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Seeing the World Through Your CEO's Eyes

Directly or indirectly, your CEO will be the one evaluating, funding, and rewarding your intrapreneurial project. The better that you understand her hopes and fears, the easier it will be to identify and deliver innovations that she finds exciting.

The Growth Imperative

The #1 thing that your CEO cares about is growth. Revenue growth. Profit growth. And, ideally, growth of both of the above.

In fact, I can almost guarantee you that at this very moment, there’s a part of her brain that is dreaming of someday producing results that, when charted, will look like this:

Sales Growth Chart

Why the obsession with growth?

  • Growth Attracts Resources - In a free market economy in which all participants are trying to maximize profits, resources flow to the organizations that produce the best returns. Growing companies produce higher returns than stagnant or shrinking companies. Eventually, if your company doesn’t grow fast enough to stay competitive with other investments of similar risk, investors / owners will withdraw their support and the organization will die.
  • Everything Else Is Baked Into the Long-Term Growth Curve - It’s sort of impossible to achieve long-term growth without doing pretty much everything else right too. Wrong strategy? Growth declines. Poor execution? Growth declines. Treat your people badly? You guessed it -- growth declines. So when a CEO wants to know, “What kind of job am I doing?” the growth numbers tell the story.

Just in case you’re not very savvy about corporate finances, note that there are two basic types of growth:

  1. Revenue Growth (also referred to as sales or top-line growth)
  2. Profit Growth (also referred to as EBITDA, pre-tax, or bottom-line growth) (Here’s an Investopedia article if you care to know more about the difference between revenue and profit.)

KEY TAKEAWAY: If you want to be a successful intrapreneur, look for ways to increase growth.

The Business Life Cycle

If Growth is the ultimate prize of your CEO’s dreams, the Business Life Cycle is the evil dragon that threatens to steal it away.

What is the business life cycle? It’s a theory that says that, similar to biological organisms, every value proposition that your company creates will go through distinct stages of life that may be characterized as Startup, Growth, Maturity, and Decline.

Business Life Cycle

To put it more bluntly, the business life cycle says that everything your company is doing today to create value and make money -- every product, every service, every big idea -- will eventually die.

How long does it take for a technology or value proposition to run its course? Today, the average is about 10 years, but many believe the cycle is getting shorter due to accelerating rates of innovation and globalization. For example it took 75 years to for landline telephone service to gain 50 million users worldwide; Angry Birds took only 35 days.

KEY TAKEAWAY: The clock is ticking and your CEO knows it. If the company doesn’t add more sales and profit this year than it did last year, your CEO is feeling anxious that your organization is starting to mature or decline.

Innovation

If Growth is the prize and The Business Life Cycle is the dragon, Innovation is the daring hero who saves the day.

There’s a lot of confusion around the word “innovation,” so let’s establish a summary definition of innovation and then flesh this definition out by exploring:

  1. The three basic categories of business innovation and
  2. The 12 components of any individual business innovation.

Innovation Defined

At the highest level, innovation may be defined in three words: intentional, positive change.

The 3 Categories of Innovation

While it’s helpful to have a simple, all-inclusive definition of innovation, it is also helpful to have a vocabulary that describes the nuance. Therefore, if we zoom in just a little, we can see that all business innovations may be lumped into three broad categories , depending on the benefits they provide, as follows:

  1. IMPROVE – These are innovations that improve the efficiency and effectiveness of current business operations.
  2. EXPAND – These are innovations that expand or extend the market reach of current lines of business.
  3. CREATE – These are innovations that create entirely new lines of business

The 12 Components of Any Given Innovation

If we zoom in up close to examine a specific innovation, we discover that, regardless of category, every innovation consists of four components, and 12 sub-components as described by the LaunchPath Innovation Framework pictured below -- these are the things we modify when making intentional, positive change: LaunchPath Innovation Framework

How Innovation Saves the Day

Innovations in the “Improve” and “Expand” categories lift and lengthen the business life cycle of your current value propositions and are ideal for organizations that are in the Growth or early Maturity stage.

Innovation Lifts and Lengthens Life Cycle

Innovations in the “Create” category regenerate the organization from within by creating entirely new lines of business that can sustain the company into the future. “Create” innovations may not be a fit during the Growth stage, but will be desperately needed as your organization matures and declines.

Innovation Regenerates the Life Cycle

Conclusion

  1. To sum it all up: Your CEO desperately needs to get and keep your company growing
  2. The Business Life Cycle is constantly fighting back
  3. You can help your CEO by identifying and implementing innovations that improve, expand, or create value propositions.
  4. Specific opportunities for innovation may be found within one or more of the 4 components and 12 sub-components of an innovation detailed above.

Gray Somerville

Gray Somerville is a serial entrepreneur, innovation expert, and LaunchPath’s CEO. Besides LaunchPath, Gray has helped launch and lead three other successful startups including Telogical Systems and Adacus.

@graysomerville