and Characteristics

Leadership styles and characteristics play a pivotal role in the success of innovation within
organizations, with different approaches being more suitable for various types of innovation thrusts.
Understanding these styles and how they align with an organization's innovation strategy is crucial.
1. Autocratic vs. Democratic: The autocratic leadership style, characterized by a top-down
approach to decision-making, can be effective in situations where quick decisions are necessary,
or when the company has lost its sense of urgency after a period of excessively laissez-faire
management. This style may be needed to re-establish a direction and focus, particularly in the
early stages of product creation or when steering the development of new or improved products
and services. On the other hand, the democratic style, which involves a more participative
approach to decision-making, is often more suitable in today’s complex organizational
environments. It fosters a higher degree of process maturity and is better adapted to situations
of growing complexity, where detailed planning is less effective, and giving people the freedom
to innovate within certain parameters is more productive.
2. Demanding yet Supportive: Regardless of the specific leadership style, innovation leaders need
to be both demanding and supportive. They must require excellence while understanding the
limits of their teams, creating an environment of trust and respect. This balance helps to
motivate and inspire team members, driving them towards achieving innovation goals while also
providing the necessary support to overcome challenges.
3. Importance of Aligning Senior Leadership with Innovation Strategy: Aligning senior leadership
with the organization's innovation strategy is critical. The leadership imperatives of an
innovation strategy suggest that senior officers must match up with the leadership requirements
dictated by the chosen innovation thrusts. This alignment ensures that the organization's
strategic objectives are supported by leaders capable of steering innovation efforts in the
desired direction.
4. Building a Cadre of Innovation Leaders: To effectively pursue multiple innovation thrusts,
organizations need to cultivate a cadre of innovation leaders who possess a mix of the required
leadership characteristics and styles. This involves identifying and developing leaders who can
navigate the complexities of innovation, from the development of new products or services to
the radical reimagination of business models. Such leaders must be adept at managing both the
'front-end' and 'back-end' aspects of innovation, capable of inspiring their teams, and skilled at
navigating the organizational and market complexities inherent in innovation.

Innovation in Mature Markets

In mature markets, companies often face a growth dilemma, as they are pressured by financial
investors to grow at rates that exceed the slow-paced growth of their markets. Traditional avenues
for growth, such as acquisitions and geographical market expansion, are becoming increasingly
challenging and less effective. In such environments, organic growth through category innovation
emerges as a promising yet challenging option. This approach involves creating new business
segments through entirely new product concepts, catering to customers' unmet or latent needs.
Successful category innovation can lead to spectacular growth, but it requires a bold management
vision and a desire to venture into new market spaces beyond the scope of current businesses.
Examples of successful category innovation in mature markets include Nestlé's Nespresso system and
Tetra Pak's introduction of the first retortable carton package. Nespresso revolutionized the stagnant
coffee bean market by offering a new, convenient way to consume high-quality coffee, demonstrating
how a clear management vision can create a new market space. Similarly, Tetra Pak's retortable
carton, aimed at displacing traditional metal food cans, showcased how innovation can open up new
business opportunities next to a company's existing units. These examples highlight the impact of
management's vision and the desire to innovate in capturing significant shares of new or existing
markets through the introduction of breakthrough product categories.

Partnerships and Collaboration

Partnerships and collaboration are increasingly recognized as essential components for innovation
success. The complexity and speed of technological advancements necessitate that organizations
collaborate with a variety of external entities, including suppliers, customers, and even competitors,
to co-create value and drive innovation. Moving beyond mere contractual relationships, successful
innovation often requires evolving into collaborative partnerships that are based on mutual trust and
understanding.
Building trust between partners is a critical element in this evolution. Trust facilitates open
communication and the sharing of resources and knowledge, which are vital for collaborative
innovation. The process of building trust can be challenging, especially when partnerships involve
entities with differing cultures, objectives, and expectations. Effective leadership plays a pivotal role in
navigating these challenges. Leaders must be adept at understanding and adapting to different
leadership styles, fostering an environment where trust can flourish. This involves not only aligning on
a common vision but also demonstrating openness, the ability to inspire trust, and a willingness to
compromise when necessary, without sacrificing the core objectives of the partnership.
In essence, the shift from contractual relationships to true collaborative partnerships requires a blend
of strategic vision, interpersonal skills, and a commitment to shared success. Leaders who can
embody these qualities and foster them within their organizations are better positioned to leverage
the full potential of partnerships for innovation.

Economic Model of Innovation

The Economic Model of Innovation emphasizes the strategic combination of different revenue
streams, the necessity of visionary but pragmatic leadership, and a clear partnering philosophy with a
high degree of adaptability. This model recognizes that innovation, especially when introducing new
business systems or models, is not solely about developing new products or services but also about
how a company goes to market, prices its goods or services, and plans to make money.
1. Combining Different Revenue Streams: Successful innovation often relies on the ability to blend
various sources of income. For instance, a company like TiVo combines margins from the sale of
DVR hardware, license fees for its DVR design, subscription fees from customers, and fees from
advertising research firms for access to TiVo data. This mix not only diversifies the company's
revenue but also enhances its resilience against market fluctuations, underscoring the
importance of rapidly achieving volume and scale economies.
2. Visionary but Pragmatic Leadership: Visionary leadership is crucial for navigating the
complexities of innovation, particularly in the context of new business models or systems.
However, vision alone is insufficient; leaders must also be pragmatic, focusing on immediately
actionable parts of their grand vision and adopting a step-by-step approach toward realizing
their full concept. This blend of vision and pragmatism ensures that innovation efforts remain
grounded and achievable, moving progressively toward the grand scheme.
3. Clear Partnering Philosophy and Adaptability: Innovation, especially in the realm of business
systems, often requires collaboration with external partners. A clear partnering philosophy,
defined from the start, is essential. This philosophy should aim for a 'win-win' proposition for all
partners involved. Yet, as market and competitive conditions change, the willingness to
reappraise and adapt the partnership formula becomes crucial. This adaptability ensures that
the original 'win-win' proposition evolves to reflect the current realities, maintaining the
sustainability of the innovation.

PART 3
Logitech's Innovation Environment
Core Characteristics
The core characteristics outlined are foundational to Logitech's innovation environment, fostering a
culture that drives their success in the competitive technology market. Here's an explanation of each
point with relevant citations:
- Hands-on management style: Logitech managers, including senior levels, are deeply involved in
day-to-day operations and product development. This approach ensures that leadership is aware
of and responsive to the challenges and opportunities their teams face, reinforcing priorities and
values through active engagement.
- Realism in execution: Emphasizing realistic and rigorous execution, Logitech focuses on practical
and achievable outcomes in their projects. This approach ensures that plans are grounded in
reality, enhancing the likelihood of success and efficiency.
- Constructive confrontation: At Logitech, open dialogue and challenging each other's ideas are
encouraged as a means of refining concepts and strategies. This environment allows for the
improvement of products and processes through healthy debate, as long as it is based on facts
and aimed at achieving better outcomes.
- Quest for efficiency: The company strives for 24-hour efficiency, constantly seeking ways to
optimize operations, reduce waste, and improve productivity. This quest is integral to
maintaining competitiveness and profitability.
- Humility: Logitech values humility and restraint with regard to success, recognizing that staying
grounded can foster continuous improvement and innovation. This attitude helps in maintaining
a focus on long-term goals and customer needs.
- Structured idea generation and product development processes: Through management reviews
and gates, Logitech ensures that product development is rigorous and methodical. This
structured approach facilitates the assessment of ideas, prioritization of projects, and allocation
of resources efficiently.
- Market and competition-oriented strategies: Understanding market dynamics and competition is
crucial for Logitech. Their strategies are designed to meet customer needs effectively while
positioning the company strongly against competitors.
- Customer intelligence: Logitech places a high emphasis on gathering and analyzing customer
insights. This intelligence informs product development and innovation, ensuring that offerings
are closely aligned with user preferences and requirements.
- External design and manufacturing sources: By leveraging external expertise and capabilities for
design and manufacturing, Logitech can focus on its core competencies while ensuring high-
quality and innovative products.
- Management reviews and gates for rigorous product development: These processes are critical
for maintaining high standards throughout the product development lifecycle. By systematically
reviewing progress and making informed decisions at key stages.

Innovation Leadership
The section on Innovation Leadership within Logitech's framework focuses on the cultivation of
leaders who can drive innovation effectively. This involves specific strategies from hiring to leader
development, emphasizing passion, a conducive environment for growth, and practical experiences in
innovation responsibilities:

1. Hiring Criteria
- Passion aligned with the company's mission and vision: Logitech values candidates who not only
show a deep passion for their work but also align with the company's broader goals and vision.
This alignment ensures that leaders are intrinsically motivated to contribute to the company's
success, as seen in influential leaders like Steve Jobs and Pekka Ala-Pietilä, who demonstrated
how passion can drive innovation and inspire those around them.
- Importance of attitude and passion: The emphasis is on recruiting individuals whose attitude
towards innovation and passion for the work match the company's ethos. This principle
acknowledges that skills can be developed, but the right attitude and a passionate commitment
are crucial for fostering an innovative culture.

2. Building Leadership Environment

- Identifying and developing innovation leaders: Logitech focuses on recognizing potential
innovation leaders within the organization and providing them with opportunities for growth.
This involves a keen understanding of who has the innate capabilities and the right mindset for
innovation leadership.
- Assessing and challenging leadership competencies: The company continuously evaluates the
competencies of its leaders, challenging them to improve and adapt. This ensures that leaders
do not become complacent and are always striving to better themselves and the organization.
- Nurturing traits like acceptance of uncertainty, risk-taking, focus on customer needs: Logitech
nurtures key traits in its leaders, such as the acceptance of uncertainty, willingness to take risks,
and a strong focus on customer needs. These traits are crucial for navigating the unpredictable
waters of innovation and for ensuring that the company remains customer-centric in its
approach.

3. Developing Leaders
- Promoting an open yet challenging environment: The company cultivates an environment where
leaders can thrive through openness and challenges. This means encouraging transparent
 communication and constructive confrontation, where ideas can be freely discussed, and
innovation can be stimulated.
- Assigning innovation responsibilities early: By giving emerging leaders innovation-related
responsibilities at an early stage, Logitech ensures that they gain valuable hands-on experience.
This approach helps in building their confidence and skill set in managing innovative projects.
- Coaching aspiring innovation leaders:coaching aspiring innovation leaders is about more than
just developing their technical skills. It's about nurturing their ability to lead, innovate, and
inspire others. By investing in personalized coaching, organizations can ensure that their future
leaders are not only capable of driving innovation but are also passionate about their work and
aligned with the company's vision
Sustaining Innovation
Sustaining innovation within an organization like Logitech involves a multifaceted approach that
encompasses a compelling vision, a push for growth, a focus on both new products and the
integration of external ideas, an obsession with cost management, and fostering a culture of passion,
dedication, and commitment.
1. Compelling Vision and Push for Growth: Logitech's leadership emphasizes continuous product
renewal and growth under strong management pressure. This relentless push is driven by both
internal ambition and external pressures, such as the need to perform in the stock market and
the competitive drive from rivals. This environment creates a dynamic where innovation is not
just encouraged but is seen as essential for survival and growth.
2. Focus on New Products and Openness to External Ideas: The company’s innovation strategy
involves developing new or improved products and services, creating entirely new product
categories, and developing new business models and customer solutions. This approach is
underpinned by a willingness to look beyond the company for technologies and ideas that can
accelerate development and reduce costs, thereby enhancing innovation. The openness to
external ideas not only speeds up the innovation process but also helps in cost management by
integrating more cost-effective solutions found outside the company.
3. Obsession with Costs: An integral part of sustaining innovation at Logitech is the focus on cost
management. The company recognizes that developing meaningful innovations is inherently
linked to the ability to drive costs down. This dual focus ensures that the company can offer
innovative products at competitive prices, thereby sustaining its market position and fueling
further innovation. The emphasis on cost management is seen as a creative challenge that
rewards engineers and innovators, aligning with the company’s broader innovation goals.
4. Culture of Passion, Dedication, and Commitment: The foundation of Logitech's ability to sustain
innovation lies in its culture. The company cultivates an environment of creativity and discipline,
where innovation is not just the responsibility of top management but is a characteristic that
pervades all levels of the organization. This culture is built on values, attitudes, policies, and
processes that encourage innovation leaders to develop and grow within the company. The
result is a workplace where passion, dedication, and commitment to innovation are part of the
daily ethos, driving the company's success in the competitive tech landscape.

Innovation Drivers
Innovation drivers are critical factors that stimulate and sustain the creative processes leading to
global success in organizations such as Logitech. These drivers include empowerment and trust, risk-
taking and hands-on management, and deeply ingrained innovation values.
1. Empowerment and Trust: Empowerment is a foundational element that fosters an environment
where employees feel confident in making decisions and taking actions that can lead to
innovative outcomes. Trust is closely tied to empowerment, as it creates a culture where
employees are supported and believed in, even when taking risks. This empowerment and trust
are seen as essential for individuals to develop, grow, and ultimately succeed in creating
innovative solutions. The approach of empowering individuals and trusting their decision-making
process encourages a sense of ownership and responsibility towards the innovative efforts of the
company.
2. Risk-taking and Hands-on Management: A willingness to take risks and an informal, hands-on
management style are pivotal in driving innovation. These elements encourage a culture where
experimentation is valued, and failures are seen as learning opportunities rather than setbacks.
This approach not only fosters creativity and out-of-the-box thinking but also ensures that
 leaders are closely involved in the innovation process, providing guidance and support where
needed. The combination of risk-taking and hands-on management ensures that innovative
projects are pursued with vigor and determination, driving the company towards global success.
3. Innovation Values Contributing to Global Success: The global success of an organization is
significantly influenced by its innovation values. These values, such as the drive for continuous
product renewal and growth, create a relentless push for innovation. Such a culture not only
challenges employees to strive for excellence but also positions the company as a leader in the
competitive global market. The shared values and attitudes towards innovation within the
company act as a guiding principle, ensuring that every effort is directed towards creating
meaningful and impactful innovations. This shared commitment to innovation is what ultimately
contributes to the global success of the organization.

Retaining Innovation Leaders

Retaining innovation leaders is a complex challenge, especially given the high mobility among
technical leaders in industries driven by rapid technological advancements and intense competition.
The factors that contribute to retaining these vital talents go beyond mere financial compensation,
emphasizing work satisfaction, the allure of success, and intrinsic motivators such as passion, vision,
motivation, and team leadership.
1. Challenge of High Mobility Among Technical Leaders: In sectors like technology and innovation,
there's a notable trend of high mobility among leaders and specialists. This mobility is driven by
the demand for their skills and the opportunities available in a burgeoning market. Organizations
must recognize and address this challenge proactively to retain their top talent.
2. Importance of Financial Compensation, Work Satisfaction, and Success: While financial
compensation is an essential factor, it's often not the primary motivator for innovation leaders.
The challenge and satisfaction derived from the work itself, coupled with the success of their
projects and contributions, are potent motivators. Innovation leaders thrive on the excitement
of creating new solutions and the pride that comes with successful implementations. These
aspects are crucial for retaining top talent, as they fulfill both the professional and personal
aspirations of innovation leaders.
3. Passion, Vision, Motivation, and Team Leadership as Key Motivators: The personal attributes of
innovation leaders, such as passion, vision, motivation, and the ability to lead teams effectively,
are significant motivators that drive them to excel in their roles. Passion for their work and the
mission of the organization fuels their dedication and commitment. A clear vision helps them
steer their teams towards achieving common goals, while strong motivation ensures they remain
focused and driven despite challenges. Effective team leadership enables them to inspire and
rally their teams, fostering an environment of collaboration and innovation. These qualities not
only contribute to the success of the organization but also to the personal fulfillment and
satisfaction of the innovation leaders themselves, making them more likely to stay and
contribute to the organization's long-term success.