What makes a World's Most Innovative Company?

Summary

The speaker shares insights from decades of research on effective and innovative leadership. Collaborating with Clayton Christensen and Jeff Dyer, they studied leaders of highly innovative companies like Amazon and Tesla, identifying five key behaviors: asking transformative questions, observing like anthropologists, networking with diverse individuals, experimenting rapidly, and thinking associatively. Innovative leaders, such as Elon Musk and Jeff Bezos, actively engage in these practices, dedicating more time to innovation compared to non-innovative leaders. They also hire, promote, and reward employees with problem-solving skills, fostering a culture of creativity throughout their organizations.

Takeaways

• 🔍 Effective leadership involves not just talking about innovation but actively engaging in innovative practices.
• 📊 Innovative leaders were studied as part of a research project in collaboration with Clayton Christensen at Harvard and Jeff Dyer at BYU.
• 🌍 The study focused on companies with a market capitalization of over $1 billion to identify those with the highest innovation premiums.
• 💡 An innovation premium represents the extra value investors place on a company for its potential to innovate and create new products or services.
• 📝 Five key behaviors of innovative leaders were identified: asking catalytic questions, observing, networking, experimenting, and thinking associatively.
• 🤔 Catalytic questions are those that challenge the status quo and lead to new possibilities.
• 📈 Innovative leaders like Jeff Bezos from Amazon excel at observing, experimenting, and building organizations that embody these innovative traits.
• 🚀 Companies like Tesla and Salesforce have high innovation premiums because their leaders actively engage in innovation work and encourage their teams to do the same.
• 🗣 Innovative companies often hire, promote, and reward individuals who demonstrate strong problem-solving skills and creativity.
• 🤝 Tesla's approach to innovation includes challenging employees with tough problems and providing the necessary support and resources to find creative solutions.

Q & A

What has the speaker spent the last 30 years focused on?

The speaker has spent the last 30 years focusing on understanding what effective leaders do and, more recently, studying what innovative leaders do to make their companies highly innovative.

Why does the speaker believe that few leaders excel at being innovative themselves?

The speaker believes that while many senior leaders talk about innovation, few excel at being innovative themselves because they lack the necessary skills or behaviors to consistently drive innovation.

What research project did the speaker work on, and with whom?

The speaker worked on a research project with Clayton Christensen from Harvard Business School and Jeff Dyer from Brigham Young University (BYU) to understand what kinds of leaders create disruptive companies.

How did the research team identify which companies and leaders to study?

The research team identified companies with a market capitalization of over $1 billion worldwide and ranked them by their 'innovation premium'—a measure of the confidence investors have in the company’s future innovations.

What is an innovation premium, according to the speaker?

An innovation premium is the difference between a company's stock price based on existing products and services and the additional value investors attribute to the company's potential for future innovation and growth.

What five key behaviors do innovative leaders consistently exhibit?

Innovative leaders excel at (1) asking catalytic questions, (2) observing their surroundings like anthropologists, (3) networking with diverse individuals, (4) experimenting quickly and cheaply, and (5) connecting unrelated ideas to create new solutions.

How does Jeff Bezos of Amazon exemplify these innovation behaviors?

Jeff Bezos is an excellent example of an innovative leader because he is skilled at asking questions, observing, experimenting, and connecting ideas. He has also built an organization that mirrors these behaviors.

What distinguishes the world's most innovative companies from others, according to the speaker?

The world's most innovative companies embed innovation deeply within their organization, allowing not just senior leaders but everyone in the company to innovate and solve problems creatively.

Why does the speaker say that innovative leaders 'walk the talk'?

Innovative leaders 'walk the talk' because they actively engage in innovation themselves, spending twice as much time on innovation work compared to leaders at non-innovative companies.

What role does leadership play in building a sustainable culture of innovation within a company?

Leadership plays a critical role in building a culture of innovation by not only practicing innovative behaviors but also by hiring, promoting, and supporting employees who solve complex problems creatively, thus embedding innovation into the organization.