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Learning from the Best of Leadership – An excerpt from ‘The Innovation Capital’

Great leaders of innovation know that creativity is not enough. They succeed not only on the basis of their ideas, but because they have the vision, reputation, and networks to win the backing needed to commercialize them. It turns out that this quality–called “innovation capital”–is measurably more important for innovation than just being creative.

The authors have spent decades studying how people get great ideas (the subject of The Innovator’s DNA) and how people test and develop those ideas (explored in The Innovator’s Method).

Featuring interviews with the superstars of innovation–individuals like Jeff Bezos (Amazon), Elon Musk (Tesla), Marc Benioff (Salesforce), Indra Nooyi (PepsiCo), and Shantanu Narayen (Adobe)–this book will help you position yourself and your ideas to compete for attention and resources so that you can launch innovations with impact.

Here is an excerpt from the book!

The Virtuous Cycle of Innovation Leadership

Whatever your view of Elon Musk, one thing he did when he helped launch Tesla was articulate a lofty vision for the company.

“Our goal [is] . . . to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible,” he wrote. “In order to get to that end goal, big leaps in technology are required. ”1 Musk then laid out his “master plan”—a strategy for launching desirable electric vehicles at the high end of the market followed by affordable electric vehicles for the mainstream market.

Sterling Anderson, former head of Tesla Model X and Tesla Autopilot and co-founder of Aurora Innovation (a startup that is successfully providing a full-stack self-driving solution for major automakers like Volkswagen and Hyundai), says that Musk’s success as an innovative leader stems largely from a reinforcing cycle of success triggered by an exciting and inspirational vision:

Elon understands people. He understands that a lofty vision, an inspirational vision, attracts world-class people,
particularly world-class engineers. With those world-class engineers, he’s able to build a better product. That better product attracts customers and attracts investors, and it’s self-reinforcing. As this feeds on itself, engineers are
increasingly inspired to join, not only because of the lofty vision but also because of the increasingly strong brand behind it. These conditions attract increasingly strong talent; it feels good to work there and to be viewed as someone who is helping drive innovation toward that lofty goal.

Without prompting, Anderson independently has described the same virtuous cycle that we have seen many leaders utilize with positive results. This cycle includes the following steps:

1. Identify an exciting, lofty, even inspirational vision. The vision needs to solve an important problem, pursue a big opportunity, or just be exciting.

2. The lofty vision attracts talented human capital (e.g., better engineers and scientists) who want to work on something exciting. It also attracts investors and/or resources from organization leaders who provide the resources and senior sponsorship needed to launch a successful innovation project.

3. The talented human capital increases the odds of developing a better product and customer experience. Put simply, talented people going after a lofty vision produces better results for the customer.

4. The better product or customer experience attracts customers. The increase in happy customers leads to the creation of a valuable, hopefully innovative, reputation. Customers of companies or brands with an innovative reputation experience “identification”—which means their personal identity gets tied up with the products and brand which makes them much more loyal and valuable customers.

The ability to attract customers and build a valuable brand leads to a reinforcing cycle. Going back to step number two: talented human capital and investors are attracted to companies and projects with a valuable brand and loyal customers. Thus, the cycle repeats.

Get your copy of the Innovation Capital today!

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