Mike Harris, Chairman of Innovation at RBS lists five things a CEO of a large organization must do to execute on innovation:

1. Be visibly and vocally behind the innovation agenda
2. Make a strategic case for innovation
3. Put an innovation infrastructure in place with processes for education and customer insight
4. Create an environment that values prototypes and pilots
5. Establish a innovation funding source and decision authority separate from the normal funding process

All of these can exist in perception but not in practice. For example, making the strategic case often gets lip service but remains in the realm of buzzwords. Perhaps this is because it is possible to get innovation results if the other four steps are done. In large organizations, people are often used to executing without a clear sense of how what they are doing aligns with strategy. Or they are used to backfitting the rationale for what they are doing to some very general definition of strategy.

For example, when we ask our project teams in early stages of seeking opportunities, how a particular idea aligns with strategy, we are likely to get such answers as

• delivers a solution to clients
• embeds us further in client’s business
• enables cross-sell
• competitors are doing it

or sometimes just “yes, it does.”

Superficial attention to strategic alignment at the outset can result in an innovation initiative that delivers random and disconnected solutions to customer problems. To quote my colleague Art Hutchinson, innovation is a strategy but it’s HOW you expect to pursue innovation (e.g., basic R&D, purchase innovative companies, partner with them, adapt existing IP, create more IP to license to others, etc.), and also WHERE you want to focus innovation (e.g., on the customer experience, on financial vehicles, on business models, etc.) that adds credibility and brings it down from the realm of buzzwords.

Working on an innovation project provides an opportunity to learn what your strategy is. Proposing something new can be an excellent way to start a conversation about what the business does and what it doesn’t do and why. Often, the boundaries are not understood by people farther down the management chain. They’ve never been asked to justify an opportunity in terms of larger business strategy and make decisions about whether an innovation fits with the current strategy or whether it needs that separate funding process. Challenging them to become innovators and test those boundaries can foster the kind of executive level thinking that rising leaders need to practice. It’s why we see innovation as a leadership development activity.