In a panel I organized about innovation, a major bank’s innovation director explained how the risk for failure had to be borne by the organization itself, not the individual. This raises the question of leadership in innovation, and I would like to illustrate this concept by a concrete example.

Company A is a leader in its market, having internally developed a solution which gathered several awards from recognized institutions. It is widely believed in the company that this solution is key to the commercial success it experiences on its market. So, at the end, everyone feels good about this cost center.

Since company A is so proud about this solution, one considered selling it to other similar companies in different (read: non-competing) geographies. Minimal resources are allocated for over a year to that purpose, and actual revenue objectives given to a business unit. Finally, one day, “out of the blue”, a large company’s top management contacts A to know more about this solution. Their financial advisers had told them about it — always consider investors’ presentation as a marketing tool for your know-how. Company A joins the RFP bandwagon, gets short-listed, and now feels that things are getting serious.

As deal closing gets close to real, everyone at A gets nervous:

• the “international” business unit needs to write a contract
• the lawyers need to back a deal in a foreign jurisdiction
• the technical team worries about committing on a project in someone else’s technical environment
• the operations team is wondering how they will work with the customer’s employees and how they will share responsibilities for failures
• the CFO needs to deal with a foreign currency and country risks
• a “domestic” business unit, whose revenue depend on company A’s solution, fears that it might lose resources and control over the roadmap — with no upside potential.

All this is crystallized when the deal needs board approval as per A’s governance rules. Risks suddenly get over-estimated, and everyone hides behinds the uncertainties. In short, people are telling the board why this new business should be dismissed, instead of explaining how work could be done. So A is in a situation where it spent resources during over a year on a new kind business, but finds itself reluctant to get real when it finally gets a potential customer.

What is needed in this situation is an actual leader.

The role of a leader in innovation is two-fold:

• reassure the teams that s/he will be responsible for what will be done. This means protecting the careers of those who will contribute, as well as giving them the right excuse to change the way they work with others. In this case, the domestic business unit has a roadmap and an existing business based on the solution. Having another company profiting from the same technical team means that the engineers will have to priorize some of its requests. These engineers need this leader to explain the hard truth to the domestic business unit, in the company’s general interest. Same thing when/if a feature gets broken as part of incremental software development.
• create a team spirit around an ambition. Large structures tend to consider employees as disposable resources, but in this case key resources need to be motivated about this new development. Key contributors need regular updates about the project, a proper kick-off and a good story about where they are heading. Otherwise, why would they bother trading their comfortable, deterministic life against a new set of issues?

As is usually said, leadership is not a given: it has to be taken. Company culture plays an important role in having someone stepping in and be the leader. For example, you may have already seen freshly-nominated directors pretending “to have done that great thing”, much to the deception of the actual do-ers. But when real leadership happens, the impossible gets done: contributors will work smarter and harder to make everyone in the team succeed. Not a given, and not possible in every company, but a clear signal for success.