I recently saw an article in Bloomberg’s BusinessWeek that caught my eye. The title of the article is, “CEOs say Investing in Innovation is not Paying off“. The bottom line is a study was recently done of companies in the US and Europe. The companies were asked questions about their willingness to invest in innovative activities (products and services).
While half of the respondents said they have recently increased funding for innovation at their companies and nearly all said innovation is important to their company’s future success, only 18% are seeing their investments pay off.
Additionally, half of the respondents said their companies have become more risk averse in their investments.
The concern is, of course, that without willingness to take risks and innovate, we are left with nothing more or better than what we now have. Complacency is not good. Aversion to risk leads to complacency.
As leaders, we have a very challenging job. In addition to being head cheerleader, coach and trainer, we also have to be innovators and most importantly we cannot be afraid to fail. Perhaps the increased pressure to perform financially has caused some corporate leaders to be less innovative, less risky and more willing to settle for the same or a slightly better result because that’s better than risking everything for a great result.
As leaders, we must ask ourselves every day if we are encouraging innovation or complacency in our companies. If the latter, we must change what we’re doing.