By Jonathan H. Westover, PhD
Abstract: This article explores the key expectations that senior leaders have of innovation teams and provides practical advice for meeting those expectations. Research shows that senior leaders primarily expect innovation teams to develop commercially viable solutions that deliver tangible business value through revenue growth, market share gains, and profitability. Additionally, initiatives should be strategically aligned with organizational priorities and leverage existing capabilities. Leaders require measurable progress updates on milestones, KPIs, and qualitative lessons to make ongoing resource allocation decisions. Finally, innovation processes should maximize efficiency through collaboration, stage-gated resource concentration, and standardized tools. The article presents industry examples from companies like Medtronic, BASF, Pfizer, Johnson & Johnson that exemplify addressing leadership expectations through rigorous customer validation, strategic audits, innovation dashboards, and open innovation practices. Overall, effectively fulfilling these expectations is important for cultivating continued senior support vital to an organization's long-term success.
In today's dynamic business climate, innovation has become a strategic imperative for organizations seeking competitive advantage and long-term sustainability. While innovation efforts are often spearheaded by dedicated teams, these groups do not operate in a vacuum; their work must ultimately serve the goals and priorities of senior leadership. However, communicating expectations across organizational levels can be challenging.
Today we will explore what senior leaders value most from innovation teams, along with practical advice and examples for meeting those expectations.
Expectation 1: Commercially Viable Solutions
Research suggests the primary expectation senior leaders have for innovation teams is developing commercially viable solutions (Hundera, 2019; Khoja et al., 2021). At the end of the day, innovation must deliver tangible business value to justify the required investments of time, money and resources. As the former CEO of Procter & Gamble famously said, "half the money spent on new product development is wasted—the trouble is nobody knows which half" (Cooper, 2019, p. 12). Senior leaders are under pressure to demonstrate innovation initiatives are contributing meaningfully to business objectives like revenue growth, market share gains, and profitability.
In practice, this means innovation teams must anchor their work tightly to customer and market insights from the beginning. Rather than pursuing ideas solely for their technical merits or the personal interests of team members, proposed solutions should directly address clearly defined customer pain points or latent needs. Quantitative market sizing and competitive landscape analyses can help estimate a solution's realistic commercial potential (Cooper, 2019). Ongoing customer validation via focus groups, surveys or prototyping further refines proposed solutions to ensure strong fit and demand.
For example, medical device company Medtronic structured its innovation process around rigorous customer discovery (Liedtka & Ogilvie, 2011). Teams began each project by interviewing over 100 patients and clinicians to deeply understand unmet clinical needs. Proposed solutions then went through multiple rounds of user testing before resources were committed to development. This "jobs to be done" focus on customers' underlying problems to solve, rather than preferred features or technologies, helped Medtronic achieve over 80% commercial success rates for new products.
Expectation 2: Strategic Alignment
In addition to commercial viability, senior leaders expect innovation initiatives to strategically align with organizational priorities and strengths (Sandström, 2016; Wright et al., 2012). Resources for innovation are seldom unlimited, so proposed projects must demonstrate how they contribute to the company's strategic direction and future growth plans. Simply put, leaders want innovation teams working on the "right things" - problems that matter most to the business both now and in the future.
To ensure strategic alignment, innovation practitioners recommend interacting regularly with leadership to understand evolving strategic priorities and market outlooks (O'Connor & Rice, 2013; Schartinger et al., 2002). Additionally, innovation teams should articulate how proposed solutions would reinforce existing capabilities and competencies, build upon related initiatives, and potentially unlock new market opportunities. Proper scenario planning allows innovation efforts to flexibly adapt to changing conditions while staying largely on strategy.
For instance, chemical company BASF conducts regular innovation audits where individual projects are objectively scored on factors like strategic fit, competitive advantage potential, financial viability, and risk (Pisano, 2015). Only those fully aligned with corporate strategy proceeds further. This structured "stage-gate" process provides ongoing senior oversight and redirects projects that lose relevance due to market shifts. It also prevents resources from being poured into solutions unlikely to provide meaningful returns.
Expectation 3: Measurable Progress
Closely tied to strategic alignment is senior leadership's need for measurable progress updates on ongoing innovation initiatives (Liedtka & Ogilvie, 2011; Sandström, 2016). As stewards of company performance and accountable for resource allocation decisions, leaders want to understand if projects are progressing as planned and achieving intended milestones. They must make ongoing "go/no-go" choices regarding continuing, adjusting or stopping innovation efforts based on tangible evidence, not just hopeful projections.
Communicating meaningful metrics is therefore imperative. Beyond simple timelines and budgets, innovation teams should establish KPIs that reliably signal solution quality improvements, customer validation steps completed, market or technology risks mitigated, and other indices of de-risking progress (O'Connor & Rice, 2013). Qualitative updates on lessons learned, strategic course corrections made, and unexpected opportunities or challenges encountered provide added context. Regular reporting keeps senior oversight timely and prevents "too little, too late" realizations of project viability issues.
For example, pharma giant Pfizer implemented a "Stage-Gate Innovation Dashboard" to monitor progress across its portfolio (Pisano, 2015). Key metrics included customer need validation milestones reached, prototypes tested, intellectual property positioning, competitive landscape dynamics, and financial analyses updates. Leadership could quickly gauge each project's "health status" and make intervention decisions to optimize the overall pipeline. Such structured progress tracking cultivated senior support while keeping innovation initiatives properly scrutiny.
Expectation 4: Resource Efficiency
Finally, research shows senior leaders want innovation teams maximizing available resources and minimizing wasted efforts (Hundera, 2019; Pisano, 2015). With budgets under constant pressure, they need assurance projects are leveraging internal and external competencies cost-effectively before committing additional funding. Leaders seek innovation processes minimizing duplicated work or "reinventing the wheel" tendencies in favor of building upon existing knowledge. Teams must also prove adept at identifying and securing outside partnerships that expand available capabilities.
One approach is practicing "open innovation" through collaboration (Chesbrough, 2003). For instance, medical supplies company Johnson & Johnson actively scans startups and academic research for externally-developed solutions relevant to its innovation agenda (Huston & Sakkab, 2006). By harnessing outside ideas early through joint ventures or targeted acquisitions, J&J avoids inefficient internal "trial and error" cycles. It simultaneously gains entrepreneurial agility and access to niche technological competencies difficult to replicate in-house.
Additionally, quality stage-gated processes efficiently concentrate resources where most worthwhile. At each review point, underperforming projects can be terminated to free funding for better opportunities (Cooper, 2019). Standardized tools like cost-benefit analyses provide objective exit criteria beyond subjective "gut feelings." Transparent resource redirection protocols maintain senior support while flexibly reallocating funds as market needs evolve.
Conclusion
Senior leaders rely on innovation teams to address crucial expectations around commercial viability, strategic alignment, measurable progress, and resource efficiency. However, fulfilling these expectations requires ongoing two-way communication to understand evolving priorities and demonstrate meaningful results. Structured processes along with customer, market and competitive insights ensure proposed solutions directly create business value. Metrics, milestones and option to pivot keep senior oversight timely and optimize large innovation portfolios. With diligent focus on these expectations anchored in industry examples, leaders gain confidence innovation is contributing significantly to strategy execution and sustainable competitive advantage. Overall, effectively meeting leadership expectations is key to cultivating continued support for innovation initiatives vital to any organization's future success.
References
Chesbrough, H. W. (2003). Open innovation: The new imperative for creating and profiting from technology. Harvard Business Press.
Cooper, R. G. (2019). Stage-gate systems: A new tool for managing new products. Business Horizons, 62(1), 9-17. https://doi.org/10.1016/j.bushor.2018.08.006
Hundera, M. B. (2019). How innovation managers can navigate organizational politics to gain senior management support. Research-Technology Management, 62(2), 38-45. https://doi.org/10.1080/08956308.2019.1577702
Huston, L., & Sakkab, N. (2006). Connect and develop: Inside Procter & Gamble's new model for innovation. Harvard business review, 84(3), 58-66.
Khoja, F. M., Basioudis, I. G., Rawaf, S., & Cox, M. (2021). Prioritizing leadership expectations to enhance innovation performance. Health Policy and Technology, 10(1), 1-10. https://doi.org/10.1016/j.hlpt.2020.09.001
Liedtka, J., & Ogilvie, T. (2011). Designing for growth: A design thinking toolkit for managers. Columbia University Press.
O'Connor, G. C., & Rice, M. P. (2013). A comprehensive model of uncertainty associated with innovation. Journal of Product Innovation Management, 30(2), 215-232. https://doi.org/10.1111/jpim.12016
Pisano, G. P. (2015). You need an innovation strategy. Harvard business review, 93(6), 44-54.
Sandström, C. G. (2016). Learning for innovation in heterarchies. Research Policy, 45(4), 823-835. https://doi.org/10.1016/j.respol.2016.01.006
Schartinger, D., Rammer, C., Fischer, M. M., & Fröhlich, J. (2002). Knowledge interactions between universities and industry in Austria: Sectoral patterns and determinants. Research policy, 31(3), 303-328. https://doi.org/10.1016/S0048-7333(01)00150-6
Wright, M., Birkinshaw, J., Bresman, H., & Hagen, B. (2012). The management innovation cascade. MIT Sloan Management Review, 53(2), 25.
Jonathan H. Westover, PhD is Chief Academic & Learning Officer (HCI Academy); Chair/Professor, Organizational Leadership (UVU); OD Consultant (Human Capital Innovations). Read Jonathan Westover's executive profile here.
Suggested Citation: Westover, J. H. (2024). What Leaders Really Want: Expectations for Innovation Teams. Human Capital Leadership Review, 11(1). doi.org/10.70175/hclreview.2020.11.1.4
