How Can Leaders Find the Capacity to Act?

One of the most vexing challenges for innovation executives is when a leadership team will not commit to a new venture even with good data to suggest it is a sound investment.  Instead of committing resources to scale a new venture, they withdraw, preferring to lament the failure of the innovation (and innovators) than publicly commit to its success.  

Most senior executives are deeply committed to the success of new ventures. Their challenge is that they have another, competing commitment that wins out. That is a commitment to sustaining the performance of their current business or organization. They fear that making the investment will jeopardize the business they already have.  

We can criticize them for being ‘short-term focused’ or ‘risk averse’, but unless we understand why they find it hard to act, we will not help them move forward.  

Sustaining short-term performance or quarterly results is a key responsibility for the leader. If we start from the assumption that the challenge to commit is rational then we have a better chance of solving the problem. 

Finding the Capacity to Act 

Executives need to manage these strategically contradictory impulses; they cannot be wished away. Here are four ways they can do this, most benefit from expert facilitation.   

 These five steps help make this possible:

1. Recognize Competing Commitments

Start out by being honest about what really matters and to whom. What is your commitment to the status quo or to current revenue streams? How committed are you to future growth, is this a nice to have or an essential step to preserve the future of the business?

2. Be explicit about what you fear

Humans fear loss more than any anticipate gain, so be explicit about what is at stake. What are the consequences of putting a commitment at risk? Everyone knows the CFO is nervous about investment in innovation, talk about it and find out what they fear most. One CEO we worked feared letting down his company’s current customers by pursuing a new innovation. Another did not want to admit to analysts that the company could not sustain its high gross margins indefinitely without investing for the future.

3. Reframe the commitment

This tension between competing commitments cannot be resolved, it will be with you until you can convert explore ventures into sustainable revenue streams. You need to reframe them as a Both/And commitment not an Either/Or. For example, our CEO concerned for his current customers reframed his commitment to exploration by making building customer loyalty a success criterion for new innovation projects.

4. Create a mechanism for attention

Too often over worked senior leadership teams ‘sleepwalk’ into undermining a commitment to new ventures. They get so overwhelmed by short-term business pressures that the nascent innovations get lost. One CEO we worked with saw this happening and created an investment board, that he chairs, to ensure focus on the innovation agenda. He also created external review boards to make sure they held to the scale of ambition that they had set themselves.

5. Diagnose work avoidance

Humans can be very adept at sidestepping awkward issues like a competing commitment. Sometimes this is conscious, often it is an unconscious reaction to the complexity of the issue. They divert attention by asking for more data, suggest that someone else take responsibility, or suggest the issue will solve itself in time. Don’t let that happen, call it out, and talk about the conflict. 

Managing these tensions is the work of senior leadership teams. It cannot be delegated. Discuss how to work with leadership teams to balance Core/Explore commitments. 

Read more about how to find the capacity to act here.