Dan MacDonald - President & CEO, Innovacorp
"Leadership and Innovation"
Speech at Mount Saint Vincent's 2010 Student Business and Tourism conference: Leadership, Growth & Effectiveness: A Connected Circle
February 5, 2010
Mount Saint Vincent University, Halifax, Nova Scotia, Canada

I have been invited to share some insights on these two concepts.

Leadership and innovation have been the topics of thousands of books, speeches, programs, and articles over the years.

So what the heck is Dan MacDonald going to say that hasn’t already been said?

Well, I would like to humbly share with you how these two things, leadership and innovation, are critically important to us all, especially when they come together.

When we think about “leadership,” we might immediately think about people of power, like the prime minister of Canada, the US president, a military general, or maybe the CEO of a company.

Yes, I suppose these are examples of leadership, but I believe “leadership” is not about a title.

Leadership is not really something you just claim, are appointed to, or obtain through some kind of certification.

Leadership is not only a concept that is relevant at the top of an organization. I believe it is relevant at all levels of an organization.

Leadership requires two key things: perspective and courage.

Perspective:

A leader knows where they are trying to go and what they are trying to achieve.
Leaders can articulate the end game and what success looks like.

While a leader knows where they are trying to go and what they are trying to achieve, it is NOT important for a leader to know every specific step or how they are actually going to specifically achieve the objective.

Leaders break new ground where there is no defined path or process to follow.

Yes, leaders of course have a view of generally how they will move forward, and are confident they will achieve the objective, but at the same time, they do not know exactly how they will reach the end point.

Courage:

A leader has the courage to move forward toward the end goal, without knowing the exact path.

Many people and stakeholders around the leader raise issues, risks, what-abouts, showstoppers, warnings, biases, etc. A leader looks to understand and deal with this input while she/he moves forward, rather than getting paralyzed by it.

Leaders combine perspective and courage to confidently (not over-confidently) move toward the objective.

Leaders know full well they will rarely take a straightforward path, but instead make course corrections along the way.

Leaders understand there will be challenges, but keep focused on the end goal while navigating the issues that arise.

Leaders step up.

Leaders are not always right, but welcome constructive challenge and solutions oriented debates.

Leaders respect the team and more importantly, are respected.

Leaders are not afraid of failure.

Leaders are ready to take the blame but not the credit.

Some of the best leaders, lead from the back.

Leaders achieve excellence while striving for perfection.

Everything I have said about leadership is as true for a CEO as it is for the manager of team of six professionals.

So let’s pause the leadership angle and move to innovation.

Innovation is about creating value out of new ideas, whether it’s new ways of doing things, new products, or new services.

Example: The iPod, the drive-thru, GPS, etc…

Organizations must continually innovate to remain relevant and competitive, let alone grow.

Failure to innovate inevitably causes organizational malaise, and invites the competition to come take market share.

Innovation. Straightforward, right? For many organizations, it is not so straightforward.

As organizations grow, many migrate from being the challenger/attacker, to being challenged and attacked.

The problem usually lies in inadvertently allowing a culture to emerge that does not foster innovation. Strict policies, procedures, and product and project management styles put in place in the name of consistency and best practice, often lead to a culture of risk aversion and dampened creativity.

In 1948, William L. McKnight, then president of Minnesota Mining & Manufacturing, directed the management of his company as follows: "As our business grows, it becomes increasingly necessary to delegate responsibility. This requires considerable tolerance and mistakes will be made. Management that is destructively critical when mistakes are made will kill initiative. It's essential that we have many people with initiative if we are to continue to grow.”

While many turn to the latest best-selling business books and industry gurus for advice on just about everything, Mr. McKnight’s wisdom, after 50 years, still makes good common sense.

Later renamed 3M, Minnesota Mining & Manufacturing’s innovative culture is today the envy of companies around the world. From Post-it Notes, to Scotch Tape, to health care and highway safety, to office products and optical films for LCD displays, 3M’s annual revenue tops $24.5 billion USD and its market capitalization is $52.72 billion. Mr. McKnight’s focus on creating and maintaining a culture of innovation is core to 3M’s continued success.

Organizations of all sizes need to enable a culture where innovation is encouraged, continuous, and recognized.

Further, an innovative culture is one in which risk is managed, mistakes are learned from, customer and stakeholder input is welcome, and management is open-minded to changes to established business models.

To some, this might sound like anarchy, but it simply describes a business culture where progress, positive change, and innovation are embraced.

Management must encourage and harness innovation across the entire organization.

Processes, policies and procedures should be constantly evolved to ensure relevancy, competitiveness, and increased value add. Organizations can effectively leverage innovation and attract and retain top talent.

Whether you are trying to increase yield, decrease costs, increase customer loyalty, diversify into new market sectors, or all of the above and more, having a culture of innovation will help position you for success.

Innovation, while not straightforward, is next to impossible if you do not have the right culture, the right leadership.

Leadership and innovation together create the magic.

These two qualities, leadership and innovation, together are the key ingredients to building a healthy dynamic organization.

These ingredients make a job, a role, or a team fun, challenging and rewarding. They are what separate a company that is attracting employees, from one that is losing employees.

Look for, observe and learn from innovative leaders.

As you all chart your course forward, I recommend you look for roles, situations, and careers, where leadership and innovation exist, or where you believe you can play a role in creating it.

Thank you.