Innovation Respect (and Comments)

17 July 06

“In your organization, which leadership qualities get the most respect?”

This was the question that the Human Resources consulting firm Development Dimensions International (DDI) asked in 2005 of more than 900 HR managers and 4,500 business leaders across 42 countries and 36 industries. 

A recent story in BusinessWeek reported some of the results for managers in North America and China.   The most respected leadership quality in both areas: the ability to bring in the numbers (36% of business leaders in North America, and 30% in China).   

One of the striking features of the study was the differing values that the North American and Chinese leaders placed on innovation and creativity.  Only four percent of North American business leaders ranked innovation and creativity as the most respected leadership trait in their organization.  For the Chinese, the figure was 16 percent. 

This result may not be too surprising – after all, these leaders were only allowed to pick one characteristic from this set; multiple choices were not allowed.  Perhaps innovation qualities in North America get more leadership attention in a supporting role, as the second or third-ranked leadership quality.  

This was tested in the second set of questions that DDI asked of 900 HR managers.  Here, the HR folks were allowed to choose as many qualities as they liked – what was important was that these were “respected leadership qualities” in their organizations.

Even here, however, leadership qualities relating to “creativity or innovation” ranked near the bottom of the list for North American HR managers.  Only 39 percent of the respondents cited these traits as respected leadership qualities.  For their Chinese counterparts, the figure was 72 percent.

Innovation Respect – US vs. China

These findings highlight a set of innovation gaps – between corporate desires and corporate reality -- that exist in many North American organizations.  Senior executives consistently stress the importance of innovation for their company’s growth and survival, yet most are disappointed with their company’s innovation performance.  One of the reasons for this poor performance may be that management qualities related to innovation are not respected in most North American organizations, as the DDI survey indicates.

In many large companies, the performance appraisal system includes nothing for attributes that encourage innovative thinking.  As Rich Wellins, one of the authors of the DDI study, noted:

Performance systems don't generally reward innovation. They reward operational efficiency, reducing costs, or increasing sales.

Rich Wellins, DDI, in BusinessWeek

Here’s the good news: these kinds of systems can be changed by senior management.  General Electric, for example, revised its performance system to reward behaviors it linked to innovation, such as teamwork, courage, and imagination. 

Here’s the bad news: this is hard work. Taking these steps involves major operational changes.  So while it’s easy to see what actions need to be done, implementation can be difficult, expensive, and risky.

Samsung provides a recent example of a company that changed its organization and work processes to demonstrate more respect for innovation.  Samsung’s CEO, Yun Jong Yong, set up the company’s “Value Innovation Program” (VIP) Center in Suwon, outside of Seoul, in 1998.  Now it is part of an integrated development process with an emphasis on Samsung’s new mantra, “market-driven change.”

Many of Samsung’s cross-functional product development teams come together for many days at the VIP Center.  The center has 20 project rooms and 38 bedrooms, as well as a kitchen, a gym, and traditional Korean baths.  When these teams are working at the VIP center, many of the members don’t go home.

The teams are supported by on-site innovation facilitators, and the line supervisors of the people working on the team free them from their other responsibilities while the team is designing a new product.  Samsung’s new flat screen television, for example, was designed at the VIP Center in about six weeks. 

Working at Samsung’s Innovation Center

Samsung managers clearly respect innovation.  Judging from the results of the DDI survey, we’re going to see more of this approach in China than in North America over the next several years.   

More Information:

1.      The survey from DDI was discussed in BusinessWeek on 21 Feb 06. It’s here.

2.      Here’s the website for DDI.

3.      The G.E. reference comes from a recent Harvard Business Review interview with G.E. CEO Jeff Immelt.  That’s here.

4.      The story on Samsung’s VIP center is from BusinessWeek of 3 July 06. It’s here.