I was researching how innovation contributes to the growth of companies and what proportion of growth it constitutes. While doing so, I came across an article, among many, from McKinsey & Co. (The Innovation Commitment). A chart in the article blew me away. Based on innovation performance across 183 companies, what McKinsey found was that there was a strong correlation between the number of “Innovation Essentials” mastered and economic performance. The fact that there is a strong correlation is not what blew me away. What blew me away was how, even though there is a 140% increase in economic profit, fewer than 10% of respondents surveyed reported mastering 7-8 “innovation essentials!”
To lay out more context, let me also give you a little background on the “Innovation Essentials.” In a 2015 article (The Eight Essentials of Innovation), McKinsey reported results and analysis from a multiyear study comprising in-depth interviews, workshops, and surveys of more than 2,500 executives in over 300 companies in a broad set of industries and countries. They found a group of eight essential attributes present, either in part or in full, at every big company that was a high performer in the product, process, or business-model innovation. These attributes were:
1. Aspire: Executives regarded innovation-led growth as being critical.
2. Chose: Invest in a portfolio of initiatives to win.
3. Discover: Differentiating business, market, and tech insights into winning propositions.
4. Evolve: Creating new business models.
5. Accelerate: Beating competition by launching innovations quickly and efficiently.
6. Scale: Launch innovations at the correct scale.
7. Extend: Winning by capitalizing on external networks.
8. Mobilize: Teams that are motivated, rewarded, and organized to innovate.
When McKinsey went back in 2019 and analyzed the mastery of these attributes and how they correlate to the economic performance across 183 companies, it reported that the impact on growth goes from 1x when mastering 0-2 skills to 2.4x when mastering 7-8 skills; in other words, a 140% increase in economic profit! This is an incredible piece of research and insight.
So here is the question - if we know innovation drives hyper-growth, why are 90% of us not mastering all the essentials?
I believe that this is so because we are not focusing on how to develop the ‘Curiosity’ muscle of our decision-makers in a way that it is measured in correlation to their business results. Consistently and continuously with feedback loops, so leaders know if they are moving the needle. This competency should be the bedrock of any outstanding leadership model.
In a 2018 HBR article titled The Business Case for Curiosity, Francesca Gino lays out the case for how greater curiosity led to higher-performing and more adaptable firms. The statistics she reported are staggering. I know it is a little dated, but I do not think the world has shifted that much since in this regard, and probably the pandemic might have made it a little worse. Ms. Gino surveyed 3,000 respondents from a wide variety of industries/firms and reported that only 1 in 4 reported feeling curious in their jobs on a regular basis. Further, 7 out of 10 respondents reported facing barriers to asking more questions in their workplace. That last statistic is why this is so staggering, depressing, and frustrating! It is almost like we have collectively mastered the art of beating the ‘Curiosity’ out of our leaders as they come into and grow inside our organizations.
Additionally, there is an observation in this article about the two reasons that restrain organizations from encouraging curiosity. These are having a wrong mindset on exploration and seeking efficiency vs. exploration. Wrong mindsets because often exploration is confused with chaos, but in reality, it encourages questioning and not settling for the first solution, and efficiency vs. exploration means that we are focused on making today's offering cheaper while ignoring the future needs that will provide the most outstanding growth opportunities.
I can completely relate to this research in my 27 years working for large organizations. The time I was most effective in my role was when I was curious about my job and when I could ask all the questions that I could think of and pursue solutions to solve them.
Until and unless we flip these statistics to where a future sample of respondents reports that 10 out of 10 leaders feel like they have zero barriers to asking questions at their workplace and 4 out of 4 employees feel curious about their jobs on a regular basis 90% of us will be satisfied with mastering 0-2 “Innovation Essentials” and achieving 1x growth rates! The question to be answered is, which team do you want to be on? The more important question is, which team are you happy being on?
There is a way to create environments where the curiosity index of leadership can be measured and driven via targeted leadership behaviors and business practices in a consistent, continuous way that correlates to innovation outcomes and overall business results. Imagine having an ROI for every single leadership development initiative that drives curiosity. If you are serious about this, there is no need to imagine – just reach out, and I can share exactly how to do this.
It is time for us to master all essentials; it is time for us to expect 2.4x growth!
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