The Innovative Executive

Leading Intelligently in the Age of Disruption

Bella Rushi

• Publisher: Forefront Books
• Year: 2022
• eBook ISBN: 9781637630853
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

In The Innovative Executive, Bella Rushi helps business leaders react to ever-changing environments with flexible thinking and adaptability to create work cultures that thrive on innovation, risk-taking, and creativity. Every executive knows that smart innovation is essential for success. But how do you create new growth strategies and address old business models that are at risk due to competition, global epidemics, or other drastic changes in the marketplace? Today, many companies don't know how to select the "right projects" to pursue new growth opportunities. They struggle to find the best market opportunities and can't decide how to efficiently allocate resources for R&D. Meanwhile, new and old competitors alike are disrupting the marketplace in dismaying ways. How do you innovate and win in today's fast-moving business climate? In The Innovative Executive, internationally renowned Bella Rushi argues that innovation should not only be a priority for survival but also for creating new sustainable growth. Companies need to flex their innovation muscles to reframe their business models, develop new capabilities, and leverage technology. Without the right methodology and framework, however, it's difficult to succeed. The Innovative Executive will show you how to build an innovation agenda. Furthermore, it will help you align your innovation goals with business strategies and invest in ideas that will open future opportunities. Rushi examines how innovative executives articulate the dream of success and effectively integrate key capabilities to focus on customercentricity, leverage technology, and cultivate innovation competency and collaboration with their networks. Through stories of successful companies and her experience consulting with Fortune 500 companies, Rushi helps business leaders react to ever-changing environments with flexible thinking and adaptability to create work cultures that thrive on innovation, risk-taking, and creativity.

PART I Rethinking Your Business Model

1 THINK LIKE A STREET VENDOR You Can’t Control Everything, but You Can Deal with Anything

ENTREPRENEURSHIP is not “natural”; it is not “creative.” It is work…. Entrepreneurship and innovation can be achieved by any business…. They can be learned, but it requires effort. Entrepreneurial businesses treat Entrepreneurship as a duty. They are disciplined about it… they work at it… they practice it.

—PETER DRUCKER¹

LIFE IS NOT A SMOOTH, frictionless glide from point A to point B; the unexpected will always happen, whether it is a financial crisis or some kind of environmental or political disaster. Most businesses understand that. The question is whether they are doing anything about it. When something unexpected does come up, are they prepared to handle it?

I’m an innovation strategy consultant but when I was a child I worked with my dad as a street vendor, selling newspapers on Roosevelt Boulevard in Philadelphia, and that experience taught me one thing above all else: if you want to survive in an uncertain world where anything can happen at any time, you need to be flexible and adaptable. External factors will always arise to complicate your plans and impede your progress, but if you’re nimble and prepared, you can always cope.

THINK LIKE A STREET VENDOR: BE ADAPTABLE, FLEXIBLE, AND DRIVEN

When you look at street vendors, regardless of what they’re selling—newspapers, hot dogs, pretzels, flowers, or whatever—what do they all have in common? Above all else, they are adaptable.

When I was one of those vendors, we all knew when we had to take our newspapers and run to the other side of the street because the heavier traffic was there. When there was a road closure, we knew that we might need to move a couple of blocks down and set up shop there instead of in our usual spots.

We would get out there by 7:00 in the morning, even on a Saturday or Sunday, in order to catch the early risers. We knew how and when to respond to bad weather, bad road conditions, or whatever that day’s challenge might be. On really hot days, we used to come with mini–water bottles to hand out for free with our newspapers—because they were cheap and helped us to sell more of our inventory.

The most important thing for a street vendor is to become so flexible that you’re always thinking ahead of the customer. You’re forced to think on your feet all the time about what the customer is feeling today and how to best serve them. Since street vendors are exposed to ever-changing and sometimes harsh conditions, they develop empathy and feel the need to alleviate others’ pain by devising solutions.

So all street vendors have intuition and flexibility in common—but just as important, they have tremendous drive. In business, we call that purpose. Street vendors have to be driven because many of them won’t earn enough to eat if they don’t sell all of their hot dogs or water bottles or whatever it is they’re selling. In order to provide food for their families, they must always be driven and flexible.

Seen in this light, street vendors are a great example of entrepreneurs who are always ready for the market, always thinking, What can we do if things don’t work out? How do I get rid of my inventory? How do I satisfy my customer? Every day you learn something new. You adapt.

I have seen those same qualities and that same attention to ever-changing external factors in the companies that have survived the economic crisis brought on by the COVID-19 pandemic. When the pandemic first struck, they already had the strong drive they would need to get them through it—that same entrepreneurial drive they had when the company first launched, the reason they started the business in the first place. That drive motivates you to serve the customer and the community as opposed to a shortsighted desire for near-term profits. It is the voice within you that says, I really want to get this product and this service out to the customer or the supplier or the vendor—so how am I going to do that? The same drive that inspired you in the first place motivates you to start brainstorming: What can I do?

My family had three different newsstands, and my brother, my dad, and I would each work one of them. Our first priority was to make sure we didn’t go home with any newspapers—that’s drive number one. You don’t want to be left with any inventory.

Many companies, both small and large, develop long-range business plans: they set up a plan for the current year and a plan for next year. The plan for the following year is flexible, but ironically the plans for current years are usually rigid. I have seen this firsthand, over and over, throughout my career as a consultant. They are not flexible at all. Many companies want predictability and control over the future. If external factors suddenly cause new problems to arise, how are they going to maneuver around them if they have a rigid plan?

You constantly have to adapt to new circumstances, just as my family and I had to adapt to whatever conditions existed on Roosevelt Boulevard on any given day: a car crashes or the road is closed in one section and an ambulance arrives, and now you are losing an hour and a half of sale time—what do you do?

A CEO doesn’t have to have experience as a street vendor to understand this, but they do have to have that sense of urgency and necessity—that sense of drive.

START WITH YOUR PURPOSE

Founded in 1902, 3M (best known for its most famous invention, the Post-it note) has been a constant presence on the Fortune 500 list for the last hundred years. In that time, they have made sixty thousand products—a third of which were invented within the last five years.²

But even the most innovative company can be affected by unexpected external events, and like many other companies, 3M struggled during the pandemic—their sales slipped in a number of areas, including oral care, office supplies, industrial glues, and automotive manufacturing. The company had to furlough a number of its employees, and one-quarter of 3M’s factories had closed by April 2020.

On the other hand, the company’s sales grew 2.7 percent, to $8.08 billion,³ in just the first quarter of 2020—a much better result than the Wall Street forecast of $7.91 billion. This was, of course, partly because 3M’s N95 face masks and other personal protective equipment were suddenly in high demand.⁴ Because they had strong portfolios in different markets, they were able to pivot their focus, increasing production for PPE such as masks, respirators, and ventilators and collaborating with other companies such as Ford to develop PPE. (We’ll discuss the topic of collaboration at greater length in chapters 8 and 9.)

Because of the vastness of the company’s portfolio, 3M products are found in many different industries. Creating so many new products (again, over sixty thousand of them!) and launching them to market successfully takes commitment and years of practice—and a culture with an innovative mindset. For over a century, 3M has demonstrated that mindset.

What else separates 3M from rivals such as United Technologies, DowDuPont, General Electric, and Arconic?⁵

• 3M has developed products that have cross- disciplinary capabilities so they can be made by the same methods and machines.
• They protect their patents and invest in R&D during good times and bad times (a critical practice and discipline much needed for all industries today).
• They focus on metrics that clearly define what constitutes a new product.

Just as important, in its early years 3M introduced a “15 percent rule”⁶ that allowed employees to use 15 percent of their work time to pursue their own programs and product development ideas. This intentional direction and support from senior management is what allows 3M employees to explore and innovate, having a mindset of a street vendor to spark creativity.

3M succeeds because the company aligns everything it does with a higher purpose and a clear set of values—most especially a respect for science. The company’s vision embraces technology to improve life through innovation, and its values also encompass diversity, inclusion, and sustainability (a set of topics we’ll discuss at length in chapter 12). Like a street vendor, 3M has had to be flexible and adaptable in order to succeed. As retired 3M vice president of human resources Gordon Engdahl said, “3M has a tolerance for tinkerers and a pattern of experimentation that led to our broadly based, diversified company today. To borrow a line from Finian’s Rainbow, you might say we learned to ‘follow the fellow who follows a dream.’ ”⁷

Ultimately, whether you have the wherewithal to find solutions to your problems comes down to knowing your strengths and your internal capabilities. Those capabilities encompass everything from your supply chain to your customer insights to your operations to your understanding of what your value proposition is—and all of these things matter, so if they are not strong in the first place, then when external factors actually hit your industry, it will be difficult for you to pivot and adapt.

Of course, out-of-the-blue, “act of God” types of events are not the only kinds of unforeseen challenges you’ll have to cope with. Even in more predictable “normal” times, change is a constant. As time passes, the public’s needs and desires continuously change, and customer habits are always changing—but if your internal capabilities are strong, you can adjust to whatever happens.

All this makes me wonder: 3M is doing great, but obviously many other companies out there also have a strong global presence yet are not doing so well in terms of coping with the pandemic. What are they doing wrong? What is another company of the same size, in the same industry, doing that isn’t working? That thought in turn makes me wonder about their business model—not their current business model but the one they had before the pandemic hit, before any external factor ever affected them.

So what are these companies doing wrong? To answer that question, you have to go back to look at their purpose. Do they have one? What is their reason for existing? What value are they providing to their customers? Why is their firm uniquely capable of providing it? A company’s purpose motivates their employees and clearly articulates and aligns strategic goals.

Having a really strong purpose and understanding the customer—having solid core strengths and understanding exactly what those are—are what enable companies to adapt quickly to whatever external threats may emerge.

Most companies don’t look internally, but they should. They look at the external environment, and they are so focused on that environment that they forget to ask themselves, What are our strengths and what can we do?

Do Not Delay!

Most leaders today tend to procrastinate, looking for that perfect solution, but that solution usually isn’t found right away. When external factors strike, speed is of the utmost importance. Just use what you have, lean in to your core strengths, and give it a try. You really can’t go wrong if your current capabilities are strong. How well do you know your customers? How strong is your supply chain? And how well do you do operations?

You know what your core strengths are. Do you have good channels? Do you provide a good customer experience? Do you have a great value proposition? Whichever of these core strengths is the strongest, use that and see what you can do with it.

SCENARIO PLANNING

When you are formulating strategy, the planning process is usually undertaken a few months or maybe even up to a year in advance, depending on how big the strategy is. If it is a strategy for going into a brand-new market, it can take months to set up. And if you are doing something like that, you really need to engage in scenario planning or else you can lose that whole market. You will need to use the techniques of scenario planning that will help you spot early warning signs and organize your teams to take action on those insights.

Remember, I’m a microbiologist by education, and I used to work in labs before I worked my way up to corporate at Merck and got into supply chain management. From my time working in the lab, I know that scenario planning is part of the scientific mindset, and this approach governs everything that people in the science world do.

Science-related industries have practices that mimic what we in the business world call scenario planning. These are the practices we use and the mindset we adopt in order to understand when we’re dealing with something new.

“Something new” in scientific terms is analogous to a new external factor in business—a competitor’s product that no one has ever seen before, a new market, a new president. These changes can create new entrepreneurial opportunities or result in damaging consequences for companies that operate under old assumptions or business models.

Anything that can potentially disrupt your supply chain management, such as riots, upheaval in your serving market, or an unanticipated “act of God,” can cost you your competitive advantage when you need it most. It is useful to adapt your approaches and practices to mimic those that are already used in the science industry—to understand what works and what doesn’t in order to determine how you’ll need to adapt in the future.

Use Scenario Planning for Market Segments, Not the Market as a Whole

When you use scenario planning, you want to make sure you are looking at the market in specific segments rather than in its entirety because if you are serving the Asia-Pacific market, the challenges you’ll face are going to be very different from what you’ll find in South America. From different demographics to different temperatures, there are endless differences in myriad factors that can affect supply chains.

Everything matters when you are looking at possible scenarios—the potential what-ifs. What if there is political instability and armed conflict in these places? Or what if there is a monsoon season?

For example, some years ago I was working with a company that made animal health products in the Asia-Pacific region—drugs and medicines for animals such as horses, cows, pigs, chickens, and whatnot. We were trying to increase efficiency in the supply chain to make sure we could meet demand, and this was a new market for us.

When you are looking at new markets, countless things can affect the supply chain: There could be a plant closure, or you could have a management crisis. You might have labor availability issues, or you could have infrastructure issues caused by a hurricane, a monsoon, or any number of things. And all these external factors will affect your service, your production costs, and your transportation costs.

It is important to focus ...

Table of contents

• Cover
• Title Page
• Dedication
• Foreword
• An Invitation
• Part I: Rethinking Your Business Model
• Part II: Innovation and Collaboration
• Part III: Making the Most of Your Technology Spend
• Final Thoughts
• Acknowledgments
• About the Author
• Notes
• Index
• Copyright