Innovating at the Top: How Global CEOs Drive Innovation for Growth and Profit (think: act International Management Knowledge)

207 Pages·2008·0.74 MB·English

by  Soumitra Dutta

INNOVATING
AT THE TOP
How Global CEOs Drive Innovation
for Growth and Profit
Roland Berger, Soumitra Dutta,
Tobias Raffel and Geoffrey Samuels
INNOVATING AT THE TOP
think: act
International Management Knowledge series
(launched 2008)
R. Schwientek and A. Schmidt (eds)
OPERATIONS EXCELLENCE
Smart Solutions for Business Success
INSEAD Business Press series
(launched 2006)
J. Frank Brown
THE GLOBAL BUSINESS LEADER
Practical Advice for Success in a Transcultural Marketplace
D. Fubini, C. Price & M. Zollo
MERGERS
Leadership, Performance and Corporate Health
M. Kets de Vries, K. Korotov & E. Florent-Treacy
COUCH AND COUCH
The Psychology of Making Better Leaders
J. Teboul
SERVICE IS FRONT STAGE
Positioning Services for Value Advantage
J. Thoenig & C. Waldman
THE MARKING ENTERPRISE
Business Success and Societal Embedding
INNOVATING
AT THE TOP
How Global CEOs Drive Innovation
for Growth and Profit
Roland Berger,
Soumitra Dutta,
Tobias Raffel
& Geoffrey Samuels
© Roland Berger Strategy Consultants & INSEAD 2009
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First published 2009 by
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(cid:2)
CONTENTS
Preface vii
KEY INNOVATION DRIVERS 1
CEO INNOVATION PERSPECTIVES 3
CEO INTERVIEWS 37
JIM BALSILLIE 39
GEORGE BUCKLEY 51
PATRICK CESCAU 71
FUJIO CHO 91
FRANZ FEHRENBACH 103
HENNING KAGERMANN 117
OLLI-PEKKA KALLASVUO 133
ARTHUR D. LEVINSON 151
N. R. NARAYANA MURTHY 171
AFTERWORD:
FUTURE INNOVATION CHALLENGES 187
Index 191
v
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(cid:2)
PREFACE
Business and management concepts often cycle through
years of favor. Diversification, quality, excellence once
occupied the spotlight, then receded to the sidelines to make
way for new priorities. Innovation now takes center stage. Is
innovation another management “fad,” a marketing phrase?
Or is innovation fundamentally different, a powerful motor
for a globalizing economy? A growing body of data suggests
innovation is indeed deeply embedded in the new dynamics
of global economic development and competition.
As individuals all involved in both management consult-
ing and academia, we share the view that economic data
and statistics confirm that innovation exhibits fundamen-
tally different qualities, more profound and far-reaching
than many prior management concepts. Anecdotally, the
evidence is overwhelming. At conferences, meetings, and
casual encounters, senior executives frequently ask us what
can be done to improve innovative performance.
Officers directing companies headquartered on every
continent express similar interest and concerns. How to
generate better returns from innovation efforts? How to
enhance results? How to improve the expenditure–reward
equation? We hear these and similar questions more and
more. What have we learned in our travels and conversa-
tions with senior executives that could shed more light on
the mystery of innovation?
Rapid technology development cycles, increased risk,
vii
PREFACE
and faster product rollouts in diverse markets are some of
the contemporary trends that “push–pull” innovation, and
likely will intensify as globalization spreads. Are conven-
tional views about innovation still valid? Does a company
need an innovation culture to be innovative? Must innova-
tion, to paraphrase Hobbes, remain risky, expensive, and
long? Are there new methods, policies, and practices that
could increase the odds innovation will deliver at least
some of its promised rewards?
These questions stirred our interest. We wanted to
explore whether there might be useful innovation policies
or methods relevant to many companies. So we decided to
investigate how highly innovative large corporations across
different industries in North America, Europe, and Asia
pursue innovation, and interview the people most respon-
sible for the companies’ innovative performance, the CEOs.
Because globalization will only increase opportunities
and competitive pressures, INSEAD and Roland Berger
Strategy Consultants selected highly innovative large
global companies to investigate innovation policies and
practices that might be highly suggestive and valuable for
other companies wishing to compete in global markets.
A high-level CEO perspective is especially revealing
because CEOs are uniquely qualified to assess the reasons for
their company’s innovative performance. Their judgment
and views elevated them to the CEO suite. Their opinions
distill many years of experience. We considered that an open
format where CEOs could discuss their views during an hour-
long personal interview would be the most effective way to
hear their observations and recommendations.
This volume presents in their own words how CEOs of
highly innovative corporations approach the challenge of
creating and developing products and services in a world
viii
PREFACE
where never before have there been so many opportunities
for innovation. Science, improved logistics and communi-
cations, expanding markets in developed and emerging
countries, demographic shifts, climate change, and energy
are the leading drivers opening new innovation frontiers.
The innovation policies and practices these CEOs find most
effective to pursue these opportunities are a useful guide for
other companies looking to create and fill innovative
niches.
Innovating at the Top is not an academic survey of all
innovation-related activities at each company. The book’s
purpose is to identify, at a high level, the values and meth-
ods the CEO finds most compelling and useful to promote
innovation. INSEAD and Roland Berger Strategy Consul-
tants chose the CEOs from the top innovating companies
around the world. These CEOs and chairmen raised several
issues and attitudes that, while differing in details, intrigu-
ingly convey many similar approaches to stimulate innova-
tion. Their views were shared across continents and
industries.
The introductory chapter, “CEO innovation perspec-
tives,” organizes their observations and recommendations
in an overview to highlight important areas of agreement.
In the core section of the book, each CEO presents his views
on innovation in his own words. This transcript format
gives the reader the immediacy of a conversation, and
conveys the tone and character of the CEO’s comments.
This should be helpful to readers for appreciating the
nuances and aspects of innovation the CEO considers most
important.
While there is no formula for innovation, these inter-
views make it clear that certain conditions favor innovation
and can increase the probability success will reward the
ix