Three Facts About Admired Leaders’ Approach to Innovation

Last week, I reviewed Fortune’s annual list of the world’s most admired companies.

After collecting survey input from several hundred leaders on 687 companies in 30 countries, on nine different dimensions from revenue to corporate responsibility to innovation, here’s what Fortune reported as this year’s top 10 companies most admired for corporate success:

Laci Loew

The success of six of those 10 — Apple, Amazon, Starbucks, Southwest Airlines, Berkshire Hathaway, and FedEx – is attributed to a single leader. Now, consider the very first “most-admired” list that Fortune released in 1983. Only one organization among the top 10 was a one-leader wonder: Digital Equipment, run by founder Ken Olsen. The others were all rooted in deep corporate structure with traditional leadership hierarchy and thinking: IBM, Hewlett-Packard, Johnson & Johnson, Eastman Kodak, Merck, AT&T, General Electric, General Mills.

So, why the shift?

Then, we were an industrial economy, and static products and services actually had shelf life. Now, we are a knowledge economy, and success and sustenance are grounded in change and transformation. Change is underscored by a single dimension: innovation. And innovation is the very ingredient that prevails in the products, services, processes, and personal brands of each of the six “one-person” leaders of today’s “most admired” firms.

To today’s less-revered organizations, innovation might seem to be a fad much like Ouija boards or big hair. To high-performing organizations, innovation is a top driver of company growth. In fact, today’s “most admired” companies are moving well beyond a focus on only innovative products and services, but also rely on innovative leaders to pioneer new business processes, value chains, and leadership development models.

What makes today’s “most admired” leaders innovative, and their peers in other organizations not so much? I suggest that the late Steve Jobs of Apple, Amazon’s Jeff Bezos, Starbucks’ Howard Schultz, Southwest Airlines’ Gary Kelly, Berkshire Hathaway’s Warren Buffet, and FedEx’s Fred Smith are characterized by at least three dimensions that describe innovative leaders:

  • Nurture networks. Based on Brandon Hall Group’s own research, and as agreed by these “most-admired” leaders, connections and networks are likely the single most critical factor in spawning and sustaining creativity.  Decentralized collaboration and cross-functional interactions — and other associations that broker information and knowledge — fuels new, fresh and differentiating calls-to-action (not just great ideas that sit dormant).
  •  Breed healthy disruption: Innovative leaders have backbones. They challenge decisions and disagree often, and sometimes not so respectfully. They have conviction and are tenacious. They never settle for “pretty good.” They do not compromise for the sake of social unity. Once a decision is made – regardless of how popular or unpopular it is – they stand behind it unwaveringly.
  • Create a “fail often and early, learn sooner” culture. Take Amazon. Jeff Bezos doesn’t think about how to build a better bookstore, but rather is consumed with executing on how to capture the long-term wallet and mind share of his customers. It’s not about his next new blockbuster product; it’s about his leaders do business, make decisions, and develop others in completely different ways. To do that at Amazon or anywhere, the underlying philosophy is small experiments and lots of them: “fail fast, fail often; embrace failure and learn from failure” – a motto born from Silicon Valley several years ago.

Google is another example of the “fail often and early, learn sooner” mentality, such as Google labs, from which 80 to 90 percent of  “experiments” haven’t passed muster. The “Google Graveyard” of failures is treated as a learning opportunity. And Google’s CEO Larry Page transparently communicates the learning across the enterprise. In so doing, he is cultivating a culture of learning, growth, creativity, and opportunity. Mistakes made early in any process are much easier and less costly to fix when caught early.

I just did a LinkedIn keyword search on “innovative leaders.” The correct number of hits that came up is  — pick one:

a)     less than 10,000

b)     10,001 to 50,000

c)      50,001 to 100,000

d)     more than 100,000

If you selected “d,” you win! In fact, the exact number was 136,716. While the challenge to earn a slot next year on Fortune’s “most admired” list will be steep, and certainly most of those 136,000+ will not fully succeed in getting their organizations that level of recognition, it does stand to reason innovation among leaders is becoming a commitment among more of us, particularly those of us who are described as high-performers.

Please share your story of how innovation is unfolding in your organization at [email protected]

Until next time…..

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Laci Loew



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Laci Loew