Many corporate leaders are wrestling with trying to get their organizations to innovate through taking risks on-the-job.
After years of cost-cutting initiatives and growing job insecurity, most executives don't feel like putting themselves on the line. Add to that the heightened expectations on individual performance, where a one-year term determines a large bonus, managers postpone risky decisions for fear of failure---making mistakes that could lead to innovative successes. That's why it is difficult for executives and their direct reports to make the shift from a play-it-safe corporate culture to an innovation-driven culture.
Here in Detroit, automotive leaders are talking about an innovation-driven culture that is imperative in today's globally competitive world. But walking the talk within the culture will require corporate leadership to recruit or promote new business unit executives and engage outside executive coaches to help them get onboard and up-to-speed quickly.
Lee Iacocca's career within the automotive industry illustrates how emerging leaders can change corporate cultures to walk the talk of innovation. When the overhyped, oversized and overpriced 1960 Edsel failed in the marketplace, Ford Motor Company needed to listen to new ideas from emerging leaders within the company. The introduction of the 1964 Ford Mustang was an innovative product tuned into customers' call for stylish affordability.
Involved with the design of several successful Ford automobiles, Lee Iacocca is remembered for most notably the Ford Mustang but then was ousted, by Henry Ford II, from Ford on October 15, 1978. He went on to become president of the struggling Chrysler Corporation, which was saddled with an inventory of gas-guzzling road yachts, just as the fuel shortage began. Iacocca made history by talking the government into offering Chrysler $1.5 billion in loans. The bailout worked, with the help of Iacocca's streamlining measures and new product innovations, including the first innovative front-wheel drive Dodge Caravan minivan. Research from consumer surveys had indicated that people were buying large truck-chassis converted vans to take the place of the station wagons but, with the gas availability and cost concerns of the mid-1970s, consumers would be interested in lighter weight and fuel efficient vans. The front-wheel drive chassis reduced weight while maintaining the large interior required by soccer moms.
To survive in today's global economy, in which product cycles are shorter than ever, is extraordinarily hard and, after a period of downsizing, requires a personal development investment in the remaining executive talent now in new leadership roles.
Most companies don't spend enough time and resources looking backward, says Chris Trimble, a professor at the Tuck School of Business at Dartmouth College and co-author of "10 Rules for Strategic Innovators." That's a mistake. "How do you learn if you don't examine the past?"
Source: BusinessWeek, July 10, 2006